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EXHIBIT 10.7                                                      EXECUTION COPY

                         WAIVER AGREEMENT AND AMENDMENT
                          TO SWAP TRANSACTION DOCUMENTS

            THIS WAIVER AGREEMENT AND AMENDMENT TO SWAP TRANSACTION DOCUMENTS,
dated as of August 9, 2004 (this "AGREEMENT"), is being entered into among the
subsidiaries of Choice One Communications Inc., a Delaware corporation (the
"COMPANY"), listed on the signature pages hereto, with each such subsidiary
being a "COUNTERPARTY" and collectively the "COUNTERPARTIES"), and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association formerly known as
First Union National Bank (the "BANK").

                             PRELIMINARY STATEMENTS

      1.    The Counterparties and the Bank are parties to that certain ISDA
Master Agreement dated as of August 24, 2000 (the "MASTER AGREEMENT"), as
modified and supplemented by that certain Schedule thereto of even date
therewith among such parties (the "SCHEDULE") and that certain Swap Transaction
Confirmation dated September 1, 2000 among such parties (the "CONFIRMATION"),
pursuant to which the Counterparties and the Bank entered into an interest rate
swap transaction in the notional amount of $125,000,000 with respect to
specified fixed and floating rate payments effective February 8, 2001 and
terminating on February 8, 2006 (the Master Agreement, as modified and
supplemented by the Schedule and Confirmation, being referred to, collectively,
as the "SWAP AGREEMENT").

      2.    Unless otherwise defined herein, terms defined in the Swap Agreement
and used herein shall have the meanings given to them in the Swap Agreement as
amended by this Agreement.

      3.    Pursuant to the Swap Agreement, the Bank agreed to make certain
floating rate payments to and for the benefit of the Counterparties and the
Counterparties agreed to make certain fixed rate payments to and the for the
benefit of the Bank.

      4.    Pursuant to the Swap Agreement the Counterparties are obligated to
pay to the Bank on August 9, 2004 a net amount approximately equal to
$1,820,000, such amount to be exactly determined pursuant to the Swap Agreement
on or prior to such due date (the "AUGUST SWAP PAYMENT").

      5.    In order to permit the Counterparties and the Bank and certain other
creditors of the Counterparties time to implement a possible restructuring of
the indebtedness of the Counterparties, the Counterparties have requested that
(a) the Bank agree to amend the Swap Agreement to postpone the date on which the
August Swap Payment is required to be made to September 30, 2004 and (b) the
Bank waive until September 30, 2004 any Events of Default that have occurred and
may occur solely under Section 5(a)(vi) of the Master Agreement and any

                         Waiver Agreement and Amendment

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rights and remedies that it may have under or in connection with the Swap
Agreement as a result of the occurrence of such Events of Default, and, the Bank
has agreed to such amendments and to provide such waivers, in each case, subject
to the terms and conditions set forth below.

            NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:

            SECTION 1. Amendment to Swap Agreement. Upon and subject to the
occurrence of the Effective Date (as defined below), the Swap Agreement is
hereby amended to add the following proviso to the end of each of the references
to "Payment Dates:" in the Confirmation under the headings "Fixed Amounts" and
"Floating Amounts:"

      "; provided, however, that the Payment Date which would otherwise occur on
      August 9, 2004 pursuant to the foregoing provision shall instead occur on
      September 30, 2004 or, if earlier, on the date of the initial funding
      under any debtor-in-possession financing with respect to any Counterparty
      in any bankruptcy or insolvency proceeding."

            SECTION 2. Waivers with Respect to the Swap Agreement. Upon and
subject to the occurrence of the Effective Date (as defined below) and subject
to the other terms and conditions set forth below, and until September 30, 2004,
the Bank hereby:

                  (a)   waives the occurrence of any now existing Event of
      Default and any other Events of Default arising hereafter solely under
      Section 5(a)(vi) of the Master Agreement as modified and supplemented by
      the Schedule (any and all such now existing and hereafter arising Events
      of Default being referred to herein, collectively, as "SPECIFIED EVENTS OF
      DEFAULT"); and

                  (b)   agrees that the Swap Agreement, and each provision
      thereof, shall be read and construed as if no Specified Event of Default
      shall have occurred; and

                  (c)   waives all of its rights to exercise any remedies
      arising under the Swap Agreement as a result of any Specified Event of
      Default, including, without limitation, (i) any assertion of the failure
      of any condition under Section 2(a)(iii) of the Master Agreement, (ii) any
      right to charge the Default Rate with respect to the August Swap Payment
      or any other amount pursuant to Section 2(d) of the Master Agreement and
      (iii) any right to effect an Early Termination Date under Sections 6(a) or
      6(c) of the Master Agreement.

Notwithstanding anything to the contrary contained in this Section 2, on
September 30, 2004, (i) each of the waivers and agreements set forth in clauses
(a) through (c) of this Section 2 shall automatically terminate and be of no
further force or effect, (ii) each Specified Event of Default that may have
occurred and is then continuing is, without further action, reinstated and shall
have the same force and effect as if the waivers and agreements set forth in
clauses (a) through (c) of this Section 2 had not been provided by the Bank and
(iii) subject to the terms of the Swap Agreement and applicable law, the Bank
may thereupon and thereafter exercise all of its rights

                         Waiver Agreement and Amendment

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and remedies with respect to any Specified Events of Default which may have
occurred and are then continuing, including, without limitation, those described
in clause (c) of this Section 2.

            SECTION 3. Conditions to Effectiveness. This Agreement shall be
effective as of the date first above written when, and only when, the following
condition precedent has been fulfilled in a manner satisfactory to the Bank (the
"EFFECTIVE DATE"): the Bank and each Counterparty shall have executed and
delivered this Agreement.

            SECTION 4. Representations and Warranties by Counterparties. To
induce the Bank to enter into this Agreement, each of the Counterparties hereby
represents and warrants to the Bank the following:

            (a)   The execution, delivery and performance by such Counterparty
of this Agreement and the Swap Agreement, as amended hereby, are within such
entity's corporate or limited liability company powers, have been duly
authorized by all necessary corporate or limited liability company action, and
do not (i) contravene such entity's constituent documents, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award applicable to such entity, or (iii) conflict with
or result in the breach of, or constitute a default under, any contractual
obligation. As of the Effective Date, except as previously disclosed to the
Bank, no Counterparty is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of any
such contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could reasonably be expected
to have a material adverse effect upon the financial condition of the
Counterparties', taken as a whole.

            (b)   No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any other
third party is required to be obtained by any Counterparty in connection with
the execution and delivery, or performance by any such entity of any of its
obligations under, this Agreement or the Swap Agreement, as amended hereby.

            (c)   This Agreement has been duly executed and delivered by each
Counterparty, and is the legal, valid and binding obligation of such entity,
enforceable against such entities in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors' rights or by
equitable principles generally.

            (d)   Such Counterparty has no knowledge of any Event of Default
other than any Specified Event of Default.

                         Waiver Agreement and Amendment

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            SECTION 5. Representations and Warranties by the Bank. To induce the
Counterparties to enter into this Agreement, the Bank hereby represents and
warrants to the Counterparties that the Bank has no knowledge of the existence
of any Event of Default other than any Specified Event of Default.

            SECTION 6. Reference to and Effect on the Swap Agreement.

            (a)   On and after the Effective Date, each reference in the Swap
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Swap Agreement or any portion thereof, shall mean and be a
reference to the Swap Agreement, as amended or otherwise modified hereby.

            (b)   The Swap Agreement, as specifically amended or otherwise
modified by this Agreement, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.

            (c)   The execution, delivery and effectiveness of this Agreement
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank under the Swap Agreement, nor constitute a
waiver of any provision of any of the Swap Agreement.

            SECTION 7. Amendments. This Agreement may not be amended,
supplemented or modified except in a writing executed and delivered by each of
the parties hereto and General Electric Capital Corporation, as Administrative
Agent (the "SENIOR AGENT") under that certain Third Amended and Restated Credit
Agreement dated as of September 13, 2002, as amended (the "SENIOR CREDIT
AGREEMENT"), among the Company, certain of its affiliates, such Administrative
Agent and certain lenders (the "SENIOR LENDERS").

            SECTION 8. Third Party Beneficiaries. The Senior Agent and the
Senior Lenders shall be third party beneficiaries of this Agreement, and the
Senior Agent, on behalf of itself and the Senior Lenders, shall be entitled to
enforce the provisions of this Agreement against any of the parties hereto as if
the Senior Agent were a direct party hereto.

            SECTION 9. Costs and Expenses. The Counterparties agree to pay all
reasonable costs and expenses of the Bank associated with the preparation,
execution, delivery, administration, and enforcement of this Agreement,
including, without limitation, the reasonable fees and expenses of legal counsel
to the Bank with respect to this Agreement.

            SECTION 10. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

            SECTION 11. Waiver of Jury Trial. Each of the COUNTERPARTIES and the
BANK irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this

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Agreement or the actions of SUCH PARTIES hereto in the negotiation,
administration, performance or enforcement thereof.

            SECTION 12. Execution in Counterparts. This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                                       ***

                         Waiver Agreement and Amendment

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                                               CHOICE ONE COMMUNICATIONS OF NEW
                                               YORK INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               CONNECTICUT INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               MAINE INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               MASSACHUSETTS INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

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                                               CHOICE ONE OF NEW HAMPSHIRE INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF OHIO
                                               INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               PENNSYLVANIA INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               RHODE ISLAND INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

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                                               CHOICE ONE COMMUNICATIONS OF
                                               VERMONT INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS
                                               INTERNATIONAL INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE ONLINE INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               CHOICE ONE COMMUNICATIONS OF
                                               VIRGINIA INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

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                                               CHOICE ONE COMMUNICATIONS
                                               SERVICES INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               US XCHANGE,  INC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               US XCHANGE OF INDIANA, L.L.C.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               US XCHANGE OF ILLINOIS, L.L.C.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               US XCHANGE OF MICHIGAN, L.L.C.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                         Waiver Agreement and Amendment

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                                               US XCHANGE OF WISCONSIN, LLC.

                                               By: /s/ Ajay Sabherwal
                                                   -----------------------------
                                               Name:  Ajay Sabherwal
                                               Title:  CFO

                                               WACHOVIA BANK, NATIONAL
                                               ASSOCIATION

                                               By: /s/ Joel Thomas
                                                   -----------------------------
                                               Name:  Joel Thomas
                                               Title:  Director

Acknowledged and Accepted:

GENERAL ELECTRIC CAPITAL CORPORATION,
as the Senior Agent

By:     /s/ Christopher T. Nicholls
    -------------------------------------
Name:  Christopher T. Nicholls
Title:  Authorized Signatory

Acknowledged and Accepted:

CHOICE ONE COMMUNICATIONS INC.,
a Delaware corporation

By:     /s/ Ajay Sabherwal
    -------------------------------------
Name:  Ajay Sabherwal
Title: CFO

                         Waiver Agreement and Amendment<PAGE>

                                  EXHIBIT 10.1

AGREEMENT WITH LLOYD G. WATERHOUSE, FORMER CHIEF EXECUTIVE OFFICER, CHAIRMAN AND
                                   PRESIDENT

I, Lloyd G. Waterhouse, hereby acknowledge and agree as follows:

      1.    I am party to an Employment Agreement ("the Employment Agreement"),
            executed May 1, 1999 as amended and restated as of December 1, 2001
            and as further amended and restated as of September 2, 2003, by and
            between myself and The Reynolds and Reynolds Company ("REYNOLDS").

      2.    Effective July 7, 2004, I resigned as an employee and director of
            REYNOLDS on the condition that I would be treated for purposes of
            the severance of my employment as though I was terminated without
            cause under the Employment Agreement.

      3.    I intend by this Agreement to resolve all issues related to the
            Employment Agreement, and my employment with and separation from
            REYNOLDS.

      4.    In accordance with the condition set forth in the Employment
            Agreement and in consideration of REYNOLDS' promise to treat me as
            having been "terminated without cause" for purposes of Paragraph
            7(a) of the Employment Agreement, provided that I sign and do not
            rescind this waiver of claims, I hereby, for myself and my heirs and
            estate, fully and completely release REYNOLDS from any claim or
            liability under the Employment Agreement (other than its obligations
            under Paragraph 7(a) thereof), and fully and completely release each
            of its subsidiaries and affiliated companies, and each of their
            stockholders, directors, employees, agents, representatives,
            successors, and assigns from any and all claims, liabilities,
            promises, agreements, and lawsuits arising from or related to my
            employment with REYNOLDS, and separation from employment, including
            any and all claims of race, color, sex, national origin, ancestry,
            religion, disability, age or other discrimination, harassment, or
            retaliation, including any and all claims under the Ohio Civil
            Rights Act, Ohio Revised Code ("O.R.C.") Section 4112 (and sections
            following), the Ohio Whistleblower's Act, O.R.C. Section 4113.52
            (and sections following), the Ohio Workers' Compensation Retaliation
            Law, O.R.C. Section 4123.90, Title VII of the Civil Rights Act of
            1964, 42 USC Section 2000e (and sections following), the Employee
            Retirement Income Security Act, 29 USC Section 1001 (and sections
            following), the Reconstruction Era Civil Rights Act, 42 USC Section
            1981 (and sections following), the Age Discrimination in Employment
            Act ("ADEA"), 29 USC Section 621 (and sections following), the
            Americans with Disabilities Act, 42 USC Section 12101 (and sections
            following), the Family and Medical Leave Act, 29 USC Section 2601
            (and sections following), the Worker Adjustment and Retraining
            Notification Act, 29 USC Section 2100 (and sections following), and
            the amendments to such laws, as well as any similar or related
            statute(s) of Ohio or another state or district, and claims for
            breach of contract, promissory estoppel, wrongful termination,
            personal injury, defamation, loss of consortium, distress,
            humiliation, loss of standing and prestige, public policy, or any
            tort, whether such claims are known or unknown, which I now have, or
            claim to have, against REYNOLDS relating to any event or
            circumstance occurring prior to the seventh day following the date
            on which I sign this Agreement, and also including any claims that
            may depend upon the identity person(s) selected to perform some or
            all of the duties that I formerly performed. I agree not to file any
            lawsuit against REYNOLDS in the future with respect to any claim
            released under this Agreement, or any arbitration demand under
            Paragraph 9 of the Employment Agreement. I waive any right to
            re-employment with REYNOLDS, and agree that REYNOLDS may reject any
            application I may make for re-employment without any liability
            whatsoever.

      5.    Notwithstanding the termination of the Employment Agreement, I
            continue to be bound by those obligations set forth in the
            Employment Agreement that survive its termination, including but not
            limited to the non-compete and confidentiality obligations set forth
            therein.

      6.    In accordance with applicable law, I confirm that I have been given
            21 days to consider whether to sign this Agreement, and I have the
            right to rescind this Agreement within a period of seven (7)
            calendar days following its execution, by delivering written notice
            of revocation to REYNOLDS c/o Douglas M. Ventura, General Counsel
            and Secretary, Reynolds and Reynolds, One Reynolds Way, Kettering,
            Ohio 45430, 937-485-0978 (facsimile), and that, in the event of such
            revocation, REYNOLDS shall have no obligation to me under the
            Employment Agreement. I confirm that I have carefully read this
            Agreement, I understand it, I have been advised to consult, and have
            consulted, with counsel of my choice concerning this Agreement, I
            have voluntarily chosen to sign it, and I have not relied upon any
            statement or promise made by or on behalf of REYNOLDS that is not
            contained in this Agreement.

/s/ Lloyd G. Waterhouse
Date: July 29, 2004
Witness: /s/ David E. Ball

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