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COUNTERPATH SOLUTIONS R&D, INC.

EMPLOYMENT AGREEMENT

THIS AGREEMENTis dated for reference the 13th day of
September 2007.

BETWEEN

CounterPath Solutions R&D
Inc., a company incorporated under the laws of the Province of British
Columbia and having an office at Suite 300, One Bentall Centre, 505 Burrard
Street, Vancouver, British Columbia, Canada V7X1M3

(hereinafter referred to as the
"Company")

AND

Greg Pellinghaving an address
for notice at # 908  360 Bloor Street East, Toronto, Ontario, Canada M4W3M3

(hereinafter referred to as the
"Employee")

WHEREAS:

|A. | The main business of the Company is in the researching,
      developing and selling of VoIP/IP Telephony software products (the
      Company's Business");
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                              
|B. | The Employee has been hired by the Company to work in the
      Company's Business; and                                                                      
|   |                                                                                                                                                              
|C. | The Employee and the Company wish to enter into this
      Agreement to record the terms of employment between
them;                                         

NOW THEREFORE THIS AGREEMENT WITNESSESthat in
consideration of mutual covenants and agreements hereafter set out, the Company
and the Employee agree to continue the relationship on the following terms and
conditions:

|1. | Term of Employment.Subject to the provisions for
      termination set forth below, the Employee's present employment with the
      Company, pursuant to this Agreement will continue until terminated in
      accordance with this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2. | Salary & Benefits.The Company shall pay the
      Employee a salary of Cdn$200,000per annum for the services of the
      Employee, payable at regular payroll periods established by the Company.
      The Employee's salary will be subject to deductions for Income Tax and
      Social Security remittances (collectively the "Government Deductions").
      The Company shall also provide the Employee with (a) extended medical and
      dental insurance coverage as provided to other employees of the Company;
      (b) participation in a bonus & incentive plan which shall provide the
      Employee the ability to earn up to a 90% bonus on his salary (the plan
      shall be split in to two components, the Companys objectives and the
      Employees objectives, these objectives shall be mutually agreed to
      between the Company and the Board of Directors (hereafter referred to as
      the Board)); and (c) additional incentives which may be provided to the
      Employee from time to time, including additional share options, special
      bonuses or other incentives approved and ratified by the
  Board.

|CounterPath Solutions
      R&D, Inc.
|-------------------------------------
|Employment Agreement                 
|Page 1 of 5                          

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|3.  | Duties and Position.As Chief Executive Officerof the Company, the Employees duties shall include those commonly associated with the office of chief executive officer. The Employee will report to the Board and
will comply with all lawful instructions given by the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.  | Policies and Procedures. The Employee shall abide by all Company policies and procedures, which policies and procedures may be updated and changed at any time at the discretion of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.  | Privacy.The Company may monitor and/or review all email, voice mail, Internet browser usage and phone calls when deemed necessary by the Company without prior notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6.  | Devote Full Time to Company.The Employee will use his best efforts to promote the interests of the Company. The Employee will devote full time (unless otherwise agreed to by the Company), attention and energies to the
Company's Business, and during employment with the Company. The Employee is not prohibited from making personal investments in any other businesses provided those such businesses are not engaged in activities which are or may be competitive with the
Company's Business and provided such investments do not require the Employee's active involvement. The Employee shall not commit or purport to commit the Company to:                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|7.  | Confidentiality.The Employee will not, during or after the term of his employment, reveal any confidential information or trade secrets of the Company to any person, firm, corporation, or entity. If the Employee reveals or
threatens to reveal any such information, the Company shall be entitled to an injunction restraining the Employee from disclosing same, or from rendering any services to any entity to whom said information has been or is threatened to be disclosed.
The right to secure an injunction is not exclusive, and the Company may pursue any other remedies it has against the Employee for a breach or threatened breach of this condition, including the recovery of damages from the Employee. The Employee
shall promptly sign and deliver the Company's form of Confidentiality and Non-Competition Agreement as a condition of continuing employment.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|8.  | Reimbursement of Expenses.The Employee may incur reasonable expenses for furthering the Company's Business, including expenses for entertainment, travel, and similar items. The Company shall reimburse the Employee for all
business expenses after the Employee presents an itemized account of expenditures including original receipts, pursuant to Company policy. The Company will also pay to the Employee a bi-monthly allowance (the Bi-Monthly Expense
Allowance) of two thousand Canadian dollars (CDN$2,000) (or such higher amount as may from time to time be agreed in writing by the Company) to offset personal expenses incurred by the Employee. The Bi-Monthly Expense Allowance will be
payable at the same time and in the same manner as the Employees salary regardless of the amount of expenses actually incurred by the Employee.                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|9.  | Vacation.The Employee shall be entitled to a yearly paid vacation of 4weeks and increases as approved by the Board. The Employee shall have due regard to the policies of the Company relating to the scheduling of
vacations at the reasonable directions of the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10. | Disability.It is understood and agreed that while the Employee is entitled to receive payments under any disability insurance plan for senior executive of the Company (when established by the Company and which disability
insurance plan provides payments commensurate with his salary set out in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|CounterPath Solutions
      R&D, Inc.
|-------------------------------------
|Employment Agreement                 
|Page 2 of 5                          

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|    | Section 2, including a draw against his bonus equaling 45% of his salary), then the Employee will not be entitled during such time, to receive the salary and/or bonus set out in Section 2. The Employee's full compensation will be
reinstated upon the Employee's return to work on a full-time basis.                                                                                       
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|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | If the Employee is absent from work or is unable to fully and effectively perform his duties because of illness or incapacity or for any other reason for a continuous period of more than 270 days or for an aggregate period of more
than 270 days in any period of 365 days, then the Company shall have the option to terminate the Employee's employment upon 30 days prior written notice.
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|11. | Termination of Employment by the Board.                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 11.1                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 11.2                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 11.3                                                                                                                                                                                                                                                                                                                                                                                            
|12. | Termination of Employment by the Employee.                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 12.1                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 12.2                                                                                                                                                                                                                                                                                                                                                                                            

|CounterPath Solutions
      R&D, Inc.
|-------------------------------------
|Employment Agreement                 
|Page 3 of 5                          

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Columbia, less applicable Government
Deductions.

|13. | Severance.Post-termination severance shall be
      paid to the Employee based upon the following schedule:                                                                                                                                                                                                                                                                                                                                                                                                                                
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|14. | Death Benefit.If the Employee dies during the
      term of employment, the Company shall pay to the Employee's estate the
      Employee's prevailing salary (in addition to any applicable bonus and/or
      incentive outlined in Section 2(b) with objectives being considered fully
      met), less applicable Government Deductions, up to and including the end
      of the month in which death occurred.                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|15. | Assistance in Litigation.Employee shall upon
      reasonable notice and at the Company's expense, furnish such information
      and proper assistance to the Company as it may reasonably require in
      connection with any litigation in which it is, or may become, a party
      either during or after employment. The Employee may, at its option and at
      the Company's expense, retain a lawyer to attend with the Employee at any
      legal proceedings, which the Company requires the Employee to be present
      at.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|16. | Effect on Prior Agreements.This Agreement
      supersedes any prior employment agreement between the Company or any
      predecessor of the Company and the Employee.                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|17. | Settlement by Arbitration.Any controversy or
      claim arising out of or relating to this Agreement, except Section 11.3,
      or the breach thereof, shall be settled by arbitration administered by the
      British Columbia Arbitration & Mediation Institute in accordance with
      its Commercial Arbitration Rules, and judgment on the award rendered by
      the arbitrator(s) may be entered in any court having jurisdiction
      thereof.                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|18. | Severability.If, for any reason, any provision of
      this Agreement is held invalid, all other provisions of this Agreement
      shall remain in effect. If this Agreement is held invalid or cannot he
      enforced, then                                                                                                                                                                                                                                                                                                           

|CounterPath Solutions
      R&D, Inc.
|-------------------------------------
|Employment Agreement                 
|Page 4 of 5                          

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|    | to the full extent permitted by law any prior agreement
      between the Company (or any predecessor thereof) and the Employee shall be
      deemed reinstated as if this Agreement had not been executed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|19. | Assumption of Agreement by Company's Successor and
      Assignees.The Companys rights and obligations under this Agreement
      will endure to the benefit and be binding upon the Companys successors
      and assignees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|20. | Oral Modifications Not Binding.Oral modifications
      to this Agreement shall have no effect. This Agreement may be modified
      only by a written agreement signed by the party against whom enforcement
      of any waiver, change, modification, extension, or discharge is
    sought.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|21. | Notices.Except as otherwise expressly provided
      herein, any and all notices or demands which must or maybe given hereunder
      or under any other instrument contemplated hereby shall be given by
      delivery in person or by regular mail or by facsimile transmission to the
      parties' respective address set out on the first page of this Agreement.
      All such communications, notices or presentations and demands provided for
      herein shall be deemed to have been delivered when actually delivered in
      person to the respective party, or if mailed, then on the date it would be
      delivered in the ordinary course of mail, or if sent by facsimile
      transmission, on the date of receipt of confirmation that the transmission
      has been received. Any party may change its address hereunder on twenty
      days notice to the other party in compliance with this
  section.

IN WITNESS WHEREOFthe parties hereto have duly executed
this agreement as of the date first above written.

|COUNTERPATH SOLUTIONS R&D, INC. | | | GREG PELLING                
|------------------------------- | - | ----------------------------
|                                | | |                             
|                                | | |                             
|                                | | |                             
|                                | | |                             
|                                | | |                             
|/s/ Mark Bruk                   | | | /s/
      Greg Pelling      
|(Authorized Signature)          | | | Signature of Employee       
|                                | | |                             
|                                | | |                             
|                                | | | /s/
      September 13, 2007
|                                | | | Date Signed                 

|CounterPath Solutions
      R&D, Inc.
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|Employment Agreement                 
|Page 5 of 5                          

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