Document:

Incentive Stock Option Letter Agreement

 Exhibit 10.4 
  
 HOUSEVALUES, INC. 
 1999 STOCK INCENTIVE PLAN 
 INCENTIVE STOCK OPTION LETTER AGREEMENT 
  

	TO:	Ian Morris 

  
 We are pleased to inform you that you have been selected by the Company to receive a stock option (the “Option”) to purchase shares (the “Option Shares”) of the Company’s Common Stock under
the Company’s 1999 Stock Incentive Plan, as amended (the “Plan”). 
  
 The terms of the Option are as set forth in this Agreement and in the Plan, a copy of which is attached. The Plan is incorporated by reference into this Agreement, which means that this Agreement is limited by and
subject to the express terms and provisions of the Plan. Capitalized terms that are not defined in this Agreement have the meanings given to them in the Plan. 
  

The most important terms of the Option are summarized as follows: 
  

			
	Grant Date:	  	May 13, 2004
		
	Number of Shares:	  	100,000
		
	Exercise Price:	  	$2.20 per share
		
	Expiration Date:	  	May 13, 2014
		
	Vesting Base Date:	  	May 13, 2004
		
	Type of Option:	  	Incentive Stock Option (“ISO”)

  
 Vesting and
Exercisability: The Option will vest and become exercisable according to the following schedule, and the other terms of this Agreement, subject to your continued employment or service relationship with the Company or a Related Corporation:

  

			
	 Date On and After Which
 Option is Vested and Exercisable:
	 	 Portion of Total Option
 Which Is
 Vested and Exercisable:

		
	Three months from Vesting Base Date	 	6.25%
		
	Each three-month period completed thereafter	 	An additional 6.25%
		
	Four years from Vesting Base Date	 	100%

  
 Accelerated
Vesting: 
  
 Notwithstanding the foregoing, in the event (a)
you terminate your employment for “Good Reason” (as defined in your Employment Agreement), 100% of the unvested portion of the Option will automatically become vested and exercisable immediately prior to termination, or (b) the Company
terminates your employment other than for “Cause” (as defined in your Employment Agreement), the unvested portion of the Option that would have been exercisable 

  

 
as of the fourth quarterly vesting following termination will automatically become vested and exercisable immediately prior to termination. 
  
 Notwithstanding the foregoing, upon a Corporate Transaction (as defined in
the Plan) (other than a Related Party Transaction), 50% of the unvested portion of the Option will automatically become vested and exercisable and the remaining unvested portion of the Option will vest in equal quarterly increments over the shorter
of (i) two years immediately following such Corporate Transaction, or (ii) the amount of time remaining under the Option’s original vesting schedule. This provision is in addition to, and not in lieu of, any other rights provided in Section 12
of the Plan concerning the effect of a Corporate Transaction on outstanding Options. 
  
 Termination of Option: The unvested portion of the Option will terminate automatically and without further notice immediately upon termination (voluntary or involuntary) of your employment or service
relationship with the Company or a Related Corporation. The vested portion of the Option will terminate automatically and without further notice on the earliest of the following dates: 
  
 (a) in the case of termination of your employment or service relationship
with the Company or a Related Corporation for any reason other than “Cause” (as defined in your Employment Agreement), on the Expiration Date, and: 
  
 (b) in the case of termination of your employment or service relationship with the Company or a Related Corporation by reason of “Cause” (as
defined in your Employment Agreement), three months after such termination; and 
  
 (c) the Expiration Date. 
  
 The Option must be
exercised within three months after termination of employment for reasons other than death or Disability and one year after termination of employment due to Disability to qualify for the beneficial tax treatment afforded ISOs. 
  
 It is your responsibility to be aware of the date your Option terminates.

  
 ISO Qualification: The Option is intended to
qualify as an ISO under federal income tax law, but the Company does not represent or guarantee that the Option qualifies as such. 
  
 If the aggregate Grant Date fair market value of the shares with respect to which the Option first becomes exercisable during any calendar year (under the
Option and all other ISOs you hold) exceeds $100,000, the excess portion will be treated as a nonqualified stock option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for ISOs. A portion of the
Option may be treated as a nonqualified stock option if certain events cause exercisability of the Option to accelerate. 
  
 Notice of Disqualifying Disposition: To obtain certain tax benefits afforded to ISOs you must hold the shares issued upon the exercise of the
Option for two years after the Grant Date and one year from the date of exercise. You may be subject to the alternative minimum tax at the time of exercise. You should obtain tax advice when exercising the Option and prior 

  

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to the disposition of the Option Shares. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Option Shares within
one year from the date you exercise all or part of the Option or within two years from the Grant Date. 
  
 Method of Exercise: You may exercise the Option by giving written notice to the Company, in form and substance satisfactory to the Company, which
will state the election to exercise the Option and the number of shares of Common Stock for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the number of shares of Common Stock
you are purchasing. 
  
 Form of Payment: You may pay the
Option exercise price, in whole or in part, in cash, by check or, unless the Plan Administrator determines otherwise, by (a) tendering (either actually or by attestation) mature shares of Common Stock (generally, shares you have held for a period of
at least six months) having a fair market value on the day prior to the date of exercise equal to the exercise price (you should consult your tax advisor before exercising the Option with stock you received upon the exercise of an incentive stock
option); (b) if and so long as the Common Stock is registered under the Securities Exchange Act of 1934, as amended, delivery of a properly executed exercise notice together with irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds necessary to pay the exercise price all in accordance with the regulations of the Federal Reserve Board; or (c) such other consideration as the Plan Administrator may permit. 
  
 Withholding Taxes: As a condition to the exercise of the Option, you
must make such arrangements as the Company may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Company has the right to retain without notice sufficient
shares of stock to satisfy the withholding obligation. Unless the Plan Administrator determines otherwise, you may satisfy the withholding obligation by electing to have the Company withhold from the shares to be issued upon exercise that number of
shares having a fair market value equal to the amount required to be withheld (up to the minimum required federal tax withholding rate). 
  
 Limited Transferability: During your lifetime only you can exercise the Option. The Option is not transferable except by will or by the applicable
laws of descent and distribution, except that nonqualified stock options may be transferred to the extent permitted by the Plan Administrator. The Plan provides for exercise of the Option by a designated beneficiary or the personal representative of
your estate. 
  
 Further Restrictions: Section 13 of the
Plan provides additional restrictions and grants additional rights to the Company until such time as the Company may effect a registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act. The Plan grants the Company a right of
repurchase such that any shares purchased under the Plan may be repurchased by the Company in the Company’s sole discretion upon termination of your employment or service relationship with the Company The Company hereby retains the foregoing
repurchase right in the event your employment relationship with the Company is terminated for “Cause” (as defined in your Employment Agreement), but agrees not to exercise such right in all other circumstances. Further, any proposed sale
of shares issued to you upon 

  

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the exercise of the Option is subject to the Company’s right of first refusal. Upon exercise, the Plan Administrator may require you to sign a Stock
Purchase Agreement that sets out these restrictions in more detail. You may request a copy of this agreement prior to exercise of the Option. 
  
 Registration: Your particular attention is directed to Section 16.3 of the Plan, which describes certain important conditions relating to federal
and state securities laws that must be satisfied before the Option can be exercised and before the Company can issue any shares to you. By accepting the Option, you hereby acknowledge that you have read and understand Section 16.3 of the Plan.

  
 Binding Effect: This Agreement will inure to the
benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns. 
  
 Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation: By entering into this Agreement and accepting
the grant of the Option evidenced hereby, you acknowledge: (a) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) that the grant of the Option is a onetime benefit which does not create any
contractual or other right to receive future grants of options, or benefits in lieu of options; (c) that all determinations with respect to any such future grants, including, but not limited to, the times when options will be granted, the number of
shares subject to each option, the option price, and the time or times when each option will be exercisable, will be at the sole discretion of the Company; (d) that your participation in the Plan is voluntary; (e) that the value of the Option is an
extraordinary item of compensation which is outside the scope of your employment contract, if any; (f) that the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (g) that the vesting of the Option ceases upon termination of employment or service relationship with the Company for any reason except as may otherwise be
explicitly provided in the Plan or this Agreement or otherwise permitted by the Plan Administrator; (h) that the future value of the underlying Option Shares is unknown and cannot be predicted with certainty; and (i) that if the underlying Option
Shares do not increase in value, the Option will have no value. 
  

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 Acceptance and Acknowledgement. Please execute the following Acceptance and Acknowledgment and
return it to the undersigned. By signing the following, you understand that as of the Grant Date, this Agreement and the Plan set forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and
written agreements on the subject. 
  

	
	 Very truly yours,

	
	 HouseValues, Inc.

	
	 /s/ Mark Powell

	 By Mark Powell

	 Its Chairman of the Board

  

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 ACCEPTANCE AND ACKNOWLEDGMENT 
  
 I, a resident of the State of Washington, accept the Option described in this Agreement and in the Plan, and acknowledge
receipt of a copy of this Agreement and a copy of the Plan. I have read and understand the Plan. 
  

					
			
	 Dated: 6/21/04
	 	 	 	/s/ Ian Morris
	 	 	 	 	Ian Morris
			
	 ###-##-####
	 	 	 	 Address 13528 137th Place NE

	 Taxpayer I.D. Number
	 	 	 	 Kirkland, WA 98034

  

 -6-Separation Agreement and Release

 Exhibit 10.5 
  
 SEPARATION AGREEMENT AND RELEASE 
  
 THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is entered into by Robert Schulze (hereinafter
referred to as “Employee”) and HouseValues Inc., its parent, affiliates, subsidiaries, officers, directors, and managers (hereinafter referred to as “HouseValues Inc.” or “Employer”). 
  
 RECITALS 
  
 A. Employee has been employed by HouseValues Inc., and Employee’s position was eliminated, effective 12/31/2003
(the “Termination Date”). 
  
 B. HouseValues Inc. wishes
to offer Employee a separation package in exchange for the Employee’s agreement clarifying and resolving any disputes that may exist between the Employee and HouseValues Inc. arising out of the employment relationship and the ending of that
relationship, and any continuing obligations of the parties to one another following the end of the employment relationship. 
  
 C. In addition, as more fully set forth in Section 17 below, in consideration of Employer’s agreement to lend money to Employee pursuant to, and upon
the execution of, this Agreement, the Full Recourse Promissory Note (attached hereto as Exhibit A) and the Pledge and Security Agreement (attached hereto as Exhibit B), and for other good and valuable consideration, Employee has agreed to extend the
terms of certain non-solicitation, non-competition and other agreements with Employer from one year to four years as more fully set forth in the Amendment Agreement (attached hereto as Exhibit C). 
  
 D. Each of the undersigned parties to this Agreement has had ample
opportunity to review the facts and law relevant to this issue, has consulted fully and freely with competent counsel of its choice if desired, and has entered this Agreement knowingly and intelligently without duress or coercion from any source.
Employee has had a reasonable time in which to consider whether he wished to sign this Agreement. 
  
 AGREEMENTS 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises contained below, it is agreed as follows: 
  

	 	1.	EMPLOYMENT ENDING DATE AND RESPONSIBILITIES, FINAL PAYCHECK 

  
 Employee’s employment with HouseValues Inc. ended on 12/31/2003. Employee has no further employment duties to HouseValues Inc. 
  

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 Employee was paid his final paycheck on 1/21/2004. Employee also received a lump sum for any
accrued vacation hours through Termination Date, less applicable withholdings on 1/6/2004. 
  
 Employee acknowledges that HouseValues Inc. does not owe him any other compensation in the way of bonus compensation or otherwise, with the exception of
any vested distribution for the 401K plan (if applicable). 
  

	 	2.	PAYMENTS BY EMPLOYER 

  
 In exchange for the promises contained in paragraph seven below, HouseValues Inc. will provide Employee two month’s salary
($10,833.33), minus applicable withholdings. This will be paid to Employee after the Effective Date, as defined below. 
  
 Employee will continue to receive the medical and dental benefits that he has been receiving as an employee of HouseValues Inc. at HouseValues Inc.’s
expense through December 31, 2003. Thereafter, Employee will be eligible for continuation of his coverage under the terms and conditions of COBRA, at his own expense. 
  
 HouseValues Inc. agrees that it will not protest any unemployment benefits allowed to Employee, if Employee applies for such
benefits. 
  

	 	3.	VALID CONSIDERATION 

  
 Employee and HouseValues Inc. agree that the offer of severance pay by HouseValues Inc. to Employee described in the preceding paragraph is not required
by HouseValues Inc.’s policies or procedures or by any pre-existing contractual obligation of HouseValues Inc. or by any statute, regulation or ordinance, and is offered by HouseValues Inc. solely as consideration for this Agreement. In the
event Employee fails to abide by the terms of this Agreement, HouseValues Inc. may elect, at its option and without waiver of other rights or remedies it may have, not to pay or provide any unpaid severance payments, and to seek to recover
previously paid severance pay. 
  

	 	4.	STOCK OPTION 

  
 Employee will be entitled to exercise any portion of the stock option granted to his that is vested as of the Termination Date, subject to the terms of
the Company’s 1999 Stock Incentive Compensation Plan and letter agreement between the Company and Employee. Employee acknowledges and agrees that under the terms of the stock option granted to Employee, all of the vested portion of the stock
option granted to Employee will terminate if not exercised within 90 days of the Termination Date, and will be thereafter unexerciseable. It is Employee’s responsibility to be aware of the date that any vested, unexercised portion of the stock
option granted to him terminates 

  

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and becomes unexerciseable. Employee further acknowledges and agrees that under the terms of the stock option granted to Employee, no shares will vest after
the Termination Date and all unvested shares will terminate as of the Termination Date. 
  

	 	5.	REAFFIRMATION OF CONFIDENTIAL INFORMATION, INVENTIONS, NONSOLICITATION AND NONCOMPETITION AGREEMENT 

  
 Employee expressly reaffirms and incorporates herein as part of this
Agreement the Confidential Information, Inventions, Nonsolicitation And Noncompetition Agreement, which Employee signed as part of his employment with HouseValues Inc., a copy of which was given to Employee, and which shall remain in full effect, as
amended pursuant to Exhibit C to this Agreement. 
  

	 	6.	CONFIDENTIALITY OF SEPARATION AGREEMENT 

  
 Employee agrees that he will keep the terms of this Agreement (including, but not limited to, the severance payment) completely confidential, and that
Employee will not disclose any information concerning this Agreement or its terms to anyone other than his spouse or domestic partner, legal counsel, tax advisors, and/or financial advisors, who will be informed of and bound by this confidentiality
clause, and except as required by court order. In the event Employee is requested, by court order or any other legal process, to provide information covered by this confidentiality obligation, Employee agrees to immediately notify HouseValues Inc.
of any such request. 
  

	 	7.	GENERAL RELEASE OF CLAIMS 

  
 Employee expressly waives any claims against HouseValues Inc. (including, for purposes of this paragraph 7, all parents, affiliates, subsidiaries,
officers, directors, stockholders, managers, employees, agents, investors, and representatives) and releases HouseValues Inc. (including its parents, affiliates, subsidiaries, officers, directors, stockholders, managers, employees, agents,
investors, and representatives) from any claims, whether known or unknown, which existed or may have existed at any time up to the date of this Agreement, including claims related in any way to Employee’s employment with HouseValues Inc. or the
ending of that relationship. This release includes, but is not limited to, any claims for wages, bonuses, employment benefits, stock options, or damages of any kind whatsoever, arising out of any common law torts, arising out of any contracts,
express or implied, any covenant of good faith and fair dealing, express or implied, any theory of wrongful discharge, any theory of negligence, any theory of retaliation, any theory of discrimination or harassment in any form, any legal restriction
on HouseValues Inc.’s right to terminate employees, or any federal, state, or other governmental statute, executive order, or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964 as amended, the Civil Rights Act
of 1991, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Age Discrimination 

  

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in Employment Act, the Older Workers Benefit Protection Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, the Washington
Law Against Discrimination, or any other legal limitation on or regulation of the employment relationship. Employee agrees to indemnify and hold HouseValues Inc. harmless from and against any and all loss, costs, damages, or expenses, including,
without limitation, reasonable attorneys’ fees incurred by HouseValues Inc. or arising out of any breach of this Agreement by Employee or resulting from any representation made herein by Employee that was false when made. This waiver and
release shall not preclude either party from filing a lawsuit for the exclusive purpose of enforcing its rights under this Agreement. 
  
 Employee represents that Employee has not filed any complaints, charges or lawsuits against HouseValues Inc. with any governmental agency or any court,
and agrees that Employee will not initiate, assist or encourage any such actions, except as required by law. Employee further agrees that if a commission, agency, or court assumes jurisdiction of such claim, complaint or charge against HouseValues
Inc. on behalf of Employee, Employee will request the commission, agency or court to withdraw from the matter. 
  
 Employee represents and warrants that he is the sole owner of the actual or alleged claims, rights, causes of action, and other matters which are released
herein, that the same have not been assigned, transferred, or disposed of in fact, by operation of law, or in any manner, and that he has the full right and power to grant, execute and deliver the releases, undertakings, and agreements contained
herein. 
  

	 	8.	NO ADMISSION OF WRONGDOING 

  
 This Agreement shall not be construed as an admission by Employer of any wrongful act, unlawful discrimination, or breach of contract, and Employer
specifically disclaims any liability to or discrimination against Employee or any other person. 
  

	 	9.	NONDISPARAGEMENT 

  
 Employee agrees to refrain from making any derogatory or disparaging comments to the press or any individual or entity regarding HouseValues Inc., its
business or related activities, or the relationship between the parties. 
  

	 	10.	RETURN OF PROPERTY 

  
 Employee confirms that Employee has or will immediately, upon the Termination Date, return to Employer all files, memoranda, records, credit cards,
pagers, computers, computer files, passwords and pass keys, card keys, or related physical or electronic access devices, and any and all other property received from 

  

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Employer or any of its current or former employees or generated by Employee in the course of employment. 
  

	 	11.	BREACH OR DEFAULT 

  
 In the event of any breach or default under this Agreement by Employee, HouseValues Inc. may suffer irreparable damages and have no adequate remedy at
law. In the event of any threatened or actual breach or default, HouseValues Inc. shall be entitled to injunctive relief, specific performance and other equitable relief. The rights and remedies of HouseValues Inc. under this paragraph are in
addition to, and not in lieu of, any other right or remedy afforded to HouseValues Inc. under any other provision of this Agreement, by law, or otherwise. Any party’s failure to enforce this Agreement in the event of one or more events that
violate this Agreement shall not constitute a waiver of any right to enforce this Agreement against subsequent violations. 
  

	 	12.	SEVERABILITY 

  
 The provisions of this Agreement are severable, and if any part of it is found to be unlawful or unenforceable, the other provisions of this Agreement
shall remain fully valid and enforceable to the maximum extent consistent with applicable law. 
  

	 	13.	ENTIRE AGREEMENT 

  
 This Agreement, and the Confidential Information, Inventions, Nonsolicitation And Noncompetition Agreement employee signed that is incorporated herein by
reference, set forth the entire understanding between Employee and HouseValues Inc. and supersedes any prior agreements or understandings, express or implied, pertaining to the terms of Employee’s employment with HouseValues Inc. and the
employment relationship. Employee acknowledges that in executing this Agreement, Employee does not rely upon any representation or statement by any representative of HouseValues Inc. concerning the subject matter of this Agreement, except as
expressly set forth in the text of the Agreement. No modification or waiver of this Agreement will be effective unless evidenced in a writing signed by both parties. 
  

	 	14.	GOVERNING LAW 

  
 This Agreement will be governed by and construed exclusively in accordance with the laws of the State of Washington without reference to its choice of law
principles. Any disputes arising under this Agreement shall be brought in a court of competent jurisdiction in the State of Washington. 
  

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	 	15.	KNOWING AND VOLUNTARY AGREEMENT 

  
 Employee agrees that Employee has carefully read and fully understands all aspects of this Agreement including the fact that this Agreement releases
any claims that Employee might have against Employer. Employee agrees that Employee has not relied upon any representations or statements not set forth herein or made by Employer’s agents or representatives. Finally, Employee agrees that
Employee has been advised to consult with an attorney prior to executing the Agreement, and that Employee has either done so or knowingly waived the right to do so, and now enters into this Agreement without duress or coercion from any source.

  

	 	16.	PERIODS FOR SIGNING AND REVOCATION 

  
 Employee acknowledges that he has been provided the opportunity to consider for twenty-one (21) days whether to enter this Agreement, and has
voluntarily chosen to enter the Agreement on this date. Employee may revoke this Agreement for a period of seven (7) days following the execution of this Agreement; this Agreement shall become effective following expiration of this seven (7) day
period (the “Effective Date”). 
  

	 	17.	LOAN AND EXTENSION OF NON-COMPETITION AND OTHER AGREEMENTS 

  
 In consideration of Employer’s agreement to lend money to Employee pursuant to, and upon the execution of, this Agreement, the Full Recourse
Promissory Note (attached hereto as Exhibit A) and the Pledge and Security Agreement (attached hereto as Exhibit B), and for other good and valuable consideration, Employee has agreed to extend the terms of certain non-solicitation, non-competiton
and other agreements with Employer from one year to four years as more fully set forth in the Amendment Agreement (attached hereto as Exhibit C). 
  

	 	18.	TERMINATION OF PRIOR SEPARATION AGREEMENT AND RELEASE. 

  
 Each party agrees that any Separation Agreement and Release signed prior to the date hereof shall be deemed superceded in its entirety by this Agreement
and such earlier agreement shall be of no force and effect. 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below. 

 

									
	HouseValues Inc.	 	 	 	 
					
	By:	 	/s/ John Zdanowski	 	 	 	 	 	/s/ Robert Schulze
	 	 	John Zdanowski	 	 	 	 	 	Robert Schulze
					
	 	 	Chief Financial Officer	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 Dated: March 23, 2004

	Dated: March 23, 2004	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

  

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 EXHIBIT A 
  

FULL-RECOURSE PROMISSORY NOTE 
  

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 EXHIBIT B 
  

PLEDGE AND SECURITY AGREEMENT 
  

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 ATTACHMENT A 
  
 STOCK POWER AND ASSIGNMENT 
 SEPARATE FROM CERTIFICATE 
  
 FOR VALUE RECEIVED, and pursuant to that certain Pledge and Security Agreement dated as of March 23, 2004, the undersigned hereby sells, assigns and transfers unto
                                        
                 shares of the Common Stock of HouseValues, Inc., a Washington corporation, standing in the undersigned’s name on the books of said
corporation, and does hereby irrevocably constitute the Secretary of said corporation as attorney-in-fact, with full power of substitution, to transfer said stock on the books of said corporation. 
  

					
	 	 	 Dated: 3/23/04

			
	 	 	 Signature:
	 	 /s/ Robert Schulze

		
	 	 	 Robert Schulze

					
			
	 	 	 Spouse’s signature, if any:
	 	 

					
			
	 	 	 Please print name:
	 	 

  
 Please see Section 1 of the Pledge and
Security Agreement for information on completing this form 
  

 -10- 

 EXHIBIT C 
  

CONFIDENTIAL INFORMATION, INVENTIONS, 
 NONSOLICITATION AND NONCOMPETITION AMENDMENT 
 AGREEMENT 
  
 THIS AMENDMENT AGREEMENT is entered into by Robert Schulze (hereinafter referred to as “Employee”) and HouseValues
Inc., its parent, affiliates, subsidiaries, officers, directors, and managers (hereinafter referred to as “HouseValues Inc.” or “Employer”), and amends the Confidential Information, Inventions, Nonsolicitation And Noncompetition
Agreement (the “Confidential Information Agreement”), which Employee signed as part of his employment with HouseValues Inc., a copy of which was given to Employee, and which shall remain in full effect, except as expressly amended below.

  
 1. Certifications. Employee hereby certifies
that (i) I do not have in my possession, and I have not failed to return, any Materials or other property belonging to HouseValues Inc., (ii) I have complied with all the terms of the Confidential Information Agreement signed by me, including the
reporting of any Inventions conceived or made by me (solely or jointly with others) covered by that agreement, and (iii) I will not use, disclose, publish or distribute any Confidential Information, Inventions, Materials or Proprietary Rights.

  
 2. Amendment From One Year to Four Years of Certain
Terms. In consideration of Employer’s agreement to lend money to Employee pursuant to, and upon the execution of, a Separation Agreement and Release, Full Recourse Promissory Note and Pledge and Security Agreement, and for other good
and valuable consideration, Employee agrees (as does Employer) that the provisions set forth in Section 4 of the Confidential Information Agreement shall hereby be amended (a) to run for four years after the end of the Term (rather than the current
one year) and each place the words “one year” appear in Section 4 of the Confidential Information Agreement shall be deemed replaced by the words “four years,” and (b) to replace the current definition of “Competing
Business” with the following definition: 
  
 “Competing Business” means any business whose efforts are in competition with the efforts of the Company. A Competing Business includes, without limitation, (x) any business engaged in advertising or lead generation for a
services industry, including real estate or related services (like title, escrow, or mortgage services), 

  

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insurance services, financial services, and/or legal services; and (y) any business whose efforts involve any research and development, products or services
in competition with products or services which are, during and at the end of the Term, either (a) produced, marketed or otherwise commercially exploited by the Company or (b) in actual or demonstrably anticipated research or development by the
Company. 
  
 In addition, if Employer extends its business to
engage in advertising or lead generation for a services industry involving real estate or related services (like title, escrow, or mortgage services), insurance services, financial services and/or legal services during the four year noncompetition
term referenced above. Employer and Employee agree to work together to reach mutually agreeable written terms that will, among other things, permit Employee to provide 25% of the television media buying services required by Employer in such
industries. 
  
 3. Written Approval of Employer. In
order to allow Employer to assess Employee’s compliance with the provisions of the Confidential Information Agreement, as amended hereby, Employee agrees (i) to provide Employer written notice prior to engaging in, being employed by, performing
services for, participating in the ownership, management, control or operation of, or otherwise being connected with, either directly or indirectly, any Competing Business, and (ii) to not engage in any activity contemplated in (i) above, unless and
until, Employer’s CEO has confirmed in writing that Employer believes such activities will not violate the Confidential Information Agreement, as amended hereby. 
  

			
	HOUSEVALUES, INC.
		
	By:	 	 /s/ John Zdanowski

	 Name:
	 	 John Zdanowski

	 Title:
	 	 Chief Financial Officer

	
	 /s/ Robert Schulze

	 Signature

	
	 Robert Schulze

  

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