ADDENDUM NO. 1
This Addendum No. 1 is made this 16th day of May, 2005, by and between GTC
Telecom Corp. ("GTC") and THE RAPAPORT FAMILY TRUST ("Investor") (together
"Parties"), to amend the terms of that certain Subscription Agreement
("Agreement") and Convertible Note ("Note") entered into between GTC and
Investor as of May 12, 2005. In the event the terms of the Agreement and the
Note and this Addendum No. 1 conflict, the terms of this Addendum No. 1 shall
control.
In consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
The following portions of Section 1.01, is hereby amended to read as
follows:
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THE NOTE
Maturity - December 31, 2006
Repayment
Terms - Accrued Interest payable monthly (provided that in
the month where such Interest is due, the Company,
after payment of all other then current obligations,
has at least $300,000 remaining in available cash;
Principal paid upon Maturity).
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Paragraph 1 of the Note is hereby deleted and replaced as follows:
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FOR VALUE RECEIVED, the undersigned, GTC TELECOM CORP., a Nevada
corporation, its assigns, and successors (the "Company"), hereby promises to pay
to the order of THE RAPAPORT FAMILY TRUST (the"Purchaser"), in lawful money of
the United States of America, and in immediately available funds, the principal
sum of ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000). The principal
hereof and any unpaid accrued interest thereon shall be due and payable on or
before 5:00 PM PACIFIC TIME ON DECEMBER 31, 2006 (unless such payment date is
accelerated as provided in Section 5 hereof, extended as provided in Section 2
hereof, or unless this Note is converted as set forth in paragraph 1 hereof)
("Maturity"). Payment of all amounts due hereunder shall be made at the address
of the Purchaser provided for in Section 6 hereof. The Company further promises
to pay simple interest (the "Interest") at the rate of twelve percent (12%) per
annum on the outstanding principal balance hereof, such interest to be paid
monthly, on the fifteenth of each month (unless such day falls on a holiday or
weekend, whereupon such date shall be extended to the next business day).
Notwithstanding the above, Interest shall accrue and not be paid in those months
where, after payment of all other then current obligations, the Company does not
have at least $300,000 in available cash.
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[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers or
other authorized signatory, have executed this Addendum as of the date first
above written.
"GTC" "INVESTOR"
Sign: /s/ Xxxx Xxxxxxx Sign: /s/ Xxxxxxx X. Xxxxxxxx
Print: Xxxx Xxxxxxx Print: Xxxxxxx X. Xxxxxxxx
Title: President Title:
