Filed by sedaredgar.com - Counterpath Corporation - Exhibit 10.31






COUNTERPATH CORPORATION & COUNTERPATH TECHNOLOGIES
INC.

SETTLEMENT AGREEMENT

THIS AGREEMENT is effective as of 15th day of
March 2009.

BETWEEN

CounterPath Corporation a
company incorporated under the laws of the state of Nevada and its
subsidiary, CounterPath Technologies Inc., a company incorporated under
the laws of the Province of British Columbia and both having an office at Suite
300, One Bentall Centre, 505 Burrard Street, Vancouver, British Columbia, Canada
V7X1M3 (hereinafter jointly and severely referred to as the "Company")

AND

Mark Bruk having an address for
notice at # 302 – 738 Broughton Street, Vancouver, British Columbia, Canada
V6G3A7 (hereinafter referred to as "Bruk")

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. 	
      Bruk is a co-founder of the Company and is Executive
      Vice-Chairman of the board of directors of the Company and an employee of
      the Company;

	 	 
	C. 	
      Bruk entered into an employment agreement with the
      Company dated December 13, 2007 (the “Employment Agreement”);

	 	 
	D. 	
      The Company has requested Bruk relinquish his position as
      Executive Vice-Chairman and assume the position of Vice-Chairman;
    and

	 	 
	E. 	
      The parties have agreed to terminate the Employment
      Agreement and enter into this Settlement Agreement which replaces the
      Employment Agreement and sets the terms of payment of severance and other
      entitlements of Bruk and their respective
obligations.



NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of mutual covenants and agreements hereafter set out, the Company
and Bruk agree to the following terms and conditions:

	1. 	
      Termination of Employment Agreement and Bruk’s
      Employment

	 	 	 
	1.1 	
      Effective March 15, 2009 (the “Notice Date”):

	 	 	 
		(a) 	
      Bruk’s employment with the Company is
  terminated;

	 	 	 
		(b) 	
      Bruk will have no further duties or responsibilities to
      the Company as an employee;




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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		(c) 	
      the forty five (45) month severance payment described in
      Section 2 will commence;

	 	 	 
		(d) 	
      the Company will immediately cease to use Bruk’s CIBC
      Visa credit card and will as soon as practicable on or after the Notice
      Date make full payment for any charges made against such credit card,
      including any interest due thereon, if applicable; and

	 	 	 
		(e) 	
      the Company will return Bruk’s personal mobile phone
      number of 604-729-7424 to him and will have such mobile phone number
      moved, at the Company’s cost, to the mobile carrier selected by Bruk.
      (After such mobile phone number is moved to the mobile carrier selected by
      Bruk, Bruk will be responsible for all mobile phone charges, except for
      the move charges).

	 	 	 
	1.2 	
      Vacation. It is acknowledged and agreed that as at
      the Notice Date, Bruk will have no accrued or unused vacation
  days.

	 	 	 
	1.3 	
      The Company will permit Bruk to continue to use the
      Company’s HP notebook computer currently in his possession until December
      15, 2012 (the “End Date”).

	 	 	 
	2. 	
      Severance and Benefits

	 	 	 
	2.1 	
      The Company will pay Bruk the severance and provide the
      benefits as set out in this section 2 commencing on the Notice Date and
      ending on the End Date.

	 	 	 
	2.2 	
      The Company will pay Bruk four hundred and ninety-five
      thousand Canadian dollars (CDN$495,000) (the “Severance”). The Severance
      will be payable by the Company in monthly installments of eleven thousand
      Canadian dollars (CDN$11,000) less statutory deductions on the fifteenth
      (15th) day of each month; the first such installment will be payable on
      April 15, 2009, to such bank account as directed by Bruk.

	 	 	 
	2.3 	
      Bruk acknowledges that the Severance is inclusive of any
      severance or notice that may be payable to Bruk pursuant to the provisions
      of the Employment Standards Act of British Columbia, and is in lieu
      of any severance or benefits that Bruk would have been entitled to under
      the Employment Agreement.

	 	 	 
	2.4 	
      The Company shall maintain Bruk’s coverage under the
      Company’s medical, dental, Accidental Death and Dismemberment (AD&D),
      and life insurance plans which are in existence as of the Notice Date (the
      “Benefits”) until such time as Bruk provides thirty (30) days prior
      written notice to the Company that Bruk wishes the Company to terminate
      the Benefits and replace them with international insurance with a similar
      level of coverage as the Benefits.

	 	 	 
	2.5 	
      The Company’s obligation to provide Benefits to Bruk
      pursuant to section 2.4 will terminate on the earlier of (1) twenty-one
      (21) months from the Notice Date, or (b) the date Bruk accepts employment
      or other position with a third party in which benefits similar to the
      Benefits are provided to Bruk by that third party and Bruk is entitled to
      receive such benefits.

	 	 	 
	2.6 	
      All unvested stock options held by Bruk as of the Notice
      Date will continue to vest as per the schedule set forth in the stock
      option agreement(s) entered into between the parties prior to the Notice
      Date, and all vested stock options held by Bruk will remain exercisable by
      Bruk until their expiry date of January 10, 2011 as defined in
      section1.1(c) of such stock option
agreement(s).




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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	3. 	
      Default by the Company

	 	 	 	 
	3.1 	
      In the event that the Company fails to make a Severance
      payment as and when due under section 2.2:

	 	 	 	 
		(a) 	
      Bruk will give the Company written notice of the failure
      to make such Severance payment; and

	 	 	 	 
		(b) 	
      the Company will have thirty (30) days from the date of
      such written notice to cure the failure to make a Severance
  payment.

	 	 	 	 
	3.2 	
      In the event that the Company fails to cure the above
      noted failure to make a Severance payment or receive a waiver providing
      relief or extension of such payment from Bruk then:

	 	 	 	 
		(a) 	
      the entire unpaid balance of the Severance due to Bruk
      under section 2.2, plus fifteen thousand Canadian Dollars (CDN$15,000)
      liquidated damages will immediately become due and payable as a debt owed
      by the Company to Bruk;

	 	 	 	 
		(b) 	
      interest shall accrue on the entire unpaid balance of the
      Severance plus the liquidated damages at the prime rate charged by the
      Royal Bank of Canada plus three percentage points (3%); and

	 	 	 	 
		(c) 	
      Bruk will be immediately released from all of his
      obligations to the Company under sections 4.3(a) and 4.3(b) of this
      Agreement.

	 	 	 	 
			
      The Company will execute a consent to judgement for the
      amount due and owing and provide it to the solicitor for Bruk upon
      execution of this Agreement.

	 	 	 	 
	3.3 	
      The parties agree that the liquidated damages referred to
      in section 3.2(a) represents a genuine pre-estimate of the damages that
      that Bruk will incur as a result of the Company’s breach of this
      Agreement.

	 	 	 	 
	4. 	
      Confidentiality and Non-Solicitation

	 	 	 	 
	4.1 	
      Definitions. For the purposes of this Agreement the
      following terms mean as follows.

	 	 	 	 
		(a) 	
      "Trade Secrets" means technical information or material
      that is commercially valuable to the Company’s Business as defined in this
      Agreement and not generally known in the VoIP/IP Telephony software
      products’ industry. This includes, without limiting the generality of the
      foregoing, the following:

	 	 	 	 
			(i) 	
      any and all versions of the Company’s proprietary or
      exclusively licensed computer software (including source code and object
      code), hardware, firmware and documentation; and

	 	 	 	 
			(ii) 	
      technical information concerning the Company's products,
      processes and services, including product and process data and
      specifications, diagrams, flow charts drawings, test results, know-how,
      inventions, research projects and product
development.




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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		(b) 	
      "Confidential Information" means non-technical
      information or material that is commercially valuable to the Company’s
      Business as defined in this Agreement and not generally known in the
      VoIP/IP Telephony software products’ industry. This includes, without
      limiting the generality of the foregoing, the following:

	 	 	 	 
			(i) 	
      information concerning the Company's Business as defined
      in this Agreement, including cost information, profits, sales information,
      accounting and unpublished financial information, business plans, markets
      and marketing methods, customer lists and customer information, purchasing
      techniques, supplier lists and supplier information, and advertising
      strategies;

	 	 	 	 
			(ii) 	
      information concerning the Company's employees, including
      their salaries, strengths, weaknesses and skills;

	 	 	 	 
			(iii) 	
      information submitted by the Company's customers,
      suppliers, employees, consultants or co-venturers with the Company for
      study, evaluation or use; and

	 	 	 	 
			(iv) 	
      any other information not generally known to the public
      which, if misused or disclosed, could reasonably be expected to adversely
      affect the Company's Business as defined in this Agreement.

	 	 	 	 
	4.2 	
      Except as required while Bruk remains a director of the
      Company and only under the same restrictions other directors of the
      Company operate under, Bruk will not reveal any Confidential Information
      or Trade Secrets of the Company to any person, firm, corporation, or
      entity.

	 	 	 	 
	4.3 	
      Bruk understands that during his employment with the
      Company and in his role as a fiduciary of the Company, he has become
      familiar with the Confidential Information and Trade Secrets of the
      Company, and therefore, it is possible that he could gravely harm the
      Company if he worked for a competitor. Accordingly, and in consideration
      of the Company paying the Severance, Bruk agrees that until the End Date
      he will not, (unless section 3.2(c) applies) without written authorization
      of the Company:

	 	 	 	 
		(a) 	
      engage directly or indirectly in, or contribute his
      knowledge to any product or work that is competitive or functionally
      similar to any VoIP/IP telephony products of the Company;

	 	 	 	 
		(b) 	
      directly or indirectly compete with the Company's
      Business (it being understood that competition includes the design,
      development, production, promotion or sale of products or services
      competitive with those marketed, developed or supported in the Company's
      Business);

	 	 	 	 
		(c) 	
      contact any customer of the Company who was a customer
      within a two (2) year period prior to the Notice Date for the purposes of
      soliciting or attempting to solicit any business the Company enjoyed or
      solicited from such customers; and

	 	 	 	 
		(d) 	
      induce, or attempt to induce, any Company employee who
      was an employee as of the Notice Date, or becomes an employee before the
      End Date, to quit the Company's employ or recruit or hire away any Company
      employee.

	 	 	 	 
		
      For the purposes of this section 4.3, the post-employment
      restrictions on Bruk shall apply in all regions of the
  world.




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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	4.4 	
      The Company agrees that it will not:

	 	 	 
		(a) 	
      claim ownership on Bruk’s non-provisional patent
      application “Method and System for Processing Financial Transactions
      Using Multiple Financial Account” filed with the United States Patent
      and Trademark Office on May 31, 2007 (Serial Number 11/809,031) and/or any
      related U.S. or international patent application, which patent application
      is not related in any way to the Company’s Business as defined in this
      Agreement nor the VoIP/IP Telephony software products’ industry;
  and

	 	 	 
		(b) 	
      claim ownership on any of Bruk’s personal Internet
      domains, including but not limited to, www.kunekt.com, www.kunekt.net,
      www.evove.com and www.evove.net.

	 	 	 
	4.5 	
      Injunctive Relief and Security for Damages. If
      Bruk breaches sections 4.2 or 4.3, (and provided that Bruk is not excused
      from compliance with those sections because of a default by the Company as
      set out in section 3), the Company will be entitled to an injunction to
      restrain Bruk from such actions. The right to secure an injunction is not
      exclusive, and the Company may pursue any other remedies it has against
      Bruk for a breach or threatened breach of this condition, including the
      recovery of damages from Bruk, and/or treating such breach as a
      repudiation of this Agreement. Provided that the Company has first
      obtained a court order (including an order for an interim or permanent
      injunction) to enforce the terms of sections 4.2 or 4.3, the Company may
      terminate any Severance payments that Bruk was entitled to pursuant to
      section 3.

	 	 	 
	5. 	
      Unconditional Release by the Company

	 	 	 
	5.1 	
      Except in the case of a breach of section 4, the Company
      on behalf of itself and all of its subsidiaries, hereby unconditionally
      and forever waive, release and discharge Bruk from and against any and all
      claims, demands, actions, causes of action, losses, costs, liabilities,
      assessments, settlements, expenses, suits of any nature and kind
      whatsoever and howsoever arising, whether known or unknown, suspected or
      unsuspected, existing or non-existing, whether at law or in equity, by
      contract of under any statute or regulation, which the Company now has,
      has ever had, or at any time hereafter shall or may have against Bruk,
      arising by reason of Bruk having been employed by the Company prior to the
      Notice Date.

	 	 	 
	6. 	
      Board Seat

	 	 	 
	6.1 	
      Until the End Date, and provided that Bruk is not
      disqualified under applicable law from acting as a director of the
      Company, is no longer a director, or resigns as a director of the Company,
      the Company will include Bruk as one of management’s nominees for election
      from time to time as a director of the Company.

	 	 	 
	6.2 	
      Until Bruk is no longer a director of the Company, the
      Company will include the following statement in its annual reports: “Mark
      Bruk is the founder of CounterPath Corporation and was until August 2007
      its CEO and Chairman. In August 2007 the company acquired New Heights
      Software Corp. at which time Mr. Bruk stepped down as CEO and
      Chairman.”

	 	 	 
	7. 	
      General

	 	 	 
	7.1 	
      Survival of Severance Obligation. If Bruk dies prior to
      the last Severance payment being made, and provided a court of competent
      jurisdiction has not determined, in a final judgment from which no appeal
      is available, that he was, prior to his death, in default of his
      obligations under section 4, any and all subsequent Severance payments
      shall be made to Bruk's estate.




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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	7.2 	
      Effect on Prior Agreements & Release by Bruk.
      This Agreement supersedes all prior agreements or communications
      between the parties, and Bruk agrees that the Severance and other
      consideration provided pursuant to this Agreement is in full satisfaction
      of any claims Bruk may have had pursuant to the Employment Agreement,
      other previous agreements or communications with the Company, or under
      common law, arising from the employment or termination of his employment
      with the Company or for any other reasons (hereinafter collectively
      referred to as “Claims”). Accordingly, Bruk, on behalf of himself, his
      heirs, executors, administrators, agents and assigns (the “Releasor”),
      releases and discharges the Company, its officers, directors, employees,
      predecessors, successors, assigns, and related or associated companies
      (the “Releasees”), from all Claims. Further, the Releasor agrees to
      indemnify the Releasees from any claims, charges, taxes, penalties or
      demands which may be made by the Canada Revenue Agency on account of
      income tax which is payable by the Releasor in excess of income tax
      withheld and remitted on the Releasor’s behalf by the Releasees.

	 	 
	7.3 	
      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 unenforceable
      through no fault of the Company and Bruk, then to the full extent
      permitted by law the Employment Agreement shall be deemed reinstated as if
      this Agreement had not been executed.

	 	 
	7.4 	
      Successors and Assigns. The Company’s rights and
      obligations under this Agreement will enure to the benefit and be binding
      upon the parties’ successors and assigns.

	 	 
	7.5 	
      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.

	 	 
	7.6 	
      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.

	 	 
	7.7 	
      Laws and Jurisdiction. This Agreement will be interpreted
      in accordance within the laws of British Columbia. The parties agree to
      attorn to the jurisdiction of the courts of British Columbia for any
      dispute arising from the enforcement or interpretation of this
      Agreement.

	 	 
	7.8 	
      Confidentiality of Terms of Agreement. Until disclosed by
      the Company in a public filing and only to the same extent that the
      Company discloses the terms of this Agreement, Bruk will not disclose the
      terms of this Agreement to anyone other than Bruk’s legal and financial
      advisors, or unless compelled by order of a court of competent
      jurisdiction or to enforce this Agreement




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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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against the Company or otherwise as
agreed to by the Company.

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

	COUNTERPATH CORPORATION 	 | 	MARK BRUK 
	COUNTERPATH TECHNOLOGIES INC. 	 | 	
	  	 | 	
	/s/ David Karp 	 |
      	/s/ Mark Bruk 
	  	 | 	
	 	 | 	 
	(Authorized Signature) 	 |
      	Signature 
	 	 | 	 
	March 12, 2009 	 |
      	March
      12, 2009 
	 	 | 	 
	Date 	 |
      	Date 



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      Corporation and CounterPath Technologies Inc. 
	Settlement Agreement 
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