Document:

CHANGE OF CONTROL-MIGLUCCI

 EXHIBIT 10.21 
  
 CHANGE OF CONTROL AGREEMENT 
  
 This Change of Control Agreement is made and entered into as of the day and
date noted on the last page hereof, by and between SciQuest, Inc. (the “Company”) and Suzanne Miglucci (the “Executive”), to be effective as of January 1, 2004. 
  
 W I T N E S S E
T H: 
  
 WHEREAS, the Company wishes to provide the Executive additional compensation in the event of a Change of Control of the Company and the happening of certain events; 
  
 WHEREAS, the Executive is willing to
remain employed with the Company for such additional compensation; and 
  
 NOW, THEREFORE, the parties hereto agree as follows: 
  
 1. DEFINITIONS. 
  
 A. AGREEMENT shall mean this Change of Control Agreement between the Executive and the Company. 
  
 B. BASE SALARY
shall mean the routine wages paid to Executive, exclusive of any employee benefits, bonuses, incentive compensation, or other non-recurring compensation, regardless of whether such compensation is taxable or not. However, notwithstanding the
foregoing, the term Base Salary shall include routine wages paid to the Executive even though the Executive may choose to contribute all or a portion of such wages on a pre-tax basis through a Code §125 cafeteria plan or a Code §401(k)
plan sponsored or maintained by a member of the Controlled Group. 
  
 C. BOARD shall mean the Board of Directors of the Company. 
  
 D. CAUSE shall mean any of the following: 
  
 (1) The willful and continued failure of Executive to substantially or satisfactorily perform his duties
under this Agreement as determined by the good-faith judgment of the Board of Directors, other than any such failure resulting from death or a Disability; 
  
 (2) The conviction of Executive based on, or Executive’s pleading nolo contendere to, an allegation of, fraud, embezzlement,
theft or another felony (excluding a traffic violation). 
  
 (3) Any willful and continued act or omission by Executive that, in the good-faith judgment of the Board, is demonstrably and materially injurious to the Company’s business or reputation. 
  
 (4) A willful and continued breach of any of the material
terms of this Agreement, and/or any attachments. 
  
 No act or omission under any
of clauses (1), (3) or (4) above shall constitute Cause (and will not be considered “willful and continued”) unless such act or omission continues after the Board (i) provides Executive written notice describing the particular act(s) or
omission(s) which the Board believes in good faith to constitute Cause, (ii) provides Executive an opportunity, as soon as reasonably possible, but in no event greater than thirty (30) days following that notice, to meet in person with the Board to
explain or defend the alleged act(s) or omission(s) and, to the extent 

 practicable, to cure such act(s) or omission(s), and (iii) following the expiration of such notice and cure period,
determines that such act(s) or omission(s) have not been cured. No act or omission shall be considered “willful” if Executive believed in good faith and based upon reasonable business judgment that such acts or omissions were in the best
interests of the Company. 
  
 E. CHANGE
OF CONTROL shall mean a change of control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act whether or
not the Company in fact is required to comply with Regulation 14A. Notwithstanding the foregoing, a Change of Control shall be deemed to have occurred if: 
  
 (1) any “person” (as used in Section 13(d) of the Exchange Act) becomes the “beneficial owner” (as determined pursuant
to Rule 13d-3 under the Exchange Act), directly or indirectly, of equity securities of the Company representing fifty and one-tenth percent (50.1%) or more of the combined voting power of the Company’s then outstanding equity securities; or

  
 (2) the Company shall reorganize or merge
with or consolidate into any other entity, other than a reorganization, merger, or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding immediately thereafter
securities representing less than fifty percent (50.0%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such reorganization, merger, or consolidation; or 
  
 (3) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition of all or substantially all of the Company’s assets. 
  
 For purposes of the definition of Change of Control, a person has “control” over another person if that first person has the power, directly or indirectly, to
direct the management and policies of that other person. However, notwithstanding the foregoing, no Change of Control shall be deemed to occur under this Agreement unless the Change of Control results in proceeds to the Company and/or its
stockholders in an aggregate amount such that the implied enterprise value of the Company is at least equal to the product of (i) the number of issued and outstanding shares of the Company’s common stock as of the end of the Company’s
fiscal quarter immediately preceding the initial announcement of the Change of Control multiplied by (ii) the average closing price of the Company’s common stock for the last thirty (30) trading days in the Company’s fiscal quarter
immediately preceding the initial announcement of the Change of Control. 
  
 F. CHANGE OF CONTROL BENEFIT shall mean, with respect to a Change of Control, a lump sum cash payment in an amount equal to the
annual base salary being paid to the Executive by all members of the Controlled Group immediately prior to his termination of employment with all members of the Controlled Group; provided, however, that if the Executive was receiving an annual base
salary at any time during the two year period immediately prior to such date of termination that was higher than such annual base salary, such higher annual base salary shall be used to determine the Executive’s Change of Control Benefit.

  
 G. CODE shall mean
the Internal Revenue Code of 1986, as amended. 
  
 H.
COMPANY shall mean SciQuest, Inc., its successors and assigns, including without limitation any successor resulting from a Change of Control. 
  
 I. CONTROLLED GROUP shall mean the Company and any other entity
whose employees would be required to be aggregated with the employees of the Company under Code §414(b), (c), (m) or (o). 

 J. DISABILITY shall mean, with respect to the Executive, a
permanent and total disability, which shall be deemed to exist (i) if Executive is unable reasonably to perform his or her then current duties and responsibilities because of any medically determinable physical or mental incapacity that has lasted
or can reasonably be expected to last for at least one hundred eighty (180) consecutive days and (ii) a qualified independent physician selected by or acceptable to the Company and Executive (or his legal representative) confirms such disability. If
Executive (or his legal representative) and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician, and those two physicians shall select a third. The determination of Disability by such third
physician, made in writing to the Company and Executive, shall be final and conclusive for all purposes of this Agreement. In this circumstance, Executive shall, if there is any question about his Disability, submit to a physical examination by such
third physician. All costs of the physician(s) shall be borne by the Company. 
  
 K. EXECUTIVE shall mean Suzanne Miglucci. 
  
 L. EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended. 
  
 M. GOOD REASON
shall mean any of the following: 
  
 (1) the
Company materially reduces Executive’s then current duties or responsibilities, provided that any change in Executive’s title and reporting level within the Controlled Group that results directly from the occurrence of a Change of Control
shall not, in and of itself, be sufficient to qualify as Good Reason under this clause (1); or 
  
 (2) the Company reduces Executive’s then current Base Salary; or 
  
 (3) the Company materially reduces Executive’s benefits or rights under any executive bonus or other
incentive compensation plan; or 
  
 (4) the
Company has failed to timely pay Executive any amounts otherwise vested and due, including any bonus, and such failure continues for ten (10) business days following written notice of nonpayment to the Company; 
  
 (5) the Company has taken action which would adversely
affect Executive’s participation in, or materially reduce Executive’s benefits under any employee benefit plan sponsored and maintained by the Company, except that any reduction, modification or elimination of a benefit shall not be
considered under this clause (5) if such reduction, modification or elimination is applied to all similarly situated employees of the Company or to all similarly situated executive employees of the Company; or 
  
 (6) the Company materially breaches any employment agreement
between the Executive and the Company; or 
  
 (7)
the Company requires Executive to relocate more than 50 miles from the location of the Company’s offices on the date of this Agreement. 
  
 Except as expressly provided in clause (4) above, none of the foregoing clauses shall constitute “Good Reason” unless Executive (i) provides the Board written
notice of the occurrence of any act(s) or omissions(s) described above that may constitute Good Reason describing the particular act(s) or omission(s) which Executive believes in good faith to constitute Good Reason, (ii) provides the Board an
opportunity, within thirty (30) days following delivery of that notice, for the Board to explain or defend the alleged act(s) or omission(s) and to cure such act(s) or omission(s), and (iii) following the expiration of such notice and cure period,
determines that such act(s) or omission(s) have not been cured. 

 2. PAYMENT OF CHANGE OF CONTROL
BENEFIT. 
  
 A.
CONDITIONS FOR CHANGE OF CONTROL BENEFIT. In consideration of the continued employment of the Executive by the Company, the Company shall pay the
Executive a Change of Control Benefit if and only if: 
  
 (1) The Executive remains employed with the Company or another member of the Controlled Group until at least three (3) months prior to the occurrence of a Change of Control during the term of this Agreement; and 
  
 (2) The Executive’s employment with all members of the
Controlled Group is terminated as of, within twenty-four (24) months following, or within three (3) months immediately preceding, the occurrence of such Change of Control; and 
  
 (3) The Executive’s termination of employment is
either: 
  
 (i) by a member of the Controlled
Group without Cause; or 
  
 (ii) by Executive for
Good Reason; or 
  
 (iii) by reason of
Executive’s death or Disability; and 
  
 (4) The Executive executes a valid and enforceable separation and release agreement in a form prepared by the Company (or other Controlled Group member) whereby the Executive releases the Company and all other
Controlled Group members from any and all liability and claims of any kind which Executive may have relating to his or her employment with the Company or other Controlled Group members. 
  
 B. TIMING OF PAYMENT OF CHANGE
OF CONTROL BENEFIT. The Executive’s Change of Control Benefit shall be paid within five (5) days of the date on which the Executive executes the separation agreement and general release
specified in clause (4) of Paragraph A above and such executed document becomes effective and irrevocable. 
  
 C. WITHHOLDINGS. The Executive’s Change of Control Benefit shall be subject to all applicable federal, state and local
withholdings (e.g., taxes and social security). 
  
 D.
GOLDEN PARACHUTE LIMITATION ON PAYMENT. Notwithstanding any provision of this Agreement to the contrary, if the Change of Control Benefit to be paid to the
Executive under this Agreement would somehow cause the Executive to be subject to the excise tax imposed by Code §4999 on golden parachute payments, then, to the extent that the total “parachute payments” (as defined in Code
§280G(b)(2)) which would be made to the Executive are greater than three (3) times the Executive’s “base amount” (as defined in Code §280G(b)(3)), the Change of Control Benefit to be paid under this Agreement, to the extent
that it would constitute a “parachute payment,” shall be reduced to the extent necessary so that the total “parachute payments” which would be paid to the Executive shall not exceed three (3) times the Executive’s “base
amount.” The Company shall have complete discretion to appoint competent tax experts to make the calculations required by this limitation, and the calculations made by such experts shall be final and binding upon both the Company and the
Executive. 
  
 3. TERM OF
AGREEMENT. This Agreement shall continue in effect for a period of one (1) year from its effective date as noted on the first page hereof (the “Initial Period”). Upon expiration of such initial period (or any renewal
period, as described below), this Agreement shall automatically renew for a one-year period unless either the Executive or the Company notifies the other prior to the end of the initial period or the renewal period that the Agreement will not be
renewed. This Agreement shall only be effective during the initial period and any renewal periods thereafter, and will not apply with respect to any Change of Control occurring thereafter.  

 4. MISCELLANEOUS PROVISIONS. 
  
 A. SET OFF. If the Executive has
any outstanding obligations to the Company at the time his Change of Control Benefit should become payable under this Agreement, the Executive hereby acknowledges that the Company is authorized to deduct such amounts owed to the Company from the
Executive’s Change of Control Benefit. 
  
 B.
ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties concerning the subject matter of this Agreement, and supersedes any prior communications, agreements or understandings,
whether oral or written, between the parties relating to the subject matter of this Agreement. However, notwithstanding the foregoing, this Agreement does not supersede or modify any existing written employment agreement or similar agreement between
the Executive and the Company, including, but not limited to, any agreement concerning confidential information or post-termination obligations to the Company. 
  

C. GOVERNING LAW. The parties hereto agree that the laws of the State of North Carolina shall govern this
Agreement, and that if North Carolina’s conflict of law rules would apply another state’s law, the parties agree that North Carolina law shall still govern. 
  
 D. SUCCESSORS AND ASSIGNS. This Agreement shall be assignable to,
and shall inure to the benefit of, the Company’s successors and assigns, including, without limitation, successors through merger, name change, or consolidation, and shall be binding upon the heirs and assigns of the Executive. The Executive
shall not have the right to assign his or her rights under this Agreement. 
  
 E. CONFIDENTIALITY. The terms of this Agreement are highly confidential. Accordingly, Executive agrees and acknowledges that neither he or she, nor their spouse or others acting on their
behalf will make disclosures concerning the existence or terms of this Agreement to any person or entity, except (1) your spouse, (2) your attorneys, accountants or financial advisors, but only to the extent that disclosure is necessary to obtain
professional services from such persons, or (3) a governmental agency or court of competent jurisdiction pursuant to a legally enforceable subpoena. If disclosure is made by Executive to any person described in clauses (1) or (2) above, the
Executive will inform such person of this confidentiality provision and will receive the individual’s agreement not to make any use, disclosure or announcement concerning this Agreement in violation of this confidentiality restriction.

  
 F. EMPLOYMENT
TERMS. Nothing contained in this Agreement shall be construed to give the Executive any rights to continued employment with the Company or any member of the Controlled Group. 
  

					
	5. MANDATORY ARBITRATION OF DISPUTES. Except as provided in this Section 5, any dispute, controversy
or claim arising out of or in connection with, or relating to, this Agreement or any breach or alleged breach hereof, shall be submitted to and settled by binding arbitration administered by the American Arbitration Association (“AAA”)
under its Commercial Arbitration Rules (the “Rules”). Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. Notwithstanding the then-current Rules, the following shall apply with respect
to arbitration proceedings, unless expressly agreed to otherwise by the parties:	 	Initials of Parties:  
  

 

	 	
	 	

	 	Executive	 	Company

  
 A. The arbitration
proceeding shall be held in Wake County, North Carolina. The arbitration shall be conducted by a single arbitrator selected in accordance with the Rules. 

 B. The arbitrator shall be and remain at all times wholly independent and impartial. 
  
 C. The administrative costs of the arbitration proceeding and the
arbitrator’s compensation shall be allocated equally between the parties by the AAA. The arbitrator shall award to the prevailing party, if any, as determined by the arbitrator, all fees, expenses, and costs. “Fees, expenses, and
costs” mean all reasonable pre-award expenses of the arbitration, including without limitation the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, witness fees, and
attorneys’ fees and expenses. 
  
 D. The decision of the
arbitrator shall be in writing, and shall be final and binding upon the parties. 
  
 E. It is the parties’ intent that the arbitration process proceed as quickly as possible. Accordingly, the party filing the demand for arbitration (the claimant) shall submit a statement of its position along
with all supporting documents and all other documents that it intends to introduce into evidence at the hearing within ten (10) business days after the AAA notifies the parties of the appointment of the arbitrator. The respondent shall submit a
statement of its position along with all supporting documents and all other documents that it intends to introduce into evidence at the hearing within ten (10) business days after receiving the claimant’s statement of position and documents. If
the respondent includes a counterclaim against the claimant, the claimant shall submit a statement of its position on that counterclaim, along with all supporting documents and all other documents that it intends to introduce into evidence at the
hearing within ten (10) business days after receiving the claimant’s statement of position and documents. Each party shall have the right to take one deposition of the other. No further discovery shall be allowed. A party will not be allowed to
introduce documents into evidence at the hearing unless they were provided to the other party with its statement of position, as described above. In order to be considered timely submitted, the submission must be delivered by hand delivery on the
date it is due, or dispatched via a recognized overnight delivery service the day before the submission is due, in such manner that it is reasonable to expect that delivery will be made on the due date. All such submissions shall simultaneously be
filed with the arbitrator. 
  
 F. The arbitration hearing shall be
held within twenty (20) business days after the date the last statement of position is submitted or was due to be submitted. The arbitrator shall render his or her award within ten (10) business days after conclusion of the hearing. The arbitrator
shall agree to comply with this schedule before accepting appointment. However, the time limits set forth in paragraphs E and G of this Section 5 may be extended by agreement of the parties or by the arbitrator if the arbitrator deems such extension
to be necessary. 
  
 G. The arbitrator shall not have the
authority to award punitive damages. 
  
 H. Any claim or action
must be brought within one (1) year after the cause of action accrues. 
  
 IN WITNESS WHEREOF, the Company and the Executive have executed this agreement, and hereunto set their hands and seals and initials, as of the date first written above.

  

									
	Executive:	 	 	 	Company:
			
	 	 	 	 	SCIQUEST, INC.
				
	
	 	 	 	 By:
	 	

				
	SUZANNE MIGLUCCI	 	 	 	 Its:Securities Purchase Agreement

 Exhibit 10.1 
  
 AXESSTEL, INC. 
  
 SECURITIES PURCHASE AGREEMENT 
  
 March 16, 2004 

 TABLE OF CONTENTS 
  

							
	 	  	 	 	 	  	Page

	1.	  	Agreement to Sell and Purchase	  	1
			
	2.	  	Fees and Warrant	  	1
			
	3.	  	Closing, Delivery and Payment	  	2
	 	  	3.1.	 	Closing	  	2
	 	  	3.2.	 	Delivery	  	2
			
	4.	  	Representations and Warranties of the Company	  	2
	 	  	4.1.	 	Organization, Good Standing and Qualification	  	2
	 	  	4.2.	 	Subsidiaries	  	3
	 	  	4.3.	 	Capitalization; Voting Rights	  	3
	 	  	4.4.	 	Authorization; Binding Obligations	  	4
	 	  	4.5.	 	Liabilities	  	4
	 	  	4.6.	 	Agreements; Action	  	4
	 	  	4.7.	 	Obligations to Related Parties	  	5
	 	  	4.8.	 	Changes	  	5
	 	  	4.9.	 	Title to Properties and Assets; Liens, Etc	  	6
	 	  	4.10.	 	Intellectual Property	  	6
	 	  	4.11.	 	Compliance with Other Instruments	  	7
	 	  	4.12.	 	Litigation	  	7
	 	  	4.13.	 	Tax Returns and Payments	  	8
	 	  	4.14.	 	Employees	  	8
	 	  	4.15.	 	Registration Rights and Voting Rights	  	8
	 	  	4.16.	 	Compliance with Laws; Permits	  	8
	 	  	4.17.	 	Environmental and Safety Laws	  	9
	 	  	4.18.	 	Valid Offering	  	9
	 	  	4.19.	 	Full Disclosure	  	9
	 	  	4.20.	 	Insurance	  	9
	 	  	4.21.	 	SEC Reports	  	10
	 	  	4.22.	 	Listing	  	10
	 	  	4.23.	 	No Integrated Offering	  	10
	 	  	4.24.	 	Stop Transfer	  	10
	 	  	4.25.	 	Dilution	  	10
			
	5.	  	Representations and Warranties of the Purchaser	  	10
	 	  	5.1.	 	No Shorting	  	11
	 	  	5.2.	 	Requisite Power and Authority	  	11
	 	  	5.3.	 	Investment Representations	  	11
	 	  	5.4.	 	Purchaser Bears Economic Risk	  	11
	 	  	5.5.	 	Acquisition for Own Account	  	11
	 	  	5.6.	 	Purchaser Can Protect Its Interest	  	11
	 	  	5.7.	 	Accredited Investor	  	12
	 	  	5.8.	 	Legends	  	12

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	 	 	  	Page

	6.	  	Covenants of the Company	  	13
	 	  	6.1.	 	Stop-Orders	  	13
	 	  	6.2.	 	Listing	  	13
	 	  	6.3.	 	Market Regulations	  	13
	 	  	6.4.	 	Reporting Requirements	  	13
	 	  	6.5.	 	Use of Funds	  	13
	 	  	6.6.	 	Access to Facilities	  	13
	 	  	6.7.	 	Taxes	  	14
	 	  	6.8.	 	Insurance	  	14
	 	  	6.9.	 	Intellectual Property	  	14
	 	  	6.10.	 	Properties	  	14
	 	  	6.11.	 	Confidentiality	  	14
	 	  	6.12.	 	Required Approvals	  	14
	 	  	6.13.	 	Reissuance of Securities	  	15
	 	  	6.14.	 	Opinion	  	15
			
	7.	  	Covenants of the Purchaser	  	15
	 	  	7.1.	 	Confidentiality	  	15
	 	  	7.2.	 	Non-Public Information	  	15
	 	  	7.3.	 	No Shorting	  	15
			
	8.	  	Covenants of the Company and Purchaser Regarding Indemnification	  	15
	 	  	8.1.	 	Company Indemnification	  	15
	 	  	8.2.	 	Purchaser’s Indemnification	  	16
	 	  	8.3.	 	Procedures	  	16
			
	9.	  	Conversion of Convertible Note	  	16
	 	  	9.1.	 	Mechanics of Conversion	  	16
	 	  	9.2.	 	Maximum Conversion	  	17
			
	10.	  	Registration Rights	  	18
	 	  	10.1.	 	Registration Rights Granted	  	18
	 	  	10.2.	 	Indemnification	  	18
	 	  	10.3.	 	Offering Restrictions	  	20
			
	11.	  	Miscellaneous	  	20
	 	  	11.1.	 	Governing Law	  	20
	 	  	11.2.	 	Survival	  	21
	 	  	11.3.	 	Successors	  	21
	 	  	11.4.	 	Entire Agreement	  	21
	 	  	11.5.	 	Severability	  	21
	 	  	11.6.	 	Amendment and Waiver	  	21
	 	  	11.7.	 	Delays or Omissions	  	21
	 	  	11.8.	 	Notices	  	21
	 	  	11.9.	 	Attorneys’ Fees	  	22
	 	  	11.10.	 	Titles and Subtitles	  	22
	 	  	11.11.	 	Facsimile Signatures; Counterparts	  	22
	 	  	11.12.	 	Broker’s Fees	  	22
	 	  	11.13.	 	Construction	  	22

  

 ii 

 SECURITIES PURCHASE AGREEMENT 
  
 This Securities Purchase Agreement (this “Agreement”) is made and entered into as of March 16,
2004, by and between AXESSTEL, INC., a Nevada corporation (the “Company”), and Laurus Master Fund, Ltd., a Cayman Islands company (the “Purchaser”). 
  
 Recitals 
  
 Whereas, the Company has authorized the sale to the Purchaser of a Convertible Term Note in the aggregate principal
amount of three million dollars ($3,000,000) (the “Note”), which Note is convertible into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at a fixed conversion price of
$3.16 per share of Common Stock (“Fixed Conversion Price”); 
  
 Whereas, the Company wishes to issue a warrant to the Purchaser to purchase up to 100,000 shares of the Company’s Common Stock in consideration of Purchaser’s agreement to purchase of the Note;

  
 Whereas, Purchaser desires to purchase the Note and
Warrant on the terms and conditions set forth herein; and 
  
 Whereas, the Company desires to issue and sell the Note and Warrant to Purchaser on the terms and conditions set forth herein. 
  
 Agreement 
  
 Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set forth in this Agreement, on the Closing Date (as defined in Section 3),
the Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Company a Note in the amount of $3,000,000, convertible in accordance with the terms thereof into shares of the Company’s Common Stock. The Note
purchased on the Closing Date shall be known as the “Offering.” A form of the Note is annexed hereto as Exhibit A. The Note will have a Maturity Date (as defined in the Note) thirty-six (36) months from the date of issuance.
Collectively, the Note and Warrant (as defined in Section 2) and Common Stock issuable in payment of the Note, upon conversion of the Note and upon exercise of the Warrant are referred to as the “Securities”. 
  
 2. Fees and Warrant. On the Closing Date: 
  
 2.1. The Company will issue and deliver to the Purchaser a Warrant to
purchase up to 100,000 shares of Common Stock in connection with the Offering (the “Warrant”) pursuant to Section 1 hereof. A form of Warrant is annexed hereto as Exhibit B. All the representations, covenants, warranties,
undertakings, and indemnification, and other rights made or granted to or for the benefit of the Purchaser by the Company are hereby also made and granted in respect of the Warrant and shares of the Company’s Common Stock issuable upon exercise
of the Warrant (the “Warrant Shares”). 
  

 1 

 2.2. Upon execution and delivery of this Agreement by the Company and Purchaser, the Company shall
pay to Laurus Capital Management, LLC, manager of Purchaser (i) a closing payment in an amount equal to three and six-tenths percent (3.6%) of the aggregate principal amount of the Note. The foregoing fee is referred to herein as the
“Closing Payment”. 
  
 2.3. The Company
shall reimburse the Purchaser for its reasonable legal fees for services rendered to the Purchaser in preparation of this Agreement and the Related Agreements (as hereinafter defined), and expenses in connection with the Purchaser’s due
diligence review of the Company and relevant matters. Amounts required to be paid hereunder will be paid at the Closing and shall not exceed $22,000 for legal expenses and $17,500 for performing due diligence inquiries on the Company. 
  
 2.4. The Closing Payment, legal fees and due diligence fees (net of
deposits previously paid by the Company) shall be paid at closing out of funds held pursuant to a Funds Escrow Agreement of even date herewith among the Company, Purchaser, and an Escrow Agent (the “Funds Escrow Agreement”) and a
disbursement letter (the “Disbursement Letter”). 
  
 3. Closing, Delivery and Payment. 
  
 3.1.
Closing. Subject to the terms and conditions herein, the closing of the transactions contemplated hereby (the “Closing”), shall take place on the date hereof, at such time or place as the Company and Purchaser may
mutually agree (such date is hereinafter referred to as the “Closing Date”). 
  
 3.2. Delivery. Pursuant to the Funds Escrow Agreement in the form attached hereto as Exhibit C, at the Closing, the Company will deliver to the Purchaser, among other things, the Note and the
Warrant and the Purchaser will deliver to the Company, among other things, the amounts set forth in the Disbursement Letter by certified funds or wire transfer. 
  

4. Representations and Warranties of the Company. 
  
 The Company hereby represents and warrants to the Purchaser as of the date of this Agreement as set forth below which disclosures are supplemented by, and
subject to the Company’s filings under the Securities Exchange Act of 1934 (collectively, the “Exchange Act Filings”), copies of which have been made available to the Purchaser, and the Schedule of Exceptions attached hereto.

  
 4.1. Organization, Good Standing and
Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company has the corporate power and authority to own and operate its properties and assets, to carry on
its business as presently conducted, to execute and deliver this Agreement, and the Note and the Warrant to be issued in connection with this Agreement, the Security Agreement relating to the Note even date herewith between the Company and the
Purchaser, the Registration Rights Agreement relating to the Securities of even date herewith between the Company and the Purchaser and all other agreements referred to herein (collectively, the 
  

 2 

 “Related Agreements”), to issue and sell the Note and the shares of Common Stock issuable upon
conversion of the Note (the “Note Shares”), to issue and sell the Warrant and the Warrant Shares, and to carry out the provisions of this Agreement and the Related Agreements. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to
do so would not have a material adverse effect on the Company or its business. 
  
 4.2. Subsidiaries. Except as disclosed on Schedule 4.2, the Company does not own or control any equity security or other interest of any other corporation, limited partnership or other business
entity. 
  
 4.3. Capitalization; Voting Rights.

  
 (a) The authorized capital stock of the
Company, as of the date hereof consists of Fifty Million (50,000,000) shares, all of which are shares of Common Stock, par value $0.001 per share, Seven Million Nine Hundred Thirty Six Thousand Eight Hundred Seventy One (7,987,451) shares of which
are issued and outstanding. 
  
 (b) Except as
disclosed on Schedule 4.3, other than (i) the shares reserved for issuance under the Company’s stock option plans; and (ii) shares which may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding
options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities.
Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note or Warrant, or the issuance of any of the Note Shares or Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a
change in the price or number of any securities of the Company outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. 
  
 (c) All issued and outstanding shares of the Company’s Common Stock (i) have been duly authorized and
validly issued and are fully paid and nonassessable and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. 
  
 (d) The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in
the Company’s Articles of Incorporation (the “Charter”). The Note Shares and Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Company’s
Charter, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances other than those created by the Purchaser; provided, however, that the Securities may be subject to
restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. 
  

 3 

 4.4. Authorization; Binding Obligations. All corporate action on the part of the Company,
its officers and directors necessary for the authorization of this Agreement and the Related Agreements, the performance of all obligations of the Company hereunder at the Closing and, the authorization, sale, issuance and delivery of the Note and
Warrant has been taken or will be taken prior to the Closing. The Agreement and the Related Agreements, when executed and delivered and to the extent it is a party thereto, will be valid and binding obligations of the Company enforceable in
accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) general principles of equity that
restrict the availability of equitable or legal remedies. The sale of the Note and the subsequent conversion of the Note into Note Shares are not, and will not be, subject to any preemptive rights or rights of first refusal that have not been
properly waived or complied with. The issuance of the Warrant and the subsequent exercise of the Warrant for Warrant Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or
complied with. 
  
 4.5. Liabilities. The Company, to
the best of its knowledge, has no material contingent liabilities, except current liabilities incurred in the ordinary course of business and liabilities disclosed in any Exchange Act Filings. 
  
 4.6. Agreements; Action. Except as set forth on Schedule 4.6
or as disclosed in any Exchange Act Filings: 
  
 (a) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or to its knowledge by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $50,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) the transfer or
license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of “off the shelf” or other standard products), or (iii) provisions restricting the
development, manufacture or distribution of the Company’s products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights. 
  
 (b) Since December 31, 2002, the Company has not (i) declared or paid any dividends, or authorized or made
any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case
of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. 
  
 (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions 
  

 4 

 involving the same person or entity (including persons or entities the Company has reason to believe are
affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. 
  
 4.7. Obligations to Related Parties. Except as set forth on Schedule 4.7, there are no obligations of the Company to officers,
directors, stockholders or employees of the Company other than (a) for payment of salary for services rendered and for bonus payments, (b) reimbursement for reasonable expenses incurred on behalf of the Company, (c) for other standard employee
benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company), and (d) obligations listed in the Company’s financial
statements or disclosed in any of its Exchange Act Filings. Except as described above or set forth on Schedule 4.7, none of the officers, directors or, to the best of the Company’s knowledge, key employees or stockholders of the Company
or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $50,000 or have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than 1% of such company) which may compete with the Company.
Except as described above, no officer, director or to the Company’s knowledge, stockholder, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company and no agreements,
understandings or proposed transactions are contemplated between the Company and any such person. Except as set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.

  
 4.8. Changes. Since September 30, 2003, except
as disclosed in any Exchange Act Filing or in any Schedule to this Agreement or to any of the Related Agreements, there has not been: 
  
 (a) Any change in the assets, liabilities, financial condition, prospects or operations of the Company, other than changes in the ordinary
course of business, none of which individually or in the aggregate has had or is reasonably expected to have a material adverse effect on such assets, liabilities, financial condition, prospects or operations of the Company; 
  
 (b) Any resignation or termination of any officer, key
employee or group of employees of the Company; 
  
 (c) Any material change, except in the ordinary course of business, in the contingent obligations of the Company by way of guaranty, endorsement, indemnity, warranty or otherwise; 
  
 (d) Any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the properties, business or prospects or financial condition of the Company; 
  

 5 

 (e) Any waiver by the Company of a valuable right or of a material debt owed to it;

  
 (f) Any direct or indirect material loans
made by the Company to any stockholder, employee, officer or director of the Company, other than advances made in the ordinary course of business; 
  
 (g) Any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder; 
  
 (h) Any declaration or payment of any dividend or other
distribution of the assets of the Company; 
  
 (i) Any labor organization activity related to the Company; 
  
 (j) Any debt, obligation or liability incurred, assumed or guaranteed by the Company, except those for immaterial amounts and for current liabilities incurred in the ordinary course of business; 
  
 (k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets; 
  
 (l) Any change in any material agreement to which the Company is a party or by which it is bound which may materially and adversely affect the business, assets, liabilities, financial condition, operations or
prospects of the Company; 
  
 (m) Any other event
or condition of any character that, either individually or cumulatively, has or may materially and adversely affect the business, assets, liabilities, financial condition, prospects or operations of the Company; or 
  
 (n) Any arrangement or commitment by the Company to do any
of the acts described in subsection (a) through (m) above. 
  
 4.9. Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule 4.9, the Company has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject
to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent, (b) minor liens and encumbrances which do not materially detract from the value of the property subject
thereto or materially impair the operations of the Company, and (c) those that have otherwise arisen in the ordinary course of business. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the
Company are in good operating condition and repair, normal wear and tear excepted, and are reasonably fit and usable for the purposes for which they are being used. Except as set forth on Schedule 4.9, the Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound. 
  

 6 

 4.10. Intellectual Property. 
  
 (a) The Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and to the Company’s knowledge as presently proposed to be conducted (the “Intellectual
Property”), without any known infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such
licenses or agreements arising from the purchase of “off the shelf” or standard products. 
  
 (b) The Company has not received any communications alleging that the Company has violated any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor is the Company aware of any basis therefor. 
  
 (c) The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of
its employees made prior to their employment by the Company, except for inventions, trade secrets or proprietary information that have been rightfully assigned to the Company. 
  
 4.11. Compliance with Other Instruments. Except as set forth on Schedule 4.11, the Company is not in
violation or default of any term of its Charter or Bylaws, or of any material provision of any mortgage, indenture, contract, agreement, instrument or contract to which it is party or by which it is bound or of any judgment, decree, order or writ.
The execution, delivery and performance of and compliance with this Agreement and the Related Agreements to which it is a party, and the issuance and sale of the Note by the Company and the other Securities by the Company each pursuant hereto, will
not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to the Company, its business or operations or
any of its assets or properties. 
  
 4.12.
Litigation. Except as set forth on Schedule 4.12 hereto, there is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company that could be reasonably expected
to prevent the Company from entering into this Agreement or the Related Agreements, or consummating the transactions contemplated hereby or thereby, or which might result, either individually or in the aggregate, in any material adverse change in
the assets, condition, affairs or prospects of the Company, financially or otherwise, or any change in the current equity ownership of the Company, nor is the Company aware that there is any basis for any of the foregoing. The Company is not a party
or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or which the Company intends
to initiate. 
  

 7 

 4.13. Tax Returns and Payments. The Company has timely filed all tax returns (federal,
state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and to the Company’s knowledge all other taxes due and payable by the Company on or before the Closing, have been paid
or will be paid prior to the time they become delinquent. Except as set forth on Schedule 4.13, the Company has not been advised (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof, or
(b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not
adequately provided for. 
  
 4.14. Employees. Except
as set forth on Schedule 4.14, the Company has no collective bargaining agreements with any of its employees. There is no labor union organizing activity pending or, to the Company’s knowledge, threatened with respect to the Company.
Except as disclosed in the Exchange Act Filings or on Schedule 4.14, the Company is not a party to or bound by any currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract,
proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company; and to the Company’s knowledge the continued employment by the Company of its present
employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company is not aware that any of its employees is obligated under any contract (including licenses, covenants
or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company. Except for employees who have a current effective employment
agreement with the Company, no employee of the Company has been granted the right to continued employment by the Company or to any material compensation following termination of employment with the Company. Except as set forth on Schedule
4.14, the Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key
employee or group of employees. 
  
 4.15. Registration
Rights and Voting Rights. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, the Company is presently not under any obligation, and has not granted any rights, to register any of the Company’s
presently outstanding securities or any of its securities that may hereafter be issued. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the Company’s knowledge, no stockholder of the Company has
entered into any agreement with respect to the voting of equity securities of the Company. 
  
 4.16. Compliance with Laws; Permits. Except as set forth on Schedule 4.16, to its knowledge, the Company is not in violation in any material respect of any applicable statute, rule, regulation,
order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which violation would materially and adversely affect the business,
assets, liabilities, 
  

 8 

 financial condition, operations or prospects of the Company. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement and the issuance of any of the Securities, except such as has been duly and
validly obtained or filed, or with respect to any filings that must be made after the Closing, as will be filed in a timely manner. The Company has all material franchises, permits, licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which would materially and adversely affect the business, properties, prospects or financial condition of the Company. 
  
 4.17. Environmental and Safety Laws. The Company is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and to its knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. Except as set forth on Schedule
4.17, no Hazardous Materials (as defined below) are used or have been used, stored, or disposed of by the Company or, to the Company’s knowledge, by any other person or entity on any property owned, leased or used by the Company. For the
purposes of the preceding sentence, “Hazardous Materials” shall mean (a) materials which are listed or otherwise defined as “hazardous” or “toxic” under any applicable local, state, federal and/or foreign laws and
regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the control of hazardous wastes, or other activities involving hazardous substances, including building
materials, or (b) any petroleum products or nuclear materials. 
  
 4.18. Valid Offering. Assuming the accuracy of the representations and warranties of the Purchaser contained in this Agreement, the offer, sale and issuance of the Securities will be exempt from the registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all
applicable state securities laws. 
  
 4.19. Full
Disclosure. The Company has provided the Purchaser with all information requested by the Purchaser in connection with its decision to purchase the Note and Warrant. Neither this Agreement, the exhibits and schedules hereto, the Related
Agreements nor any other document delivered by the Company to Purchaser or its attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit
to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading. Any financial projections and other estimates provided to the Purchaser by the
Company were based on the Company’s experience in the industry and on assumptions of fact and opinion as to future events which the Company, at the date of the issuance of such projections or estimates, believed to be reasonable. 
  
 4.20. Insurance. The Company has general commercial, product
liability, fire and casualty insurance policies with coverages which the Company believes are customary for companies similarly situated to the Company in the same or similar business. 
  

 9 

 4.21. SEC Reports. Except as set forth on Schedule 4.21, the Company has filed all
proxy statements, reports and other documents required to be filed by it under the Exchange Act. The Company has made available to the Purchaser copies of (i) its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2002 and (ii) its
Quarterly Reports on Form 10-QSB for the fiscal quarters ended March 31, 2003, June 30, 2003 and September 30, 2003 and the Form 8-K filings which it has made during 2003 to date (collectively, the “SEC Reports”). Except as set
forth on Schedule 4.21, each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the
SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. 
  
 4.22.
Listing. The Company’s Common Stock is listed for trading on the OTC Bulletin Board and satisfies all requirements for the continuation of such listing. The Company has not received any notice that its Common Stock will be delisted
from the OTC Bulletin Board or that its Common Stock does not meet all requirements for listing. 
  
 4.23. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for
purposes of the Securities Act which would prevent the Company from selling the Securities pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor will the Company or any of its
affiliates or subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings. 
  
 4.24. Stop Transfer. The Securities are restricted securities as of the date of this Agreement. The Company will not issue any stop transfer
order or other order impeding the sale and delivery of any of the Securities at such time as the Securities are registered for public sale or an exemption from registration is available, except as required by state and federal securities laws.

  
 4.25. Dilution. The Company specifically
acknowledges that its obligation to issue the shares of Common Stock upon conversion of the Note and exercise of the Warrant is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of
other shareholders of the Company. 
  
 5. Representations and
Warranties of the Purchaser. 
  
 The Purchaser hereby
represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement). 
  

 10 

 5.1. No Shorting. Neither the Purchaser nor any of its affiliates or investment partners
has, or caused any person or entity to, directly or indirectly, engage in “short sales” of the Company’s Common Stock or any other hedging strategies. 
  
 5.2. Requisite Power and Authority. Purchaser has all necessary power and authority under all applicable
provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out the provisions thereof. All corporate action on Purchaser’s part required for the lawful execution and delivery of this Agreement and the
Related Agreements has been or will be effectively taken prior to the Closing. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance with their
terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles of equity that restrict the
availability of equitable and legal remedies. 
  
 5.3.
Investment Representations. Purchaser understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act of 1933, as amended (the “Securities Act”)
based in part upon Purchaser’s representations contained in the Agreement, including, without limitation, that the Purchaser is an “accredited investor” within the meaning of Regulation D under the Securities Act. The Purchaser
confirms that it has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Securities. The Purchaser further confirms that it has had an opportunity
to ask questions and receive answers from the Company regarding the Company’s business, management and financial affairs and the terms and conditions of the Offering and the Securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Purchaser or to which the Purchaser had access. 
  
 5.4. Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment until the Securities are sold pursuant to (a) an effective registration statement under the Securities Act, or (b) an exemption from registration is available with respect to
such sale. 
  
 5.5. Acquisition for Own Account.
Purchaser is acquiring the Securities for Purchaser’s own account for investment only, and not as a nominee or agent and not with a view towards or for resale in connection with their distribution. 
  
 5.6. Purchaser Can Protect Its Interest. Purchaser represents
that by reason of its, or of its management’s, business and financial experience, Purchaser has the capacity to evaluate the merits and risks of its investment in the Note, the Warrant and the Securities and to protect its own interests in
connection with the transactions contemplated in this Agreement, and the Related Agreements. Further, Purchaser is aware of no publication of any advertisement in connection with the transactions contemplated in the Agreement or the Related
Agreements. 
  

 11 

 5.7. Accredited Investor. Purchaser represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act. 
  
 5.8. Legends. 
  
 (a) The
Note shall bear substantially the following legend: 
  
 “THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO AXESSTEL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.” 
  
 (b) The Note Shares and the Warrant Shares, if not issued by DWAC system (as hereinafter defined), shall bear a legend which shall be in
substantially the following form until such shares are covered by an effective registration statement filed with the SEC: 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE
SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
AXESSTEL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.” 
  
 (c) The Warrant shall bear substantially the following legend: 
  
 “THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE 
  

 12 

 REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AXESSTEL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.” 
  
 6. Covenants of the Company. 
  
 The Company covenants and agrees with the Purchaser as follows: 
  

6.1. Stop-Orders. The Company will advise the Purchaser, promptly after it receives notice of issuance by the Securities and Exchange
Commission (the “SEC”), any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the
qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose. 
  
 6.2. Listing. The Company shall promptly secure the listing of the shares of Common Stock issuable upon conversion of the Note and upon the
exercise of the Warrant on the OTC Bulletin Board (the “Principal Market”) upon which shares of Common Stock are listed (subject to official notice of issuance) and shall maintain such listing so long as any other shares of Common
Stock shall be so listed. The Company will maintain the listing of its Common Stock on the Principal Market, and will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the
National Association of Securities Dealers (“NASD”) and such exchanges, as applicable. 
  
 6.3. Market Regulations. The Company shall notify the SEC, NASD and applicable state authorities, in accordance with their requirements, of
the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to Purchaser and
promptly provide copies thereof to Purchaser. 
  
 6.4.
Reporting Requirements. The Company will timely file with the SEC all reports required to be filed pursuant to the Exchange Act and refrain from terminating its status as an issuer required by the Exchange Act to file reports thereunder
even if the Exchange Act or the rules or regulations thereunder would permit such termination. 
  
 6.5. Use of Funds. The Company agrees that it will use the proceeds of the sale of the Note and Warrant to repay in full the Company’s existing obligations to Agilent Financial Services and for
general corporate purposes only. 
  
 6.6. Access to
Facilities. The Company will permit any representatives designated by the Purchaser (or any successor of the Purchaser), upon reasonable notice and during normal business hours, at such person’s expense and accompanied by a representative
of the Company, to (a) visit and inspect any of the properties of the Company, (b) examine the corporate and financial records of the Company (unless such examination is not permitted by federal, state or local law or by contract) and make copies
thereof or extracts therefrom and 
  

 13 

 (c) discuss the affairs, finances and accounts of the Company with the directors, officers and independent accountants of
the Company. Notwithstanding the foregoing, the Company will not provide any material, non-public information to the Purchaser unless the Purchaser signs a confidentiality agreement and otherwise complies with Regulation FD, under the federal
securities laws. 
  
 6.7. Taxes. The Company will
promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company; provided,
however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with
respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor.

  
 6.8. Insurance. The Company will keep its assets
which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in similar business similarly situated as the Company; and the
Company will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner which the Company reasonably believes is customary for companies in
similar business similarly situated as the Company and to the extent available on commercially reasonable terms. 
  
 6.9. Intellectual Property. The Company shall maintain in full force and effect its corporate existence, rights and franchises and all
licenses and other rights to use the Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business. 
  
 6.10. Properties. The Company will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and the Company will at all times comply with each provision of all leases to which it is a party or under which it occupies property
if the breach of such provision could reasonably be expected to have a material adverse effect on the Company. 
  
 6.11. Confidentiality. The Company agrees that it will not disclose, and will not include in any public announcement, the name of the
Purchaser, unless expressly agreed to by the Purchaser or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. 
  
 6.12. Required Approvals. For so long as 25% of the principal amount of the Note is outstanding, the Company,
without the prior written consent of the Purchaser, shall not: 
  
 (a) directly or indirectly declare or pay any dividends, other than dividends with respect to its preferred stock; 
  

 14 

 (b) liquidate, dissolve or effect a material reorganization; 
  
 (c) become subject to (including, without limitation, by way
of amendment to or modification of) any agreement or instrument which by its terms would (under any circumstances) restrict the Company’s right to perform the provisions of this Agreement or any of the agreements contemplated thereby;

  
 (d) materially alter or change the scope of
the business of the Company; or 
  
 (e) make
investments in, make any loans or advances to, or transfer assets to, any of its subsidiaries, other than (in each case) in the ordinary course of business. 
  
 6.13. Reissuance of Securities. The Company agrees to reissue certificates representing the Securities without the legends set forth in
Section 5.7 above at such time as (a) the holder thereof is permitted to dispose of such Securities pursuant to Rule 144(k) under the Securities Act, or (b) upon resale subject to an effective registration statement after such Securities are
registered under the Securities Act. The Company agrees to cooperate with the Purchaser in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the Company and its
counsel receive reasonably requested representations from the selling Purchaser and broker, if any. 
  
 6.14. Opinion. On the Closing Date, the Company will deliver to the Purchaser an opinion in the form attached hereto as Exhibit D from the
Company’s legal counsel. The Company will provide, at the Company’s expense, such other legal opinions in the future as are reasonably necessary for the conversion of the Note and exercise of the Warrant. 
  
 7. Covenants of the Purchaser. 
  
 The Purchaser covenants and agrees with the Company as follows: 

 
 7.1. Confidentiality. The Purchaser agrees that it will not
disclose, and will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such
requirement. 
  
 7.2. Non-Public Information. The
Purchaser agrees not to effect any sales in the shares of the Company’s Common Stock while in possession of material, non-public information regarding the Company if such sales would violate applicable securities law. 
  
 7.3. No Shorting. Neither the Purchaser nor any of its
affiliates or investment partners will, or cause any person or entity to, directly or indirectly, engage in “short sales” of the Company’s Common Stock or any other hedging strategies. 
  

 15 

 8. Covenants of the Company and Purchaser Regarding Indemnification. 
  
 8.1. Company Indemnification. The Company agrees to indemnify,
hold harmless, reimburse and defend Purchaser, each of Purchaser’s officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including
reasonable legal fees) of any nature, incurred by or imposed upon the Purchaser which results, arises out of or is based upon (i) any misrepresentation by Company or breach of any warranty by Company in this Agreement or in any exhibits or schedules
attached hereto or any Related Agreement, or (ii) any breach or default in performance by Company of any covenant or undertaking to be performed by Company hereunder, or any other agreement entered into by the Company and Purchaser relating hereto.

  
 8.2. Purchaser’s Indemnification. Purchaser
agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s officers, directors, agents, affiliates, control persons and principal shareholders, at all times against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon (i) any misrepresentation by Purchaser or breach of any warranty by Purchaser in this
Agreement or in any exhibits or schedules attached hereto or any Related Agreement; or (ii) any breach or default in performance by Purchaser of any covenant or undertaking to be performed by Purchaser hereunder, or any other agreement entered into
by the Company and Purchaser relating hereto. 
  
 8.3.
Procedures. The procedures and limitations set forth in Section 10.2(c) and (d) shall apply to the indemnifications set forth in Sections 8.1 and 8.2 above. 
  
 9. Conversion of Convertible Note. 
  
 9.1. Mechanics of Conversion. 
  
 (a) Provided the Purchaser has notified the Company of the Purchaser’s intention to sell the Note
Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) Upon the conversion of the Note or part thereof, the Company shall, at its own cost and expense, take all
necessary action (including the issuance of an opinion of counsel) to assure that the Company’s transfer agent shall issue shares of the Company’s Common Stock in the name of the Purchaser (or its nominee) or such other persons as
designated by the Purchaser in accordance with Section 9.1(b) hereof and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) The Company warrants that no instructions other than these
instructions have been or will be given to the transfer agent of the Company’s Common Stock and that after the Effective Date (as hereinafter defined) the Note Shares issued will be freely transferable subject to the prospectus delivery
requirements of the Securities Act and the provisions of this Agreement, and will not contain a legend restricting the resale or transferability of the Note Shares. 
  
 (b) Purchaser will give notice of its decision to exercise its right to convert the Note or part thereof by
telecopying or otherwise delivering an executed and completed notice of the number of shares to be converted to the Company (the “Notice of Conversion”). The Purchaser will not be required to surrender the Note until the 

 

 16 

 Purchaser receives a credit to the account of the Purchaser’s prime broker through the DWAC system
(as defined below), representing the Note Shares or until the Note has been fully satisfied. Each date on which a Notice of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall be deemed a
“Conversion Date.” Pursuant to the terms of the Notice of Conversion, the Company will issue instructions to the transfer agent accompanied by an opinion of counsel within one (1) business day of the date of the delivery to Company
of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Purchaser’s prime broker with the Depository Trust Company
(“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within three (3) business days after receipt by the Company of the Notice of Conversion (the “Delivery Date”). 
  
 (c) The Company understands that a delay in the delivery of
the Note Shares in the form required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchaser. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchaser
via the DWAC system within the time frame set forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the Delivery Date, as compensation to the Purchaser for such loss, the Company agrees to pay late payments to the
Purchaser for late issuance of the Note Shares in the form required pursuant to Section 9 hereof upon conversion of the Note in the amount equal to the greater of (i) $500 per business day after the Delivery Date or (ii) the Purchaser’s actual
damages from such delayed delivery. Notwithstanding the foregoing, the Company will not owe the Purchaser any late payments if the delay in the delivery of the Note Shares beyond the Delivery Date is out of the control of the Company and the Company
is actively trying to cure the cause of the delay. The Company shall pay any payments incurred under this section in immediately available funds upon demand and, in the case of actual damages, accompanied by reasonable documentation of the amount of
such damages. Such documentation shall show the number of shares of Common Stock the Purchaser is forced to purchase (in an open market transaction) which the Purchaser anticipated receiving upon such conversion, and shall be calculated as the
amount by which (a) the Purchaser’s total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (b) the aggregate principal and/or interest amount of the Note, for which such
Conversion Notice was not timely honored. 
  
 Nothing contained
herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the
rate of interest or dividends required to be paid or other charges hereunder exceed the maximum amount permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to a Purchaser and thus
refunded to the Company. 
  
 9.2. Maximum Conversion.
The Purchaser shall not be entitled to convert on a Conversion Date, nor shall the Company be permitted to require the Purchaser to accept, that amount of a Note in connection with that number of shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by the 
  

 17 

 Purchaser on a Conversion Date, and (ii) the number of shares of Common Stock issuable upon the conversion of the Note
with respect to which the determination of this proviso is being made on a Conversion Date, which would result in beneficial ownership by the Purchaser of more than 4.99% of the outstanding shares of Common Stock of the Company on such Conversion
Date. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. Purchaser shall from time to time and as reasonably
requested by the Company provide the Company with information concerning its beneficial ownership of the Company’s Common Stock. Upon an Event of Default under the Note, the conversion limitation in this Section 9.2 shall become null and void.

  
 10. Registration Rights. 
  
 10.1. Registration Rights Granted. The Company hereby grants
registration rights to the Purchaser pursuant to a Registration Rights Agreement dated as of even date herewith between the Company and the Purchaser. 
  
 10.2. Indemnification. 
  
 (a) In the event of a registration of any Registrable Securities under the Securities Act pursuant to the Registration Rights Agreement,
the Company will indemnify and hold harmless the Purchaser, and its officers, directors and each other person, if any, who controls the Purchaser within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser, or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act pursuant to the Registration Rights Agreement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Purchaser, and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
so made in conformity with information furnished to the Company in writing by or on behalf of the Purchaser or any such person specifically for use in any such document. 
  
 (b) In the event of a registration of the Registrable Securities under the Securities Act pursuant to the
Registration Rights Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims,
damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as 
  

 18 

 such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities Act pursuant to the Registration Rights Agreement, any
preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. 
  
 (c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this Section 10.2(c) and shall only relieve it from any liability which it may have to such indemnified party under this Section 10.2(c) if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to
the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party under this Section 10.2(c) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof; if the indemnified party retains
its own counsel, then the indemnified party shall pay all fees, costs and expenses of such counsel, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party shall have the right to select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. 
  
 (d) In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which
either (i) the Purchaser, or any controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 10.2 but it is judicially determined (by the entry of a final judgment or decree 
  

 19 

 by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 10.2 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the
Purchaser or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 10.2; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the
registration statement bears to the public offering price of all securities offered by such registration statement, provided, however, that, in any such case, (a) the Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such registration statement; and (b) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10 of the Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation. 
  
 10.3. Offering Restrictions. Except as previously disclosed in the SEC Reports or in the Exchange Act Filings, or stock or stock options granted to employees or directors of the Company; or shares of
preferred stock issued to pay dividends in respect of the Company’s preferred stock; or equity or debt issued in connection with an acquisition of a business or assets by the Company; or the issuance by the Company of stock in connection with
the establishment of a joint venture partnership or licensing arrangement (these exceptions hereinafter referred to as the “Excepted Issuances”), the Company will not issue any securities with a continuously variable/floating
conversion feature which are or could be (by conversion or registration) free-trading securities (i.e., common stock subject to a registration statement) prior to the full repayment or conversion of the Note (the “Exclusion
Period”). 
  
 11. Miscellaneous. 
  
 11.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE BROUGHT ONLY
IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH PARTIES AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND OTHER AGREEMENTS ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND
WAIVE TRIAL BY JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY OTHER AGREEMENT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE
TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY
OTHER PROVISION OF ANY AGREEMENT. 
  

 20 

 11.2. Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by the Purchaser and the closing of the transactions contemplated hereby to the extent provided therein. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf
of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 
  
 11.3. Successors. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, heirs, executors and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of
the Securities from time to time, other than the holders of Common Stock which has been sold by the Purchaser pursuant to Rule 144 or an effective registration statement. Purchaser may not assign its rights hereunder to a competitor of the Company.

  
 11.4. Entire Agreement. This Agreement, the
exhibits and schedules hereto, the Related Agreements and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or
bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 
  
 11.5. Severability. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
  
 11.6. Amendment and Waiver. 
  
 (a) This Agreement may be amended or modified only upon the written consent of the Company and the Purchaser. 
  
 (b) The obligations of the Company and the rights of the
Purchaser under this Agreement may be waived only with the written consent of the Purchaser. 
  
 (c) The obligations of the Purchaser and the rights of the Company under this Agreement may be waived only with the written consent of the
Company. 
  
 11.7. Delays or Omissions. It is agreed
that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement or the Related Agreements, shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement, the Note or the
Related Agreements, by law or otherwise afforded to any party, shall be cumulative and not alternative. 
  

 21 

 11.8. Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) three (3) business days after
having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the Company at the address as set forth on the signature page hereof, to the Purchaser at the address set forth on the signature page hereto for such Purchaser, with a copy in the case of the Purchaser to Scott J.
Giordano, Esq., Loeb & Loeb LLP, 345 Park Avenue, New York, New York 10154, facsimile number (212) 407-4990, or at such other address as the Company or the Purchaser may designate by written notice to the other parties hereto given in accordance
herewith. 
  
 11.9. Attorneys’ Fees. In the
event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including, without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 
  
 11.10. Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 
  
 11.11. Facsimile Signatures; Counterparts. This Agreement may be executed by facsimile signatures and in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument. 
  
 11.12. Broker’s Fees. Except as set forth on Schedule 11.12 hereof, each party hereto represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or
under the authority of such party hereto is or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 11.12 being untrue. 
  

11.13. Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement and the Related
Agreements and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Agreement to favor any party against the other. 
  

 22 

 In Witness Whereof, the parties hereto have executed the Securities Purchase Agreement as
of the date set forth in the first paragraph hereof. 
  

							
	COMPANY:	 	PURCHASER:
		
	AXESSTEL, INC.	 	Laurus Master Fund, Ltd.
				
	 By:
	 	  

	 	 By:
	 	  

	 Name:
	 	  

	 	 Name:
	 	  

	 Title:
	 	  

	 	 Title:
	 	  

	 Address:
	 	 	 	 Address: c/o Ironshore Corporate Services Ltd.
 P.O. Box 1234 G.T., Queensgate House, South Church Street, Grand Cayman, Cayman Islands

  

 23 

 List of Exhibits 
  

			
	Form of Convertible Term Note	 	Exhibit A
		
	Form of Warrant	 	Exhibit B
		
	Form of Escrow Agreement	 	Exhibit C
		
	Form of Opinion	 	Exhibit D

  

 24 

 EXHIBIT A 
  

FORM OF CONVERTIBLE NOTE 
  

 25 

 EXHIBIT B 
  

FORM OF WARRANT 
  

 26 

 EXHIBIT C 
  

FORM OF ESCROW AGREEMENT 
  

 27 

 EXHIBIT D 
  

FORM OF OPINION 
  

 28

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