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                                                                   EXHIBIT 10.12

                          SOFTWARE LICENSE AGREEMENT

     THIS SOFTWARE LICENSE AND MAINTENANCE AND SUPPORT AGREEMENT ("Agreement")
is made between GTE Service Corporation, a New York corporation, with offices
for this Agreement at 1255 Corporate Drive, Irving, Texas 75038, and its
Affiliates ("GTE on the one hand, each only with respect to its obligations
hereunder, and Genuity Solutions Inc., a Delaware corporation, with offices for
this Agreement at 3 Van de Graaff Drive, Burlington, Massachusetts 01803
("GENUITY") on the other hand.

     WHEREAS, GENUITY pursuant to this Agreement will be granted a limited, non-
exclusive license to use specified GTE-owned software (including any updates
provided to GENUITY pursuant to the IT Transition Services Agreement) for the
internal operations of GENUITY and its Affiliates.

     In consideration of the mutual terms and conditions of this Agreement, the
parties agree as follows:

1.  General.
    -------

     GTE and GENUITY desire to establish a contractual mechanism pursuant to
which GENUITY and its subsidiary companies will obtain from GTE or an affiliate
company of GTE, and GTE or the affiliate will provide to GENUITY and its
subsidiary companies, licenses under certain GTE software and maintenance and
support services for certain GTE software in accordance with the terms and
conditions set forth in this Agreement.

2.   Definitions.
     -----------

     For purposes of this Agreement, and in addition to certain terms defined on
first use herein and in any schedule attached hereto, the following terms shall
have the following meanings:

     2.1. "Affiliate" shall mean an entity that controls, is under common
control with, or that is controlled by, the entity with which it is affiliated.

     2.2. "Confidential Information" shall mean: (i) any information in written,
other tangible or electronic form which is labeled by GTE as "confidential",
"proprietary" or with a legend of similar import; and (ii) Licensed Software in
any form (including, without limitation, related Documentation), whether or not
labeled in accordance with the preceding. The terms and conditions of this
Agreement shall be deemed to be Confidential Information.

     2.3. "Designated Systems" shall mean the computer hardware and operating
systems specified in Schedule A, and all computer programs and routines
incorporated therein, including, without limitation, Third Party Software.

     2.4. "Documentation" shall mean the user guides, operating manuals and
related technical materials, whether in print or electronic form, for the
Licensed Programs, including, without limitation, for each such guides, manuals
and materials, any and all Updates.

     2.5. "Effective Date" shall mean the date of the closing of the initial
public offering of shares of stock of Genuity Inc.

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     2.6. "GTE Products" shall mean Licensed Software, New Products,
Confidential Information and any other materials or rights provided hereunder by
GTE under this Agreement.

     2.7. "Improvements" shall mean all improvements, modifications and
enhancements that pertain to the Licensed Software, including without
limitation, any and all Updates.

     2.8. "Intellectual Property Rights" shall mean any and all worldwide rights
existing now or in the future under patent law, copyright law, industrial rights
design law, semiconductor chip and mask work protection law, moral rights law,
trade secret law, trademark law, unfair competition law, publicity rights law,
privacy rights law, and any and all similar proprietary rights, however
denominated, and any and all renewals, extensions and restorations thereof, now
or hereafter in force and effect.

     2.9. "Licensed Programs" shall mean the computer programs, in Object Code
only, specified in Schedule A, including, without limitation, for each such
programs any and all Updates.

     2.10. "Licensed Software" shall mean Licensed Programs and Documentation
specified in Schedule A, and any Updates thereof.

     2.11. "New Products" shall mean computer programs, in Object Code only,
that provide substantially new functions as compared to Licensed Programs, and
any related user guides, operating manuals and related technical materials,
whether in print or electronic form; provided, however, that "New Products"
shall not include Deliverables developed under a Statement of Work to the
Software Development and Technical Services Agreement between the parties or
their Affiliates of even date herewith

     2.12. "Object Code" shall mean the machine-executable version of a computer
software program.

     2.13. "Third Party Software" shall mean any version of any software
product, in Object Code only, and related documentation that is developed or
owned by a third party and is distributed or otherwise made available to GENUITY
by GTE pursuant to this Agreement or required by GENUITY for the Use of the
Licensed Software.

     2.14. "Updates" shall mean: (i) corrections of Licensed Software errors,
and (ii) any other modifications or additions to the Licensed Software that do
not provide substantially new functions to that Licensed Software provided
pursuant to a certain IT Transition Services Agreement between the parties of
even date herewith (the "IT Transition Services Agreement"). Updates shall not
include New Products.

     2.15. "Use" means to load, execute, employ, use, store or display the
specified subject matter and, in the circumstances described in Section 3.1(c),
shall include maintenance.

3.   Intellectual Property.
     ---------------------

     3.1. License Grant.
          -------------
               (a) On the terms and subject to the conditions set forth herein,
     GTE hereby grants to GENUITY, during the License Term only, a nonexclusive,
     nontransferable,

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worldwide license to Use the Licensed Program and the Documentation only for
GENUITY's own internal operations and only on the Designated Systems. The
foregoing license grant shall extend to GENUITY's Affiliates; provided, however,
                                                              --------  -------
that GENUITY shall ensure that each of its Affiliates comply with the terms and
conditions of this Agreement and shall be liable for any breach of them by any
of its Affiliate.

          (b)  The foregoing license grant shall include the right of GENUITY to
transfer a Licensed Program temporarily to a backup system if a Designated
System is inoperative, and to make a reasonable number of copies of the Licensed
Programs for testing, disaster recovery, nonproductive backup or archival
purposes; provided, however, that all titles, trademarks, copyright, patent and
          --------  -------
other proprietary rights notices relating to Intellectual Property Rights shall
be reproduced in such copies and such copies are stored in a safe and secure
place. All such copies, in whole or in part, of any Licensed Program shall be
governed by the terms and conditions of this Agreement. The foregoing license
grant also shall include the right of GENUITY to make a reasonable number of
copies of the Documentation for use with the Licensed Programs; provided,
                                                                --------
however, that all titles, trademarks, copyright, patent and other proprietary
-------
rights notices relating to Intellectual Property Rights shall be reproduced in
such copies and such copies are stored in a safe and secure place. All such
copies, in whole or in part, of any Documentation shall be governed by the terms
and conditions of this Agreement.

          (c) GTE and GENUITY shall enter into a Software Escrow Agreement,
substantially in the form attached hereto as Exhibit D, for the Licensed
Programs identified in Schedule A as requiring the escrow of source code, which
shall set forth the terms and conditions pursuant to which source code for the
identified Licensed Programs will be made available to GENUITY. In the event
that such source code is released to GENUITY pursuant to the Software Escrow
Agreement, GTE shall grant to GENUITY a limited, personal, nontransferable and
nonexclusive license to use such released source code solely for the purpose of
maintaining the License Programs during the License Term. Said license shall not
be transferable or sublicensable, and shall not include the right to create any
new versions, enhancements or other modifications of the Licensed Programs. The
said license shall include the right to have the Licensed Software maintained by
a third party, upon GTE's prior written approval, which approval shall not be
unreasonably withheld.

          (d) The license provided by this Section 3.1 shall not be
sublicensable or transferable, in whole or in part, to any third party and is in
addition to, and shall not be construed as limiting or expanding in any way, any
other licenses that GTE has granted or will grant to GENUITY under GTE
Intellectual Property Rights.

     3.2. Certain License Limitations.
          ---------------------------

          (a) The license right granted in Section 3.1 shall not include any
right to: (i) copy or reproduce, modify, market, sublicense, transfer or
distribute the Licensed Software, or any portion thereof, in any manner
whatsoever (except as otherwise expressly provided in Section 3.1(b)), (ii) make
the Licensed Software, or any portion thereof, available to any other person or
entity, whether on a time-sharing basis or otherwise, (iii) Use or otherwise
exploit the Licensed Software for the benefit of any other person or entity, or
(iv) modify or create works derivative of the Licensed Software or any portion
thereof. Except and to the extent expressly set forth in Schedule A, such
license grant does not include any license, right, title or interest in or to
any Third Party Software or other technology of any third party, or any
Intellectual Property Rights therein, required for GENUITY to exercise its
rights hereunder. To the extent any Third Party Software is provided by GTE to
GENUITY pursuant to this Agreement, the Use of such Third Party

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Software shall be pursuant to the terms and conditions of this Agreement, unless
a Third Party Software license agreement is included with such Third Party
Software, in which instance GTE shall use its best efforts to advise GENUITY of
that fact, and such Third Party Software license agreement shall govern the Use
of such Third Party Software.

               (b) The license right granted in Section 3.1 is for Object Code
only and does not include a license or any other rights to the source code or
other mnemonic or high-level statement version of the Licensed Programs or any
documentation therefor. Without limiting the foregoing, GENUITY shall not
decompile, disassemble, reverse analyze or reverse engineer any Licensed
Software, or otherwise attempt to discover, generate, use or modify the
structural framework or source code of any Licensed Software, or permit or
authorize any person or entity to do so.

               (c) Nothing herein shall be construed as granting GENUITY, by
implication, estoppel or otherwise, any license or other right under any
Intellectual Property Right of GTE, including without limitation, any such
license or right in or to the Licensed Software, except for the license
expressly granted in Section 3.1.

     3.3. Ownership.
          ---------

    GENUITY acknowledges and agrees that (i) GTE is and shall remain the sole
and exclusive owner of GTE Products, and any and all Intellectual Property
Rights therein and (ii) the third party is and shall remain the sole and
exclusive owner of Third Party Software, and any and all Intellectual Property
Rights therein, and that GENUITY acquires no rights in or to any of the
foregoing, other than the license rights expressly granted herein (or in the
instance of Third Party Software, the rights granted by the third party).
GENUITY agrees neither to do nor to permit any act which may in any way
jeopardize or be detrimental to the validity of GTE's Intellectual Property
Rights in GTE Products of the third party's Intellectual Property Rights in the
Third Party Software.

4. Payments
   --------

     4.1. Payments. In consideration for the rights and licenses granted herein
          --------
by GTE for the Use of each Licensed Software and for the Maintenance and Support
Services for such Licensed Software provided by GTE hereunder, GENUITY shall pay
GTE the annual license fee specified for each Licensed Software set forth in
Schedule A hereto; said annual license fee specified in Schedule A shall be
applicable only to the first year of the License Term, with the annual license
fee thereafter being GTE's then applicable annual license fee (which includes
Maintenance and Support Services) charged to third parties who are not
Affiliates of GTE (or if there is no annual license fee (which includes
Maintenance and Support Services) for third party licensees of the Licensed
Software, the amount set forth on the applicable invoice to GENUITY). GTE shall
invoice GENUITY for such annual license fee on the Effective Date and on each
anniversary thereafter during the License Term, and payment shall be due from
GENUITY on or before the thirtieth (30th) day following receipt by GENUITY of
such invoice. All payments shall be made in United States currency, shall be
nonrefundable and paid fully net, without set-off, deduction or counterclaim
unless expressly provided otherwise hereunder, and shall be made by wire
transfer to such bank account(s) as GTE may specify in writing.

     4.2. Late Payments. GENUITY shall pay interest on any late payments at a
          -------------
rate equal to the lesser of (i) 18% per annum and (ii) the maximum rate of
interest allowable under applicable law.

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     4.3. Taxes. In addition to the charges payable for services and rights and
          -----
licenses provided hereunder by GTE, GENUITY shall pay GTE an amount equal to any
sales, use, privilege, gross revenue, excise or any other tax (except income and
franchise taxes), as well as any assessments or duties lawfully levied by a duly
constituted governmental authority and for which GTE is required or permitted,
by law, to collect from GENUITY with respect to the services, materials and
rights provided under this Agreement.  In addition, GENUITY shall be responsible
for all real and personal property taxes imposed on Licensed Software in
GENUITY'S possession on January 1 of every year.  If GENUITY determines that any
services, materials or rights obtained from GTE are exempt from a tax, GENUITY
must provide GTE a properly completed exemption certificate, for all
jurisdictions for which GENUITY is claiming an exemption, before GTE will
exclude the respective tax from amounts charged to GENUITY.  GENUITY shall not
deduct any tax amount from remittances to GTE until a properly completed
exemption certificate, for all jurisdictions for which GENUITY is claiming an
exemption, has been provided to GTE.

5.   Delivery.
     --------

     5.1. Delivery of Licensed Software. Unless otherwise already in the
          -----------------------------
possession of GENUITY, as soon as practicable after the Effective Date of this
Agreement, but in any event within thirty (30) days thereafter, GTE shall
deliver to GENUITY a number of copies of each item comprising the Documentation
and the Licensed Programs; provided, however, the number of copies of Licensed
Programs shall in no event not exceed the number of Designated Systems.

     5.2. Updates. Any Updates to the Licensed Software shall be provided
          -------
pursuant to the IT Transition Services Agreement. Any Use or other exploitation
in any manner of any Updates shall be subject to all terms and conditions of
this Agreement.

     5.3. New Products.  Any New Products developed or made available by GTE,
          ------------

during the License Term, for Use with or as a replacement for Licensed Software
shall be offered to GENUITY at GTE's then-current published license fees, terms
and conditions.

     5.4. Maintenance and Support Services. Except as otherwise required for GTE
          --------------------------------
to satisfy its obligations contained in Section 8.3 hereof, GTE's sole
obligation to provide any maintenance and support services hereunder shall be
set forth in the IT Transition Services Agreement.

6. Indemnity for Infringement of Third Party Intellectual Property.
   ---------------------------------------------------------------

     6.1. Indemnity. If Licensed Software becomes the subject of an infringement
          ---------
claim, or in GTE's opinion is likely to become the subject of such a claim,
then, in addition to defending the claim and paying any damages and attorneys'
fees finally awarded by a court of final jurisdiction, GTE may, at its option
and in its sole discretion, and at its own cost and expense: (i) replace or
modify such Licensed Software to make it noninfringing or cure any claimed
misuse of any third party trade secret; (ii) procure for GENUITY the right to
continue Using such Licensed Software pursuant to this Agreement; or (iii)
require the return of such Licensed Software and terminate GENUITY's right to
Use the same and refund to GENUITY a pro-rata portion of the current annual
license fee actually paid to GTE by GENUITY for the Use of such Licensed
Software. Notwithstanding the foregoing, if GTE exercises its right to require
the return of such Licensed Software and terminates GENUITY's right to Use the
same, to the extent permitted by applicable law, GENUITY may retain and continue
to Use

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such Licensed Software to the extent GENUITY agrees in writing to defend and
indemnify GTE for any and all expenses, costs and liabilities associated with
such continued possession and Use of such Licensed Software.

     6.2. Limitations.  GTE shall not be liable to GENUITY for any claims of
          -----------
inducement of infringement or contributory infringement or claims of
infringement resulting from the combination of the Licensed Software with the
products or services of third parties. Further, GTE shall have no liability to
GENUITY hereunder if (i) the claim of infringement is based upon the Use or
other exploitation of Licensed Software provided by GTE hereunder in connection
or in combination with equipment, devices, data or software not supplied by GTE,
and such infringement would not have occurred but for such Use; (ii) such
Licensed Software is Used outside of the scope of the rights and licenses
granted to GENUITY or in a manner for which the Licensed Software was not
designed; (iii) the Licensed Software or any portion thereof is modified by or
for GENUITY (even by GTE at GENUITY's direction or instructions), and such
infringement would not have occurred but for such modification; or (iv) GENUITY
Uses the Licensed Software as part of a patented process and there would be no
infringement in the Use of the Licensed Software alone. For all of the foregoing
exclusions, GENUITY shall defend and indemnify GTE for any infringement claims
to the extent set forth in Section 6.1.

     6.3. Procedure. The indemnification obligations set forth in this Section 6
          ---------
shall not apply unless GENUITY: (i) uses its best efforts to notify GTE promptly
in writing of any claims, charges of infringement or litigation in order to
allow GTE the opportunity to investigate and defend the matter; provided,
                                                                --------
however, that the failure to so notify shall only relieve GTE of its obligations
-------
under this Section 6 if and to the extent that GTE is prejudiced thereby; and
(ii) gives GTE full control of the response thereto and the defense thereof,
including, without limitation, any agreement relating to the settlement thereof;

provided, however, that GENUITY shall have the right to participate, on a non-
--------  -------
interfering basis, in any legal proceeding to contest and defend a claim for
infringement and to be represented by legal counsel of its choosing, all at
GENUITY's sole cost and expense. However, if GTE fails to promptly assume the
defense of the claim, GENUITY may assume the defense at GTE's cost and expense.
GTE shall not be responsible for any settlement or compromise made without its
prior written consent, unless GENUITY has tendered notice and GTE has then
refused to assume and defend the claim and it is later determined that GTE was
obligated to assume and defend the claim. GENUITY agrees to cooperate in good
faith with the GTE at the request and expense of GTE.

     6.4. The foregoing sets forth GTE's sole and exclusive obligations, and
GENUITY's sole remedies, for infringement of any Intellectual Property Rights by
any GTE Products.

7.   Other Obligations of GENUITY and GTE.
     ------------------------------------

     7.1. Third Party Software. GENUITY acknowledges that, in order to exercise
          --------------------
any rights granted by the license set forth in Section 3.1, including, without
limitation, Using the Licensed Software as expressly provided thereby, GENUITY
may need to license or otherwise obtain permission to Use Third Party Software.
Such licenses or other permissions shall be at GENUITY's sole cost and expense
and GENUITY shall be solely responsible for observing and complying with the
terms and conditions under which Third Party Software is licensed. GTE shall use
its best efforts to inform GENUITY of any Third Party Software that, to GTE's
knowledge, is required to Use the Licensed Software.

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     7.2. Inspection of Facilities.  GENUITY shall advise GTE in writing of the
          ------------------------
location of all facilities at which it is carrying out activities subject to
license under this Agreement, including, without limitation, the location of any
Designated Systems. GTE may, from time to time, as it deems necessary, at its
sole risk and expense, enter such facilities, or any of them, and conduct such
inspection as is reasonably necessary to verify the nature of GENUITY's
activities and GENUITY's compliance with this Agreement. GENUITY shall provide
reasonable assistance to GTE for such inspection, GTE shall minimize the amount
of time that it is required to spend in GENUITY's facilities, and GTE shall
coordinate all such activities with GENUITY so as not to unreasonably interfere
with GENUITY's operations.

     7.3. Interoperability. If the provisions of the Council of European
          ----------------
Communities Directive of May 14, 1991 on the Legal Protection of Computer
Programs (the "Software Directive") apply to GENUITY's Use of the Licensed
Programs, and GENUITY wishes to obtain the information necessary to achieve
interoperability of an independently created computer program with the Licensed
Programs as permitted under Article 6 of the Software Directive
("Interoperability Information"), then GENUITY shall notify GTE in writing,
specifying the nature of the Interoperability Information it needs and the
purpose for which it will be used. If GTE reasonably determines that GENUITY is
entitled to such Interoperability Information under said Article 6, GTE shall,
at its option, either (i) provide such Interoperability Information to GENUITY
or (ii) authorize GENUITY to reverse engineer the Licensed Programs, within the
time limits prescribed by said Article 6, solely to the extent indispensable to
obtain such Interoperability Information. If GTE elects clause (i), GENUITY
shall provide all information and assistance reasonably requested by GTE to
enable GTE to perform clause (i), and GTE may charge GENUITY a reasonable fee,
determined in GTE's discretion, for making available the requested
Interoperability Information, unless such a fee is prohibited under said Article
6.

8.   Warranties.
     ----------

     8.1. Allocation of Risk. An essential purpose of the exclusion of
          ------------------
warranties and limitation of liability provided in this Agreement is allocation
of risks between GTE and GENUITY, which allocation of risks is reflected in the
arrangements between GTE and GENUITY contained in this Agreement.

     8.2. No Conflicts. GTE warrants that, to the best of its knowledge, it
          ------------
owns, or otherwise has, the necessary Intellectual Property Rights to grant the
licenses, rights and permissions contained herein.

     8.3. Conformance Warranty.  GTE warrants to GENUITY that (i) with normal
          --------------------
service and use, each of the Licensed Programs, including, without limitation,
Updates, shall, at the time of first delivery to GENUITY of the Licensed
Programs and for a period of thirty (30) days thereafter, conform substantially
on the Designated Systems to either the Documentation or the specifications
included in Schedule B, as applicable; provided, however, that such Licensed
                                       --------  -------
Program has not been modified or altered by GENUITY or any other person or
entity, has not been abused or misapplied, has not been Used outside of the
scope of the rights and licenses granted pursuant to this Agreement, and has not
been Used in combination with hardware or software other than the Designated
Systems. The warranty set forth in this Section 8.3 shall be void if GENUITY
fails to submit timely a completed report to GTE describing the condition that
GENUITY believes constitutes a breach of said warranty, together with removable
machine-readable media on which GENUITY has made a copy of that portion of the
Licensed Program that GENUITY believes to contain such condition, within twenty
(20)

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days after GENUITY discovers such condition. GENUITY's sole and exclusive
remedy, and GTE's entire liability, for breach of the warranty set forth in this
Section 8.3 shall be, at GTE's option and sole expense: to attempt to correct
any nonconforming Licensed Programs; to replace any nonconforming Licensed
Programs with a corrected copy upon return to GTE of all of GENUITY's copies of
such nonconforming Licensed Program; or if GTE is unable to make any Licensed
Programs operate as warranted hereunder, to refund any payments on a pro-rata
basis actually made by GENUITY to GTE hereunder for such nonconforming Licensed
Program during the last year of the License Term.

     8.4. Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 8 GTE
          ----------
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, OR
ARISING BY CUSTOM OR TRADE USAGE, WITH RESPECT TO THE GTE PRODUCTS OR OTHERWISE
IN CONNECTION WITH THIS AGREEMENT. WITHOUT LIMITING THE FOREGOING, GTE EXPRESSLY
DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION (i) THAT ANY GTE
PRODUCTS OR ANY OF THEIR USE OR ANY ACTIVITIES OF GENUITY CONTEMPLATED BY THIS
AGREEMENT, SHALL BE FREE FROM INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS
OF ANY THIRD PARTY, (ii) AS TO THE QUALITY OR PERFORMANCE OF ANY GTE PRODUCTS OR
SERVICES, AND (iii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE EVEN
IF GTE HAS BEEN ADVISED OR SHOULD HAVE KNOWN OF SUCH PURPOSE. GENUITY SHALL BE
SOLELY RESPONSIBLE FOR ADEQUATE PROTECTION AND BACKUP OF GENUITY'S DATA AND
SOFTWARE USED IN CONNECTION WITH ITS USE OF GTE

9.   Limitation of Liabilities.
     -------------------------

     9.1. UNDER NO CIRCUMSTANCES SHALL GENUITY BE ENTITLED TO RECOVER FROM GTE
ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES (INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFITS OR LOSS OF
USE), WHETHER BASED ON CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION,
NEGLIGENCE), OR ANY OTHER CAUSE OF ACTION RELATING TO GTE PRODUCTS, OR OTHERWISE
RELATING TO THIS AGREEMENT, EVEN IF GTE HAS BEEN INFORMED OR SHOULD HAVE KNOW OF
THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE LIABILITY OF GTE (WHETHER
BASED ON CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE) OR ANY OTHER
CAUSE OF ACTION) EXCEED THE AGGREGATE AMOUNT OF PAYMENTS ACTUALLY RECEIVED BY
GTE DURING THE LAST YEAR OF THE LICENSE TERM PURSUANT TO SECTION 4.1.

     9.2. Third Party Claims.  Without limiting the foregoing Section 9.1,
          ------------------
and except and to the extent expressly provided for in Section 6, GTE shall
under no circumstances be liable for any claim or demand by any third party
based on or related to GENUITY's Use of the Licensed Software, errors or alleged
errors in GENUITY's Use of the Licensed Software or any other GTE Products or
Services. GENUITY shall indemnify and hold GTE harmless from and against any
loss, cost or damages, including, without limitation, reasonable attorneys' and
professionals' fees, arising in connection or as a result of such claim or
demand.

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10.  Confidential Information.
     ------------------------

     10.1. Restrictions. GENUITY shall: (i) use Confidential Information only in
           ------------
connection with fulfilling its obligations and exercising its rights hereunder;
(ii) hold Confidential Information in strict confidence and exercise due care
with respect to its handling and protection, consistent with GENUITY's own
policies concerning the protection of its own confidential information of
similar importance, but in no instance less than reasonable care; (iii) not
disclose, divulge or publish Confidential Information or any portion thereof,
except to such of its responsible employees who have a bona fide need-to-know to
the extent necessary to exercise GENUITY's rights and licenses under this
Agreement and are who are bound in writing to maintain the confidentiality of
such Confidential Information; (iv) instruct all such employees not to disclose
Confidential Information to third parties; (v) not remove any titles,
trademarks, copyright, patent and other proprietary rights notices set forth on
or contained within the Confidential Information or any portion thereof; or (vi)
not copy or otherwise duplicate any Confidential Information, in whole or in
part, including, without limitation, derivations, except and to the extent
expressly permitted hereunder and necessary to exercise its rights and licenses
hereunder.

     10.2.  Compliance with Governmental, Judicial Requirements.
            ---------------------------------------------------
Notwithstanding anything herein to the contrary, if GENUITY receives a request
to disclose any Confidential Information (whether pursuant to a valid and
effective subpoena, an order issued by a court or other governmental authority
of competent jurisdiction or otherwise) on advice of legal counsel that
disclosure is required under applicable law, GENUITY agrees that, prior to
disclosing any Confidential Information, it shall (i) notify GTE of the
existence and terms of such request or advice, (ii) cooperate with GTE in taking
legally available steps to resist or narrow any such request or to otherwise
eliminate the need for such disclosure at GTE's sole expense, if requested to do
so by GTE, and (iii) if disclosure is required, it shall be the obligation of
GTE to use its best efforts to obtain a protective order or other reliable
assurance that confidential treatment shall be afforded to such portion of the
Confidential Information of GTE as is required to be disclosed.

     10.3.  Marking. Any copy of the Confidential Information authorized by GTE
            -------
to be made by GENUITY pursuant to this Agreement shall conspicuously display
markings or statements of GTE appearing on the originals of such Confidential
Information.

     10.4.  Survival. The obligations set forth in this Section 10 shall survive
            --------
any termination, cancellation or expiration of this Agreement or of any licenses
granted pursuant to this Agreement.

11.  Termination.
     -----------

     11.1.  Termination/Cancellation.  Each party shall have the right to
            ------------------------
terminate/cancel this Agreement, effective immediately, upon written notice to
the other party, if any of the following events occur:

          (a)  The other files a voluntary petition in bankruptcy (other than as
creditor);

          (b)  The other is adjudged bankrupt;

          (c) A court assumes jurisdiction of the assets of the other under a
federal reorganization act;

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          (d) A trustee or receiver is appointed by a court for all or a
substantial portion of the assets of the other;

          (e) The other becomes insolvent or suspends its business; or

          (f) The other makes an assignment of its assets for the benefit of its
creditors except as required in the ordinary course of business.

     11.2.Material Breach.  Either party may terminate or cancel this
          ---------------
Agreement or any license for Licensed Software, for a material breach or default
of any of the terms, conditions or covenants of this Agreement by the other;
provided, however, that such termination or cancellation may be made only
--------  -------
following the expiration of a thirty (30) day period during which the other
party has failed to cure such breach after having been given written notice
thereof.

     11.3.Other Termination.  GENUITY may terminate or cancel any license for
          ------------------
 any Licensed Software upon thirty (30) days prior written notice to GTE and the
rights and licenses for such terminated or cancelled Licensed Software shall
immediately terminate at the end of such thirty (30) day period or such earlier
period as specified in the notice.  Notwithstanding termination or cancellation
of any license for any Licensed Software, no refund or credits shall be due or
owing to GENUITY.

     11.4.Effect of Termination or Expiration.
          -----------------------------------
          (a)  Upon any expiration, termination or cancellation of this
Agreement, either in its entirety or with respect to any licensed for Licensed
rights and licenses granted to GENUITY hereunder or related to such Licensed
Software, respectively, shall terminate.

          (b)  Within a reasonable time after expiration, termination or
cancellation of this Agreement or of any license for any Licensed Software, but
in no event later than thirty (30) days thereafter, GENUITY shall immediately
cease using the Licensed Software and Confidential Information (or in the
instance of termination, cancellation or expiration of specific Licensed
Software, then only such Licensed Software and related Confidential Information)
and shall return to GTE, or shall destroy in a manner satisfactory to GTE, all
forms in whatever medium of such Licensed Software and Confidential Information,
including, without limitation, any and all copies thereof. An officer of GENUITY
shall certify in writing to GTE that GENUITY has complied with the obligations
of this Section 11.4(b).

          (c) No expiration, termination or cancellation of this Agreement, in
whole or in part, shall relieve GENUITY of any obligation to pay amounts due nor
affect any other rights or liabilities of the parties which may have accrued
prior to the date of expiration, termination or cancellation. Notwithstanding
anything herein to the contrary, upon any expiration or termination of this
Agreement, the provisions of Sections 2, 3.2, 3.3, 4, 6, 7.1, 8.4, 9, 10, 11, 12
and 13 shall survive such expiration, termination or cancellation and shall
continue in full force and effect.

          (d) With respect to Third Party Software in which GTE acquires rights
after the Effective Date and includes in Updates to the Licensed Software, which
Third Party Software has been approved by GENUITY as provided in the IT
Transition Services Agreement, the parties acknowledge and agree that if GTE
amortizes costs associated with such Third Party Software, GENUITY shall pay the
balance of any unamortized costs in the event of any termination, cancellation
or non-renewal of the license for the Licensed

                                       10
<PAGE>

Software prior to full amortization of such costs, and upon such payment GENUITY
will be entitled to continue use of such Third Party Software pursuant to the
applicable terms and conditions.

12.  Dispute Resolution.
     ------------------

          12.1.  General.  Any controversy or claim arising out of or relating
                 -------
to this Agreement, or the breach thereof, shall be settled first, by good faith
efforts of the parties to reach mutual agreement, and second, if mutual
agreement is not reached to resolve the dispute, by final, binding arbitration
as set out in paragraph 6(c) below.

          12.2.  Initial Resolution.  A party that wishes to initiate the
                 ------------------
dispute resolution process shall send written notice to the other party with a
summary of the controversy and a request to initiate these dispute resolution
procedures. Each party shall appoint a knowledgeable, responsible representative
from the company who has the authority to settle the dispute, to meet and
negotiate in good faith to resolve the dispute. The discussions shall be left to
the discretion of the representatives, who may utilize other alternative dispute
resolution procedures such as mediation to assist in the negotiations.
Discussions and correspondence among the representatives for purposes of these
negotiations shall be treated as Confidential Information developed for purposes
of settlement, shall be exempt from discovery and production, and shall not be
admissible in the arbitration described above or in any lawsuit pursuant to Rule
408 of the Federal Rules of Evidence. Documents identified in or provided with
such communications, which are not prepared for purposes of the negotiations,
are not so exempted and may, if otherwise admissible, be admitted in evidence in
the arbitration or lawsuit. The parties agree to pursue resolution under this
subsection for a minimum of 60 days before requesting arbitration.

          12.3.  Arbitration.  If the dispute is not resolved under the
                 -----------
preceding subsection within 60 days of the initial written notice, either party
may demand arbitration by sending written notice to the other party. The parties
shall promptly submit the dispute to the American Arbitration Association for
resolution by a single neutral arbitrator acceptable to both parties, as
selected under the rules of the American Arbitration Association. The dispute
shall then be administered according to the American Arbitration Association's
Commercial Arbitration Rules, with the following modifications: (i) the
arbitration shall be held in a location mutually acceptable to the parties, and
if the parties do not agree, the location shall be New York City; (ii) the
arbitrator shall be licensed to practice law; (iii) the arbitrator shall conduct
the arbitration as if it were a bench trial and shall use, apply and enforce the
Federal Rules of Evidence and Federal Rules of Civil Procedure; (iv) except for
breaches related to Confidential Information or intellectual property, the
arbitrator shall have no power or authority to make any award that provides for
consequential, punitive or exemplary damages; (v) the arbitrator shall control
the scheduling so that the hearing is completed no later than 60 days after the
date of the demand for arbitration; and (vi) the arbitrator's decision shall be
given within 5 days thereafter in summary form that states the award, without
written decision, which shall follow the plain meaning of this Agreement, the
relevant documents, and the intent of the parties. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction over
the parties. Each party to the dispute shall bear its own expenses arising out
of the arbitration, except that the expenses of the facilities to conduct the
arbitration and the fees of the arbitrator shall be shared equally by the
parties.

                                       11
<PAGE>

     12.4.  Injunctive Relief. The foregoing notwithstanding, each party shall
            -----------------
have the right to seek injunctive relief in an applicable court of law or equity
pending resolution of the dispute in accordance with the foregoing.

13.  General.
     --------

     13.1. Notice. Any written notice either party may give the other concerning
           ------
the subject matter of this Agreement shall be in writing and given or made by
means that obtain a written acknowledgment of receipt. Notices shall be sent to
the parties at the following addresses, which may be changed by written notice:

                   To GTE:   ___________________________

                             ___________________________

                             ___________________________

                             ___________________________
               To GENUITY:
                             ___________________________

                             ___________________________

                             ___________________________

                             ___________________________

    Notice shall be deemed to have been given or made when actually received, as
evidenced by written acknowledgment of receipt.

     13.2. Compliance. GTE and GENUITY shall each comply with the provisions of
           ----------
all applicable federal, state, and local laws, ordinances, regulations and codes
(including, without limitation, procurement of required permits or certificates)
in fulfillment of their obligations under this Agreement. GTE Products are
subject to U.S. export and foreign transactions control regulations. GENUITY
undertakes that it shall neither export, nor cause nor permit to be exported,
without GTE's prior written consent and without compliance with applicable law
and regulation, GTE Products or Services out of the United States of America,
nor shall GTE Products or Services be made available, directly or indirectly,
for use in any project associated with the design, development, production,
testing, stockpiling or use of: (i) nuclear weapons or facilities to produce
nuclear explosives, (ii) missiles, or (iii) chemical or biological warfare
agents. GENUITY agrees to comply with all applicable laws and regulations
relating to the exportation of technical information, as they currently exist
and as they may be amended from time to time.

     13.3.  Assignment, Subcontracting.  Neither this Agreement nor any rights
            --------------------------
or obligations hereunder shall be assignable by either of the parties hereto;
provided, however, that GTE may assign this Agreement to any Affiliate.
--------  -------

     13.4.  Waiver of Terms and Conditions.  Failure to enforce any of the
            ------------------------------
terms or conditions of this Agreement shall not constitute a waiver of any such
terms or conditions, or of any other terms or conditions.

     13.5.  Severability.  Where any provision of this Agreement is declared
            ------------
invalid, illegal, void or unenforceable, or any changes or modifications are
required by regulatory or judicial action, and any such invalid, illegal, void
or unenforceable provision, or such change or modification, substantially
affects any material obligation of a party hereto, the remaining provisions of
this Agreement shall remain in effect and the parties shall mutually agree upon
a course of action with respect to such invalid

                                       12
<PAGE>

provision or such change or modification to the end that the purposes of this
Agreement are carried out.

     13.6.  Governing Law.  This Agreement, and the rights and obligations
            -------------
contained in it, shall be governed by and construed in accordance with the laws
of the State of New York, without regard to any conflicts of law principles that
would require the application of the laws of any other jurisdiction.

     13.7.  No Unreasonable Delay or Withholding.  Where agreement, approval,
            ------------------------------------
acceptance, consent or similar action by GENUITY or GTE is required, such action
shall not be unreasonably delayed or withheld.

     13.8.  Force Majeure.  If performance of any obligations by either party
            -------------
under this Agreement (other than any obligation of either party to pay money
hereunder) is prevented, restricted or interfered with by reason of acts of God,
wars, revolution, civil commotion, acts of public enemy, embargo, acts of
government in its sovereign capacity, labor difficulties, including, without
limitation, strikes, slowdowns, picketing or boycotts, communication line
failures, power failures, or any other circumstances beyond the reasonable
control and not involving any fault or negligence of the party affected, the
party affected, upon giving prompt notice to the other party, shall be excused
from such performance on a day-to-day basis during the continuance of such
prevention, restriction or interference (and the other party shall likewise be
excused, on a day-to-day basis during the same period, from performance of its
obligations which are dependent upon or affected by such nonperformance);
provided, however, that the party so affected shall use its best reasonable
--------  -------
efforts to avoid or remove such causes of nonperformance and both parties shall
proceed immediately with the performance of their obligations under this
Agreement whenever such causes are removed or cease.

     13.9.  Entire Agreement.  This Agreement represents the entire
            ----------------
understanding between the parties with the respect to its provisions and cancels
and supercedes all prior agreements or understandings, whether written or oral,
with respect to the subject matter. This Agreement may only be modified or
amended by an instrument in writing signed by duly authorized representatives of
the parties. This Agreement shall be deemed to include all Schedules issued
hereunder.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
___ day of ___________, 2000 through their authorized representatives.

GTE  SERVICE CORPORATION                GENUITY SOLUTIONS INC.

By:____________________________         By:____________________________

Name:__________________________         Name:__________________________

Title:_________________________         Title:_________________________

Date:__________________________         Date:__________________________

                                       13
<PAGE>

                                   SCHEDULE A
                                   ----------

[Schedule: Documentation, Licensed Programs, Designated Systems]

                                       14
<PAGE>

                                   SCHEDULE B
                                   ----------

SPECIFICATIONS FOR LICENSED PROGRAMS

[If necessary]

                                       15<PAGE>

                                                                   EXHIBIT 10.13

             SOFTWARE DEVELOPMENT AND TECHNICAL SERVICES AGREEMENT

     THIS SOFTWARE DEVELOPMENT AND TECHNICAL SERVICES AGREEMENT ("Agreement") is
made between GTE Service Corporation, a New York corporation, with offices for
this Agreement at 1255 Corporate Drive, Irving, Texas 75038, and its Affiliates
("GTE") on the one hand, each only with respect to their respective obligations
hereunder, and Genuity Solutions Inc., a Delaware corporation, with offices for
this Agreement at 3 Van de Graaff Drive, Burlington, Massachusetts 01803
("GENUITY") on the other hand.

     WHEREAS, GENUITY pursuant to this Agreement will be allowed to procure
software development and other technical services from GTE, with the services
defined in individual Statements of Work, and the ownership and rights in
intellectual property deliverables to GENUITY pursuant to the Statements of Work
being apportioned between the parties.

  Now, therefore, in mutual consideration of the promises and obligations set
forth below, the parties agree as follows:

1.  General.
    -------

     GTE and GENUITY desire to establish a contractual relationship pursuant to
which GENUITY and its subsidiary companies will obtain from GTE or an Affiliate
of GTE, and GTE or the Affiliate will provide to GENUITY and its subsidiary
companies, software development and other technical services in accordance with
the terms and conditions set forth in this Agreement.

2.  Definitions.
    -----------

     For purposes of this Agreement, and in addition to certain terms defined on
first use herein and in any schedule attached hereto, the following terms shall
have the following meanings.

  2.1. "Affiliate" shall mean an entity that controls, is under common control
with, or that is controlled by, the entity with which it is affiliated.

  2.2. "Change Order" shall mean a change order signed by both parties as
provided in Section 3.7.

  2.3. "Deliverable" shall mean Software, Documentation or other materials and
information delivered or otherwise provided by GTE to GENUITY under the terms of
this Agreement and the applicable Statement of Work.

                                       1
<PAGE>

  2.4.  "Documentation" shall mean written documentation provided by GTE to
GENUITY in connection with a Technical Effort, as provided in the Statement of
Work for that Technical Effort.

  2.5.  "Effective Date" shall mean the date of the closing of the initial
public offering of shares of stock of Genuity Inc.

  2.6.  "Exclusive Statement of Work" shall mean a Statement of Work under which
GTE agrees to provide Deliverables exclusively to GENUITY.

  2.7.  "Intellectual Property Rights" shall mean any and all worldwide rights
existing now or in the future under patent law, copyright law, industrial rights
design law, semiconductor chip and mask work protection law, moral rights law,
trade secret law, trademark law, unfair competition law, publicity rights law,
privacy rights law, and any and all similar proprietary rights, however
denominated, and any and all renewals, extensions and restorations thereof, now
or hereafter in force and effect.

  2.8.  Internal Business Purposes" shall mean the internal operation of a
licensee's business in the provision of goods and services by the licensee to
its customers and end users in the ordinary course of its business.

  2.9.  "Legacy System" shall mean existing computer software, hardware or
firmware owned or used by GENUITY which was developed, licensed or obtained
outside the scope of any Technical Effort.

  2.10.  A "Non-exclusive Statement of Work" shall mean a Statement of Work that
is not an Exclusive Statement of Work.

  2.11.  "Object Code" shall mean the machine-executable version of a computer
software program.

  2.12.  "Schedule" shall mean the timetable and milestones for completion of a
Technical Effort as set forth in its Statement of Work, as modified by any
Change Orders or otherwise as provided in this Agreement.

  2.13.  "Services" shall mean those services provided by GTE to GENUITY under
the terms of this Agreement and the applicable Statement of Work.

  2.14.  "Software" shall mean the computer software provided by GTE to GENUITY
in connection with a Technical Effort as provided in a Statement of Work for the
Technical Effort, provided that the foregoing shall exclude Third Party
Software.

  2.15.  "Source Code" shall mean the fully commented human-readable version of
a computer software program, including, without limitation, all documentation
necessary or useful to understand such software program.

                                       2
<PAGE>

  2.16. "Specifications" shall mean the functional and other specifications for
Software included in any Deliverables set forth in a Statement of Work.

  2.17. "Statement of Work" shall mean a written description of a Technical
Effort signed by both parties and attached to this Agreement, pursuant to
Section 3.1.  The Statement of Work for each Technical Effort shall include all
Change Orders that have been agreed upon for that Technical Effort.

  2.18. "Technical Effort" shall mean the technical services provided by GTE
pursuant to the terms and conditions of this Agreement and the applicable
Statement of Work.

  2.19. "Third Party Software" shall mean any version of any software product,
in Object Code only, that is developed or owned by a third party and is
distributed or otherwise made available to one party to the other pursuant to
this Agreement or required for use of Software provided as a Deliverable under
this Agreement.

3.  Technical Effort.
    ----------------

     3.1.  Technical Effort for Software Development. The parties may from time
           -----------------------------------------
to time agree upon a Technical Effort which calls for the development or
modification of computer programs. For each such development or modification of
computer programs, the Technical Effort shall be described in a Statement of
Work. Each Statement of Work shall contain a detailed description of the
Software to be developed or modified, including the Deliverables for the
Technical Effort, the Specifications, if any, for any Software or other
Deliverables to be developed, the Schedule, acceptance criteria, the amounts and
timing of payments to be made, any Services to be provided, and such other
information as may be required by this Agreement. Each Statement of Work will
expressly indicate if it is an Exclusive Statement of Work, and if it does not
so indicate it shall be deemed to be a Non-Exclusive Statement of Work. Each
Statement of Work shall be deemed a part of and shall be subject in all respects
to the terms and conditions of this Agreement, unless otherwise set forth in a
Statement of Work with specific reference to the terms or conditions of this
Agreement that are to be altered by such Statement of Work.

     3.2.  Technical Effort for Other Technical Services. The parties may from
           ---------------------------------------------
time to time agree upon a Technical Effort for technical services which are
other than the development or modification of computer programs. Each such
Technical Effort shall be described in a Statement of Work. Each Statement of
Work shall contain a detailed description of the Technical Effort, including,
without limitation, the Deliverables for the Technical Effort, the requirements
for Deliverables to be provided, if any, the Schedule, acceptance criteria (if
any), the amounts and timing of payments to be made, any Services to be
provided, and such other information as may be required by this Agreement. Each
Statement of Work will expressly indicate if it is an Exclusive Statement of
Work, and if it does not so indicate it shall be deemed to be a Non-Exclusive
Statement of Work. Each Statement of Work shall be deemed a part of and

                                       3
<PAGE>

shall be subject in all respects to the terms and conditions of this Agreement,
unless otherwise set forth in a Statement of Work with specific reference to the
terms or conditions of this Agreement that are to be altered by such Statement
of Work

  3.3.  General Conduct of Technical Efforts.  The parties acknowledge and agree
        ------------------------------------
that the successful completion of each Technical Effort shall require the
cooperation of both parties.  GTE shall endeavor to complete each Technical
Effort in accordance with the Schedule.  GTE may, at its election, perform its
obligations under this Agreement either directly or through one or more
Affiliates, unless otherwise provided in a Statement of Work.  GENUITY agrees to
provide such information and access to facilities, personnel and GENUITY Legacy
Systems, if applicable, as may be reasonably required or requested by GTE to
complete the Technical Effort.  If GENUITY's acts or failures to act cause any
hindrance or delay in GTE's performance of the Technical Effort, the time for
GTE's performance under the Schedule shall be extended accordingly and GENUITY
shall pay GTE, at GTE's then current rates, for any additional time spent, and
reimburse GTE for any additional expenses incurred, as a result of such
hindrance or delay.

  3.4.  Technical Effort Coordinators and Technical Effort Teams.
        --------------------------------------------------------

        (a) For each Technical Effort, each party shall specify one Technical
Effort Coordinator who shall be designated to act that party's contact person
relating to the over-all conduct of the Technical Effort.

        (b) Each party shall assign to the Technical Effort such personnel (its
"Technical Effort Team") and other resources as may be reasonably necessary to
complete the Technical Effort.

        (c) Either party shall be free to change the identity of the Technical
Effort Coordinator and Technical Effort Team members upon reasonable notice to
the other party.

        (d) The GENUITY Technical Effort Coordinator and such other personnel as
are necessary shall be available during the term of the Technical Effort to
provide to GTE promptly on request all information regarding the Technical
Effort and the Specifications, if applicable, that is reasonably necessary for
GTE's completion of the Technical Effort.

   3.5.  Progress Meetings.  In the course of each Technical Effort, GTE and
         -----------------
GENUITY shall meet on a regular basis to review progress to date.  The meetings
shall take place on or about the dates indicated in the Schedule, and in no
event less frequently than once each quarter-year.  The meetings shall be
attended by each party's Technical Effort Coordinators and such other members of
their Technical Effort Teams as may be required adequately to assess the
progress of the Technical Effort, any technical or other difficulties that may
have been encountered, and to establish schedules and plans for its successful
completion

                                       4
<PAGE>

   3.6. Access to Legacy Systems. Promptly following execution of each Statement
        ------------------------
of Work related to Legacy Systems, GENUITY shall, without charge, provide to GTE
copies of the Object Code and (to the extent required to perform the relevant
Statement of Work) Source Code for all GENUITY Legacy Systems with which the
Software to be developed under the Statement of Work must interact, communicate
with or that is in any other way required for the completion of the Technical
Effort, together with all user manuals and other documentation relating to the
Legacy Systems, unless such Legacy Systems are owned by GTE and are only
licensed to GENUITY pursuant to a separate software license agreement. GENUITY
shall also provide to GTE, free of charge, access to all computer hardware and
networks on which or within which the Legacy Systems operate to the extent
reasonably required to complete each Technical Effort. During the term of this
Agreement, GENUITY shall provide to GTE all updates, new releases and new
versions of the GENUITY Legacy Systems in the same form in which such was
originally provided, unless such updates, new releases and new versions are
provided by GTE. During the term of each Technical Effort, GENUITY shall provide
GTE (or cause to be provided to GTE), without charge, with all maintenance and
support services with respect to the Legacy Systems which subscribers to
maintenance and support services for such products receive generally, unless
such maintenance and support services are provided by GTE. With respect to any
Source Code owned by GENUITY and provided to GTE under this Agreement, GTE shall
use the Source Code for the Legacy Systems solely for the purpose of performing
GTE's obligations under the Statement of Work or Statements of Work for which
such Source Code is necessary, and shall not disclose, without GENUITY's prior
consent, such Source Code to anyone other than GTE and its Affiliates who are
performing services with respect to such Statement of Work.

  3.7.  Inspection of Facilities.  GTE shall advise GENUITY in writing of the
        ------------------------
location of all facilities at which it is utilizing Source Code for the GENUITY
Legacy Systems. GENUITY may, from time to time, as it deems necessary, at its
sole risk and expense, enter such facilities, or any of them, and conduct such
inspection as is reasonably necessary to verify the nature of GTE's use of such
Source Code and GTE's compliance with its obligations with respect to the
confidentiality of such Source Code. GTE shall provide reasonable assistance to
GENUITY for such inspection, GENUITY shall minimize the amount of time that it
is required to spend in GTE's facilities, and GENUITY shall coordinate all such
activities with GTE so as not to unreasonably interfere with GTE's operations.

  3.8.  Specifications and Change Orders.
        --------------------------------
        (a) The Specifications for the Software to be developed during each
Technical Effort shall be as set forth in the Statement of Work for that
Technical Effort. No change in the Specifications shall be binding upon either
party unless it has been incorporated into a written Change Order signed by the
Technical Effort Coordinator for both parties.

                                       5
<PAGE>

         (b) If GENUITY wishes to change the Specifications for any Software, it
shall give GTE written notice of such request. GTE shall respond to such request
within thirty (30) days, including in its response any change in the Schedule,
amounts to be paid, Technical Effort Teams or other matters that may be required
by the proposed change. The parties shall thereupon negotiate in good faith for
a Change Order incorporating the changes in the Statement of Work required by
the requested changes. Either party may, however, decline in its discretion to
enter into any proposed Change Order.

         (c) In no event shall GENUITY or GTE be bound by any proposed change
unless and until it has signed a Change Order for such change, and the Statement
of Work for the Technical Effort shall remain in full force and effect, without
modification, until such Change Order has been agreed upon and signed.

4.  Delivery and Acceptance Procedure.
    ---------------------------------

    4.1. Delivery Period.  GTE shall provide each Deliverable to GENUITY in
         ---------------
accordance with the Schedule for the relevant Technical Effort.  All
Deliverables, if any, shall be provided in the form of Object Code, unless
otherwise specified in the Statement of Work, except GTE shall also provide
Source Code and Documentation for Deliverables to be owned by GENUITY under an
Exclusive Statement of Work.  GTE shall also deliver Documentation for the
Software as may be required by the Statement of Work.

    4.2. Acceptance. The procedure for delivery and acceptance of Deliverables
         ----------
by GENUITY, to the extent acceptance is contemplated by the applicable Statement
of Work and a procedure for such delivery and acceptance is not otherwise
provided therein, shall be in accordance with the following.

         (a) The Statement of Work shall specify the procedure and criteria, if
any, that GTE must meet in order for the Deliverables described in a Statement
of Work to be accepted by GENUITY. The Statement of Work shall also specify a
test plan, such other information as GTE and GENUITY mutually deem appropriate
and the period of time that GENUITY shall have to provide notice of acceptance
or rejection to GTE. However, failure to accept or reject such Deliverable
within the specified period of time or the commercial use of such item by or for
the benefit of GENUITY shall be deemed to be acceptance.

         (b) If GENUITY rejects a Deliverable, it shall specify in reasonable
detail in writing the reasons for rejection and the requirements for revision.
If the notice of rejection is not sufficiently detailed to allow GTE to
determine why such Deliverable is unacceptable, GTE may request in writing that
GENUITY provide sufficient additional information, indicating the type of
additional information required by GTE. If GTE and GENUITY have joint
responsibility for the Deliverable and the Deliverable requires revision, GTE
shall assist GENUITY in making revisions necessary for the Deliverable to meet
the acceptance criteria within a period of time that is reasonable under the

                                       6
<PAGE>

circumstances. If GTE has sole responsibility for the Deliverable, then it shall
make the necessary revisions within a period of time that is reasonable under
the circumstances.

5.  Payment.
    -------

    5.1.  Payment.  GENUITY shall pay the amounts that are charged to GENUITY,
          -------
and GTE shall invoice GENUITY, in accordance with the Statement of Work. Each
invoice shall reference this Agreement and the applicable Statement of Work. The
invoices shall be itemized to show the details as to all billed items. Payments
shall be made within thirty (30) days from the date of each invoice.

    5.2.  Taxes.  In addition to any payments required by a Statement of Work,
          -----
GENUITY shall pay GTE an amount equal to any sales, use, privilege, gross
revenue, excise, or any other tax (except income and franchise taxes), as well
as any assessments or duties with respect to the Deliverables, Services and
other services, materials and rights provided by GTE hereunder lawfully levied
by a duly constituted governmental authority and for which GTE is required or
permitted, by law, to collect from GENUITY.  In addition each party shall be
responsible for all real and personal property taxes imposed on software and
equipment owned by the respective parties on January 1 of every year; provided,
however, GENUITY shall be responsible for such real and personal property taxes
imposed upon any Deliverables provided to GENUITY.  If GENUITY determines that
any Deliverables, Services and other services, materials and rights provided by
GTE hereunder are exempt from a tax, GENUITY must provide GTE a properly
completed exemption certificate, for each jurisdiction for which GENUITY is
claiming an exemption, before GTE will exclude the respective tax from amounts
charged to GENUITY.  GENUITY shall not deduct any tax amount from remittances to
GTE until a properly completed exemption certificate, for all jurisdictions for
which GENUITY is claiming an exemption, has been provided to GTE.

    5.3.  Expenses. GENUITY shall reimburse GTE for reasonable expenses for
          --------
travel, meals and lodging incurred by them in the performance of its obligations
under this Agreement. Any such charges shall be in compliance with such GTE's
employee expense policies. There shall be no mark-up of such expense charges.
GTE shall maintain documentation of expenses incurred, and shall provide copies
of invoices of $100 or more upon GENUITY's request. GTE shall bill GENUITY
monthly for expenses as they accrue. The parties shall specify any limitation on
the reimbursement of expenses in the applicable Statement of Work. It is
acknowledged and agreed that if GTE is required to incur expenses beyond such
limitation in order to perform its obligations under the applicable Statement of
Work or under this Agreement, then GTE is excused from performing such
obligations until said expense limitation is removed or changed as mutually
agreed; provided, however, that GTE promptly notifies GENUITY of the need to
        --------  -------
exceed the limitation.

    5.4.  Records.  GTE shall maintain complete and accurate records in a form
          -------
consistent with generally accepted accounting practices, to substantiate any
charges.

                                       7
<PAGE>

GTE shall retain, and make available upon request, such records for a period of
three (3) years from the date of invoice for them. GENUITY and its authorized
agents, subject to obligations of confidentiality as set forth in this
Agreement, shall have access to such records upon prior written request during
normal business hours during the term of this Agreement and during the
respective periods in which GTE is required to maintain such records pursuant to
this Section 5.4. Access to the records shall be made at the location where such
records are normally maintained.

6.  Intellectual Property.
    ---------------------

      6.1.  Ownership.
            ---------

           (a) Subject to GENUITY'S payment in full and compliance with all
other terms and conditions of this Agreement, and except as may be otherwise set
forth in a Statement of Work, GTE agrees to (i) transfer to GENUITY all right,
title and interest in and all materials included in Deliverables that are first
created during the course of the performance of an Exclusive Statement of Work
(including, but not limited to, Software and Documentation), and any and all
Intellectual Property Rights therein; and (ii) grant to GENUITY a fully paid up,
royalty free license to use the portion of the Deliverables not covered by
subsection (i) immediately above, to the extent such portion is owned by GTE.
Without limiting the generality of the foregoing, GENUITY shall have the right,
without obligation to account to GTE, to market and distribute such
Deliverables.

           (b) GTE shall have sole and exclusive ownership of all right, title
and interest in and to all Deliverables (including, but not limited to, Software
and Documentation) (i) not included in Section 6.1(a)(i) above or (ii) described
in all Non-Exclusive Statements of Work, any and all Intellectual Property
Rights in the foregoing, and all other services, materials, information and
Intellectual Property Rights first created in the course of, pursuant to or as a
result of the performance of any Statement of Work. Without limiting the
generality of the foregoing, GTE shall have the sole and exclusive right,
without obligation to account to GENUITY, to such Deliverables and other
services, materials and Intellectual Property Rights, including, but not limited
to, the sole and exclusive right to market and distribute the Deliverables,
Intellectual Property Rights and other services, materials and information,
subject only to the licenses granted herein to GENUITY pursuant to Section 6.2.

      6.2. Grant of Licenses by GTE for GTE-Owned Deliverables. Subject to
           ---------------------------------------------------
GENUITY's payment in full of all amounts owing pursuant to a Non-Exclusive
Statement of Work, GTE hereby grants to GENUITY a nonexclusive, fully paid up,
royalty free, non-sublicensable, nontransferrable license to use the GTE-owned
Deliverables described in all Non-Exclusive Statements of Work solely for
GENUITY's Internal Business Purposes. Except and to the extent expressly set
forth in the applicable Statement of Work to this Agreement, no maintenance and
support services will be provided pursuant to the Software License Agreement for
Software delivered and licensed pursuant to this Agreement. To the extent any
Third Party Software is provided by GTE to GENUITY

                                       8
<PAGE>

pursuant to this Agreement, the use and possession of such Third Party Software
shall be pursuant to the terms and conditions of this Agreement, unless a Third
Party Software license agreement is included with such Third Party Software, in
which instance such Third Party Software license agreement shall govern the use
and possession of such Third Party Software. The said license shall include the
right to prepare derivative works and shall also include the right, to the
extent that GTE cannot perform such services on a commercially reasonable basis,
and subject to GTE's prior written approval, which shall not be unreasonably
withheld, to engage third parties for the purpose of enhancing or supporting the
Deliverables. The license granted pursuant to this Section 6.2 shall extend to
GENUITY's Affiliates, provided that such Affiliates agree to be bound by the
terms and conditions of this Agreement, but shall not otherwise include any
right to sublicense. The license provided by this Section 6.2 is in addition to,
and shall not be construed as limiting or expanding in any way, any other
licenses that GTE has granted or will grant to GENUITY under GTE Intellectual
Property Rights.

  6.3.  Grant of Licenses by GENUITY.
        ----------------------------

        (a)  Grant of Licenses by GENUITY for Deliverables under Exclusive
             -------------------------------------------------------------
Statements of Work. Except as otherwise set forth in any Statement of Work,
------------------
GENUITY hereby grants to GTE a fully paid up, perpetual, royalty-free, worldwide
license, with no right to grant sublicenses, to use the Deliverables described
in all Exclusive Statements of Work, to the extent GENUITY owns such
Deliverables, for the Internal Business Purposes of GTE. The license granted
pursuant to this Section 6.3(a) shall extend to GTE's Affiliates, provided that
such Affiliates agree to be bound by the terms and conditions of this Agreement,
but shall not otherwise include any right to sublicense. The said license shall
include the right to prepare derivative works and shall also include the right
to engage third parties for the purpose of enhancing or supporting the
Deliverables.

        (b) GENUITY hereby grants to GTE a fully paid up, royalty-free license
under any Intellectual Property Right of GENUITY solely to the extent that such
license is necessary to perform one or more Statements of Work under this
Agreement. This license shall terminate upon acceptance of each Deliverable as
to which this license is granted.

  6.4.  No Implied Licenses. Except and to the extent set forth in Sections 6.2
        -------------------
and 6.3, nothing contained herein shall be construed as granting any right or
license is to any party, by implication, estoppel or otherwise, under any
Intellectual Property Rights of any other party.

  6.5.  Notice of Infringement Claims.  Each party shall use its best efforts to
        -----------------------------
give the other party prompt written notice following receipt of any claim that
any Deliverable infringes the Intellectual Property right of any third party.

                                       9
<PAGE>

  6.6.  Marking.  Each party shall include the other's patent, copyright and
        -------
proprietary rights notices on any copies such party makes of the Software,
Documentation or related materials which belong to the other party.

7.  Confidentiality.
    ---------------

    7.1.  Confidentiality. In the course of requesting and performing any
          ---------------
Statement of Work and other obligations hereunder, each party may receive or
acquire from the other information or data pertaining to specifications,
drawings, sketches, models, samples, computer programs, methods, concepts, know-
how, techniques, processes, and other technical or business information that the
other party desires to protect against unauthorized use or further disclosure.
Unless otherwise expressly set forth in a Statement of Work, for purposes of
this Agreement, "Confidential Information" shall mean: (i) any information in
written, other tangible or electronic form which is labeled by the disclosing
party as "confidential", "proprietary" or with a legend of similar import; (ii)
software in any form (including related documentation), whether or not labeled
in accordance with the preceding; (iii)Deliverables provided pursuant to this
Agreement, with the ownership of, proprietary interest therein and Intellectual
Property Rights therein being retained by the party owning such Deliverables
under the terms and conditions of this Agreement.. Each party shall remain the
exclusive owner of its Confidential Information.

    7.2.  Use of Confidential Information.  The Confidential Information of the
          -------------------------------
disclosing party may be used by the receiving party only for the performance or
use of Deliverables and Services under this Agreement and may only be disclosed
to those employees, subcontractors or agents of the receiving party who have a
need to know in order to perform or use the Deliverables and Services under this
Agreement; provided, however, that neither party shall disclose any Confidential
Information of the other party to a person who is not an Affiliate of the
disclosing party without the prior approval of the other party, which approval
shall not be unreasonably withheld.  Except and to the extent set forth in
Section 7.3, the receiving party may not disclose Confidential Information of
the other party to any other person, entity, or the public without the prior
written consent of the disclosing party; provided, however, that such
                                         --------  -------
Confidential Information may be disclosed by the receiving party without the
necessity of prior written consent, to the receiving party's subcontractors,
employees or consultants who require access to such Confidential Information to
perform or use the Deliverables and Services under this Agreement, provided such
persons have entered into written agreements which contain obligations of
nondisclosure and nonuse no less restrictive than set forth in this Section 7.2.
It is agreed that such written agreements shall be enforceable by the disclosing
party.

    7.3.  Exceptions.  The obligations in Section 7.2 shall not apply to that
          ----------
portion of any information received from the disclosing party which is:
lawfully in the receiving party's possession, with no restriction on use or
disclosure, prior to its acquisition from the

                                       10
<PAGE>

disclosing party; received in good faith by the receiving party, with no
restrictions on use or disclosure, from a third party not subject to any
confidential obligation to the disclosing party; now or later becomes publicly
known through no breach of confidential obligation by the receiving party;
released by the disclosing party to any other person, firm or entity (including
governmental agencies or bureaus) without restriction on use or disclosure; or
independently developed by or for the receiving party without any reliance on or
use of Confidential Information of the disclosing party. The foregoing
exceptions shall not apply to Software in any form.

     7.4. Disclosure and Notification. If a receiving party receives a request
          ---------------------------
to disclose any Confidential Information of the disclosing party (whether
pursuant to a valid and effective subpoena, an order issued by a court or other
governmental authority of competent jurisdiction or otherwise) on advice of
legal counsel that disclosure is required under applicable law, the receiving
party agrees that, prior to disclosing any Confidential Information of the
disclosing party, it shall (i) notify the disclosing party of the existence and
terms of such request or advice, (ii) cooperate with the disclosing party in
taking legally available steps to resist or narrow any such request or to
otherwise eliminate the need for such disclosure at the disclosing party's sole
expense, if requested to do so by the disclosing party, and (iii) if disclosure
is required, it shall be the obligation of the disclosing party to use its best
efforts to obtain a protective order or other reliable assurance that
confidential treatment shall be afforded to such portion of the Confidential
Information of the disclosing party as is required to be disclosed.

     7.5. Continuing Obligation. The obligation of non-disclosure and non-use
          ---------------------
with respect to Confidential Information of the disclosing party shall survive
termination of this Agreement and shall continue for a period of five (5) years
thereafter; provided, however, that the obligations of non-disclosure and non-
            --------  -------
use shall continue in perpetuity for Software in any form.

8.   Warranties and Warranty Disclaimer.
     ----------------------------------

     8.1. Express Representations and Warranties.  GTE represents, warrants, and
          --------------------------------------
covenants to GENUITY that:

        (a)  In performing the Services set forth in any Statement of Work, GTE
shall comply with all applicable laws, codes, ordinances, orders, rules and
regulations of local, state, and federal governments and agencies and
instrumentalities, including, but not limited to, applicable wage and hour,
safety and environmental laws, and all standards and regulations of appropriate
regulatory commissions and similar agencies.

        (b)  All Services furnished by GTE in accordance with a Statement of
Work shall be performed by qualified personnel at a level of professional
performance standard within the industry in which the Services are provided.

                                       11
<PAGE>

     8.2. Disclaimer.  THE WARRANTIES IN THIS SECTION 8 AND ANY WARRANTY IN A
          ----------
STATEMENT OF WORK, BUT ONLY IF SPECIFICALLY IDENTIFIED AS AN EXPRESS WARRANTY IN
SUCH STATEMENT OF WORK, ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
OR WHETHER ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE
TRADE OR PROFESSION OR OTHERWISE, INCLUDING BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR WARRANTIES
AGAINST INFRINGEMENT. GTE MAKES NO WARRANTIES REGARDING THE DELIVERABLES,
INCLUDING, WITHOUT LIMITATION, SOFTWARE, OR SERVICES TO BE PROVIDED HEREUNDER,
EXPRESS, IMPLIED OR ARISING BY CUSTOM OR TRADE USAGE, AND SPECIFICALLY DISCLAIMS
THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE. Except for the warranties expressly set forth in this
Section 8 and any Statement of Work, GENUITY acknowledges and agrees that it has
relied on no other representations or warranties and that no other
representations or warranties have formed the basis of its bargain hereunder

     8.3. Survival. All representations, warranties and covenants of GTE
          --------
contained in this Section 8 shall continue for the term of this Agreement and
shall survive its termination.

9.   Indemnification.
     ---------------

     9.1. Indemnity for Infringement of Third Party Intellectual Property.
          ---------------------------------------------------------------

          (a)  Indemnity regarding Deliverables provided under Exclusive
               ---------------------------------------------------------
Statements of Work. If a Deliverable under an Exclusive Statement of Work become
------------------
the subject of an infringement claim, or in GTE's opinion is likely to become
the subject of such a claim, then, in addition to defending the claim and paying
any damages and attorneys' fees finally awarded by a court of final
jurisdiction, GTE may, at its option and in its sole discretion, and at its own
cost and expense: (i) replace or modify such Deliverable to make it
noninfringing or cure any claimed misuse of any third party trade secret; (ii)
procure for GENUITY the right to continue using such Deliverable pursuant to
this Agreement; or (iii) require GENUITY to cease using and return such
Deliverable upon a Markman determination that the patent claims on which an
action has been brought are afforded a construction which outside counsel for
GTE reasonably believes reads on the Deliverable or a decision of infringement,
whichever is earlier, in which case GTE shall refund to GENUITY a pro-rata
portion of the amount actually paid to GTE by GENUITY for such Deliverable.
Notwithstanding the foregoing, if GTE exercises its right to require the return
of such Deliverable, to the extent permitted by applicable law, GENUITY may
retain and continue to use such Deliverable to the extent GENUITY agrees in
writing to defend and indemnify GTE for any and all expenses, costs and
liabilities associated with such continued possession and use of such
Deliverable.

                                       12
<PAGE>

     (b)  Indemnity regarding Deliverable provided under Non-Exclusive
          ------------------------------------------------------------
Statements of Work. If a Deliverable under a Non-Exclusive Statement of Work
------------------
become the subject of an infringement claim, or in GTE's opinion is likely to
become the subject of such a claim, then, in addition to defending the claim and
paying any damages and attorneys' fees finally awarded by a court of final
jurisdiction, GTE may, at its option and in its sole discretion, and at its own
cost and expense: (i) replace or modify such Deliverable to make it
noninfringing or cure any claimed misuse of any third party trade secret; (ii)
procure for GENUITY the right to continue using such Deliverable pursuant to
this Agreement; or (iii) require the return of such Deliverable and terminate
GENUITY's right to use the same and refund to GENUITY a pro-rata portion of the
amount actually paid to GTE by GENUITY for such Deliverable. Notwithstanding the
foregoing, if GTE exercises its right to require the return of such Deliverable
and terminates GENUITY's right to use the same, to the extent permitted by
applicable law, GENUITY may retain and continue to use such Deliverable to the
extent GENUITY agrees in writing to defend and indemnify GTE for any and all
expenses, costs and liabilities associated with such continued possession and
use of such Deliverable.

     (c)  Limitations.  GTE shall not be liable to GENUITY for any claims of
          -----------
inducement to infringe or contributory infringement or claims of infringement
resulting from the combination of the Deliverable with the products or services
of third parties. Further, GTE shall have no liability to GENUITY hereunder if
(i) the claim of infringement is based upon the use or other exploitation of
Deliverable provided by GTE hereunder in connection or in combination with
equipment, devices, data or software not supplied by GTE, and such infringement
would not have occurred but for such use; (ii) such Deliverable is used outside
of the scope of the rights and licenses granted to GENUITY or in a manner for
which the Deliverable was not designed; (iii) the Deliverable or any portion
thereof is modified by or for GENUITY (even by GTE at GENUITY's direction or
instructions), and such infringement would not have occurred but for such
modification; (iv) GENUITY uses the Deliverable as part of a patented process
and there would be no infringement in the use of the Deliverable alone; or (v)
the infringement is the necessary result of GTE's compliance with specifications
or written instructions provided by GENUITY to GTE, misuse of a third party's
Confidential Information provided by GENUITY to GTE or use of Legacy Systems
provided by GENUITY to GTE . For all of the foregoing exclusions, GENUITY shall
defend and indemnify GTE for any infringement claims to the extent set forth in
Section 9.1(a).

     (d)  The foregoing sets forth GTE's sole and exclusive obligations, and
GENUITY's sole remedies, for infringement of any Intellectual Property Rights by
any Deliverables under any Statement of Work.

 9.2.  General.  GTE and GENUITY, to the fullest extent permitted by law, each
       -------
shall defend, indemnify and hold harmless the other and its Affiliates,
officers, agents and employees from any and all amounts payable under any
judgment, verdict, court order or settlement (and associated fees and
disbursements of counsel) arising from or

                                       13
<PAGE>

related to any third-party claims for injury, sickness, disease or death of any
person or damage to any real or tangible personal property or assets to the
extent arising from the indemnitor's (either directly or through its officers,
agents, subcontractors or representatives) negligence or willful misconduct in
the performance of this Agreement; provided, however, that if a claim is the
                                   --------  -------
result of the joint negligence or joint willful misconduct of GTE and GENUITY,
the amount of the claim for which each party is entitled to indemnification
shall be limited to that portion of such claim that is attributable to the
negligence or willful misconduct of the indemnifying party. The parties agree
that the payments required by any Statement of Work provided under this
Agreement includes consideration for the obligation to indemnify as set out in
this Section 9.

     9.3. Losses. GENUITY and GTE each shall be responsible for any and all
          ------
claims, actions, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses (collectively, "Losses"), to their respective
tangible personal or real property (whether owned or leased), and each party
agrees to look only to its own insuring arrangements (if any) with respect to
such Losses. Subject to the procedures set forth below, each party shall
indemnify, defend and hold the other party harmless from any and all Losses
arising out of, under or in connection with claims for which the indemnitor is
responsible under the preceding sentence.

     9.4. Waivers. GENUITY and GTE waive all rights to recover against each
          -------
other for any Loss to their respective tangible personal property (whether owned
or leased) from any cause covered by insurance maintained by each of them,
including their respective deductibles or self-insured retentions. GENUITY and
GTE shall cause their respective insurers to issue appropriate waivers of
subrogation rights endorsements to all property insurance policies maintained by
each party. Each party shall give the other written notice if a waiver of
subrogation is unobtainable or obtainable only at additional expense. If the
party receiving such notice agrees to reimburse the other party for such
additional expense, the other party shall obtain such waiver of subrogation. If
a waiver is unobtainable or if a party elects not to pay the additional expense
of a waiver, then neither party nor their insurers shall waive such subrogation
rights.

     9.5. Conditions.  The indemnification obligations set forth in this section
          ----------
shall not apply unless the party claiming indemnification: (i) uses its best
efforts to notify the other promptly in writing, of any matters in respect of
which the indemnity may apply and of which the notifying party has knowledge, in
order to allow the indemnitor the opportunity to investigate and defend the
matter; provided, however, that the failure to so notify shall only relieve the
        --------  -------
indemnitor of its obligations under this Section 9 if and to the extent that the
indemnitor is prejudiced thereby; and (ii) gives the other party full control of
the response thereto and the defense thereof, including any agreement relating
to the settlement thereof; provided, however, that the indemnitee shall have the
right to participate, on a non-interfering basis, in any legal proceeding to
contest and defend a claim for indemnification involving a third party and to be
represented by legal counsel of its choosing, all at the indemnitee's sole cost
and expense. However, if the

                                       14
<PAGE>

indemnitor fails to promptly assume the defense of the claim, the party entitled
to indemnification may assume the defense at the indemnitor's cost and expense.
The indemnitor shall not be responsible for any settlement or compromise made
without its prior written consent, unless the indemnitee has tendered notice and
the indemnitor has then refused to assume and defend the claim and it is later
determined that the indemnitor was obligated to assume and defend the claim. The
indemnitee agrees to cooperate in good faith with the indemnitor at the request
and expense of the indemnitor.

10.  Limitations on Liability.
     ------------------------

     10.1.  General.  A party's and its Affiliates' liability arising out of or
            -------
relating to a Statement of Work and this Agreement, including without limitation
on account of performance or nonperformance of obligations hereunder, regardless
of the form of the cause of action, whether in contract, tort (including without
limitation negligence), statute or otherwise, shall in no event exceed the
lesser of (i) the price to be paid to GTE for the completed Statement of Work as
set forth thereon; or (ii) the amount actually paid by GENUITY to GTE for the
particular Statement of Work from which the claim arises. The limitation in the
immediately preceding sentence does not apply to a party's obligations under the
section entitled Indemnification and Confidential Information or other breaches
related to Intellectual Property Rights.

     10.2.  Limitation. EXCEPT FOR BREACHES RELATED TO CONFIDENTIAL INFORMATION
            ----------
OR INTELLECTUAL PROPERTY RIGHTS, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGE
OR LOST PROFITS OF ANY KIND WHATSOEVER EVEN IF A PARTY OR ITS AFFILIATES HAVE
BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.

11.  Term.
     ----

     11.1.  Term. This Agreement is effective as of the date of closing of the
            ----
initial public offering of Genuity shares of stock ("Effective Date") and shall
expire the earlier of: (a) one (1) year after the Effective Date or (b)
expiration or termination of all of the Statements of Work under this Agreement
unless earlier terminated under Section 11.1, 11.2, 11.3 or 11.4 of this
Agreement. This Agreement may not be renewed.

     11.2.  Termination Events. Either party may terminate or cancel this
            ------------------
Agreement or any Statement of Work, effective immediately, upon written notice
to the other party, if any of the following events occur:

        (a) The other files a voluntary petition in bankruptcy (other than as
creditor).

        (b) The other is adjudged bankrupt.

                                       15
<PAGE>

        (c) A court assumes jurisdiction of the assets of the other under a
federal reorganization act.

        (d) A trustee or receiver is appointed by a court for all or a
substantial portion of the assets of the other.

        (e) The other becomes insolvent or suspends its business.

        (f) The other makes an assignment of its assets for the benefit of its
creditors except as required in the ordinary course of business.

     11.3.  Termination for Breach.  Either party may terminate or cancel this
            ----------------------
Agreement or a Statement of Work, for a material breach or default of any of the
terms, conditions or covenants of this Agreement by the other, provided that
such termination or cancellation may be made only following the expiration of a
thirty (30) day period during which the other party has failed to cure such
breach after having been given written notice of such breach.

     11.4.  Termination for Convenience. GENUITY may terminate any Statement of
            ---------------------------
Work, or this Agreement in its entirety, at any time upon written notice to GTE.
In such event, GENUITY shall pay GTE for all work performed up to the date of
termination, and for all supplies and other resources, including third party
licenses, that GTE has obtained or committed to the completion of the relevant
Statement of Work and that cannot reasonably be re-assigned or otherwise
utilized by GTE on other matters.

     11.5.  Termination by Mutual Consent. The parties may at any time terminate
            -----------------------------
any Statement of Work, or this Agreement in its entirety, by mutual consent. In
such event, GENUITY shall pay GTE for all work performed up to the date of
termination, and for all supplies and other resources, including third party
licenses, that GTE has obtained or committed to the completion of the relevant
Statement of Work and that cannot reasonably be re-assigned or otherwise
utilized by GTE on other matters.

     11.6.  Effect of Termination.
            ---------------------

        (a) No expiration, termination or cancellation of this Agreement, in
whole or in part, shall relieve GENUITY of any obligation to pay amounts due nor
affect any other rights or liabilities of the parties which may have accrued
prior to the date of expiration, termination or cancellation.

        (b) In no event shall any license granted to GENUITY hereunder (or any
license grant made by reference to the Software License Agreement) survive
expiration, termination or cancellation unless and until Internetworking has
paid in full for the Deliverables to which such license relates.

                                       16
<PAGE>

        (c) Notwithstanding anything herein to the contrary, and in addition to
any provisions of Statement of Work that expressly survive expiration,
termination or cancellation of this Agreement, upon any expiration or
termination of this Agreement, the provisions of Sections 5, 6, 7, 8.2, 8.3, 9,
10, 11.6 and 12 of this Agreement shall survive such expiration, termination or
cancellation and shall continue in full force and effect.

        (d) GTE shall use its best efforts to provide all items, services and
personnel necessary to effectuate and ensure a smooth and timely transition for
Genuity from dependence on Services under each Statement of Work to standalone
ability to perform such Services itself or in conjunction with third parties.
Both parties shall make appropriate resources available in connection with such
transition, and any such steps taken by GTE shall be accomplished prior to the
expiration of the term of this Agreement.

12.  Dispute Resolution.
     ------------------

     12.1.  General. Any controversy or claim arising out of or relating to this
            -------
Agreement, or the breach thereof, shall be settled first, by good faith efforts
of the parties to reach mutual agreement, and second, if mutual agreement is not
reached to resolve the dispute, by final, binding arbitration as set out in
Section 12.3 below.

     12.2.  Initial Resolution.  A party that wishes to initiate the dispute
            ------------------
resolution process shall send written notice to the other party with a summary
of the controversy and a request to initiate these dispute resolution
procedures. Each party shall appoint a knowledgeable, responsible representative
from the company who has the authority to settle the dispute, to meet and
negotiate in good faith to resolve the dispute. The discussions shall be left to
the discretion of the representatives, who may utilize other alternative dispute
resolution procedures such as mediation to assist in the negotiations.
Discussions and correspondence among the representatives for purposes of these
negotiations shall be treated as Confidential Information developed for purposes
of settlement, shall be exempt from discovery and production, and shall not be
admissible in the arbitration described above or in any lawsuit pursuant to Rule
408 of the Federal Rules of Evidence. Documents identified in or provided with
such communications, which are not prepared for purposes of the negotiations,
are not so exempted and may, if otherwise admissible, be admitted in evidence in
the arbitration or lawsuit. The parties agree to pursue resolution under this
subsection for a minimum of 60 days before requesting arbitration.

     12.3.  Arbitration.  If the dispute is not resolved under the preceding
            -----------
subsection within 60 days of the initial written notice, and the dispute does
not relate to Intellectual Property Rights, either party may demand arbitration
by sending written notice to the other party. The parties shall promptly submit
the dispute to the American Arbitration Association for resolution by a single
neutral arbitrator acceptable to both parties, as selected under the rules of
the American Arbitration Association. The dispute shall then

                                       17
<PAGE>

be administered according to the American Arbitration Association's Commercial
Arbitration Rules, with the following modifications: (i) the arbitration shall
be held in a location mutually acceptable to the parties, and if the parties do
not agree, the location shall be New York City; (ii) the arbitrator shall be
licensed to practice law; (iii) the arbitrator shall conduct the arbitration as
if it were a bench trial and shall use, apply and enforce the Federal Rules of
Evidence and Federal Rules of Civil Procedure; (iv) except for breaches related
to Confidential Information or intellectual property, the arbitrator shall have
no power or authority to make any award that provides for consequential,
punitive or exemplary damages; (v) the arbitrator shall control the scheduling
so that the hearing is completed no later than 60 days after the date of the
demand for arbitration; and (vi) the arbitrator's decision shall be given within
5 days thereafter in summary form that states the award, without written
decision, which shall follow the plain meaning of this Agreement, the relevant
documents, and the intent of the parties. Judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction over the parties.
Each party to the dispute shall bear its own expenses arising out of the
arbitration, except that the expenses of the facilities to conduct the
arbitration and the fees of the arbitrator shall be shared equally by the
parties.

     12.4.  Injunctive Relief. The foregoing notwithstanding, each party shall
            -----------------
have the right to seek injunctive relief in an applicable court of law or equity
pending resolution of the dispute in accordance with the foregoing.

13.  General.
     -------

     13.1.  Notice. Any written notice either party may give the other
            ------
concerning the subject matter of this Agreement shall be in writing and given or
made by means that obtain a written acknowledgment of receipt. Notices shall be
sent to the parties at the following addresses, which may be changed by written
notice:

                    To GTE:   ___________________________
                              ___________________________
                              ___________________________
                              ___________________________

                To GENUITY:   ___________________________
                              ___________________________
                              ___________________________
                              ___________________________

     Notice shall be deemed to have been given or made when actually received,
as evidenced by written acknowledgment of receipt.

     13.2.  Compliance. GTE and GENUITY shall each comply with the provisions of
            ----------
all applicable federal, state, and local laws, ordinances, regulations and codes
(including, without limitation, procurement of required permits or certificates)
in fulfillment of their

                                       18
<PAGE>

obligations under this Agreement. GTE Products and Services are subject to U.S.
export and foreign transactions control regulations. Each party undertakes that
it shall neither export, nor cause nor permit to be exported, without the other
party's prior written consent and without compliance with applicable law and
regulation, the other party's products or services out of the United States of
America, nor shall such products or services be made available, directly or
indirectly, for use in any project associated with the design, development,
production, testing, stockpiling or use of: (i) nuclear weapons or facilities to
produce nuclear explosives, (ii) missiles, or (iii) chemical or biological
warfare agents. Each party agrees to comply with all applicable laws and
regulations relating to the exportation of technical information, as they
currently exist and as they may be amended from time to time.

     13.3.  Assignment, Subcontracting.
            --------------------------

        (a) Neither this Agreement nor any rights or obligations hereunder shall
be assignable by either of the parties hereto; provided, however, that GTE may
                                               --------  -------
delegate all or any portion of its obligations under this Agreement to one or
more of its Affiliates or may assign this Agreement to any Affiliate.

        (b) GTE may use subcontractors to perform its obligations under this
Agreement. GTE shall be responsible for the fulfillment of its obligations
hereunder, notwithstanding the performance of such obligations by its
subcontractors.

     13.4.  Waiver of Terms and Conditions. Failure to enforce any of the terms
            ------------------------------
or conditions of this Agreement shall not constitute a waiver of any such terms
or conditions, or of any other terms or conditions.

     13.5.  Severability. Where any provision of this Agreement is declared
            ------------
invalid, illegal, void or unenforceable, or any changes or modifications are
required by regulatory or judicial action, and any such invalid, illegal, void
or unenforecable provision, or such change or modification, substantially
affects any material obligation of a party hereto, the remaining provisions of
this Agreement shall remain in effect and the parties shall mutually agree upon
a course of action with respect to such invalid provision or such change or
modification to the end that the purposes of this Agreement are carried out.

     13.6.  Governing Law. This Agreement, and the rights and obligations
            -------------
contained in it, shall be governed by and construed in accordance with the laws
of the State of New York, without regard to any conflicts of law principles that
would require the application of the laws of any other jurisdiction.

     13.7.  No Unreasonable Delay or Withholding.  Where agreement, approval,
            ------------------------------------
acceptance, consent or similar action by GENUITY or GTE is required, such action
shall not be unreasonably delayed or withheld.

                                       19
<PAGE>

     13.8.  Force Majeure. If performance of any obligations by either party
            -------------
under this Agreement (other than any obligation of either party to pay money
hereunder) is prevented, restricted or interfered with by reason of acts of God,
wars, revolution, civil commotion, acts of public enemy, embargo, acts of
government in its sovereign capacity, labor difficulties, including, without
limitation, strikes, slowdowns, picketing or boycotts, communication line
failures, power failures, or any other circumstances beyond the reasonable
control and not involving any fault or negligence of the party affected, the
party affected, upon giving prompt notice to the other party, shall be excused
from such performance on a day-to-day basis during the continuance of such
prevention, restriction or interference (and the other party shall likewise be
excused, on a day-to-day basis during the same period, from performance of its
obligations which are dependent upon or affected by such nonperformance);
provided, however, that the party so affected shall use its best reasonable
--------  -------
efforts to avoid or remove such causes of nonperformance and both parties shall
proceed immediately with the performance of their obligations under this
Agreement whenever such causes are removed or cease.

     13.9.  Entire Agreement. This Agreement represents the entire understanding
            ----------------
between the parties with the respect to its provisions and cancels and
supercedes all prior agreements or understandings, whether written or oral, with
respect to the subject matter. This Agreement may only be modified or amended by
an instrument in writing signed by duly authorized representatives of the
parties. This Agreement shall be deemed to include all Schedules issued
hereunder.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
___ day of ___________, 2000 through their authorized representatives.

GTE SERVICE CORPORATION                 GENUITY SOLUTIONS INC.

By:_________________________            By:_________________________

Name:_______________________            Name:_______________________

Title:______________________            Title:______________________

Date:_______________________            Date:_______________________

                                       20

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