Attached files
| file | filename |
|---|---|
| 10-Q - FORM 10-Q - LML PAYMENT SYSTEMS INC | form10q110930.htm |
| EX-10.2 - EXHIBIT 10_2 - LML PAYMENT SYSTEMS INC | exh10_2.htm |
| EX-31.2 - EXHIBIT 31_2 - LML PAYMENT SYSTEMS INC | exh31_2.htm |
| EX-32.1 - EXHIBIT 32_1 - LML PAYMENT SYSTEMS INC | exh32_1.htm |
| EX-31.1 - EXHIBIT 31_1 - LML PAYMENT SYSTEMS INC | exh31_1.htm |
SETTLEMENT AND LICENSE AGREEMENT
This Settlement and License Agreement (the "Agreement") is entered into by LML Patent Corp., on the one hand, and Wells Fargo Bank, N.A., on the other hand. LML and Wells Fargo are individually referred to as a "Party" and collectively as the "Parties." This Agreement is effective as of September 6, 2011 ("Effective Date").
RECITALS
WHEREAS, LML represents that it owns rights in the LML Patents (as defined in Section 1(n) hereof), which LML asserts is related to Electronic Check Conversion systems and services;
WHEREAS, LML began an action against Wells Fargo & Company, Wachovia Corporation, and other defendants in the United States District Court for the Eastern District of Texas, Marshall Division, 2:08-CV-448-DF ("Litigation I"), and LML also began a separate action against other defendants in the United States District Court for the Eastern District of Texas, Marshall Division, 2:09-CV-180-TJW ("Litigation II") (collectively, the "Lawsuits"), alleging in both Litigation I and Litigation II infringement of LML's U.S. Patent No. RE40,220;
WHEREAS, LML's published standard royalty rate for use of the LML Patents is $0.01 U.S. dollars for each ARC SEC coded ACH transaction and $0.03 U.S. dollars for reach POP, BOC, WEB, or TEL SEC coded ACH transaction;
WHEREAS, Wells Fargo & Company, Wells Fargo Bank, N.A., Wachovia Corporation n/k/a Wells Fargo & Company, and Wachovia Bank n/k/a Wells Fargo Bank, N.A. were named defendants in Litigation I and have denied liability;
WHEREAS, the Parties have agreed to enter into this Agreement to avoid the risk and uncertainty of continued litigation;
WHEREAS, the Parties wish to settle their disputes, and Wells Fargo desires to obtain certain rights under the LML Patents (as hereinafter defined) and LML is willing to grant such rights;
NOW, THEREFORE, in consideration of the above premises and mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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1.
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DEFINITIONS. The following definitions apply to this Agreement:
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(a)
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"ACH" is the acronym for the "Automated Clearing House" Network and means the funds transfer system governed by the National Automated Clearing House Association ("NACHA").
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(b)
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"ACH Transaction" means an entry complying with the NACHA ACH Record Format Specifications for NACHA standard entry class codes ARC, WEB, POP, TEL, and BOC.
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(c)
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"Acquires" means to obtain an interest in an entity either by acquisition, purchase, or merger.
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(d)
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"Affiliate" of a Party means any past, present, or future subsidiary, parent, sister company, or other corporation, firm, business, partnership, joint venture, or entity that controls, is controlled by, or is under common control of, that Party or any of its direct or indirect subsidiaries. The term "control" as used in this Agreement, means the possession, directly or indirectly, solely or jointly, of the power to direct or cause the direction of management, actions, or policies of a legally recognizable entity, whether through the ownership of voting shares, by contract, or otherwise. The rights conferred by this Agreement on Wells Fargo shall automatically and immediately extend to any entity that is not an Affiliate of or a part of Wells Fargo as of the Effective Date and subsequently becomes an Affiliate or a part of Wells Fargo (e.g., a future Affiliate or acquired business), and shall extend to or continue to be retained by any entity that is an Affiliate or a part of Wells Fargo as of the Effective Date and subsequently loses its status as an Affiliate or part of Wells Fargo (e.g., a former Affiliate or divested business). Except that the license shall not benefit successors or acquirers addressed in Section 6 below after the Effective Date, except as provided in Section 6 below.
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(e)
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"Bank" means any institution that (i) is a member of the Federal Reserve System and that accepts demand deposits to consumer accounts from which a consumer may withdraw funds by check or share draft for payment to others; and (ii) is engaged in the business of making commercial loans.
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(f)
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"Court" means the United States District Court for the Eastern District of Texas, Marshall Division.
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(g)
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"Covered Products and Services" means any past, present, or future application, product, apparatus, component, machine, system, module, manufacture, software, design, composition of matter, service, process, method, or technology that has been, will be, or is being Exploited by, on, for, to, through, or on behalf of Wells Fargo that, in the absence of a license, release, or covenant-not-to-sue granted pursuant to this Agreement, would allegedly infringe, either directly or indirectly, in whole or in part, any of the LML Patents. Such definition extends only to products and services to the extent they are Exploited through, with, by, for, to, or on behalf of Wells Fargo.
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(h)
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"Covered Third Parties" means Wells Fargo's customers, correspondent banks, buyers, sellers, users, developers, manufacturers, partners, promoters, advertisers, resellers, and/or distributors, and any developer, supplier, partner, vendor, or manufacturer that Exploits Covered Products and Services, and only to the extent Exploited through, with, by, for, or on behalf of Wells Fargo. Notwithstanding the foregoing, Covered Third Parties shall not include Capital One National Association, Capital One Services, LLC, Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., and Bank of America Corporation.
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(i)
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"Excluded Bank" means any Bank named in Exhibit B (the 2010 NACHA Top 50 Originators List) for which Wells Fargo has not processed any ACH Transaction on or before the Effective Date.
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(j)
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"Entity" means any individual, trust, corporation, person, company, partnership, joint venture, limited liability company, association, firm, unincorporated organization, or other legal or governmental entity.
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(k)
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"Exploit" means to own, design, develop, test, acquire, use, make, have made, sell, offer to sell, advertise, provide, perform, distribute, modify, import, export, supply, or incorporate components, steps, features, or portions of the Covered Products and Services, or otherwise offer, dispose of, distribute, display, advertise, and/or promote, and/or the exercise of any other activities specified under 35 U.S.C. § 271 and foreign counterparts thereto (as the foregoing 35 U.S.C. § 271 and foreign counterparts thereof may be amended or superseded from time to time). "Exploited," "Exploitation," and other variations of the word "Exploit" shall have correlative meanings.
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(l)
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"Infringement" or "Infringes" means direct infringement, indirect infringement, infringement under the doctrine of equivalents, or any other theory of infringement in any jurisdiction worldwide.
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(m)
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"LML" or "LML Entity" or "LML Entities" means: (a) LML Patent Corp. and its predecessors, successors, and Affiliates, including, but not limited to, Beanstream Internet Commerce, Inc.; (b) all entities controlled by LML Patent Corp., and each of their predecessors, successors, and Affiliates; (c) all entities, and each of their predecessors, successors, and Affiliates, in which LML Patent Corp. has a 25% or more ownership share.
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(n)
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"LML Patents" means (i) U.S. Patent Nos. RE40,220, 6,354,491, 6,283,366, 6,164,528, and 5,484,988, (ii) any issued patent and any pending patent application anywhere in the world that LML currently owns or controls (or has the right to own or control) as of the Effective Date of this Agreement; (iii) any past, present, or future patent or patent application worldwide to which any of the foregoing patents and/or patent applications described in (i) and (ii) claims priority or are otherwise related, including, but not limited to all parents, provisionals, substitutes, renewals, continuations, continuations-in-part, reissues, reexamination certificates, divisionals, foreign counterparts, oppositions, continued examinations, reexaminations, and extensions of any of the foregoing; and (iv) applications of the foregoing patents and/or patent applications described above. For purposes of this definition, a patent or patent application is deemed to be under LML's "control" if LML has the right to assert a claim of Infringement or grant a license under such patent or patent application.
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(o)
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"Wells Fargo" means, individually and collectively, Wells Fargo Bank, N.A., and its predecessors, successors, assigns, and Affiliates, including, without limitation, Wells Fargo & Company, Wachovia Corporation n/k/a Wells Fargo & Company, and Wachovia Bank n/k/a Wells Fargo Bank, N.A.
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2.
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SETTLEMENT OF THE LITIGATION
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2.1
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Dismissal of Litigation. The Parties agree to direct their counsel to file with the Court a joint motion for dismissal with prejudice of the Parties' respective claims for relief against the other Party in Litigation I as set forth in Exhibit A within five (5) days after the receipt of payment specified in Section 3.1. The Parties shall promptly proceed with any and all additional procedures needed to dismiss with prejudice the Parties' respective claims for relief against the other Party in Litigation I.
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2.2
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No Award of Fees or Costs. The Parties agree that they shall bear their own expenses, costs, and attorneys' fees relating to Litigation I and negotiating the Agreement, including the transactions contemplated herein.
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2.3
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No Attempt to Invalidate. Wells Fargo agrees that, in the absence of a subpoena or court order requiring its participation or support, Wells Fargo shall not participate in or support any suit, claim, action, litigation, administrative proceeding, or proceeding of any nature brought against LML that challenges the validity or enforceability of the LML Patents so long as Wells Fargo: (a) has a license to the LML Patents, subject to Section 6 (Change in Control/Acquisitions); (b) is fully released for all claims of Infringement of the LML Patents, subject to Section 6 (Change in Control/Acquisitions); and (c) is not accused of Infringement of any LML Patent, subject to Section 6 (Change in Control/Acquisitions). However, Wells Fargo may challenge the validity or enforceability of the LML Patents if: (i) any suit, claim, action, litigation, or proceeding to enforce one or more of the LML Patents is brought against Wells Fargo or a Covered Third Party related to one or more of the LML Patents, or Wells Fargo is placed in a reasonable apprehension of being sued on one or more of the LML Patents, or (ii) if LML breaches its covenants not to sue (Section 4.4) or releases (Section 4.2) or licenses (Section 5) made to Wells Fargo or Covered Third Parties (acting solely in their role as Covered Third Parties), or (iii) if Wells Fargo receives a request for indemnification related to an LML Patent, but only after Wells Fargo has provided thirty (30) days written notice to LML of its intent to challenge the validity or enforceability of the asserted LML Patent(s). Nothing in this Section 2.3 restricts or limits the licenses or covenants not to sue in this Agreement.
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3.
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PAYMENT, TERM AND TERMINATION
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3.1
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Payment by Wells Fargo. Wells Fargo agrees to pay to LML the non-refundable sum of Five Million U.S. dollars ($5,000,000.00) on or before five (5) business days following the Effective Date in consideration of the terms set forth in this Agreement. (Nothing in this Section 3.1, however, shall diminish Wells Fargo's right to seek damages independently for an alleged breach of this Agreement by LML.) Such amount will be paid by check issued to LML Patent Corp. via overnight courier to the attention of the Corporate Secretary at the Vancouver, Canada address in Section 9.3. As a condition precedent for such payment obligation, LML must deliver to Wells Fargo Bank, N.A., no later than the Effective Date, a completed W-9 tax form and an executed copy of this Agreement with Exhibits A and B hereto.
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3.2
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Term. Unless earlier terminated as specified in this Section 3.2, the term of this Agreement shall commence upon the Effective Date, and the licenses shall continue until the latter of the expiration of the latest to expire of all the LML Patents or the final disposition of all causes of action and claims arising out of or related to the LML Patents or the Lawsuits. Otherwise, this Agreement may only be earlier terminated in whole or in part pursuant to Section 3.3 (Termination Due to Non-Payment by Wells Fargo) or upon the mutual written agreement of the Parties.
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3.3
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Termination Due to Non-Payment by Wells Fargo. If Wells Fargo fails to make the payment specified in Section 3.1 (Payment by Wells Fargo) above in the time specified, such failure will constitute a material breach of this Agreement. Upon such breach, LML may then, after ten (10) business days following written notice of such breach to Wells Fargo, if Wells Fargo does not deliver the payment specified in Section 3.1 (Payment by Wells Fargo) to LML within ten (10) business days after receiving such notice from LML, at its option, either terminate this Agreement (in which event this Agreement shall become null and void) or it may petition the Court for specific enforcement of Wells Fargo's payment obligations. Wells Fargo hereby consents to the jurisdiction of the Court for enforcement of the payment obligations in Section 3.1 (Payment by Wells Fargo), and agrees that specific enforcement of the payment obligations of this Agreement is an available remedy if LML does not elect to terminate this Agreement.
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3.4
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Tax Liability. Each Party shall bear its own tax liability as a result of the existence of this Agreement or the performance of any obligations hereunder.
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3.5
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Additional Payments. The payment of the amount set forth in Section 3.1 (Payment by Wells Fargo) shall be the total compensation to any LML Entity for all releases, licenses, covenants, and all other rights granted in this Agreement, and no additional payment shall be due or made to any LML Entity or any other Entity by Wells Fargo or any other Entity with respect to the releases, licenses, covenants, and all other rights granted in this Agreement.
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3.6
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Wells Fargo's Retained Rights/Bankruptcy. The Parties acknowledge and agree that the LML 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 Agreement or any agreement supplementary hereto, pursuant to Section 365 of the Code ("365"), or if this Agreement or any agreement supplementary hereto is deemed to be rejected pursuant to 365 for any reason, this Agreement, and any agreement supplementary hereto, shall be governed by Section 365(n) of the Code ("365(n)"), and Wells Fargo will retain and may elect to fully exercise its or their rights under this Agreement in accordance with 365(n).
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4.
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RELEASES AND COVENANTS NOT TO SUE
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4.1
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Agreement Obligations Not Released. None of the releases or covenants not to sue herein releases any Party or its Affiliates from its respective obligations under this Agreement or under any protective orders entered in Litigation I as of the Effective Date, or prevents any Party or any of its Affiliates from enforcing the terms and conditions of this Agreement against the other Party or its Affiliates.
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4.2
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LML's Release to Wells Fargo. Subject to the provisions of Section 3.3 (Termination Due to Non-Payment by Wells Fargo) and Section 6 (Change in Control/Acquisitions), LML Entities forever release: (a) Wells Fargo and its respective directors, officers, employees, agents, attorneys, shareholders, assignees, assignors, insurers, and representatives from any and all claims, causes of action, actions, demands, liabilities, losses, damages, attorneys' fees, court costs, or any other form of claim or compensation, whether known or unknown, whether in law or equity, accruing, existing, or arising before or on the Effective Date (and including any damages that may accrue after the Effective Date for conduct occurring on or before the Effective Date), related in whole or part to Litigation I, any of the LML Patents, or any Exploitation of any Covered Products and Services, including without limitation any act of past or present Infringement, misappropriation, or other violation of one or more of the LML Patents, and any claim that is or would have been within the scope of either the covenant not to sue or license granted in Sections 4.4 (Covenant-Not-to-Sue by LML) and 5.1 (License), and any claim that LML asserted or could have asserted in Litigation I as of the Effective Date; and (b) Covered Third Parties from any and all claims, causes of action, actions, demands, liabilities, losses, damages, attorneys' fees, court costs, or any other form of claim or compensation, whether known or unknown, whether in law or equity, accruing, existing, or arising before or on the Effective Date (and including any damages that may accrue after the Effective Date for conduct occurring on or before the Effective Date), related in whole or in part to Litigation I, any of the LML Patents, or Exploitation of the Covered Products and Services, including without limitation any act of past or present Infringement, misappropriation, or other violation of one or more of the LML Patents, and any claim that is or would have been within the scope of either the license or covenant not to sue granted in Sections 4.4 (Covenant-Not-to-Sue by LML) and 5.1 (License), and any claim that LML asserted or could have asserted in Litigation I as of the Effective Date. Nothing in this Section 4.2 releases Wells Fargo from, or shall apply to, any breach of this Agreement.
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4.3
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Wells Fargo's Release to LML. Subject to the obligations of LML under this Agreement, Wells Fargo forever releases LML and its respective directors, officers, employees, agents, attorneys, shareholders, assignees, assignors, insurers, and representatives from any and all claims, causes of action, actions, demands, liabilities, losses, damages, attorneys' fees, court costs, or any other form of claim or compensation, whether known or unknown, whether in law or equity, accruing before or on the Effective Date (and including any damages that may accrue after the Effective Date for conduct occurring on or before the Effective Date), related in whole or part to Litigation I or any of the LML Patents (conserving, subject to Section 2.3, defenses or claims regarding the validity or enforceability of one or more of the LML Patents), that is or would have been within the scope of the covenant not to sue granted in Section 4.5 (Covenant-Not-to-Sue by Wells Fargo) and that Wells Fargo asserted or could have asserted as of the Effective Date. Nothing in this Section 4.3 releases LML from, or shall apply to, any breach of this Agreement.
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4.4
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Covenant-Not-to-Sue by LML. Subject to the provisions of Section 3.3 (Termination Due to Non-Payment by Wells Fargo) and Section 6 (Change in Control/Acquisitions), LML, on behalf of itself and its respective successors and permitted assigns, agrees that: (a) they will not assert, pursue, maintain, encourage, support, assist, or join in any action or litigation asserting any claim against Wells Fargo for Infringement of any claim of the LML Patents with respect to or arising out of the Exploitation of any Covered Products and Services; and (b) they will not assert, pursue, maintain, encourage, support, assist, or join in any action or litigation asserting any claim against any Covered Third Parties (but not including solely Excluded Banks) for Infringement of any claim of the LML Patents with respect to or arising out of the Exploitation of any Covered Products and Services.
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4.5
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Covenant-Not-to-Sue by Wells Fargo. Subject to the obligations of LML under this Agreement, Wells Fargo, on behalf of itself and its respective successors and permitted assigns, agree that they will not assert, pursue, maintain, encourage, support, assist, or join in any action or litigation asserting any claim against any LML Entity in the future for any claims related to or arising out of the LML Patents, unless any claims of Infringement with respect to the LML Patents are asserted against Wells Fargo or its successors or assigns or any Covered Third Party, or unless otherwise allowed under Section 2.3 (No Attempt to Invalidate). Nothing in this Section 4.5 shall apply to any breach of this Agreement.
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5.
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GRANT OF LICENSE
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5.1
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LML grants Wells Fargo a fully-paid up, royalty-free, irrevocable, non-exclusive, worldwide license under the LML Patents to Exploit any Covered Products and Services directly or indirectly through any channel, including, without limitation, through multiple tiers of distribution. The license grant herein also extends to Covered Third Parties (but not including solely Excluded Banks) solely in their role as Covered Third Parties. This license attaches to and is transferred with each Covered Product and Service and passes to each and every Covered Third Party (but not including solely Excluded Banks) with regard to such Covered Product and Service. This license is retroactive to the earliest priority date of the LML Patents.
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6.
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CHANGE IN CONTROL/ACQUISITIONS
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6.1
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Acquisitions by Wells Fargo. In the event Wells Fargo Acquires any Excluded Banks, Capital One National Association, Capital One Services, LLC, Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., or Bank of America Corporation after the Effective Date of this Agreement (hereinafter referred to as "Acquired Entity"), the Acquired Entity shall not gain the benefit of the license grant, covenant-not-to-sue, or releases in this Agreement.
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6.2
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Transfer of Covered Assets of Wells Fargo. Wells Fargo may assign this Agreement, without the consent of LML, to any successor, except to any Excluded Banks, Capital One National Association, Capital One Services, LLC, Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., or Bank of America Corporation, later acquiring a controlling interest in all, or substantially all, of the business or assets of Wells Fargo. The assignment of this Agreement to any such successor provides the successor only with the rights to LML Patents that Wells Fargo had prior to the change in control and does not extend this license to any Covered Products and Services made, used, or sold by the successor other than those acquired from Wells Fargo.
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7.
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CONFIDENTIALITY.
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The Parties may disclose the existence of this Agreement, provided that neither Party may disclose the specific terms and conditions of this Agreement (including without limitation the payment amount set out in Section 3.1) to any Entity except that each Party may disclose the terms and conditions of this Agreement: (i) in response to a valid subpoena or as otherwise may be required by law, regulation, or order of a court or governmental authority of competent jurisdiction, provided that the Party required to make such a disclosure gives as much notice as is reasonably possible to the other Party to contest such order or requirement and takes all reasonable actions in an effort to minimize the nature and extent of such disclosure; (ii) on a confidential basis to its legal, accounting, or financial advisors solely for the purposes of providing such advice and solely to the extent that they have a need for access; (iii) if that Party forms a good faith belief that disclosure is required under applicable securities regulations or listing agency requirements, including for the purpose of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, National Instrument NI 51-102 (under Canadian law), as amended, and any other reports filed with the Securities and Exchange Commission, or any other filings, reports, or disclosures that may be required under applicable laws or regulations; (iv) in its financial statements as it is required to do under applicable generally accepted accounting principles while acting in reliance on its auditors; (v) to any defendant as part of its disclosure obligations subject to the Court's Protective Order in the applicable litigation brought by LML to enforce an LML Patent, in which event LML will seek to have the production protected under an "Outside Counsel Attorneys Eyes Only" or higher confidentiality designation and LML will take all reasonable actions in an effort to minimize the nature and extent of such disclosure; (vi) upon the express written consent of the other Party; (vii) on a confidential basis to investors and potential investors and acquirers, but subject to any such investor or potential investor or acquirer having first executed an appropriate non-disclosure agreement requiring such investor or potential investor or acquirer to maintain this Agreement and the terms and conditions of this Agreement in confidence; or (viii) as necessary to pursue an indemnification claim (whether regarding defense, hold harmless, and/or indemnity) from a potential or actual indemnitor or defend against an indemnification claim (whether regarding defense, hold harmless and/or indemnity) from a potential or actual indemnitee, subject to obligations of confidentiality and privilege at least as stringent as those contained herein; and (ix) to a Covered Third Party or prospective Covered Third Party, or any contractor of Wells Fargo, subject to obligations of confidentiality and privilege at least as stringent as those contained herein.
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8.
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REPRESENTATIONS AND WARRANTIES
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8.1
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Wells Fargo Representations and Warranties. As a condition precedent to LML’s entering into this Agreement, Wells Fargo represents and warrants to LML that it has all requisite legal right, power, and authority to enter into, execute, deliver, and perform this Agreement and grant the releases, covenants not to sue, and all other rights provided for under this Agreement.
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8.2
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LML Representations and Warranties. As a condition precedent to Wells Fargo’s entering into this Agreement, LML represents and warrants to Wells Fargo that: (a) LML is the sole owner of and has good and valid right, title, and interest to the LML Patents and the inventions claimed therein, including, without limitation, all rights to recover for alleged Infringement of the LML Patents; (b) LML has the full right, power, and authority to enter into, execute, deliver, and perform this Agreement, grant the licenses to the LML Patents to Wells Fargo and grant the releases and covenants herein, and this Agreement constitutes the legal, valid, and binding obligation of LML, enforceable against LML, in accordance with its terms; (c) other than LML, no other person or entity owns or controls any interest in the LML Patents; (d) it has not entered into and shall not enter into any agreement in conflict with this Agreement or which would interfere with or diminish the rights granted hereunder; (e) as of the Effective Date, neither LML nor any Affiliate of LML owns or controls (or has the right to own or control) any patent or patent application, or is considering filing any patent application, with subject matter related to any LML Patent that is not an LML Patent; and (f) LML will not transfer, assign, or exclusively license to another any of the LML Patents or claims/demands that LML asserted (or could have asserted) against Wells Fargo relating to the LML Patents or Litigation I, unless the transferee, assignee, or exclusive licensee agrees to be bound by all of the terms and conditions of this Agreement.
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8.3
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Limitations on Representations and Warranties. Nothing contained in this Agreement shall be construed as: (a) a warranty or representation by either Party that any manufacture, sale, use, or other disposition of products by the other Party has been or will be free from Infringement of any patents other than the LML Patents; (b) an agreement by either Party to bring or prosecute actions or suits against any Entity for Infringement, or conferring any right to the other Party to bring or prosecute actions or suits against third parties for Infringement; (c) conferring any right to either Party to use in advertising, publicity, or otherwise, any trademark, service mark, or trade dress of the other Party, or any simulation thereof, without the prior written consent of the other Party; (d) conferring any right to either Party to use any names or trade names of the other Party (except in permitted disclosures under Section 7 (Confidentiality)), or any simulation thereof, without the prior written consent of the other Party; (e) an obligation to furnish any technical information or know-how; or (f) conferring by implication, estoppel, or otherwise, upon either Party, any right (including a license) under patents other than the LML Patents except for the rights expressly granted hereunder.
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8.4
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DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE NO EXPRESS REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE, OR OTHERWISE.
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8.5
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No Joint and Several Liability. Notwithstanding anything herein to the contrary, Wells Fargo and the Covered Third Parties (not including solely Excluded Banks but only with regard to any liability for any of their actions after the Effective Date) shall not have any liability to any of the LML Entities for any actions or inactions of another defendant in the Lawsuits or any other Entity against whom any of the LML Entities has asserted or may assert a claim for Infringement of a LML Patent.
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8.6
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No Admission. This Agreement is the result of a compromise and settlement to avoid the expense and risk of resolving any dispute through continuation of any litigation. Nothing herein shall be deemed as an admission to any party of any fact, wrongdoing, liability, infringement or non-infringement (including, without limitation, any admission by Wells Fargo that the LML Patents have been or are being Infringed), validity or invalidity, or enforceability or non-enforceability of any of the LML Patents or any position taken or proposed to be taken in any proceeding, nor shall it be deemed an admission as to any royalties (or the reasonableness of any royalties) or valuation for any of the technologies, patents, patent applications, or other intellectual property rights covered by or under or referred to in this Agreement.
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9. GENERAL PROVISIONS
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9.1
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Assignment. LML may assign, sell, or otherwise transfer any of the right to LML Patents, but only to an assignee or transferee who shall first agree in writing to assume the obligations of LML under this Agreement and to observe all rights of Wells Fargo provided in this Agreement. Any attempted assignment, transfer, or grant in contravention to this Section shall be null and void.
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9.2
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Entire Agreement. This Agreement, including all Exhibits attached hereto, constitutes the entire agreement between the Parties and embodies the entire and only understanding of each of them with respect to the subject matter of the Agreement, and merges, cancels, and supersedes all prior representations, warranties, assurances, conditions, definitions, understandings, and all other statements or agreements, whether express, implied, or arising out of operation of law, whether oral or written, whether by omission or commission, between and among the Parties hereto with respect to the subject matter of the Agreement. There are no representations, warranties, terms, conditions, undertakings, or collateral agreements, express, implied or statutory, between the Parties other than as expressly set forth in this Agreement.
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9.3
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Notices. All notices, requests, approvals, consents, and other communications required or permitted under this Agreement will be in writing and addressed as follows:
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If to LML:
Mr. Patrick H. Gaines
President
LML Patent Corp
505 East Travis St.
Suite 216
Marshall, Texas 75670
with a copy to:
LML Patent Corp.
Corporate Secretary
1680- 1140 West Pender Street
Vancouver BC, Canada V6E 4G1
If to Wells Fargo:
Sherri Hallerman Gould
Managing Counsel
Wells Fargo & Company
90 S. 7th Street
Minneapolis, Minnesota 55479
With a copy to (which copy shall not constitute notice):
John G. Flaim
Baker & McKenzie LLP
2001 Ross Avenue
Suite 2300
Dallas, Texas 75201
and will be deemed delivered: (a) upon receipt if delivered by hand; (b) the next day if sent by prepaid, U.S. recognized, overnight air courier; (c) three (3) business days after being sent by registered or certified mail (return receipt requested, postage prepaid). All notices shall be addressed to the other Party at the address set forth above or to such other person or address as the Parties may from time to time designate in writing delivered pursuant to this notice provision.
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9.4
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Governing Law. This Agreement and all matters connected with the performance thereof shall be governed by and will be construed, interpreted, and applied in accordance with the laws of the State of Delaware and the federal laws of the United States as applicable therein, without regard to the laws of those jurisdictions governing conflicts of laws.
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9.5
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Expenses. Except as otherwise specifically provided in this Agreement, the Parties agree that they shall bear their own costs and attorneys' fees incurred in connection with the negotiation and drafting of this Agreement and the transactions contemplated herein.
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9.6
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Headings. The section and sub-section headings contained in this Agreement are for convenience of reference only and shall not serve to limit, expand, or interpret the sections or sub-sections to which they apply, and shall not be deemed to be a part of this Agreement.
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9.7
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Disputes. In the event of a breach or any dispute arising out of the performance of this agreement, the aggrieved party shall provide notice to the other party and permit a 60 period to cure. If cure is not made during the 60 day cure period, the aggrieved party may pursue available legal remedies.
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9.8
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Interpretation; Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this 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 Agreement. This Agreement is in the English language only, which language shall be controlling in all respects, and all notices under this Agreement shall be in the English language. For purposes of construction, the singular includes the plural and vice versa.
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9.9
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Relationship of the Parties. This Agreement does not constitute and shall not be construed as constituting a partnership, agency, employer-employee, or joint venture between LML and Wells Fargo, and neither Party shall have any right to incur any debt, make any commitment for each other, or obligate or bind the 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. LML and Wells Fargo each expressly disclaim any reliance on any act, word, or deed of the other in entering into this Agreement.
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9.10
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Binding Effect. Subject to the provisions of Section 6 (Change in Control/Acquisitions), this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties, the licensees, and releasees referenced herein, and their predecessors, successors, and permitted assigns.
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9.11
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Enforceability. The Parties acknowledge and agree that this Agreement is enforceable according to its terms.
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9.12
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Severability. In the event that any term or provision of this Agreement is deemed illegal, invalid, unenforceable, or void by a final, non-appealable judgment of a court or tribunal of competent jurisdiction under any applicable statute or rule of law, such court or tribunal is authorized to modify such provision to the minimum extent possible to effect the overall intention of the Parties as of the Effective Date of this Agreement. The Parties agree to negotiate in good faith to try and substitute an enforceable provision for any invalid or unenforceable provision that most nearly achieves the intent of such provisions.
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9.13
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Releases; Waiver of Section 1542 of the California Civil Code. If and to the extent that California law and Section 1542 of the California Civil Code (or similar provisions of other applicable law) applies to the releases in Section 4.2 (LML's Release to Wells Fargo) and Section 4.3 (Wells Fargo's Release to LML), it is the intention of the Parties that the releases in Section 4.2 (LML's Release to Wells Fargo) and Section 4.3 (Wells Fargo 's Release to LML) shall be effective as a bar to any and all actions, fees, damages, losses, claims, liabilities and demands of whatsoever character, nature and kind, known or unknown, suspected or unsuspected, as specified therein. In furtherance of this intention, the Parties expressly waive any and all rights and benefits conferred upon them by the provisions of Section 1542 of the California Civil Code (or similar provisions of applicable law), which provides that: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
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9.14
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Counterparts. This Agreement may be executed in two or more counterparts or duplicate originals, each of which shall be considered one and the same instrument, and which shall be the official and governing version in interpretation of this Agreement. This Agreement may be executed by facsimile signatures or emailed pdf copies of signatures, and such signatures shall be deemed to bind each Party as if they were original signatures.
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9.15
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Waiver. No waiver of any breach of any provision of this Agreement shall be construed as a waiver of or consent to any previous or subsequent breach of the same or any other provision.
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9.16
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Force Majeure. The failure of a Party hereunder to perform any obligations, due to governmental action, law, or regulation, or due to events, such as war, act of public enemy, strikes or other labor disputes, fire, flood, acts of God, or any similar cause beyond the reasonable control of such Party, is excused for as long as said cause continues to exist. The Party prevented from performing shall promptly notify the other Party of such non-performance and its expected duration, and shall use all reasonable efforts to overcome the cause thereof as soon as practicable.
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9.17
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Amendment. This Agreement may not be amended or modified, except by a writing signed by all Parties.
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9.18
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Sophisticated Parties Represented by Counsel. The Parties each acknowledge, accept, warrant, and represent that: (i) they are sophisticated Entities represented at all relevant times during the negotiation and execution of this Agreement by counsel of their choice, and that they have executed this Agreement with the consent and on the advice of such independent legal counsel; and (ii) they and their counsel have determined through independent investigation and arm's-length negotiation that the terms of this Agreement shall exclusively embody and govern the subject matter of this Agreement.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.
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LML Patent Corp.
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Wells Fargo Bank N.A.:
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By:/s/ Patrick H. Gaines
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By:/s/ Stephen Ellis
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Name: Patrick H. Gaines
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Name: Stephen Ellis
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Title: President
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Title: EVP
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Date: September 6, 2011
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Date: September 6, 2011
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-15-
EXHIBIT A
STIPULATED DISMISSAL WITH PREJUDICE
and
ORDER OF DISMISSAL WITH PREJUDICE
(see attached)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
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LML PATENT CORP,
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§
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§
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PLAINTIFF
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§
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§
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v.
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§
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CIVIL ACTION NO. 2:08-CV-448-DF
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§
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§
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JURY
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JP MORGAN CHASE & CO., ET AL.,
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§
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§
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DEFENDANTS
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§
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STIPULATED DISMISSAL WITH PREJUDICE
Pursuant to Rule 41(a) of the Federal Rules of Civil Procedure and the terms of a separate Settlement and License Agreement, the Plaintiff, LML Patent Corp. ("LML") and Defendants Wells Fargo Bank, N.A. and Wachovia Bank n/k/a Wells Fargo Bank, N.A. (collectively, "Wells Fargo") have agreed to settle, adjust, and compromise all claims and counterclaims against each other in the above-captioned action. The parties, therefore, stipulate to dismiss all claims by LML against Wells Fargo and all counterclaims by Wells Fargo against LML made therein with prejudice to the re-filing of same, subject to the terms of the Settlement and License Agreement between the parties.
LML and Wells Fargo further stipulate that all costs and expenses relating to this litigation (including, but not limited to, attorneys' fees and expert fees and expenses) shall be borne solely by the party incurring the same.
A proposed Order accompanies this motion.
AGREED:
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Date: ______________, 2011
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Respectfully submitted,
/s/ W. Barton Rankin
John G. Flaim Attorney-In-Charge
Texas Bar No. 00785864
Jay F. Utley
Texas Bar No. 00798559
William D. McSpadden
Texas Bar No. 24002587
W. Barton Rankin
Texas Bar No. 24037333
BAKER & McKENZIE LLP - Dallas
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Telephone: (214) 978-3000
Facsimile: (214) 978-3099
Lance Lee
Texas Bar No. 24004762
5511 Plaza Drive
Texarkana, Texas 75503
Telephone: (903) 223-0276
Fax: (903) 223-0210
E-mail: wlancelee@aol.com
ATTORNEYS FOR
DEFENDANTS
WELLS FARGO BANK, N.A.,
WACHOVIA BANK n/k/a WELLS
FARGO BANK, N.A.
ATTORNEYS FOR
DEFENDANTS
/s/ Melissa Smith
Melissa Smith
Texas State Bar No. 00794818
GILLAM & SMITH, LLP
303 South Washington
Marshall, Texas 75670
Telephone: 903-934-8450
Facsimile: 903-934-9257
Melissa@gillamsmithlaw.com
Theodore Stevenson, III
Lead Attorney
Texas Bar No. 19196650
tstevensom@mckoolsmith.com
John Austin Curry
Texas State Bar No. 24059636
acurry@mckoolsmith.com
McKool Smith, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: 214-978-4974
Facsimile: 214-978-4044
Sam F. Baxter
Texas Bar No. 01938000
sbaxter@mckoolsmith.com
McKOOL SMITH, P.C.
505 East Travis Street, Suite 105
Marshall, Texas 75670
Telephone: 903-927-2111
Facsimile: 903-927-2622
John Garvish
Texas State Bar No. 24043681
jgarvish@mckoolsmith.com
McKool Smith, P.C.
300 W. 6th Street, Suite 1700
Austin, Texas 78701
Telephone: 512-692-8725
Facsimile: 512-692-8744
ATTORNEYS FOR PLAINTIFF
LML PATENT CORP
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
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LML PATENT CORP,
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§
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§
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||
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PLAINTIFF
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§
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§
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v.
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§
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CIVIL ACTION NO. 2:08-CV-448-DF
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§
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§
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JURY
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JP MORGAN CHASE & CO., ET AL.,
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§
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§
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DEFENDANTS
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§
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ORDER OF DISMISSAL WITH PREJUDICE
The Court is of the opinion that the Stipulated Dismissal with Prejudice agreed to by LML Patent Corp. ("LML") and Wells Fargo Bank, N.A. and Wachovia Bank n/k/a Wells Fargo Bank, N.A. (collectively, "Wells Fargo") should be GRANTED.
IT IS THEREFORE ORDERED that the above-entitled cause and all claims made by LML against Wells Fargo and all counterclaims made by Wells Fargo against LML therein are hereby DISMISSED WITH PREJUDICE to the re-filing of same, subject to the terms of the Settlement and License Agreement between the parties. All costs and expenses relating to this litigation (including, but not limited to, attorneys' fees and expert fees and expenses) shall be borne solely by the party incurring the same.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction over this action and the parties for purposes of enforcing the terms of the Settlement and License Agreement entered into by and between the parties.
This is a final judgment as between LML and Wells Fargo.
EXHIBIT B
2010 NACHA TOP 50 ORIGINATORS LIST
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