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:
