Common use of STRUCTURE; CAPITALIZATION Clause in Contracts

STRUCTURE; CAPITALIZATION. (i) Section 3(p) of the Disclosure Schedule contains (except as noted therein) a complete and correct list of EqualNet's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by EqualNet and each other Subsidiary. (ii) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Section 3(p) of the Disclosure Schedule as being owned by EqualNet and its Subsidiaries have been validly issued, are fully paid and nonassessable, and are owned by EqualNet or such other Subsidiaries free and clear of any Security Interest (except as otherwise disclosed in Section 3(p) of the Disclosure Schedule). (iii) No Subsidiary of EqualNet is a party to, or otherwise subject to any legal restriction of any agreement (other than this Agreement and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to EqualNet or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. (iv) As of the Closing Date and after giving effect to the transactions contemplated in this Agreement, the Stock Purchase Agreement and the Switch Agreement (i) EqualNet's authorized capital stock will consist of 55,000,000 shares, of which 50,000,000 will be designated EqualNet Common Shares and 5,000,000 shares are designated as preferred stock (2,000 of which will be designated as Series A Convertible Preferred Stock, $.01 par value per share); (ii) 14,269,357 of EqualNet Common Shares, issued and outstanding and

STRUCTURE; CAPITALIZATION. (ia) Section 3(p) of the Disclosure Schedule SCHEDULE 3.1.19 contains (except as has noted therein) a complete and correct list of EqualNetthe Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by EqualNet the Company and each other Subsidiary. (iib) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Section 3(p) of the Disclosure Schedule SCHEDULE 3.1.19 as being owned by EqualNet the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable, and are owned by EqualNet the Company or such other Subsidiaries free and clear of any Security Interest Lien (except as otherwise disclosed in Section 3(p) of the Disclosure Schedule)SCHEDULE 3.1.19. (iiic) No Subsidiary of EqualNet the Company is a party to, or otherwise subject to any legal restriction of any agreement (other than this Agreement and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to EqualNet the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. (ivd) As of the Closing Date and after giving effect to the transactions contemplated in this Agreement, the Stock Purchase Agreement and the Switch Agreement (i) EqualNetthe Company's authorized capital stock will consist of 55,000,000 21,000,000 shares, of which 50,000,000 20,000,000 are designated Common Stock; (ii) 6,173,750 shares of Common Stock, issued and outstanding and 2,317,900 shares are or will be designated EqualNet Common Shares reserved for issuance in connection with the Company's outstanding warrants and 5,000,000 shares are designated as preferred stock options (2,000 200,000 of which will be designated reserved for issuance in connection with the Warrants), all of which, when issued in accordance with the terms of such warrants and stock options, will be validly issued, fully paid, and non-assessable; (iii) no shares of Common Stock are owned or held by or for the account of the Company or any of its Subsidiaries (except as Series A Convertible Preferred Stock, $.01 par value per sharedisclosed in the financial statements described in Section 3.1.7); (iiiv) 14,269,357 except as disclosed on SCHEDULE 3.1.19, neither the Company nor any of EqualNet Common Sharesits Subsidiaries has outstanding any stock or other securities convertible into or exchangeable for any shares of capital stock, issued any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock, or any stock or securities convertible into or exchangeable for any capital stock which have not been waived (other than as contemplated by this Agreement); and outstanding and(v) except as disclosed in SCHEDULE 3.1.19, neither the Company nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital stock.

STRUCTURE; CAPITALIZATION. (ia) Section 3(p) of the Disclosure Schedule SCHEDULE 6R contains (except as has noted therein) a complete and correct list of EqualNetthe Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by EqualNet the Company and each other Subsidiary. (iib) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Section 3(p) of the Disclosure Schedule SCHEDULE 6R as being owned by EqualNet the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable, and are owned by EqualNet the Company or such other Subsidiaries free and clear of any Security Interest Lien (except as otherwise disclosed in Section 3(p) of the Disclosure Schedule).SCHEDULE 6R. (iiic) No Subsidiary of EqualNet the Company is a party to, or otherwise subject to any legal restriction of any agreement (other than this Agreement and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to EqualNet the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. (ivd) As of the Closing Date and after giving effect to the transactions contemplated in this Agreement, the Stock Purchase Network Agreement and the Switch Agreement (i) EqualNetthe Company's 18 23 authorized capital stock will consist of 55,000,000 shares, of which 50,000,000 will be are designated EqualNet Common Shares Stock and 5,000,000 shares are designated as preferred stock (2,000 of which will be designated as Series A Convertible Preferred Stock, $.01 par value per share); (ii) 14,269,357 shares of EqualNet Common SharesStock, issued and outstanding andand 5,450,677 shares are or will be reserved for issuance in connection with the Company's outstanding warrants and stock options all of which, when issued in accordance with the terms of such warrants and stock options, will be validly issued, fully paid, and non-assessable; (iii) no shares of Common Stock are owned or held by or for the account of the Company or any of its Subsidiaries (except as disclosed in the financial statements described in Paraxxxxx 0X); (iv) except as disclosed on SCHEDULE 6R, neither the Company nor any of its Subsidiaries has outstanding any stock or other securities convertible into or exchangeable for any shares of capital stock, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock, or any stock or securities convertible into or exchangeable for any capital stock which have not been waived (other than as contemplated by this Agreement); and (v) except as disclosed in SCHEDULE 6R, neither the Company nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital stock.

STRUCTURE; CAPITALIZATION. (ia) Section 3(p) of the Disclosure Schedule SCHEDULE 6R contains (except as has noted therein) a complete and correct list of EqualNetthe Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by EqualNet the Company and each other Subsidiary. (iib) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Section 3(p) of the Disclosure Schedule SCHEDULE 6R as being owned by EqualNet the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable, and are owned by EqualNet the Company or such other Subsidiaries free and clear of any Security Interest Lien (except as otherwise disclosed in Section 3(p) of the Disclosure Schedule).SCHEDULE 6R. (iiic) No Subsidiary of EqualNet the Company is a party to, or otherwise subject to any legal restriction of any agreement (other than this Agreement and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to EqualNet the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. (ivd) As of the Closing Date and after giving effect to the transactions contemplated in this Agreement, the Stock Purchase Network Agreement and the Switch Agreement (i) EqualNetthe Company's authorized capital stock will consist of 55,000,000 shares, of which 50,000,000 will be are designated EqualNet Common Shares Stock and 5,000,000 shares are designated as preferred stock (2,000 of which will be designated as Series A Convertible Preferred Stock, $.01 par value per share); (ii) 14,269,357 shares of EqualNet Common SharesStock, issued and outstanding andand 5,450,677 shares are or will be reserved for issuance in connection with the Company's outstanding warrants and stock options all of which, when issued in accordance with the terms of such warrants and stock options, will be validly issued, fully paid, and non-assessable; (iii) no shares of Common Stock are owned or held by or for the account of the Company or any of its Subsidiaries (except as disclosed in the financial statements described in Paragraph 6G); (iv) except as disclosed on XXXXDULE 6R, neither the Company nor any of its Subsidiaries has outstanding any stock or other securities convertible into or exchangeable for any shares of capital stock, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock, or any stock or securities convertible into or exchangeable for any capital stock which have not been waived (other than as contemplated by this Agreement); and (v) except as disclosed in SCHEDULE 6R, neither the Company nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital stock.

STRUCTURE; CAPITALIZATION. (ia) Section 3(p) of the Disclosure Schedule SCHEDULE 6R contains (except as has noted therein) a complete and correct list of EqualNetthe Company's Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by EqualNet the Company and each other Subsidiary. (iib) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Section 3(p) of the Disclosure Schedule SCHEDULE 6R as being owned by EqualNet the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable, and are owned by EqualNet the Company or such other Subsidiaries free and clear of any Security Interest Lien (except as otherwise disclosed in Section 3(p) of the Disclosure Schedule).SCHEDULE 6R. (iiic) No Subsidiary of EqualNet the Company is a party to, or otherwise subject to any legal restriction of any agreement (other than this Agreement and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to EqualNet the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. (ivd) As of the Closing Date and Date, immediately after giving effect to the transactions contemplated in this Agreement, the Stock Purchase Agreement and the Switch Agreement (i) EqualNetthe Company's authorized capital stock will consist of 55,000,000 shares, of which 50,000,000 will be are designated EqualNet Common Shares Stock and 5,000,000 shares are designated as preferred stock (2,000 of which will be designated as Series A Convertible Preferred Stock, $.01 par value per share and 3,000 of which will be designated as Series B Convertible Preferred Stock, $.01 par value per share); (ii) 14,269,357 the number of EqualNet Shares of Common SharesStock outstanding will be as set forth on SCHEDULE 6R all of which will be validly issued, issued fully paid, and non-assessable; (iii) the only outstanding andwarrants, options or other securities convertible into Common Stock will be those set forth (and exercisable on the dates and at the amounts per share set forth) in SCHEDULE 6R; (iv) no shares of Common Stock will be owned or held by or for the account of the Company or any of its Subsidiaries (except as disclosed in the financial statements described in Paragraph 6G); (v) xxxxxx xx disclosed on SCHEDULE 6R, neither the Company nor any of its Subsidiaries will have outstanding any stock or other securities convertible into or exchangeable for any shares of capital stock, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock, or any stock or securities convertible into or exchangeable for any capital stock which have not been waived (other than as contemplated by this Agreement); and (vi) except as disclosed in SCHEDULE 6R, neither the Company nor any of its Subsidiaries will be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital stock.