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
