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The Completion Meeting

July 26, 2019

Phillips, Tate and Shrive's Cambridge law practice was a modern, glass fronted building on Station Road. Simon and John Hume were taken up to the fourth floor and shown into the room where the deal would be done. The Americans had arrived early for the completion meeting and were seated at a large walnut table. A full-length window filled one wall, the others rich with walnut panelling. Despite facing north, the room was warm and smelt of lemon and polish. An oil painting, a judge in wig and robes, illuminated by a brass picture light, dominated the wall opposite the window. Simon sat between Neville Phillips and John Hume.

    Across the table from Simon, C.J. Systron's C.E.O. relaxed and leaned back in his chair. "You already know Nico and Ben Fripp." He gestured to his associates and pointed to two strangers, a large man with a paunch and a thin chisel faced man, seated by the window. "Frank Jacob. Frank's our software specialist. Nico's asked Frank to do some checks for us and John Wardman. John's part of our legal team. Flew in this morning."

    "Welcome to Cambridge," said Simon. "You must be tired after your flight. What did you think of the rugby?"

    "Hell," said C.J. "It was a tough game. Those guys play rough."

    "Shall we make a start?" suggested Neville Phillips. "There's a lot to get through." He picked up agendas from the stack of papers, in the centre of the table and passed them round. "The first item is for the existing shareholders to sign stock transfer forms." He handed documents to Simon and John.     "If you could just sign where I've put the pencil marks."

    "Just a minute," interrupted C.J. "A couple of things have come up. John'll explain."

 

The chisel-faced man smiled and cleared his throat. "Thanks C.J. My search of patent filings has exposed a weakness in your American rights. The patent for Regis Software could be challenged in the US. If the patent was shot down it would have a material effect on the value of your company. I'm not saying there will be a challenge but it's a risk we have to allow for." He sat back, waiting for a reaction.

    Simon looked at C.J. The Texan returned a blank stare. "You said a couple of things C.J. What's the second?"

    "I'll answer that," said Nico. She sat forward and looked over the top of her glasses. "I asked Frank to do some penetration testing of Regis and I'm sorry to say your software's not secure."

    "Not secure! What do you mean?" snapped John Hume.

    "Frank found Regis vulnerable to attack. It's not bullet proof."

    "That's a lie," replied John Hume angrily. "We've got the best coders in the world. There's nothing wrong with Regis."

    "Easy John, let's hear them out," said Simon, putting his hand on John 's arm. "I take it Frank's specialisation is cyber security?" Frank nodded.

    "How did you do the pen test?"

    "Go ahead Frank," said Nico.

    "OK. I tested with a Neutrino Exploit Kit and then did some manual stuff but it wasn't a full security audit."

    "You hacked our system with malicious software without telling us!" shouted John.

    "Frank Jacob shrugged. "It's what I'm paid to do and.." he smiled, "one of the dumbest ways in was laterally." He looked at John. "I accessed Harland's system through your home computer."

    John Hume stood up and glared at Jacob. "You hacked my home computer!"

    "Relax John," said C.J. He was smiling now, enjoying John Hume's discomfort. "Sit down. Don't worry. Harland Digital is a great business and we want Regis Software. Like I told Simon yesterday we're here to do a deal. Systron still want to do the deal. But you must appreciate our position."

    "I thought the deal was agreed," said Simon. "We've been together for two days and you've said nothing. Not a word about the patent or Regis software... I even asked you if there was a problem. Remember? And you," he pointed at Fripp, "said 'no, everything was fine'." Simon paused. "So what is your position?"

    Ben Fripp answered. "We have two proposals. The first is that Harland's directors, give personal guarantees the U.S. patents will hold up if challenged. I've prepared draft undertakings." He passed a paper across the table to Neville Phillips.

    The lawyer studied it. "It says here, unlimited and without time constraint."

    "What does that mean?" asked Simon.

    "It means the guarantee is for every penny paid for the business and is for everything you and John have and there is no time limit. You would be underwriting the future success of Harland Digital for ever."

    "Look at it from our point of view," said C.J. "We're trying to help you out here. Systron Security agreed eight million for Harland Digital. That's a great deal of money and we're still willing to pay but we need some comfort that what we're buying isn't a crock of crap."

    "Some comfort," spat Simon. "We'd be wedded to the business for all time. Waiting for the day you come back and put your hand in our pockets. What's the other offer?"

    "OK. We are willing to take all the risk," replied Fripp. "And it's a big risk, but it would reflect on the price,"

    "So, at the last minute after saying nothing to warn us, you're reducing your offer! HOW MUCH?" demanded Simon glaring at Fripp.

    "Don't get angry, Simon," said C.J. "Hell. This is business."

    Fripp produced another document. "I've drafted a revised share sale agreement showing the consideration we're willing to pay." He passed the papers across the table.

    Simon snatched them and flicked to the last page. He showed it to John Hume. "WHAT," shouted John. "You're taking the piss. This is a bloody joke."

    "It's no joke," replied Fripp. "It's a serious offer to buy Harland Digital."

    "And what if we say no?" shouted Simon. He thrust the paper towards Neville.

    John Wardman, replied. "Systron could challenge your patent in the Federal Courts."

    Simon banged his fist on the table, "You bastards..."

    Neville Phillips put his hand on Simon's arm. "Before we respond, my side needs a break to discuss these unexpected changes, privately. Excuse us for a few minutes." He stood up and ushered Simon and John to a small office.

 

"Four million! An offer of four million," snorted John. "Where, the hell, did that come from?"

"Shit, shit, SHIT... We've been ambushed," said Simon. "They planned this all along. How the hell did he get in through your home computer?"

    John didn't answer.

    "Look," said Simon. "We all know Regis is fine. So they've pen tested. So what? There's nothing wrong with Regis software that can't be fixed."

    "Maybe so," replied Neville Phillips. "But the lawyer Wardman, I looked him up. He's a lead counsel with a name. He wins big patent cases. American patent law is a minefield and it's the side with money that wins."

    "The weasel's threatening us," said Simon. "Do the deal. Sell Harland for half of its value or he'll use the American legal system to screw us?"

    The lawyer nodded. "Could tie you up for years. It's your call Simon. What do you want to do?"

    Simon turned to John Hume. "Your ten percent share option doesn't look quite so attractive now, does it John?.. We need to buy some time. Let's go back and tell the Yanks we still think a deal is possible but we want to consider the different offers in more detail."

 

C.J. showed no surprise when they asked for more time. "No problem. Our plans have changed. Something's come up and we'll be staying in the UK for a few days. You boys have a think. What say we hook up in a week to settle things?" He stood up, threw a casual salute towards Simon and moved towards the door.

    "We're going to need longer. A month and we need to see the results of the penetration test," answered Simon.

    "A month?" The Texan stopped. "OK, one month and Frank'll send you the details of the test, but no longer. We'll come back to the UK then. One more thing. Remember this, you signed an exclusivity agreement and can't talk with any other potential buyers while we're still negotiating. My legal boys here would be VERY UPSET if they learned you were going behind our backs."

 

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