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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">As
        filed
        with the Securities and Exchange Commission on August 31, 2007</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 360pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Registration
        No. 333-11404</font></div>
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              <td valign="top" width="80%" style="BORDER-BOTTOM: black 4px double"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
  
        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SECURITIES
        AND EXCHANGE COMMISSION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Washington,
        D.C. 20549</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">______________</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>FORM
        S-8</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>REGISTRATION
        STATEMENT UNDER</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>THE
        SECURITIES ACT OF 1933</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">______________</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><img src="lml_logo.jpg" alt=""></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>LML
        PAYMENT SYSTEMS INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Exact
        name of Registrant as specified in its charter)</font></div>
      <div><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">
  
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              <td valign="top" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Yukon
                  Territory, Canada</strong></font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="31%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>98-0209289</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(State
                  or other jurisdiction of incorporation or organization)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="31%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(I.R.S.
                  Employer Identification No.)</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1680-1140
        West Pender Street</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Vancouver,
        B.C.&#160;&#160;V6E 4G1</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Address
        of Registrant&#8217;s principal executive offices)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">______________</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1996
        Stock Option Plan</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1998
        Stock Incentive Plan</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Full
        title of the plans)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">______________</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Patrick
        H. Gaines</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>President</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>LML
        Payment Systems Inc.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1680-1140
        West Pender Street</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Vancouver,
        B.C.&#160;&#160;V6E 4G1</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Name
        and
        address of agent for service)</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(604)
        689-4440</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Telephone
        number, including area code, of agent for service)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">______________</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Copies
        to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mark
        A.
        Kopidlansky</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Munsch
        Hardt Kopf &amp; Harr, P.C.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3800
        Lincoln Plaza</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">500
        N.
        Akard St.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Dallas,
        Texas&#160;&#160;75201</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(214)
        855-7500</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>CALCULATION
        OF REGISTRATION FEE</strong></font></div>
      <div><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">
  
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              <td valign="top" width="20%" style="BORDER-TOP: black 1.5pt double; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Title
                  of securities to be registered</font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-TOP: black 1.5pt double; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Amount
                  to be registered <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(1)</sup></font></font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-TOP: black 1.5pt double; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Proposed
                  maximum offering price per share <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(2)</sup></font></font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-TOP: black 1.5pt double; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Proposed
                  maximum aggregate offering price <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(2)</sup></font></font></div>
              </td>
              <td valign="top" width="15%" style="BORDER-TOP: black 1.5pt double; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Amount
                  of registration fee</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="20%" style="BORDER-BOTTOM: black 4px double">
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  Stock, no par value</font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 4px double">
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">6,000,000
                  shares</font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 4px double">
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$3.25</font></div>
              </td>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 4px double">
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$19,500,000</font></div>
              </td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$599.00</font></div>
              </td>
            </tr>
  
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      </div>
      <div>&#160;</div>
      <div><br>&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
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      <div><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">
  
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                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(1)&#160;&#160;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  shares to be registered under this Registration Statement represent
                  additional shares authorized to be issued under the Registrant&#8217;s 1998
                  Stock Incentive Plan and 1996 Stock Option Plan (the
                  &#8220;Plans&#8221;).&#160;&#160;An aggregate of 2,500,000 shares were previously
                  registered on the Registrant&#8217;s Registration Statement on Form S-8 (SEC
                  File No. 333-11404) filed with the Securities and Exchange Commission
                  on
                  November 6, 2000, of which 2,000,000 shares were registered under
                  the 1998
                  Stock Incentive Plan and 500,000 shares were registered under the
                  1996
                  Stock Option Plan.&#160;&#160;In addition, an aggregate of 2,605,000
                  shares were previously registered on the Registrant&#8217;s Registration
                  Statement on Form S-8 (SEC File No. 333-11404) filed with the Securities
                  and Exchange Commission on January 31, 2000, of which 1,000,000 shares
                  were registered under the 1998 Stock Incentive Plan and 1,605,000
                  shares
                  were registered under the 1996 Stock Option Plan. The shares to be
                  registered under this Registration Statement include an additional
                  3,000,000 shares to be registered under the Registrant&#8217;s 1998 Stock
                  Incentive Plan and 3,000,000 shares to be registered under the 1996
                  Stock
                  Option Plan, respectively, plus such additional indeterminate number
                  of
                  shares of the Common Stock as may be issuable pursuant to certain
                  antidilution adjustment provisions
                  thereof.</font></div>
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        </table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%">
  
            <tr valign="top">
              <td align="right" style="WIDTH: 36pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(2)&#160;&#160;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Estimated
                  pursuant to Rules 457(c) and (h) under the Securities Act of 1933,
                  as
                  amended, solely for purposes of computing the registration fee based
                  on
                  the average of the high and low prices of the Common Stock on the
                  Nasdaq
                  Capital Market on August 24, 2007 for all shares being
                  registered.&#160;&#160;Because there are options still available for grant
                  under the 1998 Stock Incentive Plan and the 1996 Stock Option Plan
                  and the
                  exercise prices thereof may be based on the fair market value of
                  the
                  Common Stock on the date of grant, it is not possible as of the date
                  hereof to determine the maximum offering price per share of the shares
                  of
                  Common Stock to be offered under the plan and such prices may be
                  more or
                  less than $3.25 per share.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>PART
        I</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>INFORMATION
        REQUIRED IN THE SECTION 10(a) PROSPECTUS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><em>Note</em>:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
        documents containing the information specified in Part I of this registration
        statement on Form S-8 (the &#8220;Registration Statement&#8221;) will be sent or given to
        the employees of the registrant, LML Payment Systems Inc., a corporation
        governed by the laws of the Yukon territory (the &#8220;Corporation&#8221; or the
  &#8220;Registrant&#8221;), as specified by Rule 428(b)(1) promulgated under the Securities
        Act of 1933, as amended (the &#8220;Securities Act&#8221;). Such documents need not be filed
        with the Securities and Exchange Commission (the &#8220;Commission&#8221;) either as part of
        this registration statement or as prospectuses or prospectus supplements
        pursuant to Rule 424 promulgated under the Securities Act. These documents
        and
        the documents incorporated by reference in this registration statement pursuant
        to Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
        that meets the requirement of Section 10(a) of the Securities Act.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>PART
        II</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>INFORMATION
        REQUIRED IN THE REGISTRATION STATEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        3.&#160;&#160;Incorporation of Documents by Reference.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
        following documents filed with the Commission by the Registrant pursuant to
        the
        Securities Exchange Act of 1934, as amended (the &#8220;Exchange Act&#8221;), are
        incorporated by reference in this Registration Statement:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Registrant&#8217;s Annual Report on Form 10-K for the fiscal year ended March
                  31, 2007, filed with the Commission on June 14, 2007;
                  and</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Registrant&#8217;s Current Reports on Form 8-K filed with the Commission on May
                  4, 2007, June 6, 2007, June 15, 2007, July 5, 2007, August 9, 2007
                  and
                  August 13, 2007;</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The&#160;&#160;Registrant&#8217;s
                  quarterly report on Form 10-Q filed with the Commission on August
                  9, 2007;
                  and</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Registrant&#8217;s Current Report on Form 6-K filed on January 27, 2000 which
                  includes a description of the Common Stock of the Registrant, including
                  any amendments or reports filed with the Commission for the purpose
                  of
                  updating such description.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt;">-1-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">All
        documents subsequently filed by the Registrant pursuant to Sections 13(a),
        13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
        amendment to this Registration Statement, which indicates that all securities
        offered have been sold or which deregisters all securities then remaining
        unsold, shall be deemed to be incorporated by reference herein and to be a
        part
        hereof from the date of filing of such documents.&#160;&#160;Any statement
        contained in this Registration Statement, in an amendment hereto or in a
        document incorporated by reference herein shall be deemed to be modified or
        superseded for purposes of this Registration Statement to the extent that a
        statement contained herein, in any subsequently filed amendment to this
        Registration Statement, or in any document that also is incorporated by
        reference herein, modifies or supersedes such statement.&#160;&#160;Any
        statement so modified or superseded shall not be deemed, except as so modified
        or superseded, to constitute a part of this Registration Statement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        4.&#160;&#160;Description of Securities.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Not
        applicable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        5.&#160;&#160;Interests of Named Experts and Counsel.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Not
        applicable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        6.&#160;&#160;Indemnification of Directors and Officers.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
        only
        statutes, charter provisions, bylaws, contracts or other arrangements under
        which a director or officer of the Corporation is insured or indemnified in
        any
        manner against liability which such officer or director may incur in such
        capacity is Section 126 of the Yukon Business Corporations Act (the &#8220;Act&#8221;) and
        Section 7.03 through 7.04 of the Corporation&#8217;s Bylaws.&#160;&#160;Taken
        together, the statutory and bylaw provisions generally allow the Corporation
        to
        indemnify its directors or officers against liability and expenses provided
        the
        officer or director seeking indemnity (1) was substantially successful on the
        merits in the defense of the action or proceeding, (2) (a) acted honestly and
        in
        good faith with a view to the best interest of the Corporation and (b) in the
        case of a criminal or administrative action or proceeding that is enforced
        by a
        monetary penalty, the officer or director had reasonable grounds for believing
        the conduct was lawful, and (3) is fairly and reasonably entitled to
        indemnity.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Section
        126 of the Yukon Corporation Act is set forth in its entirety as
        follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 18pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 54pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">126.(1)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Except
                  in respect of an action by or on behalf of the corporation or body
                  corporate to procure a judgment in its favour, a corporation may
                  indemnify
                  a director or officer of the corporation, a former director or officer
                  of
                  the corporation or a person who acts or acted at the corporation&#8217;s request
                  as a director or officer of a body corporate of which the corporation
                  is
                  or was a shareholder or creditor, and his heirs and legal representatives,
                  against all costs, charges and expenses, including an amount paid
                  to
                  settle an action or satisfy a judgment, reasonably incurred by him
                  in
                  respect of any civil, criminal or administrative action or proceeding
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  officer of that corporation or body corporate,
                  if</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">he
                  acted honestly and in good faith with a view to the best interests
                  of the
                  corporation, and</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">in
                  the case of a criminal or administrative action or proceeding that
                  is
                  enforced by a monetary penalty, he had reasonable grounds for believing
                  that his conduct was lawful.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(2)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">a
                  corporation may with the approval of the Supreme Court indemnify
                  a person
                  referred to in subsection (1) in respect of an action by or on behalf
                  of
                  the corporation or body corporate to procure a judgment in its favour,
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  an officer of the corporation or body corporate, against all costs,
                  charges and expenses reasonably incurred by him in connection with
                  the
                  action if he fulfills the conditions set out in paragraphs (1)(a)
                  and
                  (b).</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt;">-2-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(3)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Notwithstanding
                  anything in this section, a person referred to in subsection (1)
                  is
                  entitled to indemnity from the corporation in respect of all costs,
                  charges and expenses reasonably incurred by him in connection with
                  the
                  defence of any civil, criminal or administrative action or proceeding
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  officer of the corporation or body corporate, if the person seeking
                  indemnity</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">was
                  substantially successful on the merits in his defence of the action
                  or
                  proceeding,</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">fulfills
                  the conditions set out in paragraphs (1)(a) and (b),
                  and</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">is
                  fairly and reasonably entitled to
                  indemnity.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(4)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">A
                  corporation may purchase and maintain insurance for the benefit of
                  any
                  person referred to in subsection (1) against any liability incurred
                  by
                  him</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">in
                  his capacity as a director or officer of the corporation, except
                  when the
                  liability relates to his failure to act honestly and in good faith
                  with a
                  view to the best interests of the corporation,
                  or</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">in
                  his capacity as a director or officer of another body corporate if
                  he acts
                  or acted in that capacity at the corporation&#8217;s request, except when the
                  liability relates to his failure to act honestly and in good faith
                  with a
                  view to the best interests of the body
                  corporate.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(5)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">A
                  corporation or a person referred to in subsection (1) may apply to
                  the
                  Supreme Court for an order approving an indemnity under this section
                  and
                  the Supreme Court may so order and make any further order it thinks
                  fit.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(6)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">On
                  an application under subsection (5), the Supreme Court may order
                  notice to
                  be given to any interested person and that person is entitled to
                  appear
                  and be heard in person or by
                  counsel.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Sections
        7.02 through 7.04 of the Corporation&#8217;s By-laws are set forth in their entirety
        as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 31.45pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 45pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">7.02</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Limitation
                  of Liability</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Subject
        to the Act, no director or officer for the time being of the Corporation shall
        be liable for the acts, receipts, neglects or defaults of any other director
        or
        officer or employee, or for the joining in any receipt or act for conformity,
        or
        for any loss or damage or expense happening to the Corporation through the
        insufficiency or deficiency of title to any property acquired by the Corporation
        or for or on behalf of the Corporation or for the insufficiency or deficiency
        of
        any security in or upon which any of the money of or belonging to the
        Corporation shall be placed or invested, or for any loss or damage arising
        from
        the bankruptcy, insolvency or tortious act of any person, firm or corporation
        including any person, firm or corporation with whom or with which any moneys,
        securities or effects shall be lodged or deposited, or for any loss, conversion,
        misapplication or misappropriation of or any damage resulting from any dealing
        with any moneys, securities or other assets of or belonging to the Corporation
        or for any other loss, damage or misfortune whatsoever which may happen in
        the
        execution of the duties of his respective office or trust or in relation thereto
        unless the same shall happen by or through his failure to exercise the powers
        and to discharge the duties of his office honestly and in good faith with a
        view
        to the best interests of the Corporation and to exercise the care, diligence
        and
        skill that a reasonably prudent person would exercise in comparable
        circumstances.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt;">-3-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 35.95pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">7.03</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Indemnity</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Subject
        to the Act, the Corporation shall indemnify a director or officer, a former
        director or officer, and a person who acts or acted at the Corporation&#8217;s request
        as a director or officer of a body corporate of which the Corporation is or
        was
        a shareholder or creditor, and his heirs and legal representatives, against
        all
        costs, charges and expenses, including any amount paid to settle an action
        or
        satisfy a judgement, reasonably incurred by him in respect of any civil,
        criminal or administrative action or proceeding to which he is made a party
        by
        reason of being or having been a director or officer of the Corporation or
        such
        body corporate, if:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">he
                  acted honestly and in good faith with a view to the best interests
                  of the
                  Corporation; and</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">in
                  the case of a criminal or administrative action or proceeding that
                  is
                  enforced by a monetary penalty, he had reasonable grounds for believing
                  his conduct was lawful.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 35.95pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">7.04</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Insurance</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
        Corporation may, subject to and in accordance with the Act, purchase and
        maintain insurance for the benefit of any director or officer as such against
        any liability incurred by him.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        7.&#160;&#160;Exemption from Registration Claimed.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Not
        applicable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        8.&#160;&#160;Exhibits.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">
  
            <tr>
              <td align="left" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Exhibit
                  Number</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Description
                  of Document</font></div>
              </td>
            </tr>
            <tr>
              <td valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">4.1</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1996
                  Stock Option Plan, as amended (incorporated by reference to Appendix
                  A to
                  the Corporation&#8217;s Definitive Proxy Statement on Schedule 14A filed with
                  the Commission on July 9 2007).</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">4.2</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1998
                  Stock Incentive Plan, as amended (incorporated by reference to Appendix
                  B
                  to the Corporation&#8217;s Definitive Proxy Statement on Schedule 14A filed with
                  the Commission on July 9, 2007).</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5.1
                  *</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Legal
                  Opinion of Munsch Hardt Kopf &amp; Harr, P.C.</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">23.1
                  *</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Consent
                  of Munsch Hardt Kopf &amp; Harr, P.C. (included in Exhibit 5.1
                  hereto).</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">23.2
                  *</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Consent
                  of Grant Thornton LLP</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">24.1&#160;*</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="67%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Power
                  of Attorney (included on signature page to this
                  Registration)</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">_______</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">*
        filed
        herewith</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt;">-4-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
        9.&#160;&#160;Undertakings.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 35.95pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 45pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  undersigned Registrant hereby
                  undertakes:</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 76.5pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(1)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                  file, during any period in which offers or sales are being made,
                  a
                  post-effective amendment to this Registration
                  Statement:</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 108pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 27pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(i)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                  include any prospectus required by Section 10(a)(3) of the Securities
                  Act
                  of 1933;</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 108pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 27pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(ii)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                  reflect in the prospectus any facts or events arising after the effective
                  date of the registration statement (or the most recent post-effective
                  amendment thereof) which, individually or in the aggregate, represent
                  a
                  fundamental change in the information set forth in the registration
                  statement. Notwithstanding the foregoing, any increase or decrease
                  in the
                  volume of securities offered (if the total dollar value of securities
                  offered would not exceed that which was registered) and any deviation
                  from
                  the low or high end of the estimated maximum offering range may be
                  reflected in the form of prospectus filed with the Securities and
                  Exchange
                  Commission pursuant to Rule 424(b) if, in the aggregate, the changes
                  in
                  volume and price represent no more than a 20% change in the maximum
                  aggregate offering price set forth in the &#8220;Calculation of Registration
                  Fee&#8221; table in the effective registration statement;
                  and</font></div>
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            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 99pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(iii)</font></div>
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              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                  include any material information with respect to the plan of distribution
                  not previously disclosed in this Registration Statement or any material
                  change in the information set forth in this Registration
                  Statement;</font></div>
              </td>
            </tr>
  
        </table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Provided
        however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the
        information required to be included in a post-effective amendment by those
        paragraphs is contained in reports filed with or furnished to the Commission
        by
        the registrant pursuant to section 13 or section 15(d) of the Securities
        Exchange Act of 1934 that are incorporated by reference in the registration
        statement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(2)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">That,
                  for the purpose of determining any liability under the Securities
                  Act,
                  each such post-effective amendment shall be deemed to be a new
                  registration statement relating to the securities offered therein,
                  and the
                  offering of such securities at that time shall be deemed to be the
                  initial
                  bona fide offering thereof.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(3)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                  remove from registration by means of a post-effective amendment any
                  of the
                  securities being registered, which remain, unsold at the termination
                  of
                  the offering.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 35.95pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Registrant hereby undertakes that, for purposes of determining any
                  liability under the Securities Act, each filing of the Registrant&#8217;s annual
                  report pursuant to Section 13(a) or Section 15(d) of the Exchange
                  Act
                  (and, where applicable, each filing of an employee benefit plan&#8217;s annual
                  report pursuant to Section 15(d) of the Exchange Act) that is incorporated
                  by reference in this Registration Statement shall be deemed to be
                  a new
                  registration statement relating to the securities offered therein,
                  and the
                  offering of such securities at that time shall be deemed to be the
                  initial
                  bona fide offering thereof.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Insofar
                  as indemnification for liabilities arising under the Securities Act
                  may be
                  permitted to directors, officers and controlling persons of the Registrant
                  pursuant to the foregoing provisions, or otherwise, the Registrant
                  has
                  been advised that in the opinion of the Commission such indemnification
                  is
                  against public policy as expressed in the Securities Act and is,
                  therefore, unenforceable.&#160;&#160;In the event that a claim for
                  indemnification against such liabilities (other than the payment
                  by the
                  Registrant of expenses incurred or paid by a director, officer or
                  controlling person of the Registrant in the successful defense of
                  any
                  action, suit or proceeding) is asserted by such director, officer
                  or
                  controlling person in connection with the securities being registered,
                  the
                  Registrant will, unless in the opinion of its counsel the matter
                  has been
                  settled by controlling precedent, submit to a court of appropriate
                  jurisdiction the question whether such indemnification by it is against
                  public policy as expressed in the Securities Act and will be governed
                  by
                  the final adjudication of such
                  issue.</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt;">-5-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SIGNATURES</strong></font></div><br><br>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
        to the requirements of the Securities Act of 1933, the Registrant certifies
        that
        it has reasonable grounds to believe that it meets all of the requirements
        for
        filing on Form S-8 and has duly caused this Registration Statement to be signed
        on its behalf by the undersigned, thereunto duly authorized, in the City of
        Vancouver, British Columbia, on this 31<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>st</sup></font> day of
        August,
        2007.</font></div>
      <div><br></div>
      <div><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">
  
            <tr>
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="34%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">LML
                  PAYMENT SYSTEMS INC.</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="34%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="34%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">/s/
                  Patrick H. Gaines</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="34%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Patrick
                  H. Gaines</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="34%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">President
                  and Chief Executive Officer</font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>POWER
        OF ATTORNEY</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">KNOW
        TO
        ALL PERSONS BY THESE PRESENTS, that each such person whose signature appears
        below constitutes and appoints, jointly and severally, Patrick H. Gaines his
        true and lawful attorney-in-fact, with the power of substitution, for him in
        any
        and all capacities, to sign any amendments to this Registration Statement on
        Form S-8 (including post-effective amendments), and to file the same, with
        all
        exhibits thereto, and other documents in connection therewith, with the
        Securities and Exchange Commission, hereby ratifying and confirming all that
        each of said attorneys-in-fact, or his or here substitute or substitutes, may
        do
        or cause to be done by virtue hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
        to the requirements of the Securities Act, this Registration Statement has
        been
        signed by the following persons in the capacities and on the date
        indicated.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">
  
            <tr>
              <td valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="43%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Title</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Date</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="21%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><em>/s/</em>
                  Patrick H. Gaines</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Chairman
                  of the Board, Chief Executive Officer, President and
                  Director</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">August
                  31, 2007</font></div>
              </td>
            </tr>
            <tr>
              <td valign="bottom" width="21%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Patrick
                  H. Gaines</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(Principal
                  Executive Officer)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="21%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><em>/s/</em>
                  Richard R. Schulz</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Controller
                  and Chief Accounting Officer</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">August
                  31, 2007</font></div>
              </td>
            </tr>
            <tr>
              <td valign="bottom" width="21%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Richard
                  R. Schulz</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="43%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(Principal
                  Financial and Accounting Officer)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="21%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><em>/s/</em>
                  L. William Seidman</font></div>
              </td>
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              <td align="justify" valign="top" width="43%">
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metadata_documents: [{"type": "S-8", "sequence": "1", "filename": "forms_8.htm", "description": "FORM S-8", "secsgml_size_bytes": 107476}]
metadata_filer: {"company-data": {"conformed-name": "LML PAYMENT SYSTEMS INC", "cik": "0000781891", "assigned-sic": "7389", "irs-number": "980209289", "state-of-incorporation": "A1", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-11404"}, "business-address": {"street1": "1680 1140 WEST PENDER ST", "street2": "VANCOUVER, BRITISH COLUMBIA", "city": "CANADA V6E 4GI", "state": "A1", "zip": "00000", "phone": "6046894440"}, "mail-address": {"street1": "1680 1140 WEST PENDER ST", "street2": "VANCOUVER, BRITISH COLUMBIA", "city": "CANADA V6E 4GI", "state": "A1", "zip": "00000"}, "former-company": [{"former-conformed-name": "LEISUREWAYS MARKETING LTD", "date-changed": "19990211"}, {"former-conformed-name": "CONSOLIDATED RUSKIN DEVELOPMENTS LTD", "date-changed": "19930105"}]}
text: forms_8.htm
  As
        filed
        with the Securities and Exchange Commission on August 31, 2007
  Registration
        No. 333-11404
  SECURITIES
        AND EXCHANGE COMMISSION
  Washington,
        D.C. 20549
  ______________
  FORM
        S-8
  REGISTRATION
        STATEMENT UNDER
  THE
        SECURITIES ACT OF 1933
  ______________
  LML
        PAYMENT SYSTEMS INC.
  (Exact
        name of Registrant as specified in its charter)
  Yukon
                  Territory, Canada
  98-0209289
  (State
                  or other jurisdiction of incorporation or organization)
  (I.R.S.
                  Employer Identification No.)
  1680-1140
        West Pender Street
  Vancouver,
        B.C.  V6E 4G1
  (Address
        of Registrant's principal executive offices)
  ______________
  1996
        Stock Option Plan
  1998
        Stock Incentive Plan
  (Full
        title of the plans)
  ______________
  Patrick
        H. Gaines
  President
  LML
        Payment Systems Inc.
  1680-1140
        West Pender Street
  Vancouver,
        B.C.  V6E 4G1
  (Name
        and
        address of agent for service)
  (604)
        689-4440
  (Telephone
        number, including area code, of agent for service)
  ______________
  Copies
        to:
  Mark
        A.
        Kopidlansky
  Munsch
        Hardt Kopf & Harr, P.C.
  3800
        Lincoln Plaza
  500
        N.
        Akard St.
  Dallas,
        Texas  75201
  (214)
        855-7500
  CALCULATION
        OF REGISTRATION FEE
  Title
                  of securities to be registered
  Amount
                  to be registered
  (1)
  Proposed
                  maximum offering price per share
  (2)
  Proposed
                  maximum aggregate offering price
  (2)
  Amount
                  of registration fee
  Common
                  Stock, no par value
  6,000,000
                  shares
  $3.25
  $19,500,000
  $599.00
  (1)
  The
                  shares to be registered under this Registration Statement represent
                  additional shares authorized to be issued under the Registrant's 1998
                  Stock Incentive Plan and 1996 Stock Option Plan (the
                  "Plans").  An aggregate of 2,500,000 shares were previously
                  registered on the Registrant's Registration Statement on Form S-8 (SEC
                  File No. 333-11404) filed with the Securities and Exchange Commission
                  on
                  November 6, 2000, of which 2,000,000 shares were registered under
                  the 1998
                  Stock Incentive Plan and 500,000 shares were registered under the
                  1996
                  Stock Option Plan.  In addition, an aggregate of 2,605,000
                  shares were previously registered on the Registrant's Registration
                  Statement on Form S-8 (SEC File No. 333-11404) filed with the Securities
                  and Exchange Commission on January 31, 2000, of which 1,000,000 shares
                  were registered under the 1998 Stock Incentive Plan and 1,605,000
                  shares
                  were registered under the 1996 Stock Option Plan. The shares to be
                  registered under this Registration Statement include an additional
                  3,000,000 shares to be registered under the Registrant's 1998 Stock
                  Incentive Plan and 3,000,000 shares to be registered under the 1996
                  Stock
                  Option Plan, respectively, plus such additional indeterminate number
                  of
                  shares of the Common Stock as may be issuable pursuant to certain
                  antidilution adjustment provisions
                  thereof.
  (2)
  Estimated
                  pursuant to Rules 457(c) and (h) under the Securities Act of 1933,
                  as
                  amended, solely for purposes of computing the registration fee based
                  on
                  the average of the high and low prices of the Common Stock on the
                  Nasdaq
                  Capital Market on August 24, 2007 for all shares being
                  registered.  Because there are options still available for grant
                  under the 1998 Stock Incentive Plan and the 1996 Stock Option Plan
                  and the
                  exercise prices thereof may be based on the fair market value of
                  the
                  Common Stock on the date of grant, it is not possible as of the date
                  hereof to determine the maximum offering price per share of the shares
                  of
                  Common Stock to be offered under the plan and such prices may be
                  more or
                  less than $3.25 per share.
  PART
        I
  INFORMATION
        REQUIRED IN THE SECTION 10(a) PROSPECTUS
  Note
  :                      The
        documents containing the information specified in Part I of this registration
        statement on Form S-8 (the "Registration Statement") will be sent or given to
        the employees of the registrant, LML Payment Systems Inc., a corporation
        governed by the laws of the Yukon territory (the "Corporation" or the
  "Registrant"), as specified by Rule 428(b)(1) promulgated under the Securities
        Act of 1933, as amended (the "Securities Act"). Such documents need not be filed
        with the Securities and Exchange Commission (the "Commission") either as part of
        this registration statement or as prospectuses or prospectus supplements
        pursuant to Rule 424 promulgated under the Securities Act. These documents
        and
        the documents incorporated by reference in this registration statement pursuant
        to Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
        that meets the requirement of Section 10(a) of the Securities Act.
  PART
        II
  INFORMATION
        REQUIRED IN THE REGISTRATION STATEMENT
  Item
        3.  Incorporation of Documents by Reference.
  The
        following documents filed with the Commission by the Registrant pursuant to
        the
        Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
        incorporated by reference in this Registration Statement:
  (a)
  The
                  Registrant's Annual Report on Form 10-K for the fiscal year ended March
                  31, 2007, filed with the Commission on June 14, 2007;
                  and
  (b)
  The
                  Registrant's Current Reports on Form 8-K filed with the Commission on May
                  4, 2007, June 6, 2007, June 15, 2007, July 5, 2007, August 9, 2007
                  and
                  August 13, 2007;
  (c)
  The  Registrant's
                  quarterly report on Form 10-Q filed with the Commission on August
                  9, 2007;
                  and
  (d)
  The
                  Registrant's Current Report on Form 6-K filed on January 27, 2000 which
                  includes a description of the Common Stock of the Registrant, including
                  any amendments or reports filed with the Commission for the purpose
                  of
                  updating such description.
  -1-
  All
        documents subsequently filed by the Registrant pursuant to Sections 13(a),
        13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
        amendment to this Registration Statement, which indicates that all securities
        offered have been sold or which deregisters all securities then remaining
        unsold, shall be deemed to be incorporated by reference herein and to be a
        part
        hereof from the date of filing of such documents.  Any statement
        contained in this Registration Statement, in an amendment hereto or in a
        document incorporated by reference herein shall be deemed to be modified or
        superseded for purposes of this Registration Statement to the extent that a
        statement contained herein, in any subsequently filed amendment to this
        Registration Statement, or in any document that also is incorporated by
        reference herein, modifies or supersedes such statement.  Any
        statement so modified or superseded shall not be deemed, except as so modified
        or superseded, to constitute a part of this Registration Statement.
  Item
        4.  Description of Securities.
  Not
        applicable.
  Item
        5.  Interests of Named Experts and Counsel.
  Not
        applicable.
  Item
        6.  Indemnification of Directors and Officers.
  The
        only
        statutes, charter provisions, bylaws, contracts or other arrangements under
        which a director or officer of the Corporation is insured or indemnified in
        any
        manner against liability which such officer or director may incur in such
        capacity is Section 126 of the Yukon Business Corporations Act (the "Act") and
        Section 7.03 through 7.04 of the Corporation's Bylaws.  Taken
        together, the statutory and bylaw provisions generally allow the Corporation
        to
        indemnify its directors or officers against liability and expenses provided
        the
        officer or director seeking indemnity (1) was substantially successful on the
        merits in the defense of the action or proceeding, (2) (a) acted honestly and
        in
        good faith with a view to the best interest of the Corporation and (b) in the
        case of a criminal or administrative action or proceeding that is enforced
        by a
        monetary penalty, the officer or director had reasonable grounds for believing
        the conduct was lawful, and (3) is fairly and reasonably entitled to
        indemnity.
  Section
        126 of the Yukon Corporation Act is set forth in its entirety as
        follows:
  126.(1)
  Except
                  in respect of an action by or on behalf of the corporation or body
                  corporate to procure a judgment in its favour, a corporation may
                  indemnify
                  a director or officer of the corporation, a former director or officer
                  of
                  the corporation or a person who acts or acted at the corporation's request
                  as a director or officer of a body corporate of which the corporation
                  is
                  or was a shareholder or creditor, and his heirs and legal representatives,
                  against all costs, charges and expenses, including an amount paid
                  to
                  settle an action or satisfy a judgment, reasonably incurred by him
                  in
                  respect of any civil, criminal or administrative action or proceeding
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  officer of that corporation or body corporate,
                  if
  (a)
  he
                  acted honestly and in good faith with a view to the best interests
                  of the
                  corporation, and
  (b)
  in
                  the case of a criminal or administrative action or proceeding that
                  is
                  enforced by a monetary penalty, he had reasonable grounds for believing
                  that his conduct was lawful.
  (2)
  a
                  corporation may with the approval of the Supreme Court indemnify
                  a person
                  referred to in subsection (1) in respect of an action by or on behalf
                  of
                  the corporation or body corporate to procure a judgment in its favour,
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  an officer of the corporation or body corporate, against all costs,
                  charges and expenses reasonably incurred by him in connection with
                  the
                  action if he fulfills the conditions set out in paragraphs (1)(a)
                  and
                  (b).
  -2-
  (3)
  Notwithstanding
                  anything in this section, a person referred to in subsection (1)
                  is
                  entitled to indemnity from the corporation in respect of all costs,
                  charges and expenses reasonably incurred by him in connection with
                  the
                  defence of any civil, criminal or administrative action or proceeding
                  to
                  which he is made a party by reason of being or having been a director
                  or
                  officer of the corporation or body corporate, if the person seeking
                  indemnity
  (a)
  was
                  substantially successful on the merits in his defence of the action
                  or
                  proceeding,
  (b)
  fulfills
                  the conditions set out in paragraphs (1)(a) and (b),
                  and
  (c)
  is
                  fairly and reasonably entitled to
                  indemnity.
  (4)
  A
                  corporation may purchase and maintain insurance for the benefit of
                  any
                  person referred to in subsection (1) against any liability incurred
                  by
                  him
  (a)
  in
                  his capacity as a director or officer of the corporation, except
                  when the
                  liability relates to his failure to act honestly and in good faith
                  with a
                  view to the best interests of the corporation,
                  or
  (b)
  in
                  his capacity as a director or officer of another body corporate if
                  he acts
                  or acted in that capacity at the corporation's request, except when the
                  liability relates to his failure to act honestly and in good faith
                  with a
                  view to the best interests of the body
                  corporate.
  (5)
  A
                  corporation or a person referred to in subsection (1) may apply to
                  the
                  Supreme Court for an order approving an indemnity under this section
                  and
                  the Supreme Court may so order and make any further order it thinks
                  fit.
  (6)
  On
                  an application under subsection (5), the Supreme Court may order
                  notice to
                  be given to any interested person and that person is entitled to
                  appear
                  and be heard in person or by
                  counsel.
  Sections
        7.02 through 7.04 of the Corporation's By-laws are set forth in their entirety
        as follows:
  7.02
  Limitation
                  of Liability
  Subject
        to the Act, no director or officer for the time being of the Corporation shall
        be liable for the acts, receipts, neglects or defaults of any other director
        or
        officer or employee, or for the joining in any receipt or act for conformity,
        or
        for any loss or damage or expense happening to the Corporation through the
        insufficiency or deficiency of title to any property acquired by the Corporation
        or for or on behalf of the Corporation or for the insufficiency or deficiency
        of
        any security in or upon which any of the money of or belonging to the
        Corporation shall be placed or invested, or for any loss or damage arising
        from
        the bankruptcy, insolvency or tortious act of any person, firm or corporation
        including any person, firm or corporation with whom or with which any moneys,
        securities or effects shall be lodged or deposited, or for any loss, conversion,
        misapplication or misappropriation of or any damage resulting from any dealing
        with any moneys, securities or other assets of or belonging to the Corporation
        or for any other loss, damage or misfortune whatsoever which may happen in
        the
        execution of the duties of his respective office or trust or in relation thereto
        unless the same shall happen by or through his failure to exercise the powers
        and to discharge the duties of his office honestly and in good faith with a
        view
        to the best interests of the Corporation and to exercise the care, diligence
        and
        skill that a reasonably prudent person would exercise in comparable
        circumstances.
  -3-
  7.03
  Indemnity
  Subject
        to the Act, the Corporation shall indemnify a director or officer, a former
        director or officer, and a person who acts or acted at the Corporation's request
        as a director or officer of a body corporate of which the Corporation is or
        was
        a shareholder or creditor, and his heirs and legal representatives, against
        all
        costs, charges and expenses, including any amount paid to settle an action
        or
        satisfy a judgement, reasonably incurred by him in respect of any civil,
        criminal or administrative action or proceeding to which he is made a party
        by
        reason of being or having been a director or officer of the Corporation or
        such
        body corporate, if:
  (a)
  he
                  acted honestly and in good faith with a view to the best interests
                  of the
                  Corporation; and
  (b)
  in
                  the case of a criminal or administrative action or proceeding that
                  is
                  enforced by a monetary penalty, he had reasonable grounds for believing
                  his conduct was lawful.
  7.04
  Insurance
  The
        Corporation may, subject to and in accordance with the Act, purchase and
        maintain insurance for the benefit of any director or officer as such against
        any liability incurred by him.
  Item
        7.  Exemption from Registration Claimed.
  Not
        applicable.
  Item
        8.  Exhibits.
  Exhibit
                  Number
  Description
                  of Document
  4.1
  1996
                  Stock Option Plan, as amended (incorporated by reference to Appendix
                  A to
                  the Corporation's Definitive Proxy Statement on Schedule 14A filed with
                  the Commission on July 9 2007).
  4.2
  1998
                  Stock Incentive Plan, as amended (incorporated by reference to Appendix
                  B
                  to the Corporation's Definitive Proxy Statement on Schedule 14A filed with
                  the Commission on July 9, 2007).
  5.1
                  *
  Legal
                  Opinion of Munsch Hardt Kopf & Harr, P.C.
  23.1
                  *
  Consent
                  of Munsch Hardt Kopf & Harr, P.C. (included in Exhibit 5.1
                  hereto).
  23.2
                  *
  Consent
                  of Grant Thornton LLP
  24.1 *
  Power
                  of Attorney (included on signature page to this
                  Registration)
  _______
  *
        filed
        herewith
  -4-
  Item
        9.  Undertakings.
  (a)
  The
                  undersigned Registrant hereby
                  undertakes:
  (1)
  To
                  file, during any period in which offers or sales are being made,
                  a
                  post-effective amendment to this Registration
                  Statement:
  (i)
  To
                  include any prospectus required by Section 10(a)(3) of the Securities
                  Act
                  of 1933;
  (ii)
  To
                  reflect in the prospectus any facts or events arising after the effective
                  date of the registration statement (or the most recent post-effective
                  amendment thereof) which, individually or in the aggregate, represent
                  a
                  fundamental change in the information set forth in the registration
                  statement. Notwithstanding the foregoing, any increase or decrease
                  in the
                  volume of securities offered (if the total dollar value of securities
                  offered would not exceed that which was registered) and any deviation
                  from
                  the low or high end of the estimated maximum offering range may be
                  reflected in the form of prospectus filed with the Securities and
                  Exchange
                  Commission pursuant to Rule 424(b) if, in the aggregate, the changes
                  in
                  volume and price represent no more than a 20% change in the maximum
                  aggregate offering price set forth in the "Calculation of Registration
                  Fee" table in the effective registration statement;
                  and
  (iii)
  To
                  include any material information with respect to the plan of distribution
                  not previously disclosed in this Registration Statement or any material
                  change in the information set forth in this Registration
                  Statement;
  Provided
        however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the
        information required to be included in a post-effective amendment by those
        paragraphs is contained in reports filed with or furnished to the Commission
        by
        the registrant pursuant to section 13 or section 15(d) of the Securities
        Exchange Act of 1934 that are incorporated by reference in the registration
        statement.
  (2)
  That,
                  for the purpose of determining any liability under the Securities
                  Act,
                  each such post-effective amendment shall be deemed to be a new
                  registration statement relating to the securities offered therein,
                  and the
                  offering of such securities at that time shall be deemed to be the
                  initial
                  bona fide offering thereof.
  (3)
  To
                  remove from registration by means of a post-effective amendment any
                  of the
                  securities being registered, which remain, unsold at the termination
                  of
                  the offering.
  (b)
  The
                  Registrant hereby undertakes that, for purposes of determining any
                  liability under the Securities Act, each filing of the Registrant's annual
                  report pursuant to Section 13(a) or Section 15(d) of the Exchange
                  Act
                  (and, where applicable, each filing of an employee benefit plan's annual
                  report pursuant to Section 15(d) of the Exchange Act) that is incorporated
                  by reference in this Registration Statement shall be deemed to be
                  a new
                  registration statement relating to the securities offered therein,
                  and the
                  offering of such securities at that time shall be deemed to be the
                  initial
                  bona fide offering thereof.
  (c)
  Insofar
                  as indemnification for liabilities arising under the Securities Act
                  may be
                  permitted to directors, officers and controlling persons of the Registrant
                  pursuant to the foregoing provisions, or otherwise, the Registrant
                  has
                  been advised that in the opinion of the Commission such indemnification
                  is
                  against public policy as expressed in the Securities Act and is,
                  therefore, unenforceable.  In the event that a claim for
                  indemnification against such liabilities (other than the payment
                  by the
                  Registrant of expenses incurred or paid by a director, officer or
                  controlling person of the Registrant in the successful defense of
                  any
                  action, suit or proceeding) is asserted by such director, officer
                  or
                  controlling person in connection with the securities being registered,
                  the
                  Registrant will, unless in the opinion of its counsel the matter
                  has been
                  settled by controlling precedent, submit to a court of appropriate
                  jurisdiction the question whether such indemnification by it is against
                  public policy as expressed in the Securities Act and will be governed
                  by
                  the final adjudication of such
                  issue.
  -5-
  SIGNATURES
  Pursuant
        to the requirements of the Securities Act of 1933, the Registrant certifies
        that
        it has reasonable grounds to believe that it meets all of the requirements
        for
        filing on Form S-8 and has duly caused this Registration Statement to be signed
        on its behalf by the undersigned, thereunto duly authorized, in the City of
        Vancouver, British Columbia, on this 31
  st
  day of
        August,
        2007.
  LML
                  PAYMENT SYSTEMS INC.
  /s/
                  Patrick H. Gaines
  Patrick
                  H. Gaines
  President
                  and Chief Executive Officer
  POWER
        OF ATTORNEY
  KNOW
        TO
        ALL PERSONS BY THESE PRESENTS, that each such person whose signature appears
        below constitutes and appoints, jointly and severally, Patrick H. Gaines his
        true and lawful attorney-in-fact, with the power of substitution, for him in
        any
        and all capacities, to sign any amendments to this Registration Statement on
        Form S-8 (including post-effective amendments), and to file the same, with
        all
        exhibits thereto, and other documents in connection therewith, with the
        Securities and Exchange Commission, hereby ratifying and confirming all that
        each of said attorneys-in-fact, or his or here substitute or substitutes, may
        do
        or cause to be done by virtue hereof.
  Pursuant
        to the requirements of the Securities Act, this Registration Statement has
        been
        signed by the following persons in the capacities and on the date
        indicated.
  Title
  Date
  /s/
  Patrick H. Gaines
  Chairman
                  of the Board, Chief Executive Officer, President and
                  Director
  August
                  31, 2007
  Patrick
                  H. Gaines
  (Principal
                  Executive Officer)
  /s/
  Richard R. Schulz
  Controller
                  and Chief Accounting Officer
  August
                  31, 2007
  Richard
                  R. Schulz
  (Principal
                  Financial and Accounting Officer)
  /s/
  L. William Seidman
  Director
  August
                  31, 2007
  L.
                  William Seidman
  /s/
  Jacqueline Pace
  Director
  August
                  31, 2007
  Jacqueline
                  Pace
  /s/
  Greg A. MacRae
  Director
  August
                  31, 2007
  Greg
                  A. MacRae
  -6-