-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LkbN5Ryd56dhTGlYKdwSxnCW9L8Weha4eiww/R/6RfjB7dfVuu2izvViMgq5LUq+ 5sK6VTjUCBsne6ARwTbw0A== /in/edgar/work/20000907/0000950172-00-001554/0000950172-00-001554.txt : 20000922 0000950172-00-001554.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950172-00-001554 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000907 GROUP MEMBERS: BELL ATLANTIC CORP GROUP MEMBERS: VERIZON ADVANCED DATA INC. GROUP MEMBERS: VERIZON VENTURES I INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NORTHPOINT COMMUNICATIONS GROUP INC CENTRAL INDEX KEY: 0001080558 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 522147716 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-57873 FILM NUMBER: 718484 BUSINESS ADDRESS: STREET 1: 303 2ND STREET STREET 2: 10TH FLOOR, NORTH TOWER CITY: SAN FRANCISCO STATE: CA ZIP: 94107 BUSINESS PHONE: 4154034003 MAIL ADDRESS: STREET 1: 222 SUTTER STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94108 FORMER COMPANY: FORMER CONFORMED NAME: NORTHPOINT COMMUNICATIONS HOLDINGS INC DATE OF NAME CHANGE: 19990224 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BELL ATLANTIC CORP CENTRAL INDEX KEY: 0000732712 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 232259884 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1095 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2123952121 MAIL ADDRESS: STREET 1: 1717 ARCH ST 47TH FL STREET 2: 1717 ARCH ST 47TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19103 SC 13D/A 1 0001.txt SC 13D - AMENDMENT NO. 1 As filed with the Securities and Exchange Commission on September 7, 2000 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (RULE 13D-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1 AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT NO. 1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 NorthPoint Communications Group, Inc. - ------------------------------------------------------------------------------ (Name of Issuer) Common Stock, Par Value $0.001 per Share - ------------------------------------------------------------------------------ (Title of Class of Securities) 666610 20 9 - ------------------------------------------------------------------------------ (CUSIP Number) Marianne Drost, Esq. Bell Atlantic Corporation (d/b/a Verizon Communications) 1095 Avenue of the Americas New York, NY 10036 (212) 395-1783 With a copy to: Martha E. McGarry, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 (212) 735-3000 - ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 5, 2000 - ------------------------------------------------------------------------------ (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: | | CUSIP NO. 666610 20 9 13D PAGE 2 OF 12 PAGES - ------------------------------------------------------------------------------ 1 NAMES OF REPORTING PERSONS Bell Atlantic Corporation (d/b/a Verizon Communications)* (I.R.S. IDENTIFICATION NO. 232259884) - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |X| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS OO, WC - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) N/A - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES 11,177,347** BENEFICIALLY ----------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 67,670,268*** REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 11,177,347 ----------------------------------------- 10 SHARED DISPOSITIVE POWER N/A - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 78,847,615 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 54.7%**** - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! * Verizon Ventures I Inc. is a wholly-owned subsidiary of Verizon Advanced Data Inc. Verizon Advanced Data Inc. is a wholly-owned subsidiary of Bell Atlantic Corporation (d/b/a Verizon Communications) ("Verizon Communications"). Due to Verizon Communications' indirect ownership of Verizon Ventures I Inc., Verizon Communications may be deemed to beneficially own shares of NorthPoint Communications Group, Inc.'s common stock. With the exception of the 9% Convertible Preferred Stock purchased by Verizon Communications, Verizon Communications does not have any interest in shares of NorthPoint Communications Group, Inc.'s common stock independent of its indirect ownership interest in Verizon Ventures I Inc. ** The number of shares reported is determined by dividing the aggregate purchase price for 9% Convertible Preferred Stock of $150 million by the conversion price of $13.42. The number of shares is subject to increase over time due to the accrual of dividends. Verizon Communications will not have voting rights until the requisite government approvals are obtained. *** Beneficial ownership of the common stock referred to herein is being reported hereunder solely because the reporting person may be deemed to have beneficial ownership of such shares as a result of the Voting and Lock-Up Agreements (the "Voting Agreements") described in Items 3, 4 and 5 of the Schedule 13D filed by Verizon Communications, Verizon Advanced Data Inc. and Verizon Ventures I Inc. on August 17, 2000. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Verizon Communications that it is the beneficial owner of any of the common stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"), or for any other purpose, and such beneficial ownership is expressly disclaimed. **** The 54.7% is determined by dividing the 78,847,615 shares of Common Stock described in Section 11 above by the sum of the 133,031,083 shares of Common Stock outstanding as of August 10, 2000 and the 11,177,347 shares of Common Stock issuable upon conversion of the 9% Convertible Preferred Stock. In the event that certain stockholders sell the 3,400,000 shares of Common Stock as permitted by the Voting Agreements, the percentage of issued and outstanding shares of Common Stock subject to the Voting Agreements set forth in this Section 13 will be reduced from 54.7% to 52.3%. - ------------------------------------------------------------------------------ 1 NAMES OF REPORTING PERSONS Verizon Advanced Data Inc.* (I.R.S. IDENTIFICATION NO. 541885544) - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |X| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) N/A - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES N/A BENEFICIALLY ---------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 67,670,268** REPORTING ---------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH N/A ---------------------------------------- 10 SHARED DISPOSITIVE POWER N/A - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 67,670,268 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 46.9%*** - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! * Verizon Ventures I Inc. is a wholly-owned subsidiary of Verizon Advanced Data Inc. Due to Verizon Advanced Data Inc.'s direct ownership of Verizon Ventures I Inc., it may be deemed to beneficially own shares of NorthPoint Communications Group, Inc.'s common stock. Verizon Advanced Data Inc. does not have any interest in shares of NorthPoint Communications Group, Inc.'s common stock independent of its ownership interests in Verizon Ventures I Inc. ** Beneficial ownership of the common stock referred to herein is being reported hereunder solely because the reporting person may be deemed to have beneficial ownership of such shares as a result of the Voting Agreements. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Verizon Advanced Data Inc. that it is the beneficial owner of any of the common stock referred to herein for purposes of Section 13(d) of the Act, or for any other purpose, and such beneficial ownership is expressly disclaimed. *** The 46.9% is determined by dividing the 67,670,268 shares of Common Stock described in Sections 8 and 11 above by the sum of the 133,031,083 shares of Common Stock outstanding as of August 10, 2000 and the 11,177,347 shares of Common Stock issuable upon conversion of the 9% Convertible Preferred Stock. In the event that certain stockholders sell the 3,400,000 shares of Common Stock as permitted by the Voting Agreements, the percentage of issued and outstanding shares of Common Stock subject to the Voting Agreements set forth in this Section 13 will be reduced from 46.9% to 44.6%. - ------------------------------------------------------------------------------ 1 NAMES OF REPORTING PERSONS Verizon Ventures I Inc. (I.R.S. IDENTIFICATION NO.- 23-3052545) - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |X| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) N/A - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES N/A BENEFICIALLY ----------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 67,670,268** REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH N/A ----------------------------------------- 10 SHARED DISPOSITIVE POWER N/A - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 67,670,268 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 46.9%*** - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! * Verizon Ventures I Inc. is a wholly-owned subsidiary of Verizon Advanced Data Inc. Verizon Advanced Data Inc. is a wholly-owned subsidiary of Verizon Communications. ** Beneficial ownership of the common stock referred to herein is being reported hereunder solely because the reporting person may be deemed to have beneficial ownership of such shares as a result of the Voting Agreements. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Verizon Ventures I Inc. that it is the beneficial owner of any of the common stock referred to herein for purposes of Section 13(d) of the Act, or for any other purpose, and such beneficial ownership is expressly disclaimed. *** The 46.9% is determined by dividing the 67,670,268 shares of Common Stock described in Sections 8 and 11 above by the sum of the 133,031,083 shares of Common Stock outstanding as of August 10, 2000 and the 11,177,347 shares of Common Stock issuable upon conversion of the 9% Convertible Preferred Stock. In the event that certain stockholders sell the 3,400,000 shares of Common Stock as permitted by the Voting Agreements, the percentage of issued and outstanding shares of Common Stock subject to the Voting Agreements set forth in this Section 13 will be reduced from 46.9% to 44.6%. This Amendment No. 1 to Schedule 13D (this "Amendment") is being filed pursuant to Rule 13d-2(a) of the Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), by Bell Atlantic Corporation (d/b/a Verizon Communications) ("Verizon Communications"), a Delaware corporation, Verizon Advanced Data Inc., a Delaware corporation, and Verizon Ventures I Inc., a Delaware corporation, with respect to the common stock, par value $.001 per share, of NorthPoint Communications Group, Inc., a Delaware corporation. This Amendment amends the Schedule 13D filed by Verizon Communications, Verizon Advanced Data Inc. and Verizon Ventures I Inc. on August 17, 2000. The Schedule 13D previously filed is hereby amended by the addition of the following information: ITEM 1. Security and Issuer. This Statement on Schedule 13D relates to the common stock, par value $0.001 per share (the "Common Stock"), of NorthPoint Communications Group, Inc., a Delaware corporation (the "Issuer") issuable upon conversion of the 150,000 shares of 9% Convertible Preferred Stock of the Issuer purchased by Verizon Communications on September 5, 2000 (the "Preferred Stock"). The principal executive offices of the Issuer are located at 303 Second Street, South Tower, San Francisco, CA 94107. Conversion Rights Each share of Preferred Stock shall be convertible at any time, or from time to time, unless previously redeemed by the Issuer, at the option of the holder thereof, into such number of shares of Common Stock as described below; provided, however, that a holder of Preferred Stock may not convert its shares of Preferred Stock into shares of Common Stock prior to the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the receipt of any required approvals under the Communications Act. The number of shares of Common Stock issuable upon conversion of each share of Preferred Stock is equal to the result obtained by dividing (a) the sum of $1,000 plus accrued dividends by (b) the conversion price of $13.42. The dividends accrue at a rate of 9% per annum, provided, however, in the event the Agreement and Plan of Merger, dated as of August 7, 2000 (the "Merger Agreement"), by and among Verizon Communications, the Issuer, Verizon Ventures I Inc. and Verizon Ventures II Inc. is terminated, the accrual rate will increase by an additional 0.5% on each subsequent three month anniversary of the date of issuance. In no event will the accrual percentage exceed 18%. ITEM 3. Source and Amount of Funds or Other Consideration. The Securities Purchase Agreement Pursuant to the terms of that certain Securities Purchase Agreement, dated as of August 7, 2000, by and between Verizon Communications and the Issuer (the "Purchase Agreement"), Verizon Communications purchased 150,000 shares of Preferred Stock at a price of $1,000 per share, for an aggregate purchase price of $150,000,000. The funds used by Verizon Communications in its acquisition of the Preferred Stock were drawn from its working capital and from funds held for investment. ITEM 4. Purpose of Transaction. In connection with the Merger Agreement, pursuant to which Verizon Ventures II Inc. will merge with and into the Issuer (the "Merger"), Verizon Communications and the Issuer entered into the Purchase Agreement whereby Verizon Communications, subject to certain conditions, agreed to purchase 150,000 shares of the Preferred Stock for a purchase price of $150,000,000. The purpose of the Preferred Stock purchase is to provide an additional source of capital for the Issuer's ongoing operations prior to the consummation of the Merger. It also enhances the Issuer's short-term and long-term liquidity. Presently Verizon Communications, the holder of the shares of Preferred Stock, is entitled to no voting rights, except as required by law. Upon receipt of the requisite government approvals as described in Item 1 hereof, each share of Preferred Stock will vote together with the Common Stock on an as converted basis and will be convertible into shares of Common Stock at a conversion price of $13.42 per share. ITEM 5. Interest in Securities of the Issuer. (a) As of the date hereof, none of the Reporting Persons owns any shares of Common Stock. However, under the definition of "beneficial ownership" as set forth in Rule 13d-3 under the Act, each of Verizon Ventures I Inc. and Verizon Advanced Data Inc. may be deemed to have beneficial ownership of the 67,670, 268 shares of Common Stock subject to the Voting Agreements, constituting in the aggregate approximately 46.9% of the effective number of outstanding shares of Common Stock (based on the number of shares of Common Stock outstanding as of August 10, 2000 plus the number of shares of Common Stock issuable with respect to the Preferred Stock). In addition, the aggregate number of shares of the Common Stock which Verizon Communications may be deemed to have beneficial ownership of under Rule 13d-3 of the Act, assuming conversion of the Preferred Stock into Common Stock, is 78,847,615. This constitutes approximately 54.7% of the effective number of outstanding shares of Common Stock (based on the number of shares of Common Stock outstanding as of August 10, 2000 plus the number of shares of Common Stock issuable with respect to the Preferred Stock). The Purchase Agreement provides that Verizon Communications may not sell the Preferred Stock prior to the earlier of the termination of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement. (b) Assuming conversion of the Preferred Stock into Common Stock and receipt of the requisite government approvals, Verizon Communications possesses the sole power to vote or direct the vote of, and the sole power to dispose of or direct the disposition of, 11,177,347 shares of Common Stock. This constitutes approximately 7.8% of the effective number of outstanding shares of Common Stock (based on the number of shares of Common Stock outstanding as of August 10, 2000 plus the number of shares of Common Stock issuable with respect to the Preferred Stock). Assuming conversion of the Preferred Stock into Common Stock, Verizon Communications, Verizon Advanced Data Inc. and Verizon Ventures I Inc. possess the shared power to vote or direct the vote of 67,670,268 shares of Common Stock with respect to certain matters relating to the Merger set forth in the Voting Agreements. This constitutes approximately 46.9% of the effective number of outstanding shares of Common Stock (based on the number of shares of Common Stock outstanding as of August 10, 2000 plus the number of shares of Common Stock issuable with respect to the Preferred Stock). (c) As described in Items 3 and 4, Verizon Communications entered into the Purchase Agreement with the Issuer on August 7, 2000. Pursuant to the Purchase Agreement, Verizon Communications purchased 150,000 shares of Preferred Stock at a price of $1,000 per share. This transaction was consummated within the last sixty (60) days. ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Verizon Communications is a party to a Registration Rights Agreement, dated as of August 7, 2000 (the "Registration Rights Agreement"), by and between the Issuer and Verizon Communications. Under the terms of the Registration Rights Agreement, Verizon Communications was granted certain demand and piggyback registration rights in respect of the Preferred Stock and the Common Stock issuable upon the conversion of the Preferred Stock. ITEM 7. Material to Be Filed as Exhibits. Exhibit Number Exhibit Description 1. Securities Purchase Agreement, dated as of August 7, 2000, by and between Verizon Communications and NorthPoint Communications Group, Inc. 2. Form of Certificate of Designation of 9% Convertible Preferred Stock of NorthPoint Communications Group, Inc. 3. Registration Rights Agreement, dated as of August 7, 2000, by and between Verizon Communications and NorthPoint Communications Group, Inc. SIGNATURES After reasonable inquiry and to the best of each of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: September 7, 2000 BELL ATLANTIC CORPORATION (d/b/a VERIZON COMMUNICATIONS) By: /s/ Marianne Drost _____________________________ Name: Marianne Drost Title: Corporate Secretary VERIZON ADVANCED DATA INC. VERIZON VENTURES I INC. By: /s/ Diane K. Ferber _____________________________ Name: Diane K. Ferber Title: Vice President, Chief Financial Officer and Treasurer EXHIBIT INDEX Exhibit Number Exhibit Description 1. Securities Purchase Agreement, dated as of August 7, 2000, by and between Verizon Communications and NorthPoint Communications Group, Inc. 2. Form of Certificate of Designation of 9% Convertible Preferred Stock of NorthPoint Communications Group, Inc. 3. Registration Rights Agreement, dated as of August 7, 2000, by and between Verizon Communications and NorthPoint Communications Group, Inc. EX-99 2 0002.txt EXHIBIT 1 - SECURITIES PURCHASE AGREEMENT SECURITIES PURCHASE AGREEMENT By and Between BELL ATLANTIC CORPORATION (D/B/A VERIZON COMMUNICATIONS) and NORTHPOINT COMMUNICATIONS GROUP, INC. Dated as of August 7, 2000 TABLE OF CONTENTS Page ARTICLE I AUTHORIZATION AND SALE OF SHARES Section 1.1 Authorization...........................................2 Section 1.2 Issuance and Sale of Shares.............................2 ARTICLE II CLOSING Section 2.1 Closing Date............................................2 Section 2.2 Delivery and Payments...................................2 ARTICLE III REPRESENTATIONS AND WARRANTIES OF NORTHPOINT Section 3.1 Authority Relative to this Agreement and the Registration Rights Agreement...................3 Section 3.2 No Conflict; Required Filings and Consents..............3 Section 3.3 Brokers.................................................4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VERIZON Section 4.1 Authority Relative to this Agreement and the Registration Rights Agreement...................5 Section 4.2 Investment..............................................5 Section 4.3 Rule 144................................................6 Section 4.4 Brokers.................................................6 ARTICLE V CONDITIONS PRECEDENT Section 5.1 Conditions to Verizon's Obligation......................6 Section 5.2 Conditions to the Obligations of NorthPoint.............7 ARTICLE VI COVENANTS OF NORTHPOINT Section 6.1 Availability of NorthPoint Common Stock.................8 Section 6.2 Additional Agreements...................................8 ARTICLE VII RESTRICTION ON TRANSFERABILITY OF SECURITIES Section 7.1 Restrictive Legend......................................9 Section 7.2 Transfer Restriction....................................9 ARTICLE VIII TERMINATION Section 8.1 Termination............................................10 ARTICLE IX MISCELLANEOUS Section 9.1 Governing Law..........................................10 Section 9.2 Entire Agreement; Amendment............................10 Section 9.3 Notices................................................11 Section 9.4 Counterparts...........................................12 Section 9.5 Severability...........................................12 Section 9.6 Titles and Subtitles...................................12 Section 9.7 Further Actions; Reasonable Efforts....................12 Section 9.8 Expenses...............................................13 Exhibits Exhibit A --Form of Certificate of Designation for 9% Convertible Preferred Stock Exhibit B --Form of Registration Rights Agreement SECURITIES PURCHASE AGREEMENT This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of August 7, 2000 by and between NorthPoint Communications Group, Inc., a Delaware corporation ("NorthPoint") and Bell Atlantic Corporation (d/b/a Verizon Communications), a Delaware corporation ("Verizon"). WHEREAS, concurrently with the execution of this Agreement, NorthPoint and Verizon are entering into an Agreement and Plan of Merger (the "Merger Agreement") providing for, among other things, (i) the contribution by Verizon to Verizon Ventures I Inc., a Delaware corporation ("Parent"), of cash and certain assets used by Verizon in connection with its digital subscriber line operations in exchange for shares of Parent's common stock and (ii) the merger of a wholly owned subsidiary of Parent with and into NorthPoint, with NorthPoint surviving as a wholly owned subsidiary of Parent; WHEREAS, NorthPoint has authorized the sale and issuance of an aggregate of 150,000 shares of its 9% Convertible Preferred Stock (the "Convertible Preferred Stock"); WHEREAS, Verizon desires to purchase from NorthPoint, and NorthPoint desires to sell to Verizon, 150,000 shares of the Convertible Preferred Stock on the terms and subject to the conditions set forth herein; WHEREAS, concurrently with the execution of this Agreement, Verizon and NorthPoint are entering into a Registration Rights Agreement providing Verizon with certain registration rights (the "Registration Rights Agreement"); NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties set forth herein, the parties hereby agree as follows: ARTICLE I AUTHORIZATION AND SALE OF SHARES Section 1.1 Authorization. NorthPoint has heretofore authorized (i) the issuance and sale to Verizon pursuant to this Agreement of an aggregate of 150,000 fully paid and nonassessable shares of Convertible Preferred Stock having the rights, preferences and privileges set forth in the Certificate of Designation attached to this Agreement as Exhibit A (the "Shares") and (ii) the issuance of a sufficient number of fully paid and nonassessable shares of common stock, par value $0.001 per share (the "Common Stock"), of NorthPoint upon conversion of the Shares. Section 1.2 Issuance and Sale of Shares. Upon the terms and subject to the conditions set forth herein, on the Closing Date (as defined below), NorthPoint will issue and sell to Verizon, and Verizon will purchase from NorthPoint, 150,000 Shares at a purchase price of $1,000 per Share in cash (the "Purchase Price"). ARTICLE II CLOSING Section 2.1 Closing Date. The closing of the purchase and sale of the Shares under this Agreement (the "Closing") shall take place as soon as practicable after the satisfaction or waiver of all of the conditions set forth in Article V (the date of the Closing is hereinafter referred to as the "Closing Date"), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, or at such other time or place as Verizon and NorthPoint may mutually agree. Section 2.2 Delivery and Payments At the Closing, subject to the terms and conditions hereof, NorthPoint will deliver to Verizon one certificate representing 150,000 Shares registered in the name of Verizon. Payment of the purchase price for the Shares to be purchased by Verizon under this Agreement shall be made or caused to be made by Verizon to NorthPoint by check or by wire transfer payable to the order of NorthPoint. ARTICLE III REPRESENTATIONS AND WARRANTIES OF NORTHPOINT Except as set forth in the disclosure schedule delivered by NorthPoint to Verizon on the date hereof (the "NorthPoint Disclosure Schedule") (each section of which qualifies the correspondingly numbered representation and warranty or covenant as specified therein), NorthPoint hereby represents and warrants to Verizon as follows: Section 3.1 Authority Relative to this Agreement and the Registration Rights Agreement. NorthPoint has the necessary corporate power and authority to enter into this Agreement and the Registration Rights Agreement and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Registration Rights Agreement by NorthPoint, and the consummation by NorthPoint of the transactions contemplated hereby and thereby, including the issuance and sale of the Shares and the issuance of the shares of Common Stock upon conversion of the Shares, have been duly authorized by all necessary corporate action on the part of NorthPoint. This Agreement and the Registration Rights Agreement has been duly executed and delivered by NorthPoint and, assuming the due authorization, execution and delivery thereof by Verizon, constitute legal, valid and binding obligations of NorthPoint, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether considered in a proceeding in equity or at law). Section 3.2 No Conflict; Required Filings and Consents. (a) Except as described in subsection (b) below or except as set forth in Section 3.2(a) of the NorthPoint Disclosure Schedule, the execution and delivery of this Agreement and the Registration Rights Agreement by NorthPoint do not, and the performance of this Agreement and the Registration Rights Agreement by NorthPoint will not, (i) violate or conflict with the Certificate of Incorporation or By-laws of NorthPoint, (ii) conflict with or violate any law, regulation, court order, judgment or decree applicable to NorthPoint or any of its Subsidiaries (as defined in the Merger Agreement) or by which any of their respective property or assets (including investments) is bound or affected, (iii) violate or conflict with the Certificate of Incorporation or By-laws of any of NorthPoint's Subsidiaries, or (iv) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets (including investments) of NorthPoint or any of its Subsidiaries pursuant to, result in the loss of any material benefit under, or result in any modification or alteration of, or require the consent of any other party to, any contract, instrument, permit, license or franchise to which NorthPoint or any of its Subsidiaries is a party or by which NorthPoint, any of such Subsidiaries or any of their respective property or assets (including investments) is bound or affected, except in the case of this clause (iv) for conflicts, violations, breaches, defaults, results or consents which, individually or in the aggregate, would not have a Material Adverse Effect (as defined in the Merger Agreement) on NorthPoint. (b) (i) Except for applicable requirements, if any, under the DGCL and any filings required under any state securities or blue sky laws and the premerger notification requirements of the HSR Act, neither NorthPoint nor any of its Subsidiaries is required to submit any notice, report or other filing with any federal, state, local or foreign government, any court, administrative, regulatory or other governmental agency, commission or authority or any non-governmental U.S. or foreign self- regulatory agency, commission or authority or any arbitral tribunal (each, a "Governmental Entity") in connection with the execution, delivery or performance of this Agreement and the Registration Rights Agreement and (ii) no waiver, consent, approval or authorization of any Governmental Entity is required to be obtained by NorthPoint or any of its Subsidiaries in connection with its execution, delivery or performance of this Agreement or the Registration Rights Agreement. Section 3.3 Brokers. Except for Goldman, Sachs & Co., a true and complete copy of whose engagement letter has been provided to Verizon prior to the execution hereof, and Frank Yeary, the terms of whose engagement have been disclosed to Verizon prior to the execution hereof, no broker, finder or investment banker is entitled to any brokerage, finder's, investment banking or other fee or commission in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement based upon arrangements made by or on behalf of NorthPoint or any of its Subsidiaries. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VERIZON Verizon hereby represents and warrants to NorthPoint as follows: Section 4.1 Authority Relative to this Agreement and the Registration Rights Agreement. Verizon has the necessary corporate power and authority to enter into this Agreement and the Registration Rights Agreement and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Registration Rights Agreement by Verizon, and the consummation by Verizon of the transactions contemplated hereby and thereby, including the purchase of the Shares and the shares of Common Stock upon conversion of the Shares, have been duly authorized by all necessary corporate action on the part of Verizon. This Agreement and the Registration Rights Agreement have been duly executed and delivered by Verizon and, assuming the due authorization, execution and delivery thereof by Verizon, constitute legal, valid and binding obligations of Verizon, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether considered in a proceeding in equity or at law). Section 4.2 Investment. (a) Verizon is acquiring the Shares for investment for its own account, and not with a view to any distribution thereof in violation of the securities laws. NorthPoint understands that such Shares and the shares of NorthPoint Common Stock issuable upon conversion of such Shares have not been registered under the Securities Act by reason of specific exemptions therefrom which depend upon, among other things, the bona fide nature of the investment intent and the accuracy of the NorthPoint's representations as expressed herein. (b) Verizon's financial condition and investments are such that it is in a position to hold the Shares and the shares of NorthPoint Common Stock issuable upon conversion of such Shares for an indefinite period, bear the economic risks of the investment and withstand the complete loss of the investment. Verizon has extensive knowledge and experience in financial and business matters and has the capability to evaluate the merits and risks of the Shares and the shares of NorthPoint Common Stock issuable upon conversion of such Shares. Verizon qualifies as an "accredited investor" as such term is defined in Section 2(15) of the Securities Act and Regulation D promulgated thereunder. Section 4.3 Rule 144. Verizon acknowledges that the Shares to be purchased by Verizon and the shares of NorthPoint Common Stock issuable upon conversion of the Shares must be held indefinitely unless subsequently registered under the Securities Act or any applicable state securities laws or unless exemptions from such registrations are available. Verizon is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions. Section 4.4 Brokers. Except for Morgan, Stanley & Co. Incorporated, the fees of which will be paid by Verizon, no broker, finder or investment banker is entitled to any brokerage, finder's, investment banking or other fee or commission in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement based upon arrangements made by or on behalf of Verizon. ARTICLE V CONDITIONS PRECEDENT Section 5.1 Conditions to Verizon's Obligation. The obligation of Verizon to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions: (a) Representations and Warranties. The representations and warranties of NorthPoint contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of a date earlier than the date hereof) shall also be true and correct on the date hereof and on and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date. (b) Agreements and Covenants. NorthPoint shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date. (c) Legality. No federal, state or foreign statute, rule, regulation, executive order, decree, injunction or administrative order shall have been enacted, entered, promulgated or enforced by any governmental entity which is in effect and has the effect of making the purchase and sale of the Shares or the shares of Common Stock issuable upon conversion of the Shares illegal or otherwise prohibiting the consummation of the transactions contemplated by this Agreement or the Registration Rights Agreement. (d) Consents Under NorthPoint Agreements. NorthPoint shall have obtained the consent or approval of any person whose consent or approval shall be required under any agreement or instrument in order to permit the consummation of the transactions contemplated by this Agreement and entering into the Registration Rights Agreement. (e) Blue Sky. NorthPoint shall have obtained all necessary "blue sky" law permits and qualifications, or have the availability of exemptions therefrom, required by any state for the offer and sale of the Shares and the underlying shares of NorthPoint Common Stock issuable upon conversion of the Shares. (f) Certificate of Designation. The Certificate of Designation shall have been filed in the office of the Secretary of State of the State of Delaware. (g) Registration Rights Agreement. NorthPoint shall have executed and delivered the Registration Rights Agreement in substantially the form attached hereto as Exhibit B. (h) Amendments to Credit Agreement. The conditions set forth in paragraphs F and G under the caption "Conditions to Signing the Credit Agreement" in Exhibit A to the Commitment Letter, dated as of August 7, 2000, between Verizon and NorthPoint Communications, Inc., shall have been satisfied. Section 5.2 Conditions to the Obligations of NorthPoint. The respective obligation of NorthPoint to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions: (a) Representations and Warranties. The representations and warranties of Verizon contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of a date earlier than the date hereof) shall also be true and correct on the date hereof and on and as of the Closing Date, with the same force and effect as if made on and as of the Closing Date. (b) Performance of Obligations. Verizon shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date. ARTICLE VI COVENANTS OF NORTHPOINT NorthPoint hereby covenants with Verizon as follows: Section 6.1 Availability of NorthPoint Common Stock. NorthPoint shall at all times reserve and keep available out of the authorized but unissued NorthPoint Common Stock, for the purpose of effecting the conversion of the Shares, the full number of shares of NorthPoint Common Stock then issuable upon the conversion of the Shares. NorthPoint will, from time to time, in accordance with the laws of the State of Delaware, increase the authorized amount of NorthPoint Common Stock if at any time the number of shares of NorthPoint Common Stock remaining unissued and available for issuance shall be insufficient to permit conversion of the Shares. Section 6.2 Additional Agreements. NorthPoint agrees to use all commercially reasonable efforts to obtain in a timely manner all necessary waivers, consents and approvals and to effect all necessary and filings, and to use all commercially reasonable efforts to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and to effect all necessary filings under the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the Communications Act of 1934, as amended, as Verizon may request. Without limiting the generality of the foregoing, at the request of Verizon, NorthPoint shall assist with the preparation and filing of the proper notification in accordance with the HSR Act, shall promptly comply with any requests for additional information, and shall use its commercially reasonable efforts to obtain termination of the waiting period thereunder as promptly as practicable. ARTICLE VII RESTRICTION ON TRANSFERABILITY OF SECURITIES Section 7.1 Restrictive Legend. Each certificate representing (a) the Shares, (b) shares of NorthPoint Common Stock issuable upon conversion of any Shares, and (c) any other securities issued in respect of the Shares or NorthPoint Common Stock issued upon conversion of any Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event (each of the foregoing securities in clauses (a) through (c) being referred to herein as "Restricted Securities"), shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to the legend required under any applicable state securities laws): THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR EXEMPTION THEREFROM UNDER SAID ACT OR LAWS. SUCH SHARES ARE ALSO SUBJECT TO THE PROVISIONS OF A SECURITIES PURCHASE AGREEMENT, DATED AS OF AUGUST 7, 2000, BETWEEN BELL ATLANTIC CORPORATION (D/B/A VERIZON COMMUNICATIONS ) AND NORTHPOINT COMMUNICATIONS GROUP, INC., AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH. NorthPoint will promptly, upon request, remove any such legend when transfer is no longer restricted by applicable law. Section 7.2 Transfer Restriction. Verizon agrees that it shall not, without the prior written consent of NorthPoint, transfer or assign any of the Convertible Preferred Stock acquired by it pursuant to this Agreement to any third party, other than one or more wholly-owned subsidiaries of Verizon, prior to the earlier of (i) the termination of the Merger Agreement or (ii) the consummation of the transactions contemplated by the Merger Agreement. ARTICLE VIII TERMINATION Section 8.1 Termination. Notwithstanding anything contained herein to the contrary, this Agreement may be terminated at any time prior to the Closing Date: (a) by the mutual written consent of Verizon and NorthPoint; or (b) by either Verizon or NorthPoint if the Merger Agreement shall have been terminated prior to the Closing. In the event that this Agreement shall be terminated pursuant to this Article VIII, all further obligations of the parties under this Agreement shall be terminated without further liability of any party to any other party, provided that nothing herein shall relieve any party from liability for its willful breach of this Agreement. ARTICLE IX MISCELLANEOUS Section 9.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES THEREOF). Section 9.2 Entire Agreement; Amendment. This Agreement, including the exhibits hereto, constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any matter by any warranties, representations or covenants except as specifically set forth herein or therein. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. Section 9.3 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date of receipt and shall be delivered personally or mailed by registered or certified mail (postage prepaid, return receipt requested), sent by overnight courier or sent by telecopy, to the parties at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be specified by like notice): (a) if to Verizon: Bell Atlantic Corporation (d/b/a Verizon Communications) 1717 Arch Street, 29th Fl. Philadelphia, Pennsylvania 19103 Attention: Stephen E. Smith Telecopy: (215) 557-7249 with copies to: Bell Atlantic Corporation (d/b/a Verizon Communications) 1095 Avenue of the Americas New York, New York 10036 Attention: Marianne Drost Telecopy: (212) 764-2739 and Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Attention: Peter Allan Atkins, Esq. Martha E. McGarry, Esq. Telecopy: (212) 735-2000 (b) if to NorthPoint: NorthPoint Communications Group, Inc. 303 Second Street, South Tower San Francisco, California 94107 Attention: Michael P. Glinsky Telecopy No.:(415) 403-4004 with a copy to: Latham & Watkins 1001 Pennsylvania Avenue, N.W. Suite 1300 Washington, DC 20004 Attention: James F. Rogers, Esq. Telecopy: (202) 637-2201 Section 9.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by only one of the parties hereto, each of which shall be enforceable against the party actually executing such counterpart, and all of which together shall constitute one instrument. Section 9.5 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provisions; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. Section 9.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. The terms "affiliate" and "associate" shall have the meanings ascribed to them in Rule 12b-2 promulgated under the Exchange Act and the term "beneficial ownership" shall have the meaning as such term is used in Rule 13d-3 promulgated under the Exchange Act. Section 9.7 Further Actions; Reasonable Efforts. Upon the terms and subject to the conditions hereof, each of the parties agrees to use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including without limitation the obtaining of all necessary consents, approvals, or waivers from third parties. Section 9.8 Expenses. NorthPoint and Verizon shall each bear its own expenses incurred on its behalf with respect to this Agreement and the transactions contemplated hereby. IN WITNESS WHEREOF, each of the undersigned has caused the foregoing Agreement to be executed as of the date first above written. BELL ATLANTIC CORPORATION (D/B/A VERIZON COMMUNICATIONS) By: ------------------------------------- Name: Title: NORTHPOINT COMMUNICATIONS GROUP, INC. By: ------------------------------------- Name: Title: EX-99 3 0003.txt EXHIBIT 2 - CERTIFICATE OF DESIGNATION CERTIFICATE OF DESIGNATION OF 9% CONVERTIBLE PREFERRED STOCK OF NORTHPOINT COMMUNICATIONS GROUP, INC. Pursuant to Section 151 of the General Corporation Law of the State of Delaware NorthPoint Communications Group, Inc., a Delaware corporation (the "Corporation"), certifies that pursuant to the authority contained in its Fourth Amended and Restated Certificate of Incorporation, as amended (the "Restated Certificate of Incorporation"), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, its Board of Directors (the "Board of Directors") has adopted the following resolution creating a series of its Preferred Stock, par value $0.001 per share, designated as 9% Convertible Preferred Stock: RESOLVED, that a series of authorized Preferred Stock, par value $0.001 per share, of the Corporation be hereby created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount; Rank. (a) Designation and Amount. The shares of such series shall be designated as the "9% Convertible Preferred Stock" (the "Convertible Preferred Stock") and the number of shares constituting such series shall be 1,500,000 shares of Convertible Preferred Stock. Section 10 contains the definitions of certain defined terms used herein. (b) Rank. The Convertible Preferred Stock shall, with respect to dividend distributions and distributions upon liquidation, winding-up and dissolution, whether voluntary or involuntary, of the Corporation, whether now or hereafter issued, rank senior to all Junior Stock. Section 2. Dividends and Distributions. (a) Entitlement; Accrual; Payment. The holders of shares of Convertible Preferred Stock shall be entitled to receive on each Dividend Payment Date in respect of the Dividend Period ending on (and including) the date prior to such Dividend Payment Date accrued dividends payable in additional shares of Convertible Preferred Stock on each such Dividend Payment Date equal to the then PIK Percentage of the Stated Amount of each share of the then outstanding Convertible Preferred Stock; provided that with respect to the Initial Dividend Period, the dividends set forth above shall be prorated based on the number of days in such period. Any reference herein to "accrued dividends" or similar phrases means that such dividends are fully cumulative and accumulate and accrue on a daily basis (computed on the basis of a 360-day year of twelve 30-day months) and compound quarterly on the Dividend Payment Dates at the rate indicated above (the "Dividend Rate") and in the manner set forth herein, whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. All dividends payable in additional shares of Convertible Preferred Stock shall be paid through the issuance of additional shares of Convertible Preferred Stock (including fractional shares) at the Stated Amount. (b) Issuance of Dividend Shares. All dividends paid in additional shares of Convertible Preferred Stock shall be deemed issued on the applicable Dividend Payment Date and will thereupon be duly authorized, validly issued, fully paid and nonassessable and free and clear of all liens and charges. (c) Priority With Respect to Junior Stock and Other Issuances of Preferred Stock. (i) Holders of shares of Convertible Preferred Stock shall be entitled to receive the dividends provided for in Section 2(a) in preference to and in priority over any dividends upon any of the Junior Stock. (ii) So long as any share of the Convertible Preferred Stock is outstanding, the Corporation shall not declare, pay or set apart for payment any dividend on any of the Junior Stock or make any payment on account of, or set apart for payment money for a sinking or other similar fund for, the purchase, redemption or other retirement of, any of the Junior Stock or any warrants, rights, calls or options exercisable for or convertible into any of the Junior Stock whether in cash, obligations or shares of the Corporation or other property (other than in exchange for Junior Stock), and shall not permit any corporation or other entity directly or indirectly controlled by the Corporation to purchase or redeem any of the Junior Stock or any such warrants, rights, calls or options (other than in exchange for Junior Stock). (iii) So long as any share of the Convertible Preferred Stock is outstanding, the Corporation shall not, without the consent of the holders of a majority of the then issued and outstanding shares of Convertible Preferred Stock, issue (i) any class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation ranking senior to, or on a parity with, the Convertible Preferred Stock as to dividend distributions or distributions upon liquidation, winding-up or dissolution of the Corporation or (ii) any additional shares of Convertible Preferred Stock (other than upon the payment of dividends pursuant to Section 2(a) hereof). Section 3. Voting Rights. (a) Voting Limitation. Except for any voting rights provided elsewhere herein or by law, the holders of shares of Convertible Preferred Stock shall not be entitled to voting rights. (b) Class Vote. In addition to any matters requiring a separate vote of the Convertible Preferred Stock under applicable law, the Corporation shall not, without the prior consent or approval of the holders of a majority of the issued and outstanding shares of Convertible Preferred Stock, voting as a single class, take any action which would adversely affect the rights, privileges or preferences of the Convertible Preferred Stock. (c) Voting Rights After Regulatory Approvals. Upon expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the "HSR Act") and the receipt of any required approvals under the Communications Act of 1934, as amended, the rules and regulations thereunder and the policies of the Federal Communications Commission (the "Communications Act") each holder of Convertible Preferred Stock shall have full voting rights and powers, and shall be entitled to vote on all matters put to a vote or consent of stockholders of the Corporation, voting together with the holders of the Common Stock as one class, with each holder of shares of Convertible Preferred Stock having the number of votes equal to the number of shares of Common Stock into which such shares of Convertible Preferred Stock could be converted in accordance with Section 8 hereof as of the record date for the vote or consent which is being taken. Section 4. Certain Restrictions. So long as any shares of Convertible Preferred Stock are outstanding, the Corporation shall not, directly or indirectly, make any Restricted Payments (as defined in the Indenture, dated as of February 8, 2000, between the Corporation and The Bank of New York, a New York banking corporation, as trustee (the "Indenture")), unless such Restricted Payments are made to redeem shares of Convertible Preferred Stock in accordance with Section 5 hereof. Section 5. Optional Redemption. (a) Redemption. To the extent permitted by law and the terms or provisions of other agreements or instruments for or with respect to Capital Stock or indebtedness of the Corporation, to which the Corporation is, or may become, a party or subject, the outstanding shares of Convertible Preferred Stock shall be redeemable, in whole at any time or from time to time in part, out of funds legally available therefor, at the option of the Corporation. Immediately prior to authorizing or making any such redemption with respect to the Convertible Preferred Stock, the Corporation, by resolution of its Board of Directors, shall declare a dividend on the Convertible Preferred Stock to be redeemed, which shall be in an amount equal to any accrued and unpaid dividends on such Convertible Preferred Stock, to and including the Optional Redemption Date, which dividend may be payable in cash or in additional shares of Convertible Preferred Stock. Redemptions shall be made on the date specified in the Redemption Notice (as defined in Section 5(b)) (the "Optional Redemption Date"), upon giving notice as provided in Section 5(c), at a per share redemption price equal to the Stated Amount plus an amount in cash equal to all Accrued Dividends on that share (the "Redemption Price"). (b) Redemption Notice. The Corporation shall deliver a notice of each redemption by first-class mail, postage prepaid, mailed not less than five calendar days following the effective date thereof, to each holder of record of shares of Convertible Preferred Stock, at such holder's address as the same appears on the stock books of the Corporation's transfer agent (the "Redemption Notice"). The Redemption Notice shall state: (i) the Optional Redemption Date (which shall be no fewer than 20 nor more than 30 calendar days following the mailing of the Redemption Notice); (ii) the Redemption Price for the Convertible Preferred Stock to be redeemed; (iii) the Accrued Dividends due on each share (and all shares) of Convertible Preferred Stock held by such holder as of the Optional Redemption Date; (iv) the place or places where, and the procedures pursuant to which, certificates for such shares are to be presented and surrendered for payment of the Redemption Price; (v) that payment of the Redemption Price will be made upon proper presentation and surrender of such certificates for shares of Convertible Preferred Stock; (vi) that unless the Corporation defaults in the payment of the Redemption Price for the shares being redeemed, dividends on the shares to be redeemed shall cease to accrue following such Optional Redemption Date; (vii) the aggregate number of shares of Convertible Preferred Stock being redeemed and, if a partial redemption, the method (e.g., pro rata, etc.) by which shares have been selected by the Corporation for redemption; (viii) in the case of a redemption pursuant to Section 5(a), that any shares of Convertible Preferred Stock not redeemed will continue to accrue dividends in accordance with the terms of Section 2; (ix) as applicable, that holders whose shares are being redeemed only in part will be issued new certificates representing shares not redeemed by the Corporation; and (x) that accrued and unpaid dividends up to and including such Optional Redemption Date, as applicable, will be paid to holders as part of the Redemption Price in respect of shares redeemed by the Corporation in accordance with the terms set forth herein. (c) Redemption Effects and Procedures. (i) On and after the Optional Redemption Date, as applicable, unless the Corporation shall be in default in providing money for the payment of the Redemption Price for the shares being redeemed, (x) dividends on the shares of the Convertible Preferred Stock so called for redemption shall cease to accrue and (y) all rights of the holders thereof as holders of those redeemed shares of Convertible Preferred Stock (except the right to receive from the Corporation the Redemption Price, without interest thereon, upon presentation and surrender of the certificates evidencing such shares) shall cease. (ii) Upon proper presentation and surrender in accordance with the Redemption Notice of the certificates for any shares of Convertible Preferred Stock so redeemed (properly endorsed or assigned for transfer), such shares shall be redeemed by the Corporation at the Redemption Price. In the event of a partial redemption of the Convertible Preferred Stock, shares to be redeemed shall be selected by the Corporation pro rata or by any other equitable method determined by the Board of Directors in its sole discretion. If fewer than all the shares represented by any certificate are redeemed, the Corporation's transfer agent for the Convertible Preferred Stock shall promptly mail to each holder or in accordance with such holder's instructions, if any, a certificate representing shares represented by the surrendered certificate but not redeemed. (iii) Notwithstanding the delivery by the Corporation of a Redemption Notice in accordance with Section 5(b), if any holder of Convertible Preferred Stock shall, prior to the close of business on the seven calender days preceding any Optional Redemption Date, give written notice to the Corporation of such holder's election to convert, pursuant to Section 8, any or all of the shares held by such holder to be redeemed (accompanied by a certificate or certificates for such shares, duly endorsed or assigned to the Corporation), then the conversion of such shares which would otherwise have been redeemed shall become effective as provided in Section 8 hereof. (d) Election Irrevocable. The election by the Corporation to redeem shares of Convertible Preferred Stock pursuant to Section 5(a) shall become irrevocable upon delivery of the Redemption Notice to the holders of Convertible Preferred Stock. Section 6. Reacquired Shares. Any shares of Convertible Preferred Stock converted, redeemed, purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof, and, if necessary to provide for the lawful redemption or purchase of such shares, the capital represented by such shares shall be reduced in accordance with the General Corporation Law of the State of Delaware. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, par value $0.001 per share, of the Corporation and may be reissued as part of another series of Preferred Stock, par value $0.001 per share, of the Corporation. Section 7. Liquidation, Dissolution or Winding Up. If the Corporation shall adopt a plan of liquidation or of dissolution, or commence a voluntary case under the Federal bankruptcy laws or any other applicable state or Federal bankruptcy, insolvency or similar law, or consent to the entry of an order for relief in any involuntary case under any such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Corporation or of any substantial part of its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or if a decree or order for relief in respect of the Corporation shall be entered by a court having jurisdiction in the premises in an involuntary case under the Federal bankruptcy laws or any other applicable Federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order shall be unstayed and in effect for a period of 90 consecutive days and on account of such event the Corporation shall liquidate, dissolve or wind up, or upon any other liquidation, dissolution or winding up of the Corporation (a "Liquidation"), the holders shall be entitled to receive the Liquidation Preference of the shares of Convertible Preferred Stock held by the holder before any distribution shall be made or any assets distributed in respect of Junior Stock to the holders of any Junior Stock, including, without limitation, Common Stock of the Corporation. If upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, the amounts payable with respect to the Convertible Preferred Stock are not paid in full, the holders of the Convertible Preferred Stock will share equally and ratably in any distribution of assets of the Corporation first in proportion to the full Liquidation Preference to which each is entitled until such preferences are paid in full, and then in proportion to their respective amounts of accumulated but unpaid dividends. After payment of the full amount of the amount set forth above to which they are entitled, the holders of shares of Convertible Preferred Stock will not be entitled to any further participation in any distribution of assets of the Corporation. For the purposes of this Section 7, the voluntary sale, conveyance, exchange or transfer of all or substantially all of the property or assets of the Corporation or the consolidation or merger of the Corporation with or into one or more other corporations shall not be deemed to be a liquidation, winding-up or dissolution of the Corporation. Section 8. Conversion into Common Stock. Each share of Convertible Preferred Stock, including any shares of Convertible Preferred Stock issued as Accrued Dividends, may, at the option of the holder thereof, be converted into shares of Common Stock at any time, whether or not the Corporation has given notice of redemption under Section 5, on the terms and conditions set forth in this Section 8. (a) Terms of Conversion. Upon expiration or termination of the applicable waiting period under the HSR Act and the receipt of any required approvals under the Communications Act, each share of Convertible Preferred Stock shall be convertible in the manner hereinafter set forth into a number of fully paid and nonassessable shares of Common Stock equal to the quotient obtained by dividing the Stated Amount plus Accrued Dividends by the Conversion Price. (b) Adjustment of Conversion Price. The Conversion Price shall be subject to adjustment from time to time as follows: In case the Corporation shall at any time or from time to time after the original issuance of the Convertible Preferred Stock declare a dividend, or make a distribution on the outstanding shares of Common Stock, in either case, in shares of Common Stock, or effect a subdivision, combination, consolidation or reclassification of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, then, and in each such case, the Conversion Price in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted by multiplying such Conversion Price by a fraction, the numerator of which is the number of shares of Common Stock that were outstanding immediately prior to such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event. An adjustment made pursuant to this Section 8(b) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification, consolidation or combination, at the close of business on the day upon which such corporate action becomes effective. (c) Reorganization, Consolidation, Merger, Asset Sale. In case of any capital reorganization or reclassification of outstanding shares of Common Stock (other than a reclassification covered by Section 8(b)), or in case of any consolidation or merger of the Corporation with or into another Person, or in case of any sale or conveyance to another Person of the property of the Corporation as an entirety or substantially as an entirety (each of the foregoing being referred to as a "Transaction"), each share of Convertible Preferred Stock then outstanding shall thereafter be convertible into, upon receipt of the requisite governmental approvals, in lieu of the Common Stock issuable upon such conversion prior to the consummation of such Transaction, the kind and amount of shares of stock and other securities and property (including cash) receivable upon the consummation of such transaction by a holder of that number of shares of Common Stock into which one share of Convertible Preferred Stock was convertible immediately prior to such Transaction (including, on a pro rata basis, the cash, securities or property received by holders of Common Stock in any tender or exchange offer that is a step in such Transaction). In any such case, if necessary, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions set forth in this Section 8 with respect to rights and interests thereafter of the holders of shares of Convertible Preferred Stock to the end that the provisions set forth herein for the protection of the conversion rights of the Convertible Preferred Stock shall thereafter be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities and property deliverable upon conversion of the shares of Convertible Preferred Stock remaining outstanding (with such adjustments in the conversion price and number of shares issuable upon conversion and such other adjustments in the provisions hereof as the Board of Directors shall reasonably determine in good faith to be appropriate). In case securities or property other than Common Stock shall be issuable or deliverable upon conversion as aforesaid, then all references in this Section 8 shall be deemed to apply, so far as appropriate and as nearly as may be, to such other securities or property. Notwithstanding anything contained herein to the contrary, the Corporation will not effect any Transaction unless, prior to the consummation thereof, the Surviving Person (as defined in Section 10) thereof, if other than the Corporation, shall assume, by written instrument mailed to each record holder of shares of Convertible Preferred Stock, at such holder's address as it appears on the transfer books of the Corporation, the obligation to deliver to such holder such cash, property and securities to which, in accordance with the foregoing provisions, such holder is entitled. Nothing contained in this Section 8(c) shall limit the rights of holders of the Convertible Preferred Stock to convert the Convertible Preferred Stock in connection with the Transaction. (d) Conversion Procedures. The holder of any shares of Convertible Preferred Stock may exercise its right to convert such shares into shares of Common Stock by surrendering for such purpose to the Corporation, at its principal office or at such other office or agency maintained by the Corporation for that purpose, a certificate or certificates representing the shares of Convertible Preferred Stock to be converted duly endorsed to the Corporation in blank accompanied by a written notice stating that such holder elects to convert all or a specified whole number of such shares in accordance with the provisions of this Section 8. The Corporation will pay any and all documentary, stamp or similar issue or transfer tax and any other taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Convertible Preferred Stock pursuant hereto. As promptly as practicable, and in any event within three Business Days after the surrender of such certificate or certificates and the receipt of such notice relating thereto and, if applicable, payment of all transfer taxes (or the demonstration to the satisfaction of the Corporation that such taxes are inapplicable), the Corporation shall deliver or cause to be delivered (i) certificates (which shall bear legends, if appropriate) registered in the name of such holder representing the number of validly issued, fully paid and nonassessable full shares of Common Stock to which the holder of shares of Convertible Preferred Stock so converted shall be entitled and (ii) if less than the full number of shares of Convertible Preferred Stock evidenced by the surrendered certificate or certificates are being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares converted. Such conversion shall be deemed to have been made at the close of business on the date of receipt of such notice and of such surrender of the certificate or certificates representing the shares of Convertible Preferred Stock to be converted so that the rights of the holder thereof as to the shares being converted shall cease except for the right to receive shares of Common Stock, and the person entitled to receive the shares of Common Stock shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time. (e) Fractional Shares. In connection with the conversion of any shares of Convertible Preferred Stock, no fractions of shares of Common Stock shall be issued, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest (after aggregating all such shares being converted) in an amount equal to such fractional interest multiplied by the Current Market Price per share of Common Stock on the day on which such shares of Convertible Preferred Stock are deemed to have been converted. (f) Dividends; Distributions. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock, or shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Convertible Preferred Stock at the addresses of each as shown on the books of the Corporation of the date on which (i) the books of the corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which Section 8(c) applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date, if known, as of which the holders of the Common Stock and of the Convertible Preferred Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock or Convertible Preferred Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance, or participate in such dissolution, liquidation or winding up, as the case may be. Section 9. Reports as to Adjustments. Whenever the number of shares of Common Stock into which each share of Convertible Preferred Stock is convertible (or the number of votes to which each share of Convertible Preferred Stock is entitled) is adjusted as provided in Section 8, the Corporation shall promptly mail to the holders of record of the outstanding shares of Convertible Preferred Stock at their respective addresses as the same shall appear in the Corporation's stock records a notice stating that the number of shares of Common Stock into which the shares of Convertible Preferred Stock are convertible has been adjusted and setting forth the new number of shares of Common Stock (or describing the new stock, securities, cash or other property) into which each share of Convertible Preferred Stock is convertible, as a result of such adjustment, a brief statement of the facts requiring such adjustment and the computation thereof, and when such adjustment became effective. Section 10. Definitions. For the purposes of the Certificate of Designation of Convertible Preferred Stock which embodies this resolution: "Accrued Dividends" to a particular date (the "Applicable Date") means all dividends accrued but not paid on the Convertible Preferred Stock pursuant to Section 2(a), whether or not declared or accrued to the Applicable Date. "affiliate" shall have the meaning set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Exchange Act. "associate" shall have the meaning set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission under the Exchange Act. "Business Day" means any day other than a Saturday, Sunday, or a day on which commercial banks in the City of New York are authorized or obligated by law or executive order to close. "Capital Stock" means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person. "Common Stock" means the common stock, par value $0.001 per share, of the Corporation. "Conversion Price" shall initially be equal to $13.42, subject to adjustment as provided in Section 8(b). "Current Market Price" per share of Common Stock on any date shall be the average of the closing prices of a share of Common Stock for the five consecutive trading days before the date in question. "Dividend Payment Date" means (i) the date which is three months from the date of issuance of the Convertible Preferred Stock, (ii) the date which is six months from the date of issuance of the Convertible Preferred Stock, (iii) the date which is nine months from the date of issuance of the Convertible Preferred Stock, (iv) the date which is twelve months from the date of issuance of the Convertible Preferred Stock and (v) the anniversaries of each of the dates referred to in clauses (i)-(iv) above. "Dividend Period" means the Initial Dividend Period and, thereafter, each quarterly period from a Dividend Payment Date to the next following Dividend Payment Date (but without including such later Dividend Payment Date). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Initial Dividend Period" means the dividend period commencing on the Convertible Preferred Stock Issuance Date and ending on the first Dividend Payment Date to occur thereafter (but without including such later Dividend Payment Date). "Issuance Date" means the original date of issuance of the Convertible Preferred Stock. "Junior Stock" means the Common Stock of the Corporation and each other class of Capital Stock of the Corporation or series of Preferred Stock of the Corporation currently existing or established hereafter. "Liquidation Preference" means, in the event of a liquidation or winding up of the Corporation, an amount per share of Convertible Preferred Stock equal to the Stated Amount of their Convertible Preferred Stock plus any Accrued Dividends. "Measurement Date" means the Business Day immediately preceding the date of issuance of shares of Common Stock (or options, rights, warrants or other securities convertible into or exchangeable for shares of Common Stock) contemplated by such Section. "Merger Termination Event" means the termination of the Agreement and Plan of Merger, dated as of August 7, 2000 by and among the Corporation, Bell Atlantic Corporation (d/b/a Verizon Communications), Verizon Ventures I Inc. and Verizon Ventures II Inc. "Person" means an individual, partnership, corporation, limited liability company or partnership, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof, or other entity of any kind. "PIK Percentage" means 9.0% per annum, provided however, in the event of a Merger Termination Event, the PIK Percentage will immediately increase to 13% and will increase by an additional 0.5% on the day following each Dividend Payment Date thereafter, but in no event shall the PIK Percentage exceed 18.0%. "Preferred Stock" means the preferred stock, par value $0.001 per share, of the Corporation. "Convertible Preferred Stock" means the 9% Convertible Preferred Stock of the Corporation, the terms of which are set forth in this Certificate of Designation. "Set Apart for Payment" means the Corporation shall have irrevocably deposited with a bank or trust company doing business in the Borough of Manhattan, the City of New York, and having a capital and surplus of at least $1,000,000,000 in trust for the exclusive benefit of the holders of shares of Convertible Preferred Stock, funds sufficient to satisfy the Corporation's payment obligation. "Stated Amount" means $1,000 per share. "Subsidiary" of any Person means any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. "Surviving Person" means the continuing or surviving Person of a merger, consolidation or other corporate combination, the Person receiving a transfer of all or a substantial part of the properties and assets of the Corporation, or the Person consolidating with or merging into the Corporation in a merger, consolidation or other corporate combination in which the Corporation is the continuing or surviving Person, but in connection with which the Convertible Preferred Stock or Common Stock of the Corporation is exchanged, converted or reinstated into the securities of any other Person or cash or any other property; provided, however, if such Surviving Person is a direct or indirect Subsidiary of a Person, the parent entity also shall be deemed to be a Surviving Person. IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation of Convertible Preferred Stock to be duly executed by its President and attested to by its Secretary and has caused its corporate seal to be affixed hereto, this 5th day of September, 2000. NORTHPOINT COMMUNICATIONS GROUP, INC. By:_______________________________ Name: Title: President By:_______________________________ Name: Title: Secretary EX-99 4 0004.txt EXHIBIT 3 - REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of August 7, 2000 by and between NorthPoint Communications Group, Inc., a Delaware corporation ("Issuer"), and Bell Atlantic Corporation (d/b/a Verizon Communications), a Delaware corporation ("Purchaser"). 1. Introduction. Issuer is a party to a Securities Purchase Agreement (the "Purchase Agreement") with Purchaser, pursuant to which Issuer has agreed, among other things, to issue to Purchaser shares of a new series of Issuer preferred stock designated 9% Convertible Preferred Stock, par value $0.001 per share (the "9% Preferred Stock"). This Agreement shall become effective upon the issuance of such shares to Purchaser pursuant to the Purchase Agreement (the date of such issuance being the "Closing Date"). Certain capitalized terms used in this Agreement are defined in Section 3 hereof; references to Sections shall be to sections of this Agreement. 2. Registration under Securities Act, etc. 2.1 Registration on Request. (a) Demand. The holders of the Registrable Securities may make up to three written requests (subject to increase pursuant to Sections 2.1(d) and 2.1(f)) that Issuer effect the registration under the Securities Act of all or part of the Registrable Securities (a "Demand Registration"), provided that not less than 10% of the Registrable Securities are included in such Demand Registration. Any request for a Demand Registration will specify the aggregate number of Registrable Securities proposed to be sold and the intended method of disposition thereof. Issuer will, subject to the terms of this Agreement, use its commercially reasonable efforts to effect such registration under the Securities Act of: (i) the Registrable Securities which Issuer has been so requested to register by Purchaser for disposition in accordance with the intended method of disposition stated in such request; and (ii) all securities which Issuer may elect to register in connection with the offering of Registrable Securities pursuant to this Section 2.1, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities and the additional securities referred to in clause (ii) above, if any, so to be registered. (b) Registration Statement Form. Demand Registrations shall be on such appropriate registration form of the Commission (i) as shall be selected by Issuer and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in the request for such registration. (c) Expenses. Issuer shall pay any Registration Expenses incurred in connection with each Demand Registration request. Underwriting discounts and commissions and transfer taxes (if any) in connection with each such registration shall be allocated pro rata among all persons on whose behalf securities of Issuer are included in such registration, on the basis of the respective amounts of the securities then being registered on their behalf. (d) Effective Registration Statement. A Demand Registration request shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, provided that a registration which does not become effective after Issuer has filed a registration statement with respect thereto solely by reason of the refusal to proceed of Purchaser (other than a refusal to proceed based upon the advice of counsel to Purchaser relating to a matter with respect to Issuer, in which case the registration shall be deemed not to have been effected) shall be deemed to have been effected by Issuer at the request of Purchaser, (ii) if, after it has become effective, such registration becomes subject to, for longer than 60 days, any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason which would prevent the effectiveness of the registration statement not attributable to Purchaser or (iii) the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of an act or omission by Purchaser. (e) Selection of Underwriters. If a Demand Registration involves an underwritten offering, the underwriter or underwriters thereof shall be selected by Purchaser, subject to Issuer's approval, which shall not unreasonably be withheld, provided that if Issuer does not grant its approval pursuant to the preceding sentence, Purchaser shall select one or more underwriters other than the underwriter or underwriters to which objection was so made, which shall also be subject to Issuer's approval, which shall not be unreasonably withheld. (f) Priority in Demand Registrations. If a Demand Registration involves an underwritten offering, and the managing underwriter shall advise Issuer in writing (with a copy to Purchaser) that, in its opinion, the number of securities requested to be included in such registration (including securities of Issuer which are not Registrable Securities) exceeds the number which can be sold in such offering, Issuer will include in such registration, to the extent of the number which Issuer is so advised can be sold in such offering, (i) first, Registrable Securities requested to be included in such registration by Purchaser and (ii) second, securities Issuer proposes to sell. If any shares requested to be included in such registration by Purchaser are excluded from registration, then Purchaser shall have the right to withdraw all, or any part, of its shares from such registration and if all shares are withdrawn in full such Demand Registration shall not be deemed to have been effected and will not count as a Demand Registration. If any shares requested to be included in the final Demand Registration request permitted under Section 2.1(a) are excluded from such final Demand Registration request, then, notwithstanding participation in such registration, the final Demand Registration request shall not be deemed to have been effected and will not count as a Demand Registration under Section 2.1(a). 2.2 Incidental Registration. If Issuer at any time after the Closing Date proposes to register any securities under the Securities Act on Form S-1, S-2 or S-3 or any successor or similar form (except registration on any such form or similar form(s) solely for registration of securities in connection with an employee benefits plan or dividend reinvestment plan or a merger or consolidation) and other than pursuant to Section 2.1), whether or not for sale for its own account, it will each such time give prompt written notice to Purchaser of its intention to do so and of Purchaser's rights under this Section 2.2. Upon the written request of Purchaser made within 10 business days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by Purchaser and the intended method of disposition thereof, provided that if the securities to be registered by Issuer are to be distributed through one or more underwriters as provided in Section 2.4, Purchaser must agree to distribute such Registrable Securities by or through such underwriter or underwriters), Issuer will, subject to the terms of this Agreement, use its commercially reasonable efforts to effect the registration under the Securities Act of all Registrable Securities which Issuer has been so requested to register by Purchaser, to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, by inclusion of such Registrable Securities in the registration statement which covers the securities which Issuer proposes to register (whether or not for sale for its own account); provided, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, Issuer shall determine for any reason either not to register or to delay registration of such securities, Issuer may, at its election, give written notice of such determination to Purchaser and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of Purchaser to request that such registration be effected as a Demand Registration, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities. No registration effected under this Section 2.2 shall relieve Issuer of its obligation to effect any Demand Registration, nor shall any such registration hereunder be deemed to be a Demand Registration. Issuer will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 2.2. 2.3 Registration Procedures. If and whenever Issuer is required to use its commercially reasonable efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 2.1 and 2.2, Issuer shall: (i) prepare and file (in the case of a Demand Registration, such filing to be made within 60 days after the initial request of Purchaser or in any event as soon after such 60 day period as possible) with the Commission the requisite registration statement to effect such registration and thereafter use its commercially reasonable efforts to cause such registration statement to become and remain effective, provided, however, that Issuer may postpone the filing or effectiveness of any registration statement otherwise required to be filed by Issuer pursuant to this Agreement or suspend the use of any registration statement for a period of time, not to exceed 90 days in any 12-month period, if Issuer determines that the filing or continued use of such registration statement would require Issuer to disclose a material financing, acquisition or other corporate development of Issuer or any of its affiliates and Issuer shall have determined that such disclosure is not in the best interests of Issuer (any such determination to be made by resolution of the Board of Directors of Issuer or a committee thereof); provided, further, that Issuer may discontinue any registration of its securities which are not Registrable Securities (and, under the circumstances specified in Section 2.2, its securities which are Registrable Securities) at any time prior to the effective date of the registration statement relating thereto; (ii) subject to Section 2.1(d), prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until the earlier of (A) such time as all of such securities have been disposed of in accordance with the intended methods of disposition set forth in such registration statement or (B) the expiration of 90 days after such registration statement becomes effective; (iii) furnish to Purchaser such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as Purchaser may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities; (iv) use its commercially reasonable efforts to register or qualify all Registrable Securities and other securities covered by such registration statement under such other securities laws or blue sky laws of such jurisdictions as Purchaser shall reasonably request, to keep such registrations or qualifications in effect for so long as such registration statement remains in effect, and take any other action which may be reasonably necessary or advisable to consummate the disposition in such jurisdictions of the Registrable Securities, except that Issuer shall not for any such purpose be required to qualify generally to do business as a foreign corporation or dealer in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction, to conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of such jurisdiction or to consent to general service of process in any such jurisdiction; (v) furnish to each underwriter, if an underwritten offering, customary "cold comfort" letters from its independent auditors, legal opinions from counsel to Issuer on customary matters, and such other certificates or other instruments reasonably requested by such underwriters; (vi) notify Purchaser and the managing underwriter or underwriters, if any, promptly and confirm such advice in writing promptly thereafter: (A) when the registration statement, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) of any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information; (C) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose; (D) if at any time the representations and warranties of Issuer made as contemplated by Section 2.4 below cease to be true and correct; and (E) of the receipt by Issuer of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (vii) notify Purchaser, at any time when a prospectus relating to a registration statement is required to be delivered under the Securities Act, upon Issuer's discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and as soon as practicable prepare and furnish to Purchaser and each underwriter, if any, a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; (viii) use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest possible moment; (ix) cause the Registrable Securities included in any registration statement to be (A) listed on each securities exchange, if any, on which the same securities issued by Issuer are then listed, or (B) authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq National Market if the Registrable Securities so qualify; (x) cooperate with Purchaser and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. ("NASD"); (xi) during the period when a prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange act; and (xii) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with Issuer's first full calendar quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. Issuer may require Purchaser to furnish Issuer such information regarding Purchaser and the distribution of the Registrable Securities as Issuer may from time to time reasonably request in writing. Issuer will not file any registration statement under Section 2.1 or amendment thereto or any prospectus or any supplement thereto (excluding documents incorporated by reference which constitute required reports under the Exchange Act) to which Purchaser shall reasonably object, provided that Issuer may file such document in a form required by law or upon the advice of its counsel. At least one day prior to any disposition of Registrable Securities by Purchaser, Purchaser will orally advise Issuer of the dates on which such disposition is expected to commence and terminate, the number of Registrable Securities expected to be sold, the method of disposition and such other information as Issuer may reasonably request in order to supplement the prospectus contained in any registration statement in accordance with the rules and regulations of the Commission. Promptly after receiving such advice, Issuer will, if necessary, (i) prepare a supplement to such prospectus based upon such advice and file the same with the Commission pursuant to Rule 424(b) under the Securities Act and (ii) if necessary, qualify the Registrable Securities to be sold under the securities or blue sky laws of such jurisdictions in the United States as Purchaser shall reasonably request (subject to the proviso of Section 2.3(iv)). Purchaser agrees by acquisition of the Registrable Securities that, upon receipt of any notice from Issuer of the occurrence of any event of the kind described in subdivisions (vi) or (vii) of this Section 2.3, Purchaser will forthwith discontinue its disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until Purchaser's receipt of the copies of the supplemented or amended prospectus contemplated by subdivisions (vi) or (vii) of this Section 2.3 and, if so directed by Issuer, will deliver to Issuer (at Issuer's reasonable expense) all copies, other than permanent file copies, then in Purchaser's possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. 2.4 Underwritten Offerings. (a) Demand Underwritten Offerings. If requested by the underwriters for any underwritten offering pursuant to a Demand Registration, Issuer will enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to Issuer and Purchaser, and to contain such representations and warranties by Issuer and such other terms as are generally prevailing in agreements of such type, including, without limitation, indemnities substantially the same as those provided in Section 2.6. Purchaser will cooperate with Issuer in the negotiation of the underwriting agreement and will give consideration to the reasonable suggestions of Issuer regarding the form thereof. Purchaser shall be a party to such underwriting agreement. (b) Incidental Underwritten Offerings. If Issuer at any time proposes to register any securities under the Securities Act as contemplated by Section 2.2 and such securities are to be distributed by or through one or more underwriters, Issuer will, if requested by Purchaser as provided in Section 2.2 and subject to the provisions of Section 2.3, use its commercially reasonable efforts to arrange for such underwriters to include all the Registrable Securities to be offered and sold by Purchaser among the securities to be distributed by such underwriters, provided that if the managing underwriter of such underwritten offering shall inform Purchaser and the holders of any other securities which shall have exercised, in respect of such underwritten offering, registration rights comparable to the rights under Section 2.2 by letter of its belief that inclusion in such underwritten distribution of all or a specified number of such Registrable Securities or of such other securities so requested to be included would interfere with the successful marketing of the securities by the underwriters (such letter to state the basis of such belief and the approximate number of such Registrable Securities and shares of other securities so requested to be included which may be included in such underwritten offering without such effect), then Issuer may, upon written notice to Purchaser and all holders of such other securities so requested to be included, exclude pro rata from such underwritten offering (if and to the extent stated by such managing underwriter to be necessary to eliminate such effect) the number of such Registrable Securities and shares of such other securities so requested to be included in the registration of which shall have been requested by Purchaser and by the holders of such other securities so that the resultant aggregate number of such Registrable Securities and of such other shares of securities so requested to be included which are included in such underwritten offering shall be equal to the approximate number of shares stated in such managing underwriter's letter. Purchaser shall be a party to the underwriting agreement between Issuer and such underwriters. If, as a result of the provisions of this Section 2.4(b), Purchaser shall not be entitled to include all Registrable Securities in a registration that it has requested to be so included, Purchaser may withdraw its request to include Registrable Securities in such registration statement prior to its effectiveness. (c) Participation in Underwritten Offerings. Purchaser agrees that it will complete and execute all questionnaires, indemnities, underwriting agreements and other documents (other than powers of attorney) reasonably required under the terms of any underwriting arrangements. 2.5 Terms of Other Registration Rights. Without limiting any of the registration rights granted pursuant to Sections 2.1 and 2.2, to the extent that the terms and conditions of any third party's registration rights in effect prior to or after the date hereof are more favorable than the rights granted hereunder, Purchaser shall, at its option, be entitled to the same terms and conditions of such third party's registration rights, such that Purchaser's registration rights are not less favorable than such third party's registration rights. 2.6 Indemnification. (a) Indemnification by Issuer. In the event of any registration of any securities of Issuer under the Securities Act, Issuer will, and hereby agrees to, indemnify and hold harmless Purchaser, its directors and officers, and each other Person, if any, who controls Purchaser within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which Purchaser or any such director or officer or controlling Person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (x) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or (y) alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and Issuer will reimburse Purchaser and each such director, officer, and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided that Issuer shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to Issuer through an instrument duly executed by Purchaser specifically stating that it is for use in the preparation thereof, provided, further, that Issuer shall not be liable to Purchaser in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of Purchaser's failure to send or give a copy of the final prospectus, as the same may be then supplemented or amended, within the time required by the Securities Act to the Person asserting the existence of an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus; and provided, further, that Issuer shall not be liable to Purchaser in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based (i) upon the use of any preliminary final or summary prospectus by or on behalf of Purchaser after Issuer has notified Purchaser, in accordance with Section 2.3(vii), that such prospectus contains an untrue statement of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) the use of any final prospectus, as amended or supplemented, by or on behalf of Purchaser after such time as the obligation of Issuer to keep the related registration statement effective has expired or (iii) any violation of any federal or state securities laws, rules or regulations committed by Purchaser (other than any violation that arises out of or is based upon the circumstances described in clause (x) or (y) above and as to which Purchaser would otherwise be entitled to indemnification hereunder). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Purchaser or any such director, officer, or controlling Person and shall survive the transfer of such securities by Purchaser. (b) Indemnification by Purchaser. Issuer may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to this Agreement, that Issuer shall have received an undertaking satisfactory to it from Purchaser, to indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this Section 2.6) Issuer, each director of Issuer, each officer of Issuer and each other Person, if any, who controls Issuer within the meaning of the Securities Act, with respect to (i) any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to Issuer through an instrument duly executed by Purchaser specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, (ii) the use of any prospectus by or on behalf of Purchaser after Issuer has notified Purchaser that such prospectus contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) the failure to send or deliver to a Person to whom Purchaser sells Registrable Securities at or prior to the written confirmation of sale, a copy of the final prospectus or of the final prospectus as then amended or supplemented, whichever is most recent, if Issuer has previously furnished copies thereof to Purchaser or its representatives, or (iv) any violation by Purchaser of any federal or state securities law or rule or regulation thereunder (other than any violation that arises out of or is based upon circumstances described in clause (x) or (y) of Section 2.6(a) above and as to which Purchaser is entitled to indemnification thereunder). Any such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of Issuer or any such director, officer or controlling person and shall survive the transfer of such securities by Purchaser. Notwithstanding the foregoing, the indemnity obligation of Purchaser pursuant to this Section 2.6(b) shall be limited to an amount equal to the total proceeds (before deducting underwriting discounts and commissions and expenses) received by Purchaser for the sale of shares by Purchaser in a registration hereunder. (c) Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subdivisions of this Section 2.6, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, enclosing a copy of all papers served, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this Section 2.6, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified, to the extent that the indemnifying party may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement of any such action which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability, and a covenant not to sue, in respect to such claim or litigation. No indemnified party shall consent to entry of any judgment or enter into any settlement of any such action the defense of which has been assumed by an indemnifying party without the consent of such indemnifying party. (d) Indemnification Payments. The indemnification required by this Section 2.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. (e) Contribution. If the indemnification provided for in the preceding subdivisions of this Section 2.6 is unavailable to an indemnified party in respect of any expense, loss, claim, damage or liability referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such expense, loss, claim, damage or liability (i) in such proportion as is appropriate to reflect the relative benefits received by Issuer on the one hand and Purchaser on the other from the distribution of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of Issuer on the one hand and of Purchaser on the other in connection with the statements or omissions which resulted in such expense, loss, damage or liability, as well as any other relevant equitable considerations. The relative benefits received by Issuer on the one hand and Purchaser on the other in connection with the distribution of the Registrable Securities shall be deemed to be in the same proportion as the total net proceeds received by Issuer from the initial sale of the Registrable Securities by Issuer bear to the gain, if any, realized by Purchaser. The relative fault of Issuer on the one hand and of Purchaser on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission to state a material fact relates to information supplied by Issuer or by Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, provided that the foregoing contribution agreement shall not inure to the benefit of any indemnified party if indemnification would be unavailable to such indemnified party by reason of the provisions contained in the first sentence of subdivision (a) of this Section 2.6, and in no event shall the obligation of any indemnifying party to contribute under this subdivision (e) exceed the amount that such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under subdivisions (a) or (b) of this Section 2.6 had been available under the circumstances. Issuer and Purchaser agree that it would not be just and equitable if contribution pursuant to this subdivision (e) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth in the preceding sentence and subdivision (c) of this Section 2.6, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subdivision (e), Purchaser shall not be required to contribute any amount in excess of the amount by which the total proceeds (before deducting underwriting discounts and commissions and expenses) received by Purchaser from the sale of Registrable Securities exceeds the amount of any damages that Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 3. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: 9% Preferred Stock: As defined in Section 1. Commission: The Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act. Issuer: As defined in the introductory paragraph of this Agreement. Demand Registration: A registration under the Securities Act requested in accordance with Section 2.1. Exchange Act: The Securities Exchange Act of 1934, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference to a particular Section of the Securities Exchange Act of 1934 shall include a reference to the comparable Section, if any, of any such similar Federal statute. Person: A corporation, an association, a partnership, a limited liability company, an organization, business, an individual, a governmental or political subdivision thereof, a governmental agency or any other entity. Registrable Securities: Any shares of 9% Preferred Stock issued to Purchaser pursuant to the Purchase Agreement and any securities issued or issuable with respect to any 9% Preferred Stock referred to above by way of conversion, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act or (c) they shall have ceased to be outstanding. Registration Expenses: All expenses incident to Issuer's performance of or compliance with Section 2, including, without limitation, all registration, filing and NASD fees, all stock exchange listing fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for Issuer and of its independent public accountants, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, the fees and disbursements of one counsel to Purchaser, and any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if any. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as of the same shall be in effect at the time. 4. Amendments and Waivers. This Agreement may be amended and Issuer may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if Issuer shall have obtained the written consent to such amendment, action or omission to act, of Purchaser. 5. Notices. Except as otherwise provided in this Agreement, all notices, requests and other communications to any party hereto shall be in writing and shall be given and addressed to such party in the manner set forth in the Purchase Agreement or at such other address as such party shall have furnished to the other party in writing. Each such notice, request or other communication shall be effective (i) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (ii) if given by any other means (including, without limitation, by air courier), when delivered at the address specified above. 6. Assignment. Issuer shall not assign (whether by operation of law or otherwise) any of the rights, interests or obligations hereunder without the prior written consent of Purchaser. Purchaser may assign (whether by operation of law or otherwise) all or any part of its rights, interests or obligations under this agreement, to the extent permitted by law, to any Person to whom Purchaser sells, transfers, assigns or pledges such Registrable Securities, without the prior written consent of Issuer if (i) the Purchaser agrees in writing with the transferee or assignee to assign such rights, and Issuer is furnished a copy of such agreement, and (ii) Issuer is furnished, within ten days after such transfer or assignment, with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such rights or interests are being assigned. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 7. Descriptive Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for reference only and shall not limit or otherwise affect the meaning hereof. 8. Governing Law. This agreement shall be governed by, enforced under and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law provision or rule thereof. 9. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. 10. Entire Agreement. This Agreement embodies the entire agreement and understanding between Issuer and Purchaser relating to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. 11. Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America in each case located in the County of New York for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts) and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in Section 5 (or to such other address for notice that such party has given the other party written notice of in accordance with Section 5) shall be effective service of process for any litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or of the United States of America in each case located in the County of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum. 12. Severability. If any provision of this Agreement, or the application of such provisions to any Person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby. * * * * * * * IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective officers hereunto duly authorized as of the date first above written. NORTHPOINT COMMUNICATIONS GROUP, INC. By:__________________________________________ Name: Title: BELL ATLANTIC CORPORATION (D/B/A VERIZON COMMUNICATIONS) By: __________________________________________ Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----