Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following capitalized terms shall have the meanings set forth below. Other capitalized terms used in this Agreement are defined in the Recitals or elsewhere in the body of this Agreement, and such definitions are equally applicable to the singular and plural forms of the terms defined.

Section 1.1 "Action" means the civil action pending in the Superior Court of the State of California, County of Santa Clara, captioned Lumos Analytics Inc. v. NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, Case No. 23-CV-004871, and all proceedings, motions, orders, and matters therein.

Section 1.2 "Agreement" or "Settlement Agreement" means this Settlement Agreement and Mutual Release, together with all exhibits attached hereto and incorporated herein by reference, as the same may be amended in accordance with Section 12.2.

Section 1.3 "Confidential Information" has the meaning ascribed to that term in the PIIAAs executed by each Individual Defendant upon hire at Lumos, and includes, without limitation, all information designated as confidential, proprietary, or trade secret thereunder.

Section 1.4 "Court" means the Superior Court of the State of California, County of Santa Clara, the Honorable David Rutherford presiding, in which the Action is pending.

Section 1.5 "Brindoval" means Brindoval Digital Forensics LLC, a California limited liability company with offices at 1901 Harrison Street, Suite 600, Oakland, California 94612, which was appointed as the neutral forensic examiner in the Action pursuant to the Parties' stipulation dated March 8, 2023, and the Court's order entered in connection therewith.

Section 1.6 "Effective Date" means September 22, 2023, the date on which this Agreement is fully executed by all Parties.

Section 1.7 "Forensic Remediation" has the meaning ascribed to that term in Article IV of this Agreement.

Section 1.8 "Individual Defendants" means Rajiv Anand, Serena Mallick, and Derek Yun, collectively, and "Individual Defendant" means any one of them.

Section 1.9 "Lumos Trade Secrets" means all proprietary and confidential information of Lumos, including without limitation: (i) the LumosEdge ensemble machine-learning model architecture, including its proprietary neural-network topology, layer configurations, activation functions, attention mechanisms, and hyperparameter configurations; (ii) proprietary feature-engineering libraries containing two thousand eight hu

Section 1.10 "Meridian" means Meridian Cybersecurity Advisors Inc., a California corporation with offices at 2100 Geng Road, Suite 210, Palo Alto, California 94303, which serves as Lumos's technical and cybersecurity consultant in connection with the matters described in this Agreement.

Section 1.11 "PIIAA" means the Proprietary Information and Inventions Assignment Agreement executed by each Individual Defendant upon commencement of employment at Lumos, containing, among other provisions, restrictive covenants regarding confidentiality, non-disclosure, invention assignment, non-solicitation of employees, and the return of company materials upon termination.

Section 1.12 "Settlement Payment" has the meaning ascribed to that term in Section 2.1 of this Agreement.

Section 1.13 "Stipulated Permanent Injunction" has the meaning ascribed to that term in Article III of this Agreement.

ARTICLE II — SETTLEMENT PAYMENT

Section 2.1 Amount. In consideration of the releases, covenants, and other obligations set forth in this Agreement, NovaSpark shall pay to Lumos a lump-sum settlement payment in the amount of Four Million Three Hundred Fifty Thousand Dollars ($4,350,000.00) (the "Settlement Payment"). The Settlement Payment shall constitute the total monetary consideration payable by Defendants to Lumos under this Agreement, subject

Section 2.2 Payment Deadline. The Settlement Payment shall be due and payable in full within thirty (30) calendar days of the Effective Date, that is, no later than October 22, 2023. Time is of the essence with respect to the payment obligation set forth in this Section.

Section 2.3 Method of Payment. The Settlement Payment shall be made by wire transfer of immediately available funds in United States dollars to a bank account designated in writing by Lumos or its counsel, Calderwood & Harkness LLP. Lumos shall provide complete wire transfer instructions to Defendants' counsel, Whitfield, Raines & Gerber LLP, within five (5) business days of the Effective Date. Such wire instructions

Section 2.4 Late Payment. In the event that the Settlement Payment is not received in full by Lumos on or before October 22, 2023, the unpaid amount shall accrue interest at the rate of ten percent (10%) per annum, or the maximum rate permitted by applicable law, whichever is lower, calculated from the due date until the date of actual receipt by Lumos. In the event that the Settlement Payment, together with any accr

Section 2.5 Joint and Several Liability. The obligation to make the Settlement Payment, including any interest accruing thereon pursuant to Section 2.4, is a joint and several obligation of NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun. Lumos may enforce the Settlement Payment obligation against any one or more Defendants, jointly or severally, without being required to proceed first against

Section 2.6 Tax Treatment. Each Party shall be solely responsible for the payment of any and all taxes, including federal, state, and local income taxes, self-employment taxes, and any other taxes or assessments, arising from or attributable to the Settlement Payment or any other consideration received by such Party under this Agreement. NovaSpark shall issue such tax reporting documentation (including, if applicable

ARTICLE III — STIPULATED PERMANENT INJUNCTION

Section 3.1 Consent to Injunction. Defendants hereby consent to the entry of a Stipulated Permanent Injunction substantially in the form attached hereto as Exhibit A (the "Stipulated Permanent Injunction"). Within fifteen (15) calendar days of the Effective Date, the Parties, through their respective counsel, shall execute and jointly file with the Court a stipulation requesting that the Honorable David Rutherford en

Section 3.2 Scope of Injunction. The Stipulated Permanent Injunction shall provide that Defendants—NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun—and their respective officers, agents, servants, employees, attorneys, successors, and assigns, and all persons acting in concert or participation with any of them, are permanently enjoined and restrained from directly or indirectly possessing, usin

Section 3.3 Survival. The Stipulated Permanent Injunction shall survive the dismissal of the Action with prejudice and shall remain in full force and effect as a standalone order of the Court, enforceable through contempt proceedings and such other remedies as the Court may deem appropriate. The Court shall retain continuing jurisdiction to enforce the Stipulated Permanent Injunction, to modify its terms upon motion

ARTICLE IV — FORENSIC REMEDIATION

Section 4.1 Scope of Remediation. Defendants shall cooperate fully and in good faith with Brindoval Digital Forensics LLC in conducting a complete forensic remediation (the "Forensic Remediation"), consisting of the verified, permanent deletion and destruction of all Lumos Trade Secrets and all other Lumos proprietary materials, in any form, from each of the following locations and systems: (a) all NovaSpark servers,

Section 4.2 Timeline. The Forensic Remediation shall commence within fifteen (15) calendar days of the Effective Date and shall be completed within forty-five (45) calendar days of the Effective Date, that is, no later than November 6, 2023. Upon completion of the Forensic Remediation, Brindoval shall issue a written certification (the "Final Forensic Remediation Certification") confirming that all Lumos Trade Secret

Section 4.3 Oversight by Meridian. Meridian Cybersecurity Advisors Inc., through its designated representative Naveen Kapoor, Senior Consultant, shall have the right to oversee and independently verify the completeness and thoroughness of the Forensic Remediation conducted by Brindoval. Defendants shall provide Meridian with reasonable access to observe the remediation process, including physical presence during on-s

Section 4.4 Lead Forensic Personnel. Brindoval shall conduct the Forensic Remediation under the direction of Dr. Irene Chow, Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst. Brindoval may utilize additional qualified forensic personnel as necessary to complete the Forensic Remediation within the timeline set forth in Section 4.2, provided that Dr. Chow or Mr. Barr shall maintain

Section 4.5 Cooperation Obligations. Defendants shall provide Brindoval with all passwords, credentials, encryption keys, decryption tools, multi-factor authentication codes, access tokens, and any other information or access necessary for Brindoval to conduct and complete the Forensic Remediation in a thorough and timely manner. Defendants shall make all devices and accounts subject to the Forensic Remediation avail

Section 4.6 Cost Allocation. The total fees of Brindoval Digital Forensics LLC for all services rendered in connection with the Action, including the forensic imaging conducted from March 22 through April 14, 2023, the issuance of the Preliminary Forensic Report dated May 1, 2023, and the Forensic Remediation contemplated by this Article IV, are Two Hundred Eighteen Thousand Six Hundred Dollars ($218,600.00). Defenda

ARTICLE V — RESTRICTIVE COVENANTS AND ONGOING OBLIGATIONS

Section 5.1 Personal Trade Secret Covenant (Five-Year). Each Individual Defendant—Rajiv Anand, Serena Mallick, and Derek Yun—hereby personally covenants and agrees that, for a period of five (5) years from the Effective Date, that is, through September 22, 2028, he or she shall not, directly or indirectly, use, disclose, reference, incorporate, rely upon, derive from, or otherwise exploit any Lumos Trade Secrets in a

Section 5.2 NovaSpark Independent Development Obligation. NovaSpark Technologies Inc. may continue to conduct its business operations and to develop, market, and sell its products and services, provided that NovaSpark shall develop any competing or other products, algorithms, models, features, data pipelines, and services using only independently created technology, publicly available information, publicly available

Section 5.3 Audit Rights. For a period of eighteen (18) months from the Effective Date, that is, through March 22, 2025, Brindoval Digital Forensics LLC shall have the right, upon not less than fifteen (15) business days' prior written notice to NovaSpark and its counsel, to conduct audits of NovaSpark's systems, servers, code repositories, development environments, and related documentation to verify NovaSpark's com

Section 5.4 Survival of PIIAA Provisions. Nothing in this Agreement is intended to, or shall be construed to, limit, supersede, extinguish, or modify any obligation of any Individual Defendant under his or her PIIAA that survives termination of employment, including without limitation the three-year post-termination confidentiality and non-disclosure provision and the twelve-month post-separation non-solicitation of

Section 6.1 Release by Lumos. Effective upon both (a) receipt by Lumos of the Settlement Payment in full in accordance with Article II and (b) issuance by Brindoval of the Final Forensic Remediation Certification in accordance with Section 4.2, Lumos, on behalf of itself and its officers, directors, shareholders, employees, agents, parents, subsidiaries, affiliates, predecessors, successors, and assigns, hereby relea

Section 6.2 Release by Defendants. Effective upon the Effective Date, each Defendant—NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun—on behalf of itself or himself or herself, and on behalf of its or his or her respective heirs, executors, administrators, personal representatives, successors, assigns, officers, directors, employees, agents, and attorneys, hereby releases and forever discharges

Section 6.3 Waiver of Unknown Claims — California Civil Code § 1542. Each Party acknowledges that it is familiar with and has been advised by its counsel regarding the provisions of Section 1542 of the California Civil Code, which provides: "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 th

ARTICLE VII — DISMISSAL OF ACTION

Section 7.1 Stipulation for Dismissal. Within five (5) business days following the satisfaction of both of the following conditions: (a) receipt by Lumos of the Settlement Payment in full in accordance with Article II, and (b) issuance by Brindoval of the Final Forensic Remediation Certification in accordance with Section 4.2, the Parties, through their respective counsel, shall execute and file with the Court a Stip

Section 7.2 Retention of Jurisdiction. The Stipulation and Proposed Order of Dismissal with Prejudice shall include a provision, and the Parties hereby stipulate, that the Court shall retain jurisdiction over the Parties and the subject matter of the Action for the purpose of enforcing the Stipulated Permanent Injunction entered pursuant to Article III and the terms of this Agreement, pursuant to California Code of C

ARTICLE VIII — NON-DISPARAGEMENT

Section 8.1 Mutual Non-Disparagement Covenant. Each Party covenants and agrees that it or he or she shall not, directly or indirectly, make, publish, cause to be made or published, ratify, or authorize any statement, whether written or oral, that disparages, defames, impugns the character or reputation of, or casts in an unfavorable light any other Party to this Agreement, or any such Party's officers, directors, emp

Section 8.2 Permitted Disclosures. Nothing in this Article VIII shall restrict or prohibit any Party from: (a) making truthful statements required by applicable law, rule, or regulation, including without limitation statements made in response to a subpoena, court order, regulatory inquiry, or governmental investigation; (b) making truthful statements in connection with the enforcement of this Agreement, the Stipulat

Section 9.1 Confidentiality of Settlement Terms. The Parties agree that the terms of this Agreement, including without limitation the Settlement Payment amount and all other financial terms, the terms of the Forensic Remediation, and the specific restrictive covenant provisions herein, are confidential and shall not be disclosed by any Party to any third party, except as follows: (a) to the Parties' respective legal

Section 9.2 Public Statements. Any public statement by any Party regarding the resolution of the Action, whether made to the press, media, investors, customers, employees, or any other audience, shall be limited to stating that "the matter has been resolved to the mutual satisfaction of the parties," or such other statement as the Parties may mutually agree upon in writing. No Party shall disclose the Settlement Paym

ARTICLE X — REPRESENTATIONS AND WARRANTIES

Section 10.1 Authority. Each Party represents and warrants that it or he or she has the full legal right, power, and authority to enter into this Agreement and to perform its or his or her obligations hereunder. NovaSpark Technologies Inc. represents and warrants that the execution, delivery, and performance of this Agreement has been duly authorized by all requisite corporate action, including approval by its board

Section 10.2 No Assignment of Claims. Each Party represents and warrants that it or he or she has not heretofore assigned, transferred, conveyed, subrogated, or otherwise disposed of any claim, demand, cause of action, or right of action released or to be released herein, in whole or in part, to any person, entity, or other third party.

Section 10.3 Advice of Counsel. Each Party acknowledges and represents that it or he or she has been represented by experienced legal counsel in connection with the negotiation, drafting, and execution of this Agreement and has had the opportunity to consult fully with such counsel regarding the terms and legal effect of this Agreement. Lumos has been represented by Calderwood & Harkness LLP, specifically by Marcus D

Section 10.4 No Undisclosed Materials. Defendants represent and warrant that they have disclosed to Brindoval Digital Forensics LLC the location, identity, and nature of all Lumos Trade Secrets and Lumos proprietary materials in their possession, custody, or control as of the Effective Date, including all devices (whether corporate or personal), cloud storage accounts, email accounts, code repositories, physical stor

ARTICLE XI — BREACH AND REMEDIES

Section 11.1 Material Breach. The following shall each constitute a material breach of this Agreement: (a) any failure by any Defendant to make the Settlement Payment in accordance with Article II; (b) any breach of the restrictive covenants set forth in Article V, including the personal trade secret covenant in Section 5.1 and the independent development obligation in Section 5.2; (c) any violation by any Defendant

Section 11.2 Remedies. In the event of a material breach of this Agreement by any Defendant, Lumos shall be entitled, in addition to any other remedy available at law or in equity, to: (a) specific performance of the breaching Defendant's obligations under this Agreement, it being acknowledged that monetary damages alone would be inadequate to compensate Lumos for a breach of the restrictive covenants, the Stipulated

Section 11.3 Cumulative Remedies. All rights and remedies of the Parties under this Agreement are cumulative and not exclusive of any other rights or remedies provided by law, equity, or any other agreement. The exercise of any one remedy shall not preclude the exercise of any other remedy, and no delay or failure in exercising any remedy shall constitute a waiver thereof.

ARTICLE XII — GENERAL PROVISIONS