Exhibit 10.3

FIRST AMENDMENT

TO

LETTER OF CREDIT DISCOUNTING AGREEMENT WITH RECOURSE

THIS FIRST AMENDMENT TO LETTER OF CREDIT DISCOUNTING AGREEMENT WITH RECOURSE
(this “Amendment”) is dated as of November 7, 2006, and is by and between
SILICON VALLEY BANK (“Bank”) and AXESSTEL, INC., a Nevada corporation
(“Client”), with offices at 6815 Flanders Drive, Suite 210, San Diego, CA 92121
(FAX 858-625-7110).

RECITALS

A. Bank and Client have entered into that certain Loan and Security Agreement
dated as of August 7, 2006 (as amended, modified, supplemented or restated, the
“LC Discounting Agreement”).

B. Bank has extended credit to Client for the purposes permitted in the LC
Discounting Agreement.

C. Client has requested that Bank amend the LC Discounting Agreement in
accordance with the terms hereof.

D. Bank has agreed to so amend certain provisions of the LC Discounting
Agreement, but only to the extent, in accordance with the terms, subject to the
conditions and in reliance upon the representations and warranties set forth
below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the LC Discounting Agreement.

2. Amendments to LC Discounting Agreement.

2.1 Letter of Credit Aggregate Amount. The section of the LC Discounting
Agreement captioned “Letter of Credit Aggregate Amount” is amended in its
entirety and replaced with the following:

“Letter of Credit Aggregate Amount: To be identified on LC Discounting Funding
Certificate; Aggregate of all LCs discounted and outstanding not to exceed
$5,000,000”

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2.2 Agreement. The second paragraph recital of the section captioned “Agreement”
of the LC Discounting Agreement is amended in its entirety and replaced with the
following:

“Pursuant to the terms and conditions set forth herein, Client may present to
SVB for discounting letter of credit bills, demand, sight drafts or usance
drafts for the letter of credit (“LC”) with the number identified above issued
to Client by Issuing Bank in the aggregate amount identified above but not to
exceed $5,000,000 as to all discounted and outstanding LCs purchased by SVB. SVB
may purchase from Client such letter of credit bills, demand, sight drafts or
usance drafts for discounting.”

3. Limitation of Amendments.

3.1 The amendments set forth in Section 2 above are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.

3.2 This Amendment shall be construed in connection with and as part of the Loan
Documents (as defined in the Loan Agreement) and all terms, conditions,
representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect.

4. Representations and Warranties. To induce Bank to enter into this Amendment,
Client hereby represents and warrants to Bank as follows:

4.1 Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

4.2 Client has the power and authority to execute and deliver this Amendment and
to perform its obligations under the LC Discounting Agreement, as amended by
this Amendment;

4.3 The organizational documents of Client delivered to Bank on or about
August 1, 2006 remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

4.4 The execution and delivery by Client of this Amendment and the performance
by Client of its obligations under the LC Discounting Agreement, as amended by
this Amendment, have been duly authorized;

 

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4.5 The execution and delivery by Client of this Amendment and the performance
by Client of its obligations under the LC Discounting Agreement, as amended by
this Amendment, do not and will not contravene (a) any law or regulation binding
on or affecting Client, (b) any contractual restriction with a Person binding on
Client, (c) any order, judgment or decree of any court or other governmental or
public body or authority, or subdivision thereof, binding on Client, or (d) the
organizational documents of Client;

4.6 The execution and delivery by Client of this Amendment and the performance
by Client of its obligations under the LC Discounting Agreement, as amended by
this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Client, except as already has been obtained or made;
and

4.7 This Amendment has been duly executed and delivered by Client and is the
binding obligation of Client, enforceable against Client in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’ rights.

5. Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

6. Effectiveness. This Amendment shall be deemed effective upon the satisfaction
of the conditions set forth in Section 7.

7. Conditions. The effectiveness of this Amendment is conditioned upon:
(i) execution and delivery to Bank of a fully executed copy of that certain
First Amendment to Loan and Security Agreement, dated as even date herewith (the
“LSA Amendment”); (ii) receipt by Bank of the amendment fee set forth in
Section 7 of the LSA Amendment (iii) delivery to Bank of a fully executed copy
of that certain First Amendment to Second Amended and Restated Accounts
Receivable Purchase Agreement, dated of even date herewith; and (iv) execution
and delivery to Bank of a fully executed copy of this Amendment.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK     CLIENT SILICON VALLEY BANK     AXESSTEL, INC.,     a Nevada
corporation, By:   /s/ Robert C. Lake     By:   /s/ Patrick Gray Name:   Robert
C. Lake     Name:   Patrick Gray Title:   Relationship Manager     Title:   SVP,
Finance

 

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First Amendment to Letter of Credit Discounting Agreement with Recourse