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Mutual Compromise Agreement and Mutual Release
Mutual Compromise Agreement and Mutual Release
Mutual Compromise Agreement and Mutual Release THIS MUTUAL COMPROMISE AGREEMENT AND MUTUAL RELEASE (Agreement) is entered into as of _____________________, by and between ____________________________ (Debtor) and ________________________ (Creditor) (collectively Parties or Party). For the purposes of the Agreement, Party includes subsidiaries and parents of a Party and includes individuals serving as directors, officers, employees, agents, consultants, and advisors to or of a Party. A. BACKGROUND 1. Debtor and Creditor entered into an agreement or series of agreements (the Contract) whereby Debtor provided a series of services to Creditor for an agreed-upon fee. 2. Since the time of entering into the Contract, the Parties have determined that a settlement of the mutual obligations between them is appropriate and would best serve the interests of all of the Parties. This Agreement is intended to express the Parties' intent to equitably settle the obligations arising from or related to the Contract. B. AGREEMENT NOW, THEREFORE, IN CONSIDERATION OF THE FOLLOWING, THE FOREGOING, THE MUTUAL COVENANTS, PROMISES, AGREEMENTS, REPRESENTATIONS, AND RELEASES CONTAINED HEREIN, AND IN EXCHANGE FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT, SUFFICIENCY, AND ADEQUACY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HEREBY AGREE AS FOLLOWS: 1. Settlement. a. Debtor shall pay the following amounts to Creditor: ____________________, such payment to be made no later than ___________________ date. b. Debtor shall owe no further liability or obligation to Creditor in connection with any services. 2. Confidentiality. Debtor and Creditor shall keep the terms of the Agreement confidential and shall not disclose such terms to any other Party except as is necessary for the proper conduct of the disclosing Party's business. 3. No Other Payments. No additional funds shall be required to be paid or transferred by Creditor to Debtor or by Debtor to Creditor. 4. Nature and Effect of Agreement and Conditions Thereon. This Agreement consists of a compromise and settlement by the Parties of claims arising from the Contract described in Section A, Paragraph 2, above, and a release given by the Parties relinquishing their claims against the other. By executing this Agreement, the Parties intend to and do hereby extinguish the obligations heretofore existing between them and arising from that dispute. The nature and effect of this agreement, and the enforcement of any of the provisions found herein, is strictly conditioned upon the actions described in Paragraph 1. The shares must bear the medallion guaranteed signature of an authorized officer of the entity whose name appears on the face of the certificate and the shares must be accompanied by a resolution of the board authorizing transfer of the shares.
5. Admissions. This Agreement is not, and shall not be treated as, an admission of liability by either Party for any purpose, and shall not be admissible as evidence before any tribunal or court. 6. Compromise Agreement. The Parties hereby compromise and settle any and all past, present, or future claims, demands, obligations, or causes of action for compensatory or punitive damages, costs, losses, expenses, and compensation, whether based on tort, contract, or other theories of recovery, which the Parties have or which may later accrue to or be acquired by one Party against the other, the other's predecessors and successors in interest, heirs, and assigns, past, present, and future officers, directors, shareholders, agents, employees, parent and subsidiary organizations, affiliates, and partners, arising from the subject matter of the claim described in Section A, Paragraph 2, above, and agree that this compromise and settlement shall constitute a bar to all such claims. The Parties agree that this compromise and settlement shall constitute a bar to all past, present, and future claims arising out of the subject matter of the action described in Section A, Paragraph 2, above. 7. Release and Discharge. The Parties hereby release and discharge the other, the other's predecessors and successors in interest, heirs, and assigns, past, present, and future officers, directors, shareholders, agents, employees, parent and subsidiary organizations, affiliates, and partners from, and relinquish, any and all past, present, or future claims, demands, obligations, or causes of action for compensatory or punitive damages, costs, losses, expenses, and compensation, whether based on tort, contract, or other theories of recovery, which the Parties have or which may later accrue to or be acquired by one Party against the other arising from the subject of the claim described in Section A, Paragraph 2, above. 8. Unknown Claims. The Parties acknowledge and agree that, upon execution of the release, this Agreement applies to all claims for damages or losses that either Party may have against the other, whether those damages or losses are known or unknown, foreseen or unforeseen, and in the event that this Agreement is deemed executed in California, the Parties thereby waive application of California Civil Code Section 1542. The Parties certify that each has read the following provisions of California Civil Code Section 1542: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. The Parties understand and acknowledge that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if one Party should eventually suffer additional damages arising out of the facts referred to in Section A, Paragraph 2, above, that Party will not be able to make any claim for these damages. Furthermore, the Parties acknowledge that they intend these consequences even as to claims for damages that may exist as of the date of this release but that the damaged or harmed Party does not know exist and that, if known, would materially affect that Party's decision to execute this release, regardless of whether the damaged Party's lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause. 9. Conditions of Execution. Each Party acknowledges and warrants that its execution of this compromise agreement and release is free and voluntary.
10. Representation of Understanding. All Parties and signatories to this Agreement acknowledge and agree that the terms of this Agreement are contractual and not mere recital, and all Parties and signatories represent and warrant that they have carefully read this Agreement, have fully reviewed its provisions with their attorneys, know and understand its contents, and sign the same as their own free acts and deeds. It is understood and agreed by all Parties and signatories to this Agreement that execution of this Agreement may affect rights and liabilities of substantial extent and degree and, with the full understanding of that fact, they represent that the covenants and releases provided for in this Agreement are in their respective best interests. 11. Construction. The provisions of this Agreement shall not be construed against either Party. 12. Entire Agreement. This Agreement constitutes the entire agreement between the Parties and signatories and all prior and contemporaneous conversation, negotiations, possible and alleged agreements, and representations, covenants, and warranties, express or implied, or written, with respect to the subject matter hereof, are waived, merged herein, and superseded hereby. There are no other agreements, representations, covenants, or warranties not set forth herein. The terms of this Agreement may not be contradicted by evidence of any prior or contemporaneous agreement. The Parties further intend and agree that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Agreement. No part of this Agreement may be amended or modified in any way unless such amendment or modification is expressed in writing signed by all Parties to this Agreement. 13. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. When all of the Parties and signatories have executed any copy hereof, such execution shall constitute the execution of this Agreement, whereupon it shall become effective. 14. Governing Law. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF _________________________ AND THE UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. This Agreement shall not be strictly construed against any Party to this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration administered under the rules of the American Arbitration Association in accordance with its applicable rules. Such arbitration shall take place within San Mateo County, California, and shall be binding upon all Parties, and any judgment upon or any an award rendered by the arbitrator may be entered in any court having jurisdiction thereof. 15. Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective successors and assigns. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person, partnership, or corporation, other than the Parties, their successors and assigns, any benefits, rights, or remedies under or by reason of this Agreement, except to the extent of any contrary provision herein contained. 16. Authority. The Parties hereto represent and warrant that they possess the full and complete authority to covenant and agree as provided in this Agreement and, if applicable, to release other Parties and signatories as provided herein. If any Party hereto is a corporation or
limited liability company, the signatory for any such corporation or limited liability company represents and warrants that such signatory possesses the authority and has been authorized by the corporation or limited liability company to enter into this Agreement, whether by resolution of the board of, upon the instruction by an authorized officer of, as authorized in the bylaws of the corporation on whose behalf the signatory is executing this Agreement, or otherwise. 17. Severability. If any provision of this Agreement is held by a court to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall be unaffected by such holding. 18. Exchanges by Fax. The exchange of a fully executed Agreement in counterparts or otherwise by fax shall be sufficient to bind the Parties to the terms and conditions of this Agreement. IN WITNESS WHEREOF, the Parties and signatories execute this Agreement on the dates indicated. ______________________________, Debtor Date ____________________ Signature _______________________________ _____________________________, Creditor Date __________________ Signature _______________________________