Document:

exhibit10_2.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.2

     

    EMPLOYMENT
AGREEMENT

     

    THIS
AGREEMENT is entered into this 5th day of
February, 2009 (the “Effective
Date”)

     

    BETWEEN:

     

    LML PAYMENT SYSTEMS INC., a
company continued pursuant to the laws of the Yukon Territory of 1680 – 1140
West Pender Street, Vancouver, BC V6E 4G1

     

    (the
“Company”)

     

    AND:

     

    CHRIS KOIDE,
of  Victoria, BC

     

    (the
“Executive”)

     

    WHEREAS:

     

    
      	
              A.  

            	
              The
      Executive has been employed by Beanstream Internet Commerce Inc. (“Beanstream”) as the
      Chief Operating Officer of Beanstream pursuant to an Employment Agreement
      made between the Executive and Beanstream dated as of December 1,
      2006 (the “Original
      Agreement”) and amended by an Amending Agreement made between the
      Company, the Executive and Beanstream dated June 29, 2007 (the “Amending Agreement”)
      (the Original Agreement as amended by the Amending Agreement is referred
      to in this Agreement as, the “Beanstream Employment
      Agreement”);

            

    

     

    
      	
              B.  

            	
              All
      the shares in the capital of Beanstream were sold to the Company pursuant
      to a Plan of Arrangement approved by an order of the Supreme Court of
      British Columbia entered on June 28, 2008 so that Beanstream is now a
      wholly-owned subsidiary of the Company (the “Beanstream
      Acquisition”);

            

    

     

    
      	
              C.  

            	
              The
      Board of Directors of the Company has determined that it is in the best
      interests of the Company and the corporations forming the LML corporate
      group (the “LML
      Group”), including Beanstream, that the Beanstream Employment
      Agreement be terminated upon the Effective Date and that the Executive be
      employed from the Effective Date under this Agreement in accordance with
      the terms of this Agreement as the Executive Vice-President – Operations
      of the Company;

            

    

     

    
      	
              D.  

            	
              The
      Executive will continue to be the Chief Operating Officer of Beanstream
      and may be appointed to be an officer of other corporations in the LML
      Group, from time to time,
hereafter;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              E.  

            	
              The
      Executive is willing to terminate the Beanstream Employment Agreement and
      to enter into this Agreement in order to be employed by the Company in
      accordance with its terms; and

            

    

     

    
      	
              F.  

            	
              The
      Company recognizes that the Executive’s talents and abilities are unique
      and have been integral to the success of Beanstream and, since the
      Beanstream Acquisition, the success of the Company, and thus wishes to
      secure the ongoing services of the Executive on the terms and conditions
      set forth herein.

            

    

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants set forth
below and other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), the parties agree as follows:

     

    1. EMPLOYMENT
TERM

     

    
      	
              1.1  

            	
              The
      employment of the Executive shall commence on the Effective Date and shall
      continue until terminated as hereinafter provided (the “Term”).

            

    

     

    
      	
              1.2  

            	
              Despite
      the provisions of section 1.1
      hereof, either the Executive or the Company may terminate the Executive’s
      employment at any time without notice for cause.  Cause shall
      mean any serious, culpable conduct, deemed cause under the common law of
      the Province of British Columbia (“Cause”).

            

    

     

    2. SERVICES

     

    
      	
              2.1  

            	
              The
      Executive agrees to perform the duties and responsibilities of Executive
      Vice-President – Operations of the Company.  The Executive’s
      duties will be as set out in the Description of Services attached hereto
      as Appendix A and such other incidental duties and responsibilities as may
      be reasonably required by the Company and assigned to the Executive by the
      Chief Executive Officer, the President or the Board from time to time
      (hereinafter collectively referred to as the “Services”).

            

    

     

    
      	
              2.2  

            	
              The
      Executive shall devote substantially all of his working time, attention
      and energies during normal business hours (other than absences due to
      illness or vacation) to the performance of his duties for the
      Company.  Notwithstanding the above, the Executive shall be
      permitted, to the extent that such activities do not substantially
      interfere with the performance of his duties and responsibilities
      hereunder or violate sections 12, 13 or 14 of this Agreement,
    to

            

    

     

    
      	
              (a)  

            	
              manage
      his personal, financial and legal
affairs;

            

    

     

    
      	
              (b)  

            	
              serve
      on civic or charitable boards or committees (it being expressly understood
      and agreed that the Executive’s continuing to serve on any such board
      and/or committees on which he is serving, or with which he is otherwise
      associated, as of the Effective Date, shall be deemed not to interfere
      with the performance of his duties and responsibilities under this
      Agreement);

            

    

     

    
      	
              (c)  

            	
              serve
      on boards of other companies; and

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (d)  

            	
              make
      personal appearances and lectures, and the Executive shall be entitled to
      receive and retain all remuneration received by him from the items listed
      in sections 2.2(a) through (d)
hereof.

            

    

     

    3. PLACE OF
PERFORMANCE

     

    
      	
              3.1  

            	
              During
      the Term, the Company shall maintain offices for the Executive in
      Victoria, British Columbia, Canada and the Executive shall not be required
      to relocate to any other location.  During the Term, the Company
      shall provide the Executive with an office and staff in the above offices
      consistent with the practices of the Company immediately prior to the
      Effective Date.

            

    

     

    4. COMPENSATION

     

    
      	
              4.1  

            	
              The
      Company agrees to pay to the Executive a base salary of not less than
      CDN $140,000 per year (“Base
      Salary”).  The Base Salary shall be paid in approximately
      equal installments in accordance with the Company’s customary payroll
      practices.  If the Company increases the Base Salary, such
      increased Base Salary shall then constitute the Base Salary for all
      purposes of this Agreement.

            

    

     

    
      	
              4.2  

            	
              For
      each full fiscal year of the Company that begins and ends during the Term,
      the Executive shall be eligible to earn an annual bonus payable in cash or
      other award (the “Annual
      Bonus”) of up to thirty-five per cent (35%) of the Base Salary
      based on the achievement by the Company of reasonable performance goals
      established by the Compensation Committee for each such fiscal year (or
      portion) which may include targets related to the revenues and the
      earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the Company
      and personal objectives.  The Compensation Committee shall
      establish objective criteria to be used to determine the extent to which
      performance goals have been
satisfied.

            

    

     

    5. BENEFITS

     

    
      	
              5.1  

            	
              During
      the Term, the Executive (and his eligible spouse and dependants) shall be
      entitled to participate in all the welfare benefit plans and programs
      maintained by the Company from time to time for the benefit of its senior
      executives, including, without limitation, all medical, hospitalization,
      dental, disability, accidental death and dismemberment and travel accident
      insurance plans and programs.  In addition, during the Term, the
      Executive shall be eligible to participate in all pensions, retirement,
      savings and other employee benefit plans and programs maintained from time
      to time by the Company for the benefit of its senior executives, other
      than any annual cash incentive plan.  The policy documents of
      such benefit plans shall determine benefit
  entitlement.

            

    

     

    6. EXPENSES

     

    
      	
              6.1  

            	
              In
      accordance with the policies formulated by the Company from time to time,
      the Executive shall be reimbursed for all reasonable traveling, business
      and entertainment expenses actually and properly incurred by the Executive
      in connection with the performance of his duties and functions, including,
      without limitation, first class transportation.  For all such
      expenses the Executive shall keep proper accounts and shall furnish
      statements and receipts to the Company in a timely
  manner.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7. AUTOMOBILES

     

    
      	
              7.1  

            	
              The
      Company shall provide the Executive with automobiles consistent with the
      practices of the Company immediately prior to the commencement of the
      Term.

            

    

     

    8. VACATION

     

    
      	
              8.1  

            	
              The
      Executive shall be entitled to fifteen (15) days’
      vacation.  Vacation not taken during the applicable fiscal year
      may be carried over to the next following fiscal
  year.

            

    

     

    9. STOCK
OPTIONS

     

    
      	
              9.1  

            	
              The
      Executive is eligible to be awarded options to purchase Common Share in
      the capital stock of the Company by the Stock Option Committee of the
      Company or the Compensation Committee of the Company, as the case may
      be.

            

    

     

    10. ILLNESS,
DISABILITY, OR DEATH

     

    
      	
              10.1  

            	
              The
      Executive’s employment hereunder shall terminate upon his
      death.

            

    

     

    
      	
              10.2  

            	
              If
      the Executive’s employment is terminated by his death, the Company shall
      provide to the Executive’s beneficiary, legal representatives or estate,
      as the case may be, a lump sum as set out in section 11.7 (a)
  hereof.

            

    

     

    11. TERMINATION
OF EMPLOYMENT

     

    
      	
              11.1  

            	
              In
      this section:

            

    

     

    
      	
              (a)  

            	
              “Control
      Change” means the occurrence of any of the following
    events:

            

    

     

    
      	
              (i)  

            	
              any
      Person acquiring twenty percent (20%) or more of the issued and
      outstanding shares of the Company;
or

            

    

     

    
      	
              (ii)  

            	
              any
      Person acquiring all or substantially all of the assets of the
      Company;

            

    

     

    provided
that for the purpose of the foregoing definition, “Person” means a third party
that is operating at arm’s length from the Executive.  For greater
certainty, “Person” shall not include any person, partnership, corporation or
other entity with which the Executive is involved directly or indirectly as
principal, agent, shareholder, officer, employee or in any other manner
whatsoever.

     

    
      	
              11.2  

            	
              The
      Executive may terminate his employment for good reason (“Good Reason”)
      after giving the Company detailed written notice thereof, if the Company
      shall have failed to cure the event or circumstance constituting Good
      Reason within ten (10) business days after receiving such
      notice.  Good Reason shall mean the occurrence of any of the
      following without the written consent of the Executive or his approval in
      his capacity as the Chief Operating
Officer:

            

    

     

    
      	
              (a)  

            	
              a
      Control Change;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              the
      assignment to the Executive of duties inconsistent with this Agreement or
      a change in his titles or
authority;

            

    

     

    
      	
              (c)  

            	
              any
      failure by the Company to comply with sections 4, 5, or 9 hereof in a material
      way;

            

    

     

    
      	
              (d)  

            	
              a
      material decrease in the Executive’s Base Salary, Annual Bonus, benefits
      or incentives;

            

    

     

    
      	
              (e)  

            	
              the
      requirement of the Executive to relocate to a location other than that
      provided in section 3
      hereof;

            

    

     

    
      	
              (f)  

            	
              the
      failure of the Company to comply with and satisfy section 16 hereof;
  or

            

    

     

    
      	
              (g)  

            	
              any
      material fundamental breach of this Agreement by the
    Company.

            

    

     

    
      	
              11.3  

            	
              The
      Executive’s right to terminate his employment for Good Reason shall expire
      if the Executive has not tendered his resignation from the Company for
      Good Reason within thirty (30) business days of his providing written
      notice thereof to the Company.

            

    

     

    
      	
              11.4  

            	
              The
      Company may terminate the Executive’s employment at any time for Cause
      without notice or payment in lieu of notice, save and except that Cause
      shall not exist unless and until the Company has delivered to the
      Executive a copy of a resolution duly adopted by the Board at a meeting of
      the Board called and held for such purpose after reasonable notice to the
      Executive and an opportunity for the Executive, together with his counsel,
      to be heard before the Board, finding that in the good faith opinion of
      the Board that Cause exists, and specifying the particulars thereof in
      detail.  This section 11.4 shall not prevent the Executive
      from challenging in any court of competent jurisdiction the Board’s
      determination that Cause exists or that the Executive has failed to cure
      any act (or failure to act) that purportedly formed the basis for the
      Board’s determination.

            

    

     

    
      	
              11.5  

            	
              The
      Company shall have the right to terminate the Executive’s employment
      hereunder without Cause by providing to the Executive notice of
      termination as set out in section 11.7
  hereof.

            

    

     

    
      	
              11.6  

            	
              Any
      termination of the Executive’s employment by the Company shall be
      communicated by written notice of termination to the Executive provided
      that such notice complies with the then existent statutory employment
      termination notice requirements in British
  Columbia.

            

    

     

    
      	
              11.7  

            	
              In
      the event that the Executive’s employment is terminated by the Company
      without Cause or by the Executive for Good Reason during the Term, the
      Company shall provide the Executive with the following
      payments:

            

    

     

    
      	
              (a)  

            	
              if
      there is no Control Change, the Company shall pay to the Executive on or
      before the date of termination (the “Date of Termination”) a
      lump sum equal to six (6) months of Base Salary and accrued vacation pay
      through to the Date of Termination;
or

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              in
      the event of a Control Change, the Company shall pay to the Executive on
      or before the Date of Termination a lump sum equal to one (1) year of Base
      Salary and accrued vacation pay through to the Date of
      Termination.

            

    

     

    The
Executive acknowledges and agrees that the payments set forth in this
section 11.7 constitute liquidated
damages for termination of his employment during the Term.  The
Executive agrees that any amount due and payable to the Executive pursuant to
section 11.7(a) or (b) shall be included and not in addition
to the amount payable pursuant to the statutory notice requirements in British
Columbia referred to in section 11.6.

     

    
      	
              11.8  

            	
              If
      the Executive’s employment is terminated by the Company for Cause or by
      the Executive other than for Good Reason, then the Company shall provide
      the Executive with any compensation earned by the Executive to the Date of
      Termination including any accrued obligations owing to the Executive
      pursuant to the provisions of sections 4, 5, 6, 8 and 9 hereof and shall have no further
      obligation to the Executive
hereunder.

            

    

     

    12. CONFIDENTIAL
INFORMATION AND COMPANY PROPERTY

     

    
      	
              12.1  

            	
              For
      purposes of this Agreement, the term “Confidential Information” means all
      of the following materials and information (whether or not reduced to
      writing and whether or not patentable or protectable by copyright) which
      the Executive receives, received access to, conceived or developed, in
      whole or part, directly or indirectly, in connection with his employment
      with the Company or in the course of his employment with the Company (in
      any capacity, whether executive, managerial, planning, technical, sales,
      research, development, manufacturing, engineering or otherwise) or through
      the use of any of the Company’s facilities or
  resources:

            

    

     

    
      	
              (a)  

            	
              business
      plans, strategies, tactics, policies, resolutions, patent applications,
      trademark applications, trade name applications and industrial design
      applications;

            

    

     

    
      	
              (b)  

            	
              litigation,
      negotiations or contractual
arrangements;

            

    

     

    
      	
              (c)  

            	
              financial
      information, including, but not limited to, cost, pricing, performance
      data, debt arrangements, equity structure, interests and
      holdings;

            

    

     

    
      	
              (d)  

            	
              operational
      and scientific information, including, but not limited to, marketing
      research techniques, trade secrets, product specifications, data, data
      base information, know-how, methodologies, formulae, models, compositions,
      processes, improvements, devices, inventions, discoveries, concepts,
      ideas, designs, sketches, photographs, graphs, drawings, notes, samples,
      past, current and planned research and development, systems, structures
      and architectures and related processes (collectively the “Works”);

            

    

     

    
      	
              (e)  

            	
              marketing
      information, including, but not limited to, current and planned marketing
      activities, methods and processes, marketing strategies, advertising
      strategies, customer or client lists, current and anticipated customer or
      client requirements, price lists and methodologies, marketing research
      methodologies, market studies, sales and marketing plans and information
      concerning customers, clients or suppliers, and strategies for attracting
      and dealing with customers or clients, including information relevant to
      the design and implementation of marketing plans and advertising
      campaigns;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (f)  

            	
              personnel
      information, including, but not limited to, the names and backgrounds of
      key personnel, personnel lists, résumés, personnel data, including
      information about compensation and benefits, organization structure,
      performance evaluations of personnel of the Company and personnel training
      techniques and materials;

            

    

     

    
      	
              (g)  

            	
              any
      and all information concerning the business and affairs of the Company
      which the Company treats as proprietary and confidential and which is not
      in the public domain;

            

    

     

    
      	
              (h)  

            	
              any
      other information, however documented, of the Employer that is a trade
      secret under any applicable legislation or at common law;
    and

            

    

     

    
      	
              (i)  

            	
              all
      ideas which are derived from or related to the Executive’s access to or
      knowledge of any of the above enumerated materials and
      information.

            

    

     

    
      	
              12.2  

            	
              Failure
      to make any of the Confidential Information as confidential, proprietary
      or protected information does not affect its status as part of the
      Confidential Information under the terms of this
  Agreement.

            

    

     

    
      	
              12.3  

            	
              For
      purposes of this Agreement, the information that would otherwise be
      Confidential Information which is or becomes publicly available without
      breach of:

            

    

     

    
      	
              (a)  

            	
              this
      Agreement;

            

    

     

    
      	
              (b)  

            	
              any
      other agreement or instrument to which the Company is a part or a
      beneficiary; or

            

    

     

    
      	
              (c)  

            	
              any
      duty owed to the Company by the Executive or any third
    party;

            

    

     

    (“Available
Information”)

     

    is not
Confidential Information, provided, however, that the Executive acknowledges and
agrees that if the Executive seeks to disclose, divulge, reveal, report,
publish, transfer or use, for any purpose, any Available Information, the
Executive bears the burden of proving that such information is Available
Information.

     

    
      	
              12.4  

            	
              For
      purposes of this Agreement, the term “Intellectual Property” means all
      works, trademarks, trademark applications, patents, patent applications,
      copyright materials, trade names, trade name applications, industrial
      designs, and applications to register
designs.

            

    

     

    
      	
              12.5  

            	
              The
      Executive acknowledges that as a result of his employment by the Company,
      the Executive may use, acquire or add to Confidential Information or
      Intellectual Property.

            

    

     

    
      	
              12.6  

            	
              The
      Executive shall not at any time during or following the Term of the
      Executive’s employment by the Company, directly or indirectly, disclose,
      divulge, reveal, report, publish, transfer or use for any purpose any of
      the Confidential Information, except with the prior written consent of the
      Company, or except if the Executive is acting as an employee of the
      Company solely for the benefit of the Company in connection with the
      Company’s business and in accordance with the Company’s business practices
      and employment policies.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              12.7  

            	
              Disclosure
      of any Confidential Information is not prohibited if the disclosure is
      directly pursuant to a valid and existing order of a court or other
      governmental body or agency within Canada; provided, however,
      that:

            

    

     

    
      	
              (a)  

            	
              the
      Executive shall first have given prompt notice to the Company of any
      possible or prospective order (or proceedings pursuant to which any order
      may result); and

            

    

     

    
      	
              (b)  

            	
              the
      Company shall have been afforded a reasonable opportunity to prevent or
      limit any disclosure.

            

    

     

    
      	
              12.8  

            	
              The
      Executive acknowledges and agrees that all rights, title and interest in
      any Confidential Information or Intellectual Property remains the
      exclusive property of the Company.  Accordingly, the Executive
      specifically agrees and acknowledges that he has no interest in the
      Confidential Information or Intellectual Property, notwithstanding the
      fact that the Executive may have created or contributed to the creation of
      or his name is used in association with such Confidential Information or
      Intellectual Property.

            

    

     

    13. NON-COMPETITION

     

    
      	
              13.1  

            	
              During
      the Term and until the six (6) month anniversary of the Date of
      Termination, if the Executive’s employment is terminated by the Company
      for Cause or the Executive terminates employment without Good Reason, the
      Executive shall not engage in or become associated with any business or
      other endeavour that engages in any country in which the Company has
      significant business operations as of the Date of Termination to a
      significant degree in a business that directly competes with all or any
      substantial part of the Company’s business
of:

            

    

     

    
      	
              (a)  

            	
              Electronic  payment
      processing solutions including:

            

    

     

    
      	
              (i)  

            	
              credit
      card, debit card, EFT, ACH, authentication,
  payroll;

            

    

     

    
      	
              (ii)  

            	
              merchant
      acquiring and payment gateway;

            

    

     

    
      	
              (iii)  

            	
              electronic
      check re-presentment (whereby returned paper checks are re-presented for
      payment electronically), and

            

    

     

    
      	
              (iv)  

            	
              check
      collection;

               

              (collectively “Competitive
      Activity”).

            

    

     

    
      	
              13.2  

            	
              A
      Competitive Activity shall not
include:

            

    

     

    
      	
              (a)  

            	
              any
      speaking engagement to the extent that such speaking engagement does not
      promote or endorse a product or service of the
  Business;

            

    

     

    
      	
              (b)  

            	
              the
      writing of any book or articles relating to subjects other than Business;
      or

            

    

     

    
      	
              (c)  

            	
              the
      television, video or movie business so long as such business does not
      relate to the Business.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              13.3  

            	
              The
      Executive shall be considered to have become “associated with a
      Competitive Activity” if he becomes involved as an owner, employee,
      officer, director, independent contractor, agent, partner, advisor or in
      any other capacity calling for the rendition of the Executive’s personal
      services, with any individual, partnership, corporation or other
      organization that is engaged in a Competitive Activity and his involvement
      relates to a significant extent to the Competitive Activity of such
      entity; provided, however, that the Executive shall not be prohibited
      from:

            

    

     

    
      	
              (a)  

            	
              owning
      less than five percent (5%) of any publicly traded corporation, whether or
      not such corporation is in competition with the Company;
  or

            

    

     

    
      	
              (b)  

            	
              serving
      as a director of a corporation or other entity the primary business of
      which is not a Competitive
Activity.

            

    

     

    14. NON-SOLICITATION

     

    
      	
              14.1  

            	
              During
      the Term, and for twelve (12) months after the Date of Termination, if the
      Executive’s employment is terminated by the Company for Cause or the
      Executive terminates employment without Good Reason, the Executive will
      not, directly or indirectly, solicit for employment by other than the
      Company any person (other than any personal secretary or assistant hired
      to work directly for the Executive) employed by the Company or its
      affiliated companies, nor will the Executive, directly or indirectly,
      solicit for employment by other than the Company any person known by the
      Executive (after reasonable inquiry) to be employed at the time by the
      Company or its affiliated
companies.

            

    

     

    
      	
              14.2  

            	
              If,
      at any time, the provisions of sections 13 or 14 hereof shall be determined to be
      invalid or unenforceable by reason of being vague or unreasonable as to
      area, duration or scope of activity, sections 13 or 14 hereof shall be considered
      divisible and shall become and be immediately amended to only such area,
      duration and scope of activity as shall be determined to be reasonable and
      enforceable by the court or other body having jurisdiction over the
      matter; and the Executive agrees that sections 13 and 14 hereof as so amended shall be
      valid and binding as though any invalid or unenforceable provision had not
      been included herein.

            

    

     

    15. INJUNCTIVE
RELIEF

     

    
      	
              15.1  

            	
              In
      the event of a breach or threatened breach of sections 13 or 14 hereof, the Executive agrees that
      the Company shall be entitled to injunctive relief in a court of
      appropriate jurisdiction to remedy any such breach or threatened breach,
      the Executive acknowledging that damages would be inadequate and
      insufficient.

            

    

     

    16. INDEMNIFICATION

     

    
      	
              (a)  

            	
              The
      Company agrees that if the Executive is made a party or is threatened to
      be made a party to any action, suit or proceeding, whether civil,
      criminal, administrative or investigative (a “Proceeding”), by reason
      of the fact that the Executive is or was a trustee, director or officer of
      the Company or any predecessor of the Company or any of its affiliates or
      is or was serving at the request of the Company, any predecessor of the
      Company, or any of its affiliates as a trustee, director, officer, member,
      employee or agent including, without limitation, service with respect to
      employee benefit plans, whether or not the basis of such proceeding is
      alleged action in an official capacity as a trustee, director, officer,
      member, employee or agent while serving as a trustee, director, officer,
      member, employee or agent, the Executive shall be indemnified and held
      harmless by the Company to the fullest extent authorized by law as the
      same exists or may hereafter be amended against all expenses incurred or
      suffered by the Executive in connection therewith, and such
      indemnification shall continue as to the Executive even if the Executive
      has ceased to be an officer, director, trustee or agent or is no longer
      employed by the Company and shall enure to the benefit of his heirs,
      executors and administrators.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              If
      a claim or request under this section 16 is not paid by the Company or on
      its behalf, within thirty (30) days after a written claim or request has
      been received by the Company, the Executive may at any time thereafter
      bring suit against the Company to recover the unpaid amount of the claim
      or request and if successful in whole or in part, the Executive shall be
      entitled to be paid also the expenses of prosecuting such
      suit.  All obligations for indemnification hereunder shall be
      subject to and paid in accordance with the law of British
      Columbia.

            

    

     

    
      	
              (c)  

            	
              If
      the Executive is entitled under any provision of this Agreement to
      indemnification by the Company for some or a portion of any claim in this
      section 16 but not, however,
      for the total amount thereof, the Company shall nevertheless indemnify the
      Executive for the portion of such claim to which the Executive is
      entitled.

            

    

     

    
      	
              (d)  

            	
              Expenses
      incurred by the Executive in connection with any Proceeding shall be paid
      by the Company in advance upon request of the Executive that the Company
      pay such expenses, but only in the event that the Executive shall have
      delivered in writing to the
Company,

            

    

     

    
      	
              (i)  

            	
              an
      undertaking to reimburse the Company for expenses with respect to which
      the Executive is not entitled to indemnification;
  and

            

    

     

    
      	
              (ii)  

            	
              a
      statement of his good faith belief that the standard of conduct necessary
      for indemnification by the Company has been
met.

            

    

     

    
      	
              (e)  

            	
              The
      Executive shall give to the Company notice of any claim made against him
      for which indemnification will or could be sought under this
      Agreement.  In addition, the Executive shall give the Company
      such information and cooperation as it may reasonably require and as shall
      be within the Executive’s power and at such time and places as are
      convenient for the Executive.

            

    

     

    
      	
              (f)  

            	
              With
      respect to any Proceeding as to which the Executive notifies the Company
      of the commencement thereof:

            

    

     

    
      	
              (i)  

            	
              The
      Company will be entitled to participate therein at its own
      expense;

            

    

     

    
      	
              (ii)  

            	
              Except
      as otherwise provided below, to the extent that it may wish, the Company
      will be entitled to assume the defence thereof, with counsel, reasonably
      satisfactory to the Executive, which in the Company’s sole discretion may
      be regular counsel to the Company and may be counsel to other officers and
      directors of the Company or any subsidiary.  The Executive also
      shall have the right to employ his own counsel in such action, suit or
      proceedings if he reasonably concludes that failure to do so would involve
      a conflict of interest between the Company and the Executive, and under
      such circumstances the fees and expenses of such counsel shall be at the
      expense of the Company;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (iii)  

            	
              The
      Company shall not be liable to indemnify the Executive under this
      Agreement for any amounts paid in settlement of any action or claim
      affected without its written consent.  The Company shall not
      settle any action or claim in any manner which would impose any penalty
      that would not be paid directly or indirectly by the Company or limitation
      on the Executive without the Executive’s written
      consent.  Neither the Company nor the Executive will
      unreasonably withhold or delay their consent to any proposed
      settlement.

            

    

     

    
      	
              (g)  

            	
              The
      right to indemnification and the payment of expenses incurred in defending
      a Proceeding in advance of its final disposition conferred in this
      section 16 shall not be
      exclusive of any other right which the Executive may have or hereafter may
      acquire under any statute or certificate of incorporation or by-laws of
      the Company or any subsidiary, agreement, vote of shareholders or
      disinterested directors or trustees or
  otherwise.

            

    

     

    17. COMPANY’S
SUCCESSORS

     

    
      	
              17.1  

            	
              No
      rights or obligations of the Company under this Agreement may be assigned
      or transferred, except that the Company shall require any successor
      (whether direct or indirect, by purchase, merger, consolidation or
      otherwise) to all or substantially all of the business and/or assets of
      the Company to expressly assume and agree to perform this Agreement in the
      same manner and to the same extent that the Company would be required to
      perform it if no such succession had taken place.  As used in
      this Agreement, “Company” shall include any successor to its business
      and/or assets (by merger, purchase or otherwise) which executes and
      delivers the agreement provided for in this section 17, or which otherwise becomes bound
      by all the terms and provisions of this Agreement by operation of
      law.

            

    

     

    18. EXECUTIVE’S
SUCCESSORS

     

    
      	
              18.1  

            	
              No
      rights or obligations of the Executive under this Agreement may be
      assigned or transferred by the Executive other than his rights to payments
      or benefits hereunder, which may be transferred by the Executive other
      than his rights to payments or benefits hereunder, which may be
      transferred only by will or the laws of descent and
      distribution.  Upon the Executive’s death, this Agreement and
      all rights of the Executive hereunder shall inure to the benefit of and be
      enforceable by the Executive’s beneficiary or beneficiaries, personal or
      legal representatives, or estate, to the extent any such person succeeds
      to the Executive’s interests under this Agreement.  If the
      Executive should die following his Date of Termination while any amounts
      would still be payable to him hereunder if he had continued to live, all
      such amounts unless otherwise provided herein shall be paid in accordance
      with the terms of this Agreement to such person or persons so appointed in
      writing by the Executive, or otherwise to his legal representatives or
      estate.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    19. NOTICE

     

    
      	
              19.1  

            	
              For
      the purposes of this Agreement, notices, demands and all other
      communications provided for in this Agreement shall be in writing and
      shall be deemed to have been duly given when delivered either personally
      or by certified or registered mail, return receipt requested, postage
      prepaid, addressed as follows:

            

    

     

    If to the
Executive:

     

    At his
address most recently filed with the Company.

     

    If to the
Company:

     

    LML
Payment Systems Inc.

    Suite
1680 — 1140 West Pender Street

    Vancouver
BC Canada V6E 4G1

     

    or to
such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

     

    20. MISCELLANEOUS

     

    
      	
              20.1  

            	
              No
      provisions of this Agreement may be amended, modified, or waived unless
      such amendment or modification is agreed to in writing signed by the
      Executive and by a duly authorized officer of the Company, and such waiver
      is set forth in writing and signed by the party to be
      charged.  No waiver by either party hereto at any time of any
      breach by the other party hereto of any condition or provision of this
      Agreement to be performed by such other party shall be deemed a waiver of
      similar or dissimilar provisions or conditions at the same or at any prior
      or subsequent time.  No agreements or representations, oral or
      otherwise, express or implied, with respect to the subject matter hereof
      have been made by either party that are not set forth expressly in this
      agreement.  The respective rights and obligations of the parties
      hereunder of this Agreement shall survive the Executive’s termination of
      employment and the termination of this Agreement to the extent necessary
      for the intended preservation of such rights and
      obligations.  The validity, interpretation, construction and
      performance of this Agreement shall be governed by the laws of the
      Province of British Columbia.

            

    

     

    
      	
              20.2  

            	
              The
      invalidity or unenforceability of any provision or provisions of this
      Agreement shall not affect the validity or enforceability of any other
      provision of this Agreement, which shall remain in full force and
      effect.

            

    

     

    
      	
              20.3  

            	
              This
      Agreement may be executed in one or more counterparts, each of which shall
      be deemed to be an original but all of which together will constitute one
      and the same instrument.

            

    

     

    
      	
              20.4  

            	
              This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of the subject matter contained herein and supersedes all prior
      agreements, promises, covenants, arrangements, communications,
      representations or warranties, whether oral or written, by any officer,
      employee or representative of any party hereto in respect of such subject
      matter including, without limitation.  Any prior agreement of
      the parties hereto in respect of the subject matter contained herein is
      hereby terminated and cancelled.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              20.5  

            	
              All
      payments hereunder shall be subject to any required withholding of taxes
      pursuant to any applicable law or
regulation.

            

    

     

    
      	
              20.6  

            	
              The
      section headings in this Agreement are for convenience of reference only,
      and they form no part of this Agreement and shall not affect its
      interpretation.

            

    

     

    
      	
              20.7  

            	
              The
      Executive acknowledges that the
Executive:

            

    

     

    
      	
              (a)  

            	
              has
      had time to review this Agreement;

            

    

     

    
      	
              (b)  

            	
              fully
      understands the contents of this Agreement;
and

            

    

     

    
      	
              (c)  

            	
              has
      had the opportunity of obtaining legal advice concerning the Agreement’s
      interpretation and effect on the Executive and has obtained or waived such
      legal advice.

            

    

     

    IN
WITNESS WHEREOF the parties hereunto have executed this Agreement as of the
5th
day of February, 2009.

     

    

     

    LML
PAYMENT SYSTEMS INC.

     

    

     

    Per: /s/ Greg
MacRae                                           

    Authorized
Signatory

     

    

     

    /s/ Chris
Koide                                                                

    CHRIS
KOIDEexhibit10_3.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit 10.3

     

    AMENDING
AGREEMENT

     

    THIS
AGREEMENT made the 5th day of
February, 2009, to be effective as at the 5th day of
February, 2009 (the “Effective
Date”)

     

    BETWEEN:

     

    LML PAYMENT SYSTEMS INC., a
corporation continued under the laws of the Yukon Territory of 1680 – 1140 West
Pender Street, Vancouver, B.C., V6E 4G1

     

    (the
“Company”)

     

    AND:

     

    PATRICK H. GAINES, businessman
of, Vancouver, B.C.

     

    (the
“Executive”)

     

    WHEREAS:

     

    
      	
              A.  

            	
              The
      Company and the Executive are parties to an employment agreement dated
      March 31, 2008 (the “Original Agreement”)
      whereby the Company has retained the services of the Executive in acting
      as its President and Chief Executive Officer and Chairman of the board of
      directors of the Company (the “Board”);

            

    

     

    
      	
              B.  

            	
              The
      Board has determined that it is in the best interests of the Company that
      the Executive cease to be the President of the Company and be replaced in
      that office by Mr. Craig Thomson who is, as of the date hereof, the
      President and Chief Executive Officer (“CEO”) of Beanstream
      Internet Commerce Inc., a wholly-owned subsidiary of the Company and that
      the Executive continue as the Chairman of the Board and CEO of the
      Company;

            

    

     

    
      	
              C.  

            	
              Section
      11.2(b) of the Agreement provides, in effect, that “the assignment to the
      Executive of duties inconsistent with this Agreement or a change in his
      titles or authority” is “Good Reason” (as defined in the Agreement) to
      allow the Executive to terminate the Agreement and, thereby, to trigger
      the payments to him contemplated in section 11.7 of the
      Agreement;

            

    

     

    
      	
              D.  

            	
              It
      is appropriate to amend the Original Agreement in order to reflect such
      changes in management of the Company and also for the Executive to waive
      his rights under section 11.2(b) in respect of his ceasing to be
      President of the Company; and

            

    

     

    
      	
              E.  

            	
              The
      parties now wish to make certain amendments to the Original Agreement upon
      the terms and conditions set out in this
  Agreement;

            

    

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and other valuable consideration (the receipt and sufficiency of which is
hereby acknowledged), the parties hereto covenant and agree as
follows:

     

    
      	
              1.  

            	
              Section 2.1
      of the Original Agreement is deleted in its
  entirety.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              2.  

            	
              The
      following provision is added to the Original Agreement as a new
      section 2.1:

            

    

     

    “2.1           The
Executive agrees to perform the duties and responsibilities of the Chief
Executive Officer of the Company and the Chairman of the board of directors of
the Company (the “Board”).  The
Executive’s duties will include the day-to-day management of the Company,
attendance at all Board meetings and Board committee meetings, and such other
incidental duties and responsibilities as may be reasonably required by the
Company and assigned to the Executive by the Board from time to time
(hereinafter collectively referred to as the “Services”).”

     

    
      	
              3.  

            	
              All
      provisions of the Original Agreement which are not amended by this
      Agreement remain unchanged and the amendments contemplated in
      sections 1 and 2 hereof taken together with all other unamended
      provisions of the Original Agreement form the employment agreement between
      the Company and the Executive as if such amendments formed part of the
      Original Agreement.

            

    

     

    
      	
              4.  

            	
              The
      Executive hereby waives all his rights under section 11.2(b) of the
      Agreement with respect to the changes to his duties, titles and authority
      resulting from his ceasing to be the President of the Company as of the
      Effective Date.

            

    

     

    
      	
              5.  

            	
              This
      Agreement shall become binding upon the parties on the Effective
      Date.

            

    

     

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on
the day and year first above written.

     

    LML
PAYMENT SYSTEMS INC.

     

    
      	Per:	 	 
	 	 	 
	/s/ Greg
      MacRae  	 	 
	Authorized
      Signatory	 	 
	 	 	 
	 	 	 
	
              PATRICK
      H. GAINES

            	 
      	 
      
	 	 	 
	/s/ Patrick
      H. Gaines  	 
      	/s/
      Carolyn Gaines
	
              Signature

            	 
      	
              Witness
      Signature

            
	 	 	 
	 
      	 
      	Carolyn
      Gaines
	 
      	 
      	
              Print
      Witness Name

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