Document:

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:

                                _________________

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).

                                _________________

     Paragraph  1  of  the  Note  is  hereby  deleted  and  replaced as follows:

                                _________________

     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.

                                _________________

                            [Signature Page Follows]

<PAGE>

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/ Eric Clemons             Sign: /s/ Stephen M. Rapaport
Print: Eric Clemons                 Print: Stephen M. Rapaport
Title: President                    Title:Exhibit 10.1

 

SETTLEMENT AGREEMENT, RELEASE AND COVENANT
NOT TO SUE

 

This Settlement Agreement, Release and Covenant Not to Sue (“Agreement”)
is entered into as of May 17, 2005 (“the Effective Date”) by and
between Fargo Electronics, Inc. (“Fargo”), a Minnesota corporation; Toppan
Printing Co., Ltd. (“Toppan”), a Japanese corporation; Viisage Technology,
Inc., a Delaware corporation; and Trans Digital Technologies Corporation, a
Delaware corporation (Viisage Technology, Inc. and Trans Digital Technologies Corporation
are collectively referred to herein as “Viisage”).  Fargo, Toppan, and Viisage are each a “Party”
and are collectively referred to as the “Parties.”

 

RECITALS

 

WHEREAS, by complaint filed on July 19, 2004,
Fargo brought an action against Toppan and Trans Digital Technologies
Corporation (“TDT”) in the United States District Court for the Eastern
District of Virginia, Fargo Electronics, Inc. v. Toppan Printing Co., Ltd.,
et al., Civil Action No. 1:04 CV 836 (E.D. Va.) (“the Action”);

 

WHEREAS, in the Action Fargo
alleged that Toppan and TDT have infringed, or induced others to infringe,
certain United States patents owned by Fargo by manufacturing, selling,
offering for sale, using in the United States, or importing into the United
States, indirect transfer type printers and associated laminators, including
the Toppan model CP400 printer and the Toppan model CL40 laminator;

 

WHEREAS,
Toppan and TDT denied Fargo’s claims of infringement and asserted various
affirmative defenses; and

 

WHEREAS, the Parties now wish to resolve all of their disputes and to
establish mutually beneficial business relations without further litigation or
disagreement.

 

1

 

N O W, T H E R E F O R E, in consideration for the mutual covenants and
conditions set forth below, the Parties agree as follows.

 

DEFINITIONS

 

CP400 Printer means
the indirect transfer type printer sold by Toppan under the model name “CP400”
and any modified, improved or replacement printer that Toppan authorizes Fargo
to distribute pursuant to the terms of the Distribution Agreement entered into
by Fargo and Toppan pursuant to the terms of this Agreement.

 

CL40 Laminator means
the laminator sold by Toppan under the model name “CL40” and any modified,
improved or replacement laminator that Toppan authorizes Fargo to distribute
pursuant to the terms of the Distribution Agreement entered into by Fargo and
Toppan pursuant to the terms of this Agreement.

 

Fargo Patents means
United States patents no. 6,261,012; 5,941,522; 5,807,461; and 6,022,429; any
divisions, continuations, continuations-in-part or reissues of such patents,
any foreign counterparts of such patents and any other United States or foreign
patents issued based on applications (i) filed within one year after the
Effective date and (ii) claiming any structure embodied in, or method of
operation of, the CP400 Printer and/or the CL40 Laminator or any other printer
or laminator for which Toppan hereafter offers to appoint Fargo as a
distributor.

 

Toppan Patents means
United States patents no. 5,344,808; 5,064,807; 5,019,452; and any patent that
matures from European Application EP 1 306 228 A2; any divisions,
continuations, continuations-in-part or reissues of such patents, any foreign
counterparts of such patents and any other United States or foreign patents
issued based on applications (i) filed within one year after the Effective date
and (ii) claiming any structure embodied in, or method of operation of,

 

2

 

the CP400 Printer and/or the
CL40 Laminator or any other printer or laminator for which Toppan hereafter
offers to appoint Fargo as a distributor.

 

SETTLEMENT
TERMS

 

1.                                       Contemporaneously
with the execution of this Agreement, Toppan and Fargo shall enter into a
Distribution Agreement.

 

2.                                       Contemporaneously
with the execution of this Agreement, Fargo and Viisage shall enter into a
Distribution Agreement.

 

3.                                       Within
fourteen (14) days following the Effective Date, Toppan shall pay to Fargo the
sum of Four Hundred Thousand United States Dollars ($400,000).  The payment required to be made pursuant to
the preceding sentence shall be made by wire transfer as follows:

 

LaSalle Bank

Account #
5800328006

Routing #
071000505

Swift ID:  LASLUS44

 

4.                                       Within
seven (7) days following the receipt of the payment referred to in paragraph 3
above, Fargo shall cause its counsel to file a signed Stipulation of Dismissal
with Prejudice under Fed. R. Civ. P. 41, dismissing the Action with prejudice,
in the form attached as Exhibit A.  Each
Party shall bear its own attorneys’ fees and costs in connection with the
Action.

 

RELEASES
AND COVENANT NOT TO SUE BY FARGO

 

5.                                       Upon
the Effective Date of this Agreement, and except as to the obligations
expressly set forth in this Agreement and the Distribution Agreements executed
contemporaneously herewith, including their attachments, Fargo, for itself and
for its present and former officers, directors, managers, employees, agents,
predecessors, successors, assigns, representatives, parents, shareholders,
subsidiaries, affiliates, and attorneys, hereby fully and forever releases and
discharges Toppan, Viisage, Global Enterprise Technologies Group, Nidec

 

3

 

Copal Corporation, the United
States of America (including its agencies and departments), and each of their
present and former officers, directors, managers, employees, agents,
predecessors, successors, assigns, representatives, parents, shareholders,
subsidiaries, affiliates, customers (direct and indirect, but with respect to
Toppan products only) and attorneys (the “Released Toppan Parties”), from any
and all damages, suits, claims, debts, demands, assessments, obligations,
liabilities, attorneys’ fees, costs, expenses, rights of action and causes of
action, of any kind or character whatsoever, whether known or unknown,
suspected or unsuspected, that Fargo may have or may have had against any of
the Released Toppan Parties, arising out of or related to the Action, the CP400
Printer, the CL40 Laminator or the Fargo Patents (“Released
Fargo Claims”).

 

6.                                       Fargo
expressly acknowledges and agrees that this Agreement fully and finally
releases and fully resolves the Released Fargo Claims, including those that are
unknown.  Accordingly, Fargo expressly
waives all of its rights under California Civil Code § 1542, which
provides that

 

A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Fargo also expressly waives all rights under any other statutes, legal
decisions or common law principles of similar effect.

 

7.                                       Fargo,
for itself and for its present and former officers, directors, managers,
employees, agents, predecessors, successors, assigns, representatives, parents,
shareholders, subsidiaries, affiliates, and attorneys, hereby covenants that it
will not, from and after the Effective Date of this Agreement, bring or suffer
to be brought any complaint or legal action

 

4

 

whatsoever, relating to any
Toppan product, in the United States or any other place in the world, against
any of the Released Toppan Parties for infringement of any of the Fargo
Patents, and will not assert in any forum or action that any Toppan product,
including the CP400 Printer or the CL40 Laminator, or their manufacture, use,
sale, offer for sale or importation, infringes any of the Fargo Patents.

 

RELEASES
AND COVENANT NOT TO SUE BY TOPPAN

 

8.                                       Upon
the Effective Date of this Agreement, and except as to the obligations
expressly set forth in this Agreement and the Distribution Agreement executed
contemporaneously herewith, including their attachments, Toppan, for itself and
for its present and former officers, directors, managers, employees, agents,
predecessors, successors, assigns, licensees, representatives, parents,
shareholders, subsidiaries, affiliates, and attorneys, hereby fully and forever
releases and discharges Fargo and each of its present and former officers,
directors, managers, employees, agents, predecessors, successors, assigns,
representatives, parents, shareholders, subsidiaries, affiliates, customers
(direct and indirect, but with respect to Fargo products only) and attorneys
(the “Released Fargo Parties”), from any and all damages, suits, claims, debts,
demands, assessments, obligations, liabilities, attorneys’ fees, costs,
expenses, rights of action and causes of action, of any kind or character
whatsoever, whether known or unknown , suspected or unsuspected, that Toppan may have or
may have had against the Released Fargo Parties arising out of or related to
the Action or the Toppan Patents (“Released Toppan Claims”).

 

9.                                       Toppan
expressly acknowledges and agrees that this Agreement fully and finally
releases and fully resolves the Released Toppan Claims, including those that
are unknown.  Accordingly, Toppan
expressly waives all of its rights under California Civil Code § 1542,
which provides that

 

5

 

A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Toppan also expressly waives all rights under any other statutes, legal
decisions or common law principles of similar effect.

 

10.                                 Toppan,
for itself and for its present and former officers, directors, managers,
employees, agents, predecessors, successors, assigns, licensees,
representatives, parents, shareholders, subsidiaries, affiliates, and
attorneys, hereby covenants that it will not, from and after the Effective Date
of this Agreement, bring or suffer to be brought any complaint or legal action
whatsoever, relating to any Fargo product, in the United States or any other
place in the world, against the Released Fargo Parties for infringement of any
of the Toppan Patents, and will not assert in any forum or action that any
Fargo product, or its manufacture, use, sale, offer for sale or importation,
infringes any of the Toppan Patents.

 

RELEASES
AND COVENANT NOT TO SUE BY VIISAGE

 

11.                                 Upon
the Effective Date of this Agreement, and except as to the obligations
expressly set forth in this Agreement and the Distribution Agreement executed
contemporaneously herewith, including their attachments, Viisage, for itself
and for its present and former officers, directors, managers, employees, agents,
predecessors, successors, assigns, licensees, representatives, parents,
shareholders, subsidiaries, affiliates, and attorneys, hereby fully and forever
releases and discharges Fargo and each of its present and former officers,
directors, managers, employees, agents, predecessors, successors, assigns,
representatives, parents, shareholders, subsidiaries, affiliates, customers
(direct and indirect) and attorneys, from any and all damages, suits, claims,
debts, demands, assessments, obligations, liabilities,

 

6

 

attorneys’ fees, costs,
expenses, rights of action and causes of action, of any kind or character
whatsoever, whether known or unknown , suspected or unsuspected, that Viisage may have
or may have had against Fargo arising out of or related to the Action or the
Toppan Patents (“Released Viisage Claims”).

 

12.                                 Viisage
expressly acknowledges and agrees that this Agreement fully and finally
releases and fully resolves the Released Viisage Claims, including those that
are unknown.  Accordingly, Viisage
expressly waives all of its rights under California Civil Code § 1542,
which provides that

 

A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Viisage also expressly waives all rights under any other statutes,
legal decisions or common law principles of similar effect.

 

REPRESENTATIONS
AND WARRANTIES

 

13.                                 The
Parties warrant and represent that in executing this Agreement, they do so with
full knowledge of any and all rights that they may have with respect to the
matters set forth and claims released herein, and that they are each entering
into this Agreement of their own free will. 
The Parties, or their authorized representatives, have each carefully
read this Agreement and know and fully understand its contents and significance.  The Parties acknowledge that they have each
been represented, or have the opportunity to be represented, by independent
counsel in the negotiation and preparation of this Agreement, and that each Party
enters into this Agreement

 

7

 

freely, without coercion, based
upon each Party’s own judgment and not in reliance on any other representations
or promises.

 

NO
ADMISSION OF LIABILITY

 

14.                                 This
Agreement constitutes a settlement of disputed claims.  This Agreement shall not be construed at any
time or for any purpose as an admission of liability by any Party.

 

ENTIRE
AGREEMENT

 

15.                                 This
Agreement constitutes the entire agreement among the Parties with respect to
the subject matter hereof and supersedes and replaces any and all
contemporaneous or prior agreements or understandings, whether written or oral,
with respect to the subject matter hereof. 
Each Party expressly acknowledges that, in making this Agreement, it has
not relied upon any statement or representation made by another that is not set
forth herein.

 

BINDING EFFECT

 

16.                                 This
Agreement shall bind and inure to the benefit of each Party’s principals,
agents, representatives, employees, officers, directors, shareholders,
partners, parents, subsidiaries, affiliated entities, attorneys, insurers and
reinsurers; all persons acting through, under the authority of or in concert
with them; and their respective successors, assigns, and representatives.

 

SEVERABILITY

 

17.                                 Should
any provision of this Agreement be determined invalid or unenforceable, the
Court may sever such provision or modify it to be consistent with the
objectives of the Parties as reflected in this Agreement.

 

NON-WAIVER

 

18.                                 A
waiver of any term or condition of this Agreement will not be deemed to be, and
may not be construed as, a waiver of any other term or condition hereof.

 

8

 

REASONABLE
INTERPRETATION

 

19.                                 Each
of the Parties acknowledges that this Agreement has been negotiated at arm’s
length among persons knowledgeable in the matters herein.  Accordingly, any rule of law—including
without limitation California Civil Code § 1654, or any other statutes,
legal decisions, or common law principles of similar effect—that would require
interpretation of any ambiguities in this Agreement against the Party that has
drafted it, is of no application and hereby is expressly waived.  This Agreement and its provisions shall be
interpreted in a reasonable manner to effect the Parties’ intentions.

 

GOVERNING
LAW; VENUE

 

20.                                 The
validity of this Agreement, and any of its terms or provisions, as well as the
rights and duties of the Parties, shall be governed by the laws of the State of
California, without regard to that State’s conflict of laws doctrine.  The Parties agree that all disputes arising
out of or related to this Agreement shall be subject to the exclusive
jurisdiction and venue of the United States District Court for the Northern
District of California if such court has subject matter jurisdiction; if
federal subject matter jurisdiction does not exist, then such disputes shall be
subject to the exclusive of jurisdiction and venue of the Superior Court of the
State of California in and for the County of Santa Clara.  The Parties consent to the jurisdiction of
such courts and agree that venue in those courts shall be exclusive.

 

EXECUTION
IN COUNTERPARTS

 

21.                                 This
Agreement may be executed in any number of counterparts and by each Party on
separate counterparts, each of which when so executed and delivered to the
other shall be deemed an original and all of which taken together shall
constitute one and the same instrument. 
The Parties may initially exchange counterparts by facsimile
transmission, with original counterparts to be exchanged promptly thereafter.

 

9

 

BINDING
EFFECT

 

22.                                 This
Agreement shall not be binding on any Party until fully executed by duly
authorized representatives of all Parties, but shall be deemed effective as of
the Effective Date regardless when executed.

 

 

I N   W I T N E S S   H E R E O F, the Parties have executed this
Agreement on the dates indicated below.

 

 

	
  Dated:  May 17, 2005

  	
  TOPPAN PRINTING CO., LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Toshitaka Tokitomo

  	
   

  
	
   

  	
   

  	
  Toshitaka Tokitomo

  	
   

  
	
   

  	
  Its Director

  
	
   

  	
   

  
	
  Dated:  May 17, 2005

  	
  FARGO ELECTRONICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Gary R. Holland

  	
   

  
	
   

  	
   

  	
  Gary R.
  Holland

  	
   

  
	
   

  	
  Its CEO and Chairman of the Board

  
	
   

  	
   

  
	
  Dated:  May 17, 2005

  	
  TRANS DIGITAL TECHNOLOGIES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Elliot Mark

  	
   

  
	
   

  	
   

  	
  Elliot Mark

  	
   

  
	
   

  	
  Its Secretary

  
	
   

  	
   

  
	
  Dated:  May 17, 2005

  	
  VIISAGE TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Elliot Mark

  	
   

  
	
   

  	
   

  	
  Elliot Mark

  	
   

  
	
   

  	
  Its Senior Vice President and General Counsel

  

 

10

 

EXHIBIT A

 

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

 

	
   

  	
   

  	
  )

  
	
  FARGO ELECTRONICS, INC.,

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
  Plaintiff,

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
  v.

  	
   

  	
  )

  	
  Civil Action No.:  1:04 CV836

  
	
   

  	
   

  	
  )

  
	
  TOPPAN PRINTING CO., LTD. and TRANS DIGITAL TECHNOLOGIES, CORP.,

  	
   

  	
  )

  
	
  )

  
	
   

  	
   

  	
  )

  
	
  Defendants.

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  

 

 

JOINT
STIPULATION OF DISMISSAL WITH PREJUDICE

 

Pursuant to Federal Rule of Civil Procedure 41, the parties, plaintiff
Fargo Electronics, Inc., and defendants Toppan Printing Co., Ltd., and Trans
Digital Technologies, Corp., by their respective undersigned counsel, hereby
stipulate to dismiss this lawsuit WITH PREJUDICE.  Each party shall bear its own attorney’s fees
and costs in connection with this lawsuit.

 

 

Dated:  May 17, 2005

 

1

 

	
  Respectfully submitted,

  	
   

  	
  Respectfully submitted,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jason R. Buratti, Esq.

  ROBINS, KAPLAN, MILLER & CIRESI L.L.P.

  1801 K Street, NW, Suite 1200

  Washington, DC  20006

  (202) 775-0725

  	
   

  	
  Alan L. Briggs

  Donnie L. Kidd, Jr.

  SQUIRE, SANDERS & DEMPSEY L.L.P.

  1201 Pennsylvania Avenue, NW, Suite 500

  Washington, DC  20004

  (202) 626-6600

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
  David Marder

  Stephen Herbes

  Lisa Furnald

  ROBINS, KAPLAN, MILLER & CIRESI L.L.P.

  111 Huntington Ave, Suite 1300

  Boston, MA  02199-7610

  (617) 267-2300

  

  Counsel for FARGO ELECTRONICS, INC.

  	
   

  	
  Nathan Lane III

  Anna Lucienne Endter

  SQUIRE, SANDERS & DEMPSEY L.L.P.

  One Maritime Plaza, Suite 300

  San Francisco, CA  94111

  (415) 954-0200

  

  Counsel for TOPPAN PRINTING CO., LTD.

  
	
   

  	
   

  	
   

  
	
  Respectfully submitted,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Roger A. Colaizzi

  VENABLE LLP

  575 7th Street, NW

  Washington, DC 20004-1601

  (202) 344-8051

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Robert S.
  Frank, Jr.

  Eric J. Marandett

  Mark S. Freeman, Esq.

  CHOATE, HALL & STEWART

  Exchange Place

  53 State Street

  Boston, MA  02109

  (617) 248-5000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Counsel for TRANS DIGITAL

  TECHNOLOGIES, CORP.

  	
   

  	
   

  

 

2

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