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                                                                  EXHIBIT 10.24

                            SERVICE BUREAU AGREEMENT

Saville:

SAVILLE SYSTEMS INC.                         Effective Date:  September 30, 1998
One Van de Graaff Drive                      Term of Agreement:  39 months
Burlington, MA 01803

Customer:

CHOICE ONE COMMUNICATIONS INC.
333 West Commercial Street
Suite 2500
East Rochester, NY 14445

     CHOICE ONE  COMMUNICATIONS  INC.  (the  "Customer")  agrees to purchase and
SAVILLE  SYSTEMS INC.  ("Saville")  agrees to furnish on the following terms and
conditions the Services described herein.

1.       INTERPRETATION

         1.1      Definitions

         Unless  otherwise  defined,  the  words  and  phrases  defined  in this
Agreement  shall have the meanings  ascribed to them herein,  and the  following
words and terms shall have the respective meanings ascribed to them as follows:

         (a) "Base Software" means Saville's  Convergent  Billing Platform (CBP)
AS/400 billing and record keeping computer  software in existence at the date of
this  Agreement,  but not less than Release 3.2.2,  and includes any Maintenance
Release (including Release 3.5 no later than when such release is first provided
to any other customer of Saville) used on behalf of Customer.

         (b) "Business  Day" means any day excepting a statutory  holiday in the
Province of Ontario, Canada, which holidays are set forth in Schedule E attached
hereto, or a Saturday or a Sunday.

         (c)   "Confidential   Information"   means   all   information   marked
"confidential",  "restricted" or  "proprietary"  by either party and information
disclosed  orally,  visually or otherwise  by either  party which is  considered
proprietary by such party and delivered to the party receiving such  proprietary
information,  including, without limitation,  source codes, other Software owned
or licensed to, or used by either party,  security  measures  adopted or used by
either party, data processing ideas, techniques,  concepts,  know-how,  Customer
Data, and business  practices which are  proprietary and  confidential to either
party and the terms and conditions of this Agreement and all Schedules hereto.
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                                      -2-


         (d) "Critical  Operation  Problems" means problems with the delivery of
the Services that will likely have a material  negative  financial impact to the
Customer if not resolved and that must be resolved on an expedited basis.

         (e) "Customer Data" means all data and information,  however  recorded,
provided to Saville by Customer to enable Saville to provide Services under this
Agreement and includes computer databases and computer related data.

         (f)  "Customer  Site"  means the site  owned,  controlled  or leased by
Customer  at which the  Customer  Systems  are  located.  The  Customer  Site is
presently  located at the address first written above.  Customer may add, delete
or change  Customer  Sites in the United  States with  Saville's  prior  written
consent, which consent shall not be unreasonably withheld or delayed.

         (g) "Customer  Systems"  means the computer  facilities of Customer and
includes all Software  and  Equipment  including  all  minicomputers,  front-end
processors,  workstations,  computers,  terminals,  local area  network  ("LAN")
servers and  associated  peripheral  equipment,  lines and cabling used for data
communication  between the Customer  Site and the Data Center or any third party
necessary to the solution.

         (h)  "Data  Center"  means  the data  center of  Saville  described  in
Schedule A.

         (i) "Effective Date" in relation to this Agreement means the date first
written above.

         (j) "End-User" or "End-Users" means any person or persons that Customer
has authorized to access any part of the Host System.

         (k) "Equipment" means all equipment,  hardware,  computers and devices,
whether for use for data processing or to provide  telecommunications  services,
tools and associated operating system Software.

         (l) "Host System" means the IBM AS/400  computer and related  operating
system software,  peripherals,  and communications  equipment used by Saville at
the Data Center to provide Processing Services under this Agreement.

         (m) "Hours of Service"  means 6:00 a.m. to  midnight  Eastern  Standard
Time or Eastern Daylight Time, as applicable, 365 days per year during which the
Host System will be available to End Users in accordance with the Service Levels
agreed to by the Customer and Saville.

         (n) "Maintenance Release" means any updates, changes, modifications, or
enhancements  made to the Base  Software  by  Saville  that  are made  generally
available to  customers  of Saville at no  additional  charge,  under  Saville's
maintenance  program and any correction of a documented  Programming  Error made
specifically for Customer.

         (o)  "Message"  or  "Messages"  means the  Customer  Data  representing
billable  or  non-billable  telecommunication  or other  services,  such as long
distance  messages  contained on the message toll tapes or other media  received
from time to time from Customer.
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                                      -3-

         (p) "Processing  Services"  means the services  described in Schedule A
under the heading "Processing Services".

         (q)  "Programming  Error"  means  any error in the Base  Software  that
materially  and  adversely  affects the  operation of the Base Software due to a
failure of the Base Software to conform to the Specifications therefor.

         (r) "Saville  Consulting  Rates" means the applicable rates and charges
established  by Saville from time to time for the  provision  of services.  Such
rates and charges  will  increase no more than eight  percent  (8%) per calendar
year and will not  exceed  the rates  charged  by  Saville  to its most  favored
customer  in the  United  States  who  purchases  similar  services,  in similar
quantities, under similar circumstances.

         (s) "Service  Levels" means the service levels for Processing  Services
specified  in Schedule B, as amended  from time to time as provided  for in this
Agreement.

         (t)  "Services"  means  the  Processing  Services,   Support  Services,
Technical  Services  and such  other  services  as Saville  shall  perform or be
required to perform under this Agreement, as more fully described on Schedule A,
but not including Software Development Services.

         (u) "Software" means computer  programs and related  documentation  and
includes application programs, operating system programs, utilities,  templates,
parameter tables and settings,  interfaces to external programs,  tools, program
related  data,   and  local  area  network   management   software  and  related
documentation.

         (y) "Software  Development  Services"  means the services  described in
Schedule C attached to this Agreement.

         (w)  "Specifications"   means,  the  associated  user  and  operations
documentation for the Base Software.

         (x) "Support Services" means the services described in Schedule A under
the heading "Support Services".

         (y)  "Technical  Services"  means the services  described in Schedule A
under the heading "Technical Services".

         (z) "Initial  Network"  means the five (5) switch network to be used by
Customer to support its initial  entry into the  marketplace,  with such network
and markets to be confirmed during the Specification Study to be performed under
the Customization Agreement.

         (aa) "Future  Network"  means that network which  Customer may put into
place to address new markets, which network shall not include any switch that is
or was used in the Initial  Network  until such time as may be  permitted  under
Section 8.3(a) hereof.
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         1.2      Incorporation of Schedules

         (a) The following  Schedules (the  "Schedules"),  annexed  hereto,  are
incorporated in this Agreement and are deemed to be a part hereof:

                Schedule A - Services Description
                Schedule B - Service Levels
                Schedule C - Customization Services Agreement
                Schedule D - Pricing
                Schedule E - Ontario Holidays

          (b)   The parties intend that Schedules will be amended and updated as
necessary or appropriate during the term of this Agreement.

2.  PROVISION OF SERVICES

         2.1      Services

         During the term of this Agreement, Saville will provide Customer and
Customer will obtain from Saville the Services, subject to the provisions
hereof.

         2.2       Documentation

         Saville agrees to supply Customer with three (3) copies of the
Specifications for the Base Software for use in connection with the Processing
Services. Customer may make a reasonable number of copies of the Specifications
for its internal use subject to the confidentiality provisions hereof.

         2.3       Capacity Planning

         From time to time, Customer and Saville shall meet to review issues
pertaining to capacity planning. Customer will use reasonable efforts to provide
Saville with projections concerning future traffic volumes, number of customers,
and number of Messages to be processed.

         2.4        Software Development Services

         Software Development Services will not be performed by Saville unless
and until Saville and Customer enter into a separate written Customization
Services Agreement in the form which is attached as Schedule C hereto.

         2.5      Customer Responsibilities

         Subject to the  provisions  of  Schedules A or B, or any other  written
agreement between the parties, Customer also agrees to:

         (a)  provide support and training to End Users;

         (b)  provide  Customer  Data to  Saville  in a form and  pursuant  to a
schedule to be mutually agreed to by the parties;

         (c) follow  standards and security  procedures  reasonably  required by
Saville for the  turnover of Customer  Data to the Data Center as  furnished  by
Saville;

         (d) not make any changes to the Customer  Systems  which may affect the
delivery of the Services or Service Levels;

         (e) be responsible for creation and administration of application-level
user access and password management  security programs,  and comply with Saville
security procedures regarding same; and

         (f) provide all paper forms and supplies required to provide the output
services described in Schedule A.

         (g) select,  provide,  operate,  configure,  support and  maintain  the
Customer Systems.

         2.6      Customer Assistance

         Customer  shall assist  Saville in the  performance  of the Services by
making  available  an  Equipment,   Software,   documentation,   Customer  Data,
information  and  personnel  reasonably  required by Saville on a timely  basis.
Customer  shall also  ensure  that those of its  personnel  who are  assigned to
assist Saville are familiar with Customer's  requirements and have the expertise
and  capabilities  necessary  to permit  Saville to  undertake  and complete the
Services.

         2.7      Security of Data

         During  the term of this  Agreement,  Saville  agrees  to use  security
measures  as such  measures  exist as at the  Effective  Date in  respect of the
facilities at the Data Center used to deliver the Processing  Services,  or such
other measures as Saville  determines  will improve  security in respect of such
facilities.  All Saville data centers  currently have card  controlled  security
access and are manned seven (7) days a week  twenty-four (24) hours per day.
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     All Customer  Data is also  duplicated  off site for  additional  security.
Disaster recovery services shall be provided by a nationally recognized provider
(i.e., Comdisco).

         2.8      Inspection by Customer

         Subject to Saville's reasonable access,  security,  and confidentiality
requirements, Customer shall have the right to make visits to the Data Center to
review  security  measures  relating to Customer  Data,  with  reasonable  prior
written notice during normal business  hours. If deficiencies  are identified by
Customer, Saville shall implement such additional security practices as Saville,
after  due  consideration,  deems  necessary  or  desirable  to  eliminate  such
deficiencies.

         2.9      Records

         Saville  will  keep,  in  accordance  with  U.S.   generally   accepted
accounting  principles,  books and records pertaining to the Processing Services
(the "Service Records"). Saville shall preserve the Service Records for a period
of three (3) years  after  the  expiration  or  termination  of this  Agreement.
Saville agrees,  upon request of Customer,  to permit Customer to have access to
the  Service  Records  on  Business  Days,  not more  than four (4) times in any
calendar year, on five (5) days' prior written notice, to determine the adequacy
and accuracy  thereof.  Customer's  right to inspect any year's Service  Records
shall  continue for a period of two (2) years  following the end of the year for
which those records  relate.  All costs  associated  with such audit and storage
shall be the responsibility of Customer.  Notwithstanding the foregoing, Saville
shall be entitled to provide copies of the Service  Records in a mutually agreed
to format to Customer following the expiration or termination of this Agreement.
Upon doing so, Saville shall have no further  obligations to Customer under this
Section.

         2.10     Changes

         At any time during the term of this Agreement,  Customer or Saville may
request  changes by  submitting  such  requests in writing.  Within a reasonable
time, but in any event not more than fifteen (15) days after  receiving  written
notice of a Customer request Saville will advise Customer whether the change can
be made and the  effect the change  will have on this  Agreement.  Within a like
period after  receiving  Saville's  request for a change,  Customer  will notify
Saville whether it authorizes the implementation of the change under the revised
terms or  rejects  the  change  proposed.  Pending  authorization  to  implement
changes, Saville shall proceed in accordance with the latest authorized terms of
this Agreement. However,  notwithstanding the foregoing, Saville shall implement
changes on an equitable basis if such change  requests are reasonably  requested
by  Customer,  are within the  general  scope of  Services  and do not  increase
Saville's  costs in providing the Services,  unless  Customer  agrees to pay all
such increased costs.

3.       PRICE AND PAYMENT

         3.1      Price

         Other than charges  relating to Software  Development  Services,  which
shall be governed by the  Customization  Services  Agreement  attached hereto as
Exhibit C, if and when executed,  Customer  agrees to pay Saville's  transaction
fees for the  Services  pursuant to Schedule D hereto,
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                                      -6-


     including any minimums  provided  therein.  If Customer requests Saville to
provide Services at a place other than Saville's  premises,  then Customer shall
be  responsible  for and shall  reimburse  Saville for all travel (coach class),
lodging, meals and other reasonable out-of-pocket expenses incurred by Saville.

         3.2      Invoicing

         (a)      Any payments due Saville  from  Customer  will be invoiced and
                  will be due and  payable  thirty  (30) days  after  Customer's
                  receipt of such  invoice,  which may be sent by facsimile  and
                  deemed  received  with  confirmed  answerback.  If  payment is
                  delayed by  Customer,  other than in  accordance  with Section
                  3.2(b) below,  Saville shall be entitled to charge interest at
                  a rate equal to the lesser of: (i)  eighteen  (18%) per annum;
                  or (ii) the maximum lawful interest rate under applicable law.

         (b)      All  payments  under  this  Agreement  shall  be  made in U.S.
                  Dollars,  and  Customer  shall  have  the  right  to  withhold
                  payments for any amounts under dispute by Customer,  but shall
                  pay any other  amounts  invoiced  that are not in dispute.  If
                  such dispute is resolved in favor of Saville,  Customer  shall
                  pay  interest  on  such  disputed  amount  from  the  date  it
                  originally  became due until the date it is paid to Saville at
                  a rate equal to the lesser of (i) eighteen  percent  (18%) per
                  annum;   or  (ii)  the  maximum  lawful  interest  rate  under
                  applicable law.

         3.3      Estimated Price

         Where an estimated price is specified,  it is not warranted by Saville,
and  it  represents  Saville's   commercially   reasonable  efforts,   based  on
information  made available,  to estimate the Services which will be required to
accomplish the tasks described.

         3.4      Accountability

         Whenever  a Saville  charge is to be based on  Saville's  cost (such as
pass-through  expenses),  Saville  will provide to  Customer,  if so  requested,
information and  documentation  sufficient to substantiate  Saville's costs with
respect to such charge.

         3.5      Proration

         All periodic  charges are to be computed on a calendar month basis, and
will be prorated for any partial month, unless specifically stated otherwise.

         3.6      Taxes

         Prices are  exclusive  of all taxes and  Customer  shall pay any sales,
use, goods and services,  personal property,  consumption,  value-added or other
tax and any  duties or  tariffs  that may be  assessed  whether  based  upon the
delivery,  possession,  sale or use of the Services or otherwise, except for tax
based on the income of Saville.
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4.       OWNERSHIP

         All  Customer  Data,  Customer  Systems  and  Customer's   Confidential
Information  shall be and remain the  property of Customer.  The Base  Software,
Host System,  and  Saville's  Confidential  Information  shall be and remain the
property of Saville.

5.       CONFIDENTIAL INFORMATION

         5.1      Confidential Obligation

         Each party acknowledges that Confidential Information will be exchanged
between the parties in the course of performance of the Services hereunder. Each
party  shall  use no less than the same  means it uses to  protect  its  similar
confidential  and  proprietary  information,  but in any  event  not  less  than
commercially  reasonable  means,  to prevent the  disclosure  and to protect the
confidentiality  of the Confidential  Information of the other party.  Except as
otherwise  provided  herein,  each  party  agrees  that  it  will  not  use  the
Confidential  Information  of the other  party  except for the  purposes of this
Agreement  and  will  not  disclose  such  Confidential  Information  or make it
available to third persons other than to its full-time  employees or consultants
having a need for access to such  Confidential  Information  in connection  with
their  employment  with such party and with  respect  to whom such  party  takes
steps,  no less  rigorous  than  those it takes to protect  its own  proprietary
information,  but in any event not less than  commercially  reasonable means, to
prevent such  employees from acting in a manner  inconsistent  with the terms of
this Agreement.

         5.2      Publicly Known Information

         Section 5.1 shall not prevent  either  party from  disclosing  or using
Confidential  Information  which is (i)  already  known by the  recipient  party
without an obligation of confidentiality,  provided that the recipient party can
establish that such information was already known to the recipient  party,  (ii)
publicly  known or becomes  publicly  known through no  unauthorized  act of the
recipient  party,   (iii)  rightfully   received  from  a  third  person,   (iv)
independently  developed by the recipient party without use of the other party's
Confidential  Information,  provided that the recipient party can establish that
the  applicable  Confidential  Information  was  independently  developed by the
recipient party without use of the other party's Confidential  Information,  (v)
approved by the other party for  disclosure,  or (vi)  required to be  disclosed
pursuant to a requirement of a governmental agency, regulation or law so long as
the disclosing party provides the other party with notice of such requirement as
soon as practicable prior to any such disclosure.

         5.3      Return of Confidential Information

         Upon  written  request  or at the  termination  or  expiration  of this
Agreement, each party will return to the other all documents and information and
all copies  thereof,  however  recorded,  including but not limited to drawings,
specifications,  descriptions, or other papers, tapes, or any other media marked
or stamped as being confidential,  which contain any of the other's Confidential
Information.
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                                      -8-


         5.4      Third Party Information

         Each  party  agrees  not  to  disclose  or  deliver  to the  other  any
proprietary,   confidential,  secret  or  private  information  or  intellectual
property  (including  any Software) of any third person which it is under a duty
or has  contracted  not to disclose,  without the prior written  consent of such
third person.

         5.5      Loss of Confidential Information

         In the event of any unauthorized disclosure or loss of, or inability to
account for,  Confidential  Information of the furnishing  party,  the receiving
party will notify the furnishing party promptly.

         5.6      Right to Perform Services for Others

         Customer  recognizes  that  Saville  is in the  business  of  providing
computer and information  technology services and may perform services for other
persons  similar to the Services.  Saville retains the right to use, and nothing
shall  prevent  Saville from using,  the ideas,  concepts,  methods,  processes,
know-how, organization, techniques or any Software or Equipment owned, leased or
licensed  by Saville in  providing  services  to any third  person,  provided no
Confidential Information of Customer is made available or released to such third
person, except as may be allowed under Section 5.2.

         5.7      Enforcement of Confidentiality Obligation

         Each of Customer and Saville  acknowledges  and agrees that irreparable
injury may result to the other party if such party  breaches the  provisions  of
this Agreement  relating to Confidential  Information and that damages may be an
inadequate remedy in respect of such breach. Each party hereby agrees in advance
that,  in the  event of such  breach,  the other  party  shall be  entitled,  in
addition to such other  remedies,  damages and relief as may be available  under
applicable law, to the granting of injunctive relief in such party's favor.

6.       OBLIGATIONS OF CUSTOMER

         6.1      Customer Personnel

         Customer  shall  from  time  to  time  provide  Saville  with a list of
Customer  employees  to whom  Saville may  deliver  data or  information  in the
provision of Services.

         6.2      Customer Data

         Customer  shall  provide  all  Customer  Data to  Saville in the manner
prescribed  herein, in the  Specifications or as the parties may agree.  Saville
will not be responsible or liable for any loss, damage or inconvenience suffered
by Customer or by any third person arising out of Saville's inability to perform
the  Services to the extent due to failure of Customer to provide all  necessary
Customer Data when required or by reason of any  deficiencies  in such Customer:
Data.
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                                      -9-


         6.3      Space

         Customer  agrees to provide  reasonable  facilities  and  security  for
Saville  Equipment and Software  which must reside on Customer  premises,  at no
charge,  and  Customer  will ensure that Saville has  sufficient  access to such
Equipment and  Software.  Customer  will also provide  reasonable  work space on
Customer premises for employees of Saville who require work space to furnish the
Services under this Agreement.

7.       WARRANTIES

         7.1      Quality of Services

         Saville  warrants  that the  Services  will be  performed  by qualified
persons  authorized  by Saville  to perform  the  Services,  in a  professional,
workmanlike  manner,  with its  reasonable  best  skill,  diligence  and care in
accordance  with the  applicable  standards  currently  recognized  in Saville's
profession and industry.  To the extent not otherwise set forth herein,  Saville
shall be solely responsible for all means, methods, and procedures in performing
the Services and for  coordinating  the  performance  of all of its  obligations
hereunder,  whether performed by Saville or others under Saville's  direction or
control.  In performing  the Services  hereunder,  Saville shall comply with all
applicable laws,  rules,  and regulations.  Saville will use its reasonable best
efforts to minimize any disruption or  interference  with the Services.  For any
breach of this  warranty  or the  failure  of Saville  to  perform  Services  as
required by this Agreement (a "Claim"),  Customer's sole and exclusive  remedies
and Saville's entire obligations  hereunder and under this Agreement shall be to
perform or  re-perform  the Services  that are the subject of the Claim,  or, if
Saville is unable to re-perform the Services within a reasonable time period, to
provide  Customer  with a refund of an amount  not to exceed  the  lesser of the
amount paid by Customer for the Services  during the last twelve calendar months
or $1,000,000.. The remedies in this Section 7.1 are expressly in lieu of any or
all other  remedies  which  may be  available  to  Customer  resulting  from the
furnishing,  the failure to furnish or the quality of any Service.  Saville does
not wan-ant the accuracy of any data or information  furnished to Customer which
is created from Customer Data or Software supplied by Customer.

         7.2      Year 2000 Readiness

         Saville  represents  and warrants that the Base Software  through which
Saville shall provide the Services  under this Agreement are designed to be used
prior to,  during,  and after the  calendar  year 2000 A.D.,  and without  human
intervention will correctly recognize,  calculate,  process, sequence, store and
transmit  Date Data without error or  interruption,  including  leap years,  and
including  errors or  interruptions  from functions  which may involve Date Data
from more than one  century.  The term "Date  Data" shall mean any data or input
which  includes  an  indication  of or  reference  to date  and  that is  stored
information and internal to functionality.  Date calculations involving either a
single century or multiple  centuries will neither cause an abnormal  ending nor
generate incorrect or unexpected results. When sorting by date, all records will
be sorted in accurate  sequence and when the date is used as a key, records will
be read and  written in accurate  sequence.  As used in the  previous  sentence,
accurate sequence means, by way of example,  that records will be read, written,
and sorted in ascending order so that the year 1999 is before the year 2000. The
Base  Software  will  calculate,  process,  and  display  leap year
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                                      -10-

     information according to the following algorithm: (i) a leap year will have
twenty-nine  (29) days in the month of February;  and (ii) a leap year occurs in
all years  divisible by 400 and all years  evenly  divisible by 4 and not evenly
divisible by 100.

         7.3      Disclaimer

         THE  WARRANTIES  CONTAINED IN THIS  AGREEMENT  ARE IN LIEU OF ANY OTHER
WARRANTIES  OR  CONDITIONS  EXPRESS OR IMPLIED,  INCLUDING,  BUT NOT LIMITED TO,
IMPLIED  WARRANTIES  OR  CONDITIONS  OF  MERCHANTABLE  QUALITY,  FITNESS  FOR  A
PARTICULAR  PURPOSE,  AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A
COURSE OF DEALING OR USAGE OF TRADE.

         7.4      Limit on Liability

         (a) FOR BREACH OR DEFAULT BY SAVILLE OF ANY OF THE  PROVISIONS  OF THIS
AGREEMENT, SAVILLE'S ENTIRE LIABILITY, REGARDLESS OF THE FORM OF ACTION, WHETHER
BASED ON CONTRACT OR TORT,  INCLUDING,  WITHOUT LIMITATION,  NEGLIGENCE,  OR THE
FURNISHING,  THE FAILURE TO FURNISH, OR THE QUALITY OF ANY SERVICE,  SHALL IN NO
EVENT EXCEED THE LESSER OF THE AMOUNT PAID BY CUSTOMER  FOR THE SERVICES  DURING
THE LAST TWELVE CALENDAR  MONTHS OR $1,000,000.  NOTHING IN THIS AGREEMENT SHALL
EXCLUDE OR RESTRICT  SAVIELLE'S  LIABILITY FOR DEATH OR PERSONAL  INJURY ARISING
FROM  EITHER THE  NEGLIGENCE  OF SAVILLE OR ITS  EMPLOYEES  WHILE  ACTING IN THE
COURSE OF THEIR EMPLOYMENT.

         (b) IN NO EVENT WILL SAVILLE BE LIABLE FOR DAMAGES HEREUNDER IN RESPECT
OF SPECIAL,  INCIDENTAL,  INDIRECT,  PUNITIVE,  OR  CONSEQUENTIAL  LOSS (EVEN IF
SAVILLE HAS BEEN ADVISED OF THE  POSSIBILITY  OF SUCH LOSS)  INCLUDING,  BUT NOT
LIMITED,  LOST  BUSINESS  REVENUE,  LOSS OF  PROFITS,  LOSS OF DATA,  FAILURE TO
REALIZE  EXPECTED PROFITS OR SAVINGS OR OTHER COMMERCIAL OR ECONOMIC LOSS OF ANY
KIND OR ANY CLAIM AGAINST CUSTOMER BY ANY OTHER PERSON.

         (c) A party shall not be responsible or liable for any loss,  damage or
inconvenience  suffered by the other party or by any third person, to the extent
that such loss,  damage or  inconvenience  is caused by the failure of the other
party to comply with its obligations under this Agreement.

         7.5      Limitation Period

         Neither  party may bring an action  (other  than by  Saville to collect
charges due hereunder)  against the other party arising out of or related to the
Services to be provided under this Agreement more than three (3) years after the
cause of action has arisen.
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                                      -11-


8.       TERM AND TERMINATION

         8.1      Term

         The term of this Agreement will commence on the Effective Date and will
continue  for the  term of  Agreement  set out on the  first  page  hereof.  The
agreement  will  continue  following  the  expiration  of such time period until
terminated by either party by giving the other no less than six (6) months prior
written  notice.  However,  regardless  of the  reason  for any  termination  or
expiration of this Agreement, Saville shall in good faith support the transition
of  Customer to a new service  provider  for not less than 12 months  after such
expiration or termination pursuant to Section 8.4 hereof, provided that Customer
pays any applicable transaction fees during such period.

         8.2      Termination for Cause

         (a)      In the event either party:

                  (i)  materially  breaches  any of its duties,  obligations  or
responsibilities under this Agreement, unless (A) the breaching party cures such
breach within thirty (30) days after written  notice is given to such  breaching
party  specifying the breach,  or, (B) in the event such breach is not so cured,
the breaching  party has used best efforts (and no less thm industry  standards)
during such 30-day period and  thereafter  continues to use best efforts to cure
such breach, or

                  (ii)  repeatedly   materially  breaches  any  of  its  duties,
obligations  or  responsibilities  for payment under this Agreement and fails to
cure and cease  committing such repeated  breaches within thirty (30) days after
being given written notice specifying the breach, or

                  (iii) commits an Act of Insolvency (as defined below),

then the party not in breach or  insolvent  as the case may be, may, by promptly
giving notice  thereof to the other party,  terminate  this  Agreement as of the
date specified in such notice of  termination.  Saville shall have the right, at
its sole option in lieu of giving notice to terminate  this  Agreement for cause
under this Section,  to delay or suspend its  performance  of the Services until
such material breach by Customer is remedied.

         (b) For the  purposes of this  Section  8.2, a party shall be deemed to
have committed an Act of Insolvency if (i) a receiver,  trustee,  administrator,
or  administrative  receiver  should be appointed for the party or its property,
(ii) the party  makes an  assignment  for the  benefit of  creditors,  (iii) any
proceedings  should  be  commenced.  Against  the party  under  any  bankruptcy,
insolvency, or debtor's relief law, and such proceedings shall not be vacated or
set aside within thirty (30) days from the date of commencement thereof, or (iv)
the party should be liquidated or dissolved.
<PAGE>

                                      -12-


         8.3      Termination to Enter a License Agreement

         (a) At any time on or before  September  30, 2000,  Customer may notify
Saville that it wishes to obtain a license to use the Base Software in a billing
system  for  the  Future  Network  (the  "Future  Network  System").  Upon  such
notification,  Saville and Customer shall enter into a license agreement for the
Base Software  with terms and  conditions  mutually  agreed upon by the parties,
including  (i) a  license  fee based on the total  number of  subscribers  to be
billed through the Future Network  System,  at Saville's then current  published
license fee for such number of subscribers,  (ii) payment of such license fee by
Customer at any time on or before September 30, 2000, (iii) a provision  stating
that the Future Network System may not be put into production  prior to April 1,
2000  (although  Customer  may  use  it  for  testing,   development  and  other
pre-production  functions prior to such date), and (iv) a provision stating that
no subscriber on the Initial  Network may be billed  through the Future  Network
System prior to October 1, 2000. Any and all  customization  services  necessary
for the Future  Network  System shall be developed  pursuant to mutually  agreed
upon statements of work as Future Software  Developments under the Customization
Services Agreement,  provided that Saville shall provide Customer with a copy of
the  Software  Developments  and  Future  Software  Developments  developed  for
Customer under the Customization  Services  Agreement.  Upon such  notification,
Saville and Customer  shall also enter a maintenance  and support  agreement for
the Base Software with terms and conditions mutually agreed upon by the parties,
including a term of thirty six (36) months from a date no earlier than September
30,  2000,  at  fees  equal  to  Saville's   then  current  fees  for  providing
maintenance, the fees for the first twelve (12) months of which shall be payable
by  Customer at any time on or before  September  30,  2000.  For the absence of
doubt and  provided  that the license and  maintenance  agreements  as described
above are executed,  (x) Customer shall not pay Service Bureau  transaction fees
hereunder  for  subscribers  billed  through the Future  Network  System and (y)
Customer shall pay Service Bureau transaction fees (and no less than the monthly
minimums  set forth in  Schedule D hereto) in  respect  of all  subscribers  and
transactions  on the Initial  Network  until  September  30, 2000, at which time
Customer  may migrate  all  subscribers  from the Initial  Network to the Future
Network  System  (provided  any  additional  license fee owed in respect of such
additional  subscribers is paid), and,  notwithstanding  Section 8.1,  terminate
this Service Bureau Agreement.

         (b) Provided  Customer has given no notice under Section  8.3(a) above,
on or after October 1, 2000, notwithstanding Section 8.1, Customer may terminate
this Agreement  upon thirty (30) days prior written  notice to Saville  provided
that  Customer  enters into (i) a license  agreement  for the Base Software with
terms and conditions  mutually  agreed upon by the parties,  including a license
fee  based on the total  number of  subscribers  to be billed  through  the Base
Software,  at Saville's  then current  published  license fee for such number of
subscribers,  and (ii) a maintenance and support agreement for the Base Software
with terms and conditions mutually agreed upon by the parties,  including a term
of thirty six (36) months from the date of the license  agreement and fees equal
to Saville's then current fees for providing  maintenance.  Upon notification by
Customer  pursuant to this Section 8.3,  Saville shall,  as soon as practicable,
produce a  statement  of work  setting  forth the steps  required to convert the
existing  service  bureau to a Base  Software  license  with all work to be done
relating to such conversion  considered Future Software  Developments  under the
Customization  Services Agreement.  During this conversion period,  Customer may
bill end user customers both on the service bureau provided  hereunder and under
the license of the Base Software described above, provided that
<PAGE>

                                      -13-

     Customer  pay the  applicable  service  bureau  transaction  fees  provided
hereunder during such conversion period and Customer pays the applicable license
fee within  thirty  days of the  execution  of the license  agreement  described
above.

         (c) Upon execution of a license  agreement  pursuant to Sections 8.3(a)
or 8.3(b)  above,  Saville will  designate  Customer as a Preferred  Beneficiary
under its Master Preferred  Software Escrow Agreement with DSI Technology Escrow
Services.

         8.4      Termination Assistance

         (a)  It is the  intent  of  the  parties  that  at  the  expiration  or
termination of this Agreement, regardless of the reason, Saville shall cooperate
with  Customer and provide  Customer  with  assistance in moving to a substitute
provider to have its  message  processing  performed  with  minimal  disruption.
Therefore,  upon any notice of termination  or expiration,  Saville will, to the
extent possible,  upon written request by Customer,  provide  Customer  promptly
(and in any event  within  fourteen  (14) days)  with a copy of the most  recent
Customer Data in its possession in a non-proprietary format agreed to by Saville
and Customer or the new service provider, and provide such other services as may
be mutually  agreed to by the parties  (the  "Transitional  Services").  Saville
shall also inform  Customer  of the format or  organization  of the  transferred
Customer Data, and no such information shall be considered confidential.

         (b) If any Transitional  Services require the utilization of additional
resources or cause  Saville to incur  expenses  that Saville would not otherwise
use or incur, as the case may be, in the performance of this Agreement, Customer
will pay Saville for such usage at the then prevailing  Saville Consulting Rates
and reimburse Saville for the expenses incurred. All Transitional Services shall
be provided  in  accordance  with a  statement  of work to be agreed upon by the
parties in accordance with the Customization Services Agreement.

9.       GENERAL

         9.1      Headings

         The  division of this  Agreement  into  Articles  and  Sections and the
insertion of headings are for convenience of reference only and shall not affect
the  construction  or  interpretation   of  this  Agreement.   The  terms  "this
Agreement",  "hereof,"  "hereunder"  and similar  expressions  in this Agreement
refer to this  Agreement  and not to any  particular  Article,  Section or other
portion and include any agreement  supplemental hereto.  Unless something in the
subject  matter or  context  is  inconsistent  therewith,  references  herein to
Articles and Sections are to Articles and Sections of this Agreement.

         9.2      Extended Meanings

         In this  Agreement,  words  importing  the  singular  number only shall
include the plural and vice versa,  and words  importing  persons  shall include
individuals,  partnerships,  associations,  trusts, unincorporated organizations
and corporations.  The terms provision and provisions in this Agreement refer to
terms, conditions, provisions, covenants, obligations,  undertakings, warranties
and representations in this Agreement.
<PAGE>

                                      -14-


         9.3      Notices

         All notices shall be in writing and shall be sent by personal delivery,
by a reputable  nationwide  overnight  courier service prepaid,  or by facsimile
with confirmed answerback. Notices shall be sent to the respective addresses set
forth above, attention President,  with a copy to General Counsel. Notices shall
be deemed received and effective upon delivery in the case of personal delivery,
on receipt in the case of facsimile,  and one day after it is sent via overnight
courier. No change of address shall be binding upon the other party hereto until
written notice thereof is received by such party at the address shown above.

         9.4      Accounting Terms

         All accounting terms not specifically defined herein shall be construed
in accordance with U.S. generally accepted accounting principles.

         9.5      Currency

         All  references  to currency  herein are deemed to mean lawful money of
United States unless expressed to be in some other currency.

         9.6      Force Majeure

         To the extent the  performance of this  Agreement,  or any  obligations
hereunder (except the making of payments hereunder) is prevented, restricted, or
interfered  with by  reason  of  fire,  flood,  earthquake,  explosion  or other
casualty or  accident or act of God;  strikes or labor  disputes;  inability  to
procure or obtain delivery of parts, supplies, power, Equipment or Software from
suppliers,  war or other  violence;  any law,  order  proclamation,  regulation,
ordinance, demand or requirement of any governmental authority; or any other act
or condition whatsoever beyond the reasonable control of the affected party, the
party so  affected,  upon  giving  prompt  notice to the other  party,  shall be
excused from such performance to the extent of such  prevention,  restriction or
interference;  provided,  however,  that the party so  affected  shall  take all
reasonable  steps to avoid or remove  such  cause of  non-performance  and shall
resume performance hereunder with dispatch whenever such causes are removed; and
provided further that, in the event such cause is not removed within a period of
two (2) weeks, the other party may terminate this Agreement for cause.  Customer
and Saville shall make best efforts to comply with the disaster recovery program
to be agreed prior to excusing performance under this Section 9.6.

         9.7      Severability

         If any provision of this  Agreement is declared or found to be illegal,
unenforceable  or void,  then both parties shall be relieved of all  obligations
arising  under such  provision,  but only to the extent that such  provision  is
illegal, unenforceable or void and does not relate to the payments to be made to
Saville.  If the  remainder  of this  Agreement  shall not be  affected  by such
declaration  or finding  and is capable of  substantial  performance,  then each
provision not so affected shall be enforced to the extent permitted by law.
<PAGE>

                                      -15-


         9.8      Insurance and Risk of Loss

         When this  Agreement  requires  performance  by Saville's or Customer's
employees on the other party's  premises,  the performing  party shall carry and
maintain worker's  compensation and employer's  liability insurance covering its
employees engaged in such performance. Each party shall bear the risk of loss or
damage to Equipment  and Software of the other while in the care,  possession or
control of such party and shall carry  insurance  against such loss.  Each party
shall also carry insurance which is required against losses or damages caused by
the performing party's negligence.

         9.9      Assignment

         Neither party may,  without the other  party's  prior written  consent,
which consent shall not be unreasonably withheld or delayed,  assign or transfer
this Agreement,  or any of its rights or obligations under this Agreement to any
third person (in this  Section,  an  "Assignee")  except to an affiliate  wholly
owned by, or that wholly owns, or that is under common control with, such party,
or as  part  of  the  sale,  merger,  or  other  transaction  involving  all  or
substantially  all of the  assets  of the  party,  provided  that  the  Assignee
undertakes to the party not making the  assignment to fully perform and be bound
by the  provisions  of this  Agreement.  Saville may delegate to  affiliates  of
Saville  and  to  agents,  suppliers  and  contractors  of  Saville  any  of the
obligations  herein  imposed  upon  Saville and Saville may disclose to any such
persons any  information  required by them to perform the duties so delegated to
them,  but  such  delegation  shall  not  relieve  Saville  of  its  performance
obligations hereunder.

         9.10     Waiver

         No  modification,  addition to or waiver of any rights,  obligations or
defaults  shall be effective  unless in writing and signed by the party  against
whom the same is  sought  to be  enforced.  One or more  waivers  of any  right,
obligation  or  default  shall not be  construed  as a waiver of any  subsequent
right,  obligation or default.  No delay or failure of Saville in exercising any
right  hereunder  and no partial or single  exercise  thereof shall be deemed of
itself to constitute a waiver of such right or any other rights hereunder.

         9.11     Governing Law

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the  Commonwealth of  Massachusetts,  excluding its conflict of laws
principles.

         9.12     Dispute Resolution

         (a) All  controversies  or claims  arising  out of or  relating to this
Agreement or breach thereof, including any billing dispute (a "Dispute"),  shall
be resolved in accordance with the procedures set forth in this Section.

         (b)  Initially  the Dispute  shall be referred to the  Customer's  Vice
President  familiar with the Services  pursuant to this  Agreement and a Saville
Vice President to resolve the Dispute.
<PAGE>

                                      -16-


         (c) In  the  event  that  one of the  individuals  specified  above  is
unavailable,  the  Dispute  shall be  referred  to that  individual's  immediate
superior or designee.

         (d) If the Dispute cannot be resolved by such individuals within thirty
(30)  days,  it  shall  be  finally  settled  by  expedited  arbitration  by one
arbitrator chosen-by the American Arbitration Association and in accordance with
the commercial  arbitration rules of the American Arbitration  Association,  and
judgments  upon the award rendered by the arbitrator may be entered in any court
having  jurisdiction  thereover.  The arbitrator shall be ethically  neutral and
agree to be bound by the  American  Bar  Association's  rules of  ethics in this
regard.  Both parties shall bear equally the cost of the arbitration  (exclusive
of legal fees and expenses, all of which each party shall bear separately).  The
place of arbitration  shall be Albany,  New York and the language of arbitration
will be English.

         9.13     Survival

         Articles 3, 4, 5, 7, 8 and Sections 2.9,  9.11,  9.12,  9.13,  and 9.15
shall survive the expiration or termination of this Agreement.

         9.14     Independent Contractor

         Saville  employees  shall be deemed not to be at any time  employees or
servants of Customer.  Saville is and shall remain an independent contractor for
all purposes.  Unless otherwise agreed to, Saville does not undertake to perform
any obligation of Customer, whether regulatory or contractual,  or to assume any
responsibility for Customer's business or operations.

         9.15     Solicitation of Employees

         In the event that either party directly or indirectly hires, whether as
an employee,  independent  contractor,  or in any other capacity, any person who
was,  within six months  prior to the hiring,  an employee of the other party or
any of its subsidiaries, such party agrees to pay the other party a finder's fee
equal to 26 times that employee's bi-weekly gross compensation at the time he or
she left the  employment of the other party or its  subsidiary.  This  provision
shall apply only to those  employees who either worked on Customer's  account in
some capacity or worked with software or applications which were in some fashion
generally similar to any offered or provided to Customer.

         9.16     Further Assurances

         Each of the parties  hereto shall from time to time execute and deliver
all such further  documents  and  instruments  and do all acts and things as the
other party may reasonably  require to effectively  carry out or better evidence
or perfect the full intent and meaning of this Agreement.

         9.17     Incorporation of Schedules

         Schedules  A, B, C, D and E annexed  hereto  are  incorporated  in this
Agreement  and  are  deemed  to be a part  hereof  and  any  references  to this
Agreement shall mean this Agreement and include Schedules A, B, C, D and E.
<PAGE>

                                      -17-


         9.18     English Language

         The parties have requested  that this Agreement and all  communications
and documents relating hereto be expressed in the English language.

         9.19     No Relationship

         Nothing in this Agreement  shall be construed to constitute or create a
joint venture,  partnership, or formal business organization of any kind and the
rights and  obligations  of each party shall be only those  expressly  set forth
herein.  Neither party shall have authority to bind the other, and neither party
assumes any liabilities of the other party.

         9.20     Entire Agreement

         This Agreement  constitutes  the entire  Agreement  between the parties
hereto with respect to the subject  matter hereof and cancels and supersedes any
prior  understandings  and  agreements  between the parties  hereto with respect
thereto. There are no provisions, representations,  undertakings, agreements, or
collateral  agreements  between the parties other than as set out herein and the
parties agree that no obligations  or duties not set out expressly  herein shall
be imposed  upon the parties or implied by law.  Unless  otherwise  agreed to in
writing by the parties,  Customer's orders for Services shall be governed by the
terms of this Agreement and nothing contained in any purchase order shall in any
way modify, vary, change or add any term or condition hereto.

         9.21     Publicly

         All media releases,  public announcements and public disclosures by the
parties or their  employees or agents  relating to this Agreement or its subject
matter,  including without limitation widely disbursed  promotional or marketing
material,  but not including any announcements  intended solely for the internal
distribution of either party, or any disclosure required by legal, accounting or
regulatory  requirements beyond the reasonable control of either party, shall be
sent in advance to the other party at least five (5) days before it is released.
Any  further  publicity  of  substantially  the same  import need not be sent in
advance to the other party.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of September 30, 1998.

CHOICE ONE COMMUNICATIONS INC.                    SAVILLE SYSTEMS INC.


By:  /s/ Kevin S. Dickens                         By:  /s/ John J. Kiley

Name:    Kevin S. Dickens                         Name:    John J. Kiley

Title:   Senior Vice President                    Title:   Senior Vice President
<PAGE>

                                      -18-


                                   Schedule A

                              SERVICES DESCRIPTION

         Within  the scope of this  Agreement  and the  Specifications,  Saville
shall provide to Customer the following Services:

Processing Services
Support Services
Technical Support Services

1.       Processing Services

         Processing Services consists of the following:

         (a)      Data Center Facilities

         Saville  will  provide the Data Center and the Host System used for the
message  processing  described  below during the Hours of Service in  accordance
with the Service Levels. Customer acknowledges that Saville makes no commitments
to any Service Levels outside of the Hours of Service, when Data Center and Host
System availability will be degraded due to backups and other maintenance tasks.
The Data Center will be located in Toronto,  Ontario,  or such other location as
Saville shall operate to provide Services to Customer  hereunder.  Saville shall
provide at least  thirty (30) days prior  written  notice of the movement of the
Data Center.

         (b)      Message Processing

         Saville  shall  process  Message and Customer Data provided by Customer
using the Host System and the Base  Software to meet the call  processing,  call
rating,  billing,  customer  interface,  and audit and control  requirements  as
agreed between the parties.

         (c)      Tape and Tape Librarian Operations

         Saville  will  retrieve,  mount and refile tape  library  volumes.  All
deliveries  coming  into and  leaving  the Data  Center are logged and will have
proper  paperwork  attached to facilitate  correct delivery and to permit prompt
tracing.

         (d)      Back-up of Data

         Saville shall provide  backup and recovery of Customer Data as directed
by Customer to protect  against  damage or loss of integrity  to Customer  Data.
Saville will ship tapes to offsite storage as per Customer's defined procedures.
This is limited to one (1) courier run per day, five (5) days per week. Customer
is  responsible  for all other tape  shipments  to and from the Data  Center and
related costs.
<PAGE>

                                      -19-


         (e)      Output Production

         Output production  consists of the output production services as agreed
between the  parties.  Saville  shall not provide  any  pre-printed  form stock,
except  as  may  be  otherwise  provided  herein,  or  be  responsible  for  any
transportation, courier or mail charges associated with the distribution of this
output.  Customer is responsible  for all report  shipments to and from the Data
Center and related  costs.  Print jobs will be set up,  scheduled  and processed
according to Customer's specifications.

         (f)      Service Outages and Changes

         Saville shall  schedule and perform  planned  service  outages  outside
Hours of Service. Saville shall provide reasonable advance notice to Customer of
planned service outages.

2.       Support Services

         Support  Services,  which shall be provided in accordance with mutually
agreed upon Service Levels, consist of the following:

         (a)      Software Training

         Saville will provide user  application  training for the Base Software.
Such training will consist of Saville providing employees of Customer with up to
an aggregate of three (3)  man-weeks of training at  location(s)  to be mutually
agreed upon.

         (b)      Telephone Message Desk

         From 2:00 a.m. to 7:00 p.m.  Eastern  Standard Time or Eastern Daylight
Time, as  applicable,  during  Business  Days,  Saville will provide a telephone
message desk for Customer to report problems and answer "how-to"  questions,  to
the extent  possible.  The service will  determine the nature of the problem and
handle the problem if possible,  or direct the problem to appropriate  personnel
who will attempt to handle the problem.

         Outside  the hours set forth in the  immediately  preceding  paragraph,
Saville  will make  available a paging  mechanism to report  Critical  Operation
Problems.  The person so paged will  determine  the  nature of the  problem  and
handle the problem if possible,  or direct the problem to appropriate  personnel
who will attempt to handle the problem.

         If the problem  reported by Customer is  determined  by Saville to have
been caused by Customer or a third party,  Saville will inform  Customer of such
fact and may charge  Customer for such  investigation,  in  accordance  with the
Saville  Consulting  Rates then in effect for such  investigation.  Customer may
request  that Saville  make  reasonable  efforts to resolve such problem at such
Consulting Rates.
<PAGE>

                                      -20-


3.       Technical Services

         Saville will answer how-to question as set forth above and will provide
technical  services  requested  by Customer  on a mutually  agreed upon basis in
accordance with the Customization. Services Agreement.
<PAGE>

                                      -21-


                                   Schedule B

                                 SERVICE LEVELS

         Subject  to  the  provisions  of  this  Agreement,  Saville  shall  use
reasonable  best efforts to meet or exceed the  following  Service Level target:
Host System  Availability  of 99.5.%  during the Hours of Service.  In addition,
during the period of the  Specification  Study provided under the  Customization
Agreement  Customer and Saville shall agree upon additional  Service Levels,  in
accordance  with which Saville  shall  provide the Services  during the Hours of
Service.

         For the purposes of this Schedule B, "Host System  Availability"  means
the number of hours  during  Hours of Service in any  calendar  quarter that the
Host System is scheduled to be available to perform Processing Services less the
amount of time in the calendar  quarter the Host System cannot be so used due to
hardware failure of the AS/400 or Programming  Errors,  divided by the number of
hours during  Hours of Service in the  calendar  quarter that the Host System is
scheduled  to be  available  to  perform  Processing  Services,  expressed  as a
percentage.
<PAGE>

                                      -22-


                                   Schedule C

                        Customization Services Agreement
                              Terms and Conditions

CHOICE ONE COMMUNICATIONS INC.
333 West Commercial Street
Suite 2500
East Rochester, NY 14445

Thank  you  for  choosing  SAVELLE  SYSTEMS  INC.  ("Saville")  to  provide  you
("Customer") with  customization  services (the "Project").  The terms appearing
below  and  on  the  attached  appendices   (Appendices  1  and  2),  which  are
incorporated by this reference,  form our Agreement for developing  software and
documentation. Please read carefully, and sign this Agreement in duplicate. Both
copies  (including  Appendices)  should  be  returned  to  Saville  for  written
acceptance.  Once accepted, Saville will sign both copies and then return one of
those copies to you.

Saville  and  Customer  have  also  entered  into  a  Service  Bureau  Agreement
commencing on September 30, 1998 (the "Service Bureau Agreement").

1.       DEFINITIONS

When  used in this  Agreement,  the  following  terms  shall  have  the  meaning
specified below:

1.1      "Base Software" means the Base Software, as that term is defined in
         the Service Bureau Agreement.

1.2      "Billing System" means the Base Software and the Software Developments.

1.3      "Documentation"  means any printed  material  in the  English  language
         related to the  Software  Developments  provided  by Saville for use in
         connection with the Billing System.

1.4      "Future  Software  Developments"  means any future  developments to the
         Billing System  specifically  requested by Customer in accordance  with
         Section 2.2 hereof.

1.5      "Intellectual Property" means all intellectual and industrial property,
         including  copyright,  trademarks,  patents,  industrial designs,  mask
         works  and  integrated  circuit  topographies,  created,  developed  or
         reduced by practice by a party under this Agreement.

1.6      "Project Plan" means the timetable for accomplishing the Project, as
         set out in the Statement of Work.

1.7      "Software Developments" means the enhancements and developments made by
         Saville  in  order  to  adapt  the  Base   Software  to  the   specific
         requirements of Customer, all as listed in the Statement of Work.
<PAGE>

                                      -23-


1.8      "Statement of Work" means the initial statement of work to be completed
         and mutually agreed upon by Saville and Customer pursuant to Appendix 1
         hereto.

1.9      "Technical Specifications" means the detailed design specifications for
         the Software  Developments  as listed in the Statement of Work, as well
         as the  detailed  description  of the other  services to be provided by
         Saville under this Agreement.

2.       SOFTWARE DEVELOPMENTS

2.1      Initial Implementation

(a)      After  acceptance of the Statement of Work by Customer,  this Agreement
         and the  Statement of Work shall  supersede  all other  definitions  or
         descriptions  of the  Software  Developments,  both  written  or  oral,
         whether made by Customer or Saville.

(b)      Based  on the  Technical  Specifications,  Saville  shall  develop  the
         Software Developments.  These will be done at Saville's premises and at
         Customer's premises as required.

(c)      Each party shall appoint a primary contact and a secondary  contact who
         shall be the contact point for every issue  concerning  the Project and
         who shall be informed of the progress of the Project.  The names of the
         contacts  will be  exchanged  in  writing  by the  parties.  Using  the
         contacts,  the parties  shall  report to each other as mutually  agreed
         upon as to the progress being made by each of them in relation to their
         various  responsibilities set out in the Project Plan, any delays being
         encountered and the actions being taken to recover from such delays.

(d)      Any additions, modifications or changes to the Technical Specifications
         contained  in the  Statement  of Work shall be deemed  Future  Software
         Developments and covered under Section 2.2 below.

2.2.     Future Software Developments.

(a)      Customer may in the future determine that Future Software  Developments
         should be made to the Billing  System.  Customer will  initiate  Future
         Software Developments by delivering a draft set of user requirements to
         Saville  detailing  the  general  functionality  required of the Future
         Software Developments and any other general requirements to be met.

(b)      Saville shall respond within a reasonable  timeframe (but not more than
         thirty (30) days) to user  requirements  received  by it under  Section
         2.2(a) above by providing  Customer with a written best estimate of the
         days of effort required to carry out the Future Software  Developments,
         together with any general comments on the user requirements that may be
         appropriate. The days of effort estimate shall be inclusive of the time
         required to produce  Documentation  as required  under this  Agreement,
         project management, consultancy work and all Saville internal testing.

(c)      Upon receipt of Saville's estimate under Section 2.2(b) above, Customer
         will review the user requirements for the Future Software  Developments
         and shall make any changes that
<PAGE>

                                      -24-

         it  deems  necessary.  Customer  will  then  prepare  a  detailed
         functional  specification and a project timetable specifying dates for
         completion of the relevant phases of the Future Software  Developments
         based on  Saville's  days of effort  estimate.  Customer,  may, at its
         discretion,  request Saville to complete the project  timetable on its
         behalf based on Customer's delivery requirements.

(d)      Upon receipt of the functional  specification  for the Future  Software
         Developments   (as  prepared  under  Section  2.2(c)  above)  and  upon
         completion of the project  timetable,  Saville shall review its days of
         effort estimate and shall advise Customer of the extent to which it can
         comply with the functional specification and the project timetable. The
         parties   shall  then  agree  upon  any   changes  to  the   functional
         specification  or to the project  timetable  which may be  necessary to
         enable  Saville  to  complete  the  Future  Software   Developments  in
         accordance with both of those documents.

(e)      Upon   completion   and  written   agreement  by  the  parties  of  the
         documentation  referred  to in  Section  2.2(d)  above in the form of a
         statement  of work  Saville  shall carry out and  implement  the Future
         Software   Developments  in  accordance  with  the  agreed   functional
         specification  and project timetable all as set forth in such statement
         of work.

(f)      The work  carried  out by Saville to  produce a  statement  of work for
         Future Software  Developments will be charged to Customer on a time and
         material basis at an hourly rate equal to Saville's  then-current  rate
         for producing such statements of work.

3.       DEVELOPMENTS AND TESTING EQUIPMENT - SPACE

Customer agrees to provide facilities for Saville, the equipment, Billing System
and the Future  Software  Developments,  at no charge,  and Customer will ensure
that Saville has sufficient access to such equipment,  Billing System and Future
Software Developments, so long as the security requirements of Customer are met.
Each party will also provide reasonable work space on the other party's premises
for its  employees who require work space to furnish the services to be provided
by Saville under this Agreement.

4.       CUSTOMER ASSISTANCE

Customer  shall assist  Saville in the  performance  of its services  under this
Agreement  by  making   available  all   equipment,   software,   documentation,
information  and  personnel  reasonably  required  for  the  execution  of  this
Agreement on a timely basis after  Saville has provided  Customer  with any such
requirement.  Customer  shall also  ensure that those of its  personnel  who are
assigned to assist Saville are familiar with  Customer's  requirements  and have
the  expertise  and  capabilities  necessary to permit  Saville to undertake and
complete the services under this Agreement.

 5.      OWNERSHIP OF SOFTWARE DEVELOPMENTS AND FUTURE SOFTWARE DEVELOPMENTS

5.1  Upon  payment  of  the  a-mounts  specified  in  Section  7,  the  Software
Developments  and all  Intellectual  Property related to them and, in accordance
with  Section 2 of this  Agreement,  the Future  Software  Developments  and all
Intellectual  Property  related to them,  shall be jointly
<PAGE>

                                      -25-

owned by Customer  and  Saville,  i.e.,  each party shall grant the other a
royalty-free,  perpetual  license to use, modify and create  derivative works of
all of the foregoing.

5.2 This  ownership  and grant of license by each  party  shall  imply that each
party will be entitled to exercise  all  Intellectual  Property  rights on these
Software  Developments  and  Future  Software  Developments  (including  without
limitation the rights to disclose,  use, sell,  license,  and adapt) without any
interference  of the other  party or any duty to  account  to the  other  party,
except  that  Customer  shall  not  license  any  third  party to use any of the
Software  Developments,  the Future Software  Developments  or the  Intellectual
Property rights related to them.

6.   DELIVERY SCHEDULE
     -----------------

6.1  Any Software Development or Future Software Development shall be tested and
implemented according to the time schedule provided in the applicable statement
of work, with the understanding that if any of the time-frames in such statement
of work are delayed, the other time-frames will be postponed by an equal number
of days.

6.2  On the date of the delivery of the Software Developments and on the date of
delivery of any Future Software Developments, Customer will initiate user
acceptance testing. If Customer is satisfied with the results of the Billing
System on the date which is fifteen (15) business days after such delivery, a
statement of provisional receipt will be drawn up and signed by Customer and
delivered to Saville. In any event, Customer will certify full acceptance of the
Billing System no later than thirty (30) business days after delivery of the
Billing System or the Future Software Development, as the case may be, for user
acceptance testing.

7.   PRICES, PAYMENT AND PENALTIES
     -----------------------------

7.1  Fee for Software Developments
     -----------------------------

Work to be performed by Saville on Software Developments pursuant to the
Statement of Work shall be charged to Customer based on Saville's then-current
hourly rates, plus reimbursement for materials and other related expenses
reasonably incurred by Saville in performing such work. Saville's current hourly
rates rates are set forth in Appendix 2 attached hereto.

7.2  Fee for Future Software Developments
     ------------------------------------

Work to be performed by Saville on Future Software Developments shall be charged
to Customer based on Saville's then-current hourly rates, plus reimbursement for
materials and other related expenses incurred by Saville in performing such
work.

7.3  Expenes
     -------

(a)  Customer agrees to reimburse Saville for the cost of travel, at coach class
     or equivalent rate, and time involved in necessary visits to carry out
     and/or to install the Software Developments and Future Software
     Developments, subject to a maximum limit eight (8) hours for travel to and
     from Saville to Customer. Travel time charges will be paid at Saville's
     then-current hourly rate for travel related to customization services for
     its other customers.

(b)  All reasonable accommodation and subsistence expenses incurred by Saville
     will also be reimbursed by Customer. Such expenses must be expressly
     requested by Customer in relation to the Project and for the services
     provided by Saville.

(c)  All telecommunication expenses incurred by Saville in relation to the
     Project and for services provided by Saville will also be reimbursed by
     Customer upon presentation by Saville of sufficient written proof of
     reasonable expenses incurred.

(d)  These expenses, except telecommunication expenses, must receive Customer's
     prior written authorization and will be reimbursed upon receipt of an
     invoice with the related vouchers.

7.4      Taxes

Prices in this  Agreement are exclusive of all taxes and Customer  shall pay any
sales, use, goods and services, personal property,  consumption,  value-added or
other tax and any duties or tariffs that may be assessed  whether based upon the
delivery,  possession, sale or use of these customization services or otherwise,
except for tax based on the net or gross income of Saville.

7.5  Invoicing and Payment Terms

(a)  Any payments due Saville from  Customer will be invoiced and wil be due and
     payable thirty (30) days after  Customer's  receipt of such invoice,  which
     may be sent by facsimile and deemed received with confirmed answerback.  If
     payment is delayed by  Customer,  other  than in  accordance  with  Section
     7.5(b) below,  Saville shall be entitled to charge interest at a rate equal
     to the lesser of: (i) eighteen (18%) per annum;  or (ii) the maximum lawful
     interest rate under applicable law. Each such invoice delivered to Customer
     will  provide  details of the  charges  to  Customer,  including  Agreement
     reference  numbers,   applicable  rates  and  hours  of  Saville  personnel
     providing services to Customer and will be supported by proper invoices and
     vouchers in respect of all expenses for which reimbursement is claimed.

(b)  All  payments  under  this  Agreement  shall be made in U.S.  Dollars,  and
     Customer  shall have the right to withhold  payments for any amounts  under
     dispute by Customer,  but shall pay any other amounts invoiced that are not
     in dispute. If such dispute is resolved in favor of Saville, Customer shall
     pay interest on such disputed amount from the date it originally became due
     until the date it is paid to  Saville at a rate equal to the lesser of: (i)
     eighteen  percent (18%) per annum; or (ii) the maximum lawful interest rate
     under applicable law.

8.   DURATION AND TERMINATION

8.1 This Agreement may be terminated forthwith by either party on written notice
if the other  party is in  significant  breach of its  obligations  and fails to
remedy  the  breach  within  thirty  (30) days of  receipt  of notice in writing
thereof.  In the event  that the  terminating  party can  demonstrate  that such
breach has  involved  it in  additional  costs,  then it shall have the right to
recover such costs from the breaching party.
<PAGE>

                                      -26-


8.2 Either party may terminate this Agreement forthwith on written notice if the
other party shall become  insolvent or bankrupt or make an arrangement  with its
creditors or go into liquidation.

8.3 Notwithstanding  anything contained in this Agreement to the contrary, in no
event  shall  the  Statement  of Work be  terminated  once it has been  accepted
pursuant to Section 2.1(a).

8.4 Upon  termination  of this  Agreement,  however  occasioned,  Saville  shall
forthwith  deliver  to  Customer  (without  retaining  copies  of the  same) all
correspondence,  drawings, specifications,  accounts documents and papers of any
description  relating to affairs and business of Customer (or any  subsidiary or
associated  company)  whether or not the same were  prepared  by  Saville,  were
supplied by Customer (or any  subsidiary or associated  company),  and all other
property  of  Customer  or any  subsidiary  or  associated  company  (other than
property  jointly owned of Saville or Customer)  within its  possession or under
its control.

8.5 Termination of this Agreement shall not prejudice any rights of either party
which have arisen on or before the date of  termination  and shall not prejudice
the Service Bureau Agreement or any rights of either party thereunder.

9.       WARRANTY

9.1 Saville  warrants  and  represents  to  Customer  that it has full right and
authority to enter into this Agreement.

9.2 Saville  warrants  that the Software  Developments  and the Future  Software
Developments  will  perform  the  facilities  and  functions  set  out in  their
respective  statements of work  (including all  technical,  functional and other
specifications  contained  therein)  as of the  date of  acceptance,  and  shall
continue  to  provide  such  facilities  and  functions  and  shall be free from
programming errors for a period of ninety (90) days from the, date of acceptance
(the "Warranty Period"). Notwithstanding anything contained in this Agreement to
the  contrary,  Saville shall not be liable for any  correction  of  programming
errors or  non-conformity  of the  Billing  System  and/or the  Future  Software
Developments to the extent required because of:

(a)      any  changes  made to the  Billing  System  and/or the Future  Software
         Developments which were not authorized by Saville nor carried out under
         the supervision and control of Saville; or

(b)      any computer program created by Customer or any third party retained by
         Customer,  which computer program  adversely affects the performance of
         the Billing System and/or the Future Software Developments; or

(c)      accident,  neglect,  misuse of the Billing System and/or the Future
         Software Developments by Customer.

During the Warranty Period,  Saville shall, at its own cost, immediately correct
and remedy any  reported,  reproducible  programming  errors,  bugs or any other
problems  because  of which  the  Billing  System  and/or  any  Future  Software
Developments  do not conform to the  applicable  statement of work  ("Problems")
notified to it by Customer and shall carry out modification to
<PAGE>

                                      -27-

and/or correctionof the Billing System and/or any Future Software  Developments,
such that these will be able to provide the  facilities and functions set out in
the applicable statement of work. If Saville is unable, after using commercially
reasonable efforts, to correct any Problem with a Software Development or Future
Software  Development  under this warranty,  Customer's sole remedy shall be the
refund of an amount not to exceed the actual  payments  received  by Saville for
the hourly fees relating to such non-conforming  Software  Development or Future
Software Development.  This shall constitute Customer's exclusive remedy for any
such  Problem.  Notification  by Customer  under the terms of this Section shall
include a listing of output and such data as Saville may  reasonably  require in
order  to  reproduce  the  operating   conditions  in  which  the  Problem,  the
programming  error or  non-conformity  was  discovered.  All work carried out by
Saville  under  this  warranty  will be  chargeable  to  Customer  at  Saville's
then-current  hourly  rate if it is found that no Problem or  programming  error
exists.

9.3  Saville  warrants  that  the  Software  Developments  and  Future  Software
Developments  developed  under this  Agreement will be designed to be used prior
to,  during,   and  after  the  calendar  year  2000  A.D.,  and  without  human
intervention will correctly recognize,  calculate,  process, sequence, store and
transmit  Date Data without error or  interruption,  including  leap years,  and
including  errors or  interruptions  from functions  which may involve Date Data
from more than one  century.  The term "Date  Data" shall mean any data or input
which  includes  an  indication  of or  reference  to date  and  that is  stored
information and internal to functionality.  Date calculations involving either a
single century or multiple  centuries will neither cause an abnormal  ending nor
generate incorrect or unexpected results. When sorting by date, all records will
be sorted in accurate  sequence and when the date is used as a key, records will
be read and  written in accurate  sequence.  As used in the  previous  sentence,
accurate sequence means, by way of example,  that records will be read, written,
and sorted in ascending order so that the year 1999 is before the year 2000. The
Software Developments and Future Software Developments will calculate,  process,
and display leap year information  according to the following  algorithm:  (i) a
leap year will have twenty-nine  (29) days in the month of February;  and (ii) a
leap year occurs in all years divisible by 400 and all years evenly divisible by
4 and not evenly divisible by 100. Saville,  however, makes no representation or
warranty nor takes any  responsibility  for errors or omissions  caused by third
party  systems,  devices,  interfaces  or  software,  or for errors or omissions
caused by functional or technical requirements specified by Customer.

9.4 Saville warrants that to the best of its knowledge, at the time of delivery,
no portion of the  Software  Developments  or Future  Software  Developments  as
delivered shall contain any software "Virus" as defined herein. For the purposes
of this Agreement,  "Virus" shall mean a set of computer  instructions which are
self-replicating  or  self-propagating  and  are  designed  to  contaminate  the
Software  Developments  or  Future  Software   Developments,   consume  computer
resources,  or modify,  destroy,  record or transmit data or programming without
the intent or permission of the user. Saville further warrants that prior to the
delivery  of any  Software  Product to  Customer,  Saville  will use  reasonable
commercial  efforts to detect and  screen out any virus  through  the use of the
current version of one or more commercially  available virus detection programs.
Saville warrants that to the best of its knowledge,  at the time of delivery, no
portion  of  the  Software  Developments  or  Future  Software  Developments  as
delivered  shall  contain any  "Disabling  Device," as defined  herein.  For the
purposes of this Agreement,  "Disabling Device" shall mean any software routines
or hardware  components designed by Saville to permit unauthorized access to, or
to disable or erase  software,  hardware  or data,  or to
<PAGE>

                                      -28-

perform  any other  such  actions  which  will have the  effect of  purposefully
materially   impeding  the  normal  and  expected   operation  of  the  Software
Developments or Future Software Developments.

9.5 THE  WARRANTIES  CONTAINED  IN  THIS  AGREEMENT  ARE IN  LIEU  OF ANY  OTHER
WARRANTIES OR  CONDITIONS,  EXPRESS OR IMPLIED,  INCLUDING,  BUT NOT LIMITED TO,
IMPLIED  WARRANTIES OR CONDITIONS OF  MERCHANTABILITY,  FITNESS FOR A PARTICULAR
PURPOSE, TITLE OR NON-INFRINGEMENT, AND THOSE ARISING BY STATUTE OR OTHERWISE IN
LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE.

10.      LIABILITY

10.1 Saville is liable for the  Software  Developments  and the Future  Software
Developments performed under this Agreement. HOWEVER, EXCEPT FOR INDEMNIFICATION
PROVIDED UNDER SECTION 11 HEREOF,  IN ANY CASE SAVILLE'S  ENTIRE LIABILITY UNDER
ANY  PROVISION OF THIS  AGREEMENT  WITH RESPECT TO A SOFTWARE  DEVELOPMENT  OR A
FUTURE SOFTWARE  DEVELOPMENT  SHALL BE LIMITED TO THE AGGREGATE AMOUNT OF HOURLY
FEES  (EXCLUDING   REIMBURSED  EXPENSES)  PAID  TO  SAVILLE  FOR  SUCH  SOFTWARE
DEVELOPMENT OR FUTURE  SOFTWARE  DEVELOPMENT,  AS THE CASE MAY BE, IN ACCORDANCE
WITH THIS AGREEMENT.

10.2 In no event shall  Saville be liable for indirect  damages (even if Saville
have been advised of the  possibility of such loss)  including,  but not limited
to, lost business  revenue,  lost data,  failure to realize  expected profits or
savings or other commercial or economic loss of any kind.

11.      INDEMNIFICATION

Saville  or  Customer,  as the  case  may be  ("Indemnitor"),  will  defend  and
indemnify  the  other  ("Indemnitee")  against  any  claim or suit  against  the
Indemnitee based on the alleged violation of a copyright trademark, trade secret
or other  proprietary  right  enforceable  within  the  United  States or Canada
through Indemnitee's use in Indemnitee's own internal operations or research and
development  program or through  Indemnitee's  use in the Billing  System,  of a
portion  of  a  Software  Development  or  Future  Software   Development,   the
responsibility  for which was that of the  Indemnitor,  and will pay all  costs,
settlements,  or judgments finally awarded, and any reasonable costs or expenses
incurred by  Indemnitee  prior to any prompt and timely  written  notice of such
claim as provided  below  (including,  but not limited to reasonable  attorneys'
fees,  whether required as a result of a third party claim or a claim to enforce
this  provision)  provided  that (i)  Indemnitor  has the right to  control  the
defense of the litigation,  (ii) Indemnitee takes such actions as Indemnitor may
reasonably request to assist in such defense, at Indemnitor's expense, and (iii)
Indemnitee gives Indemnitor prompt notice of any such claim. Indemnitee may have
its own counsel participate in, but not control, the defense of any such matter,
provided that the cost of such counsel shall be borne exclusively by Indemnitee.
Indemnitor will have no obligation to defend and indemnify  Indemnitee hereunder
to the extent that any such claim is based upon  modifications  to such Software
Development  or  Future  Software  Development  made by a party
<PAGE>

                                      -29-

other  than the  Indemnitor  or such  Software  Development  or Future  Software
Development  is used in a way or in  combination  with software for which it was
not designed.

12.      GENERAL

12.1     Confidentiality

Section 5 (confidentiality)  of the Service Bureau Agreement shall also apply to
this Agreement.

12.2     Headings

The division of this  Agreement  into Articles and Sections and the insertion of
headings  are for  convenience  of  reference  only and  shall  not  affect  the
construction or  interpretation  of this Agreement.  The terms "this Agreement",
"hereof,"  "hereunder"  and similar  expressions in this Agreement refer to this
Agreement  and not to any  particular  Article,  Section  or other  portion  and
include any  agreement  supplemental  hereto.  Unless  something  in the subject
matter or context is inconsistent  therewith,  references herein to Articles and
Sections are to Articles and Sections of this Agreement.

12.3     Extended Meaning

In this  Agreement,  words  importing the singular number only shall include the
plural and vice versa,  and words importing  persons shall include  individuals,
partnerships,    associations,    trusts,   unincorporated   organizations   and
corporations.  The terms  provision and  provisions in this  Agreement  refer to
terms, conditions, provisions, covenants, obligations,  undertakings, warranties
and representations in this Agreement.

12.4     Notices

All notices  shall be in writing and shall be sent by  personal  delivery,  by a
reputable  nationwide  overnight  courier service prepaid,  or by facsimile with
confirmed answerback. Notices shall be sent to Customer at the address set forth
above,  attention  President,  with a copy to General Counsel.  Notices shall be
sent to  Saville  at 1 Van de Graaff  Drive,  Burlington,  Massachusetts  01803,
attention President,  with a copy to General Counsel. Notices shall be effective
upon  delivery  in the case of  personal  delivery,  on  receipt  in the case of
facsimile,  and one day  after it is sent via  overnight  courier.  No change of
address  shall be binding  upon the other  party  hereto  until  written  notice
thereof is received by such party at the address shown above.

12.5     Accounting Terms

All  accounting  terms not  specifically  defined  herein  shall be construed in
accordance with U.S. generally accepted accounting principles.

12.6     Currency

All  references  to currency  herein are deemed to mean  lawful  money of United
States unless expressed to be in some other currency.
<PAGE>

                                      -30-

12.7     Force Majeure

To the extent the  performance  of this Agreement or any  obligations  hereunder
(except  the  making  of  payments  hereunder)  is  prevented,   restricted,  or
interfered  with by reason  of.  fire,  flood,  earthquake,  explosion  or other
casualty or  accident or act of God;  strikes or labor  disputes;  inability  to
procure or obtain delivery of parts, supplies, power, Equipment or Software from
suppliers,  war or other  violence;  any law,  order  proclamation,  regulation,
ordinance, demand or requirement of any governmental authority; or any other act
or condition whatsoever beyond the reasonable control of the affected party, the
party so  affected,  upon  giving  prompt  notice to the other  party,  shall be
excused from such performance to the extent of such  prevention,  restriction or
interference;  provided,  however,  that the party so  affected  shall  take all
reasonable  steps to avoid or remove  such  cause of  non-performance  and shall
resume performance hereunder with dispatch whenever such causes are removed, and
provided further that, in the event such cause is not removed within a period of
two (2) weeks, the other party may terminate this Agreement for cause.

12.8     Severability

If any  provision  of  this  Agreement  is  declared  or  found  to be  illegal,
unenforceable  or void,  then both parties shall be relieved of all  obligations
arising  under such  provision,  but only to the extent that such  provision  is
illegal, unenforceable or void and does not relate to the payments to be made to
Saville.  If the  remainder  of this  Agreement  shall not be  affected  by such
declaration  or finding  and is capable of  substantial  performance,  then each
provision not so affected shall be enforced to the extent permitted by law.

12.9     Assignment

Neither  party may,  without the other  party's  prior  written  consent,  which
consent shall not be unreasonably  withheld or delayed,  assign or transfer this
Agreement, or any of its rights or obligations under this Agreement to any third
person (in this Section,  an "Assignee") except to an affiliate wholly owned by,
or that wholly owns,  or that is under common  control with,  such party,  or as
part of the sale, merger or other transaction involving all or substantially all
of the assets of the party,  provided that the Assignee  undertakes to the party
not making the  assignment  to fully  perform and be bound by the  provisions of
this  Agreement.  Saville may delegate to  affiliates  of Saville and to agents,
suppliers and contractors of Saville any of the obligations  herein imposed upon
Saville and Saville may disclose to any such persons any information required by
them to perform the duties so delegated to them, but such  delegation  shall not
relieve Saville of its performance obligations hereunder.

12.10    Waiver

No  modification,  addition to or waiver of any rights,  obligations or defaults
shall be  effective  unless in writing and signed by the party  against whom the
same is sought to be enforced.  One or more waivers of any right,  obligation or
default shall not be construed as a waiver of any subsequent  right,  obligation
or default. No delay or failure of Saville in exercising any right hereunder and
no partial or single exercise  thereof shall be deemed of itself to constitute a
waiver of such right or any other rights hereunder.
<PAGE>

                                      -31-


12.11    Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts, excluding its conflict of laws principles.

12.12    Dispute Resolution

(a)      All  controversies  or  claims  arising  out  of or  relating  to  this
         Agreement  or  breach   thereof,   including  any  billing  dispute  (a
         "Dispute"),  shall be resolved in accordance  with the  procedures  set
         forth in this Section.

(b)      Initially  the  Dispute  shall  be  referred  to  the  Customer's  Vice
         President  familiar with the Services  pursuant to this Agreement and a
         Saville Vice President to resolve tile Dispute.

(c)      In  the  event  that  one  of  the   individuals   specified  above  is
         unavailable,  the  Dispute  shall  be  referred  to  that  individual's
         immediate superior or designee.

(d) If the Dispute  cannot be resolved by such  individuals  within  thirty (30)
days, it shall be finally  settled by expedited  arbitration  by one  arbitrator
chosen  by the  American  Arbitration  Association  and in  accordance  with the
commercial  arbitration  rules  of the  American  Arbitration  Association,  and
judgments  upon the award rendered by the arbitrator may be entered in any court
having  jurisdiction  thereover.  The arbitrator shall be ethically  neutral and
agree to be bound by the  American  Bar  Association's  rules of  ethics in this
regard.  Both parties shall bear equally the cost of the arbitration  (exclusive
of legal fees and expenses, all of which each party shall bear separately).  The
place of arbitration  shall be Albany,  New York and the language of arbitration
will be English.

12.13    Independent Contractor

Saville employees shall be deemed not to be at any time employees or servants of
Customer.  Saville  is and  shall  remain  an  independent  contractor  for  all
purposes.  Unless otherwise agreed to, Saville does not undertake to perform any
obligation  of Customer,  whether  regulatory or  contractual,  or to assume any
responsibility for Customer's business or operations.

12.14    Solicitation of Employees

In the event that either  party  directly  or  indirectly  hires,  whether as an
employee,  independent contractor, or in any other capacity, any person who was,
within six months prior to the hiring,  an employee of the other party or any of
its subsidiaries,  such party agrees to pay the other party a finder's fee equal
to 26 times that employee's  bi-weekly gross  compensation at the time he or she
left the employment of the other party or its  subsidiary.  This provision shall
apply  only to those  employees  who either  worked  for the other  party or its
subsidiary  on  the  Project  in  some  capacity  or  worked  with  software  or
applications  which were in some  fashion  generally  similar to any  offered or
provided to Customer.
<PAGE>

                                      -32-


12.15    Further Assurances

Each of the parties  hereto shall from time to time execute and deliver all such
further  documents and instruments and do all acts and things as the other party
may reasonably  require to effectively  carry out or better  evidence or perfect
the full intent and meaning of this Agreement.

12.16    English Language

The parties  have  requested  that this  Agreement  and all  communications  and
documents relating hereto be expressed in the English language.

12.17    No Relationship

Nothing in this  Agreement  shall be construed to  constitute  or create a joint
venture, partnership, or formal business organization of any kind and the rights
and  obligations  of each party shall be only those  expressly set forth herein.
Neither party shall have authority to bind the other,  and neither party assumes
any liabilities of the other party.

12.18    Entire Agreement

This Agreement  constitutes the entire Agreement between the parties hereto with
respect to the  subject  matter  hereof and  cancels  and  supersedes  any prior
understandings  and agreements  between the parties hereto with respect thereto.
There  are  no  provisions,   representations,   undertakings,   agreements,  or
collateral  agreements  between the parties other than as set out herein and the
parties agree that no obligations  or duties not set out expressly  herein shall
be imposed  upon the parties or implied by law.  Unless  otherwise  agreed to in
writing by the parties,  Customer's orders for Services shall be governed by the
terms of this Agreement and nothing contained in any purchase order shall in any
way modify, vary, change or add any term or condition hereto.

IN WITNESS  WHEREOF,  Customer and Saville have  executed this  Agreement  under
seal.

CHOICE ONE COMMUNICATIONS INC.                 SAVILLE SYSTEMS INC.


By:  /s/ Kevin S. Dickens                      By:  /s/ John J. Kiley

Name:    Kevin S. Dickens                      Name:    John J. Kiley

Title:   Senior Vice President                 Title:   Senior Vice President

Date:    September 30, 1998                    Date:    September 30, 1998