SETTLEMENT AND STANDSTILL AGREEMENT



 EXHIBIT 10.4 
 Settlement and Standstill Agreement 
 This SETTLEMENT AND STANDSTILL AGREEMENT, dated as of July 13,
2007 (the “Agreement”), is by and between Arbinet-thexchange, Inc., a Delaware corporation (“Arbinet”), and the individuals and entities listed on Schedule A hereto (collectively, the “Stockholders”). 

WHEREAS, the Stockholders are the beneficial owners of shares of common stock, par value $0.001 per share, of Arbinet (the “Common Stock”);
and 
 WHEREAS, by letter dated March 19, 2007, Karen Singer, as trustee for the Singer Children’s Management Trust (the
“Trust”), provided notice to Arbinet of her intention to nominate Shawn O’Donnell, Jill Thoerle, and Stanley Kreitman for election as directors of Arbinet at its 2007 annual meeting of stockholders (the “Stockholder
Nomination”); and 
 WHEREAS, subject to this Agreement the Trust intends hereby to withdraw the Stockholder Nomination and refrain from
contesting the election of directors at Arbinet’s 2007 annual meeting of stockholders; and 
 WHEREAS, Arbinet and the Stockholders
intend to provide hereby for, among other matters, enlargement of the Board of Directors of Arbinet (the “Board”) from six (6) to nine (9) members and for the appointment of Shawn O’Donnell, Jill Thoerle, and Stanley
Kreitman to the Board to fill the vacancies resulting therefrom, and furthermore, Arbinet and the Stockholders desire to otherwise resolve all matters between them, including those matters at issue in or with respect to the Stockholder Nomination.

 NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 
 Section 1.
Representations. 
 (a) Binding Agreement: Authority. Arbinet hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered by Arbinet, and is a valid and binding obligation of Arbinet, enforceable against Arbinet in accordance with its terms. Each of the Stockholders represents and warrants that this Agreement has been duly authorized,
executed and delivered by such Stockholder, and is a valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms. 
 (b) Share Ownership of Common Stock. Each of the Stockholders hereby represents and warrants that, as of the date hereof, it and its Affiliates and Associates (as such terms are hereinafter defined) are the
“beneficial owners” (as such term is hereinafter defined) of the shares of Common Stock set forth opposite their respective name on Schedule A hereto (the “Shares”), and that neither it nor its Affiliates or Associates
beneficially own, or have any rights, options or agreements to acquire or vote, any other shares of Common Stock. 







 (c) Defined Terms. For purposes of this Agreement, the term “Affiliate” and
“Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For
purposes of this Agreement, the terms “beneficial owner” and “beneficially own” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act, except that a person shall also be deemed to
be the beneficial owner of all shares of Common Stock that such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether
they are conditional. 
 Section 2. Directors. 
 (a) Additional Directors. The Stockholders and Arbinet agree that as promptly as practicable
(but in no event more than the second (2nd) business day) following the execution of this Agreement by the
parties hereto, the Board will increase the size of the Board to nine (9) members and (i) appoint Shawn O’Donnell and Jill Thoerle (together with any successor nominees appointed by the Stockholders pursuant to this Agreement, the
“Class III Nominees”) to fill the newly created directorships on the Board as Class III directors whose term shall expire at Arbinet’s 2007 annual meeting of stockholders, and (ii) appoint Stanley Kreitman to fill the newly
created directorships on the Board as a Class II director whose term shall expire at Arbinet’s 2009 annual meeting of stockholders. At such time as Shawn O’Donnell, Jill Thoerle, and Stanley Kreitman shall each become a director of Arbinet
in accordance with the terms of this Agreement, Shawn O’Donnell, Jill Thoerle, and Stanley Kreitman shall agree in writing to be bound by the terms and conditions of Arbinet’s policies applicable to directors, including, without
limitation, Arbinet’s Code of Business Conduct & Ethics, Corporate Governance Guidelines, and Insider Trading Policy. 
 (b)
Nominations. Arbinet agrees to nominate Michael J. Ruane, Shawn O’Donnell and Jill Thoerle for election as Class III directors of Arbinet at its 2007 annual meeting of stockholders, and use its reasonable best efforts to cause the
election of such persons, each to serve for a three-year term ending upon the election of directors at Arbinet’s 2010 annual meeting of stockholders and until his or her successor is duly elected and qualified. 
 (c) Committees. Arbinet agrees to appoint (i) Shawn O’Donnell to the Compensation Committee of the Board, (ii) Jill Thoerle to the
Audit Committee of the Board, and (iii) Stanley Kreitman to the Nominating and Corporate Governance Committee of the Board. 
 Section 3. Voting. 
 (a) 2007 Annual Meeting. The Stockholders, together with their Affiliates and Associates,
will not submit any stockholder proposal (pursuant to Rule 14a-8 or otherwise), or any notice of nomination or other business under Arbinet’s Second Amended and Restated By-laws, and will not nominate or oppose directors for election at the
2007 annual meeting of stockholders of Arbinet. The Stockholders shall cause all Shares of Common Stock beneficially owned by them, and/or their Affiliates or Associates, as of the record date for the 2007 annual meeting of stockholders of Arbinet,
to be present for quorum purposes and to be voted in favor of Michael J. Ruane, Shawn O’Donnell, and Jill Thoerle at such annual meeting or at any adjournments or postponements thereof. 
  

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 (b) Other Meetings. During the Standstill
Period (as such term is hereinafter defined), the Stockholders shall cause all Shares of Common Stock beneficially owned by them, and/or their Affiliates or Associates, as of the record date for any other meeting of stockholders of Arbinet, to be
present for quorum purposes and to be voted, at such meeting or any adjournments or postponements thereof, in favor of any matter brought before such meeting upon the recommendation of the Board by a two-thirds ( 2/3rd) vote of those members voting; provided, however, that this provision will not restrict the Stockholders from
voting as they deem appropriate in the exercise of their fiduciary duty with respect to a merger, tender offer, reorganization, recapitalization, sale of assets or other similar transaction that is submitted for stockholder approval at such meeting
(it being understood that to the extent any such proposal includes the proposed election of an alternate slate of directors in lieu of directors nominated by Arbinet, the Stockholders, together with their Affiliates and Associates, will in all
events be required to vote in favor of Arbinet’s nominees). 
 (c) Further Assurances. The Stockholders further agree to
take all action reasonably necessary to carry out the intention of this Section 3, including, without limitation, delivering to Arbinet upon its written request (and compliance by it with applicable laws) executed proxies naming the proxies
appointed by Arbinet for all shares of Common Stock beneficially owned by the Stockholders and/or their Affiliates or Associates as of the record dates for the aforementioned meetings of stockholders. 
 Section 4. Standstill Arrangements. Each of the Stockholders agrees that, during the period from the date of this Agreement through July 13,
2008 (the “Standstill Period”), neither it nor any of its Affiliates or Associates will, without the written consent of Arbinet, directly or indirectly, solicit, request, advise, assist or encourage others to (a) effect or seek, offer
or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way assist any other person to effect or seek, offer of propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any
assets of Arbinet or any of its subsidiaries; provided, however, that the Stockholders shall be able to communicate directly to the Board and third parties on a confidential, non-public basis proposals for a negotiated acquisition of assets
of Arbinet or any of its subsidiaries without the written consent of Arbinet; provided, further that any third party that the Stockholders communicate with shall expressly agree not to make any public disclosure or public announcement about
such communications; (ii) any tender or exchange offer, merger or other business combination involving Arbinet or any of its subsidiaries; provided, however, that the Stockholders shall be able to communicate directly to the Board and
third parties on a confidential, non-public basis proposals for a negotiated tender or exchange offer, merger or other business combination involving Arbinet or any of its subsidiaries without the written consent of Arbinet; provided, further
that any third party that the Stockholders communicate with shall expressly agree not to make any public disclosure or public announcement about such communications; (iii) any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to Arbinet or any of its subsidiaries; provided, however, that the Stockholders shall be able to communicate directly to the Board and third parties on a confidential, non-public basis proposals for a
negotiated recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to Arbinet or any of its 
  

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subsidiaries without the written consent of Arbinet; provided, further that any third party that the Stockholders communicate with shall expressly
agree not to make any public disclosure or public announcement about such communications; or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) or consent to vote any voting
securities of Arbinet; (b) form, join or in any way participate in a “group” (as defined under the Exchange Act); (c) except as otherwise expressly provided herein, otherwise act, alone or in concert with others, to seek to
control or influence the management, the Board or policies of Arbinet; (d) nominate any persons as a director of Arbinet or propose any matter to be voted on by stockholders of Arbinet; (e) take any action which would reasonably be
expected to force Arbinet to make a public announcement regarding any of the types of matters set forth in (a) above; or (f) except as otherwise expressly provided herein, enter into any discussions or arrangements with any third party
with respect to any of the foregoing. The Stockholders also agree during the Standstill Period not to request Arbinet (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any provision of this paragraph
(including this sentence). 
 Section 5. Withdrawal of Demand and Stockholder Nomination and Proposal. Upon the appointment of
Shawn O’Donnell, Jill Thoerle, and Stanley Kreitman to the Board and the committees thereof as required by this Agreement, the Trust has simultaneously agreed to withdraw the Stockholder Nomination and shall immediately cease all efforts,
direct or indirect, in furtherance of the Stockholder Nomination and any related solicitation. 
 Section 6. Press Releases and Other
Public Statements. During the Standstill Period, Arbinet and the Stockholders agree as follows: 
 (a) Arbinet agrees, subject to the
requirements of applicable federal securities laws, to provide the Stockholders with an opportunity to review and comment on any press release, public filing, or letter to Arbinet’s stockholders containing statements about the Stockholders,
prior to its public release. 
 (b) The Stockholders agree, subject to the requirements of applicable federal securities laws, to provide
Arbinet with an opportunity to review and comment on any press release, public filing, or letter to Arbinet’s stockholders containing statements about Arbinet, prior to its public release. 
 (c) The initial press release with respect to the execution of this Agreement shall be a press release to be reasonably agreed upon by Arbinet and the
Stockholders. 
 (d) Neither Arbinet nor any of the Stockholders, nor any of their Affiliates or Associates, shall directly or indirectly
make or issue or cause to be made or issued any disclosure, announcement or statement (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the
media or securities analyst) concerning the other party or any of its respective past, present or future general partners, directors, officers or employees, which disparages any of such other party’s respective past, present or future general
partners, directors, officers or employees as individuals (recognizing that the parties shall be free to comment in good faith regarding the business of Arbinet, provided any such comment shall not otherwise violate the terms of this
Agreement). 
  

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 Section 7. Remedies. Each party hereto hereby acknowledges and agrees that irreparable harm
would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific relief hereunder,
including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any state or federal court in the State of Delaware, in
addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond with such remedy are hereby waived. 
 Section 8. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and
may be amended only by an agreement in writing executed by the parties hereto. 
 Section 9. Notices. All notices, consents,
requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be validly given, made or served, if in writing and sent by U.S. registered mail, return receipt requested: 
  

			
	 if to Arbinet:
	  	Arbinet-thexchange, Inc.
		  	Tower II, Suite 450
		  	120 Albany Street
		  	New Brunswick, New Jersey 08901
		  	Attention: General Counsel
		
	 with a copy to:
	  	Goodwin Procter LLP
		  	Exchange Place
		  	Boston, Massachusetts 02109
		  	Attention: Joseph L. Johnson III
		
	 if to the Stockholders:
	  	Addressed to such Stockholder at the address set forth on Schedule B hereto

 Section 10. Law Governing. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard to any conflict of laws provisions thereof. The parties, on behalf of itself and its Affiliates and Associates, hereby irrevocably and unconditionally consent to the
exclusive jurisdiction of the courts in the State of Delaware and/or the courts of the United States of America located in the State of Delaware for any action, suit or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and agree not to commence any action, suit or proceeding related thereto except in such courts. The parties, on behalf of itself and its Affiliates and Associates, hereby irrevocably and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby, in the courts in the State of Delaware and/or the courts of the United States of America located in the State of Delaware,
and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding in any such court has been brought in any inconvenient forum. 
  

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 Section 11. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 Section 12. No
Presumption Against Draftsman. Each of the undersigned parties hereby acknowledges the undersigned parties fully negotiated the terms of this Agreement, that each such party had an equal opportunity to influence the drafting of the language
contained in this Agreement and that there shall be no presumption against any such party on the ground that such party was responsible for preparing this Agreement or any part hereof. 
 Section 13. Enforceability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that the parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition,
the parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any such that is held invalid, void or unenforceable by a court of competent jurisdiction. 
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 IN WITNESS WHEREOF, each of the parties hereto has executed this Settlement and Standstill Agreement, or
caused the same to be executed by its duly authorized representative as of the date first above written. 
  

			
	 ARBINET-THEXCHANGE, INC.

		
	 By:
	 	 /s/ Roger H. Moore

	 Name:
	 	Roger H. Moore
	 Title:
	 	Interim Chief Executive Officer and President


  

			
	 CADENCE MASTER LTD.

		
	 By:
	 	 /s/ Philip R. Broenniman

	 Name:
	 	Philip R. Broenniman
	 Title:
	 	Managing Member of
		 	Cadence Investment Management, LLC
		 	On behalf of
		 	Cadence Master Ltd.









 Schedule A 
 Beneficial and Record Ownership of Common Stock 
  

					
	 Stockholder
	  	 Number of Shares of Common
 Stock Held Beneficially
	  	 Number of Shares of Common
 Stock Held of Record

	 Cadence Master Ltd.
	  	318,570	  	0








 Schedule B 
  


			
	 Stockholder
	  	 Address

	 Cadence Master Ltd.
	  	 Philip R. Broenniman
 800 Third Avenue
 10th Floor
 New York, New York 10022