SETTLEMENT AGREEMENT
                              --------------------

     This  Settlement  Agreement  (this  "Agreement")  is  made this 18th day of
February  2005,  by MCI WorldCom Network Services, Inc. assignee of MCI WorldCom
Communications  Inc.,  UUNet  Technologies,  Inc.,  and  MCI  International Inc.
successor  by  merger  of  WorldCom  Int'l Data Services, Inc., their respective
parent  entity, affiliates and subsidiaries (collectively referred to as "MCI"),
all  corporations  organized  under  the  laws of the State of Delaware with the
principal  place  of business at 22001 Loudoun County Parkway, Ashburn, Virginia
20147,  and  GTC  Telecom  Corp.,  formerly  known  as  GenX LLC d/b/a Preferred
Discount  Plan  (collectively  "GTC"), a corporation organized under the laws of
the State of Nevada, with its principal place of business at 3151 Airway Avenue,
Suite P-3, Costa Mesa, California 92626.  The signatories to this Agreement will
hereafter  be  referred  to jointly as the "Parties" or individually as "Party".

     This Agreement is made as a compromise between the Parties for the complete
and  final  settlement  of  their claims, differences, and causes of action with
respect  to  the  disputes  described  below.

                                    PREAMBLE
                                    --------

     WHEREAS,  MCI  provided  telecommunication  services  to  GTC pursuant to a
Telecommunications  Service Agreement between MCI WorldCom Network Services Inc.
and  GENX  LLC  dated  August  20,  1999, Digital Services Agreement between MCI
WorldCom  Network  Services  Inc.  and GTC Telecom Inc, successor in interest to
GENX,  LLC  dated November 20, 2002 and that certain Internet Services Resellers
Agreement  between  GTC  Telecom  Inc. and UUNet Technologies Inc. dated May 20,
2002  (Services);

     WHEREAS,  GTC has outstanding account balances with respect to the Services
however,  has  been  unable  to  make  timely  payments as required by MCI. (the
"Dispute");

     WHEREAS, MCI disconnected said Services on or about July 12, 2004: WHEREAS,
MCI  and  GTC  desire  to  avoid  the  necessity,  expense,  inconvenience,  and
uncertainty  of  litigation  and  instead  to  resolve and settle all claims and
disputes  between  them  arising  out  of, or in any way related to the Dispute;

     NOW,  THEREFORE,  in  consideration  of  the  releases  and mutual promises
contained herein and other good and valuable consideration exchanged between MCI
and  GTC,  the  receipt  and  sufficiency  of  which is hereby acknowledged, the
Parties  agree  as  follows:

1.0     SETTLEMENT

     1.1     GTC shall pay to MCI the amount of Seven Hundred and Fifty Thousand
Dollars  and no/100 ($750,000.00) ("Settlement Payment"), on or before March 31,
2005.

     1.2  All  payments  made by GTC pursuant to this Agreement shall be sent in
the  form  of  a certified check payable to: "MCI WorldCom Network Services Inc"
priority  overnight  mail  to:

           Bank  One
           525  West  Monroe  Street,  8th  Floor  Mailroom,
           Attention:  Lockbox  93825-MCI
           Chicago,  Illinois,  60661

     1.3     Upon  receipt  of  the  Settlement  Payment,  MCI shall release its
security  agreement  dated  October  24,  2004  with  GTC by promptly filing UCC
releases  in  all  states  where  it  previously  filed  UCC-1's.

     1.4 The Parties' performance of all obligations set forth in this Agreement
shall  finally  settle  and  resolve, among other things, all claims asserted or
which  could  have  been asserted by MCI or GTC as of the date of this Agreement
regarding the Dispute. The parties agree to bear their own costs associated with
the  Dispute,  including, but not limited to, filing costs, attorneys' fees, and
expenses.

2.0     COMPROMISE

     The  Parties  agree  and acknowledge that this Agreement is the result of a
compromise  between  the  Parties for the complete and final settlement of their
claims, differences, and causes of action regarding the Dispute, and shall never
be  construed  as  an  admission  by MCI or GTC of any liability, wrongdoing, or
responsibility  on the part of either of the Parties or on the part of either of
the  Parties'  predecessors, successors, assigns, agents, parents, subsidiaries,
affiliates,  directors,  officers, or employees.  In fact, the Parties expressly
deny  any  such  liability,  wrongdoing,  or  responsibility.

3.0     RELEASE

     3.1     In  consideration hereof, GTC and all its predecessors, successors,
parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs,
agents,  transferees,  directors,  officers,  employees,  and  attorneys  hereby
release and forever discharge MCI and all its predecessors, successors, parents,
direct  subsidiaries, indirect subsidiaries, affiliates, assigns, heirs, agents,
transferees,  directors,  officers, employees, and shareholders from and against
all  actions,  causes  of  action,  claims,  suits,  debts,  damages, judgments,
liabilities,  and  demands  whatsoever, whether matured or unmatured, whether at
law  or  in  equity,  whether  before a local, state, or federal court, state or
federal administrative agency or commission, or arbitration tribunal, regardless
of  location  and whether now known or unknown, liquidated or unliquidated, that
GTC  now  has  or  may  have  had, or thereafter claims to have regarding issues
arising  out  of  or  related to the Dispute or any other creditor debtor matter
between  the Parties, on behalf of itself, or any other person or entity, at any
time  prior  to  and  including  the  date  of  this  Agreement.

     3.2  In  consideration  hereof,  MCI  and all its predecessors, successors,
parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs,
agents,  transferees,  directors,  officers,  employees,  and  attorneys  hereby
release and forever discharge GTC and all its predecessors, successors, parents,
direct  subsidiaries, indirect subsidiaries, affiliates, assigns, heirs, agents,
transferees,  directors,  officers, employees, and shareholders from and against
all  actions,  causes of action, claims, suits, debts, including but not limited
to  those  accounts on Exhibit "A," damages, judgments, liabilities, and demands
whatsoever,  whether  matured or unmatured, whether at law or in equity, whether
before  a local, state, or federal court, state or federal administrative agency
or  commission,  or arbitration tribunal, regardless of location and whether now
known  or unknown, liquidated or unliquidated, that MCI now has or may have had,
or  thereafter  claims to have regarding issues arising out of or related to the
Dispute  or  any  other creditor debtor matter between the Parties, on behalf of
itself,  or  any  other person or entity, at any time prior to and including the
date  of  this  Agreement.

     3.3     The  Parties acknowledge that they are entering into this Agreement
based  on  their  own  investigation  of  the  facts, and are not relying on any
representations  or  warranties  except  as may have been expressly made herein.

4.0     CONFIDENTIALITY

     The  Parties  agree that neither of them will disclose the contents of this
Agreement,  the  details  or terms of the settlement except (i) to the extent as
required  by  any  governmental  agency  including  but not limited to audit and
reporting  required  by  the  SEC  and  the  Sarbanes-Oxley  Act; (ii) otherwise
required to be disclosed by law; (iii) required by indemnifying parties; (iv) or
necessary  in  any  legal  proceedings in order to enforce any provision of this
Agreement.   The  Parties  agree  that  they  will notify each other in writing,
within  five  (5)  days  of  receipt  of  any  subpoena,  court  order  or other
administrative  order  requiring  disclosure  herein or within five (5) calendar
days  of  seeking  indemnification.   Notwithstanding  the  above,  the  Parties
acknowledge  that  GTC  will  file  a  Current  Report on Form 8-K detailing the
material  terms  of  this Agreement, as required by SEC regulations, within four
(4)  business  days  of  the  execution  of  this  Agreement.

5.0     MISCELLANEOUS  TERMS  AND  CONDITIONS

     5.1     The Parties hereby confirm and ratify the accuracy and truthfulness
of the above Preamble of this Agreement, and hereby incorporate by reference the
Preamble  as  though  it  were  fully  set  forth  herein.

     5.2  This document contains the complete Agreement between the Parties with
respect  to  its  subject  matter  and  supercedes any and all prior agreements,
understanding,  promises,  warranties, and representations made by each Party to
the  other  concerning  the  subject  matter.

     5.3     This  Agreement  may be executed in identical counterparts, each of
which shall constitute an original and all of which shall constitute one and the
same  Agreement.  A Party may deliver this Agreement by transmitting a facsimile
copy  of this Agreement to the other Party.  A facsimile copy of this Agreement,
including  the  executed  signature  page  thereof, shall be deemed an original.

     5.4     The  Parties  represent that neither have not filed or caused to be
filed any complaints or other actions against the other respectively, or against
any  of  its  predecessors,  successors,  parents, direct subsidiaries, indirect
subsidiaries,  affiliates,  assigns,  heirs,  agents,  transferees,  directors,
officers,  employees,  and shareholders with any local, state, or federal court,
state  or  federal administrative agency or commission, or arbitration tribunal,
regardless  of  location.

     5.5     The  Parties  hereby  agree  that  they  will not make any claim or
demand,  or  commence  any  action  against  any  third  party  who  might claim
contribution,  indemnity,  or  other  relief  over  against  the  said  Parties.

     5.6     This Agreement may be modified only by a written document signed by
the  Parties.  No  waiver  of  this  Agreement  or  of  any  of  the  promises,
obligations, terms, or conditions hereof shall be valid unless it is written and
signed  by  the  Party  against  whom  the  waiver  is  to  be  enforced.

     5.7  The  Parties  agree  to  execute  and  exchange  any  such  further
documentation  as  may  be  reasonably required to give effect to the Agreement.

     5.8  This  Agreement  shall be binding upon and inure to the benefit of the
Parties  thereto,  their  predecessors,  successors,  parents,  subsidiaries,
affiliates, assigns, agents, directors, officers, employees, and attorneys. Each
of  the  signatories  of  this  Agreement  represents  and  warrants  that he is
authorized  to  execute  this  Agreement  and  to  bind  the  Parties  hereto.

     5.9  If  any  part  or  any  provision  of  this Agreement shall be finally
determined  to  be  invalid  or unenforceable under applicable law by a court of
competent  jurisdiction,  that  part  or  provision  shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the  remaining  parts  of  said  provision  or  the remaining provisions of this
Agreement.

     5.10  The  Parties hereby warrant and represent that they have not assigned
or  in  any way transferred or conveyed all or any portion of the claims covered
by this Agreement, and to their knowledge, no other person or entity has a right
to  any  claim  that  purports  to  be  settled  by  this Agreement. The Parties
acknowledge  and agree that this warranty and representation is an essential and
material  term of this Agreement, without which they would not have entered into
it. The Parties each agree to defend and to hold each other harmless against the
claims of any other person or entity asserting a claim or right that purports to
be  settled  by  the  Agreement.

     5.11  The Parties acknowledge that they have had the opportunity to consult
with legal counsel of their choosing prior to entering into this Agreement, that
they  know and understand this Agreement's contents, and that they are executing
this  Agreement  knowingly  and voluntarily. Each Party acknowledges that it has
not  relied  on or made any promise or representation to the other Party that is
not  contained  within  this  Agreement.

     5.12  The  Parties cooperated in the drafting of this Agreement, and in the
event  that  it  is  determined  that  any  provision  herein is ambiguous, that
provision  shall  not  be  presumptively  construed  against  either  Party.

     5.13 In the event that either Party breaches any term of this Agreement and
the  other  Party  is  required  to  employ  counsel  to enforce its rights, the
prevailing  Party  shall recover its attorneys' fees and costs incurred therein.

     5.14  Any  notices  required  under this Agreement shall be served upon the
Parties  via  telecopier  and  overnight  priority  mail  as  follows:

     Notices  to  MCI:
     Maureen  F.  Del  Duca
     Vice  President  /Chief  Legal  Counsel
     MCI,  Inc.
     1133  19th  Street,  NW
     Washington,  DC  20036
     Telephone  No.  (202)  736-6616
     Telecopier  No.  (202)  736-6320

     Catherine  P.  Bollinger
     Associate  Counsel
     MCI, Inc.
     1133  19th  Street,  NW
     Washington,  DC  20036
     Telephone  No.  (202)  736-6616
     Telecopier  No.  (202)  736-6320

     Notices  to  GTC:

     Vi  Bui
     General  Counsel
     GTC  Telecom  Corporation
     3151  Airway  Avenue,  Suite  P-3
     Costa  Mesa,  California  92626
     Telephone  No.  (714)  549-7700
     Telecopier  No.  (714)  549-7707

     5.15     This  Agreement shall be governed, in all respects, under the laws
of  the State of Oklahoma, irrespective of its choice of law rules.    Any legal
action or preceeding with respect to this Agreement may be brought in the Courts
of  the  State of Oklahoma in and for the County of Tulsa or U.S. District Court
for  the Northern District of Oklahoma.  By execution hereof, the parties hereby
submit  to  such jurisdiction and expressly waive whatever rights may correspond
to  either  of  them  by  reason  of  the  present  of  future  domicile.

     5.16     The  undersigned  represents  and  warrants  that  he  or  she  is
authorized  to  execute  this  Agreement  and  to  bind the Party whom he or she
represents  thereto.

     IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the date
above  written.

MCI:



By:  /s/ Anastasia D. Kelly                  Date:  3/06/05
     --------------------------------
     Anastasia  Kelly
     Executive Vice President & General Counsel


GTC:

By:  /s/ Gerald A. DeCiccio                  Date:  2/18/05
     --------------------------------
     Gerald A. DeCiccio
     Chief Financial Officer


                                  Exhibit "A"

                                List of Accounts

Promissory Note, as Amended  MCI WorldCom Network Services, Inc.  $4,550,437.05
Account No. 0099283          MCI WorldCom Network Services, Inc.  $      549.56
Account No. 2100112988       UUNet Technologies, Inc.             $1,181,828.32
Account No. xu95686          MCI WorldCom Network Services, Inc.  $  483,330.65
Account No. 4857374          MCI WorldCom Network Services, Inc.  $      642.22
Account No. R2014888         MCI WorldCom Network Services, Inc.  $    1,447.51
Account No. 23436706         MCI International,  Inc.             $   11,340.96
Account No. 86337649         MCI International, Inc.              $        0