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EXHIBIT 3.3
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.
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(1) Designation and Amount. The shares of such series shall be
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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.
(2) Rank. The Convertible Preferred Stock shall, with respect to
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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.
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(1) Entitlement; Accrual; Payment. The holders of shares of
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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.
(2) Issuance of Dividend Shares. All dividends paid in additional
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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.
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(3) Priority With Respect to Junior Stock and Other Issuances of
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Preferred Stock.
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(1) 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.
(2) 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).
(3) 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.
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(1) Voting Limitation. Except for any voting rights provided
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elsewhere herein or by law, the holders of shares of Convertible Preferred Stock
shall not be entitled to voting rights.
(2) Class Vote. In addition to any matters requiring a separate
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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.
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(3) Voting Rights After Regulatory Approvals. Upon expiration or
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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
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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.
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(1) Redemption. To the extent permitted by law and the terms or
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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").
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(2) Redemption Notice. The Corporation shall deliver a notice of
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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.
(3) Redemption Effects and Procedures.
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(1) 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.
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(2) 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.
(3) 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.
(4) Election Irrevocable. The election by the Corporation to redeem
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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.
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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.
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Section 7. Liquidation, Dissolution or Winding Up.
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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.
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Section 8. Conversion into Common Stock.
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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.
(1) Terms of Conversion. Upon expiration or termination of the
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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.
(2) Adjustment of Conversion Price. The Conversion Price shall be
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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.
(3) Reorganization, Consolidation, Merger, Asset Sale. In case of
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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 "Transac-
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tion") 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.
(4) Conversion Procedures. The holder of any shares of
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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
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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.
(5) Fractional Shares. In connection with the conversion of any
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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.
(6) Dividends; Distributions. In case at any time or from time
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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
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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.
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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.
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For the purposes of the Certificate of Designation of Convertible
Preferred Stock which embodies this resolution:
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"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.
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"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.
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"PIK Percentage" means 9.0% per annum, provided however, in the event of a
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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.
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<PAGE>
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
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