Business Services Industry

T-NETIX Obtains $12 Million Cash Settlement from Global TelLink Corporation

Business Wire, Sept 16, 2003

Business Editors/High-Tech Writers

DALLAS--(BUSINESS WIRE)--Sept. 16, 2003

As announced on September 5th, T-NETIX (NASDAQ:TNTX) has ended two years of patent infringement litigation against Global Tel*Link Corporation. T-NETIX and Global Tel*Link entered into a settlement that provides for a $12 million cash payment to be made to T-NETIX by October 6, 2003.

The litigation involves various patents owned by T-NETIX. The settlement concerns, among others, three T-NETIX patents protecting automated call processing equipment and services. Two of the patents pertain to methods of detecting three-way call attempts by sensing call progress tones and hook flash pulses. The other patent pertains to premise-based automated operator systems.

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The settlement provides for two revenue components. These include the $12 million cash sum for damages for past infringements and paid-up royalties, and a provision for on-going royalty payments of $12 per month for each telephone instrument in excess of 25,200 that is connected in any manner to a device that uses any of the patented technologies. On September 12th Global informed T-NETIX that it has 1566 instruments that would come within the on-going royalty payment provision.

"We have long maintained that our intellectual property assets add immense value to our organization, and the fact that in this instance the value is being recognized validates our patent acquisition, maintenance, and enforcement strategy," said T-NETIX CEO Richard E. Cree. Continuing, Mr. Cree emphasized that, "The fact that we were willing to invest the time and money in this litigation resulting in this negotiated conclusion should strengthen our position in the implementation of future licensing strategies."

Henry G. Schopfer, CFO, added further that, "While the $12 million payment will be recorded as income in this, the third quarter, the Company's net operating loss carry forwards for tax purposes will reduce almost entirely any taxes otherwise due from the cash payment." Mr. Schopfer also noted that the Company is evaluating uses of the cash including the partial de-leveraging of its $21 million secured indebtedness.

About T-NETIX, Inc.

T-NETIX is a leading provider of specialized telecommunications products and services, including security enhanced call processing, call validation and billing for the corrections communications marketplace. The Company provides its products and services to more than 1,400 private, local, county and state correctional facilities throughout the United States and Canada. We deliver these services through direct contracts with correctional facilities, and through contracts with some of the world's leading telecommunications service providers, including Verizon, AT&T, SBC Communications, Qwest and Sprint. For additional news and information, visit the company's web site at www.T-NETIX.com.

Forward-Looking Statements

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted or expected results. Those risks include, among other things, the competitive environment in the industry in general and in the company's specific market areas, inflation, changes in costs of goods and services and economic conditions in general and in the company's specific market area. Those and other risks are more fully described in the company's filings with the Securities and Exchange Commission.

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Business Services Industry

T-NETIX Obtains $12 Million Cash Settlement from Global TelLink Corporation

Business Wire, Sept 16, 2003

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