Exhibit 10.1


    
      

    


    SETTLEMENT
      AND LICENSE AGREEMENT

     

    THIS
      SETTLEMENT AND PATENT CROSS-LICENSE AGREEMENT (the
      “Settlement and License Agreement”) is entered on April 3, 2006
      (the
“Effective Date”) by and among LML Patent Corp., a Delaware corporation having
      its principal place of business at Corporation Trust Centre, 1209 Orange Street,
      City of Wilmington, County of New Castle, Delaware, 19801, LML Payment Systems,
      Inc., a Canadian entity with its principal place of business at 1140 West Pender
      Street, Suite 1680, Vancouver, British Columbia, Canada V6E4G1 and LML Payment
      Systems Corp., a Delaware corporation with its principal place of business
      at
      1330 RiverBend Drive, Suite 600, Dallas, Texas 75247 (collectively “LML”), and
      TeleCheck Services, Inc. and TeleCheck International, Inc., both Delaware
      corporations having their principal place of business at 5251
      Westheimer Road, Houston, Texas 77056 (collectively “TeleCheck”)
      and
      First Data Corp., a Delaware corporation with its principal place of business
      at
      6200 South Quebec Street, Greenwood Village, CO 80111.

     

    RECITALS

     

    WHEREAS,
      LML
      Patent Corp. owns rights in certain U.S. Patents related to making, using,
      offering for sale and selling electronic check conversion systems and services;
      

     

    WHEREAS,
      TeleCheck International, Inc. owns rights in certain U.S. Patents related to
      making, using, offering for sale and selling checking systems and services;
      

     

    WHEREAS,
      LML
      Patent Corp. filed suit against TeleCheck Services, Inc. in the United States
      District Court for the District of Delaware, Case No. CA-04-858, alleging
      infringement of certain LML Patent Corp. patents by certain of TeleCheck’s
      products, systems and/or services;

     

    WHEREAS,
      TeleCheck International, Inc. filed suit against LML Payment Systems, Inc.
      and
      LML Payment Systems Corp. in the United States District Court for the Eastern
      District of Texas, Case No. 2:05CV270, alleging infringement of certain
      TeleCheck patents by certain of LML’s products, systems and/or services, and
      where LML asserted certain antitrust and other counterclaims.

     

    WHEREAS,
      LML,
      First Data Corp., and TeleCheck desire to cross-license the asserted patents
      and
      the parties desire to settle all litigation between them.

     

    NOW,
      THEREFORE,
      in
      consideration of the covenants contained in this Settlement and License
      Agreement, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Parties hereto agree as
      follows:

     

    
      	 	
              1.

            	
              DEFINITIONS.

            


    

     

    The
      following terms, when used in this License Agreement with initial capital
      letters, shall have the respective meanings set forth in this Section
      1.

     

    
      	 	
              1.1.

            	
              “Confidential
                Information”
                has the meaning set forth in Section
                6.

            


    

     

    
      
        
        

      

      
        -
          1 -

        
          

        

      

      
        
        

      

    


    
      	 	
              1.2.

            	
              “Current
                LML Products”
                means products or services commercially offered by LML as of the
                Effective
                Date, as well as minor or insubstantial variations in such products
                or
                services.

            


    

     

    
      	 	
              1.3.

            	 	
              “Effective
                Date”
                has the meaning set forth in the
                preamble.

            


    

     

    
      	 	
              1.4.

            	
               “First
                Data Corp.”
                means First Data Corporation and any entity controlled by First Data
                Corp.
                and/or controlled by any such controlled companies, as of the Effective
                Date or thereafter. For purposes of this Agreement, an entity will
                be
                deemed
                to “control” or be “controlled” by another entity if (a) the controlling
                entity
                owns or controls, directly or indirectly, 30% or more of the voting
                power
                of the shares or other interests entitled to vote for the directors
                or
                other governing authority of the controlled entity; (b) if the controlling
                entity has a legal or beneficial interest in the controlled entity
                of 30%
                or more of the controlled entity’s revenue or capital accounts; or (c) if
                the controlling entity possesses, directly or indirectly, the power
                to
                direct or cause the direction of the
                management and policies of the controlled entity.
                

            


    

     

    
      	 	
              1.5.

            	
              “FDC
                Customer”
                means any person or entity that purchases, licenses or otherwise
                receives services from First Data Corp. or TeleCheck for its own
                use or
                for sale, license, or transfer to
                any party.

            


    

     

    
      	 	
              1.6.

            	
              “LML
                Licensed Patents”
                means U.S. Patent Nos. 6,354,491; 6,283,366; 6,164,528; and 5,484,988,
                including any continuations, continuations-in-part, divisionals,
                extensions, reexaminations, reissues or renewals thereof, and specifically
                including any reissues of what was U.S. Patent No. 6,547,129.
                

            


    

     

    
      	 	
              1.7.

            	
              “Licensed
                Patents License Term”
                means the time period beginning on the Effective Date and ending
                on the
                date of expiration of the last to expire of the TeleCheck and LML
                Licensed
                Patents. 

            


    

     

    
      	 	
              1.8.

            	
              “LML”
                means LML Patent Corp., LML Payment Systems, Inc. and/or LML Payment
                Systems Corp., and any entity controlled by LML and/or controlled
                by any
                such controlled companies as of the Effective Date or thereafter.
                For
                purposes of this Agreement, an entity will be deemed
                to “control” or be “controlled” by another entity if (a) the controlling
                entity
                owns or controls, directly or indirectly, 30% or more of the voting
                power
                of the shares or other interests entitled to vote for the directors
                or
                other governing authority of the controlled entity; (b) if the controlling
                entity has a legal or beneficial interest in the controlled entity
                of 30%
                or more of the controlled entity’s revenue or capital accounts; or (c) if
                the controlling entity possesses, directly or indirectly, the power
                to
                direct or cause the direction of the
                management and policies of the controlled entity.
                

            


    

     

    
      	 	
              1.9.

            	
              “Other
                FDC Patents”
                means any U.S. Patents owned by First Data Corp. or TeleCheck as
                of the
                Effective Date, other than the TeleCheck Licensed Patents, as well
                as any
                patents obtained or acquired by First Data Corp. or TeleCheck after
                the
                Effective Date and before January 16, 2013.


            


    

     

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    


    
      	 	
              1.10.

            	
              “Other
                LML Patents”
                means any U.S. Patents owned by LML as of the Effective Date, other
                than
                the LML Licensed Patents, as well as any patents obtained or acquired
                by
                LML after the Effective Date and before January 16,
                2013.

            


    

     

    
      	 	
              1.11.

            	
              “Other
                Patents License Term”
                means the time period beginning on the Effective Date and ending
                on
                January 16, 2013.

            


    

     

    
      	 	
              1.12.

            	
              “Parties”
                means LML, First Data Corp. and TeleCheck,
                collectively.

            


    

     

    
      	 	
              1.13.

            	
              “Party”
                means each of LML, First Data Corp. and TeleCheck,
                individually.

            


    

     

    
      	 	
              1.14.

            	
              “Person”
                means an individual, corporation, partnership, joint venture, trust,
                unincorporated organization or similar organization or any other
                legal
                entity.

            


    

     

    
      	 	
              1.15.

            	
              “TeleCheck”
                means TeleCheck International, Inc. and/or TeleCheck Systems, Inc.
                and any
                entity controlled by TeleCheck and/or controlled by any such controlled
                companies, as of the Effective date or thereafter. For
                purposes of this Agreement, an entity will be deemed
                to “control” or be “controlled” by another entity if (a) the controlling
                entity
                owns or controls, directly or indirectly, 30% or more of the voting
                power
                of the shares or other interests entitled to vote for the directors
                or
                other governing authority of the controlled entity; (b) if the controlling
                entity has a legal or beneficial interest in the controlled entity
                of 30%
                or more of the controlled entity’s revenue or capital accounts; or (c) if
                the controlling entity possesses, directly or indirectly, the power
                to
                direct or cause the direction of the
                management and policies of the controlled entity.
                

            


    

     

    
      	 	
              1.16.

            	
              “TeleCheck
                Licensed Patents”
                means U.S. Patent Nos. 5,679,938 and 5,679,940, including any
                continuations, continuations-in-part, divisionals, extensions,
                reexaminations, reissues or renewals
                thereof.

            


    

     

     

    
      	 	
              2.

            	
               SETTLEMENT
                OF THE LITIGATION.

            


    

     

    
      	 	
              2.1.

            	
              Stipulated
                Dismissal:
                Within
                three (3) business days of the Effective Date, the parties shall
                file
                with the respective Courts Stipulated Dismissals with prejudice
                substantially in the form attached hereto as Exhibits 1 and
                2.

            


    

     

    
      	 	
              2.2.

            	
              No
                Award of Fees or Costs.
                Each party shall bear responsibility for its own costs and fees associated
                with the litigation and no request, motion, petition or otherwise
                for such
                fees and/or costs shall be made to either
                Court.

            


    

     

    
      	 	
              2.3.

            	
              No
                Attempt To Invalidate.
                LML, First Data Corp. and TeleCheck agree that, in absence of a subpoena
                or court order requiring their participation or support, no party
                shall
                take any action, participate in or support any suit, claim, action,
                litigation, administrative proceedings, or proceeding of any nature
                brought by or against the other that concerns or challenges the validity
                or enforceability of any of the LML Licensed Patents, the Other LML
                Patents, the TeleCheck Licensed Patents, or the Other FDC Patents.
                This
                Section 2.3 shall not apply to litigation between the Parties properly
                brought notwithstanding the provisions of this Settlement and License
                Agreement.

            


    

     

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    


    
      	 	
              2.4.

            	
              Retention
                of Jurisdiction to Enforce This Agreement.
                The United States District Court for the District of Delaware shall
                retain
                jurisdiction for purposes of enforcing the terms of this Settlement
                and
                License Agreement.

            


    

     

    
      	 	
              3.

            	
              LICENSE
                OF RIGHTS.

            


    

     

    
      	 	
              3.1.

            	
              LML
                License Grant - LML Licensed Patents.
                LML Patent Corp. hereby grants to First Data Corp. and TeleCheck,
                and
                First Data Corp. and TeleCheck hereby accept from LML Patent Corp.,
                a
                non-exclusive, fully-paid, license under the LML Licensed Patents
                during
                the Licensed Patents License Term.
                LML further grants to FDC Customers, for products and services purchased
                from First Data Corp. or TeleCheck, a non-exclusive, fully-paid,
                license
                under the LML Licensed Patents during the Licensed Patents License
                Term.
                

            


    

     

    
      	 	
              3.2.

            	
              LML
                License Grant - LML Other Patents.
                LML Patent Corp. hereby grants to First Data Corp. and TeleCheck,
                and
                First Data Corp. and TeleCheck hereby accept from LML Patent Corp.,
                a
                non-exclusive, fully-paid, license under the Other LML Patents during
                the
                Other Patents License Term. LML further grants to FDC Customers,
                for
                products and services purchased from First Data Corp. or TeleCheck,
                a
                non-exclusive, fully-paid, license under the Other LML Patents during
                the
                Other Patents License Term. Following the Other Patents License Term,
                in
                any suit brought by LML that alleges infringement of any Other LML
                Patent
                by First Data Corp. or TeleCheck, LML shall not seek, and will not
                be
                entitled to recover, damages for any alleged infringement by First
                Data
                Corp. or TeleCheck during the period of the Other Patents License
                Term.

            


    

     

    
      	 	
              3.3.

            	
              TeleCheck
                License Grant - TeleCheck Licensed Patents.
                TeleCheck International, Inc. hereby grants to LML, and LML hereby
                accepts
                from TeleCheck International, Inc., a non-exclusive, fully-paid,
                license
                under the TeleCheck Licensed Patents during the Licensed Patents
                License
                Term.

            


    

     

    
      	 	
              3.4.

            	
              First
                Data Corp. and TeleCheck License Grant - Other FDC Patents.
                First Data Corp. and TeleCheck hereby grant to LML, and LML hereby
                accepts
                from First Data Corp. and TeleCheck, a non-exclusive, fully-paid,
                license
                under the Other FDC Patents for all Current LML Products during the
                Other
                Patents License Term. The licenses granted under this Section 3.4
                shall
                not apply to any LML products other than Current LML Products.
                Notwithstanding the other provisions of this Agreement, the licenses
                granted under this Section 3.4 shall be personal to LML and not assignable
                and not otherwise transferable, including in the event all or
                substantially all the asserts of LML or any unit thereof are acquired
                by
                another entity. Following the Other Patents License Term, in any
                suit
                brought by First Data Corp. or TeleCheck that alleges infringement
                of any
                Other FDC Patent by LML due to its making, using, selling or offering
                to
                sell any Current LML Product, neither First Data Corp. nor TeleCheck
                shall
                seek, and neither will be entitled to recover, damages for any alleged
                infringement by LML during the period of the Other Patents License
                Term.
                

            


    

     

    
      
        
        

      

      
        -
          4 -

        
          

        

      

      
        
        

      

    


    
      	 	
              3.5.

            	
              No
                Transfer of License Grant.
                Except as expressly provided for in Section 10.2 and 3.8, the licenses
                granted under Sections 3.1, 3.2 and 3.3 of this Settlement and License
                Agreement are not assignable or
                transferable.

            


    

     

    
      	 	
              3.6.

            	
              No
                Right to Sublicense.
                The licenses granted hereunder do not include the right to grant
                sublicenses.

            


    

     

    
      	 	
              3.7.

            	
              No
                Implied License.
                Except as expressly provided herein, nothing in this Settlement and
                License Agreement is intended to grant any rights or license, express
                or
                implied, to either Party in or to any intellectual property owned,
                licensed or controlled by the other
                Party.

            


    

     

    
      	 	
              3.8.

            	
              Controlled
                Entities.
                The licenses granted under Sections 3.1, 3.2 and 3.3 of this Agreement
                shall remain with any controlled entity, as defined in Sections 1.4,
                1.8
                and 1.15, in the event such controlled entity ceases to be a controlled
                entity after the Effective Date. First Data Corp. and TeleCheck warrant
                that neither party has an intention of utilizing the provisions of
                this
                Agreement for the mere purpose of shielding companies from the LML
                Licensed Patents and Other LML Patents by passing entities through
                the
                control of First Data Corp. or TeleCheck. LML warrants that it does
                not
                have an intention of utilizing the provisions of this Agreement for
                the
                mere purpose of shielding companies from the TeleCheck Licensed Patents
                by
                passing entities through the control of
                LML.

            


    

     

    
      	 	
              3.9.

            	
              Within
                thirty (30) days after the Effective Date, LML shall make reasonable
                efforts to compile documentation sufficient to show the features
                and
                functioning of Current LML Products. LML will provide notice to First
                Data
                Corp. and TeleCheck that such documentation has been collected pursuant
                to
                this Section 3.4 and placed in secured, off-site storage. LML shall
                maintain such documentation for a period of six years following the
                end of
                the Other Patents License Term.

            


    

     

    
      	 	
              4.

            	
              MUTUAL
                RELEASE.

            


    

     

    
      	 	
              4.1.

            	 	
              LML,
                for itself and its successors, assigns, affiliates, and licensees,
                hereby
                releases and forever discharges First Data Corp., TeleCheck and any
                parents, subsidiaries, affiliates, directors, officers, employees
                and
                agents from any and all causes of action in law or at equity related
                to
                the LML Licensed Patents, whether known or unknown, which may have
                arisen
                prior to the Effective Date.
                

            


    

     

    
      	 	
              4.2.

            	 	
              First
                Data Corp. and TeleCheck, for themselves and their successors, assigns,
                affiliates, and licensees, hereby releases and forever discharges
                LML and
                any parents, subsidiaries, affiliates, directors, officers, employees
                and
                agents from any and all causes of action in law or at equity related
                to
                the TeleCheck Licensed Patents, whether known or unknown, which may
                have
                arisen prior to the Effective Date.


            


    

     

    
      
        
        

      

      
        -
          5 -

        
          

        

      

      
        
        

      

    


    
      	 	
              5.

            	
              PAYMENTS.

            


    

     

    
      	 	
              5.1.

            	 	
              Release
                Fee And Other Payment.
                As part of the consideration for this Settlement and License Agreement
                First Data Corp. or TeleCheck agrees to pay LML Patent Corp. Fifteen
                Million ($15,000,000.00) U.S. Dollars by wire transfer to the following
                account within fourteen calendar days of the Effective
                Date:

            


    

     

    
      	
              Beneficiary:

            	
              LML
                Patent Corp.

            
	
              Beneficiary
                Address:

            	
              1330
                Riverbend Drive, Suite 600

              Dallas,
                Texas 75247

            
	
              Bank
                Name:

            	
              Bank
                of America

            
	
              Bank
                Address:

            	
              Tampa,
                Florida

            
	
              Bank
                Account #:

            	 
	
              Bank
                Routing #:

            	 


    

    


     

    The
      Release Fee And Other Payment is not refundable.

     

    


    
      	 	
              6.

            	
              CONFIDENTIALITY.

            


    

     

    
      	 	
              6.1.

            	 	
              The
                terms and conditions of this Settlement and License Agreement shall
                constitute confidential information of each Party (“Confidential
                Information”). No Party shall disclose any Confidential Information to any
                third Person without the prior written consent of the other Party,
                except
                that a Party may disclose Confidential Information as required by
                SEC
                rules and regulations and any other required regulatory filings and
                may
                also disclose Confidential Information in response to a discovery
                request,
                subpoena or court order to produce such Confidential Information,
                or as
                otherwise required by law.

            


    

     

    
      	 	
              6.2.

            	 	
              Notwithstanding
                the provisions of Section 6 of this Agreement, LML may release publicly
                the statement substantially in the form attached hereto as Exhibit
                3.
                First Data Corp. or TeleCheck may release publicly a statement consistent
                with the provisions of Section 6 of this Agreement, following approval
                of
                such statement by LML. Such approval shall not be unreasonably withheld
                by
                LML.

            


    

     

    
      	 	
              6.3.

            	
               

            	
              All
                parties acknowledge and agree that it is an essential term of this
                Agreement that the Parties agree not to, and the
                Parties hereby do agree not to, disclose the contents or terms of
                this
                Agreement or any matters
                pertaining to this settlement, including its negotiation, whether
                in
                writing or orally to any person whatsoever, directly or indirectly,
                whether individually, or by or through an agent, representative,
                attorney
                or other person, unless such disclosure is (i) lawfully required
                by any
                governmental agency, including without limitation the Securities
                and
                Exchange Commission; (ii) otherwise required to be disclosed by law;
                (iii)
                necessary in any legal proceeding in order to enforce any provision
                of
                this Agreement; or (iv) permitted pursuant to this
                Agreement.

            


    

     

    
      
        
        

      

      
        -
          6 -

        
          

        

      

      
        
        

      

    


    
      	 	
              6.4.

            	 	
              The
                Parties agree that each may disclose the terms of this Agreement
                to their
                auditors, accountants, tax advisors and/or legal counsel only to
                the
                extent required for professional advice from those sources and only
                after
                securing a commitment from such professionals to maintain the
                confidentiality of the terms of this Agreement to the extent
                possible.

            


    

     

    
      	 	
              6.5.

            	 	
              The
                Parties agree that TeleCheck and First Data Corp. may disclose the
                terms
                of Sections 1.5, 1.6, 1.10, 1.11, 3.1 and 3.2 to any FDC Customer
                who
                seeks indemnification or raises any inquiry regarding any of the
                LML
                Licensed Patents or the Other LML
                Patents.

            


    

    
       

      
        	 	
                6.6.

              	 	The Parties agree to seek a protective order or
                other
                protective arrangement, if necessary,
                regarding confidential information relating to this Agreement. The
                Parties
                shall take reasonable precautions to ensure that their representatives
                and
                agents also treat such information in a confidential
                manner.


      

       

       

    

    
      	 	
              7.

            	
              REPRESENTATIONS
                AND WARRANTIES. The
                express representations and warranties contained in this Section
                7 of this
                Settlement and License Agreement are the only representations and
                warranties made by either Party. No other representations or warranties
                shall be implied in law or in fact.

            


    

     

    
      	 	
              7.1.

            	
              LML
                Patent Corp.
                LML Patent Corp. represents and warrants as
                follows.

            


    

     

    
      	 	
              (a)

            	
              LML
                Patent Corp. is a corporation organized and validly existing under
                the
                laws of the state of its incorporation and has all requisite corporate
                power and authority to enter into and legally perform its obligations
                under this Settlement and License Agreement. When executed and delivered,
                this Settlement and License Agreement shall constitute a valid and
                binding
                obligation of LML Patent Corp., legally enforceable against it in
                accordance with its terms.

            


    

     

    
      	 	
              (b)

            	
              LML
                Patent Corp. represents that it has the right, authority and capacity
                to
                enter into this Settlement and License Agreement and to grant and
                accept
                the rights set forth in Section 3.

            


    

     

    
      	 	
              (c)

            	
              LML
                Patent Corp. represents that it has not entered into any agreement
                in
                conflict with this Settlement and License Agreement or which would
                interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      	 	
              7.2.

            	
              LML
                Payment Systems, Inc.
                LML Payment Systems, Inc. represents and warrants as
                follows.

            


    

     

    
      
        
        

      

      
        -
          7 -

        
          

        

      

      
        
        

      

    


    
      	 	
              (a)

            	
              LML
                Payment Systems, Inc. is a corporation organized and validly existing
                under the laws of the jurisdiction of its incorporation and has all
                requisite corporate power and authority to enter into and legally
                perform
                its obligations under this Settlement and License Agreement. When
                executed
                and delivered, this Settlement and License Agreement shall constitute
                a
                valid and binding obligation of LML Payment Systems, Inc., legally
                enforceable against it in accordance with its
                terms.

            


    

     

    
      	 	
              (b)

            	
              LML
                Payment Systems, Inc. represents that it has the right, authority
                and
                capacity to enter into this Settlement and License Agreement and
                to accept
                the rights set forth in Section 3.

            


    

     

    
      	 	
              (c)

            	
              LML
                Payment Systems, Inc. represents that it has not entered into any
                agreement in conflict with this Settlement and License Agreement
                or which
                would interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      	 	
              7.3.

            	
              LML
                Payment Systems Corp.
                LML Payment Systems Corp. represents and warrants as
                follows.

            


    

     

    
      	 	
              (a)

            	
              LML
                Payment Systems Corp. is a corporation organized and validly existing
                under the laws of the state of its incorporation and has all requisite
                corporate power and authority to enter into and legally perform its
                obligations under this Settlement and License Agreement. When executed
                and
                delivered, this Settlement and License Agreement shall constitute
                a valid
                and binding obligation of LML Payment Systems Corp., legally enforceable
                against it in accordance with its
                terms.

            


    

     

    
      	 	
              (b)

            	
              LML
                Payment Systems Corp. represents that it has the right, authority
                and
                capacity to enter into this Settlement and License Agreement and
                to accept
                the rights set forth in Section 3.

            


    

     

    
      	 	
              (c)

            	
              LML
                Payment Systems Corp. represents that it has not entered into any
                agreement in conflict with this Settlement and License Agreement
                or which
                would interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      	 	
              7.4.

            	
              First
                Data Corp.
                First Data Corp. represents and warrants as
                follows.

            


    

     

    
      	 	
              (a)

            	
              First
                Data Corp. is a corporation organized and validly existing under
                the laws
                of the state of its incorporation and has all requisite corporate
                power
                and authority to enter into and legally perform its obligations under
                this
                Settlement and License Agreement. When executed and delivered, this
                Settlement and License Agreement shall constitute a valid and binding
                obligation of First Data Corp., legally enforceable against it in
                accordance with its terms.

            


    

     

    
      	 	
              (b)

            	
              First
                Data Corp. represents that it has the right, authority and capacity
                to
                enter into this Settlement and License Agreement, to accept the rights
                set
                forth in Section 3, and undertake the payment obligations set forth
                in
                Section 5.

            


    

     

    
      
        
        

      

      
        -
          8 -

        
          

        

      

      
        
        

      

    


    
      	 	
              (c)

            	
              First
                Data Corp. represents that it has not entered into any agreement
                in
                conflict with this Settlement and License Agreement or which would
                interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      	 	
              7.5.

            	
              TeleCheck
                International, Inc.
                TeleCheck International, Inc. represents and warrants as
                follows.

            


    

     

    
      	 	
              (a)

            	
              TeleCheck
                International, Inc. is a corporation organized and validly existing
                under
                the laws of the state of its incorporation and has all requisite
                corporate
                power and authority to enter into and legally perform its obligations
                under this Settlement and License Agreement. When executed and delivered,
                this Settlement and License Agreement shall constitute a valid and
                binding
                obligation of TeleCheck International, Inc., legally enforceable
                against
                it in accordance with its terms.

            


    

     

    
      	 	
              (b)

            	
              TeleCheck
                International, Inc. represents that it has the right, authority and
                capacity to enter into this Settlement and License Agreement, to
                grant and
                accept the rights set forth in Section 3, and undertake the payment
                obligations set forth in Section 5.

            


    

     

    
      	 	
              (c)

            	
              TeleCheck
                International, Inc. represents that it has not entered into any agreement
                in conflict with this Settlement and License Agreement or which would
                interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      	 	
              7.6.

            	
              TeleCheck
                Services, Inc.
                TeleCheck Services, Inc. represents and warrants as
                follows.

            


    

     

    
      	 	
              (a)

            	
              TeleCheck
                Services, Inc. is a corporation organized and validly existing under
                the
                laws of the state of its incorporation and has all requisite corporate
                power and authority to enter into and legally perform its obligations
                under this Settlement and License Agreement. When executed and delivered,
                this Settlement and License Agreement shall constitute a valid and
                binding
                obligation of TeleCheck Services, Inc., legally enforceable against
                it in
                accordance with its terms.

            


    

     

    
      	 	
              (b)

            	
              TeleCheck
                Services, Inc. represents that it has the right, authority and capacity
                to
                enter into this Settlement and License Agreement, to accept the rights
                set
                forth in Section 3, and undertake the payment obligations set forth
                in
                Section 5.

            


    

     

    
      	 	
              (c)

            	
              TeleCheck
                Services, Inc. represents that it has not entered into any agreement
                in
                conflict with this Settlement and License Agreement or which would
                interfere with or diminish the rights granted
                hereunder.

            


    

     

    
      
        
        

      

      
        -
          9 -

        
          

        

      

      
        
        

      

    


    
      	 	
              8.

            	
              COMPROMISE.
                The Parties acknowledge that this Agreement is the result of a compromise
                and shall never be construed as an admission by LML, First Data Corp.
                or
                TeleCheck of any liability, wrongdoing, or responsibility on the
                part of
                any of the Parties and their respective predecessors, successors,
                subsidiaries, assigns, agents, officers, directors, or employees.
                This
                Agreement is entered by way of compromise and settlement to avoid
                the
                expense and risk of resolving any dispute through the continuation
                of
                litigation.

            


    

     

    
      	 	
              9.

            	
              INVESTIGATION
                AND ENFORCEMENT.   

            


    

     

    
      	 	
              9.1

            	
              Enforcement
                by LML.
                In the event that LML brings a claim under the LML Licensed Patents
                or
                Other LML Patents against First Data Corp., TeleCheck, or any FDC
                Customer, and LML does not dismiss such action within thirty (30)
                days of
                written notice from First Data Corp. or TeleCheck that the defendant
                is a
                First Data Corp. or TeleCheck controlled entity or FDC Customer,
                and that
                the conduct forming the basis of such claim is licensed or permitted
                by
                this Agreement, and LML does not prevail on such claim because of
                the
                applicability of this Agreement to the alleged infringing conduct,
                LML
                shall be required to pay the attorneys’ fees and litigation costs of
                defending against such claim in that litigation.
                

            


    

     

    
      	 	
              9.2

            	
              Enforcement
                by First Data Corp. or TeleCheck.
                In the event that First Data Corp. or TeleCheck brings a claim under
                the
                TeleCheck Licensed Patents or Other FDC Patents against LML, and
                First
                Data Corp. or TeleCheck does not dismiss such action within thirty
                (30)
                days of written notice from LML that the defendant is an LML controlled
                entity, and that the conduct forming the basis of such claim is licensed
                or permitted by this Agreement, and First Data Corp. or TeleCheck
                does not
                prevail on such claim because of the applicability of this Agreement
                to
                the alleged infringing conduct, First Data Corp. or TeleCheck shall
                be
                required to pay the attorneys’ fees and litigation costs of defending
                against such claim in that
                litigation.

            


    

     

    
      	 	
              10.

            	
              MISCELLANEOUS
                PROVISIONS.

            


    

     

    
      	 	
              10.1.

            	
              Amendment/Waiver.
                No modification, amendment, supplement to or waiver of any provision
                of
                this Settlement and License Agreement will be binding upon the Parties
                unless made in a writing signed by the Parties. A failure of any
                Party to
                exercise any right provided for herein shall not be deemed to be
                a waiver
                of any right hereunder.

            


    

     

    
      	 	
              10.2.

            	
              Assignment.
                This Settlement and License Agreement may not be assigned or transferred
                by a Party without the prior written consent of the other Party,
                which
                consent shall not be unreasonably withheld. Divesture or sale of
                all or
                substantially all of a business unit or the assets thereof shall
                constitute a reasonable basis for assignment of this Agreement. However,
                this Section 10.2 is subject to and limited by the provisions regarding
                transfer set forth in Section 3.4 of this
                Agreement.

            


    

    
       

      
        
          
          

        

        
          - 10
            -

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              10.3.

            	
              Entire
                Settlement and License Agreement.
                This Settlement and License Agreement sets forth the entire agreement
                between the Parties as it relates to the subject matter of this Settlement
                and License Agreement, and such documents replace and supersede any
                and
                all prior agreements, promises, proposals, representations, understandings
                and negotiations, written or not, between the Parties relating to
                the
                same. 

            


    

     

    
      	 	
              10.4.

            	
              Expenses.
                Except as otherwise specifically provided in this Settlement and
                License
                Agreement, all costs and expenses incurred in connection with this
                Settlement and License Agreement and the transactions contemplated
                hereby
                shall be paid by the Party incurring such costs or
                expenses.

            


    

     

    
      	 	
              10.5.

            	
              Governing
                Law and Choice of Forum.
                This Settlement and License Agreement shall be construed and interpreted
                in accordance with the laws of Delaware, without regard to conflict
                of law
                provisions. Pursuant to Section 2.4, any disputes arising hereunder
                shall
                be resolved in the United
                States District Court for the District of
                Delaware.

            


    

     

    
      	 	
              10.6.

            	
              Headings.
                The Section headings contained in this Settlement and License Agreement
                are for convenience of reference only and shall not serve to limit,
                expand
                or interpret the Sections to which they apply, and shall not be deemed
                to
                be a part of this Settlement and License Agreement.
                

            


    

     

    
      	 	
              10.7.

            	
              Interpretation;
                Construction.
                The Parties have participated jointly in the negotiation and drafting
                of
                this Settlement and License Agreement. In the event an ambiguity
                or
                question of intent or interpretation arises, this Settlement and
                License
                Agreement shall be construed as if jointly drafted by the Parties
                and no
                presumption or burden of proof shall arise favoring or disfavoring
                either
                Party by virtue of the authorship of any provision of this Settlement
                and
                License Agreement. The word “including” shall mean “including without
                limitation.”

            


    

     

    
      	 	
              10.8.

            	
              TeleCheck’s
                Retained Rights.
                The
                Parties acknowledge and agree that the LML Licensed Patents are
                “intellectual property” as defined in Section 101(35A) of the United
                States Bankruptcy Code, as the same may be amended from time to time
                (the
                “Code”), which have been licensed hereunder in a contemporaneous exchange
                for value. The Parties further acknowledge and agree that if LML:
                (i)
                becomes insolvent or generally fails to pay, or admits in writing
                its
                inability to pay, its debts as they become due; (ii) applies for
                or
                consents to the appointment of a trustee, receiver or other custodian
                for
                it, or makes a general assignment for the benefit of its creditors;
                (iii)
                commences, or has commenced against it, any bankruptcy, reorganization,
                debt arrangement, or other case or proceeding under any bankruptcy
                or
                insolvency law, or any dissolution or liquidation proceedings; or
                (iv)
                elects to reject, or a trustee on behalf of it elects to reject,
                this
                Settlement and License Agreement or any agreement supplementary hereto,
                pursuant to Section 365 of the Code (“365”), or if this Settlement and
                License Agreement or any agreement supplementary hereto is deemed
                to be
                rejected pursuant to 365 for any reason, this Settlement and License
                Agreement, and any agreement supplementary hereto, shall be governed
                by
                Section 365(n) of the Code (“365(n)”) and First Data Corp. and TeleCheck
                will retain and may elect to fully exercise its rights under this
                Settlement and License Agreement in accordance with
                365(n).

            


    

     

    
      
        
        

      

      
        -
          11 -

        
          

        

      

      
        
        

      

    


    
      	 	
              10.9.

            	
              LML’s
                Retained Rights.
                The Parties acknowledge and agree that the TeleCheck Licensed Patents
                are
                “intellectual property” as defined in Section 101(35A) of the United
                States Bankruptcy Code, as the same may be amended from time to time
                (the
                “Code”), which have been licensed hereunder in a contemporaneous exchange
                for value. The Parties further acknowledge and agree that if TeleCheck:
                (i) becomes insolvent or generally fails to pay, or admits in writing
                its
                inability to pay, its debts as they become due; (ii) applies for
                or
                consents to the appointment of a trustee, receiver or other custodian
                for
                it, or makes a general assignment for the benefit of its creditors;
                (iii)
                commences, or has commenced against it, any bankruptcy, reorganization,
                debt arrangement, or other case or proceeding under any bankruptcy
                or
                insolvency law, or any dissolution or liquidation proceedings; or
                (iv)
                elects to reject, or a trustee on behalf of it elects to reject,
                this
                Settlement and License Agreement or any agreement supplementary hereto,
                pursuant to Section 365 of the Code (“365”), or if this Settlement and
                License Agreement or any agreement supplementary hereto is deemed
                to be
                rejected pursuant to 365 for any reason, this Settlement and License
                Agreement, and any agreement supplementary hereto, shall be governed
                by
                Section 365(n) of the Code (“365(n)”) and LML will retain and may elect to
                fully exercise its rights under this Settlement and License Agreement
                in
                accordance with 365(n).

            


    

     

    
      	 	
              10.10.

            	
              Notices.
                If a Party is required or permitted to give notice to the other Party
                under this Settlement and License Agreement, such notice shall be
                deemed
                given either (a) one business day if by overnight courier, delivery
                of which is acknowledged by signature of recipient, (b) five business
                days after depositing the notice in the U.S. mail, first-class postage
                prepaid, at the address specified below, or at such other address
                as the
                Party may specify in writing in accordance with this Section. 

            


    

     

    
      	 	
              To
                LML

            	
              To
                First Data and
                TeleCheck

            


    

    
      	 	 	 


    

    
      	 	
              Mr.
                Patrick H. Gaines

            	
              Henry
                C. Duques

            


    

    
      	 	
              CEO
                and President

            	
              Chairman
                and CEO

            


    

    
      	 	
              LML
                Patent Corp.

            	
              First
                Data Corp.

            


    

    
      	 	
              Suite
                1680

            	
              6200
                South Quebec Street

            


    

    
      	 	
              1140
                West Pender St.

            	
              Greenwood
                Village, CO 80111

            


    

    
      	 	
              Vancouver,
                BC V6E
                4GI

            	 


    

    
      
        	 	 	
                With
                  copies to:

              


      

      
        	 	 	 


      

      
        	 	with copy to:	 


      

      
        	 	 	 


      

    

    
      	 	 	
              Michael
                Whaley

            


    

    
      	 	
              Russell
                E. Levine, P.C.

            	
              General
                Counsel

            


    

    
      	 	
              Kirkland
                & Ellis LLP

            	
              First
                Data Corp.

            


    

    
      	 	
              200
                East Randolph Drive

            	
              6200
                South Quebec Street

            


    

    
      	 	
              Chicago,
                Illinois 60601

            	
              Greenwood
                Village, CO 80111

            


    


    
      
        
        

      

      
        -
          12 -

        
          

        

      

      
        
        

      

    


    
      	 	 	
              Brian
                Mooney

            


    

    
      	 	 	
              President

            


    

    
      	 	 	
              TeleCheck
                Services, Inc.

            


    

    
      	 	 	
              5251
                Westheimer Road 

            


    

    
      	 	 	
              Houston,
                Texas 77056

            


    

    


    
      	 	 	
              William
                J. Marsden, Jr.

            


    

    
      	 	 	
              Fish
                & Richardson P.C.

            


    

    
      	 	 	
              919
                N. Market Street

            


    

    
      	 	 	
              Suite
                1100

            


    

    
      	 	 	
              Wilmington,
                DE 19801

            


    

     

    
      	 	
              10.11.

            	
              Relationship
                of the Parties.
                This Settlement and License Agreement does not constitute and shall
                not be
                construed as constituting a partnership or joint venture between
                LML,
                First Data Corp. and TeleCheck, and no Party shall have any right
                to
                obligate or bind any other Party in any manner whatsoever, and nothing
                herein contained shall give or is intended to give any rights of
                any kind
                to any third persons, except as expressly provided
                herein.

            


    

     

    
      	 	
              10.12.

            	
              Severability. 
                If
                any provision of this Settlement and License Agreement is found or
                held to
                be invalid or unenforceable, the meaning of said provision will be
                construed, to the extent feasible, so as to render the provision
                enforceable, and if no feasible interpretation shall save such provision,
                it will be severed from the remainder of this Settlement and License
                Agreement, as appropriate. The remainder of this Settlement and License
                Agreement shall remain in full force and effect unless the severed
                provision is essential and material to the rights or benefits received
                by
                either Party. 

            


    

     

    
      	 	
              10.13.

            	
              Counterparts.
                This Settlement and License Agreement, which with exhibits included
                consists of 25 pages, may be executed in two or more counterparts,
                each of
                which shall be considered one and the same document.
                

            


    

     

    *
      * * *
      *


    
      
        
        

      

      
        -
          13 -

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF, the Parties have caused this Settlement and License Agreement
      to be executed by their duly authorized officers as of the Effective
      Date.

    


    
      	
              LML
                PATENT CORP.

            
	 
	
              By:

            	
              /s/
                Patrick H. Gaines

            	 
	 	 	 
	
              Name:

            	
              Patrick
                H. Gaines

            
	 	 
	
              Title:

            	
              CEO
                and President

            
	 	 
	
              Dated:

            	
              April
                1,
                2006

            
	 	 
	
              LML
                PAYMENT SYSTEMS CORP.

            
	 
	
              By:

            	
              /s/
                Patrick H. Gaines

            	 
	 	 	 
	
              Name:

            	
              Patrick
                H. Gaines

            
	 	 
	
              Title:

            	
              CEO
                and President

            
	 	 
	
              Dated:

            	
              April
                1,
                2006

            
	 	 
	
              LML
                PAYMENT SYSTEMS, INC.

            
	 
	
              By:

            	
              /s/
                Patrick H. Gaines

            	 
	 	 	 
	
              Name:

            	
              Patrick
                H. Gaines

            
	 	 
	
              Title:

            	
              CEO
                and President

            
	 	 
	
              Dated:

            	
              April
                1,
                2006

            
	 	 	 
	
              FIRST
                DATA CORPORATION

            
	 	 	 
	
              By:

            	
              /s/
                Brian Mooney

            	 
	 	 
	
              Name:

            	
              Brian
                Mooney 

            
	 	 
	
              Title:

            	
              Senior
                Vice President 

            
	 	 
	
              Dated:

            	
              April
                1
                ,
                2006

            


    

     

    
      
        
        

      

      
        -
          14 -

        
          

        

      

      
        
        

      

    

     

    
      	
              TELECHECK
                INTERNATIONAL, INC.

            
	 	 	 
	
              By:

            	
              /s/
                Brian Mooney

            	 
	 	 	 
	
              Name:

            	
              Brian
                Mooney

            
	 	 
	
              Title:

            	
              President

            
	 	 
	
              Dated:

            	
              April
                1,
                2006

            
	 	 	 
	
              TELECHECK
                SERVICES, INC.

            
	 	 	 
	
              By:

            	
              /s/
                Brian Mooney

            	 
	 	 	 
	
              Name:

            	
              Brian
                Mooney

            
	 	 
	
              Title:

            	
              President

            
	 	 
	
              Dated:

            	
              April
                1,
                2006

            


    

     

    
      
        
        

      

      
        -
          15 -

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      1

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      THE
      UNITED STATES DISTRICT COURT

    FOR
      THE
      DISTRICT OF DELAWARE

     

     

    
      	
              LML
                PATENT CORP.,

            	
              )

            	 
	 	
              )

            	 
	
              Plaintiff,

            	
              )

            	 
	 	
              )

            	 
	 	
              )

            	 
	
              v.

            	
              )

            	
              Civil
                Action No. 04-858 SLR

            
	 	
              )

            	 
	
              TELECHECK
                SERVICES, INC.,

            	
              )

            	
              Jury
                Trial Demanded

            
	
              ELECTRONIC
                CLEARING HOUSE, INC.,

            	
              )

            	 
	
              XPRESSCHEX,
                INC., and

            	
              )

            	 
	
              NOVA
                INFORMATION SYSTEMS, INC.

            	
              )

            	 
	 	
              
                )

              

            	 
	
              Defendants.

            	
              )

            	 


    

    


    STIPULATED
      DISMISSAL PERTAINING

    TO
      SOME BUT NOT ALL DEFENDANTS

     

    WHEREAS,
      plaintiff, LML Patent Corp., and defendant TeleCheck Services, Inc., as
      indicated by the signature of counsel appearing below, have agreed to the
      dismissal of TeleCheck Services, Inc. from this action pursuant to Federal
      Rule
      of Civil Procedure 41 and subject to the terms of this Order and a confidential
      settlement agreement, dated March __, 2006,

     

    NOW,
      THEREFORE, it is ordered as follows:

     

    1.    
The
      claims by LML Patent Corp. against TeleCheck Services, Inc. are hereby dismissed
      with prejudice.

     

    2.    
Each
      party shall bear its own costs and attorneys fees attributable to the
      prosecution and defense of the claims as between LML Patent Corp. and TeleCheck
      Services, Inc. 

     

    3.    
As
      a
      result of this stipulated dismissal, the following motions are rendered
      moot:

     

    
      	 	
              ·

            	
              LML’S
                MOTION FOR SUMMARY JUDGMENT NO. 1: FOR A RULING THAT TELECHECK
                INFRINGES CLAIMS
                1, 2, 4, 5, 6, 9, 10, 11 AND 16 OF THE ‘988 PATENT (Dkt. No.
                312)

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	 	
              ·

            	
              DEFENDANT
                TELECHECK SERVICES, INC.’S MOTION FOR SUMMARY JUDGMENT OF
                NON-INFRINGEMENT
                (Dkt. No. 341)

            


    

     

    STIPULATED
      AND AGREED

    


    
      	
                


            	
              /s/
                Richard K. Herrmann

            	
            	
                


            	
              /s/
                William J. Marsden, Jr.

            
	
              Richard
                K. Herrmann #405

            	 	
              William
                J. Marsden, Jr. (I.D. No. 2247)

            
	
              MORRIS
                JAMES HITCHENS & WILLIAMS

            	 	
              Sean
                Hayes (I.D. No. 4413)

            
	
              222
                Delaware Avenue, 10th
                Floor

            	 	
              FISH
                & RICHARDSON

            
	
              Wilmington,
                Delaware 19801

            	 	
              919
                North Market Street, Suite 1000

            
	
              (302)
                888-6800

            	 	
              Wilmington,
                Delaware 19801

            
	
              rherrmann@morrisjames.com

            	 	
              302.652.5070

            
	 	 	
              marsden@fr.com

            
	
              Russell
                E. Levine, P.C.

            	 	
              
                hayes@fr.com

              

            
	
              Jamie
                H. McDole

            	 	
               

            
	
              KIRKLAND
                & ELLIS LLP

            	 	
              Counsel
                for Defendant

            
	
              200
                East Randolph Drive

            	 	
              TeleCheck
                Services, Inc.

            
	
              Chicago,
                Illinois 60601

            	 	 
	
              312.861.2000

            	 	 
	 	 	 
	
              Counsel
                for Plaintiff

            	 	 
	
              LML
                Patent Corp.

            	 	 


    

     

    SO
      ORDERED this ______ day of ______________________, 2006.

     

    
      	 	
                 

            
	 	
              Judge
                Sue L. Robinson

            


    

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    


    CERTIFICATE
      OF SERVICE

    


    I
      hereby
      certify that on the __ day of _______, 2006, I electronically filed the
      foregoing document, STIPULATED
      DISMISSAL,
      with
      the Clerk of the Court using CM/ECF which will send notification of such filing
      to the following:

     

    
      	
              Francis
                DiGiovanni, Esq. (I.D. No. 3189)

            	
              Mark
                Scarsi, Esq.

            
	
              CONNOLLY
                BOVE LODGE & HUTZ 

            	
              Vision
                Winter, Esq.

            
	
              The
                Nemours Building

            	
              O'Melveny
                & Myers LLP

            
	
              1007
                N. Orange Street

            	
              400
                South Hope Street

            
	
              Wilmington,
                Delaware 19801

            	
              Los
                Angeles, CA 90071

            
	 	 
	
              Mark
                B. Mizrahi, Esq.

            	
              William
                Marsden, Esq.

            
	
              BELASCO
                JACOBS & TOWNSLEY

            	
              Timothy
                Devlin, Esq.

            
	
              Howard
                Hughes Center

            	
              Fish
                & Richardson

            
	
              6100
                Center Drive, Suite 630

            	
              919
                N. Market Street, Suite 1100

            
	
              Los
                Angeles, CA 90045

            	
              Wilmington,
                DE 19801

            
	 	 
	
              Richard
                D. Kirk, Esq. (I.D. No. 922)

            	 
	
              THE
                BAYARD FIRM

            	 
	
              222
                Delaware Avenue, Suite 900

            	 
	
              Wilmington,
                DE 19801

            	 


    

     

    
      	 	
                   

            	
              /s/
                Richard K. Herrmann

            	 
	 	
              Richard
                K. Herrmann
                (I.D. No.
                405)

            	 
	 	
              Mary
                B. Matterer (I.D. No. 2696)

            	 
	 	
              MORRIS,
                JAMES, HITCHENS & WILLIAMS

            	 
	 	
              222
                Delaware Avenue, 10th
                Floor

            	 
	 	
              Wilmington,
                Delaware 19801

            	 
	 	
              302.888.6800

            	 
	 	
              rherrmann@morrisjames.com

            	 
	 	
              mmatterer@morrisjames.com

            	 
	 	 	 
	 	
              Counsel
                for Plaintiff LML Patent Corp.

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      2


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      THE UNITED STATES DISTRICT COURT

    FOR
      THE EASTERN DISTRICT OF TEXAS 

    MARSHALL
      DIVISION

     

     

    
      	  
	
               

            	 
	
              TELECHECK
                INTERNATIONAL, INC., a

            	
              )

            	 
	
              Delaware
                Corporation,

            	
              )

            	 
	 	
              )

            	 
	
              Plaintiff
                and Counterclaim Defendant,

            	
              )

            	 
	 	
              )

            	
              Civil
                Action No. 2:05-CV-270

            
	
              v.

            	
              )

            	 
	 	
              )

            	
              Hon.
                Caroline M. Craven

            
	
              LML
                PAYMENT SYSTEMS, INC., a Yukon

            	
              )

            	 
	
              Territory,
                Canada corporation; and LML

            	
              )

            	 
	
              PAYMENT
                SYSTEMS CORP., a Delaware

            	
              )

            	 
	
              corporation,

            	
              )

            	 
	 	
              )

            	 
	
              Defendants
                and Counterclaim

            	
              )

            	 
	
              Plaintiffs,

            	
              )

            	 
	 	
              )

            	 
	
              v.

            	
              )

            	 
	 	
              )

            	 
	
              TELECHECK
                SERVICES, INC., a Delaware

            	
              )

            	 
	
              corporation,

            	
              )

            	 
	 	
              )

            	 
	 	
              )

            	 
	 	
              )

            	 
	
              Counterclaim
                Defendant.

            	
              )

            	 
	  
	
              )

            	 


    

    


    STIPULATED
      DISMISSAL

    


    


    WHEREAS,
      TeleCheck International, Inc., TeleCheck Services, Inc., LML Payment Systems,
      Inc. and LML Payment Systems Corp., as indicated by the signature of counsel
      appearing below, have agreed to the dismiss their respective causes of actions
      and claims with prejudice pursuant to Federal Rule of Civil Procedure 41 and
      subject to the terms of this Order and a confidential settlement agreement,
      dated March __, 2006,

     

    NOW,
      THEREFORE, it is ordered as follows:

     

    The
      above
      captioned case, and all claims asserted therein, are hereby dismissed with
      prejudice. Each party shall bear its own costs and attorneys fees attributable
      to the prosecution and defense of such claims.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    SO
      ORDERED this ______ day of ______________________, 2006.

     

    
      	 	
                   

            
	 	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              Dated
                this __ day of March 2006

            	 	 
	 	 	 
	 	 	 
	
              By:
                

            	 	
              By:
                

            
	
              Otis
                W. Carroll

            	 	
              Melissa
                R. Smith

            
	
              Ireland
                Carroll & Kelley, P.C.

            	 	
              Gillam
                & Smith, LLP

            
	
              6101
                South Broadway, Suite 500

            	 	
              110
                South Bolivar Street, Suite 204

            
	
              Tyler,
                TX 75703

            	 	
              Marshall,
                Texas 75670

            
	 	 	
              Phone:
                (903) 934-8450

            
	 	 	
              Fax:
                (930) 934-9257

            
	 	 	
              Email:
                Melissa@gillamsmithlaw.com

            
	 	 	 
	
              William
                Marsden

            	 	
              Russell
                E. Levine, P.C.

            
	
              Thomas
                L. Halkowski, Esq.

            	 	
              Jamie
                H. McDole

            
	
              Fish
                & Richardson P.C.

            	 	
              Kirkland
                & Ellis LLP

            
	
              919
                N. Market St. Suite 1100

            	 	
              200
                East Randolph Drive

            
	
              P.O.
                Box 1114

            	 	
              Chicago,
                Illinois 60601

            
	
              Wilmington,
                DE 19899-1114

            	 	
              Phone:
                (312) 861-2000

            
	 	 	
              Fax:
                (312) 861-2200

            
	 	 	 
	
              Attorneys
                for TeleCheck International, Inc. and TeleCheck Services,
                Inc.

            	 	
              Attorneys
                for LML Payment Systems, Inc. and LML Payment Systems
                Corp.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    EXHIBIT
      3

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      3

     

    Statement
      for Public Release Pursuant to Section 6.2

     

    LML
      and TeleCheck Enter
      Into Patent License

     

    VANCOUVER,
      BC, April 3, 2006 - LML Patent Corp. (“LML”), a wholly-owned subsidiary of LML
      Payment Systems Inc. (the “Corporation”) (Nasdaq: LMLP) announced today that LML
      and TeleCheck Services, Inc. (“TeleCheck”)
      have
      settled litigations and entered into a cross patent license agreement. The
      Settlement and License Agreement provides TeleCheck and First Data Corporation
      with a license to LML’s patents for electronic check conversion, including LML’s
      U.S. Patent Nos. 5,484,988; 6,164,528 and 6,283,366, and provides LML with
      a
      license to First Data Corporation’s U.S. Patent Nos. 5,679,938 and 5,679,940.
      Terms of the Settlement and License Agreement are confidential. 

     

    About
      LML Payment Systems Inc. (www.lmlpayment.com)

     

    The
      Corporation, through its subsidiary LML Payment Systems Corp., is a financial
      payment processor providing check processing solutions including electronic
      check authorization, electronic check conversion (ECC) and primary and secondary
      check collection including electronic check re-presentment (RCK) to national,
      regional and local retailers. The Corporation also provides selective routing
      of
      debit, credit and EBT transactions to third party processors and banks for
      authorization and settlement. The Corporation’s intellectual property estate,
      owned by subsidiary LML Patent Corp., includes U.S. Patent No. 6,354,491, No.
      6,283,366, No. 6,164,528, and No. 5,484,988 all of which relate to electronic
      check processing methods and systems.

     

    Statements
      contained in this news release which are not historical facts are
      forward-looking statements, subject to uncertainties and risks. For a discussion
      of the risks associated with the Corporation’s business, please see the
      documents filed by the Corporation with the SEC.

     

    
      	
              LML
                Payment Systems, Inc.

            	 
	
              Patrick
                H. Gaines

            	 
	
              President
                and CEO

            	 
	
              (604)
                689-4440

            	 
	 	 
	
              Investor
                Relations

            	 
	
              (800)
                888-2260