LA Galaxy Insider is reporting that Panamanian Goalkeeper Jaime Penedo and the Galaxy are terminating his contract via mutual agreement.

Penedo has been a stalwart in goal for LA since his signing two years ago. He replaced Carlos Cudicini, who had been a high-profile signing, and solidified the position, helping the Galaxy win the 2014 MLS Cup. Penedo has been with the Panamanian National team participating in the Gold Cup for the past month. His international squad defeated the US Men's National Team to claim third place in the tournament. Unfortunately for Penedo, he missed the final match of the tournament after being suspended for pushing the referee following Panama's controversial loss to Mexico in the semi-final match.

Rumors from the Gold Cup had indicated that Penedo was looking to move on, but there has been no indication as to his destination. The Galaxy are rumored to be shopping for a replacement, possibly Orlando goalkeeper Donovan Ricketts, who helped LA to two Supporters' Shields and one MLS cup between 2009 and 2011.

In Penedo's absence for international duty, backup goalkeeper Brian Rowe has played well for the Galaxy, so the team may not feel too much pressure to make an immediate signing. We'll let you know as more information becomes available.

UPDATE 7/29 8:22pm

Penedo has posted an explanation for his request to be released. Here is a brief excerpt:

What made me take this step is mainly that this contract does not guarantee and doesn't meet all the conditions that can give me stability, for my family and as a soccer player. The contract does not have a disposition for things to change, so it's better to leave now, with my head up.