Each of Verizon, Parent and Merger Subsidiary has the necessary corporate power and authority to enter into this Agreement to perform its obligations hereunder. The execution and delivery of this Agreement by Verizon, Parent and Merger Subsidiary and the consummation by Verizon, Parent and Merger Subsidiary of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Verizon, Parent and Merger Subsidiary. Thus Agreement has been duly executed and delivered by Verizon, Parent and Merger Subsidiary and, assuming the due authorization, execution and delivery thereof by the other Partite, constitutes a legal, valid and binding obligation of Verizon, Parent and Merger Subsidiary, enforceable against each of then in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether considered in a proceeding in equity or at law).

(a) Except as described in subsection (b) below, the execution and delivery of this Agreement by Verizon, Parent and Merger Subsidiary do not, and the performance of this Agreement by Verizon, Parent and Merger Subsidiary will not,

(i) violate or conflict with the Certificate of Incorporation or By-laws of Verizon, Parent or Merger Subsidiary,
(ii) conflict with or violate any law, regulation, court order, judgment or decree applicable to Verizon, Parent or Merger Subsidiary or by which any of their respective property or assets (including investments) is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination or cancellation of, or result in the creation of alien or encumbrance on any of the properties or assets (including investments) of Verizon or Parent pursuant to, result in the loss of any material benefit under, or result in any modification or alteration of, or require the consent of any other party to, any contract, instrument, permit, license or franchise to which Verizon or Parent is a party or by which Verizon or Parent or any of their respective property or assets (including investments) is bound or affected, except in the case of this clause (iii) for conflicts, violations, breaches, defaults, results or consents which, individually or in the aggregate, would not have a Material Adverse Effect on the Verizon DSL Business.

(b) Except for applicable requirements, if any, of state or foreign public utility commissions or laws or similar local or state foreign regulatory bodies

or laws, state or foreign antitrust or foreign investment laws and commissions, the Federal Communications Commission, the Exchange Act, the premerger notification requirements of the HSR Act, filing and recordation of appropriate merger or other documents as required by the DGCL and any filings required pursuant to any state securities or "blue sky" laws or the rules of any applicable stock exchanges or other self-regulatory body,

(i) none of Verizon, Parent or Merger Subsidiary is required to submit any notice, report or other filing with any Governmental Entity in connection with the execution, delivery or performance of this Agreement and
(ii) no waiver, consent, approval or authorization of any Governmental Entity is required to be obtained by Verizon or Parent in connection with its execution, delivery or performance of this Agreement.

Except as set forth in Section 5.4 of the Verizon Disclosure Schedule, there are no claims, actions, suits, proceedings or investigations pending or, to Verizon's knowledge, threatened against Verizon or Parent in respect of the Verizon DSL Business, or to which any properties or rights of Verizon included in the Verizon DSL Assets are subject, by or before any Governmental Entity, except for those that are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect on the Verizon DSL Business or prevent, materially delay or intentionally delay the ability of Verizon to consummate the transactions contemplated hereby.

(a) Verizon or one or more of its Subsidiaries have all Governmental Approvals necessary for the operation of the Verizon DSL Business, except for those Government Approvals the absence of which, individually or in the aggregate, would not have a Material Adverse Effect on the Verizon DSL Business. All material Government Approvals granted to Verizon and its Subsidiaries with respect to the Verizon DSL Business are listed in Section 5.5 of the Verizon Disclosure Schedule and remain in full force and effect, and have not been revoked, suspended, cancelled or modified in any adverse way, and are not subject to any conditions or requirements that are not generally imposed by the FCC.' or the issuing state communications regulatory agency upon the holders of such Government Approvals.

(b) The Verizon DSL Business is not being operated in violation of any Legal Requirements or in violation of any Permits, except for possible violations none of which, individually or in the aggregate, may reasonably be

(a) Except as set forth in Section 5.7 of the Verizon Disclosure Schedule, neither Verizon nor any of its Subsidiaries is a party to any collective bargaining or other labor union contract applicable to Verizon DSL Employees and no collective bargaining agreement is being negotiated by Verizon or any of its Subsidiaries which would affect Verizon DSL Employees. Since January 1, 1997, there has not been any labor strike, dispute, walkout, work stoppage, slow-down or lockout against Verizon or any of its Subsidiaries by any Verizon DSL Employees, nor is there one pending or, to the knowledge of Verizon, threatened, which interfere with the Verizon DSL Business, except where such strike, dispute, walkout, work stoppage, slow-down or lockout individually or in the aggregate is not reasonably likely to have a Material Adverse Effect on the Verizon DSL Business.

(b) To the knowledge of Verizon, there is no charge, complaint or investigation related to the Verizon DSL Business against Verizon or any of its Subsidiaries

(i) before the National Labor Relations Board or any comparable Governmental Entity pending or threatened in writing or
(ii) asserting that it or any of its Subsidiaries has committed an unfair labor practice nor is Verizon or any of its Subsidiaries the subject of any proceeding seeking to compel it to bargain with any labor union or labor organization, except in each case as is not, individually or in the aggregate, reasonably likely to (rave a Material Adverse Effect on the Verizon DSL Business. To the knowledge of Verizon, none of Verizon, any of its Subsidiaries or any Verizon DSL Employees has committed any unfair labor practice in connection with the Verizon DSL Business.

Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Verizon DSL Business,

(i) each of Verizon and its Subsidiaries has owned and operated the Verizon DSL Business in compliance with all applicable Environmental Laws;
(ii) the properties included in the Verizon DSL Assets which are. currently owned or operated by it or any of its Subsidiaries (including soils, groundwater, surface water, buildings or other strictures) are not contaminated with any Hazardous Substances;
(iii) the properties formerly owned or operated by Verizon or any of its Subsidiaries in connection with the Verizon DSL Business were not contaminated with Hazardous Substances during the period of ownership or operation by Verizon or any of its Subsidiaries;
(iv) the Verizon DSL Business is not subject to liability for any Hazardous Substance disposal or contamination on any third party property;
(v) the Verizon DSL Business has not been associated with any release or threat of release of any Hazardous Substance;

(vi) neither Verizon nor any of its Subsidiaries has received any notice, demand, letter, claim or request for information alleging that it or any of its Subsidiaries may be in violation of or liable under any Environmental Law (including any claims relating to electromagnetic fields or microwave transmissions) with respect to the Verizon DSL Business;
(vii) neither Verizon nor any of its Subsidiaries is subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or is subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances with respect to the Verizon DSL Business; and
(viii) there are no circumstances or conditions involving Verizon or any of its Subsidiaries that could reasonably be expected to result in any claims, liability, investigations, costs or restrictions on the ownership, use, or transfer of any of the Verizon DSL Assets pursuant to any Environmental Law.

Verizon or one or more of its Subsidiaries has, and at or prior to the Closing till deliver to Parent, good and valid title to, or valid leasehold interests in, all of the Verizon DSL Assets, free and clear of all Liens (except for Liens to be assumed by Parent pursuant to this Agreement, including Liens associated with leased equipment and Liens securing maintenance and similar contracts). The Verizon Network Equipment Assets and Facilities Assets are in good working order, normal wear and tear excepted, aid are fit for their intended purposes, except as would not have a Material Adverse Effect on the Verizon DSL Business. Verizon believes in good faith that

(i) the Verizon Network Equipment Assets,
(ii) the DSL subscriber contracts to which Verizon or one of its Subsidiaries is a party,
(iii) the Transferred Employees,
(iv) the assets used exclusively by the Transferred Employees,
(v) the Assumed Verizon Contracts, (vi) the OSS Support Agreement,
(vii) the commercial contracts and arrangements at tarriffed rates relating exclusively to the Verizon DSL Business,
(viii) the future contracts with respect to assets which are not used exclusively in the Verizon DSL Business that may be entered into pursuant to Section 6.8 hereof,
(ix) the Facilities Assets,
(x) Capitalized Co-Location Fees and
(xi) the Verizon DSL Assets (to the extent not listed above), taken together in the aggregate; twill be sufficient to provide services in a manner substantially similar to those provided by the Verizon DSL Business prior to the Effective Time.

(a) All Assumed Verizon Contracts are valid and in full force and effect on the date hereof except to the extent they have previously expired in accordance with their terms or if the failure to be in full force and effect, individually and in the aggregate would not have a Material Adverse Effect on the Verizon DSL Business. Neither Verizon nor any of its Subsidiaries has violated any provision of, or committed or failed to perform any act which with or without notice, lapse of time or both would constitute a default under the provisions of, any Assumed Verizon Contract, except in each case for those Assumed Verizon Contracts which, individually and in the aggregate, would not result in a Material Adverse Effect on the Verizon DSL Business.

(b) Set forth in Section 5.10 of the Verizon Disclosure Schedule is a list of each contract, agreement or arrangement to which Verizon or any of its Subsidiaries is a party or may be bound which is an arrangement limiting or restraining Verizon, NorthPoint, any Verizon or NorthPoint Subsidiary or any successor thereto from engaging or competing in any business which arrangement has, or could reasonably be expected to have in the foreseeable future, a Material Adverse Effect on the Verizon DSL Business.

(a) As used in this Agreement, "Verizon Intellectual Property" means all of the intellectual property included in the Verizon DSL Assets and identified in Section 1.1(a)(vi) of the Verizon Disclosure Schedule. The Verizon Intellectual Property constitutes all of the intellectual property used by Verizon or its Subsidiaries on the date hereof exclusively in connection with Verizon DSL Business.

(b) Except as set forth in Section 5.1 l(b) of the Verizon Disclosure Schedule, Verizon or its Subsidiaries owns or has the right to use, sell or license all Verizon Intellectual Property, free and clear of all liens or encumbrances.

(c) Except as set forth in Section 5.1l(c) of the Verizon Disclosure Schedule, to the knowledge of Verizon, the ownership and operation of the Verizon DSL Business does not materially infringe, violate or misuse any intellectual property rights or any other proprietary right of any Person or give rise to

any obligations to any Person as a result of co-authorship, and neither Verizon nor any of its Subsidiaries has received any notice, not satisfactorily resolved, of any claims or threats that the Verizon DSL Business or the use of any Verizon Intellectual Property in the Verizon DSL Business materially infringes, violates, misappropriates or misuses, or is otherwise. in conflict with any intellectual property or proprietary rights of any Person.

(d) Verizon arid its Subsidiaries have used reasonable efforts to maintain the confidentiality of the trade secrets and other confidential Verizon Intellectual Property which is included in the Verizon Intellectual Property.

(a) Except for Morgan Stanley & Co. Incorporated, the fees of which will be paid by Verizon, no broker, finder or investment banker is entitled to any brokerage, finder's, investment banking or other fee or commission in connection with die transactions contemplated by this Agreement based upon arrangements made by or on behalf of Verizon or any of its Subsidiaries.

Except as set forth in Section 5.13 of the Verizon Disclosure Schedule:

(a) Verizon has paid in full or discharged, or caused to be paid in full or discharged, all Taxes
(i) related to the Verizon DSL Assets or arising out of the conduct of the Verizon DSL Business that are required to be. paid (whether or not such Taxes are shown as due on any Tax Return) and
(ii) the non-payment of which has resulted in or which could result in a lien on the Verizon DSL Assets in the hands of Parent.

(b) Neither Verizon nor any of its Affiliates has taken, agreed to take or omitted to take any action that would prevent or impede the Asset Contribution and the Merger from qualifying as either a
(i) tax-free reorganization under Section 368(a) of the Code or
(ii) transaction described in Section 351 of the Code (it being agreed that it shall not be a violation of this Section 5.13(b) if the payment of the Cash Consideration Amount causes the Merger not to qualify as,, a tax-free reorganization under Section 368(a) of the Code).

Except as set forth in Section 5.14 of the Verizon Disclosure Schedule, the Verizon DSL Business is, and has been continuously since December 31, 1999, insured with financially responsible insurers in such amounts and against such risks and losses as are customary for companies conducting the business as conducted by Verizon and its Subsidiaries during such time period. Except as set forth in Section 5.14 of the Verizon Disclosure Schedule, since December 31, 1999, neither Verizon nor any of its Subsidiaries has received notice of cancellation or termination with respect to any material insurance policy covering the. Verizon DSL Business. The insurance policies of Verizon and its Subsidiaries with respect to the Verizon DSL Business are valid and enforceable policies.

Merger Subsidiary and Parent have not conducted any activities and have no obligations and liabilities, in each case other than in connection with their organization, the negotiation and execution of this Agreement and the consummation of the transaction.: contemplated hereby. Merger Subsidiary has no Subsidiaries and Parent has no Subsidiaries other than Merger Subsidiary.