Patent Security Agreement among Securus Technologies, Inc. and The Bank of New York Trust Company, N.A. (Trustee)

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Summary

This agreement, dated September 9, 2004, is between Securus Technologies, Inc. and its subsidiaries (the Grantors) and The Bank of New York Trust Company, N.A. (as Trustee). The Grantors grant the Trustee a security interest in their patents and related rights to secure obligations under a $154 million note issuance. The agreement ensures the Trustee can claim these patent rights if the Grantors default. The security interest is subject to certain prior liens and the terms of an intercreditor agreement. The agreement also covers future patent rights acquired by the Grantors.

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EX-4.5 27 g93674exv4w5.txt PATENT SECURITY AGREEMENT, DATED SEPTEMBER 9, 2004 Exhibit 4.5 EXECUTION VERSION PATENT SECURITY AGREEMENT This PATENT SECURITY AGREEMENT (this "Patent Security Agreement") is made this 9th day of September, 2004, among the Grantors listed on the signature pages hereof (the "Grantors"), and The Bank of New York Trust Company, N.A., in its capacity as trustee under the Indenture (as defined below) (the "Trustee"). WITNESSETH: WHEREAS, pursuant to (a) that certain Indenture dated as of September 9, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the "Indenture") among Securus Technologies, Inc., a Delaware corporation, as issuer (the "Company"), the subsidiaries of the Company party thereto as guarantors (the "Guarantors") and the Trustee, and (b) the Purchase Agreement dated as of August 18, 2004 (the "Purchase Agreement"), among the Company, the Guarantors, Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated (the "Initial Purchasers"), the Company is issuing $154,000,000 aggregate principal amount of its Second-Priority Senior Secured Notes Due 2011 (the "Notes") which will be guaranteed on a senior secured basis by the Guarantors; WHEREAS, in order to induce the Initial Purchasers to enter into the Purchase Agreement and to induce the Initial Purchasers to purchase the Notes, the Grantors have agreed to grant a continuing Lien on the Collateral in order to secure the prompt and complete payment, observance and performance of the Secured Obligations, by the granting of the security interest contemplated by the Security Agreement (as defined below); WHEREAS, the Trustee is willing to enter into the Indenture, but only upon the condition, among others, that the Grantor shall have executed and delivered to the Trustee, for the benefit of the Noteholders, that certain Security Agreement dated as of September 9, 2004 (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the "Security Agreement"); and WHEREAS, pursuant to the Security Agreement, the Grantor is required to execute and deliver to the Trustee, for the benefit of the Noteholders, this Patent Security Agreement. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby agrees as follows: 1. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement. 2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. The Grantor hereby grants to the Trustee, for the benefit of the Noteholders, a continuing security interest in all of the Grantor's right, title and interest in, to and under the following, whether presently existing or hereafter created or acquired (collectively, the "Patent Collateral"): (a) all of its Patents and Patent Intellectual Property Licenses to which it is a party including those referred to on Schedule I hereto; (b) all reissues, continuations or extensions of the foregoing; and (c) all products and proceeds of the foregoing, including, without limitation, any claim by the Grantor against third parties for past, present or future infringement of any Patent or any Patent licensed under any Intellectual Property License. 3. SECURITY AGREEMENT. The security interests granted pursuant to this Patent Security Agreement are granted in conjunction with the security interests granted to the Trustee, for the benefit of the Noteholders, pursuant to the Security Agreement. The Grantor hereby acknowledges and affirms that the rights and remedies of the Trustee with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. 4. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new patentable inventions or become entitled to the benefit of any patent application or patent for any reissue, division, or continuation, of any patent, the provisions of this Patent Security Agreement shall automatically apply thereto. The Grantors shall give prompt notice in writing to the Trustee with respect to any such new patent rights. Without limiting the Grantors' obligations under this Section 4, the Grantors hereby authorize the Trustee unilaterally to modify this Patent Security Agreement by amending Schedule I to include any such new patent rights of such Grantor. Notwithstanding the foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from the Trustee's continuing security interest in all Collateral, whether or not listed on Schedule I. 5. COUNTERPARTS. This Patent Security Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. In proving this Patent Security Agreement or any other Note Document in any judicial proceedings, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought. Any signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed an original signature hereto. 6. Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Trustee pursuant to this Patent Security Agreement are expressly subject and subordinate to the liens and security interests granted to the Administrative Agent (and its permitted successors and assigns), for the benefit of the credit parties, pursuant to the Credit Agreement and the related security documents dated as of September 9, 2004 (as further amended, restated, refinanced, replaced, supplemented or otherwise modified from time to time), by and among the Company, the Administrative Agent, the lenders and the other credit parties party thereto and the other parties party thereto and (ii) the exercise of any right or remedy by the Trustee hereunder is subject to the limitations and provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Patent Security Agreement, the terms of the Intercreditor Agreement shall govern. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above. GRANTORS: SECURUS TECHNOLOGIES, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------ Name: Lewis Schoenwettek Title: Vice President T-NETIX, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President TELEQUIP LABS, INC., a Nevada corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President T-NETIX TELECOMMUNICATIONS SERVICES, INC., a Texas corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President SPEAKEZ, INC., a Colorado corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President T-NETIX MONITORING CORPORATION, a Colorado corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President EVERCOM HOLDINGS, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President EVERCOM, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President EVERCOM SYSTEMS, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President FORTUNELINX, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President EVERCONNECT, INC., a Delaware corporation By: /s/ Lewis Schoenwettek ------------------------------------- Name: Lewis Schoenwettek Title: Vice President ACCEPTED AND ACKNOWLEDGED BY: THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee By: /s/ George W. Bemister ------------------------------------- Name: George W. Bemister Title: ASSISTANT VICE PRESIDENT SCHEDULE I TO PATENT SECURITY AGREEMENT PATENT REGISTRATIONS/ APPLICATIONS T-NETIX, INC. AND SUBSIDIARIES:
APPLICATN / OWNER COUNTRY TYPE CATEGORY NAME/TITLE REGSTRN # DATE INIT. DATE ISS. - ---------- ------- ---- ------------------ --------------------------------------------- ------------- ---------- --------- T-NETIX Canada P Attomated Phone Automatic Generation of Billing Records at a 2,007,838 12/14/99 Attendant Telephone Paystation T-NETIX Canada P Three Way Call Method and Apparatus for Detecting a 2,291,678 05/29/98 Detection Secondary Destination of a Telephone Call Based on Changes in Telephone Signal Path ("Dolphin") T-NETIX US P Automated Phone Automatic Validation of Telephone Account 4,890,317 01/23/89 12/26/89 Attendant Numbers T-NETIX US P Automated Phone Method and Apparatus for Altering the Access 4,908,852 01/23/89 03/13/90 Attendant Format of Telephone Calls T-NETIX US P Automated Phone Method and Apparatus for Downloading Speech 4,920,558 01/23/89 04/24/90 Attendant Files T-NETIX US P Automated Phone Automatic Generation of Billing Records at a 4,920,562 01/23/90 04/24/90 Attendant Telephone Paystation T-NETIX US P Automated Phone Short Time Validity Storage of a Billing 4,933,965 01/23/89 06/12/90 Attendant Account Number at a Local Telecommunications Station T-NETIX US P Automated Phone Method and Apparatus for Performing an 4,933,966 01/23/89 06/12/90 Attendant Automated Collect Call Telequip US P Automated Phone Automated Public Phone Control for Charge and 4,935,956 04/20/89 06/19/90 Attendant Collect Billings T-NETIX US P Automated Phone SMDR Translator 5,048,079 08/10/00 09/10/91 Attendant T-NETIX US P Automated Phone Method and Apparatus for Performing an 5,093,858 06/11/90 03/03/92 Attendant Automated Collect Call T-NETIX US P Automated Phone Method and Apparatus for Altering the Access 5,113,433 08/29/90 05/12/92 Attendant Format of Telephone Calls T-NETIX US P Automated Phone Short Time Validity Storage 5,131,027 06/11/90 07/14/92 Attendant T-NETIX US P Automated Phone Method and Apparatus for Performing an 5,319,701 03/04/93 06/07/94 Attendant Automated Collect Call T-NETIX US P Three Way Call Methods and Apparatus for Detecting and 5,319,702 07/29/92 06/07/94 Detection Responding to Hook Flash Events Occurring on a Remote Telephone T-NETIX US P Automated Phone Method and Apparatus for Performing an 5,483,581 06/06/94 01/09/96 Attendant Automated Collect Call T-NETIX US P Integrated Integrated Commissary Systems 5,485,507 04/12/94 01/16/96 Commissary T-NETIX US P Integrated Real Selectively Activated Integrated Real-Time 5,535,261 08/20/93 07/09/96 Time Recording Recording of Telephone Conversations T-NETIX US P Three Way Call Method and Apparatus for Detecting an 5,539,812 11/08/94 07/23/96 Detection Attempted Three Way Conference Call on a Remote Telephone T-NETIX US P Automated Phone Computer-Based M&A for Controlling, 5,655,013 08/05/97 08/05/97 Attendant Monitoring, Recording and Reporting Telephone Access "GOTU" Original T-NETIX US P Three Way Call Three Way Call Detection 5,796,811 03/11/96 08/18/98 Detection T-NETIX US P Three Way Call Three Way Call Detection By Counting Signal 5,805,685 11/15/95 09/08/98 Detection Characteristics
APPLICATN / OWNER COUNTRY TYPE CATEGORY NAME/TITLE REGSTRN # DATE INIT. DATE ISS. - ---------- ------- ---- ------------------ --------------------------------------------- ------------- ---------- --------- T-NETIX US P Three Way Call Computer-Based M&A for Controlling, 5,926,533 10/04/96 07/20/99 Detection Monitoring, Recording and Reporting Telephone Access T-NETIX US P Automated Phone Method and Apparatus for Altering the Access 5,960,072 03/04/93 09/28/99 Attendant Format of Telephone Calls T-NETIX US P Voice Recognition Automatic Key Word or Phrase Speech 6,064,963 12/17/97 05/16/00 Recognition for the Corrections Industry T-NETIX US P Three Way Call Method and Apparatus for Detecting a 6,141,406 05/30/97 10/31/00 Detection Secondary Destination of a Telephone Call Based on Changes in the Telephone Signal Path ("Dolphin") T-NETIX US P Digital Switch Telecommunication Resource Allocation System 6,381,321 05/04/98 04/30/02 Platform and Method T-NETIX US P Computer-Based M&A for Controlling, 6,560,323 08/01/97 05/06/03 Monitoring, Recording and Reporting Telephone Access T-NETIX US P Digital Switch Telecommunication Resource Allocation System 6,560,325 04/02/02 05/06/03 Platform and Method T-NETIX US P Three Way Call Computer-Based M&A for Controlling, 6,611,583 12/29/98 08/26/03 Detect Monitoring, Recording and Reporting Telephone Access Telequip US P Integrated Real System and Method for Remotely Controlling 6,647,096 04/11/00 11/11/03 Time Recording Automated Call Placement Call Monitoring Functions T-NETIX US P Integrated Real Improved Selectivity Activated Integrated 6,665,376 10/23/98 12/16/03 Time Recording Real-time Recording of Telephone Conversations with Automated Documentation Consent to Call Recording T-NETIX US P Inmate Messaging Inmate Messaging System and Method 6,665,380 01/11/99 12/16/03 System Telequip US P Automated Phone Message Screening, Delivery, and Billing 6,668,045 10/30/00 12/23/03 Attendant/Voice System Mail Sys T-NETIX US P Three Way Call Advanced Three Way Call Detection System and 6,763,099 11/05/99 07/13/04 Detection Method Using Spread Spectrum Techniques T-NETIX PCT/US P Three Way Call Method and Apparatus for Detecting a 98/010954 05/29/98 Detection Secondary Destination of a Telephone Call Based on Changes in Telephone Signal Path ("Dolphin") T-NETIX PCT/US P Off-Site Detention Off-Site Detention Monitoring System 00/40286 06/30/00 Monitoring Monitoring T-NETIX US P Three Way Call Computer-Based M&A for Controlling, 09/131,348 Detection Plus Monitoring, Recording and Reporting Telephone Recording Access + Keyword Recognition T-NETIX US P Three Way Call Computer-Based M&A for Controlling, 09/144,313 08/31/98 Detection + Monitoring, Recording and Reporting Telephone recording + key Access word recognition Telequip US P File Maintenance System and Method for Ex Post Facto 09/596,298 06/16/00 Preserving a Recorded Conversation T-NETIX US P Off-Site Detention Off-Site Detention Monitoring System 09/607,668 07/01/99 Monitoring Monitoring T-NETIX US P Three Way Call Method and Apparatus for Detecting a 09/659,366 09/12/00 Detection Secondary Destination of a Telephone Call Based on Changes in Telephone Signal Path ("Dolphin") T-NETIX US P Computer-Based M&A for Controlling, 10/327,248 12/19/02 Monitoring, Recording and Reporting Telephone Access T-NETIX US P Digital Switch Telecommunication Resource Allocation System 10/421,990 04/22/03 Platform and Method T-NETIX US P Three Way Call Computer Based M&A for Controlling, 10/606,011 06/24/03 Detect Monitoring, Recording and Reporting Telephone Access T-NETIX US P New Directions Biometric Voice Identification no number yet 06/24/04
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APPLICATN / OWNER COUNTRY TYPE CATEGORY NAME/TITLE REGSTRN # DATE INIT. DATE ISS. - ---------- ------- ---- ------------------ --------------------------------------------- ------------- ----------- --------- T-NETIX US P New Directions Spam Management System no number yet 12/16/03 T-NETIX US P automated phone Switching Call Types in Real Time no number yet Provisional attendant filed 3/11/04
3 EVERCOM HOLDINGS, INC. AND SUBSIDIARIES:
APPLICATION/ APP/REG GRANTOR COUNTRY PATENT REGISTRATION NO. DATE - ------------- ------- --------------------------- ---------------- ---------- Evercom USA System and Method for 6,636,59t 10/21/2003 Systems, Inc. Affecting Inmate Conduct with Good Behavior Discount Telephone Rates Evercom USA System and Method for 6,369,977 10/26/2003 Systems, Inc. Reverse Billing of a Telephone Call Evercom USA Method for Determining 6,639,978 10/28/2003 Systems, Inc. an Entity Responsible for Billing a Called Party Evercom USA Three-Way Call Detection 5,768,355 6/16/1998 Systems, Inc. System
Categories for Patent Applications Filed:
CATEGORY NUMBER FILED IDENTIFIER - ------------------------------------ ------------ --------------------------------------- Jail Processor 5 6. Unauthorized call detection 7. RCF 8. CAM Connect 9. Identification/Authentication 10. Unauthorized Call Detection II Nodal/Central Architecture 3 4. Information Management and Movement 5. Dynamic Networking 6. Centralized Processing Communications Throughput and Bad 10 10. Revenue Risk Management Debt/Revenue Risk Management 11. Queued Revenue 12. Call Management 13. Enhanced Risk Management 14. Smart Rev-Up 15. Rev-Up 16. Encompass(TM) 17. EverReach(TM) 18. Commerce 11. Recidivism Reduction Inter-Jail/Inter-Agency Applications 2 3. ElectronicDragnet(TM) 4. ElectronicDragnet(TM) II
4 PATENT LICENSES T-NETIX, INC. AND SUBSIDIARIES: Licensing Agreements: Intellectual Property Licenses (Inbound): 2/25/94 Technology Licensing Agreement - People's Telephone, Intellicall 8/10/94 Gateway and DNA Enterprises, Inc. (amended 6/26 and 9/29, 2003) 12/22/94 Gateway and Datalight, Incorporated 11/28/95 T-Netix, Inc. and Communications Equipment and Engineering Corporation 4/3/96 Ameritech Services, Inc. and Gateway 8/8/00 T-Netix Monitoring and Sentencing Alternatives, a division of CSSS, Inc. 11/2/00 T-Netix Monitoring and Tracking Systems Corporation 7/22/02 T-Netix and Speech Works International License Agreement 9/30/02 TELEQUIP and Scansoft, Inc. 12/10/02 CCH Incorporated and T-Netix, Inc. 9/29/03 T-Netix, Inc. and Fast-Talk Communications, Inc. Intellectual Property Licenses (Outbound): 10/26/94 Settlement and Patent License Agreement - Elcotel, Intellicall, Gateway 3/31/94 T-Netix, Inc., TTS and Ameritech Services, Inc. (amended 3/31/99, 7/1/99 and 2/14/03). 4/2/96 Patent License Agreement - Gateway, Intellicall, MCI 8/20/96 Patent License Agreement - Gateway, VAC 12/1/96 Gateway Technologies, Inc. Patent Licensing Agreement - Gateway, Ameritech 12/1/96 Gateway and Ameritech Services, Inc. 9/6/00 T-Netix Monitoring and CSSS Incorporated 5 10/19/00 T-Netix Monitoring and Global Watch Incorporated 10/25/00 T-Netix, Inc. and Voicebank AG 5/16/01 Patent Purchase and Grantback Agreements - T-Netix, Inc., Wireless WebConnect! Inc. 4/3/02 T-Netix, Inc. and an unidentified license (Agreement not dated. The fax record indicates that the document was faxed on 4/3/02). 4/25/02 T-Netix, Inc. and Digital Technologies 2000 10/2/02 T-Netix, Inc. and Innovative Alternatives to Incarceration 10/27/02 T-Netix, Inc. and Benchmark Detention Systems, Inc. 7/17/03 TELEQUIP and Cincinnati Bell Public Communications LLC 9/5/03 Patent License Agreement - T-Netix, Inc., Global Tel*Link Corp. Intellectual Property Licenses (Cross): 4/17/93 Gateway and Intellicall, Inc. (Amended 6/3/94 and 6/3/97) 9/26/94 Patent Cross-License Agreement - Protel, Intellicall, Gateway EVERCOM HOLDINGS, INC. AND SUBSIDIARIES: Pursuant to the terms of the Asset Purchase Agreement, dated as of December 22, 2003, by and between Evercom Systems, Inc. and Science Dynamics, Inc., Science Dynamics assigned to Evercom Systems their patented Three-way Call Detection System and Public Telephone with Voice Over Internet Protocol Transmission and related software. Software License Agreement, dated as of December 22, 2003, by and between Evercom Systems and Science Dynamics, Inc. pursuant to which Science Dynamics designed certain software for Evercom on a work-for-hire basis and Evercom granted specific rights in such software to Science Dynamics. License-Back Agreement, dated as of December 22, 2003, by and between Evercom Systems and Science Dynamics, Inc. pursuant to which Evercom licenses back to Science Dynamics certain rights in their patented Three-way Call Detection System and Public Telephone with Voice Over Internet Protocol Transmission and related software. 6