ensure the software was built to match their platform they also gave us a fully loaded Rock- well Spectrum Switch worth about 700K, at no cost. We had great hopes for our project. IRT offered us the use of that switch for 3K a month. Perhaps, being naive we declined. Stephen feared Rockwell might one day want their equipment back and we may not be able to afford it. That was a bad decision. The new company was always short on capi- tal. An investor was enticed to take over. He was willing to invest only if we agreed to toss away our existing shareholders’ agreement. We read- ily did as he asked. The money was badly need- ed. We should have stipulated a clause about taxes as you will soon find out. Every deal since we included that clause. IRT moved out of our office and started a competing call center only 4 miles away with- out any discussion with us. It was a slap in the face. Within a few months, they came back with the intention of buying us out. You can imagine our disgust. Even though we were still investors, we couldn’t trust them. They became a competi- tor with intimate knowledge of our clients and procedures, so we decided to remove their soft- ware and write our own. Three years later Rockwell bought the soft- ware division for 10 mils. It was an extraor- dinary sum. We were elated. As investors, we received a letter informing us of the sale with the added message that they expected to give out NO distributions. Our hearts sank. Without a distribution, we faced a huge tax liability and no way to pay it. Those were dark days. To mitigate the burden, they offered us pennies on the dollar for our shares. It was a squeeze play. We called a minority shareholder meeting to voice our dismay, and they relent- ed, paying us enough to make the tax payment. After that, I told my kids, “Never sell your shares, one day they will be valuable.” Eighteen years later my prediction came true. IRT was sold, and we made a nice profit.
Palettech Technologies Chief Architect, Stephen Shooster
SOFTWARE PATENT
In 1995, we landed a big call center project with Quintel, a public company with a stormy repu- tation. They provided psychic services over the phone using 900 numbers. When you dialed a 900 number, the caller pays a service fee on top of the long-distance charge. The project needed 50 agents. Contract in hand, we purchased computer telephony inte- gration, commonly known as screen pop, just like the Answering Service. We wanted to use the magic of software to know who we were talking to before we answered the call, a fitting feature when dealing with psychics. Shortly after the purchase, we received a letter from a lawyer representing the patent owner, David Katz, suing us for using it. With that, we got a quick lesson in patents and indem- nification. All we had to do was turn the trouble over to our vendor.
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Dave Noderer
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