Common use of Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries Clause in Contracts

Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries. The Company will not sell, and will not permit any Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of Capital Stock of a Restricted Subsidiary (including options, warrants or other rights to acquire shares of such Capital Stock) except: (1) to the Company or a Wholly Owned Restricted Subsidiary; (2) issuances of director’s qualifying shares or sales to foreign nationals of shares of Capital Stock of Foreign Restricted Subsidiaries, to the extent required by applicable law; (3) if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under Section 4.04 if made on the date of such issuance or sale; (4) issuances or sales of Common Stock of a Restricted Subsidiary, provided, however, that the Company or such Restricted Subsidiary applies the Net Cash Proceeds, if any, of any such sale in compliance with Section 4.10; and (5) issuances to employees of PAETEC Software Corp. of shares (and options, warrants and other rights to acquire or purchase shares) of the Capital Stock of PAETEC Software Corp. pursuant to employee incentive plans in an aggregate amount, calculated on an as-converted basis, not to exceed at any time 10% of the number of shares of Capital Stock of PAETEC Software Corp. then issued and outstanding, so long as PAETEC Software Corp. is a Subsidiary Guarantor.

Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries. The Company will shall not sell, and will shall not permit any Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of Capital Stock of a Restricted Subsidiary (including options, warrants or other rights to acquire purchase shares of such Capital Stock) except: (1i) to the Company or a Wholly Owned Restricted Subsidiary; (2ii) issuances of director’s 's qualifying shares or sales to foreign nationals of shares of Capital Stock of Foreign foreign Restricted Subsidiaries, to the extent required by applicable law; (3iii) if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under Section 4.04 if made on the date of such issuance or sale; (4iv) issuances or of sales of Capital Stock of a Restricted Subsidiary which is a Subsidiary Guarantor or Common Stock of a Restricted SubsidiarySubsidiary which is not a Subsidiary Guarantor (including options, providedwarrants or other rights to purchase shares of such Capital Stock), however, provided that (x) the Company or such Restricted Subsidiary applies the Net Cash Proceeds, if any, of any such sale in compliance accordance with clause (A) or (B) of Section 4.10; and 4.10 or (5y) in the case of issuances to employees or sales of PAETEC Software Corp. of shares such Capital Stock (and including options, warrants and or other rights to acquire or purchase sharesshares of Capital Stock) of a non-Wholly Owned Restricted Subsidiary, after giving effect to such issuance or sale, the Capital Stock Company maintains its percentage ownership on a fully-diluted basis in such non-Wholly Owned Restricted Subsidiary; or (v) the issuance of PAETEC Software Corp. pursuant up to employee incentive plans in an aggregate amount, calculated on an as-converted basis, not to exceed at any time 10additional 5% of the number total nominal capital of shares of Capital Stock of PAETEC Software Corp. then issued Ruf electronics GmbH pursuant to the Shareholders and outstandingEmployment Agreement, so long as PAETEC Software Corp. is a Subsidiary Guarantordated September 23, 1996, between the Company and Herbxxx Xxxxxx.