Form Of Software Development

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.
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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.


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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.


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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


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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.
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(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


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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.
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(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.


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(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.
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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


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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.
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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
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