The manner and basis of converting the shares of common stock of NorthPoint and of Merger Subsidiary at the Effective Time, by virtue of the Merger and without any action on the part of any of the Parties or the holder of any of such securities, shall be as hereinafter set forth in this Article II.

(a) Cancellation of Treasury Shares and Convertible Preferred Shares Held by Verizon.

(i) At the Effective Time, each share of NorthPoint Common Stock held in the treasury of NorthPoint or beneficially owned by NorthPoint immediately prior to the Effective Time shall be cancelled and retired and no shares of stock or other securities of Parent or the Surviving Corporation shall be issuable, and no payment or other consideration shall be made, with respect thereto.

(ii) At the Effective Time, each share of 9% Convertible PIK Preferred Stock of NorthPoint (the "NorthPoint Preferred Stock") held by Verizon immediately prior to the Effective Time shall cease to exist and shall be. converted into shares of Parent Common Stock in accordance with Section 1.1(e) hereof.

(b) Conversion of Common Stock of Merger Subsidiary into Common Stock of the Surviving Corporation. As of the Effective Time, each share of common stock, par value $0.01, of Merger Subsidiary (the "Merger Subsidiary Common Stock") issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, without any action of any holder thereof, forthwith cease to exist and be converted into one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation (the "Surviving Corporation Common Stock"). Immediately after the Effective Time and upon surrender by Parent of the certificate representing the shares of Merger Subsidiary Common Stock, NorthPoint as the Surviving Corporation shall deliver to Parent an appropriate certificate or certificates representing the Surviving Corporation Common Stock created by conversion of the Merger Subsidiary Common Stock owned by Parent.

(c) Conversion of NorthPoint Common Stock. Subject to Sections 2.3(g) and 2.6 hereof, each share of common stock, par value $0.001, of NorthPoint ("NorthPoint Common Stock") issued and outstanding immediately before the Effective Time (excluding those cancelled or converted pursuant to Section 2.2(a) hereof) and all rights in respect thereof, shall at the Effective Time, without any action on the part of any holder thereof, forthwith cease to exist and be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of Parent ("Parent Common Stock") and the right to receive an amount in cash (,the "Cash Consideration Amount") equal to

(i) $350 million divided by
(ii) the number of issued and outstanding shares of NorthPoint Common Stock immediately prior to the Effective Time plus the number of shares of NorthPoint Common Stock subject to warrants and convertible securities outstanding (excluding stock options issued pursuant to any NorthPoint Plan and excluding NorthPoint's Preferred Stock) immediately prior to the Effective Time (collectively, the "Merger Consideration").

(d) Cancellation NorthPoint Common Stock. As of the Effective Time, all shares of NorthPoint Common Stock converted pursuant to Section 2.2(c) hereof shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate (each, an "Old Certificate") representing any such shares of NorthPoint Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, in accordance with Section 2.2(c) hereof, certain dividends or other distributions in accordance with Section 23(f) hereof and any cash in lieu. of fractional shares of Parent Common Stock to be issued or paid in consideration therefor upon surrender of such certificate in accordance with Section 2.3(g) hereof, without interest.

(a) Subject to the. terms and conditions hereof, at or prior to the Effective Time, Parent shall appoint a bank or trust company to act as exchange agent (the "Exchange Agent") to effect the payment of the Merger Consideration in accordance with the provisions of this Article II.

(b) As soon as practicable following the Effective Time, Parent shall deposit, or cause to be deposited, with the Exchange Agent a sufficient amount of cash and certificates representing Parent Common Stock for exchange for Old Certificates in accordance with the provisions of Section 2.2(c) hereof, including any Excess Parent Shares to be used to pay cash in lieu of fractional shares of Parent Common Stock (;such cash and certificates, together with any dividends or distributions with respect thereto, being herein referred to as the "Exchange Fund").

(c) Promptly following the Effective Time, Parent shall cause the Exchange Agent to mail (and to make available for collection by hand) to each holder of an Old Certificate

(i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to each Old Certificate shall pass, only upon proper delivery of such Old Certificate to the Exchange Agent and which shall be in the form and have such other provisions as Parent may reasonably specify ) and
(ii) instructions for use in effecting the surrender of the Old Certificates in exchange for the Merger Consideration (or cash in lieu of fractional shares of Parent Common Stock).

(d) Upon surrender of an Old Certificate for cancellation to the Exchange Agent, together with a letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Old Certificate

shall be entitled to receive in exchange therefor the Merger Consideration for each share of NorthPoint Common Stock formerly represented by such Old Certificate, to be mailed (or made available for collection by hand if so elected by the surrendering holder) within three business days of receipt thereof, and the Old Certificate so surrendered shall be forthwith cancelled.

(e) The Exchange Agent shall accept such Old Certificates upon compliance with such reasonable terms and conditions as the Exchange Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. No interest shall be paid or accrued for the benefit of holders of the Old Certificates on the Merger Consideration (or the cash pursuant to subsections (f) and (g) below) payable upon the surrender of the Certificates.

(f) No dividends or other distributions with respect to Parent Common Stock with a record date on or after the Effective Time shall be paid to the holder of any unsurrendered Old Certificate with respect to the shares of Parent Common Stock represented thereby ("Pre-Surrender Dividends") by reason of the conversion of shares of NorthPoint Common Stock pursuant to Section 2.2(c) hereof and no cash payment in lieu of fractional shares of Parent Common Stock shall be paid to any such holier pursuant to Section 2.3(g) hereof until such Old Certificate is surrendered in accordance with this Article II. Subject to the effect of applicable laws, following surrender of any such Old Certificate, there shall be paid, without interest, to the Person in whose name the shares of Parent Common Stock representing such securities are registered

(i) at the time of such surrender or as promptly after the sale of the Excess Parent Shares as practicable, the amount of any cash payable in lieu. of fractional shares of Parent Common Stock to which such holder is entitled pursuant to Section 2.3(g) hereof and the proportionate amount of Pre-Surrender Dividends, and
(ii) at the appropriate payment date or as promptly as practicable thereafter, the proportionate amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such shares of Parent Common Stock.

(g) Notwithstanding any other provision of this Agreement, no fraction of a share of Parent Common Stock will be issued and no dividend or other distribution, stock split or interest with respect to shares of Parent Common Stock shall relate to any fractional share of Parent Common Stock, and such fractional interest shall not entitle the owner thereof to vote or to any rights as a holder of the shares of Parent Common Stock. In lieu of any such fractional security, each holder

of Parent Common Stock otherwise entitled to a fraction of a share of Parent Common Stock will be entitled to receive in accordance with the provisions of this Section 2.3 from the. Exchange Agent a cash payment representing such holder's proportionate interest in the net proceeds from the sale by the Exchange Agent on behalf of all such holders of the aggregate of the fractions of shares of Parent Common Stock which would otherwise be issued (the "Excess Parent Shares"). The sale of the Excess Parent Shares by the Exchange Agent shall be executed on Nasdaq and shall be executed in round lots to the. extent practicable. Until the net proceeds of such sale or sales have been distributed to the holders of shares of Northpoint Common Stock, the Exchange Agent will, subject to Section ?.3(h) hereof, hold such proceeds in trust for the holders of shares of NorthPoint Common Stock (the "Parent Shares Trust"). NorthPoint shall pay all commissions, transfer taxes (other than those transfer taxes for which NorthPoint's stockholders are solely liable) and other out-of-pocket transaction costs, including the expenses and compensation, of the Exchange Agent incurred in connection with such sale of the Excess Parent Shares. As soon as practicable after the determination of the amount of cash, if any, to be paid to holders of shares of NorthPoint Common Stock in lieu of any fractional Parent Common Stock interests, the Exchange Agent shall make available such amounts to such holders of shares of NorthPoint Common Stock without interest.

(h) Any portion of the Merger Consideration in the Exchange Fund which remains undistributed to the holders of the Old Certificates for six months after the Effective Time shall be delivered to Parent, upon demand, and any holders of shares of NorthPoint Common Stock prior to the Merger who have not theretofore complied with this Article II shall thereafter look for payment of their claim, as general creditors thereof, only to Parent for their claim for

(i) cash,
(ii) shares of Parent Common Stock,
(iii) any cash, to be paid, in lieu of any fractional shares of Parent Common Stock and
(iv) any dividends or other distributions with respect to shares of Parent Common Stock to which such holders may be entitled.

(i) None of Parent, Verizon, NorthPoint, Merger Subsidiary or the Exchange Agent shall be liable to any Person in respect of any shares of Parent Common Stock or cash held in the Exchange Fund (and any cash, dividends and other distributions payable in respect thereof) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any Old Certificates shall not have been surrendered prior to one year after the Effective Time (or immediately prior to such earlier date on which 0

(i) any cash,
(ii) any shares of Parent Common Stock,
(iii)any cash in lieu of fractional shares of Parent Common Stock or
(iv) any dividends or distributions with respect to shares of Parent Common Stock in

respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity (as defined herein)), any such shares of Parent Common Stock, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by applicable law, became the property of Parent, free and clear of all claims err interest of any Person previously entitled thereto. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by Parent on a daily basis. Any interest and other income resulting from such investments shall be paid to Parent. Nothing contained in this Section 2.3(j) shall relieve Parent or the Exchange Agent from making the payments required by this Article II to be made to the holders of shares of Common Stock.

The stack transfer books of NorthPoint shall be closed at the Effective Time and no transfer of any shares of NorthPoint Common Stack will thereafter be recorded an any of such stack transfer books. In the event of a transfer of ownership of NorthPoint Common Stock that is not registered in the stack transfer records of NorthPoint at the Effective Time, the Merger Consideration into which such shares of NorthPoint Common Stack shall have been converted shall be issued to the transferee together with a cash payment in lieu. of fractional shares, if any, in accordance with Section 2.3(g) hereof, and a cash payment in the amount of Pre-Surrender Dividends, if any, in accordance with Section 2.3(f) hereof, if the Old Certificate therefor is surrendered as provided in Section 2.3 hereof, accompanied by all documents required to evidence and effect such transfer and by evidence of payment of any applicable stack transfer tax. The whale shares of Parent Common Stack to be delivered to such holder shall be delivered in book entry farm, unless such holder shall timely elect in writing to receive the certificates representing such shares.

If any certificate far a share of Parent Common Stock is to be issued to, or cash is to be remitted to, a Person (other than the Person in whose name the Old Certificate surrendered in exchange therefor is registered), it shall be a condition of such exchange that the Old Certificate so surrendered shad be properly endorsed and otherwise in proper farm far transfer and that the Person requesting such exchange shall pay to the Exchange Agent any transfer or other Taxes (as defined herein) required by reason of the payment of the Merger Consideration to a Person other than the registered balder of the Old Certificate so surrendered, err shall establish to the satisfaction of the Exchange Agent that such Tax either has been paid err is not applicable. Parent err the

Exchange Agent shall be entitled to deduct and withhold from the shares of Parent Common Stock (or cash in lieu of fractional shares of Parent Common Stock) otherwise payable pursuant to this Agreement to any holder of shares of NorthPoint Common Stock such amounts as Parent or the Exchange Agent are required to deduct and withhold under the Code, or any provision of state, local or foreign Tax law, with respect to the making of such payment. To the extent that amounts are so withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the. holder of shares of NorthPoint Common Stock in respect of whom such deduction and withholding was made by Parent or the Exchange Agent.

Notwithstanding Section 2.2 hereof, shares of NorthPoint Common Stock issued and outstanding immediately prior to the Effective Time and held by a holder who has properly exercised and perfected his or her demand for appraisal rights under Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into the right to receive the Merger Consideration, but the holders of Dissenting Shares shall be entitled to receive from NorthPoint such consideration as shall be determined pursuant to Section 262 of the DGCL; provided, however, that if any such holder shall have failed to perfect or shall effectively withdraw or lose his or her right to appraisal and payment under the DGCL, such holder's shares of NorthPoint Common Stock shall thereupon be deemed to have been converted as of the Effective Time into the right to receive the Merger Consideration, without any interest thereon, and such shares shall not be deemed to be Dissenting Shares.

At the Effective Time, each option granted pursuant to a NorthPoint Plan by NorthPoint to purchase. shares of NorthPoint Common Stock (including, without limitation, any option to purchase shares of NorthPoint Common Stock outstanding under any employee stock purchase plan maintained by NorthPoint which is intended to constitute an "employee stock purchase plan" (as defined in Section 423 of the Code)) which is outstanding and unexercised immediately prior to the Effective Time shall be converted into an option to purchase shares of Parent Common Stock in such amount and at such exercise price as provided below and otherwise having the same terms and conditions as are in effect immediately prior to the Effective Time (.except to the extent that such terns, conditions and restrictions may be altered in accordance with their terms as a result of the transactions contemplated hereby). At the Effective Time, the NorthPoint Plans, and each outstanding option to purchase shares of NorthPoint Common Stock under the NorthPoint Plans, whether vested or unvested,

will be assumed by Parent. Notwithstanding anything to the contrary, no cash shall be paid pursuant to Section 2.2(c) hereof with respect to the options so assumed and converted pursuant to the following sentence. Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the. sane terms and conditions set forth in the NorthPoint Plans and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that:

(i) the number of whole shares of Parent Common Stock for which the option will be exercisable immediately after the Effective Time shall be equal to the number of shares of NorthPoint Common Stock subject to such option immediately prior to the Effective Time multiplied by a fraction the numerator of which is the Cash Consideration Amount plus the Closing Market Value and the denominator of which is the Closing Market Value (such fraction, the "Option Ratio"), with the resulting number of shares of Parent Common Stock subject to the assumed optic to be rounded down to the next whole number of shares of Parent Common Stock, and
(ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the original exercise price by the Option Ratio, with such adjusted per share exercise price to be rounded up to the next whole cant. "Closing Market Value" means the average of the last sale prices for a share of Parent Common Stock as quoted on the Nasdaq National Market (as reported in The Wall Street Journal) for the first five full trading days immediately following the Effective Time.

The adjustments provided herein with respect to any options which are "incentive stock options" (as defined in Section 422 of the Code) shall be effected in a manner consistent with Section 424(a) of the Code or which are options granted under an employee stock purchase plan (as defined in Section 42.3 of the Code).

At the Effective Time, any shares of NorthPoint Common Stock awarded pursuant to any plan, arrangement or transaction, and outstanding immediately prior to the Effective Time shall be converted into cash and shares of Parent Common Stock in accordance with Section 2.2(c) hereof, subject to the same terms, conditions and restrictions as in effect immediately prior to the Effective Time, except to the extent that such terms, conditions and restrictions may be altered in accordance with their terms as a result of the transactions contemplated hereby.

If between the date hereof and the Effective Time, the outstanding shares of NorthPoint Common Stock or of Parent Common Stock shall be changed into a different number of shares by reason of any reclassification, recapitalization, split-up, combination or exchange of shares, or any dividend payable in stock or other securities shall be declared thereon with a record date within such period, the Merger Consideration shall be adjusted accordingly to provide to the holders of NorthPoint Con anon Stock and NorthPoint Preferred Stock the same economic effect as contemplated by this Agreement prior to such reclassification, recapitalization, split-up, combination, exchange or dividend.