RELEASE AND SETTLEMENT AGREEMENT

Exhibit 10.19

RELEASE AND SETTLEMENT AGREEMENT

This Release and Settlement Agreement (“Settlement Agreement”) is made by and between US LEC Corp., US LEC Communications Inc., US LEC of Alabama Inc., US LEC of Florida Inc., US LEC of Georgia Inc., US LEC of Maryland Inc., US LEC of North Carolina Inc., US LEC of South Carolina Inc., US LEC of Pennsylvania Inc., US LEC of Tennessee Inc., and US LEC of Virginia LLC (collectively, “US LEC”) and Qwest Communications Corporation (“Qwest”). US LEC and Qwest are referred to herein individually as a “Party,” or collectively as the “Parties.” The Parties enter into this Settlement Agreement on this 4th day of August, 2006.

RECITALS

WHEREAS, disputes have arisen between US LEC and Qwest regarding charges billed by US LEC to Qwest for wireless-originated interstate and intrastate toll free (8YY) traffic (“Wireless-Originated 8YY Traffic”) (the disputes referred to hereafter as the “Wireless Access Dispute”) that were included in invoices issued by US LEC for switched access services (“Switched Access Traffic”)

WHEREAS, Qwest contends that through usage periods ending June 30 2006, US LEC billed Qwest approximately [***] in disputed charges for Wireless-Originated 8YY Traffic (the “Wireless Access Charges”);

WHEREAS, through usage periods ending June 30, 2006, Qwest contends that Qwest withheld approximately [***] for charges by US LEC (excluding late payment charges) for Wireless-Originated 8YY Traffic, and US LEC does not agree (the “Withheld Payments”). Between October 2003 and April 2006, Qwest also contends that Qwest withheld approximately [***] in late payment charges assessed by US LEC on the Withheld Payments, and US LEC does not agree (the “Late Payment Charges”). The Withheld Payments plus all Late Payment Charges related to the Withheld Payments shall be referred to hereafter as the “Disputed Withholdings”;

WHEREAS, in June 2004, Qwest commenced a lawsuit in the District Court, City and County of Denver, Colorado, Case No. 04-CV-4507 (filed June 14, 2004), concerning the Wireless Access Dispute and the Wireless Access Charges (the “Colorado Lawsuit”);

WHEREAS, US LEC removed the Colorado Lawsuit to the Federal District Court for the District of Colorado, and the Colorado Lawsuit (Civil Action No. 04-K-1447) was dismissed on June 6, 2005;

WHEREAS, in January 2005, US LEC commenced a lawsuit in the United States District Court for the Western District of North Carolina, Civil Action No. 3:05-CV-11-MU (filed January 11, 2005), concerning the Switched Access Traffic Invoices, which included the Wireless Access Dispute and the Withheld Payments (the “North Carolina Lawsuit”);

CONFIDENTIAL TREATMENT

WHEREAS, Qwest filed counterclaims against US LEC in the North Carolina Lawsuit concerning the Wireless Access Dispute and the Wireless Access Charges;

WHEREAS, the Parties desire to avoid the uncertainties, risks and expenses attendant in the North Carolina Lawsuit, and to settle and release claims related to the Wireless Access Dispute, the Wireless-Originated 8YY Traffic, the Withheld Payments, and the Wireless Access Charges (collectively “the Claims”), as 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

In resolution of all disputes regarding the Disputed Withholdings, US LEC and Qwest mutually agree that US LEC shall forgive and permanently waive any right to collect the Disputed Withholdings, and US LEC will take the actions necessary to credit Qwest’s accounts to implement the Settlement Agreement.

Simultaneously with the execution of this Settlement Agreement, the Parties shall execute a new Wholesale Services Agreement (“WSA”) in the form attached hereto as Exhibit 1.

In resolution of all disputes regarding the Wireless Access Charges and other written disputes submitted by Qwest prior to August 4, 2006 in connection with the Switched Access Traffic Invoices not relating to Wireless Access Charges, US LEC and Qwest mutually agree that:

a. US LEC shall pay Qwest Three Million Dollars ($3,000,000) (the “Settlement Payment”). The Settlement Payment shall be payable by US LEC to Qwest as set forth in Paragraph 3.f, below.

b. US LEC agrees to purchase services from Qwest in the total amount of [***] under the terms and conditions of the new WSA (the “Purchase Commitment”). In accordance with the terms and conditions of the WSA, the Parties agree that should US LEC fulfill the Purchase Commitment prior to the end of the Purchase Commitment Period, then any obligations hereunder with respect to the Purchase Commitment will be deemed satisfied. US LEC agrees that any shortfall or deficiency in purchases as required under the Purchase Commitment will require a cash payment (the “Deficiency Charge”) of a proportionate amount of the “Liquidated Settlement Value.” The parties agree that the Liquidated Settlement Value of this Purchase Commitment is [***] and that the sum of all purchases under the Purchase Commitment is

deemed to provide marginal value to Qwest equal to the Liquidated Settlement Value. The means and method of calculating such alternative cash payments are described in paragraphs 3.4(a) through 3.4(d) of the Purchase Commitment, and are incorporated herein by reference. The Parties agree that the Purchase Commitment and Deficiency Charge of Liquidated Settlement Value are alternative means of meeting US LEC’s obligations under this paragraph, and that the Liquidated Settlement Value is not a penalty.

c. Commencing with the usage period beginning July 1, 2006, Qwest agrees to pay US LEC for intrastate wireless-originated 8YY traffic in accordance with the terms set forth in the Intrastate Wireless-Originated 8YY Services Settlement Agreement between Qwest and US LEC, dated August 4, 2006.

d. Commencing with the usage period beginning July 1, 2006, Qwest agrees to pay US LEC in the ordinary course of business for all Switched Access Traffic that is not governed by the terms of the Intrastate Wireless-Originated 8YY Services Settlement Agreement between Qwest and US LEC pursuant to the rates, terms and conditions of US LEC’s applicable Federal or state tariff or price list on file with the applicable regulatory agency as of the effective date of the Settlement Agreement, and as from time to time revised by US LEC. Notwithstanding anything in this Settlement Agreement to the contrary, Qwest retains all rights to dispute US LEC’s charges for such Switched Access Traffic under the applicable US LEC tariff, federal and state law, and federal and state regulatory rules and procedures.

e. The Parties acknowledge and agree that the settlement terms contained in Paragraphs 2, 3.a, 3.b, 3.c and 3.d, together with the waiver of the Disputed Withholdings pursuant to Paragraph 1, constitutes the full and final settlement of the Wireless Access Dispute.

f. No later than ten business days from the date on which the last Party executes the Settlement Agreement US LEC shall pay Qwest the Settlement Payment by wire transfer to:

[ *** ]

Within five business days after the Settlement Payment described in Paragraph 3.a above is made, the Parties shall file a Stipulated Motion to Dismiss the North Carolina Lawsuit, with prejudice, with each Party to pay its own costs and attorney’s fees.

For and in consideration of the performance by the Parties of their obligations under this Settlement Agreement, the other agreements identified in paragraph 3, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, US LEC on the one hand, and Qwest on the other hand, for themselves and their 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 do hereby absolutely, unconditionally, completely, and without

reservation, release each other and their 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, 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