Document:

Employment Agreement

 Exhibit 10.11 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT is made effective as of July 31, 2004, by and between Transgenomic, Inc., a Delaware corporation (the “Company”), and Michael A.
Summers (“Employee”). 
  
 The Company and Employee
desire to enter into an Employment Agreement (this ”Agreement”). Accordingly, the Company and Employee agree as follows: 
  
 Section 1. Effective Date; Position; Term. This Agreement shall become effective on July 31, 2004 (the “Effective Date”). The
Company shall employ Employee as Chief Financial Officer. The initial term of the Agreement will be for a minimum of three (3) years from the Effective Date, and the Agreement may be extended upon mutual consent of the parties. 
  
 Section 2. Position and Duties. During the Employment Period:

  
 (a) Employee shall have the normal
responsibilities, duties and authorities of Chief Financial Officer to be defined prior to the Effective Date. 
  
 (b) Employee shall report to the Chief Executive Officer of the Company, and Employee shall perform faithfully the executive duties
assigned to him to the best of his ability in a diligent, trustworthy, businesslike and efficient manner and will devote his full business time and attention to the business and affairs of the Company and its Subsidiaries and Affiliates; provided,
however, that Employee may serve as a director of or a consultant to other corporations which do not compete with the Company, nonprofit corporations, civic organizations, professional groups and similar entities. 
  
 (c) For purposes of this Agreement, “Subsidiary”
shall mean any corporation or other entity of which securities having a majority of the voting power in electing directors or comparable management are, at the time of determination, owned by the Company, directly or through one or more
Subsidiaries. 
  
 (d) For purposes of this
Agreement, “Affiliate” of any particular person means any other person controlling, controlled by or under common control with such particular person. 
  

Section 3. Basic Compensation. As compensation for his services hereunder, the Company shall pay to Employee during the Employment Period
an initial base salary of $140,000 per year. 
  
 Base Salary shall
be payable in equal installments in arrears on a biweekly basis or as otherwise may be mutually agreed upon. 

 The Base Salary may be increased from time to time as mutually agreed to. In addition, Base Salary shall
be increased based on the following criteria: 
  
 (a) Base Salary
shall be increased to $175,000 starting with the first quarter after which the Company’s quarterly consolidated financial statements, fairly presented in conformance with accounting principles generally accepted in the United States of America,
reflect positive cash flow from operations 
  
 (b) Base Salary
shall be increased to $200,000 starting with the first quarter after which the Company’s quarterly consolidated financial statements, fairly presented in conformance with accounting principles generally accepted in the United States of America,
reflect positive net earnings 
  
 Section 4. Bonus.
In addition to the Base Salary, Employee shall receive a $25,000 bonus paid with the first regular payroll in January 2005. Additionally, Employee shall be eligible to receive an annual bonus based on Employee’s performance in conjunction with
specific mutually agreed goals and objectives defined prior to such calendar year payable at such time or times during or following each calendar year as shall be determined by the Chief Executive Officer and the Board of Directors (the
“Board”) or a committee thereof in its sole discretion and based on formulas to be determined each year by the Board or such committee in its sole discretion for the Company’s management bonus plan. 
  
 Section 5. Participation in Employee Benefit Plans. Employee
will be entitled to participate in all Company salaried employee benefit plans and programs, subject to the terms and conditions of each such employee benefit plan or program and to the extent commensurate with his position as Chief Financial
Officer. 
  
 Section 6. Other Benefits. 

 
 (a) Vacation. Employee shall participate in the
vacation benefit provided to all employees, except that his participation during the period in which he has less than ten (10) years of service will be equivalent to a participant with ten (10) to twenty-four (24) years of service. 
  
 (b) Insurance. The Company shall make available to
Employee health insurance (including dependent coverage), and other employee benefit plans provided to employees. 
  
 Section 7. Business Expenses. The Company shall reimburse Employee for all reasonable expenses incurred by him in the course of performing
his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting
and documentation of such expenses.  

 Section 8. Stock Options and Option Shares. Employee will be granted 100,000 shares under
the terms described below, subject to the approval of the Compensation Committee of the Board of Directors. The price of the options will be the fair market value on the date the options are granted. Fifty percent (50%) of the options will vest
immediately on the date of the grant. The remaining options will vest equally on or about the next three anniversary dates of the grant. All unvested options will vest upon the Company being acquired or merged into another entity. 
  
 Section 9. Termination of Employment. 
  
 (a) Events of Termination and Severance Payment. In
the event that, during the term of this Agreement, Employee is discharged for any reason other than for Just Cause (as defined below), Employee shall be entitled to receive certain payment (the “Severance Payment”) following termination of
employment. Severance Payment will be made at the greater of Employee’s then current annual base salary or $250,000. Additionally, upon the Company being acquired or merged into another entity, Transgenomic, Inc. will honor the Severance
Payment in the event that the Employee’s position was eliminated as a result of the merger or acquisition. 
  
 (b) “Just Cause” being defined as any criminal act (felony) being committed by employee, if employee commits fraud or dishonesty
toward the Company, other significant activities materially harmful to the reputation of the Company as reasonably defined by the Company, willful refusal to perform or substantial disregard of the duties properly assigned, significant violation of
any statutory or common law or a material violation of Sections 11 or 12 below, not reasonably performing assigned tasks to meet minimum expectations of the position, or intentionally takes any other action materially inimical to the best interests
of the Company 
  
 (c) Effect of Breach of
Noncompetition Provisions. In the event Employee breaches or otherwise fails to comply with the provisions of Section 11 or 12 below, then, in addition to any other remedies provided herein or at law or in equity, the Company shall have the
right to require return of any severance payment made to the Employee. Return of such Severance Payment pursuant to the preceding sentence shall not relieve Employee’s obligations pursuant to Sections 11 and 12 below. 
  
 Section 10. Assignment and Succession. 
  
 (a) The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon its respective successors and assigns, and Employee’s rights and obligations hereunder shall inure to the benefit of and be binding upon his successors and permitted assigns, whether
so expressed or not. 
  
 (b) Employee
acknowledges that the services to be rendered by him hereunder are unique and personal. Accordingly, Employee may not pledge or assign any of his rights or delegate any of his duties or obligations under this Agreement without the express prior
written consent of the Company. 

 (c) The Company may not assign its interest in or obligations under this Agreement
without the prior written consent of Employee. 
  
 Section 11.
Confidential Information. 
  
 (a)
Company Information. Employee agrees at all times during the term of his Relationship with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm,
corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which Employee obtains or creates, by whatever means. Employee further agrees not to make copies of such
Confidential Information except as authorized by the Company. Employee understands that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to,
research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom Employee called or with whom Employee became acquainted during the Relationship), prices and costs,
markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to
Employee by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by Employee during the period of the Relationship, whether or not during working hours. Employee understands that
“Confidential Information” includes, but is not limited to, information pertaining to any aspects of the Company’s business which is either information not known by actual or potential competitors of the Company or is
proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. Employee further understands that “Confidential Information” does not include any of the foregoing items which have
become publicly and widely known and made generally available through no wrongful act of Employee’s or of others who were under confidentiality obligations as to the item or items involved. 
  
 (b) Former Employer Information. Employee represents
that as an employee of the Company, he has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Employee in confidence or trust prior or subsequent to the commencement of
Employee’s Relationship with the Company, and Employee will not disclose to the Company, or induce the Company to use, any inventions, confidential or proprietary information or material belonging to any previous employer or any other party.

  
 (c) Third Party Information. Employee
recognizes that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only
for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out
Employee’s work for the Company consistent with the Company’s agreement with such third party. 

 Section 12. Return of Company Documents. Employee agrees that, at the time of termination
of his Relationship with the Company, he will deliver to the Company (and will not keep in his possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, laboratory notebooks, materials, flow charts; equipment, other documents or property, or reproductions of any aforementioned items developed by Employee pursuant to the Relationship or otherwise belonging to the
Company, its successors or assigns. Employee further agrees that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by
Company personnel at any time with or without notice. 
  
 Section
13. Noncompetition. Independent of any obligation under any other contract or agreement between Employee and the Company, for a period of one (1) year following the termination of Employee’s employment relationship with the
Company, Employee shall not, directly or indirectly, whether as an individual for his own account, or for or with any other person, firm, corporation, partnership, joint venture, association, or other entity whatsoever, which is or intends to be
engaged in biotechnology business and, more particularly, that provides technologies for DNA/RNA analysis and purification utilizing DHPLC technologies (provided, however, that the restrictions set forth in this clause shall not apply to involvement
that consists solely of “beneficially owning,” as such term is used in Rule 13d-3 promulgated under the Exchange Act 2% or less of the outstanding securities of any class of securities issued by a publicly-traded entity): 
  
 (a) Solicit, interfere with, or endeavor to entice away from
the Company, any person, firm, corporation, partnership, or entity of any kind whatsoever, which was or is a client or licensor of the Company, for which the Company performed services, with respect to any business, product or service that is
competitive to the products or services offered by the Company, or under development by the Company, as of the date of the termination of Employee’s relationship with the Company. This restriction shall apply only to such clients or licensors
of the Company as were serviced or solicited by Employee at any time during the one (1) year prior to the separation of Employee’s relationship with the Company, either as an independent contractor or as an employee of the Company; 

 
 (b) Solicit or endeavor to induce any of the
Company’s employees or consultants to terminate their relationship with the Company, or take away such employees or consultants, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for
Employee or for any other person or entity; 
  
 (c ) Induce or attempt to induce any supplier, licensee or other business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any such supplier, licensee or business
relation and the Company. 

 Section 14. Business Opportunity. Employee represents and acknowledges that
the foregoing restrictions will not prevent him from obtaining gainful employment in his field of expertise or cause him undue hardship; and that there are numerous other employment opportunities available to him that are not affected by the
foregoing restrictions. Employee further acknowledges that the foregoing restrictions are reasonable and necessary, in order to protect the Company’s legitimate interests, and that any violation thereof would result in irreparable injury to the
Company. 
  
 Section 15. Conflicts of Interest
Policies. Employee shall diligently adhere to the Company’s Conflict of Interest Policy as adopted by the Board and in effect from time to time. 
  
 Section 16. Arbitration and Equitable Remedies. 
  
 a) Except as provide in Section 16 (b) hereof, the parties agree that any dispute or controversy arising out of, relating to, or
concerning the interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Nebraska, in accordance with the Employment Dispute Resolution rules of the American Arbitration Association then in
effect. The arbitrator may grant injunctions or other relief in such dispute or controversy and the decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction. The Company and Employee shall each pay one-half of the costs and expenses of such arbitration, and each shall separately pay the fees and expenses of their respective legal counsel. 
  
 THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP. 
  
 (b) Notwithstanding paragraph (a) of this Section 16, the parties agree that, in the event of the breach or threatened breach of Sections
11, 13 or 14 of this Agreement by Employee, monetary damages alone would not be an adequate remedy to the Company and its Subsidiaries for the injury that would result from such breach, and that the Company and its Subsidiaries shall be entitled to
apply to any court of competent jurisdiction for specific performance and/or injunctive relief (without posting bond or other security) in order to enforce or prevent any violation of such provisions of this Agreement. Employee further agrees that
any such injunctive relief obtained by the Company or any of its Subsidiaries shall be in addition to monetary damages. 
  
 Section 17. Indemnification. The Company agrees to indemnify and hold harmless Employee for any and all actions taken by Employee in
carrying out his duties under this Agreement. 
  
 Section 18.
Entire Agreement. This Agreement represents the entire agreement between the parties relating to the subject matters covered hereby and shall supersede any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof in any way and shall not be amended or waived except in a writing signed by the parties hereto. 

 Section 19. Notices. Any notice or request required or permitted to be given hereunder
shall be in writing and will be deemed to have been given (i) when delivered personally, sent by telecopy (with hard copy to follow) or overnight express courier or (ii) five days following mailing by certified or registered mail, postage prepaid
and return receipt requested, to the addresses below unless another address is specified by such party in writing: 
  

			
	To the Company:	  	Transgenomic, Inc.
	 	  	12325 Emmet Street
	 	  	Omaha, NE 68164
	 	  	Attention: Chief Executive Officer
	 	  	Telephone: (402) 452-5400
	 	  	Telecopy: (402) 452-5447
		
	To the Employee:	  	Michael A. Summers
	 	  	201 Longwood Drive
	 	  	Papillion, NE 68133

  
 Section 20.
Headings. The article and section headings herein are for convenience of reference only and shall not define or limit the provisions hereof. 
  
 Section 21. Applicable Law. The corporate law of the State of Delaware will govern all questions concerning the relative rights of the
Company and its stockholders. All other questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal laws of the State of Nebraska. 
  
 Section 22. Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held prohibited by, invalid or unenforceable in any respect under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
  
 Section 23. Amendments and Waivers. Any provision of this Agreement may be amended or waived only with the
prior written consent of the Company and Employee. 
  
 Section 24.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party hereto.

  
 Section 25. Counterparts. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. 

 Section 26. Employee Representations. Employee hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is
a party or by which he is bound, (ii) Employee is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of Employee, enforceable in accordance with its terms. 
  
 Section 27. Survival. Sections 8, 11, 12 and 13 shall survive and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period. 
  
 IN WITNESS WHEREOF, the
Company has caused this Agreement to be signed by its duly authorized officer and Employee has signed this Agreement. 
  

			
	TRANSGENOMIC, INC.
		
	By	 	 /s/ Collin J. D’Silva

	Name:	 	Collin J. D’Silva
	Title:	 	CEO
	
	EMPLOYEE
	
	 /s/ Michael A. Summers

	Name:	 	 Michael A. SummersPromissory Note

 Exhibit 10.1 
  
 PROMISSORY NOTE 
  

			
	$1,650,000.00	  	Los Angeles, California
	 	  	August 17, 2004

  
 FOR VALUE
RECEIVED, the undersigned AXESSTEL, INC., a Nevada corporation, (“Borrower”) promises to pay to the order of WELLS FARGO HSBC TRADE BANK, NATIONAL ASSOCIATION (“Trade Bank”) at its office at Los Angeles,
California, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of One Million, Six Hundred and Fifty Thousand Dollars ($1,650,000.00), with
interest thereon as set forth herein. 
  
 DEFINITIONS 
  
 As used herein, the following terms shall have the meanings set forth after
each term below, and any other term defined in this Note shall have the meaning set forth at the place where such term is defined: 
  
 (a) “Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or
required by law to close. 
  
 (b) “Fixed Rate
Term” means a period commencing on a Business Day and continuing for one month, as designated by Borrower, during which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR;
provided, however, that no Fixed Rate Term may be selected for a principal amount less than Five Hundred Thousand Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any
Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 
  
 (c) “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) determined pursuant to the following
formula: 
  

			
	LIBOR =	 	 Base LIBOR

	 	 	100% - LIBOR Reserve Percentage

  
 (i) “Base
LIBOR” means the rate per annum for United States dollar deposits quoted by Trade Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Trade Bank for the purpose of calculating effective rates of
interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Trade Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Trade Bank
in its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market. 
  

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 (ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Trade Bank for expected changes in such reserve percentage during
the applicable Fixed Rate Term. 
  
 (d) “Prime
Rate” means at any time the rate of interest most recently announced within Trade Bank at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Trade Bank’s base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Trade Bank may designate. 
  
 INTEREST: 
  
 (a) Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day
year, actual days elapsed) either (i) at a fluctuating rate per annum zero percent (0.00%) above the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum determined by Trade Bank to be two percent (2.00%) above LIBOR in effect
on the first day of the applicable Fixed Rate Term. With respect to each LIBOR selection hereunder, Trade Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made
thereon on Trade Bank’s books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima fade evidence of the accuracy of the information noted. 
  
 (b) Selection of Interest Rate Options. At any time any portion of
this Note bears Interest determined in relation to LIBOR, it may be continued by Borrower at the end the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a
new Fixed Rate Term designated by Borrower. At any time any portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a
Fixed Rate Term designated by Borrower. At the time this Note is disbursed or Borrower wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give
Trade Bank notice specifying: (i) the interest rate option selected by Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone
(or such other electronic method as Trade Bank may permit) so long as, with respect to each LIBOR selection, (A) if requested by Trade Bank, Borrower provides to Trade Bank written confirmation thereof not later than three (3) Business Days after
such notice is given, and (B) such notice is given to Trade Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Trade Bank, at its sole option but without obligation to do so, accepts
Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Trade Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a 

 

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 redetermination by Trade Bank of the applicable fixed rate. lf no specific designation of interest is made at the time
this Note is disbursed or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for this Note or the principal amount to which such Fixed Rate Term applied. 
  
 (c) Taxes and Regulatory Costs. Borrower shall pay to Trade
Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or
foreign governmental authority and related in any manner to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar
requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Trade Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority
and related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Trade
Bank among its operations shall be conclusive and binding upon Borrower. 
  
 (d) Payment of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing August 31 2004, and, if the principal amount of this Note is paid in full earlier than
January 31, 2005, on the date on which the principal amount of this Note is paid in full. 
  
 (e) Default Interest. From and after the date the principal amount of this Note is payable in full, any principal balance of this Note outstanding after such date shall bear interest until paid in full
at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to four percent (4%) above the rate of interest from time to time applicable to this Note. 
  
 REPAYMENT AND PREPAYMENT: 
  
 (a) Repayment. Principal on this Note shall be immediately due
and payable in the amount of each payment received by Borrower (“A/R Receipts”) in respect of that certain invoice no. 063004TCVS in the amount of U.S. $1,666,500 for 15,150 units - CDMA - Phone AXW-P800B to Telcel C.A. in favor of
Borrower and dated June 30, 2004, including any replacements or substitutions thereto or thereof. Additionally, the outstanding principal balance of this Note shall be due and payable in full on demand, without presentment, notice of nonperformance,
notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, or if no demand is made before January 31, 2005, on January 31, 2005. 
  
 (b) Application of Payments. Each payment made on this Note shall be credited first to any interest accrued,
but not yet paid, on this Note and second to the outstanding principal balance of this Note. All payments credited to principal shall be applied to the oldest Fixed Rate Term first. 
  

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 (c) Prepayment. 
  
 Prime Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in
relation to the Prime Rate at any time, in any amount and without penalty. 
  
 LIBOR. Borrower may prepay principal on any portion of this Note at any time; provided, however, that each such prepayment shall be made in the minimum amount of One Hundred Thousand Dollars
($100,000.00) and provided further that if the outstanding principal balance of this Note is less than said minimum amount, the minimum prepayment amount shall be the entire outstanding principal balance of this Note. In consideration of the Trade
Bank providing this prepayment option to Borrower, or if any portion of this Note shall for any reason become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto, including, without limitation, by reason of
Borrower’s receipt of A/R Receipts, Borrower shall pay to Trade Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate
Term matures, calculated as follows for each such month: 
  

	 	(i)	Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had it remained outstanding until
the last day of the Fixed Rate Term applicable thereto. 

  

	 	(ii)	Subtract from the amount determined in (i) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such Fixed
Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. 

  

	 	(iii)	If the result obtained in (ii) for any month is greater than zero, discount that difference by LIBOR used in (ii) above. 

  
 Borrower acknowledges that prepayment of such amount may result in Trade Bank incurring
additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount
represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of Trade Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per
annum four percent (4.00%) above the Prime Rate in effect from time to time (computed on the basis of a 360-day year, actual days elapsed). 
  
 MISCELLANEOUS: 
  
 (a) Remedies. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges costs and
expenses, including, without limitation, reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note, including, without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in 
  

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 connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or
motion brought by Trade Bank or any other person) relating to Borrower or any other person or entity. 
  
 (b) Governing Law. This Note shall be governed by and construed In accordance with the laws of the State of California. 
  
 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above. 
  

			
	AXESSTEL, INC.
		
	By:	 	 /s/ David L. Morash

	Printed Name: David L. Morash
	Title: President & COO

  

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 ADDENDUM TO PROMISSORY NOTE 
  
 THIS ADDENDUM is attached to and made a part of that certain promissory note executed by AXESSTEL, INC.
(“Borrower”) and payable to WELLS FARGO HSBC TRADE BANK, NATIONAL ASSOCIATION (“Bank”), or order, dated as of August 17, 2004, in the principal amount of One Million, Six Hundred and Fifty Thousand Dollars ($1,650,000.00)
(the “Note”). 
  
 The following is hereby incorporated
into the Note: 
  
 ARBITRATION: 
  
 (a) Arbitration. The parties hereto agree, upon demand by any
party, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise arising out of or
relating to in any way (i) the loan and related loan and security documents which are the subject of this Note and its negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional credit. 
  
 (b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in California selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually
agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be
conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to, as applicable,
as the “Rules”). If there is any inconsistency between the terms hereof and the Rues, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following a demand by any other party
shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. § 91
or any similar applicable state law. 
  
 (c) No Waiver of
Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or
proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after the pendency of any arbitration
proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) and
(iii) of this paragraph. 
  

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 (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount in
controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00 shall
be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of California or a
neutral retired judge of the state or federal judiciary of California, in either case with a minimum of ten years experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine
whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion)
any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of California and may grant any remedy
or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose
sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. 
  
 (e) Discovery. In any arbitration proceeding discovery will be permitted in accordance with the Rules. All discovery shall be expressly
limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date and within 180 days of the filing of the dispute with the AAA. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is
available. 
  
 (f) Class Proceedings and
Consolidations. The resolution of any dispute arising pursuant to the terms of this Note shall be determined by a separate arbitration proceeding and such dispute shall not be consolidated with other disputes or included in any class
proceeding. 
  
 (g) Payment Of Arbitration Costs And
Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding. 
  
 (h) Real Property Collateral: Judicial Reference. Notwithstanding anything herein to the contrary, no dispute shall be submitted to arbitration if the dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien or security interest specifically elects in writing to proceed with the arbitration, or (ii) all parties to the arbitration waive any rights or
benefits that might accrue to them by virtue of the single action rule statute of California, thereby agreeing that all indebtedness and obligations of the parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable. If any such dispute is not 
  

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 submitted to arbitration, the dispute shall be referred to a referee in accordance with California Code of Civil
Procedure Section 638 et seq., and this general reference agreement is intended to be specifically enforceable in accordance with said Section 638. A referee with the qualifications required herein for arbitrators shall be selected
pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645.

  
 (i) Miscellaneous. To the maximum extent
practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may
disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by or between the
parties potentially applies to a dispute, the arbitration provision most directly related to the documents between the parties or the subject matter of the dispute shall control. This Note may be amended or modified only in writing signed by each
party hereto. If any provision of this Note shall be held to be prohibited by or invalid under applicable law such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or any remaining provisions of this Note. This arbitration provision shall survive termination, amendment or expiration of any of the documents or any relationship between the parties. 
  
 IN WITNESS WHEREOF, this Addendum has been executed as of the same date as
the Note. 
  

			
	AXESSTEL, INC.
		
	By:	 	 /s/ David L. Morash

	Printed Name: David L. Morash
	Title: President & COO

  

 -3-

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