1008-00007 · Lumos Analytics Inc · Settlement

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement and Mutual Release (this "Agreement") is entered into as of December 8, 2023 (the "Effective Date"), by and between:

Lumos Analytics Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 580 Howard Street, Suite 400, San Francisco, California 94105 ("Lumos");

and

Pinnacle Financial Holdings LLC, a limited liability company organized and existing under the laws of the State of Delaware, with its principal offices at 200 West Adams Street, Suite 3100, Chicago, Illinois 60606 ("Pinnacle" and, together with Lumos, the "Parties" and each individually, a "Party").

RECITALS

WHEREAS:

A. The MSA. The Parties entered into that certain Master Services Agreement dated January 15, 2021 (Lumos internal agreement number MSA-PFH-2021-0015) (the "MSA"), pursuant to which Lumos agreed to provide, and Pinnacle agreed to procure, enterprise software-as-a-service ("SaaS") financial analytics, risk scoring, and regulatory compliance dashboard services (collectively, the "Services") to Pinnacle and its authorized users. The MSA provides for a three-year initial term commencing on January 15, 2021 and expiring on January 14, 2024, at an annual subscription fee of One Million Four Hundred Forty Thousand Dollars ($1,440,000), payable in equal monthly installments of One Hundred Twenty Thousand Dollars ($120,000) per month. The MSA includes, among other exhibits, Exhibit C thereto (the "Service Level Agreement" or "SLA"), which sets forth certain uptime availability commitments, incident response and resolution time requirements, and a service level credit structure applicable in the event that Lumos fails to meet the specified service levels during any given measurement period;

B. The Dispute. During the period between October 2022 and March 2023, Pinnacle experienced certain service disruptions and platform availability failures in connection with the Services provided by Lumos under the MSA. These service disruptions were tracked internally under the following incident identification numbers: INC-4471 (occurring on October 12–13, 2022), INC-4602 (occurring on November 28, 2022), INC-4815 (occurring on January 9–10, 2023), and INC-5033 (occurring on March 3–5, 2023) (collectively, the "Incidents"). On May 1, 2023, Pinnacle, acting through its outside counsel Hargrove, Tillman & Burch LLP, delivered a formal written demand letter (the "Demand") to Lumos, asserting claims for breach of contract under the MSA and demanding the payment of Two Million Eight Hundred Seventy Thousand Dollars ($2,870,000) in SLA credits and additional damages arising from and related to the Incidents. Lumos, acting through its outside counsel Calderwood & Harkness LLP, timely responded to the Demand and disputed the validity, scope, and amount of Pinnacle's claims in their entirety, including Pinnacle's characterization of the nature and duration of the Incidents and the damages allegedly resulting therefrom;

C. The Mediation. Pursuant to Section 14.3 of the MSA, which requires the Parties to participate in mandatory mediation in San Francisco, California as a condition precedent to the commencement of any litigation or arbitration proceedings, the Parties participated in a full-day mediation session on November 14, 2023 before the Honorable Robert K. Tannenbaum (Ret.) at the Bay Area Dispute Resolution Center, located at 44 Montgomery Street, Suite 2800, San Francisco, California 94104. During the mediation, the Parties, with the assistance of their respective counsel, engaged in extensive arm's-length negotiations and reached agreement in principle on the terms set forth herein;

D. Settlement Purpose. The Parties desire to fully, finally, and irrevocably resolve all disputes, claims, demands, causes of action, and controversies of any kind arising from or related to the Incidents, without any admission of liability, fault, or wrongdoing by either Party, and to preserve and continue their commercial relationship under the MSA on amended terms as more particularly set forth herein; and

E. Consideration. In consideration of the mutual promises, covenants, representations, warranties, and releases contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:

ARTICLE 1 — DEFINITIONS

Section 1.1 — Defined Terms

As used in this Agreement, the following terms shall have the meanings set forth below:

(a) "Agreement" means this Settlement Agreement and Mutual Release, including all exhibits and schedules attached hereto, each of which is hereby incorporated by reference and made a part hereof.

(b) "Effective Date" means December 8, 2023.

(c) "Incidents" means, collectively, the service disruptions identified as INC-4471 (October 12–13, 2022), INC-4602 (November 28, 2022), INC-4815 (January 9–10, 2023), and INC-5033 (March 3–5, 2023), as more particularly described in Exhibit A hereto.

(d) "MSA" means the Master Services Agreement dated January 15, 2021 between Lumos and Pinnacle (Lumos internal agreement number MSA-PFH-2021-0015), as amended by MSA Amendment No. 1 executed concurrently herewith.

(e) "MSA Amendment No. 1" means the amendment to the MSA executed concurrently with this Agreement, which reflects the renewal terms, reduced subscription pricing, and enhanced SLA provisions described in Article 3 of this Agreement.

(f) "Renewal Term" means the two-year renewal term of the MSA commencing on January 15, 2024 and expiring on January 14, 2026, as established by MSA Amendment No. 1.

(g) "Service Credits" or "Settlement Credits" means the credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) to be applied against Pinnacle's subscription invoices during the Renewal Term in the manner set forth in Section 2.1 of this Agreement and as detailed in Exhibit B hereto.

(h) "Released Claims" has the meaning ascribed to such term in Section 4.1 of this Agreement.

(i) "Releasing Party" has the meaning ascribed to such term in Section 4.1 of this Agreement.

(j) "Released Party" has the meaning ascribed to such term in Section 4.1 of this Agreement.

(k) "Confidential Settlement Information" has the meaning ascribed to such term in Section 6.1 of this Agreement.

Section 1.2 — Construction

Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the MSA. The headings and captions contained in this Agreement are inserted for convenience of reference only and shall not affect in any way the meaning, interpretation, or construction of this Agreement. All references to "Sections," "Articles," and "Exhibits" in this Agreement are references to sections, articles, and exhibits of or to this Agreement, unless the context expressly requires otherwise. As used in this Agreement, the term "including" (and its grammatical variations, such as "include" and "includes") means "including, without limitation." The words "herein," "hereof," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing one gender include all genders. All references to dollar amounts in this Agreement are to the lawful currency of the United States of America.

ARTICLE 2 — SETTLEMENT CONSIDERATION

Section 2.1 — Service Credits

In full and final settlement of all Released Claims, Lumos shall provide Pinnacle with service credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) (the "Settlement Credits"). The Settlement Credits shall be applied as a lump-sum credit against Pinnacle's first four (4) monthly subscription invoices issued during the Renewal Term, at One Hundred Twenty-One Thousand Two Hundred Fifty Dollars ($121,250) per invoice (i.e., $485,000 ÷ 4 = $121,250 per month). Specifically, the Settlement Credits shall be applied against invoices for the following billing periods: January 2024, February 2024, March 2024, and April 2024.

The monthly subscription fee during the Renewal Term shall be One Hundred Fifteen Thousand Dollars ($115,000) per month (being $1,380,000 per annum ÷ 12 months = $115,000 per month). Accordingly, for each of the first four (4) months of the Renewal Term, the Settlement Credit installment of $121,250 shall fully offset the $115,000 monthly subscription invoice, with the remaining Six Thousand Two Hundred Fifty Dollars ($6,250) per month carried forward as a credit against the next succeeding invoice, until the full $485,000 in Settlement Credits has been applied and exhausted. The detailed application schedule, including the treatment of carryforward credits, is set forth in Exhibit B attached hereto. The Parties acknowledge that, based on the credit application schedule set forth in Exhibit B, all Settlement Credits shall be fully consumed no later than the May 2024 invoice cycle.

Section 2.2 — No Cash Payment

The Parties acknowledge and agree that the settlement consideration consists solely of the Service Credits described in Section 2.1 of this Agreement, and that Lumos shall not be required to make any cash payment, wire transfer, or other monetary disbursement of any kind to Pinnacle in connection with this Agreement or the settlement of the Released Claims contemplated hereby. Pinnacle acknowledges that the Service Credits, together with the MSA renewal and amendment terms described in Article 3, constitute full and adequate consideration for the releases and other commitments made by Pinnacle in this Agreement.

Section 2.3 — Tax Treatment

The Parties shall treat the Settlement Credits as a reduction in the purchase price for the Services provided under the MSA for all applicable federal, state, and local tax purposes. Neither Party shall take any position on any tax return or in any tax proceeding that is inconsistent with such treatment unless required to do so by a final determination of a court of competent jurisdiction or a taxing authority. Each Party shall be solely responsible for its own tax obligations, including the payment of any income taxes, franchise taxes, or other taxes arising from or related to this Agreement and the transactions contemplated hereby. Neither Party makes any representation or warranty to the other Party regarding the tax consequences of the settlement consideration provided hereunder.

ARTICLE 3 — MSA RENEWAL AND AMENDMENT

Section 3.1 — MSA Renewal

As a material inducement to Lumos's agreement to provide the Settlement Credits, and as additional consideration for this Agreement, Pinnacle agrees to renew the MSA for a Renewal Term of two (2) years, commencing on January 15, 2024 and expiring on January 14, 2026, subject to the terms and conditions set forth in MSA Amendment No. 1 executed concurrently herewith. The annual subscription fee during the Renewal Term shall be One Million Three Hundred Eighty Thousand Dollars ($1,380,000), reflecting a reduction of Sixty Thousand Dollars ($60,000) per annum (approximately 4.17%) from the annual subscription fee of $1,440,000 applicable during the initial term of the MSA. The total contract value for the Renewal Term shall be Two Million Seven Hundred Sixty Thousand Dollars ($2,760,000) ($1,380,000 × 2 years). Payment of the Renewal Term subscription fees shall be made in monthly installments of $115,000 each, invoiced and payable in accordance with the payment terms set forth in the MSA, as amended by MSA Amendment No. 1.

Section 3.2 — Enhanced SLA Terms

Concurrently with the execution of this Agreement, the Parties shall execute MSA Amendment No. 1, which shall, among other things, amend and restate Exhibit C (the Service Level Agreement) to the MSA to provide for the following enhanced service level commitments:

(a) Increased Uptime Commitment. The monthly uptime availability commitment shall be increased from ninety-nine and ninety-five hundredths percent (99.95%) to ninety-nine and ninety-seven hundredths percent (99.97%), measured on a calendar-month basis in accordance with the measurement methodology set forth in the amended Exhibit C.

(b) Real-Time Uptime Dashboard. Lumos shall provide Pinnacle with real-time uptime monitoring and reporting dashboard access, accessible through Lumos's standard customer portal at no additional cost to Pinnacle. Such dashboard shall display, at a minimum, current platform availability status, historical uptime metrics for the preceding twelve (12) months, and real-time incident alerts and status updates.

(c) Quarterly SLA Review Meetings. Lumos and Pinnacle shall conduct quarterly SLA review meetings between designated representatives of each Party to review platform performance metrics, incident trends, root cause analyses for any material incidents, and overall SLA compliance during the preceding quarter. The first such quarterly review meeting shall be held no later than April 15, 2024. The format (in person or by videoconference) and specific scheduling of such meetings shall be mutually agreed upon by the Parties' designated representatives.

Section 3.3 — Continued Force and Effect of MSA

Except as expressly modified by MSA Amendment No. 1, all terms and conditions of the MSA shall remain in full force and effect during the Renewal Term and shall continue to govern the Parties' respective rights and obligations with respect to the provision and receipt of the Services. In the event of any conflict or inconsistency between the terms of this Agreement and the MSA (as amended by MSA Amendment No. 1), the terms of this Agreement shall control solely with respect to the settlement of the Released Claims, and the MSA (as amended by MSA Amendment No. 1) shall control with respect to all other matters relating to the ongoing provision of the Services.

ARTICLE 4 — MUTUAL RELEASE

Section 4.1 — Release

Effective as of the Effective Date, each Party (in such capacity, a "Releasing Party"), on behalf of itself and its respective past, present, and future parents, subsidiaries, affiliates, members, managers, partners, officers, directors, employees, agents, predecessors, successors, assigns, heirs, executors, administrators, and legal representatives (collectively, with respect to any Party, such Party's "Affiliates"), hereby irrevocably and unconditionally releases, acquits, and forever discharges the other Party and such other Party's Affiliates (each, in such capacity, a "Released Party") from any and all claims, counterclaims, cross-claims, demands, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, damages, judgments, liens, losses, liabilities, obligations, costs, and expenses of every kind and nature (including, without limitation, attorneys' fees, expert fees, and court costs), whether at law or in equity, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, fixed or contingent, liquidated or unliquidated, that the Releasing Party or any of its Affiliates has, had, may have had, or may hereafter have against any Released Party, arising from, related to, based upon, or in connection with (i) the Incidents (INC-4471, INC-4602, INC-4815, and INC-5033), (ii) any matters alleged or that could have been alleged in Pinnacle's May 1, 2023 Demand, and (iii) any facts, circumstances, events, acts, or omissions underlying or related to any of the foregoing (collectively, the "Released Claims").

Section 4.2 — California Civil Code Section 1542 Waiver

Each Party expressly acknowledges that it has been advised by its respective legal counsel regarding, and is fully familiar with, the provisions of California Civil Code Section 1542, which provides as follows:

"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."

Each Party, being aware of said code section and having been fully advised of its significance and consequences, hereby expressly waives and relinquishes any and all rights and benefits it may have under California Civil Code Section 1542, as well as under any other federal or state statute, regulation, or common law principle of similar effect in any jurisdiction, with respect to the Released Claims. Each Party acknowledges that it may discover facts in addition to or different from those that it now knows or believes to be true with respect to the subject matter of the Released Claims, and each Party agrees that this Agreement shall be and remain effective in all respects notwithstanding any such additional or different facts. Each Party expressly assumes the risk of any such unknown or unanticipated claims and agrees that this Agreement applies to all Released Claims, including those that are presently unknown or unsuspected.

Section 4.3 — Scope of Release

Without limiting the generality of Section 4.1, the Released Claims include, but are not limited to:

(a) all claims for SLA credits under Section 3.2 of Exhibit C to the MSA, or any other provision of the MSA, related to or arising from the Incidents;

(b) all claims for consequential, indirect, incidental, special, punitive, or exemplary damages, including without limitation claims for lost profits, lost revenue, loss of business opportunity, or diminution in value;

(c) all claims for internal remediation costs, temporary licensing costs, costs of substitute services or workaround solutions, or similar expenses incurred by Pinnacle in connection with or as a result of the Incidents;

(d) all claims for reputational harm, goodwill impairment, client attrition damages, or any other form of reputational or business relationship damages;

(e) all claims for breach of contract, breach of warranty, negligence, gross negligence, strict liability, or any other legal or equitable theory, whether arising under contract, tort, statute, or otherwise, in each case arising from or related to the Incidents; and

(f) all claims for pre-judgment or post-judgment interest, costs, fees, and expenses of any kind related to any of the foregoing.

For the avoidance of doubt, the Released Claims specifically encompass the entirety of the Two Million Eight Hundred Seventy Thousand Dollar ($2,870,000) Demand delivered by Pinnacle on May 1, 2023, and each Party agrees that no portion of the Demand remains outstanding or unresolved following the execution of this Agreement.

Section 4.4 — Exclusions from Release

Notwithstanding anything to the contrary in this Article 4, nothing in this Agreement shall release, waive, or discharge:

(a) any Party's obligations arising under or pursuant to this Agreement;

(b) any Party's obligations arising under or pursuant to the MSA (as amended by MSA Amendment No. 1) with respect to matters other than the Released Claims;

(d) any Party's rights to enforce the terms and conditions of this Agreement.

ARTICLE 5 — NO ADMISSION OF LIABILITY

Section 5.1 — No Admission

This Agreement, the settlement contemplated herein, and the provision of the Settlement Credits do not constitute, and shall not be construed or deemed to constitute, an admission of liability, fault, wrongdoing, breach of contract, breach of duty, negligence, or any other form of culpability or responsibility on the part of either Party or any of its Affiliates. Neither this Agreement, nor any of its terms, provisions, recitals, or exhibits, nor the fact of its execution, nor any statements, communications, or conduct occurring during the course of the mediation or any settlement negotiations between the Parties, may be offered, received, or admitted in evidence in any judicial, administrative, arbitral, or other proceeding for any purpose, including without limitation as an admission or concession of liability, fault, wrongdoing, or breach by either Party. Each Party enters into this Agreement solely for the purpose of resolving the disputes described in the Recitals hereof and avoiding the expense, burden, distraction, and uncertainty associated with continued dispute resolution or litigation. The provisions of this Section 5.1 are in addition to, and not in lieu of, any protections afforded by Federal Rule of Evidence 408 or analogous state evidentiary rules or statutes.

ARTICLE 6 — CONFIDENTIALITY

Section 6.1 — Confidential Treatment

The Parties agree that the existence of this Agreement, the terms and conditions of this Agreement, including without limitation the amount of the Settlement Credits, the financial terms of the Renewal Term (including the reduced subscription pricing), any drafts or proposals exchanged during the negotiation of this Agreement, and any negotiations, discussions, communications, or proceedings leading to this Agreement, shall be kept strictly confidential and shall not be disclosed, published, or otherwise communicated to any third party (collectively, the "Confidential Settlement Information"), except as expressly permitted by Section 6.2 of this Agreement.

Section 6.2 — Permitted Disclosures

Notwithstanding Section 6.1, a Party may disclose Confidential Settlement Information in the following circumstances:

(a) Professional Advisors and Internal Personnel. To its directors, officers, employees, attorneys, accountants, auditors, financial advisors, and insurance carriers (including, in the case of Lumos, Meridian Specialty Insurance Company, as Lumos's technology errors and omissions insurer) who have a reasonable need to know such information in connection with the performance of their professional duties or the administration of such Party's business, provided that each such recipient agrees to be bound by confidentiality obligations no less restrictive than those contained in this Article 6, and the disclosing Party shall remain responsible for any breach of such obligations by any such recipient;

(b) Legal Compulsion. To the extent required by applicable law, statute, regulation, rule of a national securities exchange, court order, subpoena, civil investigative demand, or other directive of a governmental or regulatory authority having competent jurisdiction; provided, however, that the disclosing Party shall, to the extent legally permitted, provide prompt written notice to the other Party of the existence, terms, and circumstances of such requirement so as to afford the other Party a reasonable opportunity to seek a protective order or other appropriate relief prior to such disclosure; and provided further, that the disclosing Party shall limit its disclosure to the minimum information reasonably necessary to comply with such requirement;

(c) Equity Sponsors, Investors, and Lenders. To a Party's equity sponsors, investors, prospective investors, lenders, or prospective lenders (including, in the case of Lumos, Ridgeline Capital Partners, LP, and its affiliated funds and managed accounts) to the extent reasonably necessary in connection with such persons' or entities' investment activities, portfolio management, fund reporting, due diligence, or financing activities, provided that such recipients are subject to customary confidentiality obligations; and

(d) Enforcement Proceedings. In connection with any judicial, arbitral, or other proceeding commenced to enforce the terms and conditions of this Agreement, to the extent that disclosure of Confidential Settlement Information is reasonably necessary for such enforcement.

Section 6.3 — Remedies for Breach

The Parties acknowledge and agree that a breach of the confidentiality obligations set forth in this Article 6 may cause the non-breaching Party irreparable harm, injury, and damage that would not be adequately compensable by an award of monetary damages alone. Accordingly, in the event of any actual or threatened breach of this Article 6, the non-breaching Party shall be entitled to seek temporary, preliminary, and permanent injunctive relief and specific performance, in addition to any and all other remedies available at law or in equity, without being required to post a bond or other security or to prove actual damages. The seeking of equitable relief shall not be deemed a waiver of the right to seek monetary damages or any other remedy.

ARTICLE 7 — REPRESENTATIONS AND WARRANTIES

Section 7.1 — Mutual Representations

Each Party represents and warrants to the other Party, as of the Effective Date, as follows:

(a) Power and Authority. It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and has full corporate or organizational power and authority to enter into this Agreement and to perform all of its obligations hereunder.

(b) Due Authorization. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or organizational action on the part of such Party. In the case of Lumos, this Agreement has been authorized and approved by its General Counsel, Adriana Voss, acting with the requisite authority delegated by the Board of Directors of Lumos. In the case of Pinnacle, this Agreement has been authorized and approved by its Chief Executive Officer, Gerald R. Worthington, acting with the requisite authority delegated by the Board of Managers of Pinnacle.

(c) Enforceability. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent conveyance, and similar laws affecting creditors' rights generally, and (ii) general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

(d) No Assignment of Claims. It has not assigned, transferred, conveyed, pledged, hypothecated, or otherwise disposed of, in whole or in part, any of the Released Claims, and no person or entity other than the Parties and their respective Affiliates has any interest in the Released Claims.

(e) No Conflict. The execution, delivery, and performance of this Agreement do not and will not (i) violate, conflict with, or result in a breach of any provision of its organizational documents, (ii) violate any applicable law, statute, regulation, or order, or (iii) conflict with, result in a breach of, or constitute a default under any material contract, agreement, or instrument to which it is a party or by which it or its assets may be bound.

Section 7.2 — Voluntary Execution

Each Party represents and warrants that it has entered into this Agreement freely, voluntarily, and without coercion or duress, after having received independent legal advice from competent counsel of its own choosing, and with full knowledge, understanding, and appreciation of the terms, conditions, consequences, and significance of this Agreement and the releases contained herein. Each Party further represents and warrants that no promises, inducements, threats, representations, or warranties of any kind, other than those expressly set forth in this Agreement, have been made to or relied upon by such Party in connection with the negotiation, execution, or delivery of this Agreement.

ARTICLE 8 — COSTS AND EXPENSES

Section 8.1 — Each Party Bears Own Costs

Except as otherwise expressly provided in this Agreement, each Party shall bear and be solely responsible for its own costs, expenses, and attorneys' fees incurred in connection with (a) the disputes described in the Recitals of this Agreement, (b) the mediation described in Recital C, (c) the negotiation, preparation, review, and execution of this Agreement and MSA Amendment No. 1, and (d) any and all other matters arising from or related to the Incidents and the Released Claims. For the avoidance of doubt, and without limiting the generality of the foregoing: (i) all fees, costs, and expenses of Calderwood & Harkness LLP incurred in connection with the defense and resolution of Pinnacle's claims and the Demand shall be borne solely by Lumos; and (ii) all fees, costs, and expenses of Hargrove, Tillman & Burch LLP incurred in connection with the assertion and resolution of Pinnacle's claims and the Demand shall be borne solely by Pinnacle.

Section 8.2 — Mediation Costs

The mediation fee in the amount of Seven Thousand Five Hundred Dollars ($7,500) charged by the Bay Area Dispute Resolution Center for the November 14, 2023 mediation session before the Honorable Robert K. Tannenbaum (Ret.) has been split equally between the Parties, with each Party responsible for Three Thousand Seven Hundred Fifty Dollars ($3,750). Each Party confirms and acknowledges that its respective share of such mediation fee has been paid in full as of the Effective Date, and no further amounts are owed by either Party in connection with the mediation.

ARTICLE 9 — DISPUTE RESOLUTION

Section 9.1 — Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California, without giving effect to any choice-of-law or conflict-of-laws rules or principles that would cause the application of the laws of any other jurisdiction. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

Section 9.2 — Jurisdiction and Venue

Any action, suit, or proceeding arising from or relating to this Agreement, including any action to enforce the terms hereof or any dispute regarding the interpretation, validity, or enforceability of this Agreement, shall be brought exclusively in the state courts of the State of California located in the City and County of San Francisco, or in the United States District Court for the Northern District of California. Each Party hereby irrevocably and unconditionally (a) consents and submits to the exclusive personal jurisdiction of such courts for the purposes of any such action, suit, or proceeding, (b) waives any objection it may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (c) waives any claim or defense that any such action, suit, or proceeding has been brought in an inconvenient forum.

Section 9.3 — Attorneys' Fees

In any action, suit, or proceeding to enforce this Agreement or to resolve any dispute arising hereunder, the prevailing Party shall be entitled to recover its reasonable attorneys' fees, expert fees, costs, and expenses (including, without limitation, fees and costs incurred on appeal) from the non-prevailing Party, in addition to any other relief to which such prevailing Party may be entitled. For purposes of this Section 9.3, the "prevailing Party" means the Party that substantially obtains the relief it sought, whether by judgment, settlement, or otherwise.

ARTICLE 10 — GENERAL PROVISIONS

Section 10.1 — Entire Agreement

This Agreement, together with MSA Amendment No. 1 and the MSA (as amended by MSA Amendment No. 1), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, commitments, and communications, whether written or oral, between the Parties relating to the settlement of the Released Claims or the subject matter of this Agreement. No Party has relied upon any statement, representation, warranty, or agreement of the other Party except for those expressly set forth in this Agreement.

Section 10.2 — Amendment and Waiver

This Agreement may not be amended, modified, supplemented, restated, or otherwise changed except by a written instrument executed by both Parties. No waiver of any provision of this Agreement, or of any right or remedy arising hereunder, shall be effective unless set forth in a written instrument signed by the Party against whom enforcement of such waiver is sought. No waiver of any breach or default of any provision of this Agreement shall be deemed a waiver of any subsequent breach or default of the same or any other provision, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

Section 10.3 — Severability

If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, void, or unenforceable by any court of competent jurisdiction or other governmental authority, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement (or the remaining portion of such provision), and all other provisions shall remain in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid provision. If the Parties are unable to agree upon such a replacement provision, the invalid provision shall be reformed by the court or other governmental authority to the minimum extent necessary to render it valid, legal, and enforceable while preserving, to the maximum extent possible, the Parties' original intent.

Section 10.4 — Counterparts; Electronic Signatures

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. It shall not be necessary for each Party to sign the same counterpart. Signatures transmitted by electronic means, including via Brightwater Software or any similar electronic signature platform, portable document format (PDF), or facsimile transmission, shall be deemed original signatures and shall have the same legal force, validity, and effect as original ink signatures. Each Party agrees that it will not challenge the validity or enforceability of this Agreement on the ground that it was executed or delivered by electronic means.

Section 10.5 — Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Party may assign, delegate, or otherwise transfer this Agreement or any of its rights, interests, or obligations hereunder, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that either Party may assign this Agreement, without the prior consent of the other Party, in connection with a merger, consolidation, reorganization, or acquisition involving such Party, or a sale, transfer, or other disposition of all or substantially all of the assets of such Party or the business unit to which this Agreement relates, so long as the assignee expressly assumes all obligations of the assigning Party under this Agreement in writing. Any purported assignment in violation of this Section 10.5 shall be null and void and of no force or effect.

Section 10.6 — Notices

All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when: (a) delivered personally; (b) transmitted by email (with confirmation of receipt); (c) sent by registered or certified mail, return receipt requested, postage prepaid; or (d) sent by nationally recognized overnight courier service (with tracking and proof of delivery). All such notices shall be addressed to the Parties at the following addresses, or to such other addresses as either Party may designate by written notice to the other Party in accordance with this Section 10.6:

If to Lumos:

Adriana Voss, General Counsel Lumos Analytics Inc. 580 Howard Street, Suite 400 San Francisco, California 94105

Email: avoss@lumosanalytics.com

With a copy (which shall not constitute notice) to:

Linda Osei, Partner Calderwood & Harkness LLP 101 California Street, Suite 3200 San Francisco, California 94111

Email: losei@calderwoodharkness.com

If to Pinnacle:

Gerald R. Worthington, Chief Executive Officer Pinnacle Financial Holdings LLC 200 West Adams Street, Suite 3100 Chicago, Illinois 60606

Email: gworthington@pinnaclefh.com

With a copy (which shall not constitute notice) to:

Katherine Hargrove, Partner Hargrove, Tillman & Burch LLP 71 South Wacker Drive, Suite 4500 Chicago, Illinois 60606

Email: khargrove@htblaw.com

Section 10.7 — Third-Party Beneficiaries

Except as expressly set forth herein with respect to the Affiliates of each Party (solely in their capacity as Released Parties under Article 4), nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity other than the Parties hereto and their respective Affiliates, successors, and permitted assigns any right, benefit, remedy, or claim of any nature whatsoever under or by reason of this Agreement. No third party shall have any right to enforce any provision of this Agreement.

Section 10.8 — Further Assurances

Each Party agrees to execute and deliver, or cause to be executed and delivered, such further documents, instruments, and agreements, and to take or cause to be taken such further actions, as may be reasonably requested by the other Party and as may be reasonably necessary or desirable to effectuate the purposes and intent of this Agreement, to confirm and carry out the provisions hereof, and to consummate and make effective the transactions contemplated hereby, in each case at no additional cost to the requesting Party (other than de minimis administrative expenses).

Section 10.9 — Construction

This Agreement has been jointly negotiated and drafted by the Parties and their respective legal counsel. In the event of any ambiguity or dispute regarding the interpretation of any provision of this Agreement, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement and Mutual Release to be executed by their duly authorized representatives as of the Effective Date.

LUMOS ANALYTICS INC.

By: ________

Name: Adriana Voss

Title: General Counsel

Date: December 8, 2023

PINNACLE FINANCIAL HOLDINGS LLC

By: ________

Name: Gerald R. Worthington

Title: Chief Executive Officer

Date: December 8, 2023

ACKNOWLEDGED AND AGREED BY COUNSEL

CALDERWOOD & HARKNESS LLP Counsel for Lumos Analytics Inc.

By: ________

Name: Linda Osei

Title: Partner

Date: December 8, 2023

HARGROVE, TILLMAN & BURCH LLP Counsel for Pinnacle Financial Holdings LLC

By: ________

Name: Katherine Hargrove

Title: Partner

Date: December 8, 2023

EXHIBIT A

LIST OF INCIDENTS

The following table sets forth the service disruptions experienced by Pinnacle in connection with the Services provided by Lumos under the MSA that constitute the "Incidents" as defined in this Agreement:

Each of the foregoing Incidents was tracked and documented through Lumos's internal incident management system. The inclusion of the foregoing descriptions in this Exhibit A is for reference purposes only and does not constitute an admission by either Party as to the cause, scope, severity, duration, or impact of any Incident.

EXHIBIT B

SERVICE CREDIT APPLICATION SCHEDULE

The following table sets forth the manner in which the Settlement Credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) shall be applied against Pinnacle's monthly subscription invoices during the Renewal Term:

Summary and Notes:

1. Total Settlement Credits: $485,000.

2. Application Method: The Settlement Credits are applied at $121,250 per invoice against the first four (4) monthly invoices of the Renewal Term (January 2024 through April 2024). Because each monthly Settlement Credit installment of $121,250 exceeds the monthly subscription fee of $115,000 by $6,250, the excess $6,250 per month is carried forward as a credit against the next succeeding invoice.

3. Carryforward Credits: The aggregate carryforward credits accumulate to $25,000 ($6,250 × 4 months) and are applied against the May 2024 invoice, reducing the amount due for May 2024 from $115,000 to $90,000.

4. Full Exhaustion: All Settlement Credits shall be fully applied and exhausted by the May 2024 invoice cycle. Beginning with the June 2024 invoice and continuing through the end of the Renewal Term (January 2026), Pinnacle shall pay the full monthly subscription fee of $115,000 without offset or credit.

5. Renewal Term Annual Subscription Fee: $1,380,000 per annum ($115,000 per month × 12 months).

6. Total Renewal Term Contract Value: $2,760,000 ($1,380,000 × 2 years), before application of the Settlement Credits. After application of the $485,000 in Settlement Credits, the net contract value payable by Pinnacle during the Renewal Term is $2,275,000.

End of Exhibit B — Service Credit Application Schedule

Incident ID	Date(s) of Occurrence	Description
INC-4471	October 12–13, 2022	Service disruption affecting the Lumos enterprise SaaS platform, including intermittent loss of access to the financial analytics and risk scoring modules, impacting Pinnacle's authorized users during the stated period.
INC-4602	November 28, 2022	Service disruption affecting the Lumos enterprise SaaS platform, including degraded performance and partial unavailability of the regulatory compliance dashboard, impacting Pinnacle's authorized users during the stated period.
INC-4815	January 9–10, 2023	Service disruption affecting the Lumos enterprise SaaS platform, including a full platform outage resulting in the complete unavailability of all Services to Pinnacle's authorized users during the stated period.
INC-5033	March 3–5, 2023	Service disruption affecting the Lumos enterprise SaaS platform, including intermittent connectivity failures and data retrieval latency issues affecting the financial analytics and regulatory compliance dashboard modules, impacting Pinnacle's authorized users during the stated period.
Invoice Month	Monthly Subscription Fee (Renewal Term)	Settlement Credit Applied	Net Amount Due
January 2024	$115,000	$121,250	$0.00 (with $6,250 credit carried forward)
February 2024	$115,000	$121,250	$0.00 (with $6,250 credit carried forward)
March 2024	$115,000	$121,250	$0.00 (with $6,250 credit carried forward)
April 2024	$115,000	$121,250	$0.00 (with $6,250 credit carried forward)
May 2024	$115,000	$25,000 (aggregate carryforward: $6,250 × 4 = $25,000)	$90,000
June 2024 and each month thereafter through January 2026	$115,000	$0.00	$115,000

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this "Agreement") is entered into as of December 8, 2023 (the "Effective Date"), by and between:
Lumos Analytics Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 580 Howard Street, Suite 400, San Francisco, California 94105 ("Lumos");
and
Pinnacle Financial Holdings LLC, a limited liability company organized and existing under the laws of the State of Delaware, with its principal offices at 200 West Adams Street, Suite 3100, Chicago, Illinois 60606 ("Pinnacle" and, together with Lumos, the "Parties" and each individually, a "Party").
RECITALS
WHEREAS:
A. The MSA. The Parties entered into that certain Master Services Agreement dated January 15, 2021 (Lumos internal agreement number MSA-PFH-2021-0015) (the "MSA"), pursuant to which Lumos agreed to provide, and Pinnacle agreed to procure, enterprise software-as-a-service ("SaaS") financial analytics, risk scoring, and regulatory compliance dashboard services (collectively, the "Services") to Pinnacle and its authorized users. The MSA provides for a three-year initial term commencing on January 15, 2021 and expiring on January 14, 2024, at an annual subscription fee of One Million Four Hundred Forty Thousand Dollars ($1,440,000), payable in equal monthly installments of One Hundred Twenty Thousand Dollars ($120,000) per month. The MSA includes, among other exhibits, Exhibit C thereto (the "Service Level Agreement" or "SLA"), which sets forth certain uptime availability commitments, incident response and resolution time requirements, and a service level credit structure applicable in the event that Lumos fails to meet the specified service levels during any given measurement period;
B. The Dispute. During the period between October 2022 and March 2023, Pinnacle experienced certain service disruptions and platform availability failures in connection with the Services provided by Lumos under the MSA. These service disruptions were tracked internally under the following incident identification numbers: INC-4471 (occurring on October 12–13, 2022), INC-4602 (occurring on November 28, 2022), INC-4815 (occurring on January 9–10, 2023), and INC-5033 (occurring on March 3–5, 2023) (collectively, the "Incidents"). On May 1, 2023, Pinnacle, acting through its outside counsel Hargrove, Tillman & Burch LLP, delivered a formal written demand letter (the "Demand") to Lumos, asserting claims for breach of contract under the MSA and demanding the payment of Two Million Eight Hundred Seventy Thousand Dollars ($2,870,000) in SLA credits and additional damages arising from and related to the Incidents. Lumos, acting through its outside counsel Calderwood & Harkness LLP, timely responded to the Demand and disputed the validity, scope, and amount of Pinnacle's claims in their entirety, including Pinnacle's characterization of the nature and duration of the Incidents and the damages allegedly resulting therefrom;
C. The Mediation. Pursuant to Section 14.3 of the MSA, which requires the Parties to participate in mandatory mediation in San Francisco, California as a condition precedent to the commencement of any litigation or arbitration proceedings, the Parties participated in a full-day mediation session on November 14, 2023 before the Honorable Robert K. Tannenbaum (Ret.) at the Bay Area Dispute Resolution Center, located at 44 Montgomery Street, Suite 2800, San Francisco, California 94104. During the mediation, the Parties, with the assistance of their respective counsel, engaged in extensive arm's-length negotiations and reached agreement in principle on the terms set forth herein;
D. Settlement Purpose. The Parties desire to fully, finally, and irrevocably resolve all disputes, claims, demands, causes of action, and controversies of any kind arising from or related to the Incidents, without any admission of liability, fault, or wrongdoing by either Party, and to preserve and continue their commercial relationship under the MSA on amended terms as more particularly set forth herein; and
E. Consideration. In consideration of the mutual promises, covenants, representations, warranties, and releases contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
(a) "Agreement" means this Settlement Agreement and Mutual Release, including all exhibits and schedules attached hereto, each of which is hereby incorporated by reference and made a part hereof.
(b) "Effective Date" means December 8, 2023.
(c) "Incidents" means, collectively, the service disruptions identified as INC-4471 (October 12–13, 2022), INC-4602 (November 28, 2022), INC-4815 (January 9–10, 2023), and INC-5033 (March 3–5, 2023), as more particularly described in Exhibit A hereto.
(d) "MSA" means the Master Services Agreement dated January 15, 2021 between Lumos and Pinnacle (Lumos internal agreement number MSA-PFH-2021-0015), as amended by MSA Amendment No. 1 executed concurrently herewith.
(e) "MSA Amendment No. 1" means the amendment to the MSA executed concurrently with this Agreement, which reflects the renewal terms, reduced subscription pricing, and enhanced SLA provisions described in Article 3 of this Agreement.
(f) "Renewal Term" means the two-year renewal term of the MSA commencing on January 15, 2024 and expiring on January 14, 2026, as established by MSA Amendment No. 1.
(g) "Service Credits" or "Settlement Credits" means the credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) to be applied against Pinnacle's subscription invoices during the Renewal Term in the manner set forth in Section 2.1 of this Agreement and as detailed in Exhibit B hereto.
(h) "Released Claims" has the meaning ascribed to such term in Section 4.1 of this Agreement.
(i) "Releasing Party" has the meaning ascribed to such term in Section 4.1 of this Agreement.
(j) "Released Party" has the meaning ascribed to such term in Section 4.1 of this Agreement.
(k) "Confidential Settlement Information" has the meaning ascribed to such term in Section 6.1 of this Agreement.
Section 1.2 — Construction
Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the MSA. The headings and captions contained in this Agreement are inserted for convenience of reference only and shall not affect in any way the meaning, interpretation, or construction of this Agreement. All references to "Sections," "Articles," and "Exhibits" in this Agreement are references to sections, articles, and exhibits of or to this Agreement, unless the context expressly requires otherwise. As used in this Agreement, the term "including" (and its grammatical variations, such as "include" and "includes") means "including, without limitation." The words "herein," "hereof," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing one gender include all genders. All references to dollar amounts in this Agreement are to the lawful currency of the United States of America.
ARTICLE 2 — SETTLEMENT CONSIDERATION
Section 2.1 — Service Credits
In full and final settlement of all Released Claims, Lumos shall provide Pinnacle with service credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) (the "Settlement Credits"). The Settlement Credits shall be applied as a lump-sum credit against Pinnacle's first four (4) monthly subscription invoices issued during the Renewal Term, at One Hundred Twenty-One Thousand Two Hundred Fifty Dollars ($121,250) per invoice (i.e., $485,000 ÷ 4 = $121,250 per month). Specifically, the Settlement Credits shall be applied against invoices for the following billing periods: January 2024, February 2024, March 2024, and April 2024.
The monthly subscription fee during the Renewal Term shall be One Hundred Fifteen Thousand Dollars ($115,000) per month (being $1,380,000 per annum ÷ 12 months = $115,000 per month). Accordingly, for each of the first four (4) months of the Renewal Term, the Settlement Credit installment of $121,250 shall fully offset the $115,000 monthly subscription invoice, with the remaining Six Thousand Two Hundred Fifty Dollars ($6,250) per month carried forward as a credit against the next succeeding invoice, until the full $485,000 in Settlement Credits has been applied and exhausted. The detailed application schedule, including the treatment of carryforward credits, is set forth in Exhibit B attached hereto. The Parties acknowledge that, based on the credit application schedule set forth in Exhibit B, all Settlement Credits shall be fully consumed no later than the May 2024 invoice cycle.
Section 2.2 — No Cash Payment
The Parties acknowledge and agree that the settlement consideration consists solely of the Service Credits described in Section 2.1 of this Agreement, and that Lumos shall not be required to make any cash payment, wire transfer, or other monetary disbursement of any kind to Pinnacle in connection with this Agreement or the settlement of the Released Claims contemplated hereby. Pinnacle acknowledges that the Service Credits, together with the MSA renewal and amendment terms described in Article 3, constitute full and adequate consideration for the releases and other commitments made by Pinnacle in this Agreement.
Section 2.3 — Tax Treatment
The Parties shall treat the Settlement Credits as a reduction in the purchase price for the Services provided under the MSA for all applicable federal, state, and local tax purposes. Neither Party shall take any position on any tax return or in any tax proceeding that is inconsistent with such treatment unless required to do so by a final determination of a court of competent jurisdiction or a taxing authority. Each Party shall be solely responsible for its own tax obligations, including the payment of any income taxes, franchise taxes, or other taxes arising from or related to this Agreement and the transactions contemplated hereby. Neither Party makes any representation or warranty to the other Party regarding the tax consequences of the settlement consideration provided hereunder.
ARTICLE 3 — MSA RENEWAL AND AMENDMENT
Section 3.1 — MSA Renewal
As a material inducement to Lumos's agreement to provide the Settlement Credits, and as additional consideration for this Agreement, Pinnacle agrees to renew the MSA for a Renewal Term of two (2) years, commencing on January 15, 2024 and expiring on January 14, 2026, subject to the terms and conditions set forth in MSA Amendment No. 1 executed concurrently herewith. The annual subscription fee during the Renewal Term shall be One Million Three Hundred Eighty Thousand Dollars ($1,380,000), reflecting a reduction of Sixty Thousand Dollars ($60,000) per annum (approximately 4.17%) from the annual subscription fee of $1,440,000 applicable during the initial term of the MSA. The total contract value for the Renewal Term shall be Two Million Seven Hundred Sixty Thousand Dollars ($2,760,000) ($1,380,000 × 2 years). Payment of the Renewal Term subscription fees shall be made in monthly installments of $115,000 each, invoiced and payable in accordance with the payment terms set forth in the MSA, as amended by MSA Amendment No. 1.
Section 3.2 — Enhanced SLA Terms
Concurrently with the execution of this Agreement, the Parties shall execute MSA Amendment No. 1, which shall, among other things, amend and restate Exhibit C (the Service Level Agreement) to the MSA to provide for the following enhanced service level commitments:
(a) Increased Uptime Commitment. The monthly uptime availability commitment shall be increased from ninety-nine and ninety-five hundredths percent (99.95%) to ninety-nine and ninety-seven hundredths percent (99.97%), measured on a calendar-month basis in accordance with the measurement methodology set forth in the amended Exhibit C.
(b) Real-Time Uptime Dashboard. Lumos shall provide Pinnacle with real-time uptime monitoring and reporting dashboard access, accessible through Lumos's standard customer portal at no additional cost to Pinnacle. Such dashboard shall display, at a minimum, current platform availability status, historical uptime metrics for the preceding twelve (12) months, and real-time incident alerts and status updates.
(c) Quarterly SLA Review Meetings. Lumos and Pinnacle shall conduct quarterly SLA review meetings between designated representatives of each Party to review platform performance metrics, incident trends, root cause analyses for any material incidents, and overall SLA compliance during the preceding quarter. The first such quarterly review meeting shall be held no later than April 15, 2024. The format (in person or by videoconference) and specific scheduling of such meetings shall be mutually agreed upon by the Parties' designated representatives.
Section 3.3 — Continued Force and Effect of MSA
Except as expressly modified by MSA Amendment No. 1, all terms and conditions of the MSA shall remain in full force and effect during the Renewal Term and shall continue to govern the Parties' respective rights and obligations with respect to the provision and receipt of the Services. In the event of any conflict or inconsistency between the terms of this Agreement and the MSA (as amended by MSA Amendment No. 1), the terms of this Agreement shall control solely with respect to the settlement of the Released Claims, and the MSA (as amended by MSA Amendment No. 1) shall control with respect to all other matters relating to the ongoing provision of the Services.
ARTICLE 4 — MUTUAL RELEASE
Section 4.1 — Release
Effective as of the Effective Date, each Party (in such capacity, a "Releasing Party"), on behalf of itself and its respective past, present, and future parents, subsidiaries, affiliates, members, managers, partners, officers, directors, employees, agents, predecessors, successors, assigns, heirs, executors, administrators, and legal representatives (collectively, with respect to any Party, such Party's "Affiliates"), hereby irrevocably and unconditionally releases, acquits, and forever discharges the other Party and such other Party's Affiliates (each, in such capacity, a "Released Party") from any and all claims, counterclaims, cross-claims, demands, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, damages, judgments, liens, losses, liabilities, obligations, costs, and expenses of every kind and nature (including, without limitation, attorneys' fees, expert fees, and court costs), whether at law or in equity, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, fixed or contingent, liquidated or unliquidated, that the Releasing Party or any of its Affiliates has, had, may have had, or may hereafter have against any Released Party, arising from, related to, based upon, or in connection with (i) the Incidents (INC-4471, INC-4602, INC-4815, and INC-5033), (ii) any matters alleged or that could have been alleged in Pinnacle's May 1, 2023 Demand, and (iii) any facts, circumstances, events, acts, or omissions underlying or related to any of the foregoing (collectively, the "Released Claims").
Section 4.2 — California Civil Code Section 1542 Waiver
Each Party expressly acknowledges that it has been advised by its respective legal counsel regarding, and is fully familiar with, the provisions of California Civil Code Section 1542, which provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
Each Party, being aware of said code section and having been fully advised of its significance and consequences, hereby expressly waives and relinquishes any and all rights and benefits it may have under California Civil Code Section 1542, as well as under any other federal or state statute, regulation, or common law principle of similar effect in any jurisdiction, with respect to the Released Claims. Each Party acknowledges that it may discover facts in addition to or different from those that it now knows or believes to be true with respect to the subject matter of the Released Claims, and each Party agrees that this Agreement shall be and remain effective in all respects notwithstanding any such additional or different facts. Each Party expressly assumes the risk of any such unknown or unanticipated claims and agrees that this Agreement applies to all Released Claims, including those that are presently unknown or unsuspected.
Section 4.3 — Scope of Release
Without limiting the generality of Section 4.1, the Released Claims include, but are not limited to:
(a) all claims for SLA credits under Section 3.2 of Exhibit C to the MSA, or any other provision of the MSA, related to or arising from the Incidents;
(b) all claims for consequential, indirect, incidental, special, punitive, or exemplary damages, including without limitation claims for lost profits, lost revenue, loss of business opportunity, or diminution in value;
(c) all claims for internal remediation costs, temporary licensing costs, costs of substitute services or workaround solutions, or similar expenses incurred by Pinnacle in connection with or as a result of the Incidents;
(d) all claims for reputational harm, goodwill impairment, client attrition damages, or any other form of reputational or business relationship damages;
(e) all claims for breach of contract, breach of warranty, negligence, gross negligence, strict liability, or any other legal or equitable theory, whether arising under contract, tort, statute, or otherwise, in each case arising from or related to the Incidents; and
(f) all claims for pre-judgment or post-judgment interest, costs, fees, and expenses of any kind related to any of the foregoing.
For the avoidance of doubt, the Released Claims specifically encompass the entirety of the Two Million Eight Hundred Seventy Thousand Dollar ($2,870,000) Demand delivered by Pinnacle on May 1, 2023, and each Party agrees that no portion of the Demand remains outstanding or unresolved following the execution of this Agreement.
Section 4.4 — Exclusions from Release
Notwithstanding anything to the contrary in this Article 4, nothing in this Agreement shall release, waive, or discharge:
(a) any Party's obligations arising under or pursuant to this Agreement;
(b) any Party's obligations arising under or pursuant to the MSA (as amended by MSA Amendment No. 1) with respect to matters other than the Released Claims;
(c) any claims arising from events, incidents, breaches, or other occurrences taking place after the Effective Date; or
(d) any Party's rights to enforce the terms and conditions of this Agreement.
ARTICLE 5 — NO ADMISSION OF LIABILITY
Section 5.1 — No Admission
This Agreement, the settlement contemplated herein, and the provision of the Settlement Credits do not constitute, and shall not be construed or deemed to constitute, an admission of liability, fault, wrongdoing, breach of contract, breach of duty, negligence, or any other form of culpability or responsibility on the part of either Party or any of its Affiliates. Neither this Agreement, nor any of its terms, provisions, recitals, or exhibits, nor the fact of its execution, nor any statements, communications, or conduct occurring during the course of the mediation or any settlement negotiations between the Parties, may be offered, received, or admitted in evidence in any judicial, administrative, arbitral, or other proceeding for any purpose, including without limitation as an admission or concession of liability, fault, wrongdoing, or breach by either Party. Each Party enters into this Agreement solely for the purpose of resolving the disputes described in the Recitals hereof and avoiding the expense, burden, distraction, and uncertainty associated with continued dispute resolution or litigation. The provisions of this Section 5.1 are in addition to, and not in lieu of, any protections afforded by Federal Rule of Evidence 408 or analogous state evidentiary rules or statutes.
ARTICLE 6 — CONFIDENTIALITY
Section 6.1 — Confidential Treatment
The Parties agree that the existence of this Agreement, the terms and conditions of this Agreement, including without limitation the amount of the Settlement Credits, the financial terms of the Renewal Term (including the reduced subscription pricing), any drafts or proposals exchanged during the negotiation of this Agreement, and any negotiations, discussions, communications, or proceedings leading to this Agreement, shall be kept strictly confidential and shall not be disclosed, published, or otherwise communicated to any third party (collectively, the "Confidential Settlement Information"), except as expressly permitted by Section 6.2 of this Agreement.
Section 6.2 — Permitted Disclosures
Notwithstanding Section 6.1, a Party may disclose Confidential Settlement Information in the following circumstances:
(a) Professional Advisors and Internal Personnel. To its directors, officers, employees, attorneys, accountants, auditors, financial advisors, and insurance carriers (including, in the case of Lumos, Meridian Specialty Insurance Company, as Lumos's technology errors and omissions insurer) who have a reasonable need to know such information in connection with the performance of their professional duties or the administration of such Party's business, provided that each such recipient agrees to be bound by confidentiality obligations no less restrictive than those contained in this Article 6, and the disclosing Party shall remain responsible for any breach of such obligations by any such recipient;
(b) Legal Compulsion. To the extent required by applicable law, statute, regulation, rule of a national securities exchange, court order, subpoena, civil investigative demand, or other directive of a governmental or regulatory authority having competent jurisdiction; provided, however, that the disclosing Party shall, to the extent legally permitted, provide prompt written notice to the other Party of the existence, terms, and circumstances of such requirement so as to afford the other Party a reasonable opportunity to seek a protective order or other appropriate relief prior to such disclosure; and provided further, that the disclosing Party shall limit its disclosure to the minimum information reasonably necessary to comply with such requirement;
(c) Equity Sponsors, Investors, and Lenders. To a Party's equity sponsors, investors, prospective investors, lenders, or prospective lenders (including, in the case of Lumos, Ridgeline Capital Partners, LP, and its affiliated funds and managed accounts) to the extent reasonably necessary in connection with such persons' or entities' investment activities, portfolio management, fund reporting, due diligence, or financing activities, provided that such recipients are subject to customary confidentiality obligations; and
(d) Enforcement Proceedings. In connection with any judicial, arbitral, or other proceeding commenced to enforce the terms and conditions of this Agreement, to the extent that disclosure of Confidential Settlement Information is reasonably necessary for such enforcement.
Section 6.3 — Remedies for Breach
The Parties acknowledge and agree that a breach of the confidentiality obligations set forth in this Article 6 may cause the non-breaching Party irreparable harm, injury, and damage that would not be adequately compensable by an award of monetary damages alone. Accordingly, in the event of any actual or threatened breach of this Article 6, the non-breaching Party shall be entitled to seek temporary, preliminary, and permanent injunctive relief and specific performance, in addition to any and all other remedies available at law or in equity, without being required to post a bond or other security or to prove actual damages. The seeking of equitable relief shall not be deemed a waiver of the right to seek monetary damages or any other remedy.
ARTICLE 7 — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Mutual Representations
Each Party represents and warrants to the other Party, as of the Effective Date, as follows:
(a) Power and Authority. It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and has full corporate or organizational power and authority to enter into this Agreement and to perform all of its obligations hereunder.
(b) Due Authorization. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or organizational action on the part of such Party. In the case of Lumos, this Agreement has been authorized and approved by its General Counsel, Adriana Voss, acting with the requisite authority delegated by the Board of Directors of Lumos. In the case of Pinnacle, this Agreement has been authorized and approved by its Chief Executive Officer, Gerald R. Worthington, acting with the requisite authority delegated by the Board of Managers of Pinnacle.
(c) Enforceability. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent conveyance, and similar laws affecting creditors' rights generally, and (ii) general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) No Assignment of Claims. It has not assigned, transferred, conveyed, pledged, hypothecated, or otherwise disposed of, in whole or in part, any of the Released Claims, and no person or entity other than the Parties and their respective Affiliates has any interest in the Released Claims.
(e) No Conflict. The execution, delivery, and performance of this Agreement do not and will not (i) violate, conflict with, or result in a breach of any provision of its organizational documents, (ii) violate any applicable law, statute, regulation, or order, or (iii) conflict with, result in a breach of, or constitute a default under any material contract, agreement, or instrument to which it is a party or by which it or its assets may be bound.
Section 7.2 — Voluntary Execution
Each Party represents and warrants that it has entered into this Agreement freely, voluntarily, and without coercion or duress, after having received independent legal advice from competent counsel of its own choosing, and with full knowledge, understanding, and appreciation of the terms, conditions, consequences, and significance of this Agreement and the releases contained herein. Each Party further represents and warrants that no promises, inducements, threats, representations, or warranties of any kind, other than those expressly set forth in this Agreement, have been made to or relied upon by such Party in connection with the negotiation, execution, or delivery of this Agreement.
ARTICLE 8 — COSTS AND EXPENSES
Section 8.1 — Each Party Bears Own Costs
Except as otherwise expressly provided in this Agreement, each Party shall bear and be solely responsible for its own costs, expenses, and attorneys' fees incurred in connection with (a) the disputes described in the Recitals of this Agreement, (b) the mediation described in Recital C, (c) the negotiation, preparation, review, and execution of this Agreement and MSA Amendment No. 1, and (d) any and all other matters arising from or related to the Incidents and the Released Claims. For the avoidance of doubt, and without limiting the generality of the foregoing: (i) all fees, costs, and expenses of Calderwood & Harkness LLP incurred in connection with the defense and resolution of Pinnacle's claims and the Demand shall be borne solely by Lumos; and (ii) all fees, costs, and expenses of Hargrove, Tillman & Burch LLP incurred in connection with the assertion and resolution of Pinnacle's claims and the Demand shall be borne solely by Pinnacle.
Section 8.2 — Mediation Costs
The mediation fee in the amount of Seven Thousand Five Hundred Dollars ($7,500) charged by the Bay Area Dispute Resolution Center for the November 14, 2023 mediation session before the Honorable Robert K. Tannenbaum (Ret.) has been split equally between the Parties, with each Party responsible for Three Thousand Seven Hundred Fifty Dollars ($3,750). Each Party confirms and acknowledges that its respective share of such mediation fee has been paid in full as of the Effective Date, and no further amounts are owed by either Party in connection with the mediation.
ARTICLE 9 — DISPUTE RESOLUTION
Section 9.1 — Governing Law
This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California, without giving effect to any choice-of-law or conflict-of-laws rules or principles that would cause the application of the laws of any other jurisdiction. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.
Section 9.2 — Jurisdiction and Venue
Any action, suit, or proceeding arising from or relating to this Agreement, including any action to enforce the terms hereof or any dispute regarding the interpretation, validity, or enforceability of this Agreement, shall be brought exclusively in the state courts of the State of California located in the City and County of San Francisco, or in the United States District Court for the Northern District of California. Each Party hereby irrevocably and unconditionally (a) consents and submits to the exclusive personal jurisdiction of such courts for the purposes of any such action, suit, or proceeding, (b) waives any objection it may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (c) waives any claim or defense that any such action, suit, or proceeding has been brought in an inconvenient forum.
Section 9.3 — Attorneys' Fees
In any action, suit, or proceeding to enforce this Agreement or to resolve any dispute arising hereunder, the prevailing Party shall be entitled to recover its reasonable attorneys' fees, expert fees, costs, and expenses (including, without limitation, fees and costs incurred on appeal) from the non-prevailing Party, in addition to any other relief to which such prevailing Party may be entitled. For purposes of this Section 9.3, the "prevailing Party" means the Party that substantially obtains the relief it sought, whether by judgment, settlement, or otherwise.
ARTICLE 10 — GENERAL PROVISIONS
Section 10.1 — Entire Agreement
This Agreement, together with MSA Amendment No. 1 and the MSA (as amended by MSA Amendment No. 1), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, commitments, and communications, whether written or oral, between the Parties relating to the settlement of the Released Claims or the subject matter of this Agreement. No Party has relied upon any statement, representation, warranty, or agreement of the other Party except for those expressly set forth in this Agreement.
Section 10.2 — Amendment and Waiver
This Agreement may not be amended, modified, supplemented, restated, or otherwise changed except by a written instrument executed by both Parties. No waiver of any provision of this Agreement, or of any right or remedy arising hereunder, shall be effective unless set forth in a written instrument signed by the Party against whom enforcement of such waiver is sought. No waiver of any breach or default of any provision of this Agreement shall be deemed a waiver of any subsequent breach or default of the same or any other provision, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
Section 10.3 — Severability
If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, void, or unenforceable by any court of competent jurisdiction or other governmental authority, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement (or the remaining portion of such provision), and all other provisions shall remain in full force and effect. In the event any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid provision. If the Parties are unable to agree upon such a replacement provision, the invalid provision shall be reformed by the court or other governmental authority to the minimum extent necessary to render it valid, legal, and enforceable while preserving, to the maximum extent possible, the Parties' original intent.
Section 10.4 — Counterparts; Electronic Signatures
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. It shall not be necessary for each Party to sign the same counterpart. Signatures transmitted by electronic means, including via Brightwater Software or any similar electronic signature platform, portable document format (PDF), or facsimile transmission, shall be deemed original signatures and shall have the same legal force, validity, and effect as original ink signatures. Each Party agrees that it will not challenge the validity or enforceability of this Agreement on the ground that it was executed or delivered by electronic means.
Section 10.5 — Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Party may assign, delegate, or otherwise transfer this Agreement or any of its rights, interests, or obligations hereunder, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that either Party may assign this Agreement, without the prior consent of the other Party, in connection with a merger, consolidation, reorganization, or acquisition involving such Party, or a sale, transfer, or other disposition of all or substantially all of the assets of such Party or the business unit to which this Agreement relates, so long as the assignee expressly assumes all obligations of the assigning Party under this Agreement in writing. Any purported assignment in violation of this Section 10.5 shall be null and void and of no force or effect.
Section 10.6 — Notices
All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when: (a) delivered personally; (b) transmitted by email (with confirmation of receipt); (c) sent by registered or certified mail, return receipt requested, postage prepaid; or (d) sent by nationally recognized overnight courier service (with tracking and proof of delivery). All such notices shall be addressed to the Parties at the following addresses, or to such other addresses as either Party may designate by written notice to the other Party in accordance with this Section 10.6:
If to Lumos:
Adriana Voss, General Counsel Lumos Analytics Inc. 580 Howard Street, Suite 400 San Francisco, California 94105
Email: avoss@lumosanalytics.com
With a copy (which shall not constitute notice) to:
Linda Osei, Partner Calderwood & Harkness LLP 101 California Street, Suite 3200 San Francisco, California 94111
Email: losei@calderwoodharkness.com
If to Pinnacle:
Gerald R. Worthington, Chief Executive Officer Pinnacle Financial Holdings LLC 200 West Adams Street, Suite 3100 Chicago, Illinois 60606
Email: gworthington@pinnaclefh.com
With a copy (which shall not constitute notice) to:
Katherine Hargrove, Partner Hargrove, Tillman & Burch LLP 71 South Wacker Drive, Suite 4500 Chicago, Illinois 60606
Email: khargrove@htblaw.com
Section 10.7 — Third-Party Beneficiaries
Except as expressly set forth herein with respect to the Affiliates of each Party (solely in their capacity as Released Parties under Article 4), nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity other than the Parties hereto and their respective Affiliates, successors, and permitted assigns any right, benefit, remedy, or claim of any nature whatsoever under or by reason of this Agreement. No third party shall have any right to enforce any provision of this Agreement.
Section 10.8 — Further Assurances
Each Party agrees to execute and deliver, or cause to be executed and delivered, such further documents, instruments, and agreements, and to take or cause to be taken such further actions, as may be reasonably requested by the other Party and as may be reasonably necessary or desirable to effectuate the purposes and intent of this Agreement, to confirm and carry out the provisions hereof, and to consummate and make effective the transactions contemplated hereby, in each case at no additional cost to the requesting Party (other than de minimis administrative expenses).
Section 10.9 — Construction
This Agreement has been jointly negotiated and drafted by the Parties and their respective legal counsel. In the event of any ambiguity or dispute regarding the interpretation of any provision of this Agreement, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement and Mutual Release to be executed by their duly authorized representatives as of the Effective Date.
LUMOS ANALYTICS INC.
By: ________
Name: Adriana Voss
Title: General Counsel
Date: December 8, 2023
PINNACLE FINANCIAL HOLDINGS LLC
By: ________
Name: Gerald R. Worthington
Title: Chief Executive Officer
Date: December 8, 2023
ACKNOWLEDGED AND AGREED BY COUNSEL
CALDERWOOD & HARKNESS LLP Counsel for Lumos Analytics Inc.
By: ________
Name: Linda Osei
Title: Partner
Date: December 8, 2023
HARGROVE, TILLMAN & BURCH LLP Counsel for Pinnacle Financial Holdings LLC
By: ________
Name: Katherine Hargrove
Title: Partner
Date: December 8, 2023
EXHIBIT A
LIST OF INCIDENTS
The following table sets forth the service disruptions experienced by Pinnacle in connection with the Services provided by Lumos under the MSA that constitute the "Incidents" as defined in this Agreement:
Each of the foregoing Incidents was tracked and documented through Lumos's internal incident management system. The inclusion of the foregoing descriptions in this Exhibit A is for reference purposes only and does not constitute an admission by either Party as to the cause, scope, severity, duration, or impact of any Incident.
EXHIBIT B
SERVICE CREDIT APPLICATION SCHEDULE
The following table sets forth the manner in which the Settlement Credits in the aggregate amount of Four Hundred Eighty-Five Thousand Dollars ($485,000) shall be applied against Pinnacle's monthly subscription invoices during the Renewal Term:
Summary and Notes:
1.  Total Settlement Credits: $485,000.
2.  Application Method: The Settlement Credits are applied at $121,250 per invoice against the first four (4) monthly invoices of the Renewal Term (January 2024 through April 2024). Because each monthly Settlement Credit installment of $121,250 exceeds the monthly subscription fee of $115,000 by $6,250, the excess $6,250 per month is carried forward as a credit against the next succeeding invoice.
3.  Carryforward Credits: The aggregate carryforward credits accumulate to $25,000 ($6,250 × 4 months) and are applied against the May 2024 invoice, reducing the amount due for May 2024 from $115,000 to $90,000.
4.  Full Exhaustion: All Settlement Credits shall be fully applied and exhausted by the May 2024 invoice cycle. Beginning with the June 2024 invoice and continuing through the end of the Renewal Term (January 2026), Pinnacle shall pay the full monthly subscription fee of $115,000 without offset or credit.
5.  Renewal Term Annual Subscription Fee: $1,380,000 per annum ($115,000 per month × 12 months).
6.  Total Renewal Term Contract Value: $2,760,000 ($1,380,000 × 2 years), before application of the Settlement Credits. After application of the $485,000 in Settlement Credits, the net contract value payable by Pinnacle during the Renewal Term is $2,275,000.
End of Exhibit B — Service Credit Application Schedule
Incident ID | Date(s) of Occurrence | Description
INC-4471 | October 12–13, 2022 | Service disruption affecting the Lumos enterprise SaaS platform, including intermittent loss of access to the financial analytics and risk scoring modules, impacting Pinnacle's authorized users during the stated period.
INC-4602 | November 28, 2022 | Service disruption affecting the Lumos enterprise SaaS platform, including degraded performance and partial unavailability of the regulatory compliance dashboard, impacting Pinnacle's authorized users during the stated period.
INC-4815 | January 9–10, 2023 | Service disruption affecting the Lumos enterprise SaaS platform, including a full platform outage resulting in the complete unavailability of all Services to Pinnacle's authorized users during the stated period.
INC-5033 | March 3–5, 2023 | Service disruption affecting the Lumos enterprise SaaS platform, including intermittent connectivity failures and data retrieval latency issues affecting the financial analytics and regulatory compliance dashboard modules, impacting Pinnacle's authorized users during the stated period.
Invoice Month | Monthly Subscription Fee (Renewal Term) | Settlement Credit Applied | Net Amount Due
January 2024 | $115,000 | $121,250 | $0.00 (with $6,250 credit carried forward)
February 2024 | $115,000 | $121,250 | $0.00 (with $6,250 credit carried forward)
March 2024 | $115,000 | $121,250 | $0.00 (with $6,250 credit carried forward)
April 2024 | $115,000 | $121,250 | $0.00 (with $6,250 credit carried forward)
May 2024 | $115,000 | $25,000 (aggregate carryforward: $6,250 × 4 = $25,000) | $90,000
June 2024 and each month thereafter through January 2026 | $115,000 | $0.00 | $115,000

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

RECITALS

WHEREAS:

LUMOS ANALYTICS INC.

PINNACLE FINANCIAL HOLDINGS LLC

ACKNOWLEDGED AND AGREED BY COUNSEL

EXHIBIT A

LIST OF INCIDENTS

EXHIBIT B

SERVICE CREDIT APPLICATION SCHEDULE

Record

Parties

Dates

Amounts