Exhibit 10.3

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”) is made and entered
into as of November 20, 2007 by and between Marv Tseu (“Tseu”) and Axesstel,
Inc., a Nevada corporation (“Axesstel”), with respect to the following facts:

A. Tseu has served as a director and Chief Executive Officer of Axesstel
pursuant to the terms of an Employment Agreement with Axesstel, effective
May 16, 2006 (“Employment Agreement”), and has voluntarily resigned as a
director and as Chief Executive Officer as of the date of this Agreement.

B. In this Agreement, Tseu and Axesstel desire to formally document: (i) the
terms of Tseu’s separation from Axesstel; (ii) Axesstel’s and Tseu’s mutual
releases of claims against each other.

NOW, THEREFORE, for and in consideration of the execution of this Agreement
within the time frame provided for herein, and the mutual covenants contained in
the following paragraphs, Axesstel and Tseu agree as follows:

1. Wages and Vacation Time Paid. Tseu acknowledges that, upon receipt of his
final paycheck in the estimated amount of $20,833.33, he will have been paid for
all of his wages and his accrued and unused vacation time through the date of
this Agreement, his last day of work.

2. Separation Payment. As consideration of the releases contained herein,
Axesstel shall pay to Tseu the sum of Two Hundred Eighty-One Thousand Two
Hundred Fifty Dollars ($281,250) which shall be paid as follows: (i) Axesstel
will use commercially reasonable efforts to pay Tseu 75% of that sum (the “75%
Payment”) within 7 days of Axesstel’s receipt of any proceeds from its financing
of the $1.5 million letter of credit issued with respect to the account of XL
Telecom, and in any event, Axesstel will pay Tseu the 75% Payment no later than
December 31, 2007, and (ii) Axesstel will pay Tseu the 25% balance of that sum
on or before December 31, 2007.

3. Reimbursement of Expenses. In addition to the separation payment above,
Axesstel agrees to reimburse Tseu for (i) any outstanding business expenses
incurred by Tseu, (ii) Tseu’s actual and reasonable legal expenses associated
with negotiation and execution of this Agreement, (iii) the actual lease
termination fees (estimated at $2,800) for the termination of the lease on
Tseu’s apartment in San Diego, and (iv) for actual and reasonable fees to ship
Tseu’s personal belongings to his home in San Francisco. Reimbursement shall be
made within 15 days of submission of receipts for the relevant expense.

4. Stock Option. The parties agree that pursuant to that certain Stock Option
Agreement between Tseu and Axesstel of May 16, 2007 (the “Option Agreement”),
Tseu is vested in 350,000 of the 700,000 shares of Axesstel stock that are
subject to that agreement. The parties further agree that the Option Agreement
is hereby amended so that Tseu may exercise his right to purchase any of his
vested shares of stock that are subject to the Option Agreement on or before
June 30, 2008. Except as modified by this Section 4, Tseu’s rights under the
Option Agreement will continue as stated therein.

 

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5. General Releases. Axesstel and Tseu for themselves, their heirs, executors,
administrators, assigns and successors, current, former and future parents,
subsidiaries, related entities, fiduciaries, predecessors, successors, officers,
directors, shareholders, agents, employees and assigns fully and forever release
and discharge each other and their heirs, executors, administrators, assigns and
successors, current, former and future parents, subsidiaries, related entities,
employee benefit plans and their fiduciaries, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns (collectively,
“Releasees”), with respect to any and all claims, liabilities and causes of
action, of every nature, kind and description, in law, equity or otherwise,
which have arisen, occurred or existed at any time prior to the signing of this
Agreement, including, without limitation, any and all claims, liabilities and
causes of action arising out of or relating to Tseu’s employment with Axesstel
prior to the date of this Agreement, any prior employment agreement between the
two parties and any prior separation agreement between the two parties.
Notwithstanding the foregoing, nothing in this Agreement shall be deemed to
constitute a waiver or release of Tseu’s rights to indemnification pursuant to
the terms of the Indemnification Agreement between Axesstel and Tseu dated as of
May 16, 2006, Tseu’s statutory indemnity rights (including, but not limited to,
those arising under California Labor Code section 2802), any claims arising out
of Axesstel’s breach of this Agreement, or any other claims which may arise
after the date of execution of this Agreement.

6. Knowing Waiver of Employment-Related Claims. Tseu understands and agrees
that, with the exception of potential employment-related claims identified
below, he is waiving any and all rights he may have had or now has to pursue
against any of the Releasees any and all remedies available to him under any
employment-related causes of action, including without limitation, claims of
wrongful discharge, breach of contract, breach of the covenant of good faith and
fair dealing, fraud, violation of public policy, defamation, discrimination,
personal injury, physical injury, emotional distress, claims under Title VII of
the Civil Rights Act of 1964, as amended, the Americans With Disabilities Act,
the Federal Rehabilitation Act, the California Fair Employment and Housing Act,
the California Family Rights Act, the Equal Pay Act of 1963, the provisions of
the California Labor Code and any other federal, state or local laws and
regulations relating to employment, conditions of employment (including wage and
hour laws), perquisites of employment (including but not limited to claims
relating to stock and/or stock options) and/or employment discrimination. Claims
not covered by the release provisions of this Agreement are (i) claims for
unemployment insurance benefits, (ii) claims under the California Workers’
Compensation Act, and (iii) claims for unpaid wages or indemnity under the
California Labor Code, (iv) claims arising from Axesstel’s nonperformance under
this Agreement and (v) any challenge to the validity of Tseu’s release of claims
under the Age Discrimination in Employment Act of 1967, as amended, (“ADEA”) as
set forth in paragraph 6 below. Tseu expressly waives any right to recovery of
any type, including damages and reinstatement, in any administrative or court
action, whether state or federal, and whether brought by him or on his behalf,
related in any way to the matters released herein.

7. Knowing Waiver of ADEA Claims. Tseu acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under the federal Age
Discrimination in Employment Act of 1967, as amended. He also acknowledges that
the consideration given for this waiver and release is in addition to anything
of value to which he was already was entitled. Tseu further acknowledges that he
has been advised by this writing, as required by law, that: (a) his waiver and
release specified in this paragraph

 

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do not apply to any rights or claims that may arise after the date he signs this
Agreement or to any challenge to the validity of this waiver of ADEA claims;
(b) he has been advised hereby that he has the right to consult with an attorney
prior to executing this Agreement; (c) he has twenty one (21) days to consider
this Agreement (although he may choose to voluntarily execute this Agreement
earlier); (d) he has seven (7) days following his execution of this Agreement to
revoke the Agreement (in writing); and (e) this Agreement will not be effective
until the date upon which the revocation period has expired, which will be the
eighth (8th) day after this Agreement is executed by Tseu.

8. Waiver of Civil Code § 1542. Axesstel and Tseu expressly waive any and all
rights and benefits conferred upon them by Section 1542 of the Civil Code of the
State of California, which states as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

Axesstel and Tseu expressly agree and understand that the release given by them
pursuant to this Agreement applies to all unknown, unsuspected and unanticipated
claims, liabilities and causes of action which they may have against each other
or any of the other Releasees.

9. Severability of Release Provisions. Axesstel and Tseu agree that if any
provision of the release given by them under this Agreement is found to be
unenforceable, it will not affect the enforceability of the remaining provisions
and the courts may enforce all remaining provisions to the extent permitted by
law.

10. Representation Regarding Legal Actions. Axesstel and Tseu represent that, as
of the date of this Agreement, they have not filed any lawsuits, charges,
complaints, petitions, claims or other accusatory pleadings against each other
or the other Releasees in any court or with any governmental agency. Except for
claims preserved by law or expressly by this Agreement, Axesstel and Tseu
promise they will never sue each other or any of the other Releasees, or
otherwise institute or participate in any legal or administrative proceedings
against each other or any of the other Releasees, with respect to any claim
covered by the release provisions of this Agreement, unless they are compelled
by legal process to do so. Axesstel and Tseu promise and agree that they shall
not advocate or incite the institution of, or assist or participate in, any
suit, complaint, charge or administrative proceeding by any other person against
each other or any of the other Releasees, unless compelled by legal process to
do so.

11. Promise to Maintain Confidentiality of Axesstel’s Confidential Information.
Tseu acknowledges that due to the position he has occupied and the
responsibilities he has had at Axesstel, he has received confidential
information concerning Axesstel’s products, procedures, customers, sales,
prices, contracts, and the like. Tseu hereby promises and agrees that, unless
compelled by legal process, he will not disclose to others and will keep
confidential all confidential information he has received while employed by
Axesstel concerning Axesstel’s products and procedures, the identities of
Axesstel’s customers, Axesstel’s sales, Axesstel’s prices, the terms of any of
Axesstel’s contracts with third parties, and the like. Tseu agrees that a
material violation by him of the foregoing

 

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obligation to maintain the confidentiality of Axesstel’s confidential
information will constitute a material breach of this Agreement. Tseu
specifically confirms that he will continue to comply with the terms of the
Employee Innovations and Proprietary Rights Assignment Agreement dated as of
May 16, 2006 and executed by Tseu and Axesstel.

12. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them which do not appear written herein and that
this Agreement, along with the other agreements referred to herein, contains the
entire agreement of the parties on the subject matter thereof. The parties
further acknowledge and agree that parole evidence shall not be required to
interpret the intent of the parties.

13. Voluntary Execution. The parties hereby acknowledge that they have read and
understand this Agreement and that they sign this Agreement voluntarily and
without coercion.

14. Waiver, Amendment and Modification of Agreement. The parties agree that no
waiver, amendment or modification of any of the terms of this Agreement shall be
effective unless in writing and signed by all parties affected by the waiver,
amendment or modification. No waiver of any term, condition or default of any
term of this Agreement shall be construed as a waiver of any other term,
condition or default.

15. Representation by Counsel. The parties acknowledge that they have had the
opportunity to be represented in negotiations for the preparation of this
Agreement by counsel of their own choosing, and that they have entered into this
Agreement voluntarily, without coercion, and based upon their own judgment and
not in reliance upon any representations or promises made by the other party or
parties or any attorneys, other than those contained within this Agreement. The
parties further agree that if any of the facts or matters upon which they now
rely in making this Agreement hereafter prove to be otherwise, this Agreement
will nonetheless remain in full force and effect.

16. California Law. The parties agree that this Agreement and its terms shall be
construed under California law, without regard to any choice of law provisions.

17. Drafting. The parties agree that this Agreement shall be construed without
regard to the drafter of the same and shall be construed as though each party to
this Agreement participated equally in the preparation and drafting of this
Agreement.

18. Counterparts. This Agreement may be signed in counterparts and said
counterparts shall be treated as though signed as one document.

19. Period to Consider Terms of Agreement. Tseu acknowledges that this Agreement
was presented to him on November 20, 2007, and that he is entitled to have up to
twenty-one (21) days’ time in which to consider the terms of this Agreement.
Tseu acknowledges that he has obtained the advice and counsel from the legal
representative of his choice and executes this Agreement having had sufficient
time within which to consider its terms. Tseu represents that if he executes
this Agreement before 21 days have elapsed, he does so voluntarily, upon the
advice and with the approval of his legal counsel, and that he voluntarily
waives any remaining consideration period. Tseu understands that if not executed
on or before December 11, 2007, this Agreement shall expire and may not be
executed thereafter.

 

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20. Revocation of Agreement. Tseu understands that after executing this
Agreement, he has the right to revoke it within seven (7) days after his
execution of it. Tseu understands that this Agreement will not become effective
and enforceable unless the seven-day revocation period passes and Tseu does not
revoke the Agreement in writing. Tseu understands that this Agreement may not be
revoked after the seven-day revocation period has passed. Tseu understands that
any revocation of this Agreement must be made in writing and delivered to
Axesstel’s General Counsel within the seven-day period.

21. Attorneys’ Fees. In the event of any legal action relating to or arising out
of this Agreement, the prevailing party shall be entitled to recover from the
losing party its reasonable costs and attorneys’ fees.

22. Effective Date. This Agreement shall become effective and binding upon the
parties eight (8) days after Tseu’s execution thereof, so long as he has not
revoked it within the time period and in the manner specified in paragraph 20,
above.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth below.

 

Dated:   November 20, 2007     /s/ Marv Tseu       Marv Tseu

 

      AXESSTEL, INC. Dated:   November 20, 2007       By:   /s/ Patrick Gray

 

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