Section 7.1 Proxy Statement and Registration Statement.

(a) As promptly as practicable after the execution and delivery of this Agreement, the Parties shall, in compliance with applicable law, (x) prepare and file with the SEC and any applicable blue sky authorities the Registration Statement, and shall use all commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC, and such authorities; and (y) prepare. and file with the SEC and shall use all commercially reasonable efforts to have cleared by the SEC, and promptly thereafter NorthPoint shall mail to the holders of record of shares of NorthPoint Common Stock, the Proxy Statement, provided, however, that North-Point shall not n rail or otherwise furnish the Proxy Statement to its stockholders unless and until:

(i) it has received notice from the SEC that the Registration Statement has been declared effective under the 1933 Act;

(ii) Parent shall have received a letter of PricewaterhouseCoopers LLP, dated a date within two business days prior to the date of the first mailing of the Proxy Statement, and addressed to Parent, in form and substance reasonably satisfactory to Parent and customary in scope and substance for "cold comfort" letters delivered by independent public accountants in connection with registration statements on Form S-4 with respect to the financial statements of NorthPoint included in the Proxy Statement and the Registration Statement;

(b) The parties will cooperate in the preparation of the Proxy Statement (including the preparation of the financial statements contained therein) and the Registration Statement and in having the Registration Statement declared effective as soon as practicable: and

(c) Each Party will promptly inform the other Parties of the receipt by it of any comments from the SEC or its staff and of any request by the SEC for amendments or supplements to the Proxy Statement or the Registration Statement or for additional information and will supply the other Parties hereto with copies of all correspondence between it and its representatives, on the one hand, and the SEC or the members of its staff or any other governmental official, on the other hand, with respect to the Proxy Statement or the Registration Statement.

Section 7.2 NorthPoint Stockholder Meeting.

(a) As promptly as practicable aver the Registration Statement is declared effective under the Securities Act, NorthPoint

(i) shall duly take all lawful action to call, give notice of, convene and hold a meeting of its stockholders on a date determined in accordance with the mutual agreement of NorthPoint and Verizon (the "NorthPoint Stockholders' Meeting") for the purpose of obtaining the NorthPoint Stockholder Approval,
(ii) shall take all lawful action to solicit the adoption of this Agreement and
(iii) shall, subject to the provisions of Section 7.2(b) hereof, through its Board of Directors, recommend to its stockholders the approval of the Merger. If on the date of the NorthPoint Stockholders' Meeting, NorthPoint has not received duly executed proxies which, when added to the number of votes represented in Person at the meeting by Persons who intend to vote to adopt this Agreement, will constitute a sufficient number of votes to adopt this Agreement, then NorthPoint shall take all action necessary or appropriate to adjourn such meeting until the date ten days after the originally scheduled date of such meeting.

(b) Except as expressly permitted by this Section 7.2(b), neither the Board of Directors of NorthPoint nor any committee thereof shall

(i) withdraw, qualify or modify, or propose. to withdraw, qualify or modify, in a manner Averse to Verizon, the approval or recommendation of such Board of Directors or such committee of the Merger or take any action or make any statement in connection with the NorthPoint Stockholders' Meeting inconsistent with such approval or recommendation,
(ii) approve or recommend, or propose publicly to approve or recommend, any Alternative Transaction or
(iii) cause NorthPoint to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement (each, a "NorthPoint Acquisition Agreement") related to any Alternative Transaction, provided that if prior to the adoption of the Merger by the holders of NorthPoint Common Stock the Board of Directors of NorthPoint determines in good faith, after it has received a NorthPoint Superior Proposal and after receipt of advice from outside counsel, that the failure to do so would result in a breach by the Board of Directors of NorthPoint of its fiduciary duties to NorthPoint stockholders under applicable law, the Board of Directors of NorthPoint may (subject to this and the following sentences) inform NorthPoint stockholders that it no longer believes that such adoption is advisable and no longer recommends approval (a "NorthPoint Subsequent Determination"), but only at a time that is after the fifth business day following delivery by NorthPoint to Verizon of written notice advising Verizon that the Board of Directors of NorthPoint has received a NorthPoint Superior Proposal specifying the terms and conditions of such NorthPoint Superior Proposal (:and including a copy thereof with all accompanying documentation, if in writing), identifying the Person making such NorthPoint Superior Proposal and stating that it intends to make a NorthPoint Subsequent Determination. After providing such notice, NorthPoint shall provide a reasonable opportunity to Verizon, and shall cooperate in good faith with Verizon, to make such adjustments in the terms and conditions of this Agreement as would enable NorthPoint to proceed with its recommendation to its stockholders without a NorthPoint Subsequent Determination; provided, however, that any such adjustment shall be at the discretion of the parties at the time. Notwithstanding any NorthPoint Subsequent Determination, this Agreement shall be. submitted by NorthPoint to the stockholders of NorthPoint at the NorthPoint Stockholders' Meeting for the purpose of adopting this Agreement and approving the Merger and nothing herein will be deemed to relieve NorthPoint of such obligation.

(c) For purposes of this Agreement, a NorthPoint Subsequent Determination shall be deemed to include, without limitation, any action or activity described in clauses (i), (ii) or (iii) of paragraph (b) of this Section 7.2.

(a) Each of the Parties will comply in all material respects with all applicable laws and with all applicable rules and regulations of any Governmental Entity in connection with its execution, delivery and performance of this Agreement and the transactions contemplated hereby. Each of the Parties agrees to use all commercially reasonable efforts to obtain in a timely manner all necessary waivers, consents and approvals and to effect all necessary registrations and filings, and to use all commercially reasonable efforts to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and to effect all necessary filings under the 1933 Act, the Exchange Act and the HSR Act. Without limiting the generality of the foregoing, each of Verizon and NorthPoint shall promptly prepare and file a Premerger Notification in accordance with the HSR Act, shall promptly comply with any requests for additional information, and shall use its commercially reasonable efforts to obtain termination of the waiting period thereunder as promptly as practicable.

(b) Each of Verizon and NorthPoint shall, in connection with the efforts referenced in Section 7.3(a) hereof,

(i) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party:
(ii) promptly inform the other party of any material communication received by such party from, or given by such party to any Governmental Entity and of any material communication received or given in connection with any proceeding by a private party, in each ease regarding any of the transactions contemplated hereby and
(iii) consult with each other in advance of any meeting or conference with any such Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and to the. extent permitted by the applicable Governmental Entity or other Person, give the other Party the opportunity to attend and participate in such meetings and conferences.

(c) In furtherance and not in limitation of the covenants of the parties contained in Sections 7.3(a) and (b) hereof, if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) challenging any transaction contemplated by this Agreement as violative of any applicable law, or if any statute, rule, regulation,

executive order, decree, injunction or administrative order is enacted, entered or promulgated or enforced by a Governmental Entity which would make the Merger, the Asset Contribution or the other transactions contemplated hereby illegal or otherwise prohibit or materially impair or delay consummation of the transactions contemplated hereby, each of Verizon and NorthPoint shall cooperate in all respects with each other and use all commercially reasonable efforts to contest and resist any such action or proceeding, to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement and to have such statute, rule, regulation, executive order, decree, injunction or administrative order repealed, rescinded or made inapplicable.

(d) Nothing in this Agreement shall require Parent, NorthPoint, Verizon or their respective Subsidiaries to sell, hold separate or otherwise dispose of or conduct their business in a manner, or agree to sell, hold separate or otherwise dispose of or conduct their business in a specified manner or permit the sale, holding separate or other disposition, of any assets of Parent, NorthPoint, Verizon or their respective Subsidiaries or the conduct of their business in a specified manner, whether as a condition to obtaining any approval from a Government Entity or any other Person or for any other reason, if such sale, holding separate or other disposition or the conduct of their business in a specified manner, in the aggregate, would have a Material Adverse Effect on Parent, NorthPoint, Verizon or the Verizon DSL Business, after giving effect to the Merger.

(e) Notwithstanding the foregoing or any other provision of this Agreement, nothing in this Section 7.3 shall limit a Party's right to terminate this Agreement pursuant to Section 9.1 hereof so long as such Party has up to then complied in all respects with its obligations under this Section 7.3.

(a) Upon reasonable notice by Verizon, NorthPoint shall, and shall cause its Subsidiaries, and its and their office, directors, employees, auditors, counsel and agents to, afford the officers, employees, auditors, counsel and agents of Verizon with reasonable access during normal business hours to NorthPoint's and its Subsidiaries' officers, employees, auditors, counsel agents, properties, offices and other facilities and to their respective. books and records, and shall furnish Verizon

with financial, operating and other data and information as Verizon may reasonably request, including in connection with confirmatory due diligence.

(b) Verizon agrees that all information received from NorthPoint pursuant to Section 7.4(a) hereof shall be deemed received pursuant to the Nondisclosure Agreement and Verizon shall comply, and shall cause its Subsidiaries and each of its and their respective officers, directors, employees, financial advisors and agents ("Party Representatives") to comply, with the provisions of the Nondisclosure Agreement with respect to such information and the provisions of the Nondisclosure Agreement are hereby incorporated herein by reference with the same effect as if fully set forth herein, provided that such information may be used for any purpose contemplated hereby.

(c) Upon reasonable notice by NorthPoint, Verizon shall afford, and shall cause its Subsidiaries and its and their officers, directors, employees, auditors, counsel and agents to afford, the officers, employees, auditors, counsel and agents of NorthPoint with reasonable access during normal business hours to Verizon's and its Subsidiaries' officers, employees, auditors, counsel agents, properties, offices and other facilities and to their respective books and records, but in each case only to the extent related to the Verizon DSL Business, and shall furnish NorthPoint with financial, operating and other data and information regarding the Verizon DSL Business as NorthPoint may reasonably request, including in connection with contemplated due diligence.

(d) NorthPoint agrees that all information received from Verizon pursuant to Section 7.4(c) hereof shall be deemed received pursuant to the Nondisclosure Agreement and NorthPoint shall comply, and shall cause its Subsidiaries and each of its and their Party Representatives to comply, with the provisions of the Nondisclosure Agreement with respect to such information and the provisions of the Nondisclosure Agreement are hereby incorporated herein by reference with the same effect as if fully set forth herein, provided that such information may be used for any purpose contemplated hereby.

None of the Parties shall issue any press release or public statement with respect to this Agreement or the transactions contemplated hereby, including the Merger and the other agreements referred to herein, without the other Parties' prior consent, except as may be required by applicable law or court process. In addition, the Parties will consult with each other, and will provide each other with a reasonable opportunity to review and

comment upon, any such press release or other public statements prior to their issuance. The Parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.

For a period of six years after the Effective. Time., Parent shall cause NorthPoint to, and Parent shall, maintain in effect the current policies of directors' and officers' liability insurance and fiduciary liability insurance maintained by NorthPoint (provided that Parent may substitute therefor policies of at least the sane coverage and amounts containing terms and conditions which are, in the aggregate, no less advantageous to the. insured in any material respect) with respect to all possible claims arising from facts or events which occurred on or before the Effective Time. Parent shall cause NorthPoint to maintain in effect

(a) the current provisions regarding indemnification of officers and directors contained in the charter and by-laws of NorthPoint and each of its Subsidiaries until the statutes of limitations for all possible claims have run; provided that Parent need not cause NorthPoint to maintain in effect indemnification provisions contained in the charter and by-laws of its Subsidiaries if and to the extent that Parent assumes such indemnity obligations; and

(b) any directors, officers or employees indemnification agreements of NorthPoint and its respective Subsidiaries. Parent shall cause NorthPoint to, and Parent shall, indemnify the directors and officers of NorthPoint and Parent, respectively, to the fullest extent to which NorthPoint and Parent are permitted to indemnify such officers and directors under applicable law. As of the Effective Time, Parent shall unconditionally and irrevocably guarantee for the benefit of such directors, officers and employees the obligations of NorthPoint under the foregoing indemnification arrangements.

Each of the Parties shall use its commercially reasonable best efforts to obtain, prior to the Effective Time, the approval for listing on Nasdaq, effective upon official notice of issuance, of the shares of Parent Common Stock into which the NorthPoint Common Stock will be converted pursuant to Article II hereof and which will be issuable upon exercise of options pursuant to Section 2.7 hereof.

(a) At the Effective. Tune, the Board of Directors of Parent shall consist of nine directors, of which six directors shall be individuals selected by Verizon (three of whom shall be independent directors within the meaning of the rules of Nasdaq) and three directors shall be individuals selected by NorthPoint.

(b) For a period of 18 months following the Closing, Verizon shall vote all of its shares of capital stock of Parent at each regular or special meeting of the stockholders of Parent called for the purpose of filling a position on the Board of Directors of Parent, or in any written consent executed in lieu of such meeting of stockholders, and shall use its reasonable efforts to cause each and every NorthPoint Nominee (as defined in the By-laws of Parent attached hereto as Exhibit C) to be elected to the Board of Parent in accordance with By-laws of Parent, as amended from time to time.

Parent shall not be required to amend or maintain the effectiveness of the Registration Statement for the purpose of permitting resale of the shares of Parent Common Stock received pursuant hereto by the Persons who may be deemed to be Rule 145 Affiliates of NorthPoint or Verizon. The shares of Parent Common Stock issuable upon exercise of options issuable pursuant to Section 2.7 hereof shall be registered under the 1933 Act and such registration shall be effective at the. time of issuance.

NorthPoint

(i) has disclosed to Verizon in Section 7.10 of the NorthPoint Disclosure Schedule all Persons who are, or may be, as of the date hereof its Rule 145 Affiliates under the Securities Act, arid
(ii) shall use all commercially reasonable efforts to cause each Person who is identified as an "affiliate" of it in Section 7.10 of the NorthPoint Disclosure Schedule to deliver to Verizon as promptly as practicable but in no event later than 48 hours prior to the Closing Date, a signed agreement substantially in the firm attached hereto as Exhibit D. NorthPoint shall notify Verizon from time. to time of any other Persons who then are, or may be, such an "affiliate" and use all commercially reasonable efforts to cause each additional Person who is identified as an "affiliate" to execute a signed agreement as set forth in this Section 7.10.

Verizon, NorthPoint and Parent will use their best efforts to obtain prior to the Effective Time all necessary blue sky permits and approvals required to permit the distribution of the shares of Parent Common Stock to be issued in accordance with the provisions of this Agreement.

(a) Each of the Parties will use its best efforts to cause

(i) the Asset Contribution and the Merger to qualify as a transaction described in Section 351 of the Code and
(ii) the Merger to qualify as a transaction described in Section 3_51 of the Code and a tax-free reorganization under Section 368(x) of the Code, and none of the Parties will take any action that would cause

(A) the Merger to fail to qualify as either

(B) the Asset Contribution to qualify as a transaction qualifying under Section 351 of the Code (it being agreed that it shall not be a violation of this Section 7.12(a) 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).

(b) NorthPoint will deliver an Officer's Certificate substantially in the form of Exhibit E, Parent will deliver an Officer's Certificate substantially in the form of Exhibit F and Verizon will deliver an Officer's Certificate substantially in the form of Exhibit G, in each case executed as of the date of the Proxy Statement and as of the Closing Date, and as may be reasonably requested by counsel to any Party. NorthPoint will use its commercially reasonable efforts to procure from each NorthPoint stockholder that ;will hold five percent or more of the Parent Common Stock outstanding immediately following the Merger and Asset Contribution, a certificate, executed as of the date of the Proxy Statement and the Closing Date, substantially to the effect that such stockholder has no plan or intention to sell or otherwise dispose of such Parent Common Stock received in the Merger.

Concurrently with the execution of this Agreement, NorthPoint and Verizon are entering into an Employee Matters Agreement substantially in the form attached as Exhibit I hereto.

(a) Verizon shall indemnify, save and hold harmless NorthPoint and its Subsidiaries, and their respective. directors, officers, stockholders and employees (the "NorthPoint Indemnified Parties"), from and against any and all losses, liabilities, damages, lawsuits, claims, demands and expenses (including without limitation reasonable attorneys' fees and all reasonable amounts paid in investigation, defense or settlement) incurred by the NorthPoint Indemnified Parties in connection with, arising out of, or resulting from any claims against Verizon that have been or will be asserted in respect of the Verizon DSL Assets in actions captioned Covad Communications Co. et al. v. Bell Atlantic Corporation, District Court for the District of Columbia, Christopher Specht v. Bell Atlantic Corporation, Supreme Court of New York, and Walter Scott et al. v. Bell Atlantic Corporation and Bell Atlantic Internet Solutions. Inc., Supreme Court of New York, but only to the extent arising out of claims against the Verizon DSL Assets in respect of actions taken by Verizon prior to the Effective Time.

(b) If a NorthPoint Indemnified Party shall receive notice or otherwise learn of the assertion by a Person who is not a party to this Agreement of any claim or of the commencement by any such Person of :any Action (:a "Third Party Claim") with respect to which Verizon may be obligated to provide indemnification, such NorthPoint Indemnified Party shall give Verizon written notice thereof promptly after becoming aware of such Third Party Claim. Such notice shall describe the Third Party Claim in reasonable detail, and shall indicate the amount (estimated if necessary) of the loss that has been or may be sustained by or is claimed against such NorthPoint Indemnified Party. Such notice shall be a condition precedent to any liability by Verizon for any Third Party Claim under the provisions for indemnification contained in this Agreement.

(c) Verizon may, in its sole discretion, elect to compromise, settle or defend, at Verizon's own expense and by Verizon's own counsel, any Third Party Claim without the prior consent of any NorthPoint Indemnified Party.

(d) If Verizon chooses to defend any claim, the applicable NorthPoint Indemnified Party shall make available to Verizon any personnel or any books, records or other documents within its control that are necessary or appropriate for such defense.

(e) Notwithstanding anything else in this Section 7.14, if an offer of compromise or settlement is received by Verizon with respect to a Third Party Claim and Verizon notifies the applicable NorthPoint Indemnified Party in writing of Verizon's willingness to compromise or settle such Third Party Claim as to Verizon and such NorthPoint Indemnified Party declines to accept such compromise or settlement as applied to such Indemnified Third Party following Verizon's entering into such compromise or settlement, such NorthPoint Indemnified Party may continue to contest such Third Party Claim as to itself, free of any participation by Verizon, at such NorthPoint Indemnified Party's sole. expense. In such event, the obligation of Verizon to such NorthPoint Indemnified Party with respect to such Third Party Claim shall be equal to the lesser of

(i) the amount of the offer of compromise or settlement which such NorthPoint Indemnified Party declined to accept plus the costs and expenses of such NorthPoint Indemnified Party prior to the date Verizon notifies such NorthPoint Indemnified Party of the offer to compromise or settle and
(ii) the actual out-of-pocket amount such NorthPoint Indemnified Party is obligated to pay as a result of such NorthPoint Indemnified Party's continuing to contest such Third Party Claim. Verizon shall be entitled to recover (by setoff or otherwise) from an NorthPoint Indemnified Party any additional expenses incurred by Verizon as a result of such NorthPoint Indemnified Pty's decision to continue to contest such Third Party Claim.

(f) If the amount of any indemnifiable loss shall, at any time subsequent to payment pursuant to this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, less any expenses incurred in connection therewith, shall promptly be repaid by the applicable NorthPoint Indemnified Party to Verizon.

(g) In the event of payment by Verizon to any NorthPoint Indemnified Party in connection with any Third Party Claim, Verizon shall be subrogated to and shall stand in the place of such NorthPoint Indemnified Party as to any events or circumstances in respect of which such NorthPoint Indemnified Party may have any right or claim relating to such Third Party Claim. Such Northpoint Indemnified Party shall cooperate with Verizon in a reasonable manner, and, at the cost and expense of Verizon, in prosecuting any subrogated right or claim.

If, from and after the Effective Time and until the second anniversary of the date hereof, Parent determines to issue any shares of any class of capital stock or any securities convertible into capital stock (other than

(i) issuances of pro rata stock dividends to holders of Parent Common Stock and
(ii) stock issued upon the exercise of a Mirror Equity Right}, Verizon shall be entitled to purchase, at a price and on such terms as. are no less favorable to Verizon than offered by Parent to the proposed transferee, additional shares of such capital stock or securities convertible. into capital stock in such amounts as is necessary to maintain Verizon's percentage ownership of the outstanding Parent Common Stock equal to the Verizon Ownership Percentage as of the Effective Time; provided, that in the event that Verizon exercises its preemptive right in connection with the issuance of shares issued by NorthPoint upon the exercise of options granted after the Effective Time, the applicable purchase price for such shares shall be the last sale price on Nasdaq (as reported in The Wall Street Journal) on the business day immediately preceding the date of such issuance. In connection with Verizon's preemptive right, Parent shall provide written notice to Verizon no later than ten days prior to any issuance giving rise to such preemptive right.

In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each of the parties to this Agreement shall take all such necessary action.