It is possible for a person to replace the AT&T chip with a CDMA chip that will work on Verizon. However, five year contract means little in the business. If it is true that they signed a five year contract, Apple just has to say that AT&T is not able to support the number of iPhones and iPads being sold, and renegotiate. They might have planned on going with Verizon for a second carrier before the intro of the iPhone 4, and AT&T negotiated a 4-6 month exclusive agreement for concessions.