Accidental Gods (8 page)

Chapter 11

Year 4

Few men have virtue to withstand the highest bidder.

—George Washington

Thomas sat in the back of the cab as it cruised south down I-495, having just turned off the Mass Pike, thinking about this deal. It was a “big” deal—one of those deals that only comes around once in a lifetime, a chance to ensure both financial and bureaucratic freedom for IACP with no shares or influence being lost to an outside investor and a chance to make himself a large sum of money while giving up virtually nothing. It was exciting. He was also glad the team would make a lot of money as well, but really, it was the freedom for IACP to govern itself that mattered. The things they were doing at IACP had huge implications for science, technology, and society; he didn’t want to be beholden to anyone as they explored whatever paths they chose.

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, up 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.