Exhibit 10.9

         
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
       
 
X      
In re
:      
 
:     Chapter 11 Case No.
Allegiance Telecom, Inc., et al.,
:     03-13057 (RDD)
 
:      
Debtors.
:     Jointly Administered
 
X      

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
          THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this “Agreement”) is
made this 21st day of October 2008, among XO Holdings, Inc., V&K Holdings, Inc.
(“V&K”) and their affiliates (collectively, “XO” or “Plaintiff”), on the one
hand, and Allegiance Telecom Liquidating Trust (the “ATLT”) and Eugene I. Davis,
solely in his capacity as Plan Administrator for the ATLT (“Davis,” together
with the ATLT, the “Defendants”), on the other hand (collectively, the
“Parties”).
WHEREAS:
     A. On May 14, 2003, Allegiance Telecom, Inc. (“ATI”), together with its
direct and indirect subsidiaries (collectively, the “Debtors”) filed with this
Court, voluntary petitions for relief under chapter 11 of title 11 of the United
States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for
the Southern District of New York (the “Bankruptcy Court”), styled In re
Allegiance Telecom, Inc. et al., Case No. 03-13057 (RDD) (the “Chapter 11
Cases”).
     B. On February 18, 2004, XO and the Debtors entered into a certain Asset
Purchase Agreement (the “APA”) providing for the sale of assets to XO, which APA
was approved by an Order of the Bankruptcy Court, dated February 20, 2004.

 

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     C. On June 10, 2004, the Bankruptcy Court entered its Findings of Fact,
Conclusions of Law, and Order (the “Confirmation Order”) Confirming Debtors’
Third Amended Joint Plan of Reorganization (the “Plan”), which became effective
on June 23, 2004 (the “Plan Effective Date”).
     D. In accordance with the terms of the Plan and the Confirmation Order, on
the Plan Effective Date, the ATLT was created. Pursuant to the Plan, Eugene I.
Davis was appointed as the plan administrator (the “Plan Administrator”) for the
ATLT.
     E. The ATLT is the successor to the rights of the Debtors, and the ATLT and
the Plan Administrator have the authority to, among other things, perform the
duties, exercise the powers and assert the rights of a trustee under sections
704 and 1106 of the Bankruptcy Code.
     F. Pursuant to the Plan and a certain Liquidating Trust Agreement between
the Debtors and XO, the Plan Administrator is to be directed and overseen by a
three member board of directors (collectively, the “ATLT Board”) and pursuant to
a Stipulation and Order signed on June 23, 2004 Settling Certain Disputes
between Allegiance Telecom, Inc., Allegiance Telecom Company Worldwide, the
Creditors Committee1 and XO Communications, Inc. (the “ATLT/XO Plan
Stipulation”), one of the members of the ATLT Board, Mr. Robert Fischer, was
designated by XO (the “XO Designee”).
 

1   Terms used but not defined herein shall have the meanings ascribed to them
in the Plan.

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     Plan Distributions
     G. The Plan provided that each Holder of an ATI Unsecured Claim could make
a Cash Recovery Election “to receive [a certain] Cash Recovery in lieu of
receiving its pro rata share of the ATLT “A” Trust Interests or ATLT “B” Trust
Interests, as applicable, that would otherwise be distributed to such Holder in
accordance with ... the Plan, as applicable.”
     H. ATLT “A” Trust Interests represent the proceeds of the XO Common Stock,
which the ATLT represents and warrants were completely liquidated by the ATLT;
ATLT “B” Trust Interests represent the ATLT’s ownership of certain New STFI
Common Stock, which the ATLT represents and warrants has been fully distributed
to the Holders of Allowed Claims associated with an ATLT “B” Trust Interest
recovery election, net of required reserves; and the ATLT “C” Trust Interests
represent the ATLT’s ownership of the ATLT Assets, other than the XO Common
Stock and the New STFI Common Stock.
     I. The Plan provides that each Holder of an Allowed ATI Note Claim, who
neither made nor was deemed to have made the Cash Recovery Election, is to
receive a pro rata distribution of, among other things, ATLT “A” and “B” Trust
Interests. In addition, each Holder of an Allowed ATI Note Claim will receive
its pro rata share of ATLT “C” Trust Interests.
     The ATLT “A” Trust Interest Distributions
     J. The initial ATLT “A” Trust Distribution payable to XO and/or V&K in
respect of their ATI Note Claims (the “XO/V&K Note Claims”) is $27,570,645.54
(the “Initial XO/V&K Distribution”). The ATLT represents and warrants that
$274,300.79 of interest accrued on the Initial XO/V&K Distribution through
September 30, 2008 (the “Initial XO/V&K Interest”) and that the Initial XO/V&K
Distribution will be held in a separate

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interest bearing escrow account through the Effective Date (as defined below).
Any interest accruing after September 30, 2008 will be paid to XO on the
Effective Date (the “Stub Interest”).
     K. Pursuant to authority granted to it by section 7.7 of the Plan and
applicable law, the ATLT has offset its claims against XO as well as interest
thereon against the Initial XO/V&K Distribution (the “ATLT Setoff”).
     L. As a result of the ATLT Setoff, XO has not received the Initial XO/V&K
Distribution.
     The ATLT “B” Trust Interest Distributions
     M. Consistent with provisions of the Plan, on or about April 25, 2007, the
ATLT made Distributions in respect of the ATLT “B” Trust Interests to Holders of
Allowed Unsecured Claims (the “April 2007 ATLT Distribution”).
     N. On August 30, 2007, XO filed its motion to, among other things, compel
the ATLT to make required Plan Distributions, on the grounds, among others, that
the April 2007 ATLT Distribution to XO’s broker was a Cash Recovery
Distribution, not a Distribution of ATLT “B” Trust Interests representing New
STFI Common Stock, contrary to the terms of the ATLT/XO Plan Stipulation, which
confirmed the Plan Distribution elections made by XO’s broker (the “XO Motion to
Compel”).
     O. On February 7. 2008, the Court (a) entered an Order, overruling an
objection filed by Reorganized STFI and granting XO’s Motion for entry of a
negotiated Stipulation and Order granting the XO Motion to Compel [Docket
No. 2573] (the “Motion to Approve B Trust Stipulation”) and (b) entered a
stipulation and order negotiated between XO and the

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ATLT, granting the XO Motion to Compel [Docket No. 25741 (the “B Trust
Stipulation”, and collectively with the Motion to Approve B Trust Stipulation,
the “February 2008 Orders”).
     P. The B Trust Stipulation, among other things, (a) held that XO and/or V&K
elected to receive ATLT Trust Interests, not a Cash Recovery, on account of
their ATI Note Claims holdings and (h) required Shared Technologies Inc.
(“Reorganized STFI”) to distribute New STFI Common Stock to XO in lieu of the
Cash. Recovery previously distributed for XO’s broker.
     Q. On February 19, 2008, Reorganized STFI appealed the February 7, 2008
Orders (the “STFI Appeal”) and filed a motion seeking a stay of the February 7,
2008 Orders pending the STFI Appeal (the “STFI Stay Motion”). The STFI Appeal,
styled Shared Technologies Inc., Appellant, v. Allegiance Telecom Liquidating
Trust, XO Holdings, Inc. and Merrill Lynch, Pierce, Fenner & Smith, Appellees,
Case Nos. 08-CV-3050, 08-CV-3051 (LAK), is pending before the United States
District Court for the Southern District of New York.
     R. On March 25, 2008, the Bankruptcy Court entered an Order (a) denying the
STFI Stay Motion, (b) directing STFI to issue the New STFI Common Stock to XO
required by the February 7, 2008 Orders, and (c) directing STFI to include a
legend in such stock stating that such stock would be subject to cancellation in
the event that Reorganized STFI prevailed in the STFI Appeal (the “Denial of
STFI Stay Order”). In accordance with the Denial of STFI Stay Order and the B
Trust Stipulation, Reorganized STFI issued to XO 188.22 shares of Reorganized
STFI Common Stock (the “XO STFI Stock”).
     S. The STFI Appeal, and thus a final determination as to XO’s ownership
interest in the XO STFI Stock, remains pending.

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     XO and ATLT Litigations
     T. On or about August 6, 2004, XO filed the Request of XO Communications,
Inc. for Payment of Amounts Constituting Either (1) Administrative Expenses, or
(2) XO’s Cash [Docket No. 1625] (the “Administrative Expense Motion”).
     U. On November 24, 2004, the ATLT filed its (A) Amended Objection to
Request of XO Communications, Inc., for Payment of Amounts Constituting Either
(1) Administrative Expenses, or (2) XO’s Cash and (B) Motion for Payment of
Amounts Owed Under Asset Purchase Agreement and Related Transaction Documents
[Docket No. 1936] (the “Objection to Administrative Expense Motion,” together
with the Administrative Expense Motion and the related trial and other
litigation proceedings, the “Chapter 11 Litigation”).
     V. This Court held a trial (the “Trial”) with respect to the Administrative
Expense Motion and the ATLT’s objection and counterclaim thereto, which Trial
commenced on May 2, 2005 and concluded on May 5, 2005.
     W. On February 2, 2007, the Bankruptcy Court entered its (i) Corrected
Memorandum of Decision on XO’s Motion for Payment of Administrative Expenses or
XO’s Claimed Cash and Related Disputes Pertaining to Asset Purchase Agreement
[Docket No. 2419], In re Allegiance Telecom, Inc., 356 B.R. 93 (Bankr. S.D.N.Y.
2006) (the “Corrected Memorandum Decision”), and (ii) Corrected Order Pursuant
to Memorandum of Decision on XO’s Motion for Payment of Administrative Expenses
or XO’s Claimed Cash and Related Disputes Pertaining to Asset Purchase Agreement
[Docket No. 2420] (the “2007 Litigation Order”).
     X. Pursuant to the 2007 Litigation Order, the Court stayed the Chapter 11
Litigation with respect to certain disputes, and the Parties commenced an
accounting

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proceeding (the “Accounting Proceeding”) before Alvarez & Marsal Dispute
Analysis & Forensic Services, Inc. (the “Accounting Referee”) to resolve such
disputes on June 12, 2007, which proceeding remains pending.
     Y. On or around August 31, 2007, XO also commenced an adversary proceeding
against the Defendants pending in the Bankruptcy Court captioned, as
subsequently amended, XO Holdings, Inc. v. Allegiance Telecom Liquidating Trust
and Eugene I. Davis, solely in his capacity as trustee or “Plan Administrator”
for the Trust, Index No. 07-02002 (RDD) (the “Adversary Proceeding”) with
respect to certain other disputes.
     Z. The Parties, without acknowledging the existence of any liability in the
Chapter 11 Litigation, Accounting Proceeding, Adversary Proceeding
(collectively, the “Litigations”), or the Chapter 11 Cases (collectively, with
the Litigations, the “Allegiance Proceedings”), desire to settle and compromise
their differences and avoid the expense and inconvenience of further litigation
in the Allegiance Proceedings pursuant to the terms set forth herein.
          NOW, THEREFORE, in consideration of the promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Parties agree as follows:

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ARTICLE I
PAYMENTS AND XO STFI STOCK REPURCHASE
     A. Payment Of ATLT “A” Trust Interest Distribution. The ATLT shall pay to
XO $27,844,946.33 in full satisfaction of the Initial XO/V&K Distribution and
the Initial XO/V&K Distribution Interest (the “A Trust Interest Distribution
Payment”).
     B. Payment of Remaining Plan Distributions. The ATLT expects, concurrently
with the Effective Date, to make cash Distributions to the Debtors’ Allowed
Unsecured Claim Holders. The ATLT expects that XO will be entitled to a
Distribution of $13,506,764.57, representing the approximate Distribution
payable to XO and/or V&K in respect of their Claims, (i) without any reduction
in such Distribution arising as a result of the ATLT “A” Trust Interest assets
necessary to fund the ATLT’s repurchase of the XO STFI Stock further described
in Article I.C., and (ii) net of required reserves (the “Remaining Trust
Distribution Payments,” together with the A Trust Interest Distribution Payment,
the “ATLT Settlement Distribution Payments”). With respect to XO’s and/or V&K’s
Claims, XO and/or V&K shall continue to participate on a pro-rata basis in any
future distributions by the ATLT to Allowed Claim Holders of any kind or
character in respect of the ATLT “A” Trust Interest and ATLT “C” Trust Interests
associated with XO’s Allowed Claims, provided, however, that XO shall not
receive any Distribution of any of the Reorganized STFI Common Stock purchased
by the ATLT from XO and/or V&K pursuant to Article I.C., below. The ATLT hereby
represents and warrants that the ATLT Settlement Distribution Payments have been
calculated in the same fashion as all other Plan Distributions to Allowed Claim
Holders. For the avoidance of doubt, the ATLT shall no longer be required to
maintain any reserves in respect of XO’s and/or V&K’s Claims, whether in the
Disputed Claims Reserve or otherwise.

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     C. ATLT’s Repurchase of the XO STFI Stock. In order to facilitate the
repurchase of the XO STFI Stock and redistribution of such stock to Allowed
Unsecured Claim Holders that elected ATLT “A” Trust Interest recoveries: (a) the
ATLT shall repurchase all of the XO STFI Stock in exchange for a payment of
$18,942,785.48 (the “ATLT Repurchase Payment”); (b) the ATLT shall redistribute
the XO STFI Stock, pro rata, to each beneficial Holder of an Allowed Unsecured
Claim, other than XO and/or V&K, that elected to receive ATLT “A” Trust
Interests in lieu of the Cash Recovery (“A Trust Electors”), as (x) determined
in accordance with the (i) Order Granting Motion of the Allegiance Telecom
Liquidating Trust for an Order Setting Distribution Record Date and Authorizing
Procedures for Distributions to Certain Holders of Allowed ATI Note Claims,
entered October 16, 2007 [Docket No. 2536] and (ii) Final. Order Granting Motion
of the Allegiance Telecom Liquidating Trust for an Order Setting Distribution
Record Date and Authorizing Procedures for Distributions to Certain Holders of
Allowed ATI Note Claims, entered November 16, 2007 [Docket No. 2547] and
(y) updated by the ATLT in accordance with instructions received from such A
Trust Electors and reconciled by the ATLT, provided, however, that A Trust
Electors entitled to less than one full share of the XO STFI Stock will receive
cash in lieu of their pro rata XO STFI Stock at a value equivalent to the value
paid to XO for the XO STFI Stock; (c) XO shall interpose no objection to any of
the foregoing and will use its reasonable efforts to cooperate with the ATLT in
effecting any and all actions necessary to effect the foregoing repurchase,
including, without limitation, upon delivery to XO of the ATLT Net Settlement
Payment, delivering to the ATLT stock certificates representing such XO STFI
Stock, together with stock powers endorsed in blank within four (4) business
days of the Effective Date; and (d) Reorganized STFI shall execute and file a

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stipulation of dismissal of the STFI Appeal pursuant to the terms and conditions
in Article II.B, below.
     D. Litigation Settlement Payments.
          1. XO shall pay to the ATLT $2,897,591.77 (the “XO Litigation
Settlement Payment”), which amount includes pre-judgment interest, and also
includes the amount of certain tax refunds (the “Tax Refunds”), in full
satisfaction of all of the Parties’ respective claims and counterclaims in any
and all of the Litigations.
          2. Certain refund checks (“Tax Refund Checks”) from the United States
Treasury and various state taxing authorities were issued in the name of ATI and
certain of its subsidiaries. The ATLT shall use its reasonable efforts, and
shall take all reasonably necessary actions and sign all relevant documents, to
request such taxing authorities to reissue the Tax Refund Checks in XO’s name in
the aggregate amount of $558,605, or if that cannot be accomplished, in the name
of the original payee (or its successor). If the ATLT receives any reissued Tax
Refund Check, it will promptly assign such check to XO.
     E. Timing of the Settlement Payments. Within four (4) business days after
the Approval Order entered by the Bankruptcy Court has become a Final Order, the
ATLT shall make a payment to XO in the amount of the Stub Interest, plus
$57,396,904.61 (the “ATLT Net Settlement Payment”), which amount represents the
sum of the amount of the (a) ATLT Settlement Distribution Payments and (b) ATLT
Repurchase Payment, less (c) the amount of the XO Litigation Settlement Payment.

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ARTICLE II
RELEASES AND TERMINATION OF LITIGATION
     A. Stipulations of Discontinuance. Within four (4) business days of the
Effective Date (as defined below) of this Agreement:
          1. The Parties shall, through their attorneys, execute and file with
the Clerk of the United States Bankruptcy Court for the Southern District of New
York a Stipulation of Dismissal with Prejudice and Without Costs of the
Adversary Proceeding, in the form attached as Exhibit A, by which the Adversary
Proceeding, including all the claims and counterclaims filed by the Parties,
shall be dismissed with prejudice and without cost.
          2. The Parties shall, through their attorneys, jointly notify in
writing the Accounting Referee that the Parties have discontinued the Accounting
Proceeding.
     B. Dismissal of STFI Appeal. Within four (4) business days of the Effective
Date of this Agreement, the parties to the STFI Appeal, through their attorneys,
execute and file with the Clerk of the United States District Court for the
Southern District of New York a Stipulation of Dismissal of the Appeal with
Prejudice and Without Costs, in the form attached as Exhibit B, by which the
STFI Appeal shall be dismissed with prejudice and without cost.
     C. Mutual Releases. Upon the Effective Date of this Agreement:
          1. Plaintiff, on behalf of itself and each and all of its past and
present heirs, success predecessors, assigns, affiliates, officers, directors,
employees, shareholders, partners, members, managers, proprietors, advisors,
attorneys, representatives and agents, and Mr. Robert Fischer (collectively, the
“XO Entities”), hereby release, acquit and forever discharge Defendants and
Reorganized STFI and each and all of their respective past and present heirs,
successors, predecessors, assigns, affiliates, officers, directors, employees,

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shareholders, partners, members, managers, proprietors, advisors, attorneys,
representatives and agents, whether in their official or individual capacities,
or otherwise (collectively, the “ATLT Releasees”) from any and all claims,
including, without limitation, any Claims, as defined under the Plan,
counterclaims, demands, causes of actions, liabilities, contracts, agreements,
promises, obligations or defenses of any kind whatsoever, whether based on tort,
contract, or any other theory of recovery, and whether for general, special,
compensatory, punitive or any other damages, whether asserted or unasserted,
direct or indirect, derivative, known or unknown, now arising or which hereafter
may arise, based in full or in part, on any matter, fact or thing, occurring
from the beginning of time to the date hereof, which any of the XO Entities have
or may have against any or all of the ATLT Releasees, for any reason whatsoever,
arising from or in any way related to the APA, the Plan, the Liquidating Trust
Agreement or any of the Allegiance Proceedings, and further agrees that this
Agreement may be pleaded and shall serve as a full defense to any action, suit
or other proceeding covered by the terms of this Agreement which is or may be
initiated, prosecuted or maintained, provided, however, that the foregoing
releases shall not limit XO’s rights under this Agreement or to continuing Plan
Distributions, if any, set forth in Article I.B., above.
          2. Defendants and Reorganized STFI, on behalf of themselves and each
and all of their respective past and present heirs, successors, predecessors,
assigns, affiliates, officers, directors, employees, shareholders, partners,
members, managers, proprietors, advisors, attorneys, representatives and agents
(collectively, the “ATLT Entities”) hereby release, acquit and forever discharge
each and all of the XO Entities, whether in their official or individual
capacities, or otherwise (the “XO Releasees”) from any and all claims,
including, without limitation, any Claims, as defined under the Plan,
counterclaims, demands,

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causes of actions, liabilities, contracts, agreements, promises, obligations or
defenses of any kind whatsoever, whether based on tort, contract, or any other
theory of recovery, and whether for general, special, compensatory, punitive or
any other damages, whether asserted or unasserted, direct or indirect,
derivative, known or unknown, now arising or which hereafter may arise, based in
full or in part, on any matter, fact or thing, occurring from the beginning of
time to the date hereof, which any of the ATLT Entities have or may have against
any or all of the XO Releasees for any reason whatsoever, arising from or in any
way related to the APA, the Plan, the Liquidating Trust Agreement or any of the
Allegiance Proceedings, and further agrees that this Agreement may be pleaded
and shall serve as a full defense to any action, suit or other proceeding
covered by the terms of this Agreement which is or may be initiated, prosecuted
or maintained, provided, however, that the foregoing releases shall not limit
the ATLT’s or Reorganized STFI’s rights under this Agreement.
          3 The XO Entities and the ATLT Entities expressly waive any right
and/or benefit conferred upon them by Section 1542 of the California Civil Code
with respect to the claims being released by this Agreement, and expressly
consent that this Agreement shall be given full force and effect according to
all of its terms, including those terms relating to unknown and unsuspected
claims, if any, as well as those terms relating to any other claims.
Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO THE 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 SETTLEMENT WITH
THE DEBTOR.

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ARTICLE III
REMOVAL OF XO DESIGNEE FROM ATLT BOARD
          Removal of XO Designee from ATLT Board. Upon the Effective Date, and
without any further action by any of the Parties or Mr. Robert Fischer,
(a) Mr. Robert Fischer shall be deemed to vote to amend the requirement
contained in section 2.02 of the Liquidating Trust Agreement that three
directors serve on the ATLT Board, such that the ATLT Board will be comprised of
only two directors for the remaining duration of the ATLT and (b) Mr. Robert
Fischer shall be deemed to have resigned from the ATLT Board, and XO shall no
longer have any right to an XO Designee to the ATLT Board, as previously
provided by the ATLT/XO Plan Stipulation.
ARTICLE IV
APPROVAL
     A. Subject to the provisions of section (C) below, this Agreement is
contingent upon (a) the entry of a Final Order of the Bankruptcy Court approving
this Agreement, in substantially the form attached hereto as Exhibit C, with
only such modifications as are approved by the Parties in their sole discretion
(the “Approval Order”), and (b) the occurrence of the Effective Date as such
term is defined immediately below in Section B. For purposes of this Agreement,
the term “Final Order” shall mean an order that has not been stayed, reversed,
amended or vacated, and as to which no appeal or petition for review,
reconsideration, rehearing or certiorari has been taken by the deadline therefor
or, if taken, remains pending.
     B. The “Effective Date” of this Agreement shall be the date of the first
business day on which the following conditions have been and remain satisfied:
          1. the Approval Order has become a Final Order; and

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          2. the ATLT Net Settlement Payment has been received by XO.
     C. Within ten (10) business days after the execution of this Agreement, the
ATLT shall file in the Bankruptcy Court a motion seeking approval of this
Agreement, which motion shall be in form and substance reasonably acceptable to
XO, and which shall attach the proposed Approval Order. ATLT shall serve a copy
of the motion, and any exhibit or attachment thereto, on all parties entitled to
receive notice under the Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure, or any applicable local rule, including without limitation on XO.
ATLT and XO shall thereafter use their best efforts to obtain entry of the
Approval Order as a Final Order and any and all other approvals and orders as
may be necessary or appropriate for the consummation of this Agreement as soon
as practicable.
     D. In the event that the Bankruptcy Court declines to enter the Approval
Order, this Agreement shall be null and void and all of the rights, claims and
defenses, obligations and liabilities of each of the Parties immediately prior
to the execution of this Agreement shall be restored to the status quo ante.
ARTICLE V
MISCELLANEOUS
     A. No Admission of Liability. The Parties understand and agree that the
Agreement is only a compromise in settlement of disputed claims and shall not be
construed as an admission of liability.
     B. Representations and Warranties. Each of the Parties hereto represents
and warrants that, subject to the entry of the Approval Order as a Final Order,
(a) it has taken all actions necessary and otherwise has full authority to
execute this Agreement and any other documents incident thereto and to perform
all of its obligations set forth herein; (b) the

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performance of such obligations shall not conflict with any other agreements to
which it is a party or by which it is bound; and (c) it intends this Agreement
to be legal, valid and binding upon it.
     C. Construction. The headings in this Agreement are inserted for
convenience and identification only and shall not be considered in the
interpretation of this Agreement. This Agreement represents the bargained-for
agreement of the Parties resulting from negotiation among them. Therefore, the
Agreement shall he construed as if prepared by all Parties jointly, and not in
favor of any one Party and thus no rule of construction requiring interpretation
against the drafting Party hereof shall apply in the interpretation of this
Agreement. If any provision of this Agreement is held by a court or regulatory
agency of competent jurisdiction to be unenforceable, the balance of this
Agreement shall remain in full force and effect and shall not be affected unless
removal of the unenforceable provision results in a material change to this
Agreement, in which case the Parties shall negotiate in good faith to reform
this Agreement in a manner which retains the respective economic benefits of the
Parties.
     D. Legal Fees and Costs. The Parties shall pay their own respective costs
and attorneys’ fees incurred with respect to the Allegiance Proceedings and this
Agreement.
     E. Entire Agreement. This Agreement constitutes the entire agreement with
respect to the subject matter addressed herein and supersedes any prior written
and/or verbal agreement between the Parties, and shall be binding upon, and
inure to the benefit of each and all of the Parties and their respective heirs,
successors and assigns.
     F. Amendments. This Agreement may not be orally modified. This Agreement
may only be modified in a writing signed by all of the Parties.

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     G. Waiver and Modification. The failure of a Party to insist, in any one or
more instances, upon the strict performance of any of the covenants of this
Agreement, or to exercise any option herein contained, shall not be construed as
a waiver, or a relinquishment for the future, of such covenant or option, but
the same shall continue and remain in full force and effect.
     H. Jurisdiction. The Bankruptcy Court shall retain exclusive jurisdiction
to resolve any disputes between the Parties arising with respect to the
enforcement of this Agreement.
     I. New York Law. The Parties understand and agree that this Agreement shall
be construed and interpreted in accordance with the laws of the State of New
York without giving effect to principles of conflicts of law.
     J. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
assigns.
     K. Good Faith Performance. The Parties shall act in good faith and
consistent with the intent of this Agreement in the performance of their
obligations under this Agreement. Without limiting the generality of any
provisions of this Agreement, the Parties agree to perform all further acts and
execute and deliver all documents as may be reasonably necessary to give effect
to or confirm the effectiveness of the provisions of this Agreement. Nothing
contained herein shall limit or abridge XO’s obligation to provide the ATLT with
access to certain records pursuant to section 6.5(b) of the APA.

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     L. Counterparts and Facsimile Signature. This Agreement may he executed in
one or more counterparts, all of which shall he considered one and the same
document as if all Parties had executed a single original document. This
Agreement may he executed by facsimile copy and each signature thereto shall be
and constitute an original signature, again as if all Parties had executed a
single original document.
Dated: New York, New York
October 21, 2008

                  XO HOLDINGS, INC.   ALLEGIANCE TELECOM LIQUIDATING TRUST    
 
               
By:
  /s/ Simone Wu   By:   /s/    
 
  Title:  SVP, General Counsel       Title:  Plan Administrator    
 
                V&K HOLDINGS, INC.      
 
                By:   /s/ Simone Wu   EUGENE I. DAVIS, SOLELY IN HIS CAPACITY AS
TRUSTEE OR “PLAN ADMINISTRATOR” FOR THE ALLEGIANCE TELECOM LIQUIDATING TRUST    
    Title:  SVP, General Counsel
 
 
                SHARED TECHNOLOGIES, INC., JOINS IN THIS AGREEMENT SOLELY TO
AGREE TO DISMISS ITS APPEAL, AS PROVIDED IN ARTICLE II.B AND FOR PURPOSES OF THE
RELEASES PROVIDED FOR IN ARTICLE II.C.
 
  /s/    

ROBERT FISCHER, JOINS IN THIS AGREEMENT SOLELY TO AGREE TO THE PROVISIONS OF
ARTICLE III.B.
 
               
By:
  /s/   By:   /s/    
 
  Title:  General Counsel       Title:    
 
                MERRILL LYNCH, PIERCE, FENNER & SMITH, JOINS IN THIS AGREEMENT
SOLELY TO CONSENT TO THE DISMISSAL OF THE APPEAL, AS PROVIDED IN ARTICLE II.B  
         
 
               
By:
  /s/            
 
  Title:  Counsel            

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