Document:

<PAGE>

                           STOCK PURCHASE AGREEMENT
                           ------------------------

          This Stock Purchase Agreement ("Agreement") is entered into as of
November 17, 2000 ("Effective Date"), by OnePoint Communications Corp. (the
"Company") and Ventures in Communications II, L.L.C. ("Purchaser").

          WHEREAS, pursuant to that certain Definitive Merger Agreement dated as
of August 4, 2000 (the "Merger Agreement") by and among Bell Atlantic
Corporation d/b/a Verizon Communications ("VC"), Sphere Merger Corp., OnePoint
Communications Corp., Purchaser, and Vencom, L.L.C., Purchaser is required, upon
the request of VC to purchase 91,957 shares of common stock, par value $0.01
(the "Common Stock") of the Company for an aggregate amount of $12,879,480.00
(the "Equity Funding Obligation").

          WHEREAS, VC has notified Purchaser of its intention to require
Purchaser to consummate the Equity Funding Obligation.

          NOW THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements herein contained and intending to be
legally bound, the parties agree as follows:

          SECTION 1.  Purchase and Sale. On or before November 17, 2000,
                      -----------------
Purchaser agrees to pay to Company $12,879,480.00 by wire transfer in
immediately available funds, and Company agrees to issue and sell to Purchaser
91,957 shares of Common Stock (the "Purchased Shares").

          SECTION 2.  Company Representations. In connection with the issuance
                      -----------------------
and acquisition of the Purchased Shares under this Agreement, Company hereby
represents and warrants to Purchaser as follows:

          (a) Organization, Corporate Power and License.  Company is a
              -----------------------------------------
corporation organized, validly existing and in good standing under the laws of
the State of Delaware and is qualified to do business in and is in good standing
under the laws of each jurisdiction where such qualification is required, except
where the lack of such qualification would not have a material adverse effect on
the financial condition of Company and its subsidiaries taken as a whole.
Company and each of its subsidiaries possesses all municipal, state, or federal
licenses, permits, certificates, grants of authority and any similar
authorization ( each a "License" and collectively, the "Licenses") which are
necessary for it to conduct its respective business operations in the manner in
which they are presently being conducted (and such Licenses are valid and in
full force and effect), other than any Licenses, the failure of which to hold
would not, singly or in the aggregate, have a material adverse effect on the
financial condition of Company and its subsidiaries taken as a whole. No event
has occurred with respect to the Licenses which is likely to result in, or after
notice or lapse of time or both would be likely to result in, revocation,
termination or non-renewal thereof or would result in any other material
impairment of the rights of the holder of any of the Licenses, which would
result in a material adverse effect on the financial condition of Company and
its subsidiaries taken as a whole.
<PAGE>

          (b) Capitalization and Related Matters.  Immediately prior to the
              ----------------------------------
Effective Date, the number of outstanding shares of Common Stock of Company
shall be as set forth in the attached "Capitalization Schedule." As of the
Effective Date, except as set forth on the attached Capitalization Schedule,
neither Company nor any of its subsidiaries shall have outstanding any stock or
securities convertible or exchangeable for any shares of its capital stock or
containing any profit participation features, nor shall it have outstanding any
rights or options to subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its capital stock. As of the
Effective Date, except as set forth on the attached Capitalization Schedule,
neither Company nor any of its subsidiaries shall be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock or any warrants, options or other rights to acquire
its capital stock.

          (c) Securities Laws. Company has not violated any applicable federal
              ---------------
or state securities laws in connection with the offer, sale or issuance of any
of its Common Stock or any other debt or equity securities. In addition,
Company's filings with the Securities and Exchange Commission accurate and
complete in all material respects.

          (d) Subsidiary.  The attached "Subsidiary Schedule" sets forth the
              ----------
name of each subsidiary of Company, its jurisdiction of organization and the
ownership of the equity of such subsidiary. Each such subsidiary is organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, possesses all requisite power and authority and all material
licenses, permits and authorizations necessary to own its properties and to
carry on the businesses in which it is engaged and is qualified and is in good
standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a material
adverse effect on the financial condition of Company and its subsidiaries taken
as a whole. All of the outstanding shares of capital stock of each subsidiary
are validly issued, fully paid and nonassessable, and all such shares are owned
by the Company free and clear of any lien and not subject to any option or right
to purchase any such shares. Neither Company nor any of its subsidiaries owns or
holds the right to acquire any shares of stock or any other security or interest
in any other person, except as set forth in the attached Subsidiary Schedule.

          (e) Authorization, No Breach.  The execution, delivery and performance
              ------------------------
of this Agreement and all other agreements contemplated hereby to which Company
is a party, have been duly authorized by Company. This Agreement and all other
agreements contemplated hereby to which Company is a party each constitutes a
valid and binding obligation of Company, enforceable in accordance with its
terms.  The execution and delivery by Company of this Agreement and all other
agreements, contemplated hereby to which Company is a party, and the fulfillment
of and compliance with the respective terms thereof by Company, do not and shall
not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in the creation of
any lien, security interest charge or encumbrance upon Company's capital stock
or assets pursuant to, (iv) give any third party the right to modify, terminate
or accelerate any obligation under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or other action by or
notice or declaration to, or filing with, any court or administrative or
governmental body or agency pursuant to the charter
<PAGE>

or bylaws of Company, or any law, statute, rule or regulation to which Company
is subject or any agreement, instrument, order, judgment or decree to which
Company is subject.

          (f) Financial Statements.  Attached hereto as the "Financial
              --------------------
Statements Schedule" are the following financial statements: the audited
consolidated balance sheets of Company and its Subsidiaries as of December 31,
1998 and December 31, 1999 (the "Latest Balance Sheet") and the interim
financial statements and balance sheet as of September 30, 2000 (the "Interim
Balance Sheet"), and the related statements of income and cash flows (or the
equivalent) for the respective twelve-month periods then ended. Each of the
foregoing financial statements (including in all cases the notes thereto, if
any) is accurate and complete in all material respects, is consistent with the
books and records of Company (which, in turn, are accurate and complete in all
material respects) and has been prepared in accordance with generally accepted
accounting principles, consistently applied.

          (g) Absence of Undisclosed Liabilities.  Company and its subsidiaries
              ----------------------------------
do not have any material obligation or liability (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to Company or any
subsidiary, whether due or to become due and regardless of when asserted)
arising out of transactions entered into at or prior to the Effective Date, or
any action or inaction at or prior to the Effective Date, which would cause a
material adverse effect on the financial condition, business prospects or
operations of Company and its subsidiaries taken as a whole other than: (i)
liabilities set forth on the Interim Balance Sheet (including any notes
thereto), (ii) liabilities which have arisen after the date of the Interim
Balance Sheet in the ordinary course of business (none of which is a liability
resulting from breach of contract, breach of warranty, tort, infringement claim
or lawsuit) and (iii) other liabilities expressly disclosed in the other
Schedules to this Agreement.

          (h) No Material Adverse Change.  Since the date of the Interim Balance
              --------------------------
Shed, there has been no material adverse effect on the financial condition,
business prospects or operations of Company and its subsidiaries taken as a
whole.

          (i) Absence of Certain Developments.  Except as expressly contemplated
              -------------------------------
by this Agreement or asset forth on the attached "Developments Schedule" since
the date of the Interim Balance Sheet, neither Company nor any of its
Subsidiaries have:

              (i)   issued any notes, bonds or other debt securities or any
capital stock or other equity securities or any securities convertible,
exchangeable or exercisable into any capital stock or other equity securities;

              (ii)  borrowed any amount or incurred or become subject to any
material liabilities, except current liabilities incurred in the ordinary course
of business and liabilities under contacts entered into in the ordinary course
of business;

              (iii) discharged or satisfied any material lien or paid any
material obligation or liability, other than current liabilities paid in the
ordinary course of business;
<PAGE>

              (iv)   declared or made any payment or distribution of cash or
other property to its stockholders with respect to its capital stock or other
equity securities or purchased or redeemed any shares of its capital stock or
other equity securities (including, without limitation, any warrants, options or
other fights to acquire its capital stock or other equity securities);

              (v)    mortgaged or pledged any of its properties or assets or
subjected them to any material lien, except liens for current property taxes not
yet due and payable;

              (vi)   sold, assigned or transferred any of its material tangible
assets, except in the ordinary course of business, or canceled any material
debts or claims,

              (vii)  suffered any material extraordinary losses or waived any
rights of material value, whether or not in the ordinary course of business or
consistent with past practice;

              (viii) made capital expenditures or commitments therefor that
aggregate in excess often million dollars ($10,000,000);

              (ix)   made any loans or advances to, guarantees for the benefit
of, or any investments in any persons in excess of five hundred thousand dollars
($500,000) in the aggregate; or

              (x)    suffered any damage, destruction or casualty loss exceeding
in the aggregate one million dollars ($1,000,000), whether or not covered by
insurance.

          (j) Assets.  Company and each subsidiary have good and marketable
              ------
title to, or a valid leasehold interest in, the material properties and assets
used by them, located on their promises or shown on the Interim Balance Sheet or
acquired thereafter, free and clear of all liens, except for properties and
assets disposed of in the ordinary course of business since the date of the
Interim Balance Sheet and except for liens disclosed on the Interim Balance
Sheet (including any notes thereto) and liens for current property taxes not yet
due and payable.

          (k) Tax Matters.  Company and each subsidiary have filed all Tax
              -----------
Returns which they are required to file under applicable laws and regulations
and have paid all Taxes shown thereon as owing by them except where the failure
to file Tax Returns or pay Taxes would not have a material adverse effect on the
financial condition of Company and its subsidiaries taken as a whole.  "Tax" or
"Taxes" means federal, state, county, local, foreign or other income, gross
receipts, ad valorem, franchise, profits, sales or use, transfer, registration,
excise, utility, environmental, communications, real or personal property,
capital stock, license, payroll, wage or other withholding, employment, social
security, severance, stamp, occupation, alternative or add-on minimum, estimated
and other taxes of any kind whatsoever (including, without limitation,
deficiencies, penalties, additions to tax, and interest attributable thereto)
whether disputed or not. "Tax Return" means any return, information report or
filing with respect to Taxes, including any schedules attached thereto and
including any amendment thereof.
<PAGE>

          (1) Brokerage.  Except as disclosed on the attached "Brokerage
              ---------
Schedule", Company has no liability or obligation to pay any brokerage
commissions, finders fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon Company or any of its Subsidiaries.

          (m) Governmental Consent, etc.  No permit, consent, approval or
              -------------------------
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by Company of any other transactions contemplated hereby or thereby
where a failure to so obtain Would have a material adverse effect on the
financial condition, business prospects or operations of Company and its
subsidiaries taken as a whole.

          (n) Compliance with Laws.  To the knowledge of Company, neither
              --------------------
Company nor any subsidiary has violated any law or any governmental regulation
or requirement which violation has had or would reasonably be expected to have a
material adverse effect upon the financial condition, business prospects or
operations of Company and its subsidiaries taken as a whole.

          (o) Environmental.  Neither Company nor its subsidiaries have received
              -------------
any written notice, report or other information regarding any actual or alleged
material violation of any environmental regulation, or any material liabilities
or potential material liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to the Company or its subsidiaries or their facilities
arising under environmental regulations, the subject of which would have a
material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole. Company and each of its subsidiaries is in
material compliance with all applicable laws and regulations related to the,
environment, health and safety, all required permits from governmental entities
have been obtained and are in effect, and no on-site storage, treatment or
disposal of hazardous waste or material has been made (except in compliance with
applicable laws and regulations) in connection with any of such operations,
where a failure to so comply, obtain or maintain in effect would have a material
adverse effect on the financial condition of Company and its subsidiaries taken
as a whole. There are no pending actions, proceedings, or notices of potential
action and there are no facts that would reasonably be expected to lead to
actions, proceedings, or notices of potential action from any governmental
agency regarding the condition of any of such assets or operations under
environmental, health or safety laws where any of the foregoing would have a
material adverse effect on the financial condition of Company and its
subsidiaries taken as a whole. Company has lawfully disposed of the waste
generated by the businesses associated with assets and operations and no pending
or threatened proceedings exist concerning disposal of waste generated by the
businesses associated with the Company. There am no underground storage tanks,
PCBs, asbestos, radon gas or harmful nuclear radiation present on any real
property owned by Company nor has Company to the best of its knowledge caused
any such material to be placed on property it occupies.

          (p) Knowledge.  As used in this Section 2, the terms "knowledge" or
              ---------
"aware" shall mean and include (i) the actual knowledge or awareness of Company
and its Subsidiaries
<PAGE>

(which shall include the actual knowledge and awareness of the officers,
directors and key employees of Company and its Subsidiaries and the general
managers of each facility of Company and its Subsidiaries) and (ii) the
knowledge or awareness which a prudent business person would have obtained in
the conduct of his business after making reasonable inquiry and reasonable
diligence with respect to the particular matter in question.

          (q) Legal Proceedings. There is no litigation, proceeding or
              -----------------
governmental investigation pending or to the best of Company's knowledge,
threatened, against Company, any subsidiary, or any of their respective
properties or businesses or any of their respective assets which, if decided
adversely, would have a material adverse effect on the financial condition or
the business prospects of the Company and its subsidiaries taken as a whole or
on the ability of Company or any subsidiary to conduct their businesses in the
same manner in all material respects in which they are currently operated.

          (r) Merger Agreement.  The representations and warranties set forth in
              ----------------
the Merger Agreement are true and correct in all material respects as of the
date hereof, and the Company has complied with all covenants or other
obligations required to be complied by it under the Merger Agreement as of the
date hereof.

          SECTION 3.  Purchaser Representations.  In connection with the
                      -------------------------
issuance and acquisition of Purchased Shares under this Agreement, the Purchaser
hereby represents and warrants to the Company as follows:

          (a) The Purchaser is acquiring and will hold the Purchased Shares for
investment for its account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act of 1933, as amended ("Securities Act").

          (b) Purchaser understands that the Purchased Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom
and further acknowledges and understands that the Company is under no obligation
to register the Purchased Shares; except as provided in the attached
"Registration Rights Provisions" Schedule.

          (c) Purchaser will not sell, transfer or otherwise dispose of the
Purchased Shares (i) on or before the earlier the Closing Date or the date that
the Merger Agreement is terminated or (ii) in violation of any federal or state
securities laws or any the rules promulgated thereunder.

          (d) Purchaser has been given access to all information regarding
Company that it has requested Purchaser is a sophisticated investor with such
knowledge and experience in business and financial matters as will enable it to
evaluate the merits and risks of investment in the Purchased Shares and that it
is able to bear the economic risk and lack of liquidity of an investment in the
Purchased Shares.

          SECTION 4 Legends.  All certificates evidencing Purchased Shares shall
                    -------
bear the following legends:
<PAGE>

          "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."

          SECTION 5.  Entire Agreement.  This Agreement constitutes the entire
                      ----------------
contract between the parties hereto with regard to the subject matter hereof It
supersedes any other agreements, representations or understandings (whether oral
or written and whether express or implied) relating to the subject matter hereof
This Agreement is intended to bind and inure to the benefit of and be
enforceable by Company and Purchaser and their respective successors and
assigns. The Agreement may be executed in counterparts, any one of which need
not contain the signatures of more am one Party, but all such counterparts taken
together shall constitute one and the same instrument.

                              ONEPOINT COMMUNICATIONS CORP.

                              By:____________________________________
                              Name:__________________________________
                              Title:_________________________________

                              VENTURES IN COMMUNICATIONS II, L.L.C.

                              By:____________________________________
                              Name:__________________________________
<PAGE>

                            Capitalization Schedule

Owner                                       Shares of Common Stock       Percent
-----                                       ----------------------       -------

Ventures in Communications II, LLC               1,010,075                87.2%
Bell Atlantic Investments, Inc.                     19,570                 1.7%
Warrants - Bondholders                             111,125                 9.6%
Warrants - Verizon Investments, Inc.                17,850                 1.5%

Notes:
-----

     Immediately prior to the Effective Date, Company has authorized 2,000,000
shares of $0.01 par value common stock, 1,029,645 of which are issued and
outstanding.

     Company has outstanding warrants to purchase an additional 111,125 shares
of its Common Stock, which were issued in May 1998 in connection with its
issuance of 14 1/2% Senior Notes.

     Ventures in Communications II, LLC owns all 35,000 of the authorized and
issued shares of $1.00 par value preferred stock of the Company ("Preferred
Stock"). Shares of Preferred Stock are entitled to a liquidation preference
equal to $1,000 per share. Shares of Preferred Stock are not convertible into
any other class of capital stock.

     Company's subsidiary, OnePoint Communications Holdings, LLC has the right
to repurchase all of the membership units of VIC-RMTS-DC, LLC purchased by SBC
Comventures, Inc. pursuant to a Purchase Agreement dated December 16, 1999 at a
price equal to the price paid for the purchased units plus 15% per annum. SBC
Comventures, Inc. has the right to put its interest in VIC-RMTS-DC, LLC to
Company's chairman and controlling shareholder under the same terms as the
OnePoint Communications Holdings, LLC call provision.

     Ventures in Communications II, LLC ("VIC II") has pledged the capital
stock of Company it owns to secure a loan VIC II has with the Bank of Montreal.
In addition, VIC II has granted the bank an option to purchase up to 75% of VIC
II's capital stock in the event certain conditions are not met.
<PAGE>

                              Subsidiary Schedule

The Subsidiaries of OnePoint Communications Corp. are as follows:

<TABLE>
<CAPTION>
                                            Jurisdiction of    Issued            Shares
Name of Subsidiary                          Organization       Shares/Units      Held by OP
------------------                          ------------       ------------      ----------
<S>                                         <C>                <C>               <C>
OnePoint Communications-Colorado, LLC       Delaware           100               100

OnePoint Communications-Illinois, LLC       Delaware           100               100

OnePoint Communications-Georgia, LLC        Delaware           100               100

OnePoint Communications Holdings, LLC       Delaware           100               100

Mid-Atlantic RMTS Holdings LLC              Delaware           10                9.9

VIC-RMTS-DC, LLC                            Delaware           28.710            25.265

OnePoint Services LLC                       Delaware           Common:
                                                               6,600,700         4,370,700
                                                               Preferred:
                                                               1,629,300         1,629,300

RCP Communications, Inc./1/                 Arizona            2,000             0

OnePoint Prepaid Services LLC/2/            Delaware           N/A               N/A

Other Minority Investments:
--------------------------

ComPlus, L.P.                               Delaware           General Partner Units:
                                                               10                0
                                                               Class A LP Units:
                                                               1,000             10
</TABLE>

__________________
/1/ 100% owned by OnePoint Services, LLC
/2/ Dissolved
<PAGE>

                         Financial Statements Schedule
<PAGE>

Item 1. Financial Statements
----------------------------

                         OnePoint Communications Corp.
               Consolidated Statements of Operations (Unaudited)
                 (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                 Three Months Ended            Nine Months Ended
                                                    September 30                 September 30
                                                 2000          1999          2000              1999
                                            -------------------------------------------------------
<S>                                         <C>           <C>          <C>              <C>
Revenue                                     $  12,392     $   5,957    $   33,378       $    15,080
Cost of revenue                                12,266         5,869        32,115            15,096
                                            -------------------------------------------------------
                                                  126            88         1,263               (16)
Expenses:
Selling, general and admin.                    18,379        12,766        52,784            33,432
Depreciation and amortization                   1,077           727         3,232             1,947
                                            -------------------------------------------------------
Loss from operations                          (19,330)      (13,405)      (54,753)          (35,395)

Other income (expense)
Interest income                                   291           506         1,143             2,308
Interest expense                               (4,127)       (3,369)      (12,131)          (11,489)
Other                                         (11,265)         (141)      (11,287)             (102)
                                            -------------------------------------------------------
                                              (15,101)       (3,004)      (22,275)           (9,283)
                                            -------------------------------------------------------
Equity in income and (losses) of
   unconsolidated subsidiaries                  4,610        (1,097)       24,325            (2,641)
                                            -------------------------------------------------------
Loss before extraordinary item                (29,821)      (17,506)      (52,703)          (47,319)
Extraordinary gain on bond
   repurchases                                     --            --            --            20,506
                                            -------------------------------------------------------
Net Loss                                    $ (29,821     $ (17,506)   $  (52,703)      $   (26,813)
                                            =======================================================
Loss per share - Basic:

Loss before extraordinary item              $  (28.96)    $  (17.51)   $   (51.85)      $    (47.32)
Extraordinary item                                 --            --            --             20.51
                                            -------------------------------------------------------
Net Loss                                    $  (28.96)    $  (17.51)   $   (51.85)      $    (26.81)
                                            =======================================================

Shares used in computing loss per share:
Weighted average common
   shares - basic                           1,029,645     1,000,000     1,016,445         1,000,000
                                            =======================================================
</TABLE>

                            See accompanying notes.
<PAGE>

                         OnePoint Communications Corp.
                         Consolidated Balance Sheets
                 (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                            September 30,               December 31,
                                                                                2000                      1999 (*)
                                                                            ----------------------------------------
                                                                            (Unaudited)
<S>                                                                         <C>                           <C>
Assets
Current assets:
   Cash and cash equivalents                                                $    1,677                    $    6,608
   Restricted cash                                                                 134                           134
   Investment in marketable securities, current                                  1,762                         4,230
   Accounts receivable, net                                                      5,162                         2,722
   Other receivable                                                              2,000                            --
   Affiliate receivable                                                            566                           266
   Prepaid expenses                                                              1,448                         3,358
                                                                            ----------------------------------------
Total current assets                                                            12,749                        17,318
                                                                            ----------------------------------------

Investment in marketable securities, non-current
($18,250 and $23,390, restricted                                                18,652                        24,570
   at September 30, 2000 and December 31, 1999, respectively)
Investments in unconsolidated subsidiaries                                          --                         2,240
Property and equipment, net                                                     22,645                        20,378
Intangible assets, net                                                           6,147                        10,909
Other assets                                                                     2,203                         5,993
                                                                            ----------------------------------------
Total assets                                                                $   62,396                    $   81,408
                                                                            ========================================
Liabilities, Redeemable Preferred Stock and Stockholders' (Deficit)
Current liabilities:
   Accounts payable and accrued expense                                     $   27,563                    $   17,232
   Affiliate payable                                                             4,611                         3,778
   Accrued interest payable                                                      5,024                         1,152
     Current portion of long term debt                                           3,605                           980

Total current liabilities                                                       40,803                        23,142

Deferred obligations                                                               354                           864
Deferred gain on sale of equity interest
   in consolidated subsidiary                                                    3,744                         9,188
Minority interest in consolidated subsidiaries                                   1,256                         1,041
Long term debt                                                                 116,460                       102,437
Redeemable preferred stock, $1.00 par value, 35,000
   shares authorized, 35,000 shares issued and
   outstanding at redemption value                                              35,000                        35,000

Stockholders' deficit:
Common stock, $0.01 par value, 2,000,000 shares                                     10                            10
   authorized, 1,029,645 and 1,000,000 shares
   issued and outstanding at September 30, 2000 and
</TABLE>
<PAGE>

<TABLE>
<S>                                                                         <C>                           <C>
   December 31, 1999, respectively
Additional capital                                                              14,444                         6,870
Note receivable - stockholder                                                   (1,500)                       (1,500)
Accumulated deficit                                                           (148,382)                      (95,679)
   Other comprehensive income                                                      207                            35
                                                                            ----------------------------------------
Total stockholders' (deficit)                                                 (135,221)                      (90,264)
                                                                            ----------------------------------------
Total liabilities, redeemable preferred stock
  and stockholders' (deficit)                                               $   62,396                    $   81,408
                                                                            ========================================
</TABLE>

(*) The balance sheet at December 31, 1999 has been derived from the audited
    financial statements at that date, but does not include all of the
    information and footnotes required by accounting principles generally
    accepted in the United States for complete financial statements.
    See accompanying notes.
<PAGE>

                         OnePoint Communications Corp.
               Consolidated Statements of Cash Flow (Unaudited)
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                              Nine Months Ended September 30,
                                                                                  2000               1999
                                                                              -------------------------------
<S>                                                                           <C>                  <C>
Operating activities
Net loss                                                                        $(52,703)          $(26,813)
Adjustments to reconcile net loss to net cash
     used in operating activities:
   Depreciation and amortization                                                   3,232              1,947
   Amortization of premium (discount) of securities
     acquired included in interest income                                         (1,096)              (973)
   Amortization of debt discount issuance cost and
     warrants included in interest expense                                           677                683
   Amortization of developer payments included in
     reselling costs                                                               2,583              1,475
Losses in equity of interest of unconsolidated investments                           792              2,641
Loss on sale of private cable assets                                              11,265
Extraordinary gain on bond repurchases                                                --            (20,506)
Deferred gain on sale of investments                                              (5,444)                --
Unrealized gain/(loss) on investments in
   marketable securities                                                             172               (593)
Loss on disposal of property and equipment                                            --                114
Change in allowance for doubtful accounts                                            648                172
Change in minority interest                                                          444                 --
Changes in operating assets and liabilities:
   Accounts receivable                                                            (3,694)            (1,141)
   Prepaid expenses                                                                2,986             (1,951)
   Other assets                                                                    4,883                100
   Affiliates payable                                                                833               (358)
   Affiliates receivable                                                            (300)               366
   Accounts payable and accrued expenses                                          10,331                788
   Accrued interest                                                                3,872              2,320
                                                                              -----------------------------
   Net cash (used in) operating activities                                       (20,519)           (41,729)
Investing activities
Restricted cash, net                                                                  --              5,066
Proceeds from sale of unconsolidated subsidiary                                   26,500                 --
Purchase of equity instruments                                                     1,449                 --
Proceeds from sale of marketable securities                                       51,986             74,987
Purchase of marketable securities                                                (69,439)            (8,313)
Purchase of Note Receivable                                                         (900)                --
Repayment of Note Receivable                                                         633                 --
Acquisition of property and equipment                                            (12,225)            (8,714)
                                                                              -----------------------------
Net cash provided by investing activities                                         (1,996)            63,026
Financing activities
Proceeds from issuance of long-term debt                                          20,000                 --
Proceeds from issuance (repayment) of short-term debt                                 --            (27,027)
Proceeds from issuance of common stock                                             7,632                 --
</TABLE>
<PAGE>

<TABLE>
<S>                                                                           <C>                  <C>
Repayment of long-term debt                                                       (5,851)                --
Repayment of capital lease obligations                                            (4,197)                --
                                                                              -----------------------------
Net cash provided by (used in) financing activities                               17,584            (27,027)
                                                                              -----------------------------
Net (decrease) in cash                                                            (4,931)            (5,730)
Cash at the beginning of period                                                    6,608              5,730
                                                                              -----------------------------
Cash at the end of period                                                        $ 1,677           $     --
                                                                              =============================
</TABLE>

See accompanying notes.
<PAGE>

                         OnePoint Communications Corp.
            Notes to Consolidated Financial Statements (Unaudited)

Note 1 - Organization and Basis of Presentation

     OnePoint Communications Corp. (the "Company") was incorporated to provide
voice, data and video services to residents of multiple dwelling units ("MDUs").
The Company consists of OnePoint Communications Corp., the parent company, and
its wholly-owned subsidiaries, OnePoint Communications-Colorado, LLC, one point
Communications-Illinois, LLC, OnePoint Communications Holdings, LLC ("OPC
Holdings") and its majority-owned subsidiary OnePoint Services, LLC ("OPS") in
which the Company maintains a 71% interest and is consolidated in the
accompanying financials statements. In addition, through OPC Holdings, the
Company maintains a 87.97% interest in VIC-RMTS-DC, LLC, which has been
consolidated in the accompanying financial statements.

     In August 2000, the Company signed a definitive merger agreement with Bell
Atlantic Corporation d/b/a Verizon Communications ("Verizon") under which the
Company would merge into a wholly-owned subsidiary of Verizon. As a result of
this transaction, Verizon will acquire all of the Company's stock and the
Company will be the surviving entity. The merger is anticipated to close during
December 2000 and is subject to certain conditions, adjustments and regulatory
and other approvals. Since signing the merger agreement, Verizon has provided
the Company with certain equity and debt financing to fund its operations. See
Management's Discussion and Analysis--Liquidity and Capital Resources for
additional information related to the funding commitments and impact to the
Company if such financings are not consummated.

     The accompanying unaudited consolidated financial statements include the
accounts of OnePoint Communications Corp., its wholly-owned subsidiaries, and
its majority-owned subsidiaries (OnePoint Services, LLC, and VIC-RMTS-DC, LLC).
All inter-company transactions have been eliminated in consolidation.

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and the instructions to Form 10-
Q and Article 10 of Regulation S-X. Accordingly, the accompanying consolidated
financial statements do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. In the opinion of management, all adjustments
(consisting of normally recurring accruals) considered necessary for a fair
presentation have been included in the accompanying consolidated financial
statements. The consolidated results of operations for the nine-month period
ended September 30, 2000 are not necessarily indicative of the results that may
be expected for the full fiscal year. These consolidated financial statements
should be read in conjunction with the consolidated audited financial statements
as of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999 included in the Annual Report on Form 10-K of OnePoint
Communications Corp. (File No. 333-63787), as filed with the Securities and
Exchange Commission.

Note 2 - Summarized Income Statement Information of Affiliates

     Since 1997, the Company had a 41% minority equity investment in Mid-
Atlantic Telcom Plus, LLC and accounted for this investment using the equity
method. In March
<PAGE>

2000, this company sold substantially all of its assets to Comcast Corporation,
ceased operations and provided for an initial distribution of the sale proceeds.
In July 2000, Mid-Atlantic Telcom Plus, LLC redeemed the Company's 41% interest
for $4.5 million and entered into a series of agreements which terminated all
relationships between the parties and waived any future claims.

     During March 2000, the Company purchased a minority equity investment of 1%
in ComPlus LP, an affiliated company which provided engineering services to the
Company and which was accounted for using the equity method. During the second
quarter of 2000 this company became insolvent and the investment was written
off. The Company also made a secured loan to ComPlus, LP in March 2000 for $0.9
million. Although the Company reserved $0.3 million against this loan during the
second quarter, the Company has since received payments and offset its payable
to this vendor in an amount sufficient to completely retire this secured loan.
The combined results of operations and financial position of the Company's
equity-basis affiliates are summarized below (in thousands):
<PAGE>

Note 2 - Summarized Income Statement Information of Affiliates (continued)

                                    Three Months Ended        Nine Months Ended
                                       September 30              September 30
                                     2000         1999        2000        1999
                                     ----         ----        ----        ----
Condensed Operating
   Information
Net sales                              --      $ 4,937         17,197   $14,697
Income/(loss) from operations          --        1,221          4,614     4,064
Gain on sale of assets                 --           --         83,310        --
Net income/(loss)                      --       (2,675)       (75,593)   (6,407)

Note 3 - Long Term Debt

     In May 1998, the Company offered 175,000 units each consisting of a $1,000
principal amount of 14.5 % Senior Notes due 2008 (the "Senior Notes") and a
warrant to purchase 0.635 shares of the common stock of the Company (a
"Warrant") for gross proceeds of $175.0 million (collectively, the "Unit
Offering"). The Company used approximately $80.5 million of the net proceeds
from the Unit Offering to purchase securities pledged with a trustee to fund
future interest payments on the Senior Notes (the "Pledged Securities"). The
Company also used a portion of the proceeds to pay down the borrowings under a
term note from Northern Trust Bank (the "Credit Facility") which the Company has
borrowed again since that time. The Company completed open market purchases of
Senior Notes having an aggregate principal amount of $92.3 million between
November 9, 1998 and June 30, 1999 at various prices for an aggregate total cost
of approximately $47.9 million, including accrued interest and transaction fees.
The Company recognized an extraordinary gain on the early extinguishment of this
debt of $19.8 million in the fourth quarter of 1998 and recognized an
extraordinary gain of approximately $12.4 million and $8.0 million in the first
and second quarters of 1999, respectively. Pursuant to the restricted securities
agreement entered into in connection with the issuance of the Senior Notes, the
trustee of the Pledged Securities released approximately $26.7 million of such
securities on February 24, 1999 and $11.5 million on July 8, 1999 upon request
by the Company. The balance of the net proceeds have been invested in network
infrastructure, to support voice and data services, investment in the Company's
subsidiaries and to fund working capital for general corporate purposes,
including operating losses. As of September 30, 2000 the carrying value of the
Senior Notes was $77.4 million net of the unamortized debt discount, warrants
and issue costs of $1.9, $2.0 and $1.5 million respectively.

     In March 1998, the Company obtained the $9.0 million Credit Facility.
Borrowings under the Credit Facility outstanding as of December 15, 1998,
(approximately $8.75 million) are repaid over a five-year period. The interest
rate on borrowings under the Credit Facility is, at the Company's election: (i)
Northern Trust's prime rate less 3/4 of 1%; (ii) LIBOR plus 50 basis points; or
(iii) the federal funds rate (as defined) plus 50 basis points. As of September
30, 2000, the Company had outstanding $8.3 million and obtained a $0.25 million
letter of credit under the facility. On August 30, 1999 the Company established
a $16.0 million credit facility (the "Second Credit Facility") with the same
bank that matures on January 1, 2004. The terms of the Second Credit Facility
are similar to those contained in the previous agreement. On August 30, 1999 the
Credit Facility was amended in order to make the default provisions consistent
under both facilities. As
<PAGE>

of September 30, 2000 the Company had $13.8 million outstanding on the Second
Credit Facility and obtained $1.6 million in letters of credit.

     In July 2000, the Company entered into a $20.0 million unsecured loan
agreement with Lucent Technologies Inc. which was guaranteed by all of the
Company's controlled subsidiaries. Advances under this loan agreement were
subsequently capped at $5.0 million at the Company's direction and incur
interest at prime plus 7% per annum, with a scheduled maturity during 2008. This
loan agreement was assigned by Lucent Technologies Inc. to Verizon Investments,
Inc., an affiliate of Verizon, during October 2000 with an outstanding principal
balance of $5.0 million.

     In August 2000, the Company entered into a $15.0 million unsecured loan
agreement with Verizon Investments, Inc., an affiliate of Verizon, which was
guaranteed by all of the Company's controlled subsidiaries. Advances under this
loan agreement incur interest at prime plus 7% per annum, with a scheduled
maturity during 2008. As of September 30, 2000 $10.0 million was drawn against
this loan agreement.
<PAGE>

Note 4 - Changes in Non-owner Equity

     Beginning in the first quarter of 1998, compliance with SFAS No. 130,
"Reporting Comprehensive Income" was required. In accordance with the
requirements of this standard, the components of changes in non-owner equity,
net of related tax for the nine months ended September 30, 2000 and 1999 are as
follows (in thousands):

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                                September 30,
                                                       2000                     1999
                                                    -----------------------------------
<S>                                                 <C>                       <C>
Net (loss)                                          $ (52,703)                $ (26,813)
Unrealized gain/(loss) on securities                      207                       108
                                                    -----------------------------------
Changes in non-owner equity                         $ (52,496)                $ (26,705)
                                                    ===================================
</TABLE>

Note 5 - Accounting for Derivatives

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which was required to be adopted in years
beginning after June 15, 1999. The FASB recently issued Statement No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of
Effective Date of FASB Statement No. 133". The Statement defers for one year the
effective date of FASB Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities". The rule now will apply to all fiscal quarters of all
fiscal years beginning after June 15, 2000. The Statement will require the
Company to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change in fair
value of the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. Certain of the Company's holdings of equity
instruments have been deemed derivatives pursuant to the criteria established in
SFAS 133. The Company expects the adoption of SFAS 133 in fiscal 2001, as well
as the effect on subsequent periods, to be immaterial. The Company is evaluating
the impact of the adoption of SFAS 133, which will be adopted effective January
1, 2001, on the Company's financial position and results of operations.

Note 6 - Shareholder's Deficit

     The Company's basic loss per share calculations are based upon the weighted
average shares of common stock outstanding. The dilutive effect of the vested
stock appreciation rights and warrants outstanding are included for purposes of
calculating diluted earnings per share, except for periods when the Company
reported a net loss, in which case the inclusion of stock appreciation rights
and warrants outstanding would be anti-dilutive.

     The Company sold 29,645 shares of common stock in the second quarter of
2000 for net proceeds of $7.6 million and 17,850 warrants to purchase common
stock in the third quarter for net proceeds of $2.5 million.
<PAGE>

Note 7 - Disposition of Assets

     In September 2000, the Company completed the sale of its private cable
assets in Chicago to 21st Century Cable TV of Chicago, Inc. The Company sold
approximately $19.0 million in net assets, received $5.7 million in cash and
recognized an accounts receivable balance of $2.0 million relating to an escrow
amount.

<TABLE>
<S>                                                                                      <C>
PP&E, net of accumulated depreciation of $2.8 million                                    $ 10.4 million
Intangible assets, net of accumulated amortization of $0.8 million                       $  3.9 million
Other Assets                                                                             $  4.7 million
                                                                                         --------------
                                                                                         $ 19.0 million
Cash proceeds received                                                                    ($5.7 million)
Other receivable                                                                          ($2.0 million)
                                                                                         --------------
Loss on disposition                                                                      $ 11.3 million
                                                                                         ==============
</TABLE>
<PAGE>

Note 7 - Disposition of Assets (continued)

     In addition to the proceeds received at closing and escrowed amounts, the
Company can receive up to $2.0 million, or a pro rata share thereof, contingent
upon the Company securing short-term extensions of contracts with property
owners expiring prior to March 11, 2001. These contingent sales proceeds have
not been recognized in the accompanying financial statements due to the
uncertainty of the ultimate resolution of the contingencies.

Note 8 - Other Information

     The Company made cash payments of $7.7 million and $8.5 million for
interest during the nine months ended September 30, 2000 and 1999, respectively.
There were no cash payments for income taxes during those periods.

     The Company is, from time to time, party to litigation arising in the
ordinary course of its business. The Company believes that such litigation will
not have a material impact on the Company's financial position or results of
operations.

Note 9 - Segment Information

     The Company's reportable segments are segregated into business units that
offer services to four distinct geographic regions; (i) Atlanta, Georgia and
Charlotte/Raleigh/Durham, North Carolina (the "Southeast Region"), (ii) Chicago,
Illinois (the "Central Region"), (iii) Denver, Colorado and Phoenix, Arizona
(the "Western Region"), and (iv) Washington, DC/Baltimore, MD/Philadelphia, PA
(the "Mid-Atlantic Region"). The Company's services to each segment include a
combination of telephony, video and/or high-speed Internet access services.

     The Company evaluates performance and allocates resources based on
operating income or loss. The accounting policies of the reportable segments are
the same as those described in the summary of significant accounting policies.
The Company and its subsidiaries carry their investments in affiliates on the
equity method of accounting. Accordingly, certain segments have recognized
equity in the earnings of other segments and their proportionate share of the
assets and liabilities of investments in affiliates. All inter-segment
investment amounts have been excluded in the reported financial information for
the business segments. The Company's segments do not provide services to each
other; therefore, there were no inter-segment sales or related cost of sales
during the periods presented.

     All investments in affiliates accounted for under the equity method are in
the Mid-Atlantic Region segment, except for the Company's investment in ComPlus,
LP which is included in the Other segment. Equity in the net income/(losses) of
investees accounted for by the equity method totaled $24.4 million and ($2.6)
million for the Mid-Atlantic segment and ($0.1) million and $0.0 million for the
Other segment for the nine months ended September 30, 2000 and 1999,
respectively. The Company sold its remaining interest in the investment held in
the Mid-Atlantic region during July 2000. The Mid-Atlantic region's investment
in affiliates accounted for under the equity method totaled $0.0 million and
$2.2 million as of September 30, 2000 and December 31, 1999, respectively. The
Company wrote off its $0.1 million equity investment in ComPlus, LP during the
second quarter due to the insolvency of ComPlus, LP. As the Other region's
investment in affiliates accounted for under the equity method was established
during the first quarter of 2000 and
<PAGE>

written off during the second quarter of 2000 the investment totaled $0.0
million and $0.0 million as of September 30, 2000 and December 31, 1999,
respectively.

The following table provides certain financial information for each business
segment (in thousands):
<PAGE>

<TABLE>
<CAPTION>
                                                                September 30,
                                                         2000                   1999
                                                    --------------------------------
<S>                                                 <C>                    <C>
Revenues:
   Central Region                                   $   6,023              $   4,512
   Mid-Atlantic Region                                  5,550                  3,187
   Southeast Region                                     7,964                  4,232
   Western Region                                      13,841                  3,112
   Other                                                   --                     37
                                                    --------------------------------
                                                    $  33,378              $  15,080
                                                    ================================

Earning/(Loss) from operations:
   Central Region                                   $ (10,401)             $ (11,541)
   Mid-Atlantic Region                                (11,018)                (8,345)
   Southeast Region                                   (12,287)                (7,690)
   Western Region                                     (18,494)                (7,235)
   Other                                               (2,553)                  (584)
                                                    --------------------------------
                                                    $ (54,753)             $ (35,395)
                                                    ================================
Identifiable assets:
   Central Region                                   $   3,166              $  20,784
   Mid-Atlantic Region                                  3,689                  4,919
   Southeast Region                                     3,672                  3,061
   Western Region                                      14,025                  1,794
   Other                                               37,844                 44,341
                                                    --------------------------------
                                                    $  62,396              $  74,899
                                                    ================================
</TABLE>

The following table provides gross revenues on a service line basis (in
thousands):

<TABLE>
<CAPTION>
                                            Nine Months September 30,
                                              2000               1999
                                          ---------------------------
      <S>                                 <C>                <C>
      Revenues:
         Voice                            $ 29,626           $ 11,628
         Video                               3,664              3,415
         Data                                   88                 37
                                          ---------------------------
                                          $ 33,378           $ 15,080
                                          ===========================
</TABLE>

Note 10 - Related Party Transactions

     The Company entered into a professional services agreement with The VenCom
Group Inc., ("VenCom") in April 1998, pursuant to which VenCom provides
financial and management consulting services and manages the Company's
relationships with Ventures in Communications II, LLC ("VIC2") and SBC
Communications Inc. ("SBC"). The Company accrued fees of $0.8 million during the
nine month period ended September 30, 2000. Approximately $4.6 million and $3.8
million remained unpaid as of September 30, 2000 and December 31, 1999
respectively.
<PAGE>

Note 11 - Deferred Gain on Sale of Equity Interest in Consolidated Subsidiary

     In December 1999 and February 2000, SBC Comventures, Inc., a wholly-owned
subsidiary of SBC, invested $10.0 million and $5.0 million, respectively, to
obtain a 24.0% and 12.0% direct ownership interest, respectively, in a majority-
owned subsidiary of the Company, VIC-RMTS-DC, LLC. These transactions resulted
in an aggregate deferred gain of approximately $12.9 million. This agreement
provided the Company the right to repurchase the interest in VIC-RMTS-DC, LLC
for the original sales price plus 15% per annum. In addition, SBC Comventures,
Inc. has the right to put the VIC-RMTS-DC, LLC interests to the Company's
Chairman, personally, under the same terms as the Company's call repurchase
rights.
<PAGE>

Note 11 - Deferred Gain on Sale of Equity Interest in Consolidated Subsidiary
(continued)

     In April 2000, the Company exercised its right to repurchase a portion of
the common ownership interest in VIC-RMTS-DC, LLC previously sold to SBC
Comventures, Inc. in exchange for $10.4 million. After giving effect to this
repurchase, SBC Comventures, Inc. holds a 12.0% interest in VIC-RMTS-DC, LLC.
The Company retains its call on such units at the original purchase price plus
15.0% per annum and SBC Comventures, Inc. retains its rights to put such
interest to the Company's Chairman, personally, under the same provisions as the
Company's call right. As of September 30, 2000 the Company has accrued $0.6
million relating to the outstanding ownership interest of $5.0 million. The
Company has deferred the recognition of gains generated by the sale of VIC-RMTS-
DC, LLC units to SBC Comventures, Inc. due to the uncertainty of the ultimate
outcome of these transactions.

Note 12 - Leases

     In January 2000, the Company entered into a long-term lease for office
space in Lake Forest, IL to serve as the Company's corporate headquarters. The
lease terms require monthly payments of approximately $0.06 million in 2000 and
escalate at 3.0% per annum to $0.08 million per month in 2010 at the lease
expiration date. The lease provides for the pass-through of increases in
operating expenses and real estate taxes in years subsequent to 2000 on a pro
rata basis. The aggregate future minimum lease payments under this noncancelable
operating lease are approximately $8.4 million over the 10-year term.

Note 13 - Subsequent Events

     In October 2000, the Company sold to Verizon Investments, Inc. of a Common
Stock Purchase Warrant to purchase 17,850 shares of Common Stock, par value
$0.01 per share, of the Company in exchange for $2.5 million.

     In October 2000, the Company borrowed an additional $5.0 million against
the unsecured loan agreement with Verizon Investments, Inc., an affiliate of
Verizon, which was guaranteed by all of the Company's controlled subsidiaries.
Advances under this loan agreement incur interest at prime plus 7% per annum,
with a scheduled maturity during 2008. As of October 31, 2000 $15.0 million was
outstanding against this loan agreement.

     Pursuant to Section 5.18 of the Verizon merger agreement, the shareholders
of the Company received notice from Verizon on November 2, 2000 that requires
them to invest $12.9 million of additional equity in the Company by November 17,
2000.
<PAGE>

                        Report of Independent Auditors

Stockholder
OnePoint Communications Corp.

We have audited the accompanying consolidated balance sheets of OnePoint
Communications Corp. as of December 31, 1999 and 1998, and the related
consolidated statements of operations, comprehensive income,
unitholders'/stockholder's equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Mid-Atlantic Telcom Plus Holdings, LLC, an investment in
a 41.4% owned unconsolidated subsidiary, which statements reflect total assets
of $58.5 million and $57.2 million as of December 31, 1999 and 1998,
respectively, and total revenues of $19.8 million, $16.5 million and the $14.0
million for each of the three years in the period ended December 31, 1999. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to data included for Mid-Atlantic Telcom
Plus Holdings, LLC, is based solely on the report of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principals used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits and the report of other auditors
provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material aspects,
the consolidated financial position of OnePoint Communications Corp. at December
31, 1999 and 1998, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.

February 29, 2000                                        /s/ Ernst & Young LLP
McLean, Virginia

                                      F-3
<PAGE>

                         OnePoint Communications Corp.

                       Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                 December 31
                                                                      1999          1998           1997
                                                                -----------------------------------------
                                                                  (In Thousands, except per share data)
<S>                                                              <C>           <C>            <C>
Revenue                                                          $    22,138   $     6,953    $        43
Cost of revenue                                                       22,006         8,765             83
                                                                 ----------------------------------------
Gross margin (loss)                                                      132        (1,812)           (40)

Expenses:
   Selling, general and administrative                                53,667        27,873         12,788
   Depreciation and amortization                                       3,060         1,455            235
                                                                 ----------------------------------------
Loss from operations                                                 (56,595)      (31,140)       (13,063)

Other income (expense):
   Interest income                                                     3,197         6,042             72
   Interest expense                                                  (15,277)      (15,846)           (11)
   Other income (loss)                                                  (285)           17            (17)
     Loss on disposals of equipment                                      (96)           --             --
     Loss-abandonment of leasehold improvements                         (274)           --             --
                                                                 ----------------------------------------
                                                                     (12,735)       (9,787)            44
                                                                 ----------------------------------------
                                                                     (69,330)      (40,927)       (13,019)
Equity in losses of unconsolidated subsidiaries                       (3,828)       (3,698)        (3,072)
                                                                 ----------------------------------------
Loss before extraordinary items                                      (73,158)      (44,625)       (16,091)
Extraordinary Items:
Gain on bond repurchases                                              20,432        19,799             --
                                                                 ----------------------------------------
Net loss                                                         $   (52,726)  $   (24,826)   $   (16,091)
                                                                 ========================================
Basic and diluted earnings per share:
Loss before extraordinary items                                  $    (73.16)  $    (44.62)   $    (16.09)
Extraordinary items                                                    20.43         19.80             --
                                                                 ----------------------------------------
Net loss                                                         $    (52.73)  $    (24.82)   $    (16.09)
                                                                 ========================================
Shares used in computing loss per share:
                                                                 ----------------------------------------
   Weighted average common shares--basic and diluted               1,000,000     1,000,000      1,000,000
                                                                 ========================================
</TABLE>

See accompanying notes.

                                      F-4
<PAGE>

                         OnePoint Communications Corp.

                 Consolidated Statements of Comprehensive Loss

<TABLE>
<CAPTION>
                                                                                    December 31
                                                                          1999         1998        1997
                                                                      ------------------------------------
<S>                                                                   <C>           <C>          <C>
Net loss                                                              $  (52,726)   $ (24,826)   $ (16,091)
Other comprehensive income, net of tax:
   Unrealized (loss) gain arising during the year on securities             (666)         701           --
                                                                      ------------------------------------
Comprehensive loss                                                    $  (53,392)   $ (24,125)   $ (16,091)
                                                                      ====================================
</TABLE>

See accompanying notes.

                                      F-5
<PAGE>

                         OnePoint Communications Corp.

                          Consolidated Balance Sheet
                 (dollars in thousands, except per share data)

                                                            December 31
                                                         1999          1998
                                                       ----------------------
Assets
Current assets:
  Cash and cash equivalents                            $   6,608    $   5,730
  Restricted cash                                            134        5,199
  Investment in marketable securities, current             4,230       13,118
  Accounts receivable:
    Trade, net                                             2,722        2,277
    Related party                                            266          653
  Prepaid expenses                                         3,358          898
                                                       ----------------------
Total current assets                                      17,318       27,875

Investment in marketable securities, noncurrent
  ($23,390 and $73,377 restricted at December 31,
   1999 and 1998, respectively)                           24,570       86,705
Investments in unconsolidated subsidiaries                 2,240        6,283
Property and equipment, net                               20,378       10,923
Intangible assets, net                                    10,909       11,799
Other assets                                               5,993        5,722

                                                       ----------------------
Total assets                                           $  81,408    $ 149,307
                                                       ======================

                                      F-6
<PAGE>

<TABLE>
<CAPTION>
                                                                        December 31
                                                                    1999          1998
                                                                  ----------------------
<S>                                                               <C>          <C>
Liabilities, minority interest, redeemable preferred
stock, and Common Stockholder's deficit
Current liabilities:
   Accounts payable and accrued expense                           $  17,232    $   6,857
   Related Party payable                                              3,778        3,558
   Accrued interest payable                                           1,152        1,701
   Current portion of long-term debt                                    980          250
                                                                  ----------------------
Total current liabilities                                            23,142       12,366

Deferred obligations                                                    864          310
Deferred gain on sale of equity interest in consolidated
     Subsidiary                                                       9,188           --
Minority interest in consolidated subsidiaries                        1,041           --
Long-term debt                                                      102,437      138,503
Redeemable preferred stock, $1.00 par value, 35,000
   shares authorized, 35,000 shares issued and outstanding
   at redemption value                                               35,000       35,000

Stockholder's deficit:
   Common stock, $0.01 par value, 2,000,000 shares authorized,
       1,000,000 shares issued and outstanding
       at December 31, 1998                                              10           10
   Additional capital                                                 6,870        6,870
   Note receivable - stockholder                                     (1,500)      (1,500)
   Accumulated deficit                                              (95,679)     (42,953)
   Other comprehensive income                                            35          701
                                                                  ----------------------
Total common stockholder's deficit                                  (90,264)     (36,872)
Total liabilities, minority interest, redeemable preferred
   stock, and common stockholder's deficit                        $  81,408    $ 149,307
                                                                  ======================
</TABLE>

See accompanying notes

                                      F-7
<PAGE>

                         OnePoint Communications Corp.

    Consolidated Statements of Unitholder's/Stockholder's Equity/(Deficit)
                 (dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                    Number Units                                Notes
                                                  Redeemable Units                 Founders Units               Receivable
                                               Units           Amount          Units            Amount     Unitholder/Stockholder
                                            -------------------------------------------------------------------------------------
<S>                                         <C>              <C>             <C>              <C>          <C>
Balance, December 31, 1996                  $      --        $     --          10,000         $ 15,640           $     --
Additional unitholder contributions                --              --              --           12,000                 --
Issuance of units - 1999                           --              --              --            1,580             (1,580)
recapitalization                              199,000          33,500         791,000           27,640                 --
1997 Recapitalization
Comprehensive Income:                              --              --              --               --
                                            -------------------------------------------------------------------------------------
Balance, December 31, 1997                    199,000          33,500         801,000            1,580             (1,580)
   1998 recapitalization (Note 1)            (199,000)        (33,500)       (801,000)          (1,580)                --
   Unit-holder payment                             --              --              --               --                 80
   Warrants                                        --              --              --               --                 --
   Comprehensive income:
     Net (loss)                                    --              --              --               --                 --
     Net unrealized gain on marketable
       securities                                  --              --              --               --                 --
                                            -------------------------------------------------------------------------------------
Balance, December 31, 1998                         --              --              --               --             (1,500)
   Comprehensive income:
     Net (loss)                                    --              --              --               --                 --
     Net unrealized loss on marketable
       securities                                  --              --              --               --                 --
                                            -------------------------------------------------------------------------------------
Balance, December 31, 1999                         --        $     --              --         $     --           $ (1,500)
                                            =====================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                                           Accumulated
                                               Common       Additional    Accumulative    Comprehensive       Total
                                               Stock          Capital        Deficit         Income           Equity
                                            ----------------------------------------------------------------------------
<S>                                         <C>             <C>           <C>             <C>                 <C>
Balance, December 31, 1996                  $      --        $     --      $   (2,036)        $     --        $   13,604
Additional unitholder                              --              --              --               --            12,000
contributions
Issuance of units - 1999                           --              --              --               --                --
recapitalization                                   --              --              --               --             5,860
1997 Recapitalization
Comprehensive Income:
                                            ----------------------------------------------------------------------------
Balance, December 31, 1997                         --              --         (18,127)              --            15,373
   1998 recapitalization (Note 1)                  10           1,570              --               --           (33,500)
   Unit-holder payment                             --              --              --               --                80
   Warrants                                        --           5,300              --               --             5,300
   Comprehensive income:
     Net (loss)                                    --              --         (24,826)              --           (24,826)
     Net unrealized gain on marketable
       securities                                  --              --              --              701               701
                                            ----------------------------------------------------------------------------
Balance, December 31, 1998                         10           6,870         (42,953)             701           (36,872)
   Comprehensive income:
     Net (loss)                                    --              --         (52,726)              --           (52,726)
     Net unrealized loss on marketable
       securities                                  --              --              --             (666)             (666)
                                            ----------------------------------------------------------------------------
Balance, December 31, 1999                  $      10        $  6,870      $  (95,679)        $     35        $  (90,264)
                                            ============================================================================
</TABLE>

See accompanying notes

                                      F-8
<PAGE>

                         OnePoint Communications Corp.

                     Consolidated Statements of Cash Flow
                            (dollars in thousands)

<TABLE>
<CAPTION>
                                                                         December 31
                                                               1999         1998        1997
                                                          -------------------------------------
<S>                                                      <C>          <C>         <C>
  Operating activities
  Net loss                                               $ (52,726)  $ (24,826)  $ (16,091)
  Adjustments to reconcile net loss to net cash
  used in operating activities:
      Loss on disposals of equipment                            96          --          --
      Loss on abandonment of leasehold improvements            274          --          --
      Depreciation and amortization                          3,060       1,455         235
      Amortization of premium (discount) of securities
        acquired included in interest income                  (499)        499          --
      Amortization of debt discount and issuance cost
      included in interest expense                             513         552          --
      Amortization of warrants included in interest
        expense                                                299          63          --
      Amortization of developer payments included in
        reselling costs                                        367         173          --
      Losses in equity interest of unconsolidated
        investments                                          3,828       3,698       3,072
      Extraordinary gain on bond repurchases               (20,432)    (19,799)         --
      Unrealized loss (gain) on investments in
        marketable securities                                 (666)       (701)         --
      Change in allowance for doubtful accounts                383         208           7
      Changes in operating assets and liabilities:
    Trade receivable                                          (828)     (2,454)        (39)
    Related party receivable                                   387        (620)        (51)
    Developer payments PCTV acquisition                         --      (5,400)         --
    Prepaid expenses                                        (2,460)         --      (1,121)
    Other assets                                              (638)        (50)        180
    Accounts payable and accrued expenses                   10,375       4,281       2,370
    Related party payable                                      220       3,559          --
    Accrued interest                                          (549)      1,690          11
      Other Deferred                                           554          --          --
                                                       -------------------------------------
  Net cash used in operating activities                    (58,442)    (37,672)    (11,427)
</TABLE>

                                      F-9
<PAGE>

                         OnePoint Communications Corp.

               Consolidated Statements of Cash Flow (continued)
                            (dollars in thousands)

<TABLE>
<CAPTION>
                                                                 December 31
                                                         1999      1998        1997
                                                  -----------------------------------------
<S>                                               <C>            <C>         <C>
Investing activities
Restricted cash, net                                     5,065      (5,199)        13,000
Acquisition of intangible assets                        (2,135)     (4,467)            --
Purchase of equity investments                              --          --        (13,133)
Proceeds from sale of marketable securities            108,782      85,179             --
Purchase of marketable securities                      (37,260)   (184,711)            --
Acquisition of property and equipment                  (12,408)     (9,374)        (2,440)
Acquisition of other intangible assets                    (432)         --             --
Proceeds from sale of unconsolidated subsidiary            135          --             --
Proceeds from sale of equity interest in
consolidated subsidiary                                 10,000          --             --
                                                  -----------------------------------------
Net cash used in investing activities                   71,747    (118,572)        (2,573)

Financing activities
Proceeds from issuance of long-term debt                14,434   $ 188,050    $     1,500
Repayment of long-term debt                            (27,090)    (22,151)            --
Minority interest                                          229          --             --
Debt discount and issuance costs                            --      (9,468)            --
Unitholder contributions                                    --          80         17,860
                                                  -----------------------------------------
Net cash provided by financing activities              (12,427)    156,511         19,360
                                                  -----------------------------------------
Net increase in cash                                       878         267          5,360
Cash at the beginning of period                          5,730       5,463            103
                                                  -----------------------------------------
Cash at the end of period                           $    6,608   $   5,730    $     5,463
                                                  =========================================
</TABLE>

See accompanying notes

                                     F-10
<PAGE>

                         OnePoint Communications Corp.

                  Notes to Consolidated Financial Statements
                 (Dollars in thousands, except per share data)
             For the Years ended December 31, 1999, 1998 and 1997

1.   Organization and Recapitalization

Organization

OnePoint Communications Corp., (the "Company") was incorporated to provide
bundled communications services including local and long distance telephony,
video programming and Internet access to residents of multiple dwelling units
("MDUs"). The Company is the successor to OnePoint Communications, L.L.C. (the
"Predecessor"). The Predecessor entered into several significant contracts and
began to generate revenue during the second half of 1997.

The Company consists of OnePoint Communications Corp., the parent company and
its wholly- owned subsidiaries, OnePoint Communications-Colorado, L.L.C.,
OnePoint Communications-Illinois, L.L.C., OnePoint Communications-Georgia,
L.L.C., OnePoint Communications Holdings, L.L.C. ("OPC Holdings"), and its
majority-owned subsidiary OnePoint Services, LLC ("OPS") in which the Company
maintains a 71.3% interest and has been consolidated in the Company's financial
statements. In addition, through OPC Holdings, the Company maintains (i) a
75.52% interest in VIC-RMTS-DC, L.L.C., which has been consolidated in the
Company's financial statements and (ii) 41.38% interest in Mid-Atlantic Telcom
Plus, L.L.C. (Mid-Atlantic), a subsidiary accounted for under the equity method
(see Note 7).

In October 1997, AMI-VCOM2, Inc. ("AMI2") transferred to Ventures In
Communications, LLC ("VIC") its membership units of the Predecessor. Mr.
Otterbeck, the Company's chairman became a member of the Predecessor and the
Predecessor was recapitalized (the Recapitalization). Pursuant to the
Recapitalization, VIC agreed to guarantee up to $9,000 of collateralized
indebtedness of the Predecessor, contributed additional capital to the
Predecessor (resulting in aggregate equity contributions to the Predecessor of
$33,500) and exchanged its membership interests for (i) 19.9% of the Predecessor
membership units, and a priority on the first $33,500 of distributions, (ii) a
promissory note in the principal amount of $1,500 due October 15, 2007, which
bore interest at 10% per annum (the Predecessor Note), and (iii) a warrant to
purchase 5% of the common units outstanding following exercise of the warrant.
In connection with the Recapitalization, Mr. Otterbeck purchased 80.1% of the
Predecessor's membership units (which did not have a preferential return or
priority on distributions) for an aggregate of $80 and agreed to contribute up
to an additional $1,500 to the Predecessor. Mr. Otterbeck's 80.1% of the
Predecessor's membership units are held by VenCom, L.L.C.("VenCom"), a company
in which Mr. Otterbeck is the sole member and manager. The parties also entered
into (i) a Members Agreement that restricted the transfer of membership units
and provided preemptive rights on the sale of new securities and (ii) a
Registration Agreement that provided certain rights to register the
Predecessor's securities under the Securities Act of 1933, as amended.

                                     F-11
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

1.   Organization and Recapitalization (continued)

Organization (continued)

In April 1998, in order to convert the Predecessor into a corporation, VenCom,
and VIC contributed their membership interests in the Predecessor and a $1,500
promissory note payable by the Predecessor to VIC to Ventures in Communications
II, LLC ("VIC2") in exchange for membership interests of VIC2. Subsequently, the
Predecessor merged with and into the Company, with the Predecessor's outstanding
membership interests and its $1,500 promissory note payable to VIC exchanged for
shares of the Company's common stock and preferred stock. As a result of the
April 1998 merger transactions, the Company became a Delaware corporation, which
is wholly owned by VIC2.

The operating agreement of VIC2 entered into April 1998 in connection with the
Recapitalization (i) imposes certain restrictions on the transfer of VIC2's
membership units; (ii) grants certain participation rights in connection with a
sale of membership units by a member; (iii) grants VIC certain preemptive rights
with respect to VIC2 membership units in connection with issuances by VIC2 of
membership units or issuances by the Company of common stock; (iv) grants VIC
the right to require VenCom to purchase all or any portion of the VIC2
membership units held by VIC; (v) grants a first refusal right to the members in
connection with a transfer of VIC2 membership units and shares of the Company's
common stock; (vi) requires the members to take certain actions in the event of
an initial public offering by VIC2; and (vii) grants VIC the right to require
VIC2 to exercise its demand and piggyback registration rights and to require
VIC2 to distribute the proceeds of the resulting offering.

In August 1999, VenCom purchased 9.8% of the common units and all of the
preferred units of VIC2 and a non-interest bearing promissory note for $1,500
issued by VIC2 from VIC in exchange for an interest bearing note in the amount
of $60,700.

In October 1999, CAIS Internet, Inc. made a $2,574 equity investment in VIC2.
This investment gave CAIS Internet Inc. a 1.0 % indirect ownership in the
Company, with the remaining membership interest owned by VIC (9.9%) and VenCom,
LLC (89.1%). VIC also owns warrants to purchase 11.9% of the membership units of
VIC2.

In November 1999, the Company established a 71.3% owned subsidiary, OnePoint
Services, LLC, ("OPS") to acquire 100% of the equity of RCP Communications,
Inc., a provider of pre-paid telephony services. The remaining minority
ownership interest is held by management of OnePoint Services. Total
consideration for this acquisition, recorder pursuant to the purchase method of
accounting, was $985 and 1,425,000 of restricted common units. Of these amounts

                                     F-12
<PAGE>

1.   Organization and Recapitalization (continued)

Organization (continued)

$891 and 1,050,000 million restricted common units are being withheld subject to
the achievement of certain revenue and cash flow performance criteria. The
Company acquired assets with a fair market value of $800 and assumed liabilities
of $3,020 resulting in goodwill of $2.5 million. Goodwill will increase if the
revenue and cash flow performance criteria are met and related contingent
consideration is paid by the Company and will decrease if certain assumed
liabilities are settled at lesser amounts due to negotiations or valuations
allowances recorded against deferred tax assets are release in subsequent
periods.

In December 1999, a subsidiary of SBC Communications, Inc. ("SBC"), purchased a
24% direct ownership interest in a majority-owned subsidiary of the Company,
from OPC Holdings, a wholly-owned subsidiary of the company, in exchange for
$10,000. This agreement provided the Company the right to sell up to an
additional 24% direct ownership interest in VIC-RMTS-DC on the same terms during
2000.

2. Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly- owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

                                       F-13
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

2.   Significant Accounting Policies (continued)

Marketable Securities

Management determines the appropriate classification of debt securities at the
time of purchase and reevaluates such designation as of each balance sheet date.
Debt securities are classified as held-to-maturity when the Company has the
intent and ability to hold the securities to maturity. Held-to-maturity
securities are stated at amortized cost, adjusted for amortization of premiums
and accretion of discounts to maturity. Such amortization is included in
investment income. Interest on securities classified as held-to-maturity is
included in investment income.

Marketable equity securities and debt securities not classified as
held-to-maturity are classified as available-for-sale. Available-for-sale
securities are carried at fair value, with the unrealized gains and losses, net
of tax, reported in a component of comprehensive income. The amortized cost of
debt securities in this category is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization is included in investment
income. Realized gains and losses and declines in value judged to be
other-than-temporary on available-for-sale securities are included in investment
income. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale
are included in investment income.

Property and Equipment

Property and equipment are stated at cost and depreciated on the straight-line
method over their estimated useful lives, ranging from five to ten years.
Leasehold improvements are depreciated over the shorter of their useful lives or
the lease term, not to exceed fifteen years. The Company classifies installed
wiring and hardware costs in construction in progress until the installation is
completed, at which time the balances are classified as leasehold improvements.

Intangible Assets

Intangible assets consist of goodwill representing the excess of cost over net
assets acquired and rights of entry ("ROE") contracts resulting from the
purchase of certain assets and liabilities from Preferred Entertainment, Inc., a
subsidiary of People's Choice-TV Corp. ("PCTV"); goodwill representing the
excess of cost over net assets acquired resulting from the purchase of 100% of
the equity interest of RCP Communications, Inc. ("RCP"); and deferred financing
charges consisting of original issue debt discount and issuance costs related to
the Company's offering of 175,000 units each consisting of $1,000 principal
amount of 14 1/2% Senior Notes due 2008 (the Senior Notes) and warrants to
purchase 111,125 shares of common stock (the Warrants) for gross proceeds of
$175,000 (collectively, the Unit Offering). Goodwill and rights of entry
contracts are

                                       F-14
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

2.   Significant Accounting Policies (continued)

Intangible Assets (continued)

amortized using the straight-line method over a fifteen-year period. Deferred
financing charges are amortized under the effective interest method as a
component of interest expense over the life of the related debt.

Impairment of Long Lived Assets

The Company assesses the impairment of long-lived assets including intangible
assets in accordance with Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to
be Disposed of ("Statement No. 121"). Statement No. 121 requires impairment
losses to be recognized for long-lived assets when indicators of impairment are
present and the undiscounted cash flows are not sufficient to recover the
assets' carrying amounts. Intangibles are also evaluated for recoverability by
estimating the projected undiscounted cash flows, excluding interest, of the
related business activities. The impairment loss of these assets, including
goodwill, is measured by comparing the carrying amount of the asset to its fair
value with any excess of carrying value over fair value written off. Fair value
is based on market prices where available, an estimate of market value, or
determined by various valuation techniques including discounted cash flow.

Research and Development

All research and development costs are charged to operations as incurred.

Revenue Recognition

The Company recognizes revenue as services are provided to MDU customers.
Prepaid phone card revenues are recognized upon delivery of the cards to OPS's
customer as the Company has no ongoing performance obligation after transfer of
title upon delivery.

Fair Value of Financial Instruments

The Company considers the recorded value of its financial assets and
liabilities, to approximate the fair value of the respective assets and
liabilities at December 31, 1999 and 1998, respectively.

                                       F-15
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

2.   Significant Accounting Policies (continued)

Stock-Based Compensation

The Company has adopted the Financial Accounting Standards Board's Statement of
Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
("Statement No. 123"). Statement No. 123 allows companies to either account for
stock-based compensation under the new provisions of Statement No. 123 or under
the provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("Opinion No. 25"), but requires pro forma
disclosures in the footnotes to the consolidated financial statements as if the
measurement provisions of Statement No. 123 had been adopted. The Company
intends to continue to account for its stock-based compensation in accordance
with Opinion No. 25.

Marketing Costs

Marketing costs are expensed as incurred. For the years ended December 31, 1999,
1998 and 1997, marketing costs were approximately $1,914, $1,921 and $484,
respectively.

Income Taxes

The Company accounts for income taxes and the related accounts under the
liability method. Deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax basis of assets and
liabilities using enacted rates expected to be in effect during the year in
which the differences reverse. The Company has incurred losses for both
financial and income tax reporting since inception. Accordingly, no provision or
benefit for income tax has been recorded in the accompanying consolidated
financial statements.

Loss Per Share

The Company's basic loss per share calculations are based upon the weighted
average of shares of common stock outstanding. The dilutive effect of stock
appreciation rights and warrants to purchase the Company's common stock are
included for purposes of calculating diluted earnings per share, except for
periods when the Company reported a net loss, in which case the inclusion of
stock options would be anti-dilutive. Diluted loss per share is not presented
for the periods ended December 31, 1999, 1998, and 1997 as the effects of
potentially dilutive instruments are anti-dilutive.

                                       F-16
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

2.   Significant Accounting Policies (continued)

Recently Issued Accounting Standards

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," which
requires that all derivatives be recognized as either assets or liabilities in
the statement of financial position and that those instruments shall be measured
at fair value. Statement No. 133 also prescribes the accounting treatment for
changes in the fair value of derivatives which depends on the intended use of
the derivative and the resulting designation. Designations include hedges of the
exposure to changes in the fair value of a recognized asset or liability, hedges
of the exposure to variable cash flows of a forecasted transaction, hedges of
the exposure to foreign currency translations, and derivatives not designated as
hedging instruments. Statement No. 133 is effective for fiscal years beginning
after June 15, 1999.

Accounting for Derivative Instruments and Hedging Activities

The FASB agreed to defer for one year the implementation date of FASB Statement
133, "Accounting for Derivative Instruments and Hedging Activities" ("Statement
No. 133). In agreeing to the deferral, the FASB acknowledged constituent
concerns about the need for the FASB to provide guidance on significant
implementation issues. As amended, Statement 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. Early application
continues to be encouraged. The Company has not adopted Statement No. 133 as of
December 31, 1999. The adoption of this Statement is not expected to have a
material impact on the Company's financial position or results from operations.

3.   Acquisitions

On November 30, 1999, OPS, one of the Company's subsidiaries entered into a
definitive stock purchase agreement to acquire 100% of the equity interest of
RCP, an Arizona-based retailer of prepaid telephone cards, for a total
consideration of $985,000 in cash and 1,425,000 million of restricted common
membership units of OPS. Of these amounts $891,000 and 1,050,000 million of
restricted common membership units are being withheld subject to the achievement
of revenue and cash flow performance criteria. Such amounts have been treated as
contingent consideration in this acquisition and will be recognized in OPS's
financial statements when and if earned by the former shareholders of RCP. The
RCP acquisition was recorded pursuant to the purchase method of accounting.
Pursuant to the stock purchase agreement, on the first anniversary of the
closing date the Company is obligated to pay, provided RCP meets certain
performance criteria, the amount of the initial holdback less any existing
reserves as stated in the agreement.

                                     F-17
<PAGE>

                           OnePoint Communications Corp.

              Notes to Consolidated Financial Statements (Continued)

3.   Acquisitions (continued)

The results of operations of the RCP acquisition have been included in the
Company's consolidated financial statements from the date of acquisition through
December 31, 1999. The Company amortizes the goodwill over a period of ten
years, on a straight-line basis, based on the estimated future economic benefit
to the Company related to the assets acquired in connection with these
transactions.

4.   Restricted Cash

At December 31, 1999 and 1998 the Company had restricted cash of $134 and $125,
respectively, which represented security deposits on certain leased office
space. In addition, at December 31, 1998 the Company had restricted cash of
$5,000 plus accrued interest held in anticipation of meeting an equity capital
call for Mid-Atlantic, pending the successful outcome of arbitration
proceedings. On January 15, 1999, the Company entered into a Settlement
Agreement (the "Settlement Agreement"), which resolved the disputes covered by
the arbitration demand and released the restrictions on such cash balance and
accrued interest thereon.

5.   Trade Receivables

Trade receivables consist of the following:

                                           December 31
                                         1999       1998
                                       ------------------
Customers                              $ 3,307    $ 2,487
Other                                       14          6
                                       ------------------
Total trade receivables                  3,321      2,493

Allowance for doubtful accounts           (599)      (216)
                                       ------------------
Trade receivables, net                 $ 2,722    $ 2,277
                                       ==================

The Company provides an allowance for doubtful accounts for trade receivable
amounts deemed uncollectible as determined by management.

                                     F-18
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

5. Trade receivables (continued)

Activity in the allowance for doubtful accounts was as follows:

                                                     December 31
                                            1999        1998       1997
                                         -------------------------------

Opening balance                          $    216     $     7     $    -
Bad debt charge-offs                       (3,692)       (568)         -
Adjustments to reserves                     4,075         777          7
                                         -------------------------------
Ending balance                           $    599     $   216     $    7
                                         ===============================

6.   Investments in Marketable Securities

This is a summary of marketable securities, all of which were classified as
available-for-sale, as of December 31, 1999 and 1998:

<TABLE>
[CAPTION]

                                                      Unrealized      Unrealized      Accrued      Estimated
                                           Cost        Losses         Gains/(Loss)    Interest     Fair Value
                                         --------------------------------------------------------------------
                                                                         1999
                                         --------------------------------------------------------------------
<S>                                      <C>          <C>             <C>             <C>          <C>
Non-restricted:
   Municipal/provincial
   bonds                                  $ 1,275             $-             $  -       $    5        $ 1,280
   Commercial paper                         3,816              -                -            5          3,821
   Mutual funds                               394              -                -           14            408
Restricted:
   U.S. treasury notes and
     securities                            20,649              -               35        1,768         22,452
   Money market                               839              -                -            -            839
                                         --------------------------------------------------------------------
                                          $26,973             $-             $ 35       $1,792        $28,800
                                         ====================================================================
                                                                         1998
                                         --------------------------------------------------------------------
Non-restricted:
   Municipal/provincial
   bonds                                  $13,048             $-             $ 91       $  188        $13,327
   Commercial paper                        12,637              -                -          121         12,758
   Mutual funds                               339              -                -           21            360
Restricted:
   U.S. treasury notes and
     securities                            69,988              -              610            -         70,598
   Money market                             2,780              -                -            -          3,780
                                         --------------------------------------------------------------------
                                          $98,792             $-             $701       $  330        $99,823
                                         ====================================================================
</TABLE>
                                     F-19
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

6.  Investments in Marketable Securities (continued)

The net adjustment to unrealized holding gains (losses) on available-for-sale
securities included as comprehensive income in shareholders' equity totaled
$(666) and $701 in 1999 and 1998, respectively. The Company did not hold
investments in marketable securities in 1997.

The amortized cost and estimated fair value of debt and marketable equity
securities at December 31, 1999 and 1998, by contractual maturity, are shown
below. Expected maturities will differ from contractual maturities because the
issuers of the securities may have the right to prepay obligations without
prepayment penalties. The Company's restricted securities are comprised of the
Pledged Securities as discussed in Note 10. The Company has classified
restricted securities with an estimated fair value of approximately $12,417
which mature within twelve months as noncurrent investments in the accompanying
consolidated balance sheet.

                                     December 31,            December 31,
                                       1999                    1998
                               -------------------------------------------------
                                               Estimated               Estimated
                                   Cost        Fair Value    Cost     Fair Value
                               -------------------------------------------------

Due in one year or less          $14,411       $15,400       $36,969     $37,248
Due after one year through        10,054        10,873        58,704      59,435
three years
Due after three years              1,275         1,280             -           -
                               -------------------------------------------------
                                  25,740        27,553        95,673      96,683
Mutual funds and money market      1,233         1,247         3,119       3,140
                               -------------------------------------------------
                                 $27,973       $28,800       $98,792     $99,823
                               =================================================

7.  Investment in Unconsolidated Subsidiaries

The Company has an investment of 41% in one company and accounts for this
investment using the equity method.

The daily operations of Mid-Atlantic are managed by an entity which owns the
other 59% interest. The Company maintains certain veto rights on significant
transactions and as defined in the operating agreement between the unit-holders.

The results of operations and financial position as of December 31, 1999 and
1998 is summarized

                                     F-20
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

7. Investment in Unconsolidated Subsidiaries (continued)

below for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                    1999        1998         1997
                                                 --------     --------     -------
     <S>                                         <C>          <C>          <C>
     Condensed operating information:
        Net sales                                $ 19,886     $ 16,494     $ 14,040
        Loss from operations                       (4,753)      (3,919)      (3,367)
        Net loss                                   (9,337)      (7,717)      (6,142)

     Condensed balance sheet information:

        Current assets                           $  2,032     $  2,192
        Noncurrent assets                          56,497       55,183
        Current liabilities                        52,112        7,233
        Noncurrent liabilities                         --       34,257
        Net worth                                   6,417       15,885
</TABLE>

Investments in net assets of companies accounted for under the equity method was
as follows:

                                                 1999        1998        1997
                                               --------    --------    --------

Opening balance                                $  6,283    $ 10,061    $     --
Purchase of equity interests                                     --      12,750
Equity losses of unconsolidated subsidiaries     (3,828)     (3,698)     (3,072)
MAC Interactive write off                          (135)         --          --
Other investment costs                              463
Amortization of other investment costs              (80)        (80)        (80)
                                               --------    --------    --------
Balance at December 31                         $  2,240    $  6,283    $ 10,061
                                               ========    ========    ========

                                     F-21
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

8.   Property and Equipment

Property and equipment consist of the following:

                                                  December 31
                                              1999           1998
                                           ----------------------

Furniture and equipment                    $ 6,194       $  3,157
Computer equipment                           3,424          1,942
Facility equipment                          10,306          3,176
Vehicles                                       854            791
Leasehold improvements                       2,389          1,828
Switch equipment                             1,014             --
                                           -------       --------
                                            24,181         10,894
Less accumulated depreciation               (3,807)        (1,409)
                                           -------       --------
                                            20,374          9,485
Construction in progress                         4          1,438
                                           -------       --------
                                           $20,378       $ 10,923
                                           =======       ========

The Company recognized depreciation expense of $2,607, $1,155 and $235 in 1999,
1998 and 1997, respectively.

9.   Intangible Assets

Intangible assets consist of the following as of December 31:

                                                               1999      1998
                                                          ---------------------

   Issuance costs and original issuance discount on Senior
   Notes                                                     $  4,477   $ 7,250
   Goodwill                                                     7,250     5,215
   Other                                                          462        30
                                                             ------------------
                                                               12,189    12,495
   Accumulated amortization                                    (1,280)     (696)
                                                             ------------------
                                                             $ 10,909   $11,799
                                                             ==================

During the years ended December 31, 1999 and 1998, the Company repurchased
$51,250 and $41,000 of its 14 1/2% Senior Notes and wrote off $2,547 and $2,111
of issuance costs and original issuance discount on the Senior Notes, net of
accumulated amortization of $226 and $107, respectively.

                                     F-22
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

9.   Intangible Assets (continued)

Amortization expense for the years ended December 31, 1999, 1998 and 1997
totaled $374, $775 and $0, respectively.

Amortization related to the issuance costs and original issuance discount on the
Senior Notes during the years ended December 31, 1999 and 1998 of $513 and $552
was recognized as a component of interest expense.

10.  Long-Term Debt

Unit Offering

During May 1998, the Company offered units each consisting of $1 principal
amount of 14 1/2% Senior Notes due 2008 (the "Senior Notes") and Warrants to
purchase 111,125 shares of common stock (the "Warrants") for gross proceeds of
$175,000 (collectively, the "Unit Offering"). Each of the 175,000 Warrants
entitles the holders to purchase 0.635 shares of common stock of the Company at
an exercise price of $0.01 per share. Unless exercised, the Warrants expire on
June 1, 2008. The Warrants were valued at $5,300 based on independent appraisal
thereof as of the issuance date and are reflected as an additional debt discount
and reduction of the carrying amount of the Senior Notes in the accompanying
financial statements.

In connection with the Unit Offering, the Company purchased $80,500 of
government securities (the "Pledged Securities") to fund the first seven
scheduled interest payments on the Senior

                                     F-23
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

10.  Long-Term Debt (continued)

Notes. These Pledged Securities are pledged to a trustee for the benefit of the
holders of the Senior Notes, and secure a portion of the Company's obligations
under the indenture with respect to the Unit Offering (the "Indenture").
Pursuant to the restricted securities agreement entered into in connection with
the Unit Offering, the trustee is allowed to release Pledged Securities in
excess of the amount required to fund the first seven scheduled interest
payments on the Senior Notes, upon request by the Company.

As of November 6, 1998, the date on which the Senior Notes and the Warrants
became separable, the Company recognized a discount of $5,300 on the book value
of the Senior Notes relating to the Warrants and will amortize this amount over
the life of the Senior Notes. Accordingly, for the years ended December 31, 1999
and 1998, $299 and $63, respectively, of amortization of the discount of the
Senior Notes resulting from the issuance of the Warrants has been recorded in
the accompanying financial statement.

The Company completed open market purchases of Senior Notes having an aggregate
principal amount of $92,250 between November 9, 1998 and June 9, 1999 at various
prices for an aggregate total cost of approximately $47,947, including accrued
interest and transaction fees. For the years ended December 31, 1999 and 1998,
the Company recognized an extraordinary gain on the early extinguishment of this
debt of $20,432 and $19,799, respectively. Pursuant to the restricted securities
agreement entered into in connection with the Unit Offering, the trustee of the
Pledged Securities had released approximately $38,200 upon request by the
Company.

The Senior Notes bear interest annually at 14 1/2% from the date of issuance.
Interest payments are due on June 1 and December 1 of each year, commencing on
December 1, 1998. During the years ended December 31, 1999 and 1998, the Company
paid $13,256 and $10,656, respectively, of interest related to the Senior Notes
and paid approximately $390 of liquidated damages as described below. The
Company is not required to make mandatory redemption or sinking fund payments
under the Senior Notes. The Senior Notes generally are not redeemable at the
option of the Company at anytime prior to June 1, 2003. Thereafter, the Senior
Notes will be subject to redemption at any time at the option of the Company, in
whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus any unpaid interest and liquidated
damages, if any.

                                                        Percentage
          June 1, 2003 to May 31, 2004                   107.250%
          June 1, 2004 to May 31, 2005                   104.833%
          June 1, 2005 to May 31, 2006                   102.417%
          June 1, 2006 and thereafter                    100.000%

                                     F-24
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

10.  Long-Term Debt (continued)

In addition, the Company may redeem up to 35% of the aggregate principal amount
of issued Senior Notes at a redemption price of 114.5% of the principal amount,
plus unpaid interest and liquidated damages, if any, with the net cash proceeds
of one or more public or private offerings of common stock generating net cash
proceeds to the Company of at least $20,000 provided at least 65% of the
aggregate principal amount of Senior Notes issued remain outstanding immediately
after such redemption.

In the event of a change in control, as defined in the Indenture, the Company
will be required to make an offer to each holder of Senior Notes to repurchase
all or any part of the Senior Notes at 101% of the aggregate principal amount,
plus unpaid interest and liquidated damages, if any.

Amounts outstanding under the Senior Notes at December 31, 1999 and 1998 were
$80,546 and $130,003 respectively, net of a discount of $2,204 and $3,997,
respectively, relating to the value assigned to the Warrants. Interest accrued
under the Senior Notes at December 31, 1999 and 1998 was $1,019 and $1,678,
respectively.

The Company is required to comply with specified covenants described in the
Senior Notes Indenture. These covenants include limitations on sales of
subsidiaries and certain assets, mergers, the acquisition of additional debt,
the distribution of capital and other activities.

In connection with the May 1998 Unit Offering, the Company entered into a
Registration Rights Agreement (the "Registration Rights Agreement") pursuant to
which it agreed to file and use its best efforts to cause to become effective
the registration statement relating to an offer to exchange the Senior Notes for
substantially identical notes which are not subject to restrictions on transfer
that are applicable to the Senior Notes. The Company filed the registration
statement on September 18, 1998, as required under the Registration Rights
Agreement. The Registration Rights Agreement provides; however, that if the
registration statement has not been declared effective by the Securities and
Exchange Commission on or before November 17, 1998, then liquidated damages will
accrue with respect to the Senior Notes. Such liquidated damages accrued at a
rate of $0.05 per week per $1,000 principal amount of Senior Notes for the first
ninety days beyond November 17, 1998, and thereafter increase by $0.05 per week
per $1,000 outstanding principal amount of the Senior Notes each ninety-day
period, up to a maximum of $0.50 per week per $1,000 principal amount of Senior
Notes. Liquidated damages ceased to accrue on August 6, 1999 when the
registration statement was declared effective. The Company paid, on December 1,
1999, a total of $390 in total liquidated damages.

                                     F-25
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

10.  Long-Term Debt (continued)

Term Note

On March 25, 1998, the Company entered into a term note with a bank (the "Credit
Facility"). Under the terms of the Credit Facility, the Company may borrow up to
$9,000. The interest rate on borrowings under the Credit Facility is, at the
Company's election: (i) the Lender's prime rate less 0.75%; (ii) LIBOR plus 50
basis points; or (iii) the federal funds rate (as defined) plus 50 basis points.
As of December 31, 1999, the effective interest rate on the Credit Facility was
approximately 5.75% per annum. Through December 1998, the Company borrowed
$8,750 with the additional $250 of availability securing a letter of credit.
Principal payments began on January 1, 1999 with all balances payable on or
before January 1, 2003. The Credit Facility has mandatory repayment provisions
upon certain events. The Credit Facility is collateralized by certain of the
Company's assets and is guaranteed by SBC. As of December 31, 1999, the
outstanding principal balance and accrued interest was $8,437 and $46
respectively on this Credit Facility.

On August 30, 1999 the Company established an additional borrowing facility (the
"Second Credit Facility") with the same bank enabling the Company to borrow up
to an additional $16,000 that matures on January 1, 2004. The terms of the
Second Credit Facility are similar to those contained in the previous agreement.
On the same date the first Credit Facility was amended in order to make the
default provisions consistent with the Second Credit Facility. As of December
31, 1999, the outstanding principal balance and accrued interest of the Second
Credit facility was $14,434 and $80 respectively.

The following future minimum debt payments are required for the Company's
borrowings as of December 31, 1999:

          2000                        $     980
          2001                            3,210
          2002                            7,820
          2003                            8,507
          Thereafter                     85,104
                                      ---------
                                        105,621
          Less remaining debt
          discounts attributable
          to warrants issued             (2,204)
                                      ---------
                                      $ 103,417
                                      =========

                                     F-26
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

11. Stockholder's Equity

Pursuant to the Company's Recapitalization as described in Note 1, the Company
has authorized capital stock consisting of 2,000,000 shares of $0.01 par value
common stock ("Common Stock") and 35,000 shares of $1.00 par value preferred
stock ("Preferred Stock"). Upon liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to receive pro rata the assets
of the Company, which are legally available for distribution, after payment of
all debts and other liabilities and subject to the prior rights of any holders
of Preferred Stock. Each outstanding share of Common Stock is entitled to vote
on all matters submitted to a vote of stockholders. Subject to the prior rights
of the holders of Preferred Stock, the holders of outstanding shares of Common
Stock are entitled to receive dividends as determined, from time to time, by the
Board of Directors. The Indenture restricts the ability of the Company to pay
dividends on the Common Stock.

The Preferred Stock is not entitled to receive dividends; however, the Company
can not redeem, purchase, or otherwise acquire directly or indirectly any junior
securities or pay or declare dividends or make any distribution upon any junior
securities so long as the Preferred Stock is outstanding. The Preferred Stock is
not entitled to vote on matters upon which holders of the Common Stock are
entitled to vote unless the Company is non-compliant with certain provisions of
the Company's amended and restated articles of incorporation (an "Event of
Noncompliance"), at which time the holders of Preferred Stock are entitled to
elect an additional member of the Board of Directors who shall have voting
rights equal to the total number of board members plus one. The Preferred Stock
is redeemable by the Company at any time in whole or in part, and the holders
thereof have the right to demand redemption if an Event of Noncompliance occurs,
at a redemption price of $1,000 per share. Upon liquidation, dissolution or
winding up of the Company, each holder of Preferred Stock is entitled to be paid
before any distribution or payment is made with respect to any other class of
the Company's capital stock, an amount in cash equal to the aggregate
liquidation value of all Preferred Stock held by such holder. "Liquidation
Value" for any share of Preferred Stock is equal to $1,000 per share. The
Preferred Stock does not accrue dividends, and is not convertible into any other
class of capital stock. The Preferred Stock is entitled to certain anti-dilution
rights in the event of a stock split, dividend, combination, or other
recapitalization.

12. Stock Appreciation Rights Plan

During 1998, the Company authorized the issuance of up to 166,669 stock
appreciation rights ("SARs") pursuant to the OnePoint Stock Appreciation Rights
Plan (the "Plan") - the Company granted a total of 44,200 and 71,719 SARs with
an exercise price of $67.50 or $135.00 per SAR in 1998 and 1999, respectively,
to certain officers and employees of the Company pursuant to agreements with
each grantee. All SARs issued have an expiration date of ten years and are

                                     F-27
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

12. Stock Appreciation Rights Plan (continued)

subject to certain vesting schedules, typically five years. The Company
estimates the market value of SARs issued based on a capitalization of
discounted cash flow valuation model, as adjusted for the current general market
conditions and specific company information. The Company recognized compensation
expense related to these stock appreciation rights totaling approximately $4,193
and $0 in 1999 and 1998 respectively, in the accompanying financial statements.
No form of stock based compensation was issued prior to 1998.

                                                      Year ended December 31
                                                        1999     1998   1997
                                                    ------------------------

Stock appreciation rights outstanding, beginning      69,944       --     --
Granted                                               44,200   71,919     --
Exercised                                                 --       --     --
Forfeited                                            (30,625)  (1,975)    --
                                                    ------------------------
Stock appreciation rights outstanding, ending         83,519   69,944     --
                                                    ========================

The Company had no SARs that were exercisable as of December 31, 1999. The
weighted average grant-date estimated market value of common stock underlying
the SARs granted during the years ended December 31, 1999 and 1998 was
approximately $101.26 and $67.50 per share, respectively. Had the Company
adopted the employee stock compensation measurement provisions of Statement No.
123, net loss and basis net loss per share, on a pro forma basis assuming no
other adjustments, would have been approximately the same as reported amounts.

The company's estimation of the fair value of stock appreciation rights granted
during 1998 was estimated using the Black-Scholes option pricing model. The
following assumptions were used for grants made in 1998: no dividend yield, zero
volatility, risk-free interest rate of 6 percent, and an expected life of ten
years. For 1999 the Company valued the stock based on the valuation performed in
conjunction with the CAIS Internet, Inc. investment which yielded a value of
$257.40 per share.

13. Related Party Transactions

Receivable

As of December 31, 1999 and 1998, the Company had receivable balances from
Mid-Atlantic, primarily resulting from a shared cash receipts lockbox, totaling
approximately $266 and $653, respectively.

                                     F-28
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

13. Related Party Transactions (continued)

Other

Certain officers of the Company are officers of VIC and VIC2.

The Company shared certain operations with Mid-Atlantic, a company in which the
Company holds a 41.4% interest. The Company paid approximately $266, $836 and
$250 for services provided by Mid-Atlantic in 1999, 1998 and 1997, respectively.

At December 31, 1999 and 1998, the Company had accrued $0 and $208 in accounts
payable related to reimbursement for seconded employees provided by SBC. SBC has
guaranteed certain leases and other obligations of the Company.

The Company entered into a professional services agreement with The VenCom
Group, Inc., ("VenCom") in April 1998, pursuant to which VenCom provides
financial and management consulting services and manages the Company's
relationships with VIC2 and SBC. Under this agreement, VenCom receives an annual
management fee of $750 and a fee of 2% of the amount of any capital raising
activity or acquisition activity of the Company, including debt and equity
placements. Fees payable under the agreement are subject to an annual cap of
$900, provided that if the amount paid in any calendar year is less than $900,
the annual cap in the next calendar year shall be equal to the difference
between $1,800 and the amount paid in the previous calendar year and further
provided that amounts owed in excess of the cap in any year may be paid in one
or more subsequent years if and to the extent they are within the cap in such
years. The Company accrued consulting fees payable of $3,500 from the Unit
Offering, Credit Facility, $320 from the Second Credit Facility, $58 from the
RCP Acquisition and $200 from the sale of VIC-RMTS-DC, LLC interest to SBC of
which, approximately $3,778 and $3,350 remained unpaid as of December 31, 1999
and 1998, respectively. Amortization of this debt issuance cost has been
recognized as a component of interest expense. Under this agreement, the Company
paid VenCom $900 during 1999 and 1998.

14. Income Taxes

The Company was treated as a partnership for income tax purposes until
incorporation in April 1998. Accordingly, no provision or benefit for income
taxes has been included in the financial statement for any period prior to April
1998 as taxable income or loss passes through to and is reported by unit-holders
individually. As of December 31, 1998, the Company had net tax operating loss
carryforwards of approximately $47,546 and $20,350, respectively. These losses
were generated from April 1998 through December 31, 1999 will expire through
2018 and 2019.

Net operating loss carryforwards may be used to offset future taxable income
generated by the Company. The Company's ability to utilize $410 of the net
operating losses attributable to one on its subsidiaries will be limited to the
future taxable income, if any, of that subsidiary prior to the expiration date
of the carryforward period as the subsidiary is not included in the Company's
consolidated income tax return. All loss carryforwards may be limited in the
future in the event of significant changes in the ownership of the Company.

                                     F-29
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

14. Income Taxes (continued)

The Company had net deferred tax assets of approximately $27.4 million and $8.3
million at December 31, 1999 and 1998 respectively. The components of net
deferred tax assets consist primarily of net operating loss carryforwards and
current nondeductible reserves. The benefit of deferred tax assets are recorded
to the extent that management believes the realization of such deferred tax
assets to be "more likely than not." As of December 31, 1999 and 1998, the
Company has incurred losses since inception and management does not believe
taxable income will be achieved in the near future. Accordingly, management has
fully reserved the net deferred tax assets due to uncertainty of the ultimate
realization of any benefit from such assets.

The effective income tax rate differs from the statutory federal income tax rate
due principally to the following:

                                  December 31     December 31     December 31
                                      1999            1998            1997
                                 --------------------------------------------
Federal tax rate (benefit)            34.0%          (34.0)%               --%
State tax, net of federal tax         (6.6)           (7.0)                --
Valuation allowance                   40.5            33.8                 --
Nondeductible expenses                 0.1             6.9                 --
Change in entity tax status             --            (0.1)                --
Other                                   --             0.4                 --
                                 --------------------------------------------
Effective rate                         0.0%            0.0%                --%
                                 ============================================

The net deferred tax liabilities in the accompanying balance sheets include the
following components:

                                       December 31             December 31
                                           1999                    1998
                                       -----------------------------------
Deferred tax assets:
   Intangibles                         $  2,541                    $    --
   Deferred income                        3,580                         --
   Incentive compensation                 1,702                         --
   Net operating losses                  19,296                      8,258
   Other                                  1,242                         88
                                       -----------------------------------
                                         28,361                      8,346

                                       December 31             December 31
                                           1999                     1998
                                       -----------------------------------
Deferred tax liabilities:
   Fixed assets                        $    978                   $     --
                                       -----------------------------------
   Net deferred tax asset                27,383                      8,346
   Valuation allowance                  (27,383)                    (8,346)
                                       -----------------------------------
   Net deferred tax asset              $     --                   $      -
                                       ===================================

                                     F-30
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

15. Fringe Benefit Plans

The Company has a 401(k) Savings Plan and Trust for the benefit of all employees
who meet certain eligibility requirements. The plan documents provide for the
Company to make defined contributions as well as matching and other
discretionary contributions, as determined by the Board of Directors. The
Company contributed $152, $47, and $0 to the 401(k) Savings Plan and Trust for
the years ended December 31, 1999, 1998 and 1997, respectively.

16. Leases

The Company currently leases office space and equipment under noncancelable
operating leases. The future minimum lease payments under noncancelable
operating leases at December 31, 1999, are as follows:

          December 31,

          2000                                 $ 3,758
          2001                                   3,928
          2002                                   3,963
          2003                                   3,412
          Thereafter                            17,749
                                             ---------
          Total                                $32,810
                                             =========

Most leases provide for the pass-through of increases in operating expenses and
real estate taxes. Rent expense for 1999, 1998 and 1997 was approximately
$2,643, $1,107 and $629, respectively.

17. Other Information

During the years ended December 31, 1999, 1998 and 1997, the Company made cash
payments of $13,256, $10,656 and $0 for interest, respectively. During 1998, the
Company recapitalized long-term debt totaling $1,500 through the issuance of
preferred stock. During 1999, 1998 and 1997 the Company made no cash payments
for income taxes.

The Company is from time to time party to litigation arising in the ordinary
course of its business. The Company believes that such litigation will not have
a material impact on the Company's financial position or results from
operations.

                                     F-31
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

17. Other Information (continued)

Approximately 74%, 70% and 50% of the Company's cost of revenues for the years
ended December 31, 1999, 1998 and 1997, respectively, were purchased from five
suppliers, each of whom supplied between 6% and 20% of the total cost of
revenues during such periods.

18. Arbitration Proceedings

On August 6, 1998, OPC Holdings made a demand for arbitration of certain
disputes under the Mid-Atlantic operating agreement. The arbitration demand
sought the resolution of several disputes between the parties, including among
other things, whether the Company was entitled to disclose Mid-Atlantic's
financial results in connection with the Company's exchange offer registration
statement. On January 15, 1999, OPC Holdings, Mid-Atlantic and other related
parties entered into a Settlement Agreement which resolved the disputes covered
by the arbitration demand. The Settlement Agreement provides, among other
things, that Mid-Atlantic would provide the necessary financial information
regarding Mid-Atlantic for the exchange offer and OPC Holdings' periodic filings
under the Security Exchange Act of 1934, as amended. During the fourth quarter
of 1999, the parties engaged in settlement discussions, ultimately leading to
the execution of a settlement and dismissal of the claims asserted. In addition,
and in connection therewith, OPC Holdings consented to the sale by Mid-Atlantic
of the assets of another joint venture between the parties, Mid-Atlantic Telcom
Plus, LLC ("Cableco"), to Comcast Corporation. OPC Holdings released
Mid-Atlantic from any claims it may have currently or in the future relating to
the Comcast transaction.

Net proceeds to the Company from the sale of the assets of the Cableco are
estimated to be $34.0 million, subject to adjustments. The transaction closed
during March 2000. The Company received approximately $22.4 million in March
2000 and anticipates receiving and additional $11.7 million of contingent
consideration and hold-back upon expiration of such periods over the subsequent
12 months.

19. Segment Information

The Company's reportable segments are segregated into business units that offer
services to four distinct geographic regions; (i) Atlanta, Georgia and
Charlotte/Raleigh/Durham, North Carolina (the "Southeast Region"), (ii) Chicago,
Illinois (the "Central Region"), (iii) Denver, Colorado and Phoenix, Arizona
(the "Western Region"), and (iv) Washington, DC/Baltimore, MD/Philadelphia, PA
(the "Mid-Atlantic Region"). The Company's services to each segment include a
combination of telephony, video and/or high-speed Internet access services.

                                     F-32
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

19. Segment Information (continued)

The Company evaluates performance and allocates resources based on operating
profit or loss. The accounting policies of the reportable segments are the same
as those described in the summary of significant accounting policies. The
Company and its subsidiaries carry their investments in affiliates on the equity
method of accounting. Accordingly, certain segments have recognized equity in
the earnings of other segments and their proportionate share of the assets and
liabilities of investments in affiliates. All such amounts have been included in
the reported financial information for the business segments. The Company's
segments do not provide services to each other; therefore, there were no
inter-segment sales or related cost of sales during the periods presented.

The following table provides certain financial information for each business
segment:

                                                  December 31
                                       1999            1998           1997
                                   ---------------------------------------
Revenues:
   Central Region                  $  6,187        $  2,690       $     --
   Mid-Atlantic Region                4,653           1,660             43
   Southeast Region                   6,129           1,670             --
   Western Region                     5,107             911             --
   Other                                 62              22             --
                                   ---------------------------------------
                                   $ 22,138        $  6,953       $     43
                                   =======================================
Loss from operations:
   Central Region                   (15,705)       $ (5,817)      $ (3,138)
   Mid-Atlantic Region              (12,571)        (11,772)        (4,686)
   Southeast Region                 (11,841)         (6,938)        (2,853)
   Western Region                   (11,601)         (5,585)        (2,411)
   Other                             (4,877)         (1,028)            25
                                   ---------------------------------------
                                   $(56,595)       $(31,140)      $(13,063)
                                   =======================================
Identifiable assets:
   Central Region                  $ 20,600        $ 15,515       $  1,039
   Mid-Atlantic Region                4,190           4,378          1,860
   Southeast Region                   3,306           2,206            595
   Western Region                     9,580             908            465
   Other                             43,732         126,300         15,722
                                   ---------------------------------------
                                   $ 81,408        $149,307       $ 19,681
                                   =======================================

                                     F-33
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

     19. Segment Information (continued)

                                                     December 31
                                            1999        1998          1997
                                           --------------------------------
     Capital expenditures:
        Central Region                     $ 6,926    $ 4,677       $   816
        Mid-Atlantic Region                    595      1,200         1,004
        Southeast Region                       376        837           364
        Western Region                       2,366        390           199
        Other                                2,419      2,270            57
                                           --------------------------------
                                           $12,682    $ 9,374       $ 2,440
                                           ================================

                                                    December 31
                                            1999       1998         1997
                                           --------------------------------
     Depreciation and
     amortization:
        Central Region                     $ 1,565   $  684       $   94
        Mid-Atlantic Region                    347      287           57
        Southeast Region                       197      111           30
        Western Region                         166       74           20
        Other                                  785      299           34
                                           --------------------------------
                                           $ 3,060   $1,455       $  235
                                           ================================

The following table provides gross revenues on a service line basis:

                                                      December 31,
                                           --------------------------------
                                           1999         1998           1997
                                           --------------------------------
     Revenues:
        Telephony                          $ 17,475   $ 4,463        $   43
        Video                                 4,601     2,462             -
        High-speed Internet                      62        28             -
                                           --------------------------------
                                           $ 22,138   $ 6,953        $   43
                                           ================================

20. Consolidating Condensed Financial Statements

The Company's consolidating condensed financial statements for the (i) Company,
(ii) its wholly-owned subsidiaries (OnePoint Communications-Illinois LLC,
OnePoint Communications-Colorado LLC, OnePoint Communications-Georgia LLC and
OnePoint Communications Holdings, LLC), on a combined basis, which are
guarantors under the Senior

                                     F-34
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

20. Consolidating Condensed Financial Statements (continued)

Notes, and (iii) its majority owned subsidiaries (VIC-RMTS-DC, LCC and OnePoint
Services, LLC), on a combined basis, which are a guarantors under the Senior
Notes as required by the Securities and Exchange Commission's Staff Accounting
Bulletin No. 53 follows.

                  The Consolidating Condensed Balance Sheets
                       as of December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                          Wholly-        Majority-
                                           Owned          Owned
                                         Guarantor      Guarantor                    Consolidated
                               Parent   Subsidiaries   Subsidiaries   Eliminations      Total
-----------------------------------------------------------------------------------------------------
<S>                          <C>        <C>            <C>            <C>            <C>
December 31, 1999
Current assets               $   21,420   $    4,681     $     3,634    $        -     $      17,318
Noncurrent assets                49,968       26,045           5,883       (30,223)           64,090
Current liabilities              14,735        4,733           3,674             -            23,142
Noncurrent liabilities          111,688          630             171             -           112,489
Redeemable preferred stock       35,000            -               -             -            35,000
Minority interests                  229          812               -             -             1,041
Total stockholders'
   equity/(deficit)          $  (90,264)  $   24,551     $     5,672    $  (30,223)    $     (90,264)

December 31, 1998
Current assets                 $ 24,769   $    2,141     $       965    $        -     $      27,875
Noncurrent assets               119,415       25,790           3,413       (27,186)          121,432
Current liabilities               7,553        3,750           1,063             -            12,366
Noncurrent liabilities          138,503          310               -             -           138,813
Redeemable preferred stock       35,000            -               -             -            35,000
Minority interests                    -            -               -             -                 -
Total unit-holders' equity
 (deficit)
                                (36,872)      23,871           3,315       (27,186)          (36,872)
</TABLE>

                                     F-35
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

20. Consolidating Condensed Financial Statement (continued)

               Consolidating Condensed Statements of Operations
             for the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                      Wholly-       Majority-
                                                      Owned          Owned
                                                    Guarantor      Guarantor                      Consolidated
                                      Parent      Subsidiaries   Subsidiaries    Eliminations        Total
                                  ----------------------------------------------------------------------------
<S>                               <C>              <C>            <C>              <C>            <C>
                                                       For the Year Ended December 31, 1999

Revenues                          $          -     $   17,069     $    5,069     $        -       $   22,138
Cost of revenues                             -         15,987          6,019              -           22,006
Loss from continuing
   operations before
   extraordinary
   items                               (73,158)       (38,951)        (12,802)        51,753         (73,158)
                                  --------------------------------------------------------------------------
Net loss                          $    (52,726)    $  (33,287)    $   (13,657)   $    46,946      $  (52,726)
                                  ==========================================================================
                                                    For the Year Ended December 31, 1998

Revenues                          $          -     $    5,293     $    1,660     $        -       $    6,953
Cost of revenues                             -          5,925          2,840              -            8,765
Loss from continuing
   operations before
   extraordinary
   items                               (44,625)       (33,567)        (11,772)        45,339         (44,625)
                                  --------------------------------------------------------------------------
Net loss                          $    (24,826)    $  (33,567)    $   (11,772)   $    45,339       $ (24,826)
                                  ==========================================================================
                                                     For the Year Ended December 31, 1997

Revenues                          $          -     $        -     $       43     $        -        $      43
Cost of revenues                             -              -             83              -               83
Loss from continuing
   operations before
   extraordinary                       (16,091)       (16,135)        (4,686)         20,821         (16,091)
   items
                                  --------------------------------------------------------------------------
Net loss                          $    (16,091)    $  (16,135)    $   (4,686)    $    20,821       $ (16,091)
                                  ==========================================================================
</TABLE>

21. Subsequent Events

In February 2000, SBC Comventures, Inc., a wholly-owned subsidiary of SBC,
invested $5.0 million to obtain additional 12% direct ownership interest in a
majority-owned subsidiary of the Company, VIC-RMTS-DC, LLC. This transaction
will result in an additional deferred gain of $3.7 million.

                                       F-36
<PAGE>

                         OnePoint Communications Corp.

            Notes to Consolidated Financial Statements (Continued)

21. Subsequent Events (continued)

In March of 2000, Mid-Atlantic sold substantially all of its assets, net of
certain liabilities to Comcast Corporation. The Company's proportionate share of
the net proceeds related thereto was approximately $34.0 million, of which
approximately $11.6 million is subject to certain earn-out provisions. The
Company will recognize a gain of approximately $20.0 million in the first
quarter of 2000 related to this transaction, after giving effect to the carrying
value of its investment in and amounts due from Mid-Atlantic of approximately
$2.2 million of $0.2 million, respectively. The Company will recognize the
remaining $11.6 million gain attributable to the contingent sales price in the
period such amounts are determinable.

In March 2000, the Company purchased a 1% redeemable equity interest in ComPlus,
LP, and affiliated vendor of engineering and installation services, in exchange
for $100 in cash. This investment secured the resources to engineer and install
the Company's network. ComPlus, LP also issued a secured promissory note,
payable on demand to the Company in exchange for $900 in cash. VIC owns 99% of
the equity interests of ComPlus, LP.

As the Company begins deployment of its IP-based network capable of providing a
full range of voice, data and video services, the Company is in the process of
divesting its private cable assets in Illinois and Georgia. During the first
quarter of 2000, the Company received multiple offers to purchase its
wholly-owned subsidiary, OnePoint Communications-Illinois, LLC.

                                     F-37
<PAGE>

                             Developments Schedule

In October 2000, Company borrowed an additional $5,000,000 against the Verizon
Investments, Inc. $15,000,000 loan dated 8/25/00.

In October 2000, the Company sold to Verizon Investments, Inc. a Common Stock
Purchase Warrant to purchase 17,850 shares of Common Stock, par value $0.01 per
share, of the Company in exchange for $2.5 million.

Verizon Investments, Inc. $25,000,000 loan dated 11/17/00.<PAGE>

                                LOAN AGREEMENT

Borrower: OnePoint Communications Corp.

Address:  Two Conway Park
          150 Field Drive, Suite 300
          Lake Forest, Illinois  60045
          Phone No. (847) 582-8710
          Fax No. (847) 582-8801

Date:     November 17, 2000 (the "Closing Date")

          THIS LOAN AGREEMENT (this "Agreement") is entered into on the above
                                     ---------
date between VERIZON INVESTMENTS, INC. ("Lender"), and the borrower named above
                                         ------
("Borrower"), whose chief executive office is located at the above address
  --------
("Borrower's Address").  The Schedule to this Agreement (the "Schedule") shall
--------------------                                          --------
for all purposes be deemed to be an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 8
below.)

1.   CREDIT FACILITY.

          1.1  Advances.

          (a)  Availability.  Subject to the terms and conditions of this
Agreement, Lender agrees to advance to Borrower from time to time during the
commitment period set forth on the Schedule (the "Commitment Period") such
                                                  -----------------
advances as Borrower may request under this Section 1 (individually, an
"Advance"); provided, however, that Lender shall not be obligated to make an
 -------    --------  -------
Advance to the Borrower to the extent that such Advance when aggregated with all
prior Advances, would exceed the portion of the Commitment set forth on the
Schedule (the "Commitment") available to Borrower at such time.
               ----------

          (b)  Request for Advance.  Borrower shall request each Advance by
delivering to Lender an irrevocable written request in the form of Exhibit A,
                                                                   ---------
appropriately completed (a "Request for Advance"), which specifies, among other
                            -------------------
things (i) the principal amount of the requested Advance, which shall be in the
amount as set forth on the Schedule; (ii) the use of the Advance and (iii) the
date of the requested Advance, which shall be a Business Day.  Unless otherwise
consented to by Lender, Borrower shall give each request for Advance to Lender
at least five (5) Business Days before the date of the requested Advance.  Each
Request for Advance shall be delivered by first-class mail or facsimile to
Lender at the office or facsimile number and during the hours specified in
Section 9.2.  The maximum number of Advances and the permitted timing of the
Advances is set forth on the Schedule.

          (c)  Interest.  All outstanding Advances and all other monetary
Obligations shall bear interest at the rate set forth on the Schedule, except
where expressly set forth to the contrary in this Agreement.  Borrower shall pay
interest on each outstanding Advance in arrears as set forth on the Schedule.

          (d)  Repayment of Principal. Borrower shall repay the principal amount
of the Advances in full on or before the Maturity Date.

          (e)  Purpose.  The proceeds of each Advance shall be used by Borrower
exclusively (i) to finance Borrower's acquisition of network equipment, (ii) to
satisfy Borrower's accounts payable (if any) to Lender and/or its Affiliates and
(iii) for its working capital purposes, including operational and capital and
general corporate expenditures.  Notwithstanding the
<PAGE>

foregoing, in no event shall Borrower use the proceeds of any Advance (a) for
any purpose that is restricted under any other loan agreement, credit facility,
capital lease agreement, the Indenture or other financing arrangement to which
the Borrower or any subsidiary of the Borrower is a party, (b) for any purpose
for which a consent or waiver is required from the Lender under that certain
Definitive Merger Agreement dated August 4, 2000 (the "Merger Agreement") by and
                                                       ----------------
among Lender, Sphere Merger Corp., Borrower, Ventures in Communications II,
L.L.C. ("VIC II") and VenCom, L.L.C. ("VenCom"), (c) to declare or pay any
         ------                        ------
dividend or to make any other payment or distribution to any holder of any
Equity Interest (as such term is defined in the Indenture) of Borrower or any
direct or indirect parent of the Borrower (including without limitation VIC II,
VenCom, Ventures in Communications, L.L.C or James A. Otterbeck) or to purchase,
redeem or otherwise acquire or retire for value any Equity Interest of Borrower
or any direct or indirect parent of the Borrower (including without limitation
VIC II, VenCom, Ventures in Communications, L.L.C or James A. Otterbeck). The
execution and delivery of this Agreement and the Credit Documents, and the
making of any Advances hereunder shall not be deemed or construed to be a waiver
or consent under the Merger Agreement, or (d) to make any loans or advances to
any executive officer or director of Borrower or any Subsidiary.

          1.2  Reduction or Cancellation of Commitment; Effect.  Borrower may,
upon five (5) Business Days written notice to Lender, permanently reduce the
Commitment by the amount set forth on the Schedule or cancel the Commitment in
its entirety; provided, however, that Borrower may not reduce the Commitment
              --------  -------
prior to the Maturity Date, if, after giving effect to such reduction, the
aggregate principal amount of all Advances then outstanding would exceed the
Commitment.  From the effective date of any reduction of the Commitment, the
commitment fees (if any) payable pursuant to Section 1.3 shall be computed on
the basis of the Commitment as so reduced.  Once reduced or cancelled, the
Commitment may not be increased or reinstated without the prior written consent
of Lender.

          1.3  Fees.  Borrower shall pay Lender the fee(s) set forth on the
Schedule, which are in addition to all interest and other sums payable to Lender
and are not refundable.

          1.4  Prepayments.

          (a)  Terms of all Prepayments.  Upon the prepayment of any Advance
(whether such prepayment is an optional prepayment under Subsection 1.4(b), a
mandatory prepayment required by Subsection 1.4(c) or a mandatory prepayment
required by any other provision of this Agreement or the other Credit Documents,
including a prepayment upon acceleration), Borrower shall pay to Lender all
accrued interest to the date of such prepayment on the amount prepaid.

          (b)  Optional Prepayments.  At its option, Borrower may, upon five (5)
Business Days notice to Lender, prepay any Advance in part, in an aggregate
principal amount of $50,000 or more, or in whole.  Borrower shall not have the
ability to re-borrow any Advance to the extent it has been repaid.

          (c)  Mandatory Prepayments.  Borrower shall repay the principal amount
of all Advances in whole on the date Borrower repays, repurchases or redeems all
of the outstanding Indenture Notes.

          1.5  Other Payment Terms.

          (a)  Place and Manner.  Borrower shall make all payments due to Lender
hereunder by payments to Lender's office located at the address specified in
Section 9.2 or by wire transfer to an account specified by Lender.  Borrower
shall make all payments hereunder in

                                      -2-
<PAGE>

lawful money of the United States and in same day or immediately available funds
not later than 12:00 p.m., East Coast time on the date due.

          (b) Date.  Whenever any payment due hereunder shall fall due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be.

          (c) Late Payments.  If any amount required to be paid by Borrower
under this Agreement or the other Credit Documents (including principal or
interest payable on any Advance, any fee or other amount) remains unpaid after
such amount is due, Borrower shall pay interest on the aggregate, outstanding
balance of such amount from the date due until such amount is paid in full at a
per annum rate equal to the Default Rate.

          1.6  Application of Payments.  All payments hereunder shall be applied
first to unpaid fees, costs and expenses then due and payable under this
Agreement or the other Credit Documents, second to accrued interest then due and
payable under this Agreement or the other Credit Documents and finally to reduce
the principal amount of outstanding Advances.

          1.7  Note.  The obligation of Borrower to repay the Advances shall be
evidenced by a promissory note in the form of Exhibit B (the "Note") which Note
                                              ---------       ----
shall be (i) payable to the order of Lender, (ii) in the principal amount of
$25,000,000, (iii) dated the Closing Date and (iv) otherwise appropriately
completed.  Borrower authorizes Lender to record on the schedule annexed to the
Note the date and amount of each Advance made by Lender and of each payment or
prepayment of principal thereon made by Borrower, and agrees that all such
notations shall constitute prima facie evidence of the matters noted; provided,
                           -----------                                --------
however, that any failure by a Lender to make, or any error by Lender in making,
-------
any such notation shall not affect Borrower's Obligations.  Borrower further
authorizes Lender to attach to and make a part of the Note continuations of the
schedule attached thereto as necessary.

          1.8  Taxes on Payments.  All payments made by Borrower under this
Agreement and the other Credit Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp, documentary or other taxes, any duties, or any other levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority (except
net income taxes and franchise taxes in lieu of net income taxes imposed on
Lender by its jurisdiction of incorporation) (all such non-excluded taxes,
duties, levies, imposts, charges, fees, deductions and withholdings being
hereinafter called "Taxes").  If any Taxes are required to be withheld from any
                    -----
amounts payable to Lender hereunder or under the other Credit Documents, the
amounts so payable to Lender shall be increased to the extent necessary to yield
to Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the other Credit Documents.

2.   GUARANTEES.

          2.1  Execution of Guarantees by Guarantors.  The payment and
performance by Borrower of the Obligations shall be guaranteed in full pursuant
to Guarantees in the form of Exhibit C, duly executed by each direct or indirect
                             ---------
majority owned subsidiary of Borrower that is also a guarantor under the
Indenture (collectively, the "Subsidiary Guarantees").
                              ---------------------

          2.2  Further Assurances.  Borrower agrees, at its expense, to cause
each direct or indirect majority owned subsidiary now or hereafter in existence
to execute all documents and take all actions, as Lender, may deem reasonably
necessary or useful in order to fully consummate the transactions contemplated
pursuant to the Subsidiary Guarantees.

                                      -3-
<PAGE>

3.   CONDITIONS PRECEDENT.

          3.1  Initial Conditions Precedent.  The obligation of Lender to enter
into this Agreement is subject to (a) receipt by Lender, on or prior to the date
set forth above, of each item set forth on the Schedule, each in form and
substance satisfactory to Lender and (b) consummation of the Equity Funding
Obligation (as defined in the Merger Agreement).

          3.2  Conditions Precedent to Initial Advance.  The obligation of
Lender to make the initial Advance is subject to the receipt by Lender of an
income statement, balance sheet and statement of cash flow, each in form and
substance substantially similar to those submitted by Borrower to its board of
directors and executive officers ("Financial Statements"), for (i) Borrower's
                                   --------------------
financial results for the ten month period ended October 31, 2000, presented on
a monthly basis, and (ii) Borrower's projected financial results for the year
ending December 31, 2000 presented on a monthly basis.  In addition, the initial
Advance shall not be made on or before the date that is 15 calendar days after
date of the consummation of the Equity Funding Obligation.

          3.3  Conditions Precedent to Each Advance.  The obligation of Lender
to make each Advance is subject to the further conditions that (a) Borrower
shall have delivered to Lender the Request for Advance in accordance with this
Agreement; (b) on the date of such Advance, Borrower shall not have more than
$3,000,000 in unrestricted cash available to it; (c) the Borrower shall have
delivered the Financial Statements required pursuant to Section 5.2; (d) the
Merger Agreement shall not have been terminated pursuant to Section 7.1(b)
thereof and the termination date of the Merger Agreement shall have been
extended to at least January 4, 2001; and (e) on the date such Advance is to be
made and after giving effect to such Advance, the following shall be true and
correct:  (i) the representations and warranties of Borrower and the other Loan
Parties set forth in Section 4 and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date); (ii) no Event of Default has occurred and is
continuing or will result from such Advance; (iii) all of the Credit Documents
are in full force and effect; and (iv) Borrower has performed in all respects
all obligations and covenants under the Merger Agreement required to be
performed by it as of the date of such Advance.  The submission by Borrower to
Lender of each Request for Advance shall be deemed to be a representation and
warranty by Borrower that each of the statements set forth above is true and
correct as of the date of such notice.

4.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

          In order to induce Lender to enter into this Agreement and to make the
Advances, Borrower represents and warrants to Lender as follows, and Borrower
covenants that the following representations will continue to be true, and that
Borrower will at all times comply with all of the following covenants:

          4.1  Corporate Existence.  Borrower is, and will continue to be, a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.  Borrower is and will continue to be
qualified and licensed to do business in all jurisdictions in which any failure
to do so would have a Material Adverse Effect.

          4.2  Legal Authority.  The execution, delivery and performance by each
Loan Party of each Credit Document executed, or to be executed, by such Loan
Party and the consummation of the transactions contemplated thereby (a) are
within the power of such Loan Party and (b) have been duly authorized by all
necessary actions on the part of such Loan Party.

                                      -4-
<PAGE>

          4.3  Enforceability.  Each Credit Document executed, or to be
executed, by each Loan Party has been, or will be, duly executed and delivered
by such Loan Party and constitutes, or will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against such Loan Party in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.

          4.4  No Contravention.  The execution and delivery by each Loan Party
of the Credit Documents executed by such Loan Party and the performance and
consummation of the transactions contemplated thereby do not (a) violate any
Requirement of Law applicable to such Loan Party; (b) violate any provision of,
or result in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or both), any
contractual obligation of such Loan Party; or (c) result in the creation or
imposition of any lien (or the obligation to create or impose any lien) upon any
property, asset or revenue of such Loan Party.  The execution and delivery of
this Agreement, does not violate any provision of the Indenture and shall not
result in the occurrence of an Event of Default under the Indenture.

          4.5  Approvals.  No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person (including, without limitation, the shareholders of any Person) is
required in connection with the execution and delivery of the Credit Documents
executed by the Loan Parties or the performance or consummation of the
transactions contemplated thereby, except for those which have been made or
obtained and are in full force and effect.

          4.6  No Violation or Default.  No Loan Party is in violation of or in
default with respect to (a) any Requirement of Law applicable to such Loan Party
or (b) any contractual obligation of such Loan Party (nor is there any waiver in
effect which, if not in effect, would result in such a violation or default),
where, in each case, such violation or default is reasonably likely to have a
Material Adverse Effect.

          4.7  Name; Trade Names and Styles.  The name of Borrower set forth in
the heading to this Agreement is its correct name.  Set forth on the Schedule
are all prior names of Borrower and all of Borrower's present and prior trade
names.  Borrower shall give Lender reasonably prompt written notice of any
change in its name or if it begins doing business under any other name.
Borrower has complied, and will in the future comply, with all laws relating to
the conduct of business under a fictitious  business name.

          4.8  Other Rights.  Each Loan Party owns, licenses or otherwise has
the full right to use, under validly existing agreements, all material licenses,
trademarks, trade names and all rights with respect thereto, which are required
to conduct their businesses as now conducted.

          4.9  Place of Business.  The address set forth in the heading to this
Agreement is Borrower's chief executive office.  Borrower will give Lender
reasonably prompt written notice of the opening of any additional place of
business or if it changes its chief executive office.

          4.10 Title to Assets.  Borrower owns and has good and marketable
title, or a valid leasehold interest in, all of its properties and assets as
reflected in the most recent financial statements delivered to Lender (except
those assets and properties disposed of in the ordinary course of business or
otherwise in compliance with the Indenture since the date of such financial
statements) and all respective assets and properties acquired by Borrower since
such date (except those disposed of in the ordinary course of business or
otherwise in compliance with the Indenture).  Such assets and properties are
subject to no Lien, except for Permitted Liens.

                                      -5-
<PAGE>

Borrower has complied with all material obligations under all material leases to
which it is a party and enjoys peaceful and undisturbed possession under such
leases.

          4.11 Books and Records.  Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.

          4.12 Litigation.  Except as disclosed and set forth on the Schedule,
there is no claim, suit, litigation, proceeding or investigation pending or (to
best of Borrower's knowledge) threatened by or against or affecting Borrower in
any court or before any Governmental Authority (or any basis therefor known to
Borrower) which is reasonably likely to result, either separately or in the
aggregate, in (a) any Material Adverse Effect or (b) a Material Adverse Effect
on the ability of Borrower to pay or perform the Obligations in accordance with
the terms of this Agreement and the other Credit Documents or the rights and
remedies of Lender under this Agreement, the other Credit Documents or any
related document, instrument or agreement.  Borrower will use its reasonable
best efforts to promptly inform Lender in writing of any material claim,
proceeding or litigation in the future instituted by or against Borrower
involving any claim.

          4.13 Financial Condition, Statements and Reports.  All financial
statements now or in the future delivered to Lender have been, and will be,
prepared in conformity with generally accepted accounting principles and now and
in the future completely and accurately reflect the financial condition of
Borrower, at the times and for the periods therein stated.  Between the last
date covered by any such financial statement provided to Lender and the date
hereof; there has been no Material Adverse Effect.

          4.14 Tax Returns and Payments; Pension Contributions.  Borrower has
timely filed, and will timely file, all tax returns and reports required by
foreign, federal, state and local law, and Borrower has timely paid, and will
timely pay, all foreign, federal, state and local taxes, assessments, deposits
and contributions now or in the future owed by Borrower.  Borrower may, however,
defer payment of any contested taxes, provided that Borrower in good faith
contests Borrower's obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted.  Borrower is unaware of any
claims or adjustments proposed for any of Borrower's prior tax years which could
result in additional taxes becoming due and payable  by Borrower.  Borrower has
paid, and shall continue to pay all amounts necessary to fund all present and
future pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not and will not withdraw from participation
in, permit partial or complete termination of, or permit the occurrence of any
other event with respect to, any such plan which could result in any material
liability of Borrower, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other Governmental Authority.

          4.15 Compliance with Law.  Borrower has complied, and will comply, in
all material respects, with all provisions of all foreign, federal, state and
local laws and regulations relating to Borrower, including, but not limited to,
those relating to Borrower's ownership of real or personal property, the conduct
and licensing of Borrower's business, and all environmental matters.

          4.16 No Material Adverse Effect.  No event has occurred and no
condition exists which is reasonably likely to have a Material Adverse Effect.

          4.17 Subsidiaries.  The Schedule sets forth each of Borrower's
majority owned subsidiaries, each such subsidiary's jurisdiction of organization
and the number of shares and percentages of shares of each such class owned
directly or indirectly by Borrower.

                                      -6-
<PAGE>

          4.18 Accuracy of Information Furnished.  The Credit Documents and the
other certificates, statements and information (excluding projections) furnished
by each Loan Party in connection with the Credit Documents and the transactions
contemplated thereby, taken as a whole, do not contain any untrue statement of a
material fact.  All projections furnished by Borrower in connection with this
Agreement and the transactions contemplated thereby have been based upon
reasonable assumptions and represent, as of their respective dates of
presentations, Borrower's reasonable estimates of the future performance of
Borrower.

          4.19 Use of Proceeds.  All proceeds of all Advances shall be used
solely for lawful business purposes and in accordance with Subsection 1.1(e).

5.   ADDITIONAL DUTIES OF THE BORROWER.

          5.1  Insurance.  Borrower shall at all times, and shall cause each
other Loan Party at all times to, insure all of the tangible personal property
assets and carry such other business insurance, in such form and amounts as are
ordinarily carried by other owners in similar businesses conducted in the
locations where Borrower's business is conducted on the date hereof.

          5.2  Reports.  Borrower, at its expense, shall provide Lender with the
written reports set forth on the Schedule, and such other written reports with
respect to Borrower and the other Loan Parties on a consolidated basis
(including budgets, sales projections, operating plans and other financial
documentation), as Lender shall from time to time reasonably specify.

          5.3  Access to Books and Records.  At reasonable times, and five (5)
Business Day's notice, Lender, or its agents, shall have the right to audit and
copy Borrower's and each other Loan Party's books and records.  Lender shall
take reasonable steps to keep confidential all information obtained in any such
inspection or audit, but Lender shall have the right to disclose any such
information to its auditors, regulatory agencies, and attorneys, and pursuant to
any subpoena or other legal process.

          5.4  Intentionally omitted.

          5.5  Negative Covenants.  Without Lender's prior written consent,
Borrower shall not do, and shall not permit any other Loan Party to (a) pay
total compensation (or make any loans or advances), including salaries, fees,
bonuses, commissions, and all other payments, whether directly or indirectly, in
money or otherwise, to Borrower's executives, officers and directors (or any
relative thereof) in an amount in excess of the amount set forth on the
Schedule; (b) violate or fail to comply with any of the covenants contained in
the Indenture as in existence on the date hereof or as modified with the consent
of Lender; provided, however, that (i) the references to "Holders of the Notes"
           --------  -------
or "Holder of a Note", each as used and defined in the Indenture, shall be
deemed to be references to the Lender, (ii) references to the "Trustee", as used
and defined in the Indenture, shall be deemed to be references to the Lender,
(iii) references to the "Indenture", as used and defined in the Indenture, shall
be deemed to be references to this Agreement, (iv) references to the "Company",
as used and defined in the Indenture, shall be deemed to be references to
Borrower, (v) references to the "Pledge Agreement", as used and defined in the
Indenture, shall be ignored, and (vi) references to the "Notes", as used and
defined in the Indenture, shall be deemed to be references to the Notes as used
and defined in this Agreement; provided further that all other similar terms
                               -------- -------
used and defined in the Indenture that have a meaning similar to terms used and
defined in this Agreement shall be deemed to be modified such that the
interpretation of such covenants are consistent in both the Indenture and this
Agreement; or (c) amend the Indenture without the prior written consent of
Lender; provided, however, that the Borrower shall be permitted to amend the
        --------  --------
Indenture as contemplated by the Merger Agreement.

                                      -7-
<PAGE>

          5.6  Indemnity.  Borrower hereby agrees to indemnify Lender and hold
Lender harmless from and against any and all claims, debts, liabilities,
demands, obligations, actions, causes of action, penalties, costs and expenses
(including attorneys' fees), of every nature, character and description, which
Lender may sustain or incur based upon or arising out of any of the Obligations,
any actual or alleged failure to collect and pay over any Taxes relating to
Borrower or its employees, any relationship between Lender and Borrower pursuant
to this Agreement, or any other matter, cause or thing whatsoever occurred,
done, omitted or suffered to be done by Lender relating to Borrower or the
Obligations (except any such amounts sustained or incurred as the result of the
gross negligence or willful misconduct of Lender or any of its directors,
officers, employees, agents, attorneys, or any other person affiliated with or
representing Lender).  Notwithstanding any provision in this Agreement to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination of this Agreement and shall for all purposes continue in full force
and effect.

6.   TERM.

          6.1  Maturity Date.  This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the "Maturity Date"), subject to
                                              -------------
Section 6.2 below.

          6.2  Payment of Obligations.  On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Notwithstanding any termination of this Agreement, the Subsidiary Guarantees and
all of the terms and provisions of this Agreement shall continue in full force
and effect until all Obligations have been paid and performed in full.  No
termination shall in any way affect or impair any right or remedy of Lender, nor
shall any such termination relieve Borrower of any Obligation to Lender, until
all of the Obligations have been paid and performed in full.

7.   EVENTS OF DEFAULT AND REMEDIES.

          7.1  Events of Default.  The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement, and Borrower shall
                     ----------------
give Lender immediate written notice thereof:  (a) Borrower shall (i) fail to
pay when due any principal of any Advance or (ii) fail to pay within five (5)
Business Days after the same becomes due, any interest, fees or other amount
required under the terms of this Agreement or any of the other Credit Documents;
(b) the total Advances outstanding at any time shall exceed the Commitment; (c)
Borrower or any other Loan Party shall fail to comply with any of the financial
covenants (if any) set forth on the Schedule or shall fail to perform any other
non-monetary  Obligation set forth in this Agreement or any other Credit
Document which by its nature cannot be cured; (d) except as otherwise provided
in Section (k) below, Borrower or any other Loan Party shall fail to perform any
other non-monetary Obligation set forth in this Agreement or any other Credit
Document, which failure is not cured within ten (10) Business Days after receipt
by Borrower of written notice thereof; (e) any representation, warranty,
certificate, information or other statement (financial or otherwise) made or
furnished by or on behalf of Borrower or any other Loan Party to lender in or in
connection with this Agreement or any of the other Credit Documents, or as an
inducement to Lender to enter into this Agreement shall be false, incorrect,
incomplete or misleading in any material respect when made or furnished; (f)(i)
Borrower or any other Loan Party shall fail to make any payment on account of
any debt of such Person (other than the Obligations but

                                      -8-
<PAGE>

including obligations, if any, under any Indenture Note) when due (whether at
scheduled maturity, by required prepayment, upon acceleration or otherwise) and
such failure shall continue beyond any period of grace provided with respect
thereto, if the amount of such debt exceeds $1,500,000 or the effect of such
failure is to cause, or permit the holder or holders thereof to cause, debt of
such Loan Party (other than the Obligations but including obligations, if any,
under any Indenture Note). In an aggregate amount exceeding $1,500,000 to become
redeemable, due or otherwise payable (whether at scheduled maturity, by required
prepayment, upon acceleration or otherwise) or (ii) Borrower or any other Loan
Party shall otherwise fail to observe or perform any agreement, term or
condition contained in any agreement or instrument relating to any debt of such
Person (other than the Obligations but including obligations, if any, under any
Indenture Note), or any other event shall occur or condition shall exist, if the
effect of such failure, event or condition is to cause, or permit the holder or
holders thereof to cause, debt of Borrower and/or such other Loan Party (other
than the Obligations but including obligations, if any, under any Indenture
Note) in an aggregate amount exceeding $1,500,000 to become redeemable, due or
otherwise payable (whether at scheduled maturity, by required prepayment, upon
acceleration or otherwise); (g) dissolution, termination of existence,
insolvency or business failure of Borrower or any other Loan Party, or
appointment of a receiver, trustee or custodian, for all or any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding by Borrower or any other Loan Party under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect;
(h) commencement of any proceeding against Borrower or any other Loan Party
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
the future in effect, which is not cured by the dismissal thereof within thirty
(30) days after the date commenced; (i) revocation or termination of, or
limitation or denial of liability under, any Credit Document by any Loan Party;
(j) any Loan Party shall generally not pay its debts as they become due; or (k)
Borrower fails, for any reason, to maintain all material licenses necessary to
conduct its business. Lender may cease making any Advances hereunder during any
of the above cure periods, and thereafter if an Event of Default has occurred.

          7.2  Remedies.  Upon the occurrence of any Event of Default, and at
any time thereafter, Lender, at its option, and without notice or demand of any
kind (all of which are hereby expressly waived by Borrower), may do any one or
more of the following:  (a) cease making Advances or otherwise extending credit
to Borrower under this Agreement or any other document or agreement; and (b)
accelerate and declare all or any part of the Obligations to be immediately due,
payable, and performable, notwithstanding any deferred or installment payments
allowed by any instrument evidencing or relating to any Obligation.  All
reasonable attorneys' fees, expenses, costs, liabilities and obligations
incurred by Lender with respect to the foregoing shall be added to and become
part of the Obligations, shall be due on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations.
Without limiting any of Lender's rights and remedies, from and after the
occurrence of any Event of Default, the interest rate applicable to the
Obligations shall be increased such that the per annum rate shall be equal to
the Prime Rate plus twelve and one half percent (12.5%) (such increased rate,
the "Default Rate").
     ------------

          7.3  Rights to Set-Off.  Borrower hereby waives any and all rights
               -----------------
Borrower may have to withhold or set-off against any amount due from or payable
by Lender for any claim or payment to which Borrower may be entitled under the
Merger Agreement.  In the event that the Borrower has a claim for payment
against Lender or any Affiliate of Lender, Lender, in its sole discretion, shall
have the right to pay such claim by forgiving or canceling, in part or in whole,
the outstanding principal amount, accrued interest and any fees due and payable
to Lender under this Agreement and the Note.

                                      -9-
<PAGE>

8.   DEFINITIONS; OTHER TERMS.

          8.1  Definitions.  As used in this Agreement, the following terms have
               -----------
the following meanings:

          "Advance" has the meaning set forth in Subsection 1.1(a).
           -------

          "Affiliate" means, with respect to any Person, a relative, partner,
           ---------
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

          "Business Day" means a day other than a Saturday or a Sunday or day on
           ------------
which commercial banks in the state of New Jersey are closed for business.

          "Change of Control" shall mean the occurrence of any of the following:
           -----------------
(i) the acquisition after the date hereof by any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934
(as amended, the "Exchange Act")) of (A) beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Exchange Act) of twenty percent (20%) or more of the outstanding
Equity Securities of Borrower entitled to vote for members of the board of
directors, or (B) all or a material portion of the assets of Borrower; (ii) the
first day on which a majority of the members of the Board of Directors of
Borrower are not Continuing Directors (defined as any member of the Board of
Directors of Borrower who (A) was a member of such Board of Directors on the
date of the Loan Agreement or (B) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election); or (iii) the first day on which Borrower's existing long distance
telephone contract (or any replacement thereof) terminates and is not replaced
by a contract having no less favorable economic terms than Borrower's long
distance telephone contract in existence as of May 21, 1998, and a term
(assuming exercise of any renewal options) ending after the Maturity Date;
provided, however, that a Change of Control shall not be deemed to have occurred
--------  -------
upon the merger of Sphere Merger Corp. with and into the Borrower pursuant to
the terms and conditions of the Merger Agreement.

          "Closing Date" has the meaning set forth in the introductory paragraph
           ------------
hereto.

          "Commitment" has the meaning set forth in Subsection 1.1(a).
           ----------

          "Commitment Period" has the meaning set forth in Subsection 1.1(a).
           -----------------

          "Continuing Directors" means any member of the Board of Directors of
           --------------------
Borrower who (i) was a member of such Board of Directors on the date of this
Agreement or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or election.

          "Credit Documents" means and includes this Agreement, the Side Letter,
           ----------------
the Subsidiary Guarantees, the Note and all other documents, instruments and
agreements delivered by Borrower or any other Loan Party in connection with this
Agreement.

          "Default" means any event which with notice or passage of time or
           -------
both, would constitute an Event of Default.

          "Default Rate" has the meaning set forth in Section 7.2.
           ------------

                                      -10-
<PAGE>

          "Equity Securities" of any Person means (a) all common stock,
           -----------------
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person, including membership interests in limited
liability companies (regardless of how designated and whether or not voting or
non-voting), and (b) all warrants, options and other rights to acquire any of
the foregoing.

          "Event of Default" means any of the events set forth in Section 7.1 of
           ----------------
this Agreement.

          "Governmental Authority" means any domestic or foreign national, state
           ----------------------
or local government, any political subdivision thereof, any department, agency,
authority or bureau of any of the foregoing, or any other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

          "Indenture" means that certain Indenture dated as of May 21, 1998
           ---------
among Borrower, the subsidiary guarantors defined therein and Harris Trust and
Savings Bank, a true and correct copy of which is attached as Exhibit D.
                                                              ---------

          "Indenture Notes" means, collectively, those certain Series B 14 1/2%
           ---------------
Senior Notes Due 2008 issued pursuant to the Indenture.

          "Loan Parties" shall mean Borrower and each other Person that executes
           ------------
and delivers to Lender a Credit Document pursuant to this Agreement.

          "Material Adverse Effect" means a material adverse effect on the
           -----------------------
business, assets, operations or financial conditions of Borrower and its
subsidiaries, taken as a whole.

          "Maturity Date" has the meaning set forth on the Schedule.
           -------------

          "Merger Agreement" has the meaning set forth in Section 1.1.
           ----------------

          "Note" has the meaning set forth in Section 1.7.
           ----

          "Obligations" means all present and future Advances, advances, debts,
           -----------
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Lender, whether evidenced by this Agreement or any
note or other instrument or document, whether arising from an extension of
credit, loan, guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment and any
participation by Lender in Borrower's debts owing to others), absolute or
contingent, due or to become due.

          "Permitted Assignment" means a transfer or assignment of this
           --------------------
Agreement (whether by operation of law or otherwise) in connection with a merger
by Borrower with and into an entity or wholly owned subsidiary of an entity
whose long term debt is rated "A" or higher by Standard & Poor's Rating Services
or "A2" or higher by Moody's Investors Service, Inc.

          "Permitted Liens" means liens permitted under the Indenture as in
           ---------------
effect on the date hereof.

          "Person" means an individual, a partnership, a corporation (including
           ------
a business trust), a joint stock company, an unincorporated association, a
limited liability company, a joint venture, a trust or other entity or a
Governmental Authority.

                                      -11-
<PAGE>

          "Request for Advance" has the meaning set forth in Subsection 1.1(b).
           -------------------

          "Requirement of Law" applicable to any Person means (a) the articles
           ------------------
or certificate of incorporation and by-laws, partnership agreement or other
organizational or governing documents of such Person, (b) any rule of any
Governmental Authority applicable to such Person, (c) any license, permit,
approval or other authorization granted by any Governmental Authority to or for
the benefit of such Person or (d) any judgment, decision or determination of any
Governmental Authority or arbitrator, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject.

          "Side Letter" means that certain Side Letter, dated as of the date
           -----------
hereof, executed by Borrower in favor of Lender.

          "Subsidiary Guarantees" has the meaning set forth in Section 2.1.
           ---------------------

          "Taxes" has the meaning set forth in Section 1.8.
           -----

9.   GENERAL PROVISIONS.

          9.1  Calculation of Interest and Fees.  All calculations of interest
and fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 365 or 366 days, as
appropriate, for actual days elapsed.

          9.2  Notices.  Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower or Lender under this Agreement or the other Credit Documents shall be
in writing and faxed, mailed or delivered, if to Borrower, at the Borrower's
Address or if to Lender, at the address or facsimile number set forth below (or
to such other facsimile number or address for any party as indicated in any
notice given by that party to the other party).  All such notices and
communications shall be effective (a) when sent by an overnight courier service
of recognized standing, on the second Business Day following the deposit with
such service; (b) when mailed, first class postage prepaid and addressed as
aforesaid through the United States Postal Service, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when faxed, upon confirmation of
receipt:

     Lender:

     Verizon Investments, Inc.
     1717 Arch Street
     Philadelphia, PA 19103
     Attn:  Philip R. Marx, Esq.
     Telephone:  (215) 963-6660
     Facsimile:  (215) 963-9195

     with a copy to:

     Laura W. O'Connor
     1717 Arch Street
     47/th/ Floor
     Philadelphia, PA 19103
     Telephone:  (215) 963-6151
     Facsimile:  (215) 569-8207

                                      -12-
<PAGE>

     and

     Janet M. Garrity
     3900 Washington Street
     2/nd/ Floor
     Wilmington, DE  19802
     Telephone:  (302) 761-4210
     Facsimile:    (302) 761-4229

Each Request for Advance shall be given by Borrower to Lender's office located
at the address referred to above during Lender's normal business hours;
provided, however, that any such notice received by Lender after 12:00 p.m. East
--------  -------
Coast time on any Business Day shall be deemed received by Lender on the next
Business Day.  In any case where this Agreement authorizes notices, requests,
demands or other communications by Borrower to Lender to be made by telephone or
facsimile, Lender may conclusively presume that anyone purporting to be a person
designated in any incumbency certificate or other similar document received by
Lender is such a person.

          9.3  Severability.  Should any provision of this Agreement be held by
any court of competent jurisdiction to be void or unenforceable, such defect
shall not affect the remainder of this Agreement, which shall continue in full
force and effect.

          9.4  Integration.  This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and Lender and supersede
all prior and contemporaneous negotiations and oral representations and
agreements, all of which are merged and integrated in this Agreement.  There are
no oral understandings, representations or agreements between the parties which
are not set forth in this Agreement or in other written agreements signed by the
parties in connection herewith.

          9.5  Waivers.  The failure of Lender at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Lender shall not waive or
diminish any right of Lender later to demand and receive strict compliance
therewith.  Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar.  None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Lender shall be deemed to have been waived
by any act or knowledge of Lender or its agents or employees, but only by a
specific written waiver signed by an authorized officer of Lender and delivered
to Borrower.  Borrower waives demand, protest, notice of protest and notice of
default or dishonor, notice of payment and nonpayment, unless expressly required
by this Agreement.

          9.6  Amendment.  The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Lender.

          9.7  Time of Essence.  Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.

                                      -13-
<PAGE>

          9.8  Attorneys Fees and Costs.  Borrower shall reimburse Lender for
all reasonable attorneys' fees and all other reasonable costs incurred by Lender
pursuant to, or in connection with, or relating to this Agreement (whether or
not a lawsuit is filed), including, but not limited to, any reasonable
attorneys' fees and costs Lender incurs in order to do the following:  prepare
and negotiate this Agreement and the documents relating to this Agreement;
obtain legal advice in connection with this Agreement or Borrower; commence,
intervene in, or defend any action or proceeding; initiate any complaint to be
relieved of the automatic stay in bankruptcy; file or prosecute any bankruptcy
claim or third party claim; and otherwise represent Lender in any litigation
relating to Borrower.  All attorneys' fees and costs to which Lender may be
entitled pursuant to this Section shall immediately become part of Borrower's
Obligations and shall be due on demand.

          9.9  Benefit of Agreement.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Lender; provided,
                                                                 --------
however, that Borrower may only assign or transfer any of its rights under this
-------
Agreement pursuant to a Permitted Assignment or upon the prior written consent
of Lender, which such consent shall not be unreasonably withheld, and any other
prohibited assignment or transfer of this Agreement shall be void.  No consent
by Lender to any assignment shall release Borrower from its liability for the
Obligations.  Lender may, at any time, sell and assign, or grant participating
interests in, to any other Person not a direct competitor of Borrower, all or a
portion of its rights and obligations under this Agreement and the other Credit
Documents.  Borrower agrees that it shall perform such acts, and provide such
information, as Lender may reasonably request to assist Lender with any such
assignment or participation.

          9.10 Limitation of Actions.  Any claim or cause of action by Borrower
against Lender, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Agreement, or any other
present or future document or agreement, or any other transaction contemplated
hereby or thereby or relating hereto or thereto, or any other matter, cause or
thing whatsoever, occurred, done, omitted or suffered to be done by Lender, its
directors, officers, employees, agents, accountants or attorneys, shall be
barred unless asserted by Borrower by the commencement of an action or
proceeding in a court of competent jurisdiction by the filing of a complaint
within one year after the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based, and the service of a
summons and complaint on an officer of Lender, or on any other person authorized
to accept service on behalf of Lender, within thirty (30) days thereafter.
Borrower agrees that such one-year period is a reasonable and sufficient time
for Borrower to investigate and act upon any such claim or cause of action.  The
one-year period provided herein shall not be waived, tolled, or extended except
by the written consent of Lender in its sole discretion.  This provision shall
survive any termination of this Agreement or any other present or future
agreement.

          9.11 Paragraph Headings; Construction.  Paragraph headings are only
used in this Agreement for convenience.  Borrower and Lender acknowledge that
the headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement.  The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)".  This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Lender or Borrower under any rule
of construction or otherwise.

          9.12 Governing Law; Jurisdiction; Venue.  This Agreement and all acts
and transactions hereunder and all rights and obligations of Lender and Borrower
shall be governed by the laws of the State of New York.  As a material part of
the consideration to Lender to enter into this Agreement, Borrower (i) agrees
that all actions and proceedings relating directly or

                                      -14-
<PAGE>

indirectly to this Agreement shall, at Lender's option, be litigated in courts
located within New York, and that the exclusive venue therefor shall be New York
County; (ii) consents to the jurisdiction and venue of any such court and
consents to service of process in any such action or proceeding by personal
delivery or any other method permitted by law; and (iii) waives any and all
rights Borrower may have to object to the jurisdiction of any such court, or to
transfer or change the venue of any such action or proceeding.

          9.13 MUTUAL WAIVER OF JURY TRIAL.  BORROWER AND LENDER EACH HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN LENDER AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF LENDER OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN
ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

                                      Borrower:

                                          ONEPOINT COMMUNICATIONS CORP.

                                          By____________________________________
                                             President, Vice President or Chief
                                             Financial Officer

                                          By____________________________________
                                             Secretary or Assistant Secretary

                                      Lender:

                                          VERIZON INVESTMENTS, INC.

                                          By____________________________________
                                          Name__________________________________
                                          Title_________________________________

                                      -15-
<PAGE>

                           Verizon Investments, Inc.

                                  Schedule to

                                Loan Agreement

Borrower: OnePoint Communications Corp.

Address:  Two Conway Park
          150 Field Drive, Suite 300
          Lake Forest, Illinois 60045
          Phone No. (847) 582-8710
          Fax No. (847) 5828801

Date:     November 17, 2000 (the "Closing Date")

This Schedule forms an integral part of the Loan of even date herewith between
VERIZON INVESTMENTS, INC. ("Lender") and the above-named borrower
                            ------
("Borrower").
  --------

1.  CREDIT FACILITY

Commitment Period
(Subsection 1.1(a)):     Closing Date until December 31, 2000.

(Subsection 1.1(a)):     $25,000,000 shall be available to Borrower from time to
                         time up to December 31, 2000, which may be borrowed in
                         three tranches, in the following amounts and on the
                         following dates :

                         (1) Initial Tranche: The Initial Tranche shall be for
                         $8,000,000 and may be drawn on or after the 15th
                         calendar day following the consummation of the Equity
                         Funding Obligation.

                         (2) Second Tranche: The Second Tranche shall be for
                         $8,000,000 and may be drawn on or after the date that
                         is the 10/th/ calendar day after the date of funding of
                         the Initial Tranche.

                         (3) Third Tranche: The Third Tranche shall be for
                         $9,000,000 and may be drawn on or after the date that
                         is the 10/th/ calendar day after the date of funding of
                         the Second Tranche.

Maximum number
of Advances
(Subsection 1.1(b)):     Three (3).

Interest Rate
(Subsection 1.1(e)):     A per annum rate equal to the "Prime Rate" in effect
                                                        ----------
                         from time to time, plus 7.0%; provided, however, that
                                                       --------  -------
                         ninety (90) days after the occurrence of a Change of
                         Control, the rate of interest payable by Borrower
                         hereunder shall be increased to a per annum rate equal
                         to the "Prime Rate" in effect from time to time, plus
                                 ----------
                         12.5%. "Prime

                                      S-1
<PAGE>

                         Rate" shall mean, with respect to any Advance, the rate
                         of interest specified as the "prime rate" in The Wall
                                                                      --------
                         Street Journal. The, Prime Rate will change, at the
                         ---------------
                         option of Lender, on (i) each date on which the Prime
                         Rate changes or (ii) the first business day of each
                         calendar month that such Advance is outstanding or, if
                         The Wall Street Journal is not published on such day or
                         such rate is not specified therein on such day for any
                         reason, the rate of interest specified as the Prime
                         Rate in the most recent issue of The Wall Street
                                                          ---------------
                         Journal specifying the Prime Rate prior to such day.)
                         -------

Interest Payments
(Subsection 1.1(c)):     Borrower shall pay interest on the first day of each
                         calendar month, commencing with the first calendar
                         month after the date of each Advance.

Commitment
Reductions
(Subsection 1.2):        In the amount of One Hundred Thousand Dollars
                         ($100,000) or an integral multiple of One Hundred
                         Thousand Dollars ($100,000) in excess thereof.

Fees
(Section 1.3):           (i)   On the date Borrower receives each Advance,
                         Borrower shall pay to Lender additional origination
                         fees equal to three percent (3.0%) of the amount of
                         such Advance. Such fees may be borrowed by Borrower as
                         a portion of each such Advance.

                         (ii)  Borrower shall pay an administrative fee for the
                         period beginning on the Closing Date and ending on the
                         Maturity Date equal to $1,500 per year. Borrower shall
                         pay the administrative fee in arrears on the first day
                         of each calendar quarter commencing on September 1,
                         2000.

                         (iii) Borrower shall pay a commitment fee on the daily
                         average unutilized portion of the Commitment equal to
                         two percent (2.0%) per annum for the period beginning
                         on the Closing Date and ending on the last day of the
                         Commitment Period. Borrower shall pay the commitment
                         fee in arrears on the first day of each calendar
                         quarter commencing on the first calendar quarter after
                         the Closing Date.

2. CONDITIONS PRECEDENT
   (Section 3.1):
                         To induce the Lender to enter into this Agreement,
                         Lender shall have received the following, each in form
                         and substance satisfactory to Lender:

                              (a) The Credit Documents, duly executed by Lender
                                  and each Loan Party.

                              (b) Secretary Certificates and Incumbency
                                  Certificates of each Loan Party, dated the
                                  Closing Date, certifying that none of its
                                  organizational documents have been amended or
                                  otherwise changed since August 24, 2000,

                                      S-2
<PAGE>

                                  and attaching thereto (i) the incumbency,
                                  signatures and authority of the officers of
                                  the Loan Party authorized to execute, deliver
                                  and perform the Credit Documents and (ii) a
                                  true and correct copy of the resolutions of
                                  such Loan Party as in effect on the Closing
                                  Date

                              (c) Favorable written opinion from counsel for the
                                  Loan Parties, dated the Closing Date,
                                  addressed to Lender, covering such legal
                                  matters as Lender may reasonably request
                                  (including without limitation that the
                                  execution, deliver and performance by Borrower
                                  of the Credit Documents does not conflict with
                                  the Indenture, subject to factual assumptions)
                                  and otherwise in form and substance reasonably
                                  satisfactory to Lender.

                              (d) Certificates of Good Standing (or comparable
                                  certificates) for each Loan Party, certified
                                  as of a recent date prior to the Closing Date
                                  by the Secretaries of State (or comparable
                                  official) of the states in which each Loan
                                  Party is organized.

                              (e) Evidence that the Equity Funding Obligation
                                  has been consummated.

                              (f) Such other instruments, agreements,
                                  certificates and other documents as Lender may
                                  reasonably request.

3. REPRESENTATIONS, WAS AND COVENANTS OF BORROWER
   (Section 4.1):

Prior Names of
Borrower
(Section 4.7):                None.

Prior Trade
Names of Borrower
(Section 4.7):                None.

Existing Trade
Names of Borrower
(Section 4.7):                OnePoint Communications.

Material Adverse
Litigation (Section 4.12):    None.

Subsidiaries (Section 4.17):

<TABLE>
<CAPTION>
                                             Jurisdiction of   Issued           Shares
Name of Subsidiary                           Organization      Shares/Units     Held by OnePoint
------------------                           ------------      ------------     ----------------
<S>                                         <C>                <C>              <C>
OnePoint Communications - Colorado, LLC         Delaware                  100                  100
</TABLE>

                                      S-3
<PAGE>

<TABLE>
<S>                                         <C>                <C>              <C>
OnePoint Communications-Illinois, LLC           Delaware              100                100
OnePoint Communications-Georgia, LLC            Delaware              100                100
OnePoint Communications-Holdings, LC            Delaware              100                100
Mid-Atlantic RMTS Holdings, LLC/1/              Delaware              10                 9.9
VTC-RMTS-DC, LLC/2/                             Delaware             28.710            25.265
OnePoint Services, LLC                          Delaware             Common            25.265
OnePoint Services, LLC                          Delaware          6,600,700          4,370,700
                                                                  Preferred:
                                                                  1,629,300          1,629,300

RCP Communications, Inc./3/                     Arizona                 2,000          2,000
</TABLE>

4. Reporting
   (Section 5.2):        Borrower shall provide Lender with the following:

                              1.   At least every 30 calendar days commencing on
                                   the Closing Date and continuing during the
                                   Commitment Period, historical Financial
                                   Statements (as defined in Section 3.2 of the
                                   Agreement) for the period commencing at the
                                   beginning of the then current fiscal year and
                                   ending on the last day of the preceding month
                                   and projected financial results for the
                                   remaining portion of the then current fiscal
                                   year. Financial Statements provided hereunder
                                   shall be in form and substance substantially
                                   similar to those provided to Borrower's board
                                   of directors and executive officers.

                              2.   Within 90 days after each year-end,
                                   consolidated and consolidating financial
                                   statements of Borrower and its subsidiaries
                                   audited by an independent public accounting
                                   firm acceptable to Lender.

                              3.   Within 45 days after each quarter-end,
                                   quarterly unaudited consolidated and
                                   consolidating financial statements of
                                   Borrower and its subsidiaries.

                              4.   Within 30 days prior to the commencement of
                                   each fiscal year, a budget and business plan
                                   for Borrower for such fiscal year.

_______________
/1/  OnePoint interests held by OnePoint Communications Holdings, LLC.
/2/  OnePoint interests held by OnePoint Communications Holdings, LLC and Mid-
     Atlantic RMTS Holdings, LLC
/3/  OnePoint interests held by OnePoint Services, LLC.

                                      S-4
<PAGE>

                              5.   Contemporaneously with the delivery of the
                                   quarterly and year-end financial statements
                                   compliance certificate of the Borrower which
                                   states that (i) no Event of Default has
                                   occurred and is continuing and (ii) Borrower
                                   is in compliance with each of the covenants
                                   set forth in the Credit Documents (the
                                   "Compliance Certificate").
                                    -----------------------

                              6.   Such other instruments, agreements,
                                   certificates, opinions, statements, documents
                                   and information relating to the operations or
                                   condition (financial or otherwise) of
                                   Borrower or its subsidiaries, and compliance
                                   by Borrower with the terms of this Agreement
                                   and the other Credit Documents as Lender may
                                   from time to time reasonably request.

5. COVENANTS
   (Section 5.5):
                              1.   Without Lender's prior written consent,
                                   Borrower shall not pay total compensation (or
                                   make any loans or advances), including
                                   salaries, withdrawals, fees, bonuses,
                                   commissions, drawing accounts and other
                                   payments, whether directly or indirectly, in
                                   money or otherwise, during any fiscal year to
                                   all of Borrower's executives, officers and
                                   directors (or any relative thereof) as a
                                   group in excess of market rates for similarly
                                   situated executives, officers and directors.

6. TERM
   (Section 6.1)         The "Maturity Date" shall be June 2, 2008.

Borrower:                                  Lender:

ONEPOINT COMMUNICATIONS CORP.              VERIZON INVESTMENTS, INC.

By___________________________________      By___________________________________
  President, Vice President or Chief       Name
  Financial Officer                        Title

By___________________________________
  Secretary or Assistant Secretary

                                      S-5
<PAGE>

                                   EXHIBIT A
                                   ---------

                              REQUEST FOR ADVANCE
                              -------------------

                       ______________,20___[insert date]

To: Verizon Investments, Inc. ( Fax No. __________________)

Reference is made to the Loan Agreement (the "Loan Agreement") between OnePoint
Communications Corp. ("Borrower") and Verizon Investments, Inc. ("Lender") dated
as of November __, 2000.  Capitalized terms used herein shall have the same
meaning given to them in the Loan Agreement.

In accordance with Subsection 1.1(b) of the Loan Agreement, Borrower hereby
requests the following Advance:

     Request Number:                                                 ___________
     Business Day of Advance (at least 5 Business Days from
     the date hereof):                                               ___________
     Use of proceeds:

        A.   Amount to finance Borrower's acquisition of
             network equipment:                                      $
                                                                     ___________
        B.   Amount to satisfy Borrower's existing accounts payable
             owed to Lender and/or any Affiliate:                    $
                                                                     ___________
        C.   Amount for working capital purposes:                    $
                                                                     ___________
        D.   Amount for other purposes:                              $
                                                                     ___________
        E.   Total amount of Advance requested (A + B + C + D)       $
                                                                     ___________

The funds related to the Advance should be remitted by wire transfer based on
the following instructions:

     Bank:                      ________________________________________________

     Bank city, State:          ________________________________________________

     Bank ABA or routing number ________________________________________________

     Account name:              ________________________________________________

     Account number             ________________________________________________

     Reference:                 ________________________________________________

In connection with the proposed Advance, Borrower hereby certifies that as of
the date hereof:

     (i)   Borrower does not have $3,000,000 of unrestricted cash on hand;

     (ii)  the representations and warranties of Borrower and the other Loan
Parties set forth in Section 4 of the Loan Agreement and in the other Credit
Documents are true and correct in all material respects  as of the date hereof
(except for representations and warranties expressly made as of a specified
date, which shall be true as of such date);

     (iii) no Default has occurred and is continuing or will result from such
Advance;

                                      A-1
<PAGE>

     (iv)  all of the Credit Documents are in full force and effect; and

     (v)   Borrower has performed in all respects all obligations and covenants
under the Merger Agreement required to be performed by it as of the date hereof.

                                             ONEPOINT COMMUNICATIONS CORP.

                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________

                                      A-2
<PAGE>

                                PROMISSORY NOTE
                                ---------------

$25,000,000                                          Philadelphia, Pennsylvania
                                                              November 17, 2000

          FOR VALUE RECEIVED, ONEPOINT COMMUNICATIONS CORP., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of VERIZON
              --------
INVESTMENTS, INC. ("Lender"), the principal sum of TWENTY-FIVE MILLION DOLLARS
                    ------
($25,000,000) or such lesser amount as shall equal the aggregate outstanding
principal balance of the Advances made by Lender to Borrower pursuant to the
Loan Agreement of even date herewith by and between Lender and Borrower (as
amended from time to time, the "Loan Agreement"), on or before the Maturity Date
                                --------------
specified in the Loan Agreement; and to pay interest on said sum, or such lesser
amount, at the rates and on the dates provided in the Loan Agreement.

          Borrower shall make all payments hereunder to Lender as indicated in
the Loan Agreement, in lawful money of the United States and in same day or
immediately available funds.

          Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this note the date and amount of each Advance and of each payment or
prepayment of principal made by Borrower and agrees that all such notations
shall constitute prima facie evidence of the matters noted: provided, however,
                                                            --------  -------
that the failure of Lender to make any such notation shall not affect Borrower's
obligations hereunder.

          Borrower hereby waives any and all rights Borrower may have to
withhold or set-off against any amount due from or payable by Lender for any
claim or payment to which Borrower may be entitled under the Merger Agreement.
In the event that the Borrower has a claim for payment against Lender or any
Affiliate of Lender, Lender, in its sole discretion, shall have the right to pay
such claim by forgiving or canceling, in part or in whole, the outstanding
principal amount, accrued interest and any fees due and payable to Lender under
this Note.

          This note is the Note referred to in the Loan Agreement.  This note is
subject to the terms of the Loan Agreement, including the rights of prepayment
and the rights of acceleration of maturity set forth therein. Terms used herein
have the meanings assigned to those terms in the Loan Agreement, unless
otherwise defined herein.

          This note shall be governed by and construed in accordance with the
laws of the State of New York.

                                   ONEPOINT COMMUNICATIONS CORP.

                                   By:___________________________________
                                   Name:_________________________________
                                   Title:________________________________
<PAGE>

                        LOANS AND PAYMENTS OF PRINCIPAL
                        -------------------------------

<TABLE>
<CAPTION>
             Type of          Amount of        Interest        Amount of Principal             Unpaid               Notation
    Date       Loan             Loan            Period           Paid or Prepaid          Principal Balance         Made By
-----------------------------------------------------------------------------------------------------------------------------
<S>          <C>              <C>              <C>             <C>                        <C>                       <C>

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>

                                   EXHIBIT C
                                   ---------

                          FORM OF SUBSIDIARY GUARANTY
                          ---------------------------

                                    GUARANTY

THIS GUARANTY, dated as of November 17, 2000, is executed by [NAME OF SUBSIDIARY
GUARANTOR] ("Guarantor"), in favor of Verizon Investments, Inc. ("Lender").
             ---------                                            ------

                                    RECITALS
                                    --------

     (a)  Pursuant to that certain Loan Agreement dated as of November 17, 2000
(as amended, restated or otherwise modified from time to time, the "Loan
                                                                    ----
Agreement"), between OnePoint Communications Corp., a Delaware corporation
---------
("Borrower") and Lender, Lender has agreed to extend certain credit facilities
----------
to Borrower upon the terms and subject to the conditions set forth therein.

     (b)  Guarantor is a direct or indirect subsidiary of Borrower and Guarantor
expects to derive substantial benefit from the credit facilities to be made
available to Borrower pursuant to the Loan Agreement.

     (c)  Lender's obligation to extend the credit facilities to borrower under
the Loan Agreement are subject, among other conditions, to receipt by Lender of
this Guaranty, duly executed by Guarantor.

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees with Lender as follows:

1.   DEFINITIONS AND INTERPRETATION.

     (a)  Definitions.  When used in this Guaranty, the following terms shall
have the following respective meanings:

          "Adjusted Net Worth" shall mean, with respect to Guarantor at any
           ------------------
time, the remainder of (a) the fair value of the assets of Guarantor as of such
dated, minus (b) the fair value of the liabilities of Guarantor as of such date
(excluding, however, any liability of Guarantor hereunder), such assets and
liabilities to be determined in accordance with any state or federal fraudulent
conveyance or transfer law which is applicable to this Guaranty.

          "Borrower" shall have the meaning given to that term in Recital A
           --------                                               ---------
hereof.

          "Disallowed Post-Commencement Interest and Expenses" shall mean
           --------------------------------------------------
interest computed at the rate provided for in the Loan Agreement and claims for
reimbursement, costs, expenses or indemnities under the terms of any of the
Credit Documents accruing or claimed at any time after the commencement of any
Insolvency Proceeding, if the claim for such interest, reimbursement, costs,
expenses or indemnities is not allowable, allowed or enforceable against
Borrower in such Insolvency Proceeding.

                                      C-1
<PAGE>

     "Guaranteed Obligation" shall mean all present and future Advances,
      ---------------------
advances, debts, liabilities, obligations, guaranties, covenants, duties and
indebtedness at any time owing by Borrower to Lender, pursuant to the Loan
Agreement or any other Credit Document, whether absolute or contingent, due or
to become due.

     "Guarantor" shall have the meaning given to that term in the introductory
      ---------                                                   ------------
paragraph hereof.
---------

     "Insolvency Proceeding" shall mean any case or proceeding under the United
      ---------------------
States Bankruptcy code or any other similar law, rule or regulation of the
United States or any jurisdiction or any other action or proceeding for the
reorganization, liquidation, appointment of a receiver, rearrangement of debts,
marshalling of assets or similar action relating to Borrower or Guarantor, their
respective creditors or any substantial part of their respective assets, whether
or not any such case, proceeding or action is voluntary or involuntary.

     "Lender" shall have the meaning given to that term in the introductory
      ------                                                   ------------
paragraph hereof.
---------

     "Loan Agreement" shall have the meaning given to that term in Recital A
      --------------                                               ---------
hereof.

     "Material Adverse Effect" shall mean, with respect to the Guarantor, a
      -----------------------
material adverse effect on the business, assets, operations or financial
condition of Guarantor.

     "Maximum Guaranty Amount" shall mean, at any time, the greatest of (a)
      -----------------------
ninety-five percent (95%) of the Adjusted Net Worth of Guarantor at such time,
(b) ninety-five percent (95%) of the Adjusted Net Worth of guarantor on the date
hereof and (c) the value derived by Guarantor from the Guaranteed Obligations
incurred at or prior to such time.

     Unless otherwise defined herein, all other capitalized terms used herein
and defined in the Loan Agreement shall have the respective meanings given to
those terms in the Loan Agreement.

     (b)  Other Interpretive Provisions.  The rules of construction set forth in
Paragraph 9 of the Loan Agreement shall, to the extent not inconsistent with the
---------------------------------
terms of this Guaranty, apply to this Guaranty and are hereby incorporated by
reference.  Guarantor acknowledges receipt of copies of the Loan Agreement and
the other Credit Documents.  Headings in this Guaranty are for convenience of
reference only and are not part of the substance hereof.  All terms defined in
this guaranty in the singular form shall have comparable meanings when used in
the plural form and vice versa.  References in this Guaranty to any document,
instrument or agreement (i) shall include all exhibits, schedules and other
attachments thereto, (ii) shall include all documents, instruments or agreements
issued or executed in replacement thereof and (iii) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
modified and supplemented from time to time and in effect at any given time.
References in this Guaranty to any statute or other law (A) shall include any
successor statute or law, (B) shall include all rules and regulations
promulgated under such statute or law (or any successor statute or law), and (C)
shall mean such statute or law (or successor statute or law) and such rules and
regulations, as amended, modified, codified or reenacted from time to time and
in effect at any given time.  The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Guaranty shall refer to this Guaranty
as a whole and not to any particular provision of this Guaranty.  The words
"include" and "including' and words of similar import when used in  this
Guaranty shall not be construed to be limiting or exclusive.

2.   GUARANTY.

     (a)  Payment Guaranty.  Guarantor unconditionally guarantees and promises
to pay and perform as and when due, whether at stated maturity, upon
acceleration or otherwise, any

                                      C-2
<PAGE>

and all of the Guaranteed Obligations. If any Insolvency Proceeding relating to
Borrower is commenced, Guarantor further unconditionally guarantees and promises
to pay and perform, upon the demand of Lender, any and all of the Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest and
Expenses) in accordance with the terms of the Credit Documents, whether or not
such obligations are then due and payable by Borrower and whether or not such
obligations are modified, reduced or discharged in such Insolvency Proceeding.
This Guaranty is a guaranty of payment and not of collection.

     (b)  Continuing Guaranty. This Guaranty is an irrevocable continuing
guaranty of the Guaranteed Obligations which shall continue in effect until all
obligations of Lender to extend credit to Borrower have terminated and all of
the Guaranteed Obligations have been fully, finally and indefeasibly paid. If
any payment on any Guaranteed Obligation is set aside, avoided or rescinded or
otherwise recovered from Lender, such recovered payment shall constitute a
Guaranteed Obligation hereunder and, if this Guaranty was previously released or
terminated, it automatically shall be fully reinstated, as if such payment was
never made.

     (c)  Independent Obligation.  The liability of Guarantor hereunder is
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against Guarantor irrespective of whether action is
brought against Borrower or any other guarantor of the Guaranteed Obligations or
whether Borrower or any other guarantor of the Guaranteed Obligations is joined
in any such action or actions.

     (d)  Fraudulent Transfer Limitation.  If, in any action to enforce this
Guaranty, any court of competent jurisdiction determines that enforcement
against Guarantor of the full amount of the Guaranteed Obligations is not lawful
under or would be subject to avoidance under Section 548 of the United States
Bankruptcy Code or any applicable provision of any comparable law of any state
or other jurisdiction, the liability of Guarantor under this Guaranty shall be
limited to the maximum amount lawful and not subject to such avoidance.

     (e)  Maximum Guaranty Amount. The liability of Guarantor under this
Guaranty shall not at any time exceed the Maximum guaranty Amount; provided,
                                                                   --------
however, that Lender may permit the Guaranteed Obligations to exceed the
-------
foregoing limitation without affecting Guarantor's liability hereunder.

     (f)  Termination. This Guaranty shall continue to be in full force and
effect and applicable to any guaranteed Obligations arising thereunder which
arise because prior payments of Guaranteed Obligations are rescinded or
otherwise required to be surrendered by Lender after receipt.

3.   REPRESENTATIONS AND WARRANTIES.

     Guarantor hereby represents and warrants to Lender as follows:

     (a)  Due Organization, Qualification, Etc. Guarantor is a limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and is duly qualified and in good standing in
each jurisdiction where the nature of its business or properties requires such
qualification, except where the failure to qualify could not have a Material
Adverse Effect.

     (b)  Authority. The execution, delivery and performance by Guarantor of
this Guaranty are within the power of Guarantor and have been duly authorized by
all necessary actions on the part of Guarantor.

                                      C-3
<PAGE>

     (c)  Enforceability.  This Guaranty has been duly executed and delivered by
Guarantor and constitutes a legal, valid and binding obligation of Guarantor,
enforceable against it in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general principals
of equity.

     (d)  Non-Contravention. The execution, delivery and performance by
Guarantor of this Guaranty and the performance and consummation of the
transactions contemplated hereby do not (i) violate any Requirement of Law
applicable to Guarantor, (ii) violate any provision of, or result in the breach
or the acceleration of, or entitle any other Person to accelerate (whether after
the giving of notice or lapse of time or both), any contractual obligation of
Guarantor or (iii) result in the creation of imposition of any lien (or the
obligation to create or impose any lien) upon any property, asset or revenue of
Guarantor.

     (e)  Approvals.  No consent, approval, order or authorization of, or
registration declaration or filing with, any Governmental Authority or other
Person (including, without limitation, the shareholders of any Person) is
required in connection with the execution, delivery and performance of this
Guaranty, except for those which have been made or obtained and are in full
force and effect.

     (f)  No Violation. Guarantor is not in violation of or in default with
respect to (a) any Requirement of Law applicable to Guarantor or (b) any
contractual obligation of Guarantor (nor is there any waiver in effect which, if
not in effect, would result in such a violation or default), where, in each
case, such violation or default is reasonably likely to have a Material Adverse
Effect.

     (g)  Litigation.  No claim, suit, litigation proceeding or investigation
pending or (to best of Guarantor's knowledge) threatened by or against or
affecting Guarantor in any court or before any Governmental Authority (or any
basis therefor known to Guarantor) which is (i) reasonably likely to result,
either separately or in the aggregate, in any Material Adverse Effect or (ii)
seeks to enjoin, either directly or indirectly, the execution, delivery or
performance of this Guaranty by Guarantor.

4.   AUTHORIZATIONS, WAIVERS, ETC.

     (a)  Authorizations. Guarantor authorizes Lender, in its discretion,
without notice to Guarantor, irrespective of any change in the financial
condition of Borrower, Guarantor or any other guarantor of the Guaranteed
Obligations since the date hereof, and without affecting or impairing in any way
the liability of Guarantor hereunder, from time to time to:

          (i)    Create new Guaranteed Obligations and renew, compromise,
extend, accelerate or otherwise change the time for payment or performance of,
or otherwise amend or modify the Credit Documents or change the terms of the
Guaranteed Obligations or any part thereof, including increase or decrease of
the rate of interest thereon;

          (ii)   Otherwise exercise any right or remedy it may have against
Borrower, Guarantor, any other guarantor of the Guaranteed Obligations or any
security;

          (iii)  Settle, compromise with, release or substitute any one or more
makers, endorsers or guarantors of the Guaranteed Obligations; and

          (iv)   Assign the Guaranteed Obligations, this Guaranty or the other
Credit Documents in whole or in part to the extent provided in the Loan
Agreement.

                                      C-4
<PAGE>

     (b)  Waivers.  Guarantor hereby waives:

          (i)    Any right to require Lender to (A) proceed against Borrower or
any other guarantor of the Guaranteed Obligations or (B) pursue any other remedy
in Lender's power whatsoever;

          (ii)   Any defense arising by reason of the application by Borrower of
the proceeds of any borrowing;

          (iii)  Any defense resulting from the absence, impairment or loss of
any right of reimbursement, subrogation, contribution or other right or remedy
of Guarantor against Borrower, any other guarantor of the Guaranteed
Obligations;

          (iv)   Any setoff or counterclaim of Borrower or any defense which
results from any disability or other defense of Borrower or the cessation or
stay of enforcement from any cause whatsoever of the liability of Borrower
(including, without limitation, the lack of validity or enforceability of any of
the Credit Documents);

          (v)    Any defense based upon any law, rule or regulation which
provides that the obligation of a surety must not be greater or more burdensome
than the obligation of the principal;

          (vi)   Until all obligations of Lender to extend credit to Borrower
have terminated and all of the Guaranteed Obligations have been fully, finally
and indefeasibly paid, any right of subrogation, reimbursement, indemnification
or contribution and other similar right to enforce any remedy which Lender or
any other Person now has or may hereafter have against Borrower on account of
the Guaranteed Obligations;

          (vii)  All presentments, demands for performance, notices of non-
performance, notices delivered under the Credit Documents, protests, notice of
dishonor, and notices of acceptance of this Guaranty and of the existence,
creation or incurring of new or additional Guaranteed Obligations;

          (viii) The benefit of any statute of limitations to the extent
permitted by law;

          (ix)   Any right to be informed by Lender of the financial condition
of Borrower or any other guarantor of the Guaranteed Obligations or any change
therein or any other circumstances bearing upon the risk of nonpayment or
nonperformance of the Guaranteed Obligations;

          (x)    Until all obligations of Lender to extend credit to Borrower
have terminated and all of the Guaranteed Obligations have been fully finally
and indefeasibly paid, any right to revoke this Guaranty; and

          (xi)   Any defense arising from an election for the application of
Section 1111(b)(2) of the United States Bankruptcy Code which applies to the
Guaranteed Obligations.

     (c)  Financial Condition of Borrower, Etc.  Guarantor is fully aware of the
financial condition and affairs of Borrower.  Guarantor has executed this
Guaranty without reliance upon any representation, warranty, statement or
information concerning Borrower furnished to Guarantor by Lender and has,
independently and without reliance on Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of Borrower and of other circumstances affecting
the risk of nonpayment or nonperformance of the Guaranteed Obligations.
Guarantor is in a position to obtain, and

                                      C-5
<PAGE>

assumes full responsibility for obtaining, any additional information about the
financial condition and affairs of Borrower and of other circumstances affecting
the risk of nonpayment or nonperformance of the Guaranteed Obligations and will,
independently and without reliance upon Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action in connection with this
Guaranty.

5.   MISCELLANEOUS.

     (a)  Notices.  Except as otherwise provided herein, all notices, requests,
demands, consents, instructions or other communications to or upon Guarantor or
Lender under this Guaranty shall be in writing and faxed, mailed or delivered at
the address or facsimile number set forth below (or to such other facsimile
number or address for any party as indicated in any notice given by the party to
the other party.)  All such notices and communications shall be effective (a)
when sent by an overnight courier service of recognized standing, on the second
Business Day following the deposit with such service; (b) when mailed, first
class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d)
when faxed, upon confirmation of receipt;

If to Lender:

     Verizon Investments, Inc.
     1717 Arch Street
     Philadelphia, PA 19103
     Attn: Philip R. Marx, Esq.
     Telephone: (215) 963-6660
     Facsimile: (215) 963-9195

     with a copy to:

     Laura W. O'Connor
     1717 Arch Street
     47/th/ Floor
     Philadelphia, PA 19103
     Telephone: (215) 963-6151
     Facsimile: (215) 569-8207

     and

     Janet M. Garrity
     3900 Washington Street
     2/nd/ Floor
     Wilmington, DE 19802
     Telephone: (302) 761-4210
     Facsimile: (302) 761-4229

                                      C-6
<PAGE>

If to Guarantor:

     c/o OnePoint Communications Corp.
     Two Conway Park
     150 Field Drive, Suite 300
     Lake Forest, Illinois 60045
     Attn: John Stavig, Chief Financial Officer
     Telephone: (847) 582-8710
     Facsimile: (847) 582-8801

     (b) Payments.  Guarantor shall make all payments due to Lender hereunder by
payment to Lender's office located at the address set forth in Subparagraph 5(a)
                                                               -----------------
hereof, or at such other office as Lender may designate or by wire to an account
specified by Lender, on demand, in United States Dollars.  If any amounts
required to be paid by Guarantor under this Guaranty remain unpaid after such
amount is due, Guarantor shall pay interest on the aggregate, outstanding
balance of such amounts from the date due until those amounts are paid in full
at a per annum rate equal to the Default Rate.

     (c) Expenses.  To the extent not otherwise paid by Borrower pursuant to the
Credit Agreement, Guarantor shall reimburse Lender for all reasonable attorneys'
fees and all other reasonable costs incurred by Lender pursuant to, or in
connection with, or relating to this Guaranty (whether or not a lawsuit is
filed), including, but not limited to, any reasonable attorneys' fees and costs
Lender incurs in order to do the following:  prepare and negotiate this
Guaranty; obtain legal advice in connection with this Guaranty or Guarantor;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any bankruptcy claim or third-party claim; and otherwise represent Lender in any
litigation relating to Guarantor.  All attorneys' fees and costs to which Lender
may be entitled pursuant to this Section shall immediately become part of the
Guaranteed Obligations and shall be due on demand.

     (d) Waivers; Amendments.  This Guaranty may not be amended or modified, nor
may any of its terms be amended or modified, nor may any of its terms be waived,
except by written instruments signed by Guarantor and Lender.  Each waiver or
consent under any provision hereof shall be effective only in the specific
instances for the purpose for which given.  No failure or delay on Lender's part
in exercising any right hereunder shall operate as a waiver thereof or of any
other right nor shall any single or partial exercise of any such right preclude
any other further exercise thereof or  of any other right.

     (e) Assignment. This Guaranty shall be binding upon and inure to the
benefit of Lender and Guarantor and their respective successors and assigns;
provided, however, that Lender may sell, assign and delegate their respective
--------  -------
rights and obligations hereunder as permitted by the Loan Agreement. All
references in this Guaranty to any Person shall be deemed to include all
permitted successors and assigns of such Person.

     (f) Cumulative Rights, etc. The rights, powers and remedies of Lender under
this Guaranty shall be in addition to all rights, powers and remedies given to
Lender by virtue of any applicable law, rule or regulation of any Governmental
Authority, the Loan Agreement, any other Credit Document or any other agreement,
all of which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Lender's rights
hereunder.

     (g) Payments Free of Taxes, Etc.  All payments made by Guarantor under this
Guaranty shall be made by Guarantor free and clear of and without deduction for
any and all present and future taxes, levies, charges, deductions and
withholdings.  In addition, Guarantor

                                      C-7
<PAGE>

shall pay upon demand any stamp or other taxes, levies or charges of any
jurisdiction with respect to the execution, delivery, registration, performance
and enforcement of this Guaranty. If any taxes, levies, charges or other amounts
are required to be withheld from any amounts payable to Lender hereunder, the
amounts so payable to Lender shall be increased to the extent necessary to yield
to Lender (after payment of all such amounts) any such amounts payable hereunder
in the amounts specified in this Guaranty. Upon request by Lender, Guarantor
shall furnish evidence satisfactory to Lender that all requisite authorizations
and approvals by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite taxes,
levies and charges have been paid.

     (h) Partial Invalidity. If at any time any provision of this Guaranty is or
becomes illegal, invalid or unenforceable in any respect under the law or any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Guaranty nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby.

     (i) Governing Law.  This Guaranty shall be governed by and construed in
accordance with the laws of the State of New York without reference to conflicts
of law rules.

     (j) Jury Trial. EACH OF GUARANTOR AND LENDER, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTY.

     (k) Limitation of Liability. NO CLAIM MAY BE MADE BY GUARANTOR AGAINST
LENDER OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF
LENDER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT
OF ANY CLAIM (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH OF
STATUTORY DUTY OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND GUARANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

     IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of
the day and year first above written.

                                        [NAME OF SUBSIDIARY GUARANTOR]

                                        By:________________________________
                                        Name:______________________________
                                        Title:_____________________________

                                      C-8
<PAGE>

                                   EXHIBIT D
                                   ---------

                                   INDENTURE
                                   ---------

                                  See Attached

                                      D-1
<PAGE>

                         ONEPOINT COMMUNICATIONS CORP.

                               November 17, 2000

Verizon Investments, Inc.

          Re:  Loan Agreement dated as of November __, 2000, by and between
               OnePoint Communications Corp. and Verizon Investments, Inc.
               -----------------------------------------------------------

          Reference is made to that certain Loan Agreement dated as of November
17, 2000 (the "Loan Agreement") among OnePoint Communications Corp. (the
               --------------
"Borrower"), and Verizon Investments, Inc. (the "Lender").  Capitalized terms
---------                                        ------
used herein and not otherwise defined shall have the meanings given to such
terms in the Loan Agreement.

          In addition to the indemnities set forth in Section 5.6 of the Loan
Agreement, Borrower agrees that it shall indemnify Lender from and against any
and all liabilities, losses, damages and expenses of any kind or nature and from
all suits, claims or demands arising on account of or in connection with any
claim by one or more of the holders of the Series B 14  1/2% Senior Notes Due
2008 issued pursuant to the Indenture that the transactions evidenced by the
Credit Documents violates the covenants and agreements of Borrower contained in
the Indenture.  Notwithstanding any provision in the Loan Agreement to the
contrary, the indemnity agreement set forth in this letter shall survive any
termination of this letter or the Loan Agreement and shall for all purposes
continue in full force and effect.

          This letter shall be governed by and construed in accordance with the
State of New York.

                                        Very truly yours,

                                        ONEPOINT COMMUNICATIONS CORP.

                                        By:________________________________
                                        Name:______________________________
                                        Title:_____________________________

ACCEPTED AND AGREED:
--------------------

VERIZON INVESTMENTS, INC.

By:___________________________________
Name:_________________________________
Title:________________________________

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