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 ”).
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.
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
Chapter 11 Case No.
Allegiance Telecom, Inc., et al .,
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