Dear Patricia,
I hope this message finds you well. I am writing following the productive mediation session held on Wednesday, September 6, 2023 before the Honorable Eleanor Voss (Ret.) at the Tidewater Mediation Group offices in San Jose. I wanted to promptly memorialize the principal settlement terms reached in principle at the mediation and transmit the attached proposed settlement term sheet for your review and discussion with your clients — NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun. The term sheet reflects the parties' understanding as communicated through Judge Voss during the mediation.
For your convenience, I have summarized the principal terms below:
1. **Monetary Payment.** NovaSpark Technologies Inc. shall pay Lumos Analytics Inc. a lump-sum settlement payment of $4,350,000 (four million three hundred fifty thousand dollars) within thirty (30) days of execution of the definitive Settlement Agreement and Mutual Release.
2. **Stipulated Permanent Injunction (Injunction-by-Consent).** The parties shall jointly submit a Stipulated Permanent Injunction to the Honorable David Rutherford in Case No. 23-CV-004871 for entry by the Court. The injunction shall permanently enjoin all Defendants — NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun — from possessing, using, disclosing, or exploiting any trade secrets of Lumos Analytics Inc., including but not limited to: (a) the LumosEdge ensemble ML model architecture and hyperparameter configurations; (b) the proprietary feature-engineering libraries (comprising 2,847 engineered features); (c) the DataStream ETL pipeline codebase and data-schema definitions; (d) the curated training dataset of approximately 14.6 terabytes of historical financial and alternative data; and (e) confidential product roadmap materials, including the LumosEdge 3.0 specifications.
3. **Forensic Remediation Protocol.** NovaSpark and the individual Defendants shall submit to a complete forensic remediation — consisting of verified deletion and destruction of all Lumos proprietary materials from all systems, devices, and cloud storage accounts — supervised by Brindoval Digital Forensics LLC (Dr. Irene Chow, Managing Director), the neutral forensic examiner previously appointed by stipulation and Court order. Remediation shall be completed within thirty (30) days of entry of the Stipulated Permanent Injunction. Oversight of the remediation process shall be provided by Meridian Cybersecurity Advisors Inc. (Naveen Kapoor, Senior Consultant) on behalf of Lumos. Brindoval shall issue a final certification upon completion.
4. **Forensic Examiner Cost Allocation.** Brindoval Digital Forensics LLC's fees for the remediation shall be allocated 60% to Defendants/NovaSpark and 40% to Lumos, consistent with the existing Court order and the parties' prior stipulation.
5. **Personal Covenants — Individual Defendants.** Each of Rajiv Anand, Serena Mallick, and Derek Yun shall personally covenant not to use or exploit any Lumos Analytics Inc. trade secrets in any future employment, venture, or undertaking for a period of five (5) years from the effective date of the Settlement Agreement.
6. **Ongoing Operations — NovaSpark.** NovaSpark Technologies Inc. may continue its business operations, provided that any competing product or technology must be developed using only independently created or publicly available technology and information, with no reliance on Lumos proprietary materials. NovaSpark shall be subject to audit rights exercisable by Brindoval Digital Forensics LLC for a period of eighteen (18) months from the effective date of the Settlement Agreement to verify compliance.
7. **Mutual Non-Disparagement.** The parties shall agree to mutual non-disparagement provisions.
8. **Confidentiality of Settlement Terms.** All terms of the settlement shall be confidential, except for the Stipulated Permanent Injunction, which will be filed as a public court record with the Court.
9. **Dismissal.** Upon completion of the forensic remediation and receipt of Brindoval's final certification, the parties shall stipulate to dismissal of Case No. 23-CV-004871 with prejudice, each side to bear its own attorneys' fees and costs except as otherwise provided in the Settlement Agreement.
I would appreciate it if you could review the attached term sheet with your clients and provide any comments or redlines by Friday, September 15, 2023, so that we can maintain momentum toward finalizing this matter. Once the term sheet is agreed upon, Calderwood & Harkness will prepare the definitive Settlement Agreement and Mutual Release, the Stipulated Permanent Injunction for submission to Judge Rutherford, and the forensic remediation protocol letter for Brindoval.
As a housekeeping matter, the mediation fee of $18,500 from Tidewater Mediation Group is to be split equally between the parties ($9,250 each), per the mediation agreement. I understand Tidewater will be invoicing both firms directly.
Please do not hesitate to call me if you or Sam have any questions or would like to discuss any of the terms. I am happy to arrange a call at your convenience.
Best regards,
Marcus Delgado Partner Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104 Tel: (415) 555-7200 Email: mdelgado@calderwoodharkness.com
C&H Matter No.: 1008-00005
**Attachment:** Proposed Settlement Term Sheet — Lumos Analytics Inc. v. NovaSpark Technologies Inc. et al. (Case No. 23-CV-004871)
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