by Andrew Busey
The cab took exit 21B and turned left onto South Street. After a mile and change, the cab stopped at 176 South Street, the world headquarters of the MC2 Corporation, the leader in information storage solutions, according to their website. They were also the supplier of the storage systems Thomas and IACP had spent millions for—up until Larry and Bleys helped make kilocarat storage a reality. Now it was time to get not just millions but hopefully billions back.
Thomas stepped out of the cab and adjusted his tailor-made Ermenegildo Zegna suit, which was a blue hue virtually indistinguishable from black. He had an impulse to button the coat—these Boston guys were always so formal—but he wore no tie, so he let the coat hang open to keep it from excessively wrinkling the crisply starched white shirt he had changed into after the flight.
A smiling young man wearing a suit and tie emerged from the building and greeted Thomas.
“Hello, Dr. Gray. I’m Lloyd Reincar, Joe Tucker’s assistant. If you would follow me, he and Bob Gris are waiting for you on the fifth floor.”
Thomas followed Lloyd inside and toward a pair of elevators.
Getting this close to such a potentially prosperous deal had been an arduous process for everyone. Thomas couldn’t blow it now, not only as his duty to IACP and the entire staff but also as a courtesy to MC2. So many companies had wanted this deal, but after months of substantial due diligence and detailed analyses of both technology and patents, only a few remained. Finally, after no one found any flaws and everyone realized the real value of what IACP was offering, only the most substantial of those remaining competitors remained, and MC2 was the highest bidder among them.
Lloyd pressed the up button between the elevators, and after a brief wait, a light above one set of elevator doors came on with a ding. The doors opened, and Thomas followed Lloyd inside.
Thomas had significant financial and technological stakes in this deal. Larry had listed Thomas as one of the inventors, probably because he gave him credit for kicking him in the ass to get started down this path. The university was pissed about this whole deal and frowned on letting principals negotiate, but they couldn’t do anything about it. Thomas had insisted from the outset that a special IACP holding corporation would own all but a sliver of the intellectual property rights generated through IACP’s work. He had granted the university only the smallest piece of that pie—the opposite of the way it usually worked. This particular limitation had precluded Thomas’s being invited to most universities, but the negotiators at UT and the handful of other universities that were willing to negotiate had apparently not expected much marketable technology to come out of the work.
Thomas smiled at how wrong they had been.
The elevator stopped at the fifth floor, and Lloyd led Thomas through a maze of corridors.
“Focus,” Thomas mumbled under his breath.
After everything was said and done—his earliest dealings with the universities, IACP’s innovations, the marketplace’s due diligence and research—after everything, MC2’s desire for this deal and IACP’s power to negotiate had come together like perfectly mixed cement.
Lloyd opened a door to a large conference room. Waiting inside were two men.
The black-goateed, thick-necked one smiled at Thomas and offered his hand.
Lloyd said, “Dr. Gray, this is Joe Tucker, MC2’s CEO.”
Thomas shook Joe’s hand. “Mr. Tucker,” he said. “Nice to finally meet you in person.”
Lloyd opened his mouth to say something else, but Thomas had already clasped the other man’s hand.
“And Bob,” Thomas said turning to Bob Gris, MC2’s executive vice president of corporate development and strategy. “Good to see you again.” They had met a few times during the earlier discussions and negotiation around the licensing of the IACP technology. Bob had even come down to Austin.
Joe said, “It’s nice to finally be able to put a face with the voice, Dr. Gray. Call me Joe.” He had a piercing, unblinking stare and, without turning his eyes from Thomas, said, “Thank you, Lloyd.”
Lloyd left the conference room and closed the door behind him.
Joe turned toward the giant conference table, motioning to one of the chairs. “Please.”
Thomas sat.
Bob unbuttoned his gray pinstripe suit’s jacket and sat across from Thomas. A tiny, circular tie pin with divots like a miniature golf ball restrained his blood-red tie.
Joe sat at the end of the table, between Thomas and Bob.
Picking right up where the last phone conversation had left off, Bob said, “We want to do this deal, Dr. Gray, but it’s a little bizarre that we have to license the patents from one entity and buy manufacturing from another. That’s pretty out of the ordinary.”
“Everything we’ve built has evolved in an out of the ordinary way. First, my team owns Nanogrids, Inc.,” Thomas said. “IACP IP Holding Corp., in which UT is a partner, owns the core intellectual property but doesn’t manufacture. So your deal with IACP is a worldwide exclusive right to most of the IP. We retain the right to continue using any or all of the IP for our research projects but not the right to sell it or storage products based on it without prior mutual agreement.”
“‘Most?’ I thought we got exclusive rights to the IP to manufacture whatever we want.”
“This is the part I wanted to discuss in person. Yes, as I said before, you can use the IP we’re willing to license exclusively to you for whatever products you see fit, but we’re keeping the IP for the nanotubes.” Thomas raised his brows and smiled, he hoped, pleasantly. “That’s what Nanogrids, Inc., is for.”
“And the intellectual property relating to the diamonds?”
“The process of synthesizing the diamonds is not patented and therefore is not easily licensable. The process is something we prefer not to reveal, so it’s protected using trade secret rules, because we didn’t want the process to be published. We think there are a myriad of applications for this technology beyond storage and that by protecting the process we can control it. Frankly, we also don’t want anyone else mimicking what we’re doing at IACP.”
“So what exactly are we licensing?”
“All the storage-related intellectual property.” Thomas leaned forward and clasped his hands on the table. It felt too much like praying, so he forced his hands to unclasp and then laid them flat, palms down, on the table. It felt awkward. “You’ve reviewed our core inventions and patents?”
“Yes, everything looks good.”
“But the core IP for the laser focus mesh that wraps the diamonds and the manufacturing of said diamonds—well, that we’ll be keeping. You only get exclusive purchase rights for storage systems.”
“I see.”
Bob leaned back and ran his forefinger and thumb over the corners of his mouth and down his chin, as if he were the one with the goatee.
Joe had been watching with his marksman’s eyes whoever had been speaking, and now, he seemed unsure where to look.
Thomas asked Bob, “Is this a deal killer?” and Joe’s eyes latched onto Thomas’s.
“I doubt it,” Bob said.
Joe’s chest swelled with a deep breath, pushing the white crew neck against the open lapels of his sports coat. Thomas turned to Joe, expecting him to speak with all that air, but he let the air out and only smiled.
Thomas turned back to Bob. “Look, we’ll make sure you get the basic mesh diamonds at a price that gives you insane margins. Much of the value, as I am sure you know, is the software that controls these things. That’s where you have a lot of opportunity for value-add. We’ve only been using them as raw, specialized storage.”
Joe nodded.
Bob said, “We certainly get that part.”
Joe finally spoke. “So let’s run through the deal on the table,” he said and nodded to the dry-erase board. “Bob?”
Bob walked up to the dry-erase board, wrote, “$750,000,000.00,” and said, “As per our conversations, seven hundred fifty million one time, u
p front…” He kept writing as he spoke. “…for an exclusive license to IACP IP Holding Corp.’s intellectual property.” He turned to Thomas. “Most of it. Your attorneys and our attorneys will amend the contract as necessary before we meet again for signatures.” He turned back to the board and wrote again. “An ongoing royalty of ten percent of the gross sales of the diamond storage systems. A one-time, up-front payment of two hundred million to Nanogrids, Inc., for exclusive purchase rights for synthetic diamonds for use in storage devices. Finally, a cost-plus-fifty-percent purchase agreement on the diamonds from Nanogrids, Inc.”
Joe nodded firmly but pursed his lips. The bristles in his goatee stuck out around his mouth. His crew-neck shirt collar dipped and then bobbed back up around his Adam’s apple as he swallowed.
Thomas watched closely. He had spent a lot of time negotiating at his last company and understood this game. Joe’s swallow had been a nervous one. Thomas knew then that they were ready to do the deal.
He smiled. It was a good thing he hadn’t let the university negotiate this. They wouldn’t have gotten a good deal, and IACP wouldn’t have benefited nearly as much.
Thomas cleared his throat and said, “That looks like the main points. The only thing that’s missing is that if you want to audit the cost-plus-fifty, any information about our production process can only be viewed on site under strict confidentiality agreements that bind the auditor.”
Joe said, “Not a problem, given the prices we’ve heard so far, we are pretty comfortable with the numbers. Our biggest questions are simple. How quickly can you start supplying them, and can you keep up with demand?”
Thomas gave a confident half smile and nodded. “Much of that two hundred million will go into a new production facility. We think we can get you enough in the next six months to meet initial demand, and by early next year, our new facilities should be complete. It will take you at least that long to develop the software you’re going to need. We can get you prototypes almost immediately.”
“Sounds good,” Joe said. His smile was back, and his bristles had settled down. He stood up and said, “Let’s do it.”
“One more thing,” Thomas said, still sitting. “You can’t hire any of our people.”
Bob frowned and looked at Joe and then back at Thomas. “Actually, we have one more thing, too.”
“Yeah?”
“We need to know that we are the first priority on the diamond systems—before even IACP.” Bob scrutinized Thomas.
“Certainly, but we’ll need at least a small holdback in the event you guys knock it out of the park.”
“The lesser of one a month or ten percent of production,” Bob said, “and it has to be in the contract that we get priority.”
Thomas struggled not to frown or sigh. He hoped Bob’s “one more thing” wouldn’t make a difference. If they sold a ton, IACP would still make a lot of money, so it would be a good situation, but it could also severely limit them.
Thomas said, “Done.”
Joe watched Bob nod and then said, “Deal.” He extended his hand.
Thomas stood and shook it.
Bob walked to the wall’s intercom and hit a button.
Lloyd came in with a bottle of Dom Pérignon and three champagne flutes. He opened the bottle with a linen napkin and a head waiter’s finesse, filled the flutes, quickly but gently, and set the bottle on the table. Without a word, he turned around and left.
Joe, Bob, and Thomas raised the glasses.
Joe said, “To a prosperous new partnership for us both and a huge new product line for us.”
The glasses clinked.
Bob pulled a large contract out of his bag. “Some reading for your flight back. It’s pending some minor changes based on today’s discussion, of course.”
“Of course,” Thomas said.
“We’re really looking forward to this,” Joe said and refilled the flutes all around.
Thomas nodded. “As are we.”
He sipped the champagne; the aroma always reminded him of the day he had sold his last start-up. That day had made him twenty million dollars. Today was better. Much better.
***
Thomas rode back to the airport in MC2’s chauffeured Mercedes-Benz S500 instead of a taxi like he had arrived in, and he sat speculating on IACP’s new future.
If this grew into a billion-dollar-plus line of business—and based on MC2’s expectations, it was almost certain that it would—the royalties alone would be a hundred million dollars a year. IACP could move off campus into a facility with far higher security and a massive data center. Even more important, these kinds of royalties would give IACP the financial freedom to continue their research for a decade or more without any restrictions or interference from outsiders. They could now hire the extended staff they needed to support the expanding research.
Now they could push the envelope.
Chapter 12
Year 4
I think that travel comes from some deep urge to see the world, like the urge that brings up a worm in an Irish bog to see the moon when it is full.
—Lord Dunsany
Thomas woke up, startled by something. It was still dark, and it took him a few minutes to focus in the darkness.
He heard a faint chuckle, a familiar woman’s chuckle, next to him. He reached beside him, and his hand touched a warm body.
Then it all came rushing back to him. He was at the Park Hyatt Goa…in India…at Ajay’s wedding. Everyone had gotten overly drunk at the reception.
“Oh shit,” he mumbled.
“Oh, come on,” she said. “It’s not so bad.”
He smiled. He had really missed being with her. He ran his hand along her warm, naked body, still concealed beneath the sheets. He felt her shift slightly in response to his touch.
“Don’t get used to it,” Lisa said, and he knew from the exact sound of her words that she was smiling.
“Why not?” he asked.
“Nothing’s changed. You still care more about your work than me. Or anything else for that matter. The most interesting thing I’ve learned in the last few years is that it almost doesn’t matter what the work is—although I would definitely say the work we’re doing now is at least something worth getting excited about.”
“It is.”
“Maybe one day you’ll understand,” she said with a sigh. Then she rolled onto her side facing him and propped herself up with an elbow.
“I hope so,” he said, and he really meant it.
“Well, for now, let’s make the most of the fact that we are far away from reality,” she said and pulled him down toward her.
***
A few bungalows down, Catherine was sitting up in her bed wondering what she had been thinking. It appeared neither an Ivy League education nor a PhD was a shield against alcohol. The problem she was struggling with now was whether this was a mistake induced by too much drinking or some other subconscious thing that had just been facilitated by it.
Sunlight was starting to find its way past the billowy drapes, giving the room the hint of an orangey glow. The dark hardwood covering the floor and the earth tones of the room only amplified this effect, creating a comforting embrace that gave her a good feeling.
The form next to her rustled, drawing her back to her dilemma. He opened his eyes. Catherine had expected him to be surprised or startled, but he wasn’t. He simply reached out and took her hand. Then his eyes closed again. She almost wasn’t sure he had woken up at all. Then he gently rubbed the back of her hand. She smiled. He was full of surprises.
***
They had spent the day before relaxing around the hotel’s beautiful pool, a hundred yards from and affording a sweeping view of the Indian Ocean. Dunes, palm trees, and a well-groomed garden provided a buffer between them and it. Wooden bridges stretched out, like tendrils, from the resort to the beach. The occasional guest made the trek out to the actual ocean. The IACP crowd had found the bar at the pool to be more appealing after a f
ew excursions.
That night, they had gathered on the beautiful outer patio of Masala, the Goan restaurant in the hotel. Goa had been a Portuguese colony for almost four hundred and fifty years, starting in 1510. The mingling of Portuguese and Indian cultures was readily apparent in the architecture and food—and this restaurant showcased them both. It was largely open air by design with a large patio that featured a beautifully crafted and exquisitely colorful tile pattern that was clearly infused with Portuguese influence.
The food was unique, spicy dishes of prawns and other seafood, combined with traditional Indian breads. It was a delicious combination that kept the IACP crowd eating and drinking well into the night.
Ajay and his new bride, Chunni, had been entertaining them all evening. The funniest moment had come when it had been revealed that Chunni roughly translated to “star.” The entire IACP group, which was about a quarter of the small wedding party, had a good laugh at that. Ajay had actually blushed a little.
As the evening began to wind down, people trickled away. Most of Ajay’s and Chunni’s families were the first to go. Then Ajay and Chunni themselves politely bowed out, and they were wished well with too many not-so-subtle hints. As the crowd began to thin, there were a lot of furtive glances. Thomas thought it was almost like some spy game.
The previous night, everyone had been so drunk that no one even remembered leaving—much less who had left with whom. Tonight, it seemed, would require more cloak-and-dagger work. He and Lisa had already agreed that this trip would be a “special exception,” so she was going to make her way to his room shortly after he left. He wasn’t so concerned about himself; rather, he was more curious about the others. Stephen, Larry, Catherine, Jenn, and Jules—none of them had brought dates.
He was enjoying watching the interaction. It was pretty entertaining. Lisa kept catching his eye, so he didn’t want to linger. But he didn’t want to be the first to leave. Eventually, Catherine stood up and took her leave. She wandered into the dark paths back toward her bungalow after saying her good nights.