Exhibit 10.1

 

MUTUAL RELEASE OF ALL CLAIMS

 

This Mutual Release of All Claims (“Release”) is made and entered into by and
between Comarco, Inc. (“Comarco”) on the one hand and Hartford Casualty
Insurance Company and Hartford Insurance Company of the Midwest on the other
hand (collectively “Hartford”).

 

Comarco and Hartford are referred to collectively herein as the “Parties.”

 

1.

RECITALS

 

1.1

On or about April 26, 2011, Chicony Power Technology Co., Ltd. (“Chicony”) filed
a complaint against Comarco, alleging breach of contract and common counts
related to money allegedly due under a May 2009 contract for computer components
(“the Action”).

 

 

1.2

The Action was filed in Orange County Superior Court, Case No. 30-2011-00470249.

 

 

1.3

In the Action, Chicony alleged that Comarco was liable for events between May
2009 and March 2010.

 

 

1.4

On or about May 13, 2011, Comarco filed a cross-complaint against Chicony.

 

 

1.5

On or about June 6, 2012, Chicony filed a first amended complaint against
Comarco.

 

 

1.6

On or about April 16, 2013 Comarco filed its first amended cross-complaint
against Chicony.

 

 

1.7

Comarco was a named insured under a primary commercial general liability policy
(Policy No. 72 UUN HY 0266) issued by Hartford Insurance Company of the Midwest
with effective dates of February 1, 2008 to February 1, 2009 and February 1,
2009 to February 1, 2010 (“Primary Policy”).

 

 

1.8

Comarco was also a named insured under a commercial umbrella policy (Policy No.
72 RHU J09915) issued by Hartford Casualty Insurance Company with effective
dates of February 1, 2008 to February 1, 2009 and February 1, 2009 to February
1, 2010 (“Umbrella Policy”).

 

 

1.9

On or about May 7, 2012, Comarco first tendered its defense under the first
amended complaint to the Action to Hartford (“the Claim”) under both the Primary
Policy and the Umbrella Policy (“the Policies”).

 

 

1.10

At and before the time of tender, William Bollard of Julander Brown & Bollard,
LLP (“Bollard”) had been retained by Comarco and represented Comarco’s interests
as to all claims brought by Chicony against Comarco and as to all cross-claims
Comarco brought against Chicony in the Action.

 

 
 

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RELEASE AGREEMENT

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1.11

On or about October 26, 2012, Hartford agreed to defend the claims brought
against Comarco by Chicony in its first amended complaint to the Action, subject
to a reservation of rights, and retained Daniel Friedenthal of Friedenthal,
Heffernan & Klein, LLP (“Friedenthal”) to defend Comarco against these claims by
Chicony.

 

 

1.12

Hartford did not agree to prosecute or pay for any claims Comarco brought
against Chicony, including Comarco’s cross-complaint to the Action.

 

 

1.13

Hartford has defended Comarco for the claims brought against it by Chicony in
the Action; however, Comarco now wishes to pursue the prosecution of its
cross-claims and its defense solely through Bollard at its own expense including
but not limited to defense fees and costs (except as noted herein in Paragraph
2.4) and indemnity related to the Action.

 

 

1.14

As such, Friedenthal will withdraw from its representation of Comarco against
the claims by Chicony effective August 31, 2013.

 

 

1.15

The Parties now enter into this Release with the intent to effect a final
resolution and settlement of any and all disputes, claims, obligations, and
duties between the Parties arising from or related to the Action, the Claim,
and/or the Policies, including those that have arose, may have arisen, or
hereinafter could arise by reason of any manner, cause of action, or thing
whatsoever which occurred prior to the date of this Release. This includes but
is not limited to contractual or extra-contractual claims that the Parties have,
ever had, or may hereafter acquire against each other arising from or related to
the Action, the Claim, and/or the Policies.

 

 

1.16

As such, the Parties wish to resolve certain disputes and differences existing
among them by settling and hereinafter having their peace for all issues
whatsoever that arise in any fashion from the Action, the Claim, and/or the
Policies.

 

 

1.17

This Release is entered into solely for the purposes of compromise and the
Parties, and each of them, expressly acknowledge and agree that neither Comarco
nor Hartford have admitted, and by execution of this Release, do not admit, in
fact expressly deny, any and all liability, obligation, or duty, to one another,
except as otherwise provided in this Release.

 

 

1.18

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
in this Release which consists of good and valuable consideration, receipt of
which is hereby acknowledged, the Parties agree as follows:

 

 
 

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RELEASE AGREEMENT

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2.

RELEASE

 

2.1

In consideration for the payment of #### by Hartford to Comarco, Comarco, its
agents, parent companies, affiliated companies, direct or indirect subsidiaries,
predecessor or successor companies, related entities, officers, directors,
members, managers, representatives, employees, partnerships, and any other
business relationships, generally and irrevocably release, acquit, dismiss, and
forever discharge Hartford, its agents, parent companies, affiliated companies,
direct or indirect subsidiaries, predecessor or successor companies, related
entities, officers, directors, members, managers, representatives, employees,
partnerships, attorneys, and any other business relationships, of and from any
and all claims, actions, suits, proceedings, demands, obligations, losses,
causes of action, damages, penalties, costs, attorneys’ fees and costs, and
liabilities of any nature whatsoever, whether based on a contract, tort,
statute, or other legal or equitable theory of recovery, whether now known or
unknown, past, present, or future, which Comarco its agents, parent companies,
affiliated companies, direct or indirect subsidiaries, predecessor or successor
companies, related entities, officers, directors, members, managers,
representatives, employees, partnerships, and any other business relationships,
either had, now has, claims to have had, or otherwise may have in the future
against Hartford its agents, parent companies, affiliated companies, direct or
indirect subsidiaries, predecessor or successor companies, related entities,
officers, directors, members, managers, representatives, employees,
partnerships, attorneys, and any other business relationships, including, but
not limited to, claims for breach of the insurance contract, breach of the
covenant of good faith and fair dealing, indemnity, contribution, claims for
breach of fiduciary duties, claims for breach of statutory duties, violation of
the Unfair Claims Settlement Practice Regulations, claims for fraud, unfair
claims practices, unfair trade practices, concealment of material facts,
misrepresentation, failure or delay in affirmation or denial of coverage,
failure or delay in good faith attempts to effectuate a prompt, fair, and
equitable settlement of the underlying claim, failure to evaluate, failure to
defend, failure to indemnify, or failure to investigate, arising from or
relating to any of the following:

 

 

a.

Any and all claims, including those against Friedenthal, arising from or
relating to the Action;

 

 

b.

The Claim, including but not limited to the processing and handling by Hartford,
its agents, parent companies, affiliated companies, direct or indirect
subsidiaries, predecessor or successor companies, related entities, officers,
directors, members, managers, representatives, employees, attorneys, and all
others of such claims arising from or relating to the Action;

 

 

c.

The duties and obligations of Hartford, including but not limited to defense,
including trial and appeal, and indemnity under the Policies, i.e., Policy No.
72 UUN HY 0266 and 72 RHU J09915 relating to the Action.

 

    #### Portions of this page have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.

 

 
 

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RELEASE AGREEMENT

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2.2

As further consideration, Comarco agrees to be solely responsible for all
indemnity payments related to the Action including but not limited to payments
related to the settlement,and/or resolution of the Action or any judgment
against it in the Action and shall not make any claims to Hartford for any
further payment of any kind relating to the Action.

 

 

2.3

As further consideration, Comarco agrees to be solely responsible for all
amounts it may spend to pursue and/or defend all claims in the Action of any
kind whatsoever, regardless of whether such claims have yet been pled, are known
or unknown, or have otherwise arisen, except as set forth in Paragraph 2.4.

 

 

2.4

As further consideration, Hartford agrees to pay fifty percent (50%) of expert
fees relating to Comarco’s defense of the Action and one-hundred (100%) of the
defense costs incurred by Friedenthal related to the Action for the period up to
and including August 31, 2013. For any expert fees and defense costs related to
the Action that Comarco, its agents, parent companies, affiliated companies,
direct or indirect subsidiaries, predecessor or successor companies, related
entities, officers, directors, members, managers, representatives, employees,
partnerships, and any other business relationships, incur after August 31, 2013,
Comarco, its agents, parent companies, affiliated companies, direct or indirect
subsidiaries, predecessor or successor companies, related entities, officers,
directors, members, managers, representatives, employees, partnerships, and any
other business relationships, generally and irrevocably release, acquit,
dismiss, and forever discharge Hartford, its agents, parent companies,
affiliated companies, direct or indirect subsidiaries, predecessor or successor
companies, related entities, officers, directors, members, managers,
representatives, employees, partnerships, and any other business relationships,
of and from any and all claims, actions, suits, proceedings, demands,
obligations, losses, causes of action, damages, penalties, costs, attorneys’
fees and costs, and liabilities of any nature whatsoever relating to such expert
fees and costs.

 

 

2.5

As still further consideration, Hartford waives any and all claims for
reimbursement or repayment against Comarco for its defense in the Action under
the Policies.

 

 

2.6

For and in consideration of the above, Hartford releases and forever discharges
Comarco, its agents, parent companies, affiliated companies, direct or indirect
subsidiaries, predecessor or successor companies, related entities, officers,
directors, members, managers, representatives, employees, partnerships,
attorneys, and any other business relationships, of and from any and all claims,
actions, suits, proceedings, demands, obligations, losses, causes of action,
damages, penalties, costs, expenses, attorneys fees and costs, and liabilities
of any nature whatsoever, whether based on a contract, tort, statute, or other
legal or equitable theory of recovery, whether now known or unknown, past,
present, or future, which Hartford either had, now has, claims to have had, or
otherwise may have in the future against Comarco, its agents, parent companies,
affiliated companies, direct or indirect subsidiaries, predecessor or successor
companies, related entities, officers, directors, members, managers,
representatives, employees, partnerships, attorneys, and any other business
relationships, including, but not limited to, claims for breach of the insurance
contract, claims for fraud, concealment of material facts, or misrepresentation,
arising from or relating to any of the following:

 

 

a.

Any and all claims, including those against Bollard, arising from or relating to
the Action;

 

 

b.

The duties and obligations of Comarco under the Policies, i.e., Policy No. 72
UUN HY 0266 and 72 RHU J09915, except payment of premium if owed.

 

 
 

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RELEASE AGREEMENT

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2.7

The provisions of Section 1542 of the California Civil Code are expressly
relinquished and waived by the Parties, their agents, parent companies,
affiliated companies, direct or indirect subsidiaries, predecessor or successor
companies, related entities, officers, directors, members, managers,
representatives, employees, and each of them. Civil Code Section 1542 provides:

 

   

“A general release does not extend to claims which a 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.”

 

 

2.8

The Parties agree to bear their own attorneys’ fees and costs relating to this
Release, including, but not limited to, its drafting and execution.

 

 

2.9

However, Comarco also agrees to indemnify and hold Hartford harmless from and
against any claims Chicony may bring against Hartford arising from or relating
to the Action, including any and all attorneys’ fees and costs Hartford may
incur in defense of said potential claims.

 

3.

REPRESENTATIONS AND WARRANTIES

 

3.1

Each of the Parties to this Release represents and warrants that it has not
relied on any statement, representation, or promise of any other party, not
contained herein, in executing this Release or entering into this Release.

 

 

3.2

Each person or entity executing this Release on behalf of any other person or
entity represents and warrants to all other Parties that he or she has the
authority to execute this Release on behalf of, and fully bind hereunder, such
purported principal.

 

 
 

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RELEASE AGREEMENT

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3.3

All Parties are advised and acknowledge that they have the right, prior to
executing this document, to consult with attorneys of their choice as to this
Release, including the release of claims released herein, and as to the subject
matter and other terms of this Release, including independent attorneys other
than the attorneys for the Parties herein. The Parties hereto agree that they
have each read and understand this Release, that they have sufficient
opportunity to consult with attorneys of their choice, including independent
attorneys, prior to executing this Release and that they enter into this Release
voluntarily with full knowledge of its significance as a release of the claims
and rights described herein.

 

 

3.4

The Parties agree, represent, and warrant that they have not assigned or in any
way conveyed, transferred, or encumbered all or any portion of the claims or
rights covered by this Release.

 

 

3.5

This Release shall not be construed as an admission by any party as to the truth
or merit of any contention made regarding liability and damages as to the
matters addressed in this Release.

 

 

3.6

This Release does not and is not intended to convey any rights to third parties
and does not and is not intended to release any person or entity including but
not limited to any employee, representative, agent, or any other person or
entity claiming through Comarco.

 

4.

CONFIDENTIALITY

 

4.1

The Parties, their agents, parent companies, affiliated companies, direct or
indirect subsidiaries, predecessor or successor companies, related entities,
officers, directors, members, managers, representatives, employees, further
agree that the terms of this Release are and shall remain confidential.
Confidentiality is a material part of this Release, and is intended to apply to
and be binding upon the Parties, and each of them, personally and upon their
agents and representatives.

 

 

4.2

The Parties, their agents, parent companies, affiliated companies, direct or
indirect subsidiaries, predecessor or successor companies, related entities,
officers, directors, members, managers, representatives, employees, shall not
publicize or disclose in any manner this Release, or its contents, terms, or any
part thereof either orally or in writing, directly or indirectly, to any person
or entity whomsoever. As illustration but without limitation the information
will not be published in any newspaper, periodical, journal, magazine,
publication, radio or television station or in any electronic medium (including
the Internet.)

 

 

4.3

The Parties, their agents, parent companies, affiliated companies, direct or
indirect subsidiaries, predecessor or successor companies, related entities,
officers, directors, members, managers, representatives, employees, may disclose
this Release where it is necessary to do so for purposes of accounting, tax, or
insurance purposes, where disclosure is required by operation of law, or
required by subpoena or order of a court of competent jurisdiction. If a
subpoena or order to disclose this Release or any part thereof is received, the
recipient shall give notice thereof to the other party herein within five (5)
business days.

 

 
 

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RELEASE AGREEMENT

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5.

ADDITIONAL PROVISIONS

 

5.1

This Release shall be governed by California law.

 

 

5.2

The Parties, and each of them, hereby acknowledge this Release has been jointly
negotiated and drafted. The language of this Release shall be construed as a
whole according to its fair meaning, and not strictly “for” or “against” any
particular party based upon that party’s status as drafter of any particular
provision, term, or concept.

 

 

5.3

This Release and all of its terms shall inure to the benefit of, and shall bind
upon, the successors, assigns, representatives, beneficiaries, and attorneys of
the Parties, and each of them.

 

 

5.4

This Release constitutes the entire agreement among the Parties arising from or
related to the matters described herein, and all prior or contemporaneous
agreements, understandings, representations, and statements, oral or written,
are merged into this Release.

 

 

5.5

This Release shall supersede any and all previously executed release agreements,
if any such agreements exist, between the Parties.

 

 

5.6

This Release may not be amended, modified, discharged, waived, or otherwise
changed unless it is in writing and signed by the party against whom the
enforcement of said amendment, modification, discharge waiver, or change is
sought.

 

 

5.7

Any failure to enforce any rights arising by reason of breach of any provision
of this Release shall not constitute a waiver of such breach.

 

 

5.8

If any provision of this Release is found to be invalid or unenforceable, the
remaining provisions shall nevertheless be enforced to the full extent permitted
by law.

 

 

5.9

The Parties agree to execute such other documents as are reasonably necessary to
effectuate the terms of this Release.

 

 

5.10

This Release may be executed in multiple identical counterparts, each of which
shall be deemed an original, and counterpart signature pages may be assembled to
form a single original document. Furthermore, this Release may be executed and
delivered by the exchange of electronic or facsimile copies or counterparts of
the signature page, which electronic or facsimile copies or counterparts shall
be binding upon the Parties.

 

 
 

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RELEASE AGREEMENT

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(SIGNATURES ON NEXT PAGE)

 

 
 

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RELEASE AGREEMENT

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IN WITNESS WHEREOF, the undersigned have caused this Release to be signed as of
the date set forth by their signature.

 

Dated: August 26, 2013

COMARCO, INC.

 

/s/ THOMAS W. LANNI, President & CEO

   

Dated: August 26, 2013

HARTFORD CASUALTY INSURANCE COMPANY

 

/s/ DOUGLAS SHAPIRO, Assistant Vice President

   

Dated: August 26, 2013

HARTFORD INSURANCE COMPANY OF THE MIDWEST

 

/s/ DOUGLAS SHAPIRO, Assistant Vice President