Document:

Second Amended and Restated Accounts

 EXHIBIT 10.2 
 

 
 Silicon Valley Bank 
 3003 Tasman Drive 
 Santa Clara, Ca. 95054 
 654-1000 - Fax (408) 980-6410 
 SECOND AMENDED AND RESTATED 
 ACCOUNTS RECEIVABLE PURCHASE AGREEMENT 
 This Second Amended and Restated Accounts Receivable Purchase Agreement (the “Agreement”) is made as of the Effective Date by and between Silicon Valley Bank (“Buyer”) having a place of business at the address
specified above and Axesstel, Inc., a Nevada corporation (“Seller”) having its principal place of business and chief executive office at 6815 Flanders Drive, Suite 210, San Diego, California 92121 and with a FAX number of
858-625-2110. 
 A. Buyer and Seller entered into that certain Amended and Restated Accounts Receivable Purchase Agreement, dated on or about
December 23, 2005 (the “Existing A/R Purchase Agreement”). 
 B. Buyer and Seller desire to amend, restate and supersede the
Existing A/R Purchase Agreement pursuant to the terms hereunder. 
 Now heretofore, the parties agree as follows: 
 1. Definitions. When used herein, the following terms shall have the following meanings. 
 “Account Balance” shall mean, on any given day, the gross amount of all Purchased Receivables unpaid on that day. 
 “Account Debtor” shall have the meaning set forth in the California Uniform Commercial Code and shall include any person liable on any
Purchased Receivable, including without limitation, any guarantor of the Purchased Receivable and any issuer of a letter of credit or banker’s acceptance with respect to a Purchased Receivable. 
 “Adjustments” shall mean all discounts, allowances, returns, disputes, counterclaims, offsets, defenses, rights of recoupment, rights of
return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Purchased Receivable. 
 “Administrative Fee” shall have the meaning as set forth in Section 3.3 hereof. 
 “Advance” shall have the
meaning set forth in Section 2.2 hereof. 
 “AEB Letters of Credit” shall mean, collectively, any and all Standby Letters of
Credit issued by American Express Bank in favor of Seller with respect to any Purchased Receivable. 

 “Applicable Rate” means, as applicable, (i) the Prime Rate plus the Prime Rate Margin or
(ii) the Libor Rate plus the Libor Rate Margin. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which
the Buyer is closed. 
 “Collateral” shall have the meaning set forth in Section 8 hereof. 
 “Collections” shall mean all good funds received by Buyer from or on behalf of an Account Debtor with respect to Purchased Receivables.

 “Effective Date” is the date Buyer executes this Agreement. 
 “Event of Default” shall have the meaning set forth in Section 9 hereof. 
 “Finance Charges” shall have the meaning set forth in Section 3.2 hereof. 
 “Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or
insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. 
 “Invoice Transmittal” shall mean a writing signed by an authorized representative of Seller which (i) accurately identifies the Telcel
Receivables which Buyer, at its election, may purchase, and includes for each such receivable the correct amount owed by Telcel, the name and address of Telcel, the invoice number, the invoice date, the account code and a copy of the purchase order
for such invoice (ii) states whether the Advance is to be comprised of LIBOR Advances or Prime Rate Advances; (iii) the duration of the Interest Period applicable to any such LIBOR Advances included in such notice, and (iv) the
duration of the period for such Advance. 
 “Interest Period” shall mean, as to any LIBOR Advance, the period commencing on the
date of such LIBOR Advance and ending on the date that is, at the Seller’s option, sixty (60) or ninety (90) days thereafter; provided, however, that (a) no Interest Period with respect to any LIBOR Advance shall end later than
the termination of this Agreement as set forth in Section 17, (b) the last day of an Interest Period shall be determined in accordance with the practices of the LIBOR interbank market as from time to time in effect, (c) if any
Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding Business Day, (d) any Interest Period pertaining to a LIBOR Advance that begins on the last Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period, and (e) interest shall accrue from and include the first Business Day of an
Interest Period but exclude the last Business Day of such Interest Period, and (f) no Interest Period with respect to any LIBOR Advance shall end after the date that is 14 days prior to the expiry date of the AEB Letter of Credit issued with
respect to the Purchase Receivable relating to such Advance. 
 “Interest Rate Determination Date” shall mean each date for
calculating the LIBOR for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period for a LIBOR Advance.

  

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 “LIBOR” shall mean with respect to an Interest Period for any Advance to be made, continued as
or converted into a LIBOR Advance, the rate of interest per annum determined by Buyer to be the per annum rate of interest at which deposits in United States Dollars are offered to Seller in the London interbank market (rounded upward, if necessary,
to the nearest 1/100th of one percent (0.01%)) in which Seller customarily participates at 11:00 a.m. (local time in such interbank market) two (2) Business Days prior to the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount approximately equal to the amount of such Advance. 
 “LIBOR Advance” shall mean an
Advance that bears interest at a rate equal to the LIBOR Rate plus the LIBOR Rate Margin. 
 “LIBOR Rate” shall mean, for each
Interest Period in respect of LIBOR Advances an interest rate per annum (rounded upward to the nearest 1/16th of one percent (0.0625%)) equal to LIBOR for such Interest Period divided by one (1) minus the Reserve Requirement for such Interest
Period. 
 “LIBOR Rate Margin” is two and one-half of one percent (2.5%). 
 “Loan Agreement” is that certain Loan and Security Agreement between Buyer and Seller, dated on or about the date hereof, as amended, renewed
or refinanced from time to time. 
 “Obligations” shall mean all advances, financial accommodations, liabilities, obligations,
covenants and duties owing, arising, due or payable by Seller to Buyer of any kind or nature, present or future, arising under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any
note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising,
and however acquired; including, without limitation, all Advances, Finance Charges, Administrative Fees, interest, Repurchase Amounts, fees, expenses, professional fees and attorneys’ fees and any other sums chargeable to Seller hereunder or
otherwise. 
 “Prime Rate” shall mean the Buyer’s most recently announced “prime rate,” even if it is not
Buyer’s lowest rate. 
 “Prime Rate Advance” shall mean an Advance that bears interest at a rate equal to the Prime Rate plus
Prime Rate Margin. 
 “Prime Rate Margin” shall mean one percent (1.00%). 
 “Purchased Receivables” shall mean all those accounts, receivables, chattel paper, instruments, contract rights, documents, general
intangibles, letters of credit, drafts, bankers acceptances, and rights to payment, and all proceeds thereof (all of the foregoing being referred to as “receivables”), arising out of the invoices and other agreements identified on or
delivered with any Invoice Transmittal delivered by Seller to Buyer which Buyer elects to purchase and for which Buyer makes an Advance. 
 “Purchased Receivable Balance” is the total outstanding gross face amount, at any time, of any Purchased Receivable. 
 “Regulatory Change” means, with respect to Buyer, any change on or after the date of this Agreement in United States federal, state, or foreign laws or regulations, including Regulation D, or the 

  

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adoption or making on or after such date of any interpretations, directives, or requests applying to a class of lenders including Buyer, of or under any
United States federal or state, or any foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. 
 “Reserve Requirement” shall mean, for any Interest Period, the average maximum rate at which reserves (including any marginal, supplemental, or
emergency reserves) are required to be maintained during such Interest Period under Regulation D against “Eurocurrency liabilities” (as such term is used in Regulation D) by member banks of the Federal Reserve System. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by Buyer by reason of any Regulatory Change against (a) any category of liabilities which includes deposits by reference to which the
LIBOR Rate is to be determined as provided in the definition of LIBOR or (b) any category of extensions of credit or other assets which include Advances. 
 “Repurchase Amount” shall have the meaning set forth in Section 4.1 hereof. 
 “Telcel” shall mean Telcel, C.A., a company organized under the laws of Venezuela. 
 “Telcel Receivable” shall
mean a receivable which is owed to Seller by Telcel. 
 “Termination Date” is the earlier of the date two years from the date
hereof or the date of acceleration or termination of the Loan Agreement. 
 2. Purchase and Sale of Receivables.

 2.1 Offer to Sell Receivables. During the period commencing on the date hereof and ending on the Termination Date, subject to the
satisfaction of the conditions set forth in Sections 2.5 and 2.6 and provided that there does not then exist any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default, Seller may request that
Buyer purchase Telcel Receivables and Buyer may, in its sole discretion, elect to purchase Telcel Receivables. Seller shall deliver to Buyer an Invoice Transmittal with respect to any Telcel Receivable for which a request for purchase is made. An
authorized representative of Seller shall sign each Invoice Transmittal delivered to Buyer. Buyer shall be entitled to rely on all the information provided by Seller to Buyer on or with the Invoice Transmittal and to rely on the signature on any
Invoice Transmittal as an authorized signature of Seller. 
 2.2 Acceptance of Receivables. Buyer shall have no obligation to purchase
any Telcel Receivable listed on an Invoice Transmittal. Upon acceptance by Buyer of all or any of the Telcel Receivables described on any Invoice Transmittal, Buyer shall pay to Seller one hundred percent (100%) of the face amount of each
Telcel Receivable Buyer desires to purchase less any fees or expenses owing to Buyer in connection with the purchase of such Telcel Receivable. Such payment shall be the “Advance” with respect to such Telcel Receivable. At the time an
Advance is made, Seller must specify the length of the period such Advance will remain outstanding, which period shall not exceed 150 days. Advances requested by Seller for less than 150 days may be extended for an additional period of time,
provided, however, that the aggregate number of days in such periods may not exceed 150 days from the date on which the first Advance with respect to such Purchased Receivable was funded. Buyer may, from time to time, in its sole
discretion, change the percentage of the Advance. Upon Buyer’s acceptance of the receivable and payment to Seller of the Advance, the Telcel Receivable shall become a “Purchased 

  

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Receivable.” It shall be a condition to each Advance that (i) all the conditions set forth in Section 2.5 are satisfied, (ii) all of the
representations and warranties set forth in Section 6 of this Agreement be true and correct on and as of the date of the related Invoice Transmittal and on and as of the date of such Advance as though made at and as of each such date, and
(iii) no Event of Default or any event or condition that with notice, lapse of time or otherwise would constitute an Event of Default shall have occurred and be continuing, or would result from such Advance. Notwithstanding the foregoing, in no
event shall the aggregate amount of all Purchased Receivables outstanding at any time exceed Four Million Dollars ($4,000,000). 
 2.3
Effectiveness of Sale to Buyer. Effective upon Buyer’s payment of an Advance, and for and in consideration therefor and in consideration of the covenants of this Agreement, Seller hereby absolutely sells, transfers and assigns to Buyer,
all of Seller’s right, title and interest in and to each Purchased Receivable and all monies due or which may become due on or with respect to such Purchased Receivable. Buyer shall be the absolute owner of each Purchased Receivable. Buyer
shall have, with respect to any goods related to the Purchased Receivable, all the rights and remedies of an unpaid seller under the California Uniform Commercial Code and other applicable law, including the rights of replevin, claim and delivery,
reclamation and stoppage in transit. 
 2.4 Applicable Rate for Advances. 
 (A) Each Advance shall, at Seller’s option in accordance with the terms of this Agreement, be either in the form of a Prime Rate
Advance or a LIBOR Advance; provided that any Advance made with respect to a Purchased Receivable with a due date of less than 60 days of the date such Advance is made shall be in the form of a Prime Rate Advance. 
 (B) If upon the expiration of any Interest Period applicable to any LIBOR Advances, Seller shall have timely failed to select a new
Interest Period to be applicable to such LIBOR Advances, Seller shall be deemed to have elected to convert such LIBOR Advances into Prime Rate Advances. 
 (C) Any LIBOR Advances shall, at Buyer’s option, convert into Prime Rate Advances in the event that an Event of Default or Default shall exist. Seller agrees to pay Buyer, upon demand by Buyer (or Buyer may, at
its option, charge any account Seller maintains with Buyer) any amounts required to compensate Buyer for any loss (including loss of anticipated profits), cost, or expense incurred by Buyer, as a result of the conversion of LIBOR Advances to Prime
Rate Advances pursuant to the foregoing. 
 (D) Notwithstanding anything to the contrary contained herein, Buyer shall not be
required to purchase United States Dollar deposits in the London interbank market or other applicable LIBOR market to fund any LIBOR Advances, but the provisions hereof shall be deemed to apply as if Buyer had purchased such deposits to fund the
LIBOR Advances. 
 2.5 Conditions Precedent to all Advances. Buyer’s agreement to make each Advance is subject to the following:

 (A) Buyer’s receipt of an Invoice Transmittal, signed by an authorized representative of Seller. 
  

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 (B) Buyer’s receipt of copies of all invoices, purchase orders and shipping
documents evidencing Telcel Receivables listed on the Invoice Transmittal; 
 (C) Effective assignment of the proceeds of the
AEB Letters of Credit, including original executed draw certificates and executed drafts with respect to the same; and 
 (D)
No material adverse change has occurred to the financial condition of the Seller or Telcel. 
 2.6 Conditions to Effectiveness of
Agreement. This Agreement shall become effective upon Buyer’s receipt of the following, each in form and substance satisfactory to Buyer: 
 (A) Documents satisfactory to Buyer evidencing Buyer’s interest in the AEB Letters of Credit. 
 2.7
Special Provisions Governing LIBOR Advances. Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to LIBOR Advances as to the matters covered: 
 (A) As soon as practicable on each Interest Rate Determination Date, Buyer shall determine (which determination shall, absent manifest
error in calculation, be final, conclusive and binding upon all parties) the interest rate that shall apply to the LIBOR Advances for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Seller. 
 (B) In the event that Buyer shall have determined
(which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any LIBOR Advance, that by reason of circumstances affecting the London interbank market adequate and
fair means do not exist for ascertaining the interest rate applicable to such Advance on the basis provided for in the definition of LIBOR, Buyer shall on such date give notice (by facsimile or by telephone confirmed in writing) to Seller of such
determination, whereupon (i) no Advances may be made as, or converted to, LIBOR Advances until such time as Buyer notifies Seller that the circumstances giving rise to such notice no longer exist, and (ii) any Invoice Transmittal given by
Seller with respect to Advances in respect of which such determination was made shall be deemed to be rescinded by Seller. 
 (C) Seller shall compensate Buyer, upon written request by Buyer (which request shall set forth the manner and method of computing such compensation), for all reasonable losses, expenses and liabilities, if any (including any interest paid
by Buyer to lenders of funds borrowed by it to make or carry its LIBOR Advances and any loss, expense or liability incurred by Buyer in connection with the liquidation or re-employment of such funds) such that Buyer may incur: (i) if for any
reason (other than a default by Buyer or due to any failure of Buyer to fund LIBOR Advances due to impracticability or illegality under Sections 2.8(d) and 2.8(e)) a borrowing or a conversion to or continuation of any LIBOR Advance does not
occur on a date specified in an Invoice Transmittal, or (ii) if any principal payment or any conversion of any of its LIBOR Advances occurs on a date prior to the last day of an Interest Period applicable to that Advance. 
  

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 (D) Calculation of all amounts payable to Buyer under this Section 2.7 and under
Section 2.4 shall be made as though Buyer had actually funded each of its relevant LIBOR Advances through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to the definition of LIBOR Rate in an amount equal to
the amount of such LIBOR Advance and having a maturity comparable to the relevant Interest Period; provided, however, that Buyer may fund each of its LIBOR Advances in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this Section 2.7 and under Section 2.4. 
 (E) After the
occurrence and during the continuance of an Event of Default, Seller may not elect to have an Advance be made or continued as, or converted to, a LIBOR Advance after the expiration of any Interest Period then in effect for such Advance.

 2.8 Additional Requirements/Provisions Regarding LIBOR Advances. 
 (A) If for any reason (including voluntary or mandatory prepayment or acceleration), Buyer receives all or part of the principal amount of
a LIBOR Advance prior to the last day of the Interest Period for such Advance, Seller shall immediately notify Seller’s account officer at Buyer and, on demand by Buyer, pay Buyer the amount (if any) by which (i) the additional interest
which would have been payable on the amount so received had it not been received until the last day of such Interest Period exceeds (ii) the interest which would have been recoverable by Buyer by placing the amount so received on deposit in the
certificate of deposit markets, the offshore currency markets, or United States Treasury investment products, as the case may be, for a period starting on the date on which it was so received and ending on the last day of such Interest Period at the
interest rate determined by Buyer in its reasonable discretion. Buyer’s determination as to such amount shall be conclusive absent manifest error. 
 (B) Seller shall pay Buyer, upon demand by Buyer, from time to time such amounts as Buyer may determine to be necessary to compensate it for any costs incurred by Buyer that Buyer determines are attributable to its
making or maintaining of any amount receivable by Buyer hereunder in respect of any Advances relating thereto (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), in each case resulting
from any Regulatory Change which: 
 (1) changes the basis of taxation of any amounts payable to Buyer under this Agreement in
respect of any Advances (other than changes which affect taxes measured by or imposed on the overall net income of Buyer by the jurisdiction in which Buyer has its principal office); 
 (2) imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or
any deposits with, or other liabilities of Buyer (including any Advances or any deposits referred to in the definition of LIBOR); or 
 (3) imposes any other condition affecting this Agreement (or any of such extensions of credit or liabilities). 
 Buyer will notify
Seller of any event occurring after the Effective Date which will entitle Buyer to compensation pursuant to this Section 2.8 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. Buyer will
furnish Seller with a statement setting forth the basis and amount of each request by Buyer for compensation under this Section 2.8. Determinations and allocations by Buyer for purposes of this Section 2.8 of the 

  

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effect of any Regulatory Change on its costs of maintaining its obligations to make Advances, of making or maintaining Advances, or on amounts receivable by
it in respect of Advances, and of the additional amounts required to compensate Buyer in respect of any Additional Costs, shall be conclusive absent manifest error. 
 (C) If Buyer shall determine that the adoption or implementation of any applicable law, rule, regulation, or treaty regarding capital
adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by Buyer (or
its applicable lending office) with any respect or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return
on capital of Buyer or any person or entity controlling Buyer (a “Parent”) as a consequence of its obligations hereunder to a level below that which Buyer (or its Parent) could have achieved but for such adoption, change, or
compliance (taking into consideration policies with respect to capital adequacy) by an amount deemed by Buyer to be material, then from time to time, within fifteen (15) days after demand by Buyer, Seller shall pay to Buyer such additional
amount or amounts as will compensate Buyer for such reduction. A statement of Buyer claiming compensation under this Section 2.8(C) and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent
manifest error. 
 (D) If, at any time, Buyer, in its sole and absolute discretion, determines that (i) the amount of
LIBOR Advances for periods equal to the corresponding Interest Periods are not available to Buyer in the offshore currency interbank markets, or (ii) LIBOR does not accurately reflect the cost to Buyer of lending the LIBOR Advances, then Buyer
shall promptly give notice thereof to Seller. Upon the giving of such notice, Buyer’s obligation to make the LIBOR Advances shall terminate; provided, however, Advances shall not terminate if Buyer and Seller agree in writing to a
different interest rate applicable to LIBOR Advances. 
 (E) If it shall become unlawful for Buyer to continue to fund or
maintain any LIBOR Advances, or to perform its obligations hereunder, upon demand by Buyer, Seller shall prepay the Advances in full with accrued interest thereon and all other amounts payable by Seller hereunder (including, without limitation, any
amount payable in connection with such prepayment pursuant to Section 2.8(a)). Notwithstanding the foregoing, to the extent a determination by Buyer as described above relates to a LIBOR Advance then being requested by Seller pursuant to an
Invoice Transmittal, Seller shall have the option, subject to the provisions of Section 2.7(c), to (i) rescind such Invoice Transmittal by giving notice (by facsimile or by telephone confirmed in writing) to Buyer of such rescission on the
date on which Buyer gives notice of its determination as described above, or (ii) modify such Invoice Transmittal to obtain a Prime Rate Advance or to have outstanding Advances converted into or continued as Prime Rate Advances by giving notice
(by facsimile or by telephone confirmed in writing) to Buyer of such modification on the date on which Buyer gives notice of its determination as described above. 
 3. Collections, Charges and Remittances. 
 3.1 Collections. Upon receipt by Buyer of Collections, Buyer shall promptly credit such Collections to Seller’s Account Balance on a daily basis; provided, that if an Event of Default exists, Buyer shall
apply all Collections to Seller’s Obligations hereunder in such order and manner as Buyer may determine. If an item of collection is not honored or Buyer does not receive good funds for any 

  

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reason, the amount shall be included in the Account Balance as if the Collections had not been received and Finance Charges under Section 3.2 shall
accrue thereon. 
 3.2 Finance Charges. Seller will pay a finance charge (the “Finance Charge”) on all outstanding Advances
with respect to Purchased Receivables which is equal to the Applicable Rate. The Finance Charge shall be computed on the basis of a 360-day year for the actual number of days elapsed. The Finance Charge is payable when the Advance made based on such
Purchased Receivable is payable in accordance with Section 4 hereof. Notwithstanding the foregoing, there shall be a minimum Finance Charge for each Advance equal to the amount of Finance Charges accrued if such Advance (in the amount at
funding) would have been outstanding for 60 days. 
 3.3 Administrative Fee. Seller shall pay to Buyer an Administrative Fee equal to
one-eighth of one percent (1/8%) percent of each Advance with respect to a Purchased Receivable (the “Administrative Fee”). 
 3.4 Accounting. Buyer shall prepare and send to Seller after the close of business for each month, an accounting of the transactions for that month, including the amount of all Purchased Receivables, all Advances, all Collections,
Adjustments, Finance Charges, and the Administrative Fee. The accounting shall be deemed correct and conclusive unless Seller makes written objection to Buyer within thirty (30) days after the Buyer mails the accounting to Seller. 

4. Repurchase Obligations. 
 4.1 Seller’s Agreement to Repurchase. Seller agrees to pay to Buyer on demand, the full-face amount, or any unpaid portion, of any Purchased Receivable: 
 (A) which remains unpaid one hundred fifty (150) calendar days after the date the first Advance was made on such Purchased
Receivable; or 
 (B) which remains unpaid on the Termination Date; 
 (C) which remains unpaid on the date that is 14 days prior to the expiry date of the AEB Letter of Credit issued with respect to such
Purchased Receivable to guarantee payment of the same; 
 (D) which remains unpaid on the last day of the period chosen by
Seller for such Advance, unless such period has been extended by Seller in accordance with Section 2.2. 
 (E)
with respect to which there has been any breach of warranty or representation set forth in Section 6 hereof or any breach of any covenant contained in this Agreement; 
 (F) with respect to which the Account Debtor asserts any discount, allowance, return, dispute, counterclaim, offset, defense, right of
recoupment, right of return, warranty claim, or short payment; 
 together with all reasonable attorneys’ and professional fees and expenses and all
court costs incurred by Buyer in collecting such Purchased Receivable and/or enforcing its rights under, or collecting amounts owed by Seller in connection with, this Agreement (collectively, the “Repurchase Amount”). 
  

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 4.2 Seller’s Payment of the Repurchase Amount or Other Amounts Due Buyer. When any Repurchase
Amount or other amount owing to Buyer becomes due, Buyer shall pay in cash immediately upon demand therefor. 
 4.3 Seller’s
Agreement to Repurchase All Purchased Receivables. Upon and after the occurrence of an Event of Default, Seller shall, upon Buyer’s demand (or, in the case of an Event of Default under Section 9(B), immediately without notice or demand
from Buyer) repurchase all the Purchased Receivables then outstanding, or such portion thereof as Buyer may demand. Such demand may, at Buyer’s option, include and Seller shall pay to Buyer immediately upon demand, cash in an amount equal to
the Advance with respect to each Purchased Receivable then outstanding together with all accrued Finance Charges, Adjustments, Administrative Fees, attorney’s and professional fees, court costs and expenses as provided for herein, and any other
Obligations. Upon receipt of payment in full of the Obligations, Buyer shall immediately instruct Account Debtors to pay Seller directly. 
 5. Power of
Attorney. Seller does hereby irrevocably appoint Buyer and its successors and assigns as Seller’s true and lawful attorney in fact, and hereby authorizes Buyer, regardless of whether there has been an Event of Default, (a) to sell,
assign, transfer, pledge, compromise, or discharge the whole or any part of the Purchased Receivables; (b) to demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect
to the Purchased Receivables and to compromise, prosecute, or defend any action, claim, case or proceeding relating to the Purchased Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in
Buyer’s name or Seller’s name, as Buyer may choose; (c) to prepare, file and sign Seller’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document
with respect to Purchased Receivables; (d) to notify all Account Debtors with respect to the Purchased Receivables to pay Buyer directly; (e) to receive, open, and dispose of all mail addressed to Seller for the purpose of collecting the
Purchased Receivables; (f) to endorse Seller’s name on any checks or other forms of payment on the Purchased Receivables; (g) to execute on behalf of Seller any and all instruments, documents, financing statements and the like to
perfect Buyer’s interests in the Purchased Receivables and Collateral; and (h) to do all acts and things necessary or expedient, in furtherance of any such purposes. If Buyer receives a check or item which is payment for both a Purchased
Receivable and another receivable, the funds shall first be applied to the Purchased Receivable and, so long as there does not exist an Event of Default or an event that with notice, lapse of time or otherwise would constitute an Event of Default,
the excess shall be remitted to Seller. Upon the occurrence and continuation of an Event of Default, all of the power of attorney rights granted by Seller to Buyer hereunder shall be applicable with respect to all Purchased Receivables and all
Collateral. 
 6. Representations, Warranties and Covenants. 
 6.1 Receivables’ Warranties, Representations and Covenants. To induce Buyer to buy receivables and to renders its services to Seller, and with full knowledge that the truth and accuracy of the following
are being relied upon by the Buyer in determining whether to accept receivables as Purchased Receivables, Seller represents, warrants, covenants and agrees, with respect to each Invoice Transmittal delivered to Buyer and each receivable described
therein, that: 
 (A) Seller is the absolute owner of each receivable set forth in the Invoice Transmittal and has full legal
right to sell, transfer and assign such receivables; 
  

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 (B) The correct amount of each receivable is as set forth in the Invoice Transmittal and
is not in dispute; 
 (C) The payment of each receivable is not contingent upon the fulfillment of any obligation or contract,
past or future and any and all obligations required of the Seller have been fulfilled as of the date of the Invoice Transmittal; 
 (D) Each receivable set forth on the Invoice Transmittal is based on an actual sale and delivery of goods and/or services actually rendered, is presently due and owing to Seller, is not past due or in default, has not been previously sold,
assigned, transferred, or pledged, and is free of any and all liens, security interests and encumbrances other than liens, security interests or encumbrances in favor of Buyer or any other division or affiliate of Silicon Valley Bank; 
 (E) There are no defenses, offsets, or counterclaims against any of the Purchased Receivables, and no agreement has been made under which
the Account Debtor may claim any deduction or discount, except as otherwise stated in the Invoice Transmittal; 
 (F) Each
Purchased Receivable shall be the property of the Buyer and shall be collected by Buyer, but if for any reason it should be paid to Seller, Seller shall promptly notify Buyer of such payment, shall hold any checks, drafts, or monies so received in
trust for the benefit of Buyer, and shall promptly transfer and deliver the same to the Buyer; 
 (G) Buyer shall have the
right of endorsement, and also the right to require endorsement by Seller, on all payments received in connection with each Purchased Receivable and any proceeds of Collateral; 
 (H) Seller, and to Seller’s best knowledge, each Account Debtor set forth in the Invoice Transmittal, are and shall remain solvent as
that term is defined in the United States Bankruptcy Code and the California Uniform Commercial Code, and no such Account Debtor has filed or had filed against it a voluntary or involuntary petition for relief under the United States Bankruptcy
Code; 
 (I) Each Account Debtor named on the Invoice Transmittal will not object to the payment for, or the quality or the
quantity of the subject matter of, the receivable and is liable for the amount set forth on the Invoice Transmittal; 
 (J)
All receivables forwarded to and accepted by Buyer after the date hereof, and thereby becoming Purchased Receivables, shall comply with each and every one of the foregoing representations, warranties, covenants and agreements referred to above in
this Section 6.1; and 
 (K) The invoices issued by Seller to Telcel subject to this Agreement and the transactions
represented thereby satisfy all requirements of the issuer of the AEB Letters of Credit. 
 6.2 Additional Warranties, Representations and
Covenants. In addition to the foregoing warranties, representations and covenants, to induce Buyer to buy receivables and to render its services to Seller, Seller hereby represents, warrants, covenants and agrees that: 
 (A) Seller will not assign, transfer, sell, or grant, or permit any lien or security interest in any Purchased Receivables or Collateral
to or in favor of any other party, without Buyer’s prior written consent, (except for Permitted Liens (as defined in the Loan Agreement); 
  

 11 

 (B) The Seller’s name, form of organization, chief executive office, and the place
where the records concerning all Purchased Receivables and Collateral are kept is set forth at the beginning of this Agreement, Collateral is located only at the location set forth in the beginning of this Agreement, or, if located at any additional
location, as set forth on a schedule attached to this Agreement, and Seller will give Buyer at least thirty (30) days prior written notice if such name, organization, chief executive office or other locations of Collateral or records concerning
Purchased Receivables or Collateral is changed or added and shall execute any documents necessary to perfect Buyer’s interest in the Purchased Receivables and the Collateral; 
 (C) Seller shall (i) pay all of its normal gross payroll for employees, and all federal and state taxes, as and when due, including
without limitation all payroll and withholding taxes and state sales taxes; (ii) deliver at any time and from time to time at Buyer’s request, evidence satisfactory to Buyer that all such amounts have been paid to the proper taxing
authorities; and (iii) if requested by Buyer, pay its payroll and related taxes through a bank or an independent payroll service acceptable to Buyer. 
 (D) Seller has not, as of the time Seller delivers to Buyer an Invoice Transmittal, or as of the time Seller accepts any Advance from Buyer, filed a voluntary petition for relief under the United States Bankruptcy
Code or had filed against it an involuntary petition for relief; 
 (E) Seller shall provide Buyer within five (5) days
of filing, copies of all statements, reports and notices made available to Seller’s security holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission (except
where such disclosure violates securities or other law); 
 (F) Seller shall provide Buyer with a deferred revenue listing
upon request; 
 (G) On request by Buyer, Seller will promptly furnish any information Buyer may reasonably request to
determine financial condition of Seller, including, but not limited to all of Seller’s Obligations, and the condition of any of Seller’s receivables which may include but are not limited to Purchased Receivables; 
 (H) Seller will maintain no less than 85% of its primary depository and operating accounts and securities accounts with Buyer; 

(I) Upon the request of Buyer, the Seller will effectuate a draw under any or all of the AEB Letters of Credit and pay all of the
proceeds of each such draw to the Buyer; and 
 (J) Seller shall not request or cause the making of a draw under the AEB
Letters of Credit without the prior written consent of the Buyer. 
 7. Adjustments. In the event of a breach of any of the representations,
warranties, or covenants set forth in Section 6.1, or in the event any Adjustment or dispute is asserted by any Account Debtor, Seller shall promptly advise Buyer and shall, subject to the Buyer’s approval, resolve such disputes and advise
Buyer of any adjustments. Unless the disputed Purchased Receivable is repurchased by Seller and the full Repurchase Amount is paid, Buyer shall remain the absolute owner of any Purchased Receivable which is subject to Adjustment or repurchase under
Section 4 hereof, and any rejected, returned, or recovered personal property, with the right to take possession thereof at any time. If such possession is not taken by Buyer, Seller is to resell it for Buyer’s account at Seller’s
expense with the proceeds made payable to 

  

 12 

 
Buyer. While Seller retains possession of said returned goods, Seller shall segregate said goods and mark them “property of Silicon Valley Bank.”

 8. Security Interest. To secure the prompt payment and performance to Buyer of all of the Obligations, Seller hereby grants to Buyer a continuing
lien upon and security interest in all of Seller’s now existing or hereafter arising Collateral, as defined under the Loan Agreement, and the Obligations hereunder are secured by the security interest granted under the Loan Agreement. The
Collateral shall include all rights and interest in the Telcel Receivables and to all letter of credit rights relating to the Telcel Receivables (including letter of credit rights relating to the AEB Letters of Credit; the “Telcel
Collateral”). Seller is not authorized to sell, assign, transfer or otherwise convey any Telcel Collateral without Buyer’s prior written consent. Seller agrees to sign any instruments and documents requested by Buyer to evidence, perfect,
or protect the interests of Buyer in the Collateral. Seller authorizes Buyer to file financing statements without notice to Seller, with all appropriate jurisdictions, as Buyer deems appropriate, in order to perfect or protect Buyer’s interest
in the Collateral. Seller agrees to deliver to Buyer the originals of all instruments, chattel paper and documents evidencing or related to Purchased Receivables and Collateral. 
 9. Default. The occurrence of any one or more of the following shall constitute an Event of Default hereunder. 
 (A) Seller fails to pay any amount owed to Buyer as and when due; 
 (B) (i) Seller is unable
to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (ii) Seller begins an Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against Seller and not dismissed or stayed within thirty
(30) days (but no Advances shall be made before any Insolvency Proceeding is dismissed); 
 (C) (i) Any material portion
of Seller’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy is not removed in ten (10) days; (ii) the service of process upon Seller seeking to attach, by
trustee or similar process, any funds of Seller on deposit with Buyer, or any entity under the control of Buyer (including a subsidiary); (iii) Seller is enjoined, restrained, or prevented by court order from conducting any part of its
business; (iv) a judgment or other claim in excess of $250,000 becomes a lien on any portion of Seller’s assets (except for Permitted Liens as defined in the Loan Agreement); or (v) a notice of lien, levy, or assessment is
filed against any of Seller’s assets by any government agency and not paid or released within ten (10) days after Seller receives notice. These are not Events of Default if stayed or if a bond is posted pending contest by Seller (but no
Advances shall be made during the cure period); 
 (D) Seller fails or neglects to perform any obligation in hereunder or
violates any covenant hereunder or fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant or agreement contained in this Agreement, the Loan Agreement, any Loan Document (as defined in the Loan
Agreement), or in any present or future agreement between Seller and Buyer and the same is not cured within the applicable cure or grace period; 
 (E) If there is a default in any agreement to which Seller is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any
indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000) or that could result in an Event of Default under (G) below; 
  

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 (F) A default or breach occurs under any agreement between Seller and any creditor of
Seller that signed a subordination agreement with Buyer, or any creditor that has signed a subordination agreement with Buyer breaches any terms of the subordination agreement. 
 (G) If Seller or any third party acting for Seller makes any material misrepresentation or material misstatement now or later in any
warranty or representation in this Agreement or in any writing delivered to Buyer or to induce Buyer to enter this Agreement or any Loan Document (as defined in the Loan Agreement); 
 (H) (i) There is a material adverse change in the business, operations, or condition (financial or otherwise) of the Seller, or
(ii) there is a material impairment of the prospect of repayment of any portion of the Obligations or (iii) there is a material impairment of the value or priority of Buyer’s security interests in the Collateral. 
 (I) The AEB Letters of Credit shall not be effective or Buyer shall not be able to make any draws against such letters of credit for the
full face amount of such letters of credit for any reason. 
 10. Remedies Upon Default. Upon the occurrence of an Event of Default, (1) without
implying any obligation to buy receivables, Buyer may cease buying receivables or extending any financial accommodations to Seller; (2) all or a portion of the Obligations shall be, at the option of and upon demand by Buyer, or with respect to
an Event of Default described in Section 9(B), automatically and without notice or demand, due and payable in full; and (3) Buyer shall have and may exercise all the rights and remedies under this Agreement (including effectuating a draw
under the AEB Letters of Credit using the signed draw documents delivered to Buyer by Seller) and under applicable law, including the rights and remedies of a secured party under the California Uniform Commercial Code, all the power of attorney
rights described in Section 5 with respect to all Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Purchased Receivables and all Collateral in any commercial reasonable manner. Seller and Buyer agree that
any notice of sale required to be given to Seller shall be deemed to be reasonable if given ten (10) days prior to the date on or after which the sale may be held. In the event that the Obligations are accelerated hereunder, Seller shall
repurchase all of the Purchased Receivables as set forth in Section 4.4. 
 11. Accrual of Interest. If any amount owed by Seller hereunder is
not paid when due, including, without limitation, amounts due under Section 3.5, Repurchase Amounts, amounts due under Section 12, and any other Obligations, such amounts shall bear interest at a per annum rate equal to the per annum rate
of the Finance Charges until the earlier of (i) payment in good funds or (ii) entry of a final judgment thereof, at which time the principal amount of any money judgment remaining unsatisfied shall accrue interest at the highest rate
allowed by applicable law. 
 12. Fees, Costs and Expenses; Indemnification. The Seller will pay to Buyer immediately upon demand all fees, costs and
expenses (including fees of attorneys and professionals and their costs and expenses) that Buyer incurs or may from time to time impose in connection with any of the following: (a) preparing, negotiating, administering, and enforcing this
Agreement or any other agreement executed in connection herewith, including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Buyer, Seller or any other person) in
any way relating to the Purchased Receivables, the Collateral, this Agreement or any other agreement executed in connection herewith or therewith, (c) enforcing any rights against Seller or any guarantor, or any Account Debtor,
(d) protecting or enforcing its interest in the Purchased Receivables or the Collateral, 

  

 14 

 
(e) collecting the Purchased Receivables and the Obligations, and (f) the representation of Buyer in connection with any bankruptcy case or insolvency
proceeding involving Seller, any Purchased Receivable, the Collateral, any Account Debtor, or any guarantor. Seller shall indemnify and hold Buyer harmless from and against any and all claims, actions, damages, costs, expenses, and liabilities of
any nature whatsoever arising in connection with any of the foregoing. 
 13. Severability, Waiver, and Choice of Law. In the event that any provision
of this Agreement is deemed invalid by reason of law, this Agreement will be construed as not containing such provision and the remainder of the Agreement shall remain in full force and effect. Buyer retains all of its rights, even if it makes an
Advance after an Event of Default. If Buyer waives an Event of Default, it may enforce a later Event of Default. Any consent or waiver under, or amendment of, this Agreement must be in writing. Nothing contained herein, or any action taken or not
taken by Buyer at any time, shall be construed at any time to be indicative of any obligation or willingness on the part of Buyer to amend this Agreement or to grant to Seller any waivers or consents. This Agreement has been transmitted by Seller to
Buyer at Buyer’s office in the State of California and has been executed and accepted by Buyer in the State of California. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of California.

 14. Account Collection Services. Certain Account Debtors may require or prefer that all of Seller’s receivables be paid to the same address
and/or party, or Seller and Buyer may agree that all receivables with respect to certain Account Debtors be paid to one party. In such event Buyer and Seller may agree that Buyer shall collect all receivables whether owned by Seller or Buyer and
(provided that there does not then exist an Event of Default or event that with notice, lapse or time or otherwise would constitute an Event of Default, and subject to Buyer’s rights in the Collateral) Buyer agrees to remit to Seller the amount
of the receivables collections it receives with respect to receivables other than Purchased Receivables. It is understood and agreed by Seller that this Section does not impose any affirmative duty on Buyer to do any act other than to turn over such
amounts. All such receivables and collections are Collateral and in the event of Seller’s default hereunder, Buyer shall have no duty to remit collections of Collateral and may apply such collections to the obligations hereunder and Buyer shall
have the rights of a secured party under the California Uniform Commercial Code. 
 15. Notices. All notices shall be given to Buyer and Seller at the
addresses or faxes set forth on the first page of this Agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postage pre-paid,
(b) one (1) calendar day after deposit with an overnight mail or messenger service; or (c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex. 
 16. Jury Trial. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT; AND (c) REPRESENT
AND WARRANT THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’
AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all 

  

 15 

 
disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties
(or, if they cannot agree, by the Presiding Judge of the Santa Clara County Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls
within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary
restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any
dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County Superior Court for such relief. 
 17. Term and Termination. The term of this Agreement shall be through the Termination Date unless terminated in writing by Buyer or Seller. Seller and Buyer shall
each have the right to terminate this Agreement at any time, provided, however, Buyer must provide Seller with 90 days notice of the proposed termination if and only if no event of Default has occurred and is continuing at the time Buyer notifies
Seller of its intent to terminate the Agreement and the Termination Date is more than 90 days after the date of any such notice of intent to terminate. No notice shall be required for this Agreement to terminate automatically on the Termination
Date. Notwithstanding the foregoing, any termination of this Agreement shall not affect Buyer’s security interest in the Collateral and Buyer’s ownership of the Purchased Receivables, and this Agreement shall continue to be effective, and
Buyer’s rights and remedies hereunder shall survive such termination, until all transactions entered into and Obligations incurred hereunder or in connection herewith have been completed and satisfied in full. 
 18. Titles and Section Headings. The titles and section headings used herein are for convenience only and shall not be used in interpreting this Agreement.

 19. Other Agreements. The terms and provisions of this Agreement shall not adversely affect the rights of Buyer or any other division or affiliate
of Silicon Valley Bank under any other document, instrument or agreement, including the Loan Agreement. The terms of such other documents, instruments and agreements shall remain in full force and effect notwithstanding the execution of this
Agreement. In the event of a conflict between any provision of this Agreement and any provision of any other document, instrument or agreement between Seller on the one hand, and Buyer or any other division or affiliate of Silicon Valley Bank on the
other hand, Buyer shall determine in its sole discretion which provision shall apply. Seller acknowledges specifically that any security agreements, liens and/or security interests currently securing payment of any obligations of Seller owing to
Buyer or any other division or affiliate of Silicon Valley Bank also secure Seller’s obligations under this Agreement, and are valid and subsisting and are not adversely affected by execution of this Agreement. Seller further acknowledges that
(a) any collateral under other outstanding security agreements or other documents between Seller and Buyer or any other division or affiliate of Silicon Valley Bank secures the obligations of Seller under this Agreement and (b) an Event of
Default by Seller under this Agreement constitutes a default under other outstanding agreements between Seller and Buyer or any other division or affiliate of Silicon Valley Bank. 
 20. Amended and Restated Agreement. Buyer and Seller agree that, effective upon the execution and delivery of this Agreement by each such party, the terms and provisions of the Existing A/R Purchase 

  

 16 

 
Agreement shall be and hereby are amended, restated and superseded in their entirety by the terms and provisions of this Agreement. Nothing herein contained
shall be construed as a substitution or novation of the obligations of Buyer and Seller outstanding under the Existing A/R Purchase Agreement or instruments securing the same, which obligations shall remain in full force and effect, except to the
extent that the terms thereof are modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of Seller, or any guarantor from any of its
obligations or liabilities under the Existing A/R Purchase Agreement or any of the security agreements, pledge agreements, mortgages, guaranties or other loan documents executed in connection therewith. Seller hereby (i) confirms and agrees
that each document relating to the Existing A/R Purchase Agreement to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Effective Date all
references in any such document to “the Agreement”, the “Accounts Receivable Purchase Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Existing A/R Purchase
Agreement shall mean the Existing A/R Purchase Agreement as amended and restated by this Agreement; and (ii) confirms and agrees that to the extent that the Existing A/R Purchase Agreement or any document relating thereto executed in connection
therewith purports to assign or pledge to the Buyer or to grant to the Buyer a security interest in or lien on, any collateral as security for the obligations hereunder or to grant control over any such collateral from time to time existing in
respect of the Existing A/R Purchase Agreement, such pledge, assignment or grant of the security interest, lien, or grant of control, is hereby ratified and confirmed in all respects and shall remain effective as of the first date it became
effective. 
 [Remainder of Page Intentionally Blank] 
  

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 IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the day and year
above written. 
  

			
	SELLER: AXESSTEL, INC.
		
	 By
	 	/s/ Patrick Gray
	 Title
	 	SVP, Finance
	
	BUYER: SILICON VALLEY BANK
		
	 By
	 	/s/ Robert C. Lake
	 Title
	 	Relationship Manager
	
	 Effective Date: August 7, 2006

  

 S-1 
 Second Amended and Restated Accounts 
 Receivable Purchase AgreementLetter of Credit Discounting Agreement

 EXHIBIT 10.3 
 Silicon Valley Bank 
 LETTER OF CREDIT DISCOUNTING AGREEMENT 
 WITH RECOURSE 
 Client: Axesstel, Inc.

 Letter of Credit Number: To be identified on LC Discounting Funding Certificate 
 Issuing Bank: To be identified on LC Discounting Funding Certificate 
 Letter of Credit Date: To be identified on
LC Discounting Funding Certificate 
 Letter of Credit Aggregate Amount: To be identified on LC Discounting Funding Certificate; Aggregate of all LCs
discounted and outstanding not to exceed $6,000,000 
 Beneficiary: To be identified on LC Discounting Funding Certificate 
 Applicant: To be identified on LC Discounting Funding Certificate 
 Amount To be Drawn for Discounting (“LC Discounted Amount “) To be identified on LC Discounting Funding Certificate and to be determined by SVB as to each LC in its discretion 
 Discount Interest Rate: To be determined by SVB in its discretion as to each LC as reflected on the LC Discounting Funding Certificate, provided that such rate shall
not exceed SVB’s Prime Rate (which may change from time to time) on the day of discounting plus 2.5 percentage points 
 Agreement

 This Letter of Credit Discounting Agreement (this “Agreement”) is entered into between the above-referenced “Client” and
Silicon Valley Bank (“SVB”). Client and SVB are collectively referred to herein as “Parties”. 
 Pursuant to the terms and conditions set
forth herein, Client may present to SVB for discounting letter of credit bills, demand, sight drafts or usance drafts for the letter of credit (“LC”) with the number identified above issued to Client by Issuing Bank in the aggregate amount
identified above but not to exceed $6,000,000 as to all discounted and outstanding LCs purchased by SVB. SVB may purchase from Client such letter of credit bills, demand, sight drafts or usance drafts for discounting. 
 For transactions involving the discounting of the LC between SVB and Client as described above, the Parties agree as follows: 
  

	1.	Definitions 

  

	 	A.	Issuing Bank: The financial institution that establishes or established the letter of credit at the request of the buyer in favor of the seller/exporter.

  

	 	B.	Reimbursing Bank: The financial institution named in the documentary letter of credit from which the Paying, Accepting or Negotiating Bank may request payment be made after
receipt of the documents in compliance with the documentary letter of credit. 

  

	 	C.	Negotiating Bank: The financial institution that receives documentation from beneficiary, examines those documents for adherence to the terms and conditions of the letter of
credit, and forwards those documents to the Issuing Bank. 

  

 1 

	 	D.	Accepting Bank: The financial institution that by signing a time draft accepts responsibility to pay when the draft becomes due. 

  

	 	E.	Paying Bank: The financial institution primarily responsible for the payment under the documentary letter of credit. 

  

	 	F.	Confirming Bank: The financial institution that assumes responsibility for payment from the Issuing Bank to the beneficiary of a letter of credit. 

 

	 	G.	Irrevocable Documentary Letter of Credit: A document issued by a financial institution stating its commitment to pay someone a stated amount of money if specific terms and
conditions are met. It cannot be amended or cancelled without the prior mutual consent of all parties to the letter of credit. 

  

	 	H.	Sight Draft: A draft payable upon presentation or demand. 

  

	 	I.	Usance or Time Draft: A draft payable at a future fixed or determinable date. 

  

	 	J.	Discount Period: The total number of calendar days between the date that SVB makes payment to Client for SVB’s purchase of the letter of credit bills, demand, sight
drafts or usance drafts for discounting and the date that SVB receives payment from the Issuing Bank, Paying Bank or Reimbursing Bank (as the case may be). The date that SVB actually receives such payment may be after the payment due date. Client
agrees that in the case of sight drafts that SVB will charge no less than 30 days of interest. Client agrees that in the case of usance drafts, SVB will charge interest of no less than the greater of 30 days or 5 days past the LC payment due date.
Client agrees that if SVB discounts letters of credit pursuant to section 5(B) and 22, then SVB will charge no less than 30 days interest after the LC payment due date. 

  

	2.	SVB Requirements Concerning Banks and Letter of Credit. 

  

	 	A.	Issuing Bank: The financial strength of the Issuing Bank of each letter of credit, and the financial strength of the country in which the Issuing Bank is located, must be
acceptable to SVB at its sole and absolute discretion. 

  

	 	B.	Confirming Bank. The financial strength of the Confirming Bank of each letter of credit, and the financial strength of the country in which the Confirming Bank is located,
must be acceptable to SVB at its sole and absolute discretion. 

  

	 	C.	Paying Bank. The financial strength of the Paying Bank of each letter of credit, and the financial strength of the country in which the Paying Bank is located, must be
acceptable to SVB at its sole and absolute discretion. 

  

	 	D.	Letter of Credit. Each LC must be: (i) irrevocable; (ii) subject to the Uniform Customs and Practices for Documentary Credits, International Chamber of
Commerce publication number 500; (iii) payable in U.S. Dollars; (iv) negotiation is either restricted solely to SVB or SVB determines in SVB’s sole and absolute discretion that the LC is freely negotiable and negotiation is not
restricted to any financial institution other than SVB. Sight drafts must be paid within 60 days of commencement of the Discount Period and usance drafts within 30 days. In its sole and absolute discretion, SVB may impose additional requirements for
the LC. 

  

 2 

	3.	Client Representations and Warranties. Client hereby represents and warrants that: 

  

	 	A.	Client is and will continue to be, duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any
state where such qualification is necessary, except for jurisdictions in which failure to do so would not have a material adverse effect on Client. 

  

	 	B.	The execution, delivery and performance by Client of this Agreement and all other related documents have been duly and validly authorized, do not conflict with Client’s
formation documents, and do not constitute an event of default under any material agreement by which Client is bound. 

  

	 	C.	Other than Client’s rights in the LC and related documents and liens granted in favor of SVB, there are no liens or any other encumbrances or claims to or on the LC and
related documents or the Client’s rights in such LC and related documents other than liens granted in favor of SVB and the liens described in subsection (b) and (f) of the definition of Permitted Liens (as defined in that certain Loan
and Security Agreement, of even date herewith, by and between SVB and Client (the “Loan Agreement”)) . The Client has not assigned, transferred, encumbered or otherwise impaired any rights in the LC or related documents other than liens
granted in favor of SVB and the liens described in subsection (b) and (f) of the definition of Permitted Liens. Other than to SVB, the Client will not assign, transfer, encumber or otherwise impair any rights in the LC or related
documents, except for liens described in subsection (b) and (f) of the definition of Permitted Liens. Client will not interfere with or impede, and will not assist, encourage or facilitate any other party in interfering with or impeding or
with, any of SVB’s or SVB’s assign’s rights under the LC or related documents including any rights to payments. 

  

	 	D.	Documents presented by Client under the LC are in full compliance with the terms and conditions of the LC. 

  

	4.	Regulatory Requirements. The letter of credit and all its terms and conditions must necessarily be in full compliance with all regulatory requirements.

  

	5.	Acceptance. 

  

	 	A.	Standard Acceptance Procedure. For usance letters of credit with drafts drawn on either the Issuing Bank or any other banks, no funding by SVB shall take place unless
and until the drafts are accepted by the respective drawees and written confirmation to that effect, in the form of a Tested Telex or SWIFT, is received by SVB from the Issuing Bank, the Accepting Bank and/or Confirming Bank (as applicable).

  

	 	B.	Exception Acceptance Procedure. In its sole and absolute discretion, SVB may fund (in accordance with Section 22 below) SVB’s purchase of a sight or
usance letters of credit prior to receiving written confirmation of acceptance of the drafts by the Issuing Bank, Accepting Bank or Confirming Bank so long as SVB receives from Client information relating to the letters of credit and parties to it
sufficient, in Bank’s sole and absolute discretion, to confirm the issuance of the letter of credit, the parties to the letter of credit, the amount of the letter of credit and any other information SVB deems necessary to receive prior to
funding, including, but not limited to: 

  

	 	i.	Name of Issuing Bank 

  

	 	ii.	Number of letter of credit 

  

	 	iii.	Amount of letter of credit 

  

	 	iv.	Client invoice amount or draft amount 

  

	 	v.	Maturity/tenor date of letter of credit 

  

 3 

	 	vi.	Written confirmation from Client that goods have been shipped. 

  

	6.	Refusal to Discount. Client agrees that SVB reserves the right at all times to refuse to discount any one or all of the Client’s request for discounting of
any LC for any reason, including, but not limited to, non-compliance with any of the terms and conditions of this Agreement. 

  

	7.	Document Discrepancies. Any discrepancies in any drafts, bills or any other documents presented by Client to SVB for discounting must be accepted by the Issuing
Bank and/or Confirming Bank (as appropriate) before SVB will discount the LC. 

  

	8.	Discount Interest Payment to SVB. Client agrees that as consideration for purchasing the LC and related documents, and for accepting assignment of the LC
proceeds, SVB shall be paid by Client an amount equal to: the product of (a) the LC Amount Discounted multiplied by (b) the Discount Interest Rate, then multiplied by the Discount Period, and then divided by 360 days.

  

	9.	SVB Fees. SVB may charge additional fees related to wire transfers, fees from the Issuing, Accepting or other banks that are Client’s responsibility, or
other SVB transaction fees, etc. SVB will inform Client of those fees. 

  

	10.	Reimbursement of Unpaid LC Discounted Amount. Client will reimburse SVB for any and all amounts owed to SVB under a discounted LC. Client will make such
payments to SVB within ten (10) Business Days (as defined in the Loan Agreement) of the later of: (i) the payment due date and draw with respect to such LC (as set forth in such LC and related documents) and (ii) a demand for payment
made by SVB on Client. Client agrees that Bank may debit Client’s accounts held at or through SVB for any such payments and such debit will not be considered an offset. In addition, Client shall reimburse SVB for all such amounts immediately
upon any termination or acceleration under the Loan and Security Agreement dated on or about the date hereof between Client and Bank. 

  

	11.	Indemnity and Hold Harmless of Bank; Collateral. In addition to the reimbursement obligation set forth in section 10, Client hereby agrees to indemnify and hold
harmless SVB, its affiliates and their respective directors, officers, agents, employees and assigns (“Indemnified Persons”) against any and all claims, causes of action, liabilities, lawsuits, demands, losses and damages arising from, or
incurred by an Indemnified Person as a result of, this Agreement, and the transactions contemplated by it (each, a “Claim”), including without limitation: any and all court costs and reasonable attorneys’ fees, in any way related to
or arising out of or in connection with this Agreement or any action taken or not taken pursuant hereto; any Claims arising as a result of SVB’s adherence to instructions from Client; any assertion of a dispute relating to the LC (whether
asserted by the LC’s applicant or beneficiary); any Claims arising from allegations of fraud with respect to the LC; any Claims arising from any temporary restraining order, injunction or other legal process (in any country) which may restrict,
impair or otherwise affect the Issuing Bank’s or Confirming Bank’s ability to pay SVB or an assignee of SVB; or any Claims incurred by an Indemnified person as a result of non payment of the LC; provided that no Indemnified Person shall be
entitled to be indemnified to the extent that such Claims result from an Indemnified Person’s gross negligence or willful misconduct. Client will pay interest on any amounts owed under this provision at five percent 5% above the SVB’s
prime rate (calculated on a per annum basis) from the date the amount is demanded by an Indemnified Person until the date such amount is paid to the Indemnified Person. This provision shall survive the termination of this Agreement. The obligations
of Client to SVB hereunder are secured by the security interest granted to SVB by Client under that certain Loan and Security Agreement, dated on or about the date hereof, and any amendment, refinancing or replacement thereof.

  

	12.	Relationship of the Parties. Nothing in this Agreement shall create any agency or fiduciary relationship between Client and SVB. 

  

 4 

	13.	Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, CLIENT WAIVES, AND AGREES THAT CLIENT SHALL NOT SEEK FROM SVB
UNDER ANY THEORY OF LIABILITY (INCLUDING WITHOUT LIMITATION ANY THEORY IN TORT), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING IN CONNECTION WITH THIS AGREEMENT. 

  

	14.	Jury Trial Waiver. SVB AND CLIENT WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, OR ANY
CONTEMPLATED TRANSACTION HEREIN, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies
of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County Superior Court) appointed in accordance
with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California;
and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The
private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be
closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the
judicial reference procedures, then such party may apply to the Santa Clara County Superior Court for such relief. 

  

	15.	Governing Law and Jurisdiction. The Parties agree that, regardless of conflicts of law principles, this Agreement shall be governed exclusively under and in accordance
with the laws of the State of California. The Parties submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California. 

  

	16.	Attorneys’ Fees, Costs and Expenses. In any action or proceeding between the Bank and any other party to this Agreement, the prevailing party will be entitled to
recover its reasonable attorneys’ fees and other reasonable costs and expenses incurred, in addition to any other relief to which it may be entitled. 

  

	17.	Termination; Survival. This Agreement remains effective until written notice of termination by one party has been received by the other party, but any revocation does
not release Client from any liability that it may have incurred prior to such termination, provided, however, SVB must provide Client with 90 days notice of the proposed termination if and only if no event of Default has occurred and is continuing
at the time SVB notifies Client of its intent to terminate this Agreement. Sections 10 through 16 shall survive the termination of this Agreement. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of the
Loan Agreement. 

  

	18.	 Amendment and Integration. The provisions of this Agreement may only be altered, modified or amended by instrument in writing duly executed by the
Parties hereto. This Agreement, the Loan and Security Agreement between Client and Bank, the LC and the credit bills, demand drafts, sight drafts or usance drafts associated with the LC, together represent the entire agreement about this subject
matter and supersede all prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement, the LC and the credit bills, demand
drafts, sight drafts 

  

 5 

	 	 
or usance drafts associated with the LC merge into this Agreement and the credit bills, demand drafts, sight drafts or usance drafts associated with the LC.

  

	19.	Severability. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 

  

	20.	Notices. Any notice or other communication may be sent by United States mail, overnight courier or facsimile to the noted addresses set forth below the parties’
signatures. 

  

	21.	Assignment by SVB. SVB may assign this Agreement and all of its obligations and rights to another party without consent from or notice to Client, provided, however,
that any such assignment may only occur as part of the assignment of the Loan Agreement (as defined in Section 3(C)) and the ARPA (as defined in the Loan Agreement). 

  

	22.	Funding Procedure for Exception Acceptance Procedure. LCs funded pursuant as set forth in Section 5(B) will be funded by SVB as follows: 

 

	 	A.	All amounts funded by SVB will be deposited into a deposit or other account maintained at SVB by Client. Initially that account will be the cash collateral deposit account
maintained by Client at SVB. Client grants to SVB a security interest in the proceeds from any letter of credit funded pursuant to Section 5(B) and this Section 22 but only for so long as those proceeds are held in the deposit account
pursuant to this Section 22. 

  

	 	B.	All amounts funded by SVB will be held and not released to Client by SVB until SVB determines, in its sole and absolute discretion, that: 

  

	 	i.	SVB has received the original letter of credit by the end of the fifth (5th) calendar day after discounting by SVB; 

  

	 	ii.	SVB has received all original documents necessary for discounting the letter of credit (including all drafts, confirmations, etc.) by the fourteenth (14th) calendar day after discounting by SVB; 

  

	 	iii.	All documents presented to SVB contain no discrepancies or some discrepancies that SVB in its sole and absolute discretion does not deem material; 

 

	 	iv.	Client has shipped the goods that are the subject of the letter of credit; 

  

	 	v.	Issuance date of any letter of credit is not later than the date SVB discounts the letter of credit; and 

  

	 	vi.	The amount of any Client invoice may not exceed the Letter of Credit Aggregate Amount. 

  

	 	C.	In the event that SVB determines that any one of the conditions in Section 22(B) are not satisfied, SVB may debit Client’s deposit account for the amount funded to
Client for the letter of credit at issue and such LC shall not be discounted pursuant to this Agreement, and SVB shall take all reasonable actions necessary to reflect that such LC has not been discounted. Such debit may be done without notice to
Client and is not considered an offset. 

 THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives
as of the date written below. 
  

									
	Client: Axesstel, Inc.	 		 	Silicon Valley Bank
					
	 By:
	 	 /s/ Patrick Gray
	 		 	 By:
	 	 /s/ Robert C. Lake

	 Name:
	 	 Patrick Gray
	 		 	 Name:
	 	 Robert C. Lake

					
	 Title:
	 	 SVP, Finance
	 		 	 Title:
	 	 Relationship Manager

					
	 Dated:
	 	 8/8/06
	 		 	 Dated:
	 	 August 7, 2006

			
	 Address For Notices:
	 		 	 Address For Notices:

			
	 Axesstel, Inc.
	 		 	 Silicon Valley Bank

	 6815 Flanders Dr., Suite 210
	 		 	 4445 Eastlake Mall

	 San Diego, CA 92121
	 		 	 Suite 110

		 		 	 San Diego, CA 92121

			
	 Telephone:
858-            -            
	 		 	 Telephone: 858-784-3306

			
	 Facsimile: 858-625-2110
	 		 	 Facsimile: 858-622-1424

  

 7

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