Document:

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                                                                   Exhibit 10.39

                                  [LETTERHEAD]

June 29, 2001
Direct Line:  (604) 691-7528

Our File:  18814/0013

VIA FACSIMILE    669-1620
AND BY E-MAIL - RSIDER@LAWSONLUNDELL.COM

Lawson Lundell Lawson & McIntosh
Barristers & Solicitors
1600 - 925 West Georgia Street
Vancouver, BC     V6C 3L2

ATTENTION:        MR. ROBERT SIDER

Dear Sirs/Mesdames:

         RE: THOMAS O'FLAHERTY AND THE VOICE MOBILITY GROUP OF COMPANIES

Further to our telephone conversations of June 29, 2001, we confirm that our
respective clients have agreed to the following all-inclusive terms of
settlement:

1.       Mr. O'Flaherty will resign from his position as President and Director
         of Voice Mobility and from his positions as an Officer and/or Director
         of each of their subsidiary corporations, effective June 29, 2001.

2.       Mr. O'Flaherty will remain on salary continuance up to December 31,
         2002 at his regular monthly rate of $13,250.00. He recognizes that he
         will be under a duty to mitigate and will report to the Chief Financial
         Officer by the 8th business day of the month following the month in
         question regarding any outside salary or billings for work performed
         during the month in question.

         In the case of re-employment with another Company, Voice Mobility will
         continue to pay the difference, if any, between his new monthly base
         salary and the monthly base salary which he was earning at Voice
         Mobility.

         In the case of a contract for services which is longer than four days,
         either individually or cumulatively, with any client, Mr. O'Flaherty
         will be expected to report the existence of same to the Company in a
         timely manner and to advise the Company on a monthly basis of the
         duration of the contract(s), if known, and the amounts he has billed to
         such client(s) for any services performed (pre-G.S.T.) during the
         months in question. 75% of the amount(s) exclusive of pre-tax
         disbursements will be subtracted from the compensation otherwise owing
         to Mr. O'Flaherty from Voice Mobility for the months in question
         (recognizing that 25% of his contractual revenue for services performed
         will go to overhead).

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                                      -2-

3.       In addition to the aforementioned compensation, Mr. O'Flaherty will
         continue to receive up to $500.00 per month car allowance up to
         December 31, 2002. Should he receive a car allowance of any kind from a
         new employer, then Voice Mobility will only pay the difference between
         his new car allowance and $500.00, if required. Again, Mr. O'Flaherty
         will be expected to advise Voice Mobility of such a change in his
         situation in an accurate and timely manner.

4.       With regard to health and welfare benefits, the Company will pay Mr
         O'Flaherty the sum of $2,500 in lieu of continued coverage under its
         health and welfare insurance plans. It will, however, continue to pay
         the BC Medical Services Plan premiums for your client, his wife and son
         until August 31, 2001 so that he can arrange alternative coverage.

5.       With regard to monetary bonuses, Voice Mobility will pay out the
         $25,000.00 balance still owing to Mr. O'Flaherty on the 2000 bonus, to
         Lawson Lundell in Trust within five working days of final settlement,
         and Mr. O'Flaherty will forego any rights he may have under his
         employment agreement to any additional monetary bonuses and associated
         options for 2001 and 2002.

6.       With regard to his VMII stock options, Mr. O'Flaherty will receive
         125,000 stock options as part of the bonus owing to him for 2000.
         Currently he has 250,000 stock options, and he will continue to accrue
         the balance of the options promised under the employment agreement up
         to December 31, 2002, at a rate of 13,889 stock options per month.

         It is agreed that should Mr. O'Flaherty cease receiving compensation
         under point (2) above prior to December 31, 2002, then VMII will
         accelerate the vesting date(s) to the day before the date on which he
         finished receiving compensation from Voice Mobility for the balance of
         the 625,000 shares otherwise owing to him at that time. In all cases,
         the expiration date for exercising the options will be March 31, 2003
         unless an earlier expiration date is stipulated under the applicable
         option agreement.

7.       With regard to selling his VMII shares, Mr. O'Flaherty will be subject
         to the same restrictions as other senior employees, directors, officers
         and insiders. Thus, commencing on the first day of trading on the
         Toronto Stock Exchange, he will have the right to sell up to 93,750
         shares at a maximum of 2000 shares per trading day. Commencing 6 months
         after the first day of trading he will have the right to sell an
         additional 93,750 shares at a maximum of 2000 shares per trading day.
         Commencing one year after the first day of trading he will have the
         right to sell an additional 93,750 shares at a maximum of 2000 shares
         per trading day. Finally, commencing 18 months from the first day of
         trading. Mr. O'Flaherty will be able to sell the balance of his shares
         - being a minimum of 343,750 shares plus whatever other shares he has
         not yet sold - on an unrestricted basis, provided that if he intends to
         sell a block of shares of 50,000 or more in one transaction, he must
         give written notice of his intention to do so at least 48 hours in
         advance to the Company's Chief Financial Officer so that the Company,
         in its discretion, may exercise its right to facilitate a block
         purchase of same.

         It is also agreed that if the above restrictions are relaxed for other
         senior employees, directors, officers and insiders, they will be
         similarly relaxed for Mr. O'Flaherty.

8.       Mr. O'Flaherty will receive 1 1/2 weeks of holiday pay from the Company
         within five working days of the date of settlement, paid to Lawson
         Lundell in Trust.

9.       In addition, Mr. O'Flaherty will retain his laptop computer and his
         cell phone, but will transfer the cell phone account to his name and
         the Company will cease paying the cost of the phone as of June 30,
         2001.

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                                      -3-

10.      Voice Mobility agrees to remove the non-competition restrictions
         outlined in Section 9 of his employment agreement.

11.      Subject to full compliance with the terms of this Agreement. Mr.
         O'Flaherty will agree to a consent dismissal order, without costs to
         either party, in his British Columbia Supreme Court Action No. S013612,
         filed June 26, 2001, and will sign a final release in favour of the
         Voice Mobility Group of Companies.

12.      Mr. O'Flaherty will forthwith return to Voice Mobility all property in
         his possession belonging to the Company, including any access cards and
         corporate American Express credit cards.

13.      Mr. O'Flaherty will undertake not to state at any time to any third
         party that his departure from the Voice Mobility Group of Companies was
         other than amicable, and will not make any statements, either express
         or implied, that are derogatory to the Companies' reputation or
         prejudicial to its business.

14.      Mr. O'Flaherty will keep the contents of this settlement and all
         communications relating thereto confidential except to Revenue Canada
         or as is required to obtain legal and tax advice, or to enforce his
         rights hereunder in a court of law, or as is required by law.

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                                      -4-

Finally, with regard to outstanding expenses, Voice Mobility will pay for any
legitimate business expenses incurred by Mr. O'Flaherty prior to June 1st,
provided the necessary back-up invoices and information are provided, if
requested.

Yours truly,

OWEN, BIRD

"Kitty Heller"

Kitty Heller

KJH/ds
cc:      Voice Mobility
         Attn:  Mr. Randy Buchamer<PAGE>

                                                                    Exhibit 4.16

                           CONVERTIBLE PROMISSORY NOTE

$150,000.00
Houston, Texas                                                      June 5, 2001

FOR VALUE RECEIVED, iExalt, Inc., a Nevada Corporation (Maker), promises to pay
to Don Ballard, 13902 Barryknoll, Houston, Texas 77079 (Holder) the principal
sum of One Hundred Fifty Thousand Dollars ($150,000.00) with interest from date
at the rate of 33,750 restricted shares to be issued, per month, plus 100,000
restricted shares if total amount of Promissory Note is delivered to iExalt,
Inc. prior to June 30, 2001. In addition to the above, Holder has the right to
convert all of the Principal and accrued interest to restricted common stock at
the rate of sixty-five percent (65%) of the closing price of the common stock
traded on the date of this Note. The total shares to be issued in full
satisfaction of this Promissory Note, may not exceed 1,500,000 shares. Principal
is payable in lawful money of the United States of America at 12000 Aerospace
Avenue, Suite 375, Houston, Texas 77034, or at such place as may later be
designated by written notice from the Holder to the Maker hereof, on the date
and in the manner following:

         All principal and accrued interest is due on or before six (6) months
         from the date of this note, or December 31, 2001.

         This Note is unsecured.

         Both parties understand that the amount or value above may exceed the
         maximum interest allowed by law, under the statutes of the state of
         Texas, and acknowledge that the terms are reasonable given the nature
         of the loan.

                                            iExalt, Inc.
                                            a Nevada corporation

                                            By: /s/Chris L. Sisk
                                                Chris L. Sisk
                                                Its Chief Financial Officer

Amount: $ 150,000 Received on: 2nd day of July, 2001

                                       36

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