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EXHIBIT 10.61 MUTUAL SETTLEMENT AND RELEASE AGREEMENT ANDCOVENANT NOT TO SUE This Mutual Settlement and Release and Covenant Not to Sue is made by and between Novo
Networks, Inc. (NNI) and the Novo Liquidating Trust as successor in interest to Novo Networks
Operating Corp., e.Volve Technology Group Inc, and AxisTel Communications, Inc. (the Trust) (NNI
and the Trust are collectively referred to as Novo) and Qwest Communications Corporation
(Qwest). Qwest and Novo are referred to herein individually as a Party, or collectively as the
Parties. The Parties Enter into this Mutual Settlement and Release Agreement and Covenant Not to
Sue (Agreement) on this 10th day of December, 2004. RECITALS WHEREAS, disputes have arisen between the Parties regarding the provision and receipt of
telecommunication services, including but not limited to disputes concerning the Parties April 29,
1998 Switched Services Agreement, September 17, 1998 Carrier Services Agreement, and September 30,
1999 IRU Agreement as amended; and WHEREAS, on July 30, 2001, AxisTel Communications, Inc., Novo Networks Global Services, Inc..
Novo Networks International Services, Inc., e.Volve Technology Group, Inc., Novo Networks Operating
Corp., and on September 14, 2001 Novo Networks Metro Services, Inc., (collectively, the Debtors),
filed for Chapter 11 Bankruptcy protection in the United States Bankruptcy Court for the District
of Delaware (the Bankruptcy Court), Case No. 01-10005 (RJN) (the Bankruptcy Proceeding), WHEREAS, on March 13, 2002, the Bankruptcy Court confirmed the First Amended Joint Chapter 11
Plan filed by NNl and the Debtors (the Plan); and WHEREAS, Executive Sounding Board Associates, Inc. (ESBA) was originally appointed as the
Trustee of the Trust pursuant to the Plan and Rivershore Advisors, LLC subsequently replaced ESBA,
(the Trustee). WHEREAS, NNI and the Trust (as successor in interest to Novo Networks Operating Corp., e.Volve
Technology Group, Inc., and AxisTel Communications, Inc.) filed claims against Qwest in Novo
Networks, Inc. and the Novo Liquidating Trust (as successor in Interest to Nova Networks Operating
Corp., e.Volve Technology Group, Inc, and AxisTel Communications, Inc.) vs. Qwest Communications
Corporation and John L. Higgins, Case No. A452142, County of Clark, State of Nevada (the
Nevada Litigation); and WHEREAS, the Nevada Court ordered that the Parties arbitrate the claims made against in the
Nevada Litigation; WHEREAS, Novo subsequently asserted claims against Qwest in American Arbitration Association
(the AAA) Matter No. 161 181 00622 02 (the Arbitration); and WHEREAS, Qwest filed an administrative claim in the Bankruptcy Proceeding, which the Trustee
disputed, and Qwest sought to set off that claim in the Arbitration and asserted other 1




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scheduled or filed claims (together with the disputed administrative claim, the Contested
Matters). WHEREAS, the Parties desire to avoid the uncertainties, risks and expenses attendant in the
Nevada Litigation and the Arbitration and to compromise, settle and release the claims by and
between the Parties as set forth herein; WHEREAS, the Plan provides that any settlement of Novas claims against Qwest must be approved
by NNI and the Trustee; WHEREAS, the Trustee and NNI have approved the settlement set forth herein; NOW, THEREFORE, in consideration of the mutual promises and covenants provided herein, and
other good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Parties agree as follows: AGREEMENT 1.Payment Within seven (7) days after the execution of this Agreement by the Parties, Qwest shall pay
NNI, on behalf of itself and the Trust, One Million One Hundred Fifty Thousand and 00/100 Dollars
($1,150,000.00) by wire transfer to: JP Morgan Chase Bank
2200 Ross Avenue
Dallas, Texas 75201
ABA: #########
Account: ###-###-##### a. Novo believes that the payment set forth herein is intended to be a contemporaneous
exchange for new value provided by Novo. 2.Dismissal with Prejudice Novo hereby acknowledges the sufficiency of the payment and consideration outlined in
Paragraph 1 of this Agreement. Within five (5) days after payment of the amount outlined in
Paragraph 1 of this Agreement, the Parties will file a Stipulated Motion to Dismiss the Nevada
Litigation, with prejudice, and will inform the AAA that the Arbitration has been finally settled
with each party to pay its own costs and attorney fees. 3.If Bankruptcy, Approval is Necessary Novo represents and warrants that the Plan provides that Bankruptcy Court approval is
unnecessary to effectuate the Agreement. To the extent that Bankruptcy Court approval of the
Agreement is necessary, Qwests obligation to make the payment identified in paragraph 1 of the
Agreement to Novo shall be suspended until five (5) days after Bankruptcy Court approval is
obtained, or if payment has already been made, Novo shall immediately deposit any funds from 2




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Qwest paid pursuant to paragraph 1 into the registry of the Bankruptcy Court until approval is
obtained. 4.Scope of Agreement The Parties intend that this Agreement resolve all charges, amounts, disputes, damages,
obligations, rights, controversies, refunds, complaints, demands and other claims, known or
unknown, billed or unbilled, discoverable or undiscoverable, and/or fixed or contingent, that any
Party has or may have against the other Party including, but not limited to, those arising under,
relating to, or that were asserted or could have been asserted by NNI, the Debtors, the Trust, the
Trustee and Qwest or any of their respective parent, subsidiary, or affiliated companies, in the
Bankruptcy Proceeding, in the Nevada Litigation, or in the Arbitration (collectively, the Claims
and Demands). The parties agree that the scope of this agreement and the releases contained herein
shall not include matters involving the Trustee and Qwest not relating to the Claims and Demands. 5.Novos Release of Claims and Demands For and in consideration of the performance by Qwest of its obligations under this Agreement
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, NNI, and the Trustee on behalf of the Trust, and their parent companies, subsidiaries
(including without limitation Novo Networks Global Services, Inc., Novo Networks International
Services, Inc., Novo Networks Metro Services, Inc. and Orix Global Communications, Inc.), owners,
affiliates, predecessors, successors, shareholders, partners, principals, insurers and assigns and
their past, present and future employees, officers, directors, attorneys, agents and
representatives absolutely, unconditionally, completely, and without reservation, release, acquit,
and irrevocably release and forever discharge Qwest and its parent companies; subsidiaries, owners,
affiliates, predecessors, successors, shareholders, partners, principals, insurers and assigns and
their past, present and future employees, officers, directors, attorneys, agents and
representatives from and against each and every past, present and future action, claim, demand,
charge, invoice, complaint, petition, right, action, claim, demand, charge, invoice, liability,
damage, loss, expense, obligation, potential action, cause of action, suit, judgment, offset, or
decree in controversy of any kind and nature whatsoever, at law, in equity or otherwise, whether
known or unknown, foreseen or unforeseeable, discoverable or undiscoverable, or certain or
contingent, that have arisen or might arise in connection with or relating to the Claims and
Demands, or that were or could have been asserted in the Nevada Litigation, the Bankruptcy
Proceeding or the Arbitration. a. The foregoing release of Qwest and affiliated parties is contingent upon: (i) Qwests
making the payment described in Paragraph 1 above. 6.Novos Release of Higgins For and in consideration of the performance by Qwest of its obligations under this Agreement
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, NNI, and the Trustee on behalf of the Trust, and their parent companies, subsidiaries
(including without limitation Novo Networks Global Services, Inc., Novo Networks 3




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International Services, Inc., Novo Networks Metro Services, Inc. and Orix Global
Communications, Inc.), owners, affiliates, predecessors, successors, shareholders, partners,
principals, insurers and assigns and their past, present and future employees, officers, directors,
attorneys, agents and representatives absolutely, unconditionally, completely, and without
reservation, release, acquit, and irrevocably, release, and forever discharge John L. Jack
Higgins and his companies, subsidiaries, affiliates, predecessors, successors, shareholders,
partners, principals, insurers and assigns and their past, present and future employees, attorneys,
agents and representatives from and against each and every past, present and future action, claim,
demand; charge, invoice, complaint, petition, right, action, claim, demand, charge, invoice,
liability, damage, loss, expense, obligation, potential action, cause of action, suit, judgment,
offset, or decree in controversy of any kind and nature whatsoever, at law, in equity or otherwise,
whether or known or unknown, foreseen or unforeseeable, discoverable or undiscoverable, or certain
or contingent, that have arisen or might arise in connection with or relating to the Claims and
Demands, or that were or could have been asserted in the Nevada Litigation, the Bankruptcy
Proceeding or the Arbitration. a. The foregoing release of Higgins and affiliated parties is contingent upon: (i) Qwests
making the payment described in Paragraph I above. 7.Qwests Release For and in consideration of the performance by NNI, and the Trustee on behalf of the Trust, of
their obligations under this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Qwest, for itself and its parent companies,
subsidiaries, owners, affiliates, predecessors, successors, partners, principals, shareholders,
insurers and assigns and their past, present and future employees, officers, directors, agents and
representatives, fully and finally waives, releases, acquits and forever discharges Novo
individually and collectively, including the Trust and Trustee, and their parent companies,
subsidiaries, owners, affiliates, predecessors, partners, principals, shareholders, insurers and
assigns and their respective past, present and future employees, officers, directors, attorneys,
agents and representatives from and against each and every past, present and future action, claim,
demand, charge, invoice, complaint, petition, obligation, potential action, cause of action,
controversy of any kind or nature whatsoever, at law, in equity or otherwise, whether known or
unknown, foreseen or unforeseeable, discoverable or undiscoverable, or certain or contingent, that
have arisen or might arise in connection with or relating to the Claims and Demands, or that were
or could have been asserted in the Nevada Litigation, the Bankruptcy Proceeding or the Arbitration. a. If for any reason the release of Qwest and its affiliated parties set forth in paragraph 5
above does not become effective, the foregoing release of NNI and the Trustee and affiliated
parties will also not become effective. 8.Covenant not to Sue Except as it relates to the enforcement of this Agreement, the Parties agree not to institute,
cause to be instituted, or participate in any way in the institution of any litigation, proceeding,
or other action against any Party in which liability is sought in any way to be 4




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predicated upon the Claims and Demands, or any other claims that were or could have been
asserted in the Nevada Litigation, the Bankruptcy Proceeding, or the Arbitration. 9.Confidentiality and Non-Disparagement The Parties agree that they shall keep in strict confidence the terms and amount of this
Agreement and settlement discussions related thereto. The Parties shall not reveal this
confidential information to any other person, except as required by law or order of the court or
other government authority, or as is reasonably necessary to be disclosed to the Parties
accountants, tax advisors, investors, potential investors, or attorneys. The Parties further agree
that if they receive a subpoena, summons or request to reveal this confidential information, then
the Party shall promptly notify the other Party of the subpoena, summons, or request. The Parties
expressly acknowledge that the purpose of this notice and requirement is to provide the
non-receiving Party with adequate opportunity to oppose any subpoena, summons, or request. If any
Party initiates an enforcement action relating to the terms and conditions of this Agreement, the
Parties agree that they will jointly request that everything the Parties file with the court
regarding the enforcement case remain sealed from the public. The Parties, further agree that they
shall not in writing, orally, or electronically publish or divulge publicly disparaging remarks
about one another. These Confidentiality and Non-Disparagement Provisions are contractual
consideration and not mere recitals. Notwithstanding anything to the contrary in this
Agreement, the Parties acknowledge and agree that NNI will have the unconditional right to disclose
in its filings with the United States Securities and Exchange Commission such information about
this Agreement as may be required, in NNIs sole and reasonable discretion, to satisfy its duties
and obligations under applicable securities laws. Notwithstanding the above, the parties agree that
the Trust may file in the Bankruptcy Court and serve a notice referencing the existence of the
settlement but not the terms thereof. In addition, the parties agree that the Trustee may file with
the Bankruptcy Court and provide to the Office of the United States Trustee a report which will
include the Trustees receipt of the settled amount. 10.No Admission of Liability or Wrongdoings Nothing in this Agreement shall constitute or be construed as an admission of liability on
behalf of any of the Parties as to the validity of any of the claims, defenses, or allegations made
against the other, or shall be admissible in any court, administrative agency, or tribunal for any
purpose whatsoever, with the sole exception of any proceeding to enforce or interpret the terms of
this Agreement. 11.Warranty of Capacity to Execute Release The Parties represent and warrant that no other persons or entities have or have had any
interest in the claims, demands, obligations, or causes of action referenced in this Agreement, and
that the Parties have the sole right and exclusive authority to execute this Agreement. The Parties
further represent and warrant that they have the right and authority to agree to this settlement
and the releases contained herein and have agreed to this settlement after careful consideration of
its merits and after consultation with their attorneys. The Parties further represent and warrant
that they have not sold, assigned, transferred, conveyed, or otherwise disposed of any of the
claims, demands, obligations or causes of action referenced in this 5




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Agreement or released herein. The Parties and their attorneys represent and warrant that each
Party is competent to agree to this settlement. The Parties warrant, if applicable, that all
necessary corporate actions, notices, or elections have been taken to authorize execution of this
Agreement. 12.Voluntarily Entered Each Party represents and warrants that this Agreement is fair and is executed voluntarily and
by such Party with full knowledge of the consequences and implications of the obligations contained
herein. Each Party also represents and warrants that such Party has had the opportunity to be
represented by counsel of its choice throughout the negotiations which preceded that execution of
this Agreement, and in connection with the preparation and execution of this Agreement, and that
each Party has carefully and thoroughly reviewed this Agreement in its entirety. 13.No Representation as to Tax Consequences or Other Matters The Parties execute this Agreement without reliance upon any statements or representations by
the other Parties or their attorneys concerning the nature and extent of any legal liability, tax
consequences, bankruptcy impact, or any other matter except as contained in this Agreement. 14.Litigation and Arbitration Expenses The Parties understand and agree that each Party shall bear its own attorney fees and costs
arising from the actions of its own counsel in connection with this Agreement, the Nevada
Litigation, the Bankruptcy Proceeding and/or the Arbitration. 15.Binding Effect The terms and conditions contained in this Agreement shall inure to the benefit of, and be
binding upon, the respective successors, assigns, insurers, heirs, survivors, and personal
representatives of the Parties. 16.Applicable Law, Jurisdiction, Venue, and Arbitration This Agreement shall be construed under the substantive laws of the State of New York, without
regard to its choice of law rules. The Parties to this Agreement agree that the place of
performance of this contract is Washington, D.C. Any dispute arising out of this Agreement or any
disputes relating to the claims and disputes or potential claims and disputes at issue in the
Arbitration, the Nevada Litigation or the Bankruptcy Proceeding shall be resolved by binding
arbitration before a single arbitrator in Washington, D.C. The rules and procedures of the AAA or
those of a private arbitrator mutually selected by the Parties shall be the sole and exclusive
procedures for the resolution of such disputes, except to the extent, if any, that a claim or
dispute must be heard as a matter of law in the Bankruptcy Proceeding. 6




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17.Notice Notices under this Agreement will be effective if mailed by registered or certified mail.
postage prepaid, or delivered by a nationally recognized overnight courier, or by facsimile, to the
addresses listed below for each Party, or to such other addresses as any Patty may subsequently
designate in writing. If to Qwest, to: Jana Eisinger
Qwest Communications Corporation
1801 California Street, Suite 900
Denver, CO 80202
Facsimile: 303-383-6663 With a copy to: Timothy R. Beyer
Amy L. Benson
Brownstein, Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, CO 80202
Facsimile: 303-223-1111 If to Novo, to: Steven W. Caple
Novo Networks, Inc.
2311 Cedar Springs Road, Suite 400
Dallas, TX 75201
Facsimile: 214-777-4103 Charles M Setzfand
Rivershore Advisors, LLC
As Trustee of the Novo Liquidating Trust
1419 Forest Drive, Suite 205
Annapolis, MD 21403
Facsimile: 410-268-8070 With a copy to: William A. Brewer III
Bickel & Brewer
1717 Main Street, Suite 4800
Dallas, TX 75201
Facsimile: 214-653-1015 Jeffrey M. Schlerf
The Bayard Firm, P.A. 7




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222 Delaware Avenue, Suite 900
Wilmington, DE 19801
Facsimile: 302-658-6395 18.Modifications No modification of this Agreement shall be effective unless in writing and signed by the to
this Agreement. 19.Merger and Integration This Agreement contains the entire agreement between the Parties and embodies and expresses
the entire intent of the Parties with regard to the matters set forth herein, and shall be binding
and inure to the benefit of the employees, former employees, principals, partners, shareholders,
officers, contractors, administrators, agents, personal representatives, successors, and assigns of
each Party. There are no representations or warranties between the Parties other than those
contained within this Agreement related to the matters herein. There also are no representations or
warranties between the Parties relating to the future provision or receipt of telecommunication
services or any type of future business relationship. This Agreement supersedes, merges and
replaces all prior or contemporaneous understandings, negotiations, offers, promises,
representatives, contracts and agreements between the Parties, to the extent such prior
understandings, negotiations, offers, promises, representations, contracts and agreements are
inconsistent with this Agreement. Extrinsic evidence is not admissible in any proceeding to vary or
contradict the terms of this Agreement. 20.Headings The headings of the paragraphs in this Agreement are for convenience and reference only, and
shall not affect the meaning or construction of any of the terms or provisions in this Agreement. 21.Counterparts The Parties agree to sign this Agreement in counterparts. 22.Faxed Signatures The Parties agree that faxed signatures are acceptable. 8




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I have read this Agreement, understand the terms used in it and their legal significance and
have executed it voluntarily. on behalf of Novo Networks, Inc.STATE OF TEXAS
    
    
    ))COUNTY OF TARRANT
    
    
    )Subscribed and sworn to me this 08 day of December, 2004, by .My commission expires Oct. 19, 2007.Witness my hand and official seal./s/ Asantewa HackshawNotary Public[Seal]
 9




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I have read this Agreement, understand the terms used in it and their legal significance and
have executed it voluntarily. /s/
    
    Managing Director Rivershore Advisors, LLCTrustee
 on behalf of Novo Liquidation Trust (as successor in interest to Novo Networks Operating Corp.,
e.Volve Technology Group, Inc. and AxisTel Communications, Inc.) STATE OF MARYLAND
    
    
    ))COUNTY OF GRINE ARUNDEL
    
    
    )Subscribed and sworn to me this 7th day of December, 2004, by .My commission expires July 3, 2008.Witness my hand and official seal./s/ Susan M.K. BestNotary Public[Seal]
 10




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I have read this Agreement, understand the terms used in it and their legal significance and
have executed it voluntarily. /s/     Teresa TaylorTeresa TaylorQwest Services Corporation1801 California Street, Suite 900Denver, CO 80202
 on behalf of Qwest Communications Corporation STATE OF
    
    
    ))COUNTY OF
    
    
    )Subscribed and sworn to me this 10th day of December, 2004, by Teresa Taylor.My commission expires April 30, 2007.Witness my hand and official seal./s/ Linda SciezNotary Public[Seal]
 11




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Approved as to Form:/s/ John BickelJohn Bickel IIBickel & Brewer1717 Main Street, Suite 4800Dallas, Texas 75219(214)653-4000Counsel for NovoTimothy R. BeyerAmy L. BensonBenjamin A. KahnBrownstein, Hyatt & Farber, P.C.410 17th Street, 22nd FloorDenver, CO 80202(303) 223-1100Counsel for Qwest
 12