<PAGE>
EXHIBIT 10.82

Commercial Volume                                          Terms and Conditions

                            SUPPLY CONTRACT BETWEEN
                      SUBMARINE SYSTEMS INTERNATIONAL LTD.
                                       AND
                             GCI COMMUNICATION CORP.













           [CERTAIN INFORMATION HAS BEEN REDACTED FROM THIS DOCUMENT
            WHICH THE COMPANY DESIRES TO KEEP UNDISCLOSED AND A COPY
           OF THE UNREDACTED DOCUMENT HAS BEEN FILED SEPARATELY WITH
                    THE SECURITIES AND EXCHANGE COMMISSION.]







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Commercial Volume                                          Terms and Conditions



                                Table of Contents

Article 1.        Provision of System.........................................1
Article 2.        Documents Forming the Entire Contract.......................1
Article 3.        Definitions.................................................2
Article 4.        Contract Price..............................................3
Article 5.        Terms of Payment............................................4
Article 6.        Contract Variations.........................................7
Article 7.        Responsibilities for Submarine Cable Construction
                   Approvals, Permits, Permissions and Consents...............8
Article 8.        Route Survey................................................9
Article 9.        Acceptance..................................................9
Article 10.       Warranty....................................................12
Article 11.       Contractor Support..........................................15
Article 12.       Purchaser's Obligations.....................................15
Article 13.       Termination for Default.....................................16
Article 14.       Termination for Convenience.................................17
Article 15.       Suspension..................................................20
Article 16.       Title and Risk of Loss......................................20
Article 17.       Force Majeure...............................................21
Article 18.       Intellectual Property.......................................22
Article 19.       Infringement................................................25
Article 20.       Safeguarding of Information and Technology..................26
Article 21.       Export Control..............................................27
Article 22.       Liquidated Damages..........................................27
Article 23.       Limitation of Liability/Indemnification.....................27
Article 24.       (Intentionally Left Blank)..................................28
Article 25.       Design and Performance Responsibility.......................28
Article 26.       Product Changes.............................................29
Article 27.       Risk and Insurance..........................................29
Article 28.       Plant and Work Rules........................................30
Article 29.       Right of Access.............................................30
Article 30.       Quality Assurance...........................................31
Article 31.       Documentation...............................................31
Article 32.       Training....................................................31
Article 33.       Settlement of Disputes/Arbitration..........................31
Article 34.       Applicable Law..............................................33
Article 35.       Notices.....................................................33
Article 36.       Publicity...................................................34
Article 37.       Assignment..................................................34
Article 38.       Relationship of the Parties.................................34
Article 39.       Successors Bound............................................34
Article 40.       Paragraph Captions..........................................34
Article 41.       Severability................................................34
Article 42.       Survival of Obligations.....................................35
Article 43.       Non-Waiver..................................................35
Article 44.       Language....................................................35
Article 45.       Performance Guarantee.......................................35
Article 46.       Entire Agreement............................................35



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Commercial Volume                                          Terms and Conditions


                                   Appendices


Appendix 1  -  Provisioning Schedule

Appendix 2  -  Billing Schedule

Appendix 3  -  Sample Invoice

Appendix 4  -  Responsibilities for Submarine Cable Construction Approvals,
               Permits, Permissions and Consents

Appendix 5  -  (Intentionally Left Blank)

Appendix 6  -  Plan of Work




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Commercial Volume                                          Terms and Conditions


                             SUPPLY CONTRACT BETWEEN
                      SUBMARINE SYSTEMS INTERNATIONAL LTD.
                                       AND
                             GCI COMMUNICATION CORP.


This  agreement  for the supply of a fiber optic cable  system  ("Contract")  is
effective as of this 11th day of July, 1997 ("Effective Date") between Submarine
Systems  International Ltd., a corporation organized and existing under the laws
of the State of Delaware,  of the United States of America, and having an office
at 340 Mt.  Kemble  Avenue,  Morristown,  New Jersey,  07962-1923  of the United
States of America  ("SSI" and  "Contractor");  and GCI  Communication  Corp.,  a
corporation  organized  and  existing  under the laws of  Alaska,  of the United
States of  America,  and  having an office  at 2550  Denali  Street,  Anchorage,
Alaska, 99503-2721 ("Purchaser").


WHEREAS, Purchaser desires to establish a fiber optic submarine cable system, to
be known as Alaska United Fiber System  ("System")  linking the State of Alaska,
with landings in Juneau at Lena Point North and Whittier at Lookout  Point,  and
the State of Washington, with a landing in Richmond Beach at Puget Sound;

WHEREAS,   Contractor   is  in  the   business   of   designing,   constructing,
manufacturing, supplying, delivering, and installing fiber optic submarine cable
systems;

WHEREAS,  Purchaser  seeks to  purchase  and own the System and wishes to engage
Contractor to be responsible to design, construct, manufacture, supply, deliver,
and install the System and for Cable  laying,  testing,  and  commissioning  the
System (hereinafter collectively called "Work"); and

WHEREAS,  Contractor is willing to do the Work in accordance with and subject to
the terms hereof.

NOW THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:

Article 1.   Provision of System
Contractor  agrees to  design,  engineer,  provide  and  install  or cause to be
designed,  engineered,  provided and installed and Purchaser  agrees to purchase
the  System  designed,  manufactured  and  installed  in  accordance  with  this
Contract.

Article 2.   Documents Forming the Entire Contract
This  Contract  consists  of  these  commercial  Terms  and  Conditions  and the
following documents (in the form of attachments,  including appendices, attached
hereto),  which shall be read and construed as part of the  Contract,  listed in
order of precedence:

                  -    Technical Volume (including Route Information)
                  -    Plan of Work, Appendix 6


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                  -    Provisioning Schedule, Appendix 1
                  -    Billing Schedule, Appendix 2
                  -    Responsibilities for Submarine Cable Construction
                       Approvals, Permits, Permissions and Consents, Appendix 4

This ordering shall be used to establish  priority in the event that there is an
inconsistency between any of these documents.  In the event of any inconsistency
between the Terms and Conditions and the above listed  documents,  the Terms and
Conditions shall prevail.

These documents also may refer to the System as the Alaska United Cable System.

Article 3.   Definitions
Definitions  are as  described  in the  specific  Articles.  Except as otherwise
defined, the following definitions shall apply throughout the Contract:

CIF means cost,  insurance  and freight  which  charges  shall be  reimbursed by
Purchaser, as estimated on Appendix 1 and as invoiced by Contractor.

Contract  means  this  agreement,   specifically  consisting  of  the  documents
described in Article 2, and shall be deemed to include any amendments thereto or
Contract Variations pursuant to Article 6 (Contract Variations).

Contractor  means the entity that has executed this Contract as Contractor (SSI)
and will be responsible  for the performance of the Work under this Contract and
shall include its successors and/or assigns.

Contract  Price  means  the  total  price  payable  for the  performance  of the
Contract,  as  contained  in Article 4  (Contract  Price)  and the  Provisioning
Schedule,  including any variations agreed upon between Contractor and Purchaser
pursuant to Article 6 (Contract Variations).

FOB (Free On Board) means that the Contractor fulfills its obligation to deliver
when the goods have passed over the vessel's rail at the named port of shipment.
Purchaser shall bear all costs of shipping and handling.

Initial Contract Price means the price set forth in Article 4(A).

Party(ies) means either of Purchaser and/or Contractor, as appropriate.

Performance  Requirements means the System performance requirements set forth in
the Specifications or such other System performance levels as mutually agreed by
the Parties.

Provisioning Schedule means the price schedule attached hereto in Appendix 1.



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Purchaser means the entity that has executed this Contract as the Purchaser (GCI
Communication Corp.) and shall include its successors and/or assigns.

Specifications means the contents of the Technical Volume.

Software means all programs,  data, object codes,  documentation,  and operating
systems,  whether in  writing,  in  firmware,  or in any other  form,  which are
necessary for operation of the System.  It includes  documentation,  any support
tools  which  are not  commercially  available,  and  data  connected  with  the
development  and support as well as any upgrade or enhancement  thereto that may
be required under the warranty provisions.

Work  means  the  managing,   coordinating,   planning,  surveying,   designing,
manufacturing,  transporting,  cable laying, installing, testing, commissioning,
training and any other associated services or activities  whatsoever,  including
any other  work and  obligations  to be  carried  out in the  execution  of this
Contract by Contractor.

Article 4.   Contract Price
         A.       Contract Price
                  Prices  shall be as set  forth  in  Appendix  1,  Provisioning
                  Schedule.  The initial Contract Price in United States Dollars
                  (US$) is ********** ("Initial Contract Price") for the System.

         B.       Taxes, Levies and Duties
                  1.       Contract  Price,  as stated in 4(A)  above,  excludes
                           customs  duties,   sales,  state,  local,   business,
                           occupation  and use taxes,  VAT,  and  fiscal  stamps
                           connected  with  Contract  legalization  or any other
                           tax, duty, levy or similar charge which Contractor is
                           required  by law to  bill  to and  collect  from  the
                           Purchaser.  At the  Purchaser's  request,  Contractor
                           shall  provide  a good  faith  estimate  of  customs,
                           duties,  and taxes or similar  charges payable by the
                           Purchaser.

                  2.       The  Purchaser  will  be   responsible   for  paying,
                           including  but not limited  to, all such  appropriate
                           customs  duties,   sales,  state,  local,   business,
                           occupation  and use taxes,  VAT,  and fiscal  stamps,
                           etc.  connected  with Contract  legalizations  to the
                           authorities   in   their   countries.   However,   if
                           Contractor  is  required  to pay  such,  it  will  be
                           reimbursed by the  Purchaser  within thirty (30) days
                           of the date the  appropriate  invoice is  received by
                           the Purchaser in accordance  with Article 5 (Terms of
                           Payment).

                  3.       The  Purchaser  shall  obtain  at its  own  risk  and
                           expense   any  import   license  or  other   official
                           authorization  and carry out all customs  formalities
                           necessary for the importation of goods.
                           Contractor,


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Commercial Volume                                          Terms and Conditions


                           upon request of Purchaser,  shall  provide  Purchaser
                           with any reasonable  assistance.  The Purchaser shall
                           agree to be the  Importer of Record or  designate  an
                           Importer of Record/Consignee on its behalf. Purchaser
                           must provide a Letter of Authorization from the third
                           party  designate  stating  it  will  agree  to be the
                           Importer of Record on Purchaser's behalf and identify
                           the individual  name of the person and address of the
                           designated Importer of Record.

                  4.       Unless otherwise agreed to in writing, the equipment,
                           materials  and  supplies to be  installed  or held on
                           land shall be  delivered  to the agreed  point at the
                           named place of destination  and shall be consigned to
                           the Purchaser.

         C.       Contractor's Income Tax
                  The Contractor  shall be  responsible  for any income tax that
                  might be incurred by Contractor as a result of income obtained
                  by  Contractor  arising  from  and/or in  connection  with the
                  Contract.

Article 5.   Terms of Payment
         A.       General Conditions of Payment
                  1.       All payments  shall be made and all invoices shall be
                           rendered in US Dollars (US$).  The Purchaser shall be
                           responsible  for and shall pay all costs and fees for
                           payment,  as well as the banking  and cabling  costs.
                           All banking documents and  correspondence  must be in
                           English.

                  2.       On or before **********,  payment shall be secured by
                           one  of  the   following   Payment   Securities:   1)
                           **********,  or 2) **********, or 3) ********** or 4)
                           any  other   financial   instrument   acceptable   to
                           Contractor.  Any such Payment  Security shall be in a
                           format  that  is  acceptable  to  Contractor  and  be
                           confirmed   by  and  payable  at  a  bank  chosen  by
                           Contractor.

                                   Account Number: **********

                                   ABA Number: **********

                                   Bank name and address: **********
                                                          **********
                                                          **********

                  3.       The Payment  Security  will be in an amount  equal to
                           the value of the work  undertaken or to be undertaken
                           by Contractor, plus any other charges associated with
                           the issuance of any such Payment


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                           Security.  At all times  Contractor shall be entitled
                           to have any work to be  undertaken to be secured by a
                           Payment Security before proceeding with such work.

         B.       Terms of Payment
                  1.       Down Payment
                           **********  of  the  Initial  Contract  Price  ("Down
                           Payment"), as provided in the Billing Schedule, shall
                           be due after Contract signing and on or before August
                           1, 1997.

                  2.       Progress Payments
                            (a)      **********  of the  Contract  Price will be
                                     invoiced  in  accordance  with the  Billing
                                     Schedule in Appendix 2

                  3.       Final Payment
                            (a)      The  remaining  balance  **********  of the
                                     Contract  Price will be  invoiced  upon the
                                     issuance of the  Certificate of Provisional
                                     Acceptance, as set forth in Article 9.
                            (b)      In the event a  Certificate  of  Commercial
                                     Service is issued  prior to the issuance of
                                     the Certificate of Provisional  Acceptance,
                                     the Purchaser shall be invoiced  **********
                                     of the  remaining  balance upon issuance of
                                     the Certificate of Commercial Service, with
                                     the  balance  to  be   invoiced   upon  the
                                     issuance of the  Certificate of Provisional
                                     Acceptance.

                  4.       Payment for Contract Variations
                           Contract  variations  will be  invoiced  and  paid in
                           accordance  with the terms of the Contract  Variation
                           as set forth in Article 6 (Contract Variations).

         C.       Invoice Procedures
                  1.       Invoices shall be submitted in the format as provided
                           in Appendix 3. All  invoices for Work will be paid in
                           accordance with Article 5(B) hereof.

                  2.       If the  progress of the work  within any  category is
                           such that an appropriate milestone is not achieved by
                           the end of the month  corresponding  to the milestone
                           as set  forth in the  Plan of Work and in  accordance
                           with the  Billing  Schedule,  Contractor  may, at the
                           Purchaser's option, invoice an amount consistent with
                           the  portion  thus far  completed,  to  achieve  that
                           milestone. If the Purchaser authorizes the submission
                           of such an invoice,  the  remaining  amount  shall be
                           invoiced at the time of completion of the  milestone.
                           If the  Purchaser  does  not  authorize  the  partial
                           invoice,  the entire  amount  will be  invoiced  upon
                           completion of the milestone.


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                  3.       The   Contractor   shall  render  all  invoices,   in
                           accordance   with   Article  35,  to  the   following
                           addresses:

                                   GCI Communication Corp.
                                   2550 Denali Street (Suite 1000)
                                   Anchorage, Alaska  99503-2721
                                   Attn:  Mr. Jimmy R. Sipes
                                   Vice President
                                   Telephony Network Engineering

                                   GCI Communication Corp.
                                   2550 Denali Street (Suite 1000)
                                   Anchorage, Alaska  99503-2721
                                   Attn:  Accounts Payable

        D.       Payment Procedures
                  1.       Purchaser shall pay Contractor,  and Contractor shall
                           accept  payment,  in accordance with Article 5 (Terms
                           of Payment).

                  2.       The full  amount  owed,  as  invoiced,  shall be paid
                           within  **********  of the  date  of  the  respective
                           invoice,  except for the Down Payment  which shall be
                           paid as set forth in Article 5(B)1.

                  3.       Invoices  shall be submitted to the  Purchaser by the
                           ********** day of the month concerned.

                  4.       Invoices  not paid when due shall accrue late payment
                           charges  from the day,  following  the day,  on which
                           payment  was due  until  the day on which it is paid.
                           Invoices for extended  payment  charges  shall not be
                           issued  for an  amount  less  than  U.S.  **********.
                           Extended  payment  charges  shall be  computed at the
                           rate of **********.

                  5.       An invoice  shall be deemed to have been accepted for
                           payment if the  Purchaser  does not present a written
                           good faith objection within ********** of the receipt
                           date of the  invoice  by Mail,  as defined in Article
                           35.

                  6.       In the event that the  Purchaser  has an objection to
                           an invoice as mentioned in Article 5(D)(5) above, the
                           Purchaser and Contractor  shall make every reasonable
                           effort to settle promptly the dispute  concerning the
                           invoice  in  question.  The  Purchaser  will have the
                           right to withhold  payment of the disputed  amount so
                           long as it deposits,  in full,  such disputed  amount
                           into an escrow account held by a mutually agreed upon
                           escrow agent (hereinafter referred to as "Escrow") on
                           or before the date such amount was otherwise due.


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                           (a)      Provided such disputed amount is placed into
                                    Escrow  in a timely  manner,  the  Purchaser
                                    shall not be deemed to be in breach of or in
                                    default for failing to pay Contractor.
                           (b)      Upon final  resolution of such dispute,  the
                                    Escrow  agent will  distribute  the disputed
                                    amount to the prevailing party in accordance
                                    with  the  resolution,   together  with  any
                                    interest earned on such amount.
                           (c)      In addition,  the prevailing  party shall be
                                    entitled  to  receive  from the other  party
                                    interest on the distributed  disputed amount
                                    at a rate of **********.

                  7.       The  Purchaser  shall make timely  payments  for that
                           portion of the invoice  not in dispute in  accordance
                           with Article  5(D), or such payments will be assessed
                           extended  payment  charges  as set  forth in  Article
                           5(D)(4) above. Pending resolution of the dispute, the
                           Purchaser  may  not  withhold  payment  on any  other
                           invoice  concerning  different  goods and/or services
                           submitted by Contractor.

                  8.       If  Purchaser  fails to timely pay into the Escrow or
                           to   Contractor,   then   Contractor   must   provide
                           ********** written notice, in accordance with Article
                           35, to  Purchaser of the failure to pay. If Purchaser
                           fails to cure such  failure,  then  Contractor,  upon
                           written  notice,  may suspend Work until such payment
                           is made.

Article 6.   Contract Variations
         A.       Either  the   Purchaser   or  the   Contractor   may,   during
                  construction  of the  System  request,  in  writing,  contract
                  variations  requiring  additions or alterations to, deviations
                  or deductions  from the System  ("Contract  Variation").  Upon
                  consent of the other Party, any such change will be formalized
                  as an amendment to the Contract.

         B.       A  Contract   Variation  shall  be  priced  according  to  the
                  applicable unit prices listed in the Provisioning Schedule. To
                  the extent  that the unit  prices  listed in the  Provisioning
                  Schedule are not applicable to equipment,  services or work in
                  the  Contract  Variation,  the price  payable for the Contract
                  Variation  shall  be as  determined,  in  advance,  by  mutual
                  agreement  based upon the price  information  provided  to the
                  Purchaser  by the  Contractor.  The terms of  payment  and the
                  payment  procedures for the Contract  Variations shall also be
                  as mutually agreed upon prior to the execution of the Contract
                  Variation.

         C.       If a Contract  Variation  results in an  increase  in the time
                  required to complete the Work, the Contractor shall notify, in
                  writing,  the Purchaser of the extension of time  required.  A
                  Contract Variation shall not become effective unless and until
                  the price adjustment, the terms and schedule of


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                  payment and the  extension of time have been  mutually  agreed
                  upon by the  Parties.  A Contract  Variation  is accepted  and
                  binding when signed by an  authorized  representative  of each
                  Party  and  shall  be  incorporated  as  amendments  into  the
                  Contract.

         D.       Any changes in Work resulting from a change in route selection
                  will be treated as a Contract Variation.

         E.       Any change of any law  (except  those  affecting  the  customs
                  duties,  sales,  use or import taxes,  VAT, and any other tax,
                  duty, levy or similar charges borne by the Purchaser, relating
                  to Contract items and fiscal stamps  connected within Contract
                  legalization) which require a change in the Work and/or affect
                  the Contract Price,  shall be treated as a Contract  Variation
                  and its terms must be mutually agreed as set forth in Articles
                  6(B) and 6(C).

         F.       The  engineering  for  the  shore  end/land   construction  is
                  provided   for   in  the   Provisioning   Schedule   and   the
                  Specifications.  Purchaser and Contractor  shall work together
                  cooperatively to determine the final engineering for the shore
                  end/land  construction.  Any  changes  will  be  treated  as a
                  Contract  Variation.  In the  event,  Purchaser  seek  certain
                  changes  to reach an agreed  upon final  engineering  plan and
                  provided  such  changes are within the  general  scope of Work
                  covered  by  the  Contract  and  technically   feasible,   the
                  Contractor  shall  not  unreasonably  refuse  to agree to such
                  changes  where  they  are  not  of a  fundamental  nature  and
                  provided   the   changes   can  be   implemented   during  the
                  construction  period.  Contractor  agrees it will not commence
                  Work  on  the  final   engineering   for  the  shore  end/land
                  construction  until such final  engineering  plan is  mutually
                  agreed upon.

Article 7.   Responsibilities for Submarine Cable Construction Approvals,
Permits, Permissions and Consents
         A.       Both the Contractor  and the Purchaser  shall work together to
                  obtain  all   necessary   approvals,   permits,   permissions,
                  consents, licenses and customs clearance (hereinafter referred
                  to as "Permits").

         B.       The Purchaser  shall be solely  responsible  for obtaining the
                  Permits  identified  in Appendix  4(I)  (Responsibilities  for
                  Submarine Cable Construction Approvals,  Permits,  Permissions
                  and Consents).  Upon written  request,  the  Contractor  shall
                  assist the  Purchaser in obtaining  such  Permits.  In case of
                  such assistance,  promptly after the actual costs become known
                  to the Contractor, the Contractor shall provide a statement of
                  such actual costs to the Purchaser.  Thereafter, the Purchaser
                  shall  reimburse the  Contractor for the actual costs incurred
                  by  the  Contractor   against   submission  of   corresponding
                  invoices, and in accordance with Article 5 (Terms of Payment).



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         C.       The Contractor  shall be solely  responsible for obtaining the
                  Permits  identified in Appendix 4(II).  Upon written  request,
                  the Purchaser will assist and promptly provide  information to
                  the Contractor.

         D.       Any delay in obtaining  such Permits shall  constitute a Force
                  Majeure  and be  treated  as  described  in  Article 17 (Force
                  Majeure), unless the fault can be attributed to a Party.

Article 8.   Route Survey
         A.       Contractor  has  conducted a Route Survey and has made a route
                  selection  for the  System,  based on the  Route  Survey.  The
                  Purchaser and Contractor have mutually agreed on the route and
                  on the consequent  Straight Line Diagram (SLD). The Contractor
                  shall be responsible for any changes  resulting from any Route
                  Survey inaccuracies.

         B.       Any changes  required to the route  selection shall be treated
                  as a Contract Variation in accordance with Article 6, Contract
                  Variation.

Article 9.   Acceptance
         A.       General
                  1.       Provisional  Acceptance and Final Acceptance shall be
                           determined in  accordance  with the  applicable  test
                           programs described in the Specifications ("Acceptance
                           Testing").

                  2.       The  Acceptance  Testing  shall be  performed  by the
                           Contractor.   The   Purchaser   or   its   designated
                           representatives  may observe the  Contractor's  tests
                           and review the test results. Additionally,  Purchaser
                           shall perform its own tests, including the confidence
                           trials    described   in   Section   1.1.2   of   the
                           Specifications.

                  3.       All expenses  incurred by the  Contractor  (including
                           testing   apparatus  and  technical   staff)  in  the
                           execution of the Acceptance Testing shall be borne by
                           the   Contractor.   The   Contractor   shall  not  be
                           responsible  for any costs  incurred by the Purchaser
                           or its  representatives  or for any additional  tests
                           requested by the Purchaser.

                  4.       The  Purchaser   shall  not   unreasonably   withhold
                           issuance of any Acceptance Certificate.

         B.       Provisional Acceptance
                  1.       This System shall be ready for Provisional Acceptance
                           by a date  mutually  agreed to by both the  Purchaser
                           and the  Contractor.  Provisional  Acceptance  occurs
                           when   the   results   of  the   Acceptance   Testing
                           demonstrate  that the Work is  sufficient  to realize
                           the System performance requirements set forth in the


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                           Specifications  or  such  other  System   performance
                           levels as agreed upon as  acceptable by the Purchaser
                           and   the   Contractor   (hereinafter    collectively
                           "Performance  Requirements"),  and the Contractor has
                           fulfilled its commitments under the Contract.

                  2.       Within  **********  of receipt of the complete set of
                           Acceptance Testing results,  the Purchaser must issue
                           notification of the following:
                           (a)       Issuance of a  Certificate  of  Provisional
                                     Acceptance in accordance  with this Article
                                     9(B); or
                           (b)       rejection of a Certificate  of  Provisional
                                     Acceptance,   but  instead  issuance  of  a
                                     Certificate   of   Commercial   Service  in
                                     accordance with Article 9(C) below; or
                           (c)       rejection    of   the   System   for   both
                                     Provisional   Acceptance   and   Commercial
                                     Service in its  existing  condition  with a
                                     written    explanation   of   reasons   for
                                     rejection.
                           If  the   Purchaser   fails  to  respond   with  such
                           notification  in a timely  manner,  but no later than
                           **********, then Provisional Acceptance of the System
                           shall  be  deemed  from the  date of  receipt  of the
                           results of Acceptance Testing.

                  3.       On receipt of a notice from the Purchaser pursuant to
                           Articles  9(B)(2)(b)  or (c)  above,  the  Contractor
                           shall be entitled to address any disputes and explain
                           any  discrepancies  to the  Purchaser  regarding  the
                           results of the Acceptance  Testing.  If the Purchaser
                           is agreeable,  it may issue a new notice  pursuant to
                           Article  9(B)1  above,  which shall be deemed to have
                           been issued on the date of the original notice.

                  4.       In case of rejection,  and if the  explanation by the
                           Contractor  as  in  Article   9(B)(3)  above  is  not
                           accepted,  for  good  cause,  by the  Purchaser,  the
                           Contractor  shall carry out the necessary  corrective
                           actions  and will  effect a new series of  Acceptance
                           Testing ("Re-testing").  After receipt of the results
                           of the  Re-testing,  the Purchaser  will be granted a
                           new period of  **********  to analyze the new results
                           according to the  provisions of Article 9(B)2 and any
                           new notice  from the  Purchaser  shall apply from the
                           date the Purchaser receives the latest test results.

                  5.       In  accordance  with the above,  upon  issuance  of a
                           Certificate   of   Provisional   Acceptance   by  the
                           Purchaser,  the System shall vest in the Purchaser on
                           whichever is the later of the  following  dates,  the
                           actual  deemed  date of  issue of the  notice  or the
                           Provisional   Acceptance  date.  The  Certificate  of
                           Provisional  Acceptance  shall bear the  actual  date
                           when the System was put into  service and may contain
                           a written list of outstanding items, if any, required
                           by  this  Contract  that  do not  affect  the  normal
                           operation and maintenance of the System.


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                  6.       The  Contractor  shall  remedy  the items in a timely
                           fashion,  prior  to  Final  Acceptance.   In  such  a
                           situation,  the Purchaser  shall allow the Contractor
                           access to the System,  as the  Contractor may need to
                           remedy  such  outstanding  items upon the  Contractor
                           giving the  Purchaser  reasonable  notice of its need
                           for such access.

                  7.       As from the date of vesting of the System, determined
                           in accordance with Article 9(B)5 above, the Purchaser
                           shall  assume the risk in respect of all parts of the
                           System  and   responsibility   for  its  maintenance.
                           Notwithstanding   the   above,   provided   that  the
                           Contractor  has been allowed  access to the System as
                           required  in  Article  9(B)6,  the  Contractor  shall
                           continue  to  carry  the  risk  with  respect  of any
                           outstanding items.

         C.       Commercial Service
                  1.       A Certificate of Commercial  Service may be issued if
                           the  results of the  Acceptance  Testing  demonstrate
                           that  the  Work:  (i) is not  sufficient  to meet the
                           System  Performance  Requirements  and (ii)  does not
                           reasonably  justify the issuance of a Certificate  of
                           Provisional   Acceptance,   but   nevertheless,   the
                           Contractor  determines  that the System is capable of
                           carrying   commercial   traffic  and  the   Purchaser
                           consents to put the System into  Commercial  Service,
                           which consent shall not be unreasonably withheld.

                  2.       Upon the  issuance  of a  Certificate  of  Commercial
                           Service,  the System  shall be deemed to be  accepted
                           for commercial use and shall vest in the Purchaser on
                           the  actual   date  when  the  System  was  put  into
                           commercial service.

                  3.       The  Certificate  of  Commercial  Service  shall have
                           annexed  to  it  a  mutually   agreed   list  of  all
                           outstanding items to be completed by the Contractor.

                  4.       The  Contractor  shall  remedy  the items in a timely
                           fashion,  provided  that  the  Purchaser  allows  the
                           Contractor the necessary  access to the System as the
                           Contractor  needs to remedy such  outstanding  items.
                           The  Contractor  shall give the Purchaser  reasonable
                           notice   of  its   requirement   for   such   access.
                           Notwithstanding   the   above,   provided   that  the
                           Contractor  has been allowed  access to the System as
                           required  in  Article  9(D)4,  the  Contractor  shall
                           continue   to   carry   the  risk  of  loss  for  any
                           outstanding items.

                  5.       From the date of vesting, as determined in accordance
                           with Article 9(C)2 above,  the Purchaser shall assume
                           the risk of loss with

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                           respect  to  all  parts  of  the  System  (except  as
                           mentioned in Article 9(C)4 above) and  responsibility
                           for its maintenance.

                  6.       When the  outstanding  items  referenced  in  Article
                           9(C)3 above have been  remedied,  the Purchaser  will
                           immediately   issue  a  Certificate   of  Provisional
                           Acceptance.

                  7.       The issuance of a Certificate  of Commercial  Service
                           shall  in no way  relieve  the  Contractor  from  its
                           obligation  to provide a System  conforming  with the
                           Performance  Requirements at the time of the issuance
                           of a Certificate of Provisional Acceptance.

         D.       Final Acceptance
                  1.       Final   Acceptance   shall  occur  six  months  after
                           Provisional  Acceptance  provided that the System has
                           successfully completed Final Acceptance Testing which
                           demonstrates that the System meets System Performance
                           Requirements,  and the  Contractor  has fulfilled its
                           commitments under the Contract.

                  2.       Within  **********  of the date of the  Report of the
                           Final Acceptance Testing, the Purchaser shall issue a
                           Certificate of Final Acceptance.  The issuance of the
                           Certificate   of   Final   Acceptance   will  not  be
                           unreasonably   withheld  or   delayed.   If  no  such
                           Certificate of Final Acceptance is issued, then Final
                           Acceptance  of the  System  shall be  deemed  to have
                           occurred at the date of the Report.

                  3.       The  Purchaser  may  choose to  dispense  with  Final
                           Acceptance   Testing   and   immediately   issue  the
                           Certificate of Final Acceptance.

Article 10.   Warranty
         A.       The Contractor  warrants that  ********** and that  **********
                  (hereinafter  "Warranty  Period"),  **********.  However,  the
                  Contractor  shall only be responsible for **********  Warranty
                  Period for  **********.  The  remaining  years of the Warranty
                  Period shall be **********.
                            1.      During the Warranty  Period,  the Contractor
                                    shall  make  good,  **********,   which  may
                                    become  apparent  or be  discovered  due  to
                                    **********


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                                    **********.(a)  The Contractor shall perform
                                    any repair required to restore the System to
                                    the  Specifications,  if at any time  during
                                    the Warranty Period,  **********.
                           (b)      The Contractor  shall make every  reasonable
                                    effort  **********.  The Purchaser agrees to
                                    cooperate  with the Contractor to facilitate
                                    the Contractor's repair activity.
                           (c)      In the event  that the  Contractor  fails to
                                    timely  make  the  repair  **********,   the
                                    Purchaser  may repair the System and collect
                                    the reasonable costs of such repair from the
                                    Contractor.
                                    (i)    The  Contractor  shall be entitled to
                                           have a  representative  on board ship
                                           to observe at sea  repairs  and shall
                                           be given the earliest possible notice
                                           of any such repair. If the Contractor
                                           is  not  able  to   attend  in  time,
                                           despite  such advance  notices,  then
                                           the     Contractor     will    accept
                                           responsibility    for   the   repairs
                                           provided **********.
                                    (ii)   Subject to the foregoing,  any repair
                                           by  the  Purchaser  **********.   Any
                                           equipment  discovered to be defective
                                           or  faulty  and  recovered  during  a
                                           warranty  repair shall be returned to
                                           the Contractor at its request.

                  2.       The Contractor shall  **********  required during the
                           Warranty Period, which **********


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                           **********.

                  3.       The  Contractor  shall   **********.   However,   the
                           Contractor   may  use,   with  the   consent  of  the
                           Purchaser,  which shall not be unreasonably withheld,
                           **********.  The  Contractor  shall  replace  in kind
                           **********,  or  at  the  option  of  the  Purchaser,
                           reimburse the Purchaser  **********.  The replacement
                           of or reimbursement  for such materials shall be made
                           at a time mutually agreed to by the Purchaser and the
                           Contractor.

                  4.       If during the  Warranty  Period  **********.

                  5.       Any defective  part  repaired or replaced  during the
                           Warranty  Period  **********.  However,  the Warranty
                           Period shall never **********.

         B.       The Contractor warrants that services furnished hereunder will
                  be  performed  in  a  careful  and  workmanlike  manner  using
                  materials  free  from  defects  except  **********.   If  such
                  services  prove  to be  not so  performed  and  the  Purchaser
                  notifies the Contractor  **********,  the  Contractor,  at its
                  option, either **********.

         C.       The  warranty  provided by the  Contractor  shall not apply to
                  defects  or  failures  of   performance,   which  result  from
                  **********.


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         D.       EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN, **********.

Article 11.   Contractor Support
         A.       For a  period  of  **********  from  the  date of  Provisional
                  Acceptance,   the  Contractor   will  make  available  to  the
                  Purchaser  replacement parts and repair service for the System
                  as may be reasonably necessary for its operation,  maintenance
                  or repair.  Where  identical  parts  cannot be  supplied,  the
                  Contractor   shall   provide  fully   compatible   parts  with
                  characteristics   equal  or  equivalent  to  those  originally
                  provided by the  Contractor.  Such parts and services shall be
                  provided under Contractor's  normal and reasonable  conditions
                  of price and delivery.

         B.       If  for  any   reason   the   Contractor   intends   to  cease
                  manufacturing  or  having  manufactured   identical  or  fully
                  compatible  replacement  parts,  the  Contractor  shall give a
                  minimum of  **********  notice to the  Purchaser  to allow the
                  Purchaser   to  order  from  the   Contractor   any   required
                  replacement  parts and shall forthwith provide full details of
                  the arrangements to provide equivalents.

         C.       In the  event  that  Purchaser  fails  or  does  not  purchase
                  sufficient parts during the period set forth in Article 11(B),
                  Purchaser  understands  that Contractor will provide  support,
                  but such support shall be at Purchaser's expense.

         D.       Nothing under Article 11(B) shall be  interpreted  to limit or
                  eliminate the Contractor's obligations under Article 10(A)4.

Article 12.   Purchaser's Obligations
If any loss, damage,  delay or failure of performance of the System results from
the Purchaser's  failure to perform its obligations  hereunder and results in an
increase in the costs of performance or the time required for performance of any
of the Contractor's  duties or obligations under this Contract,  which cannot be
avoided by  reasonable  efforts on the part of the  Contractor,  the  Contractor
shall be entitled to (i) **********, (ii) **********, (iii) **********, and (iv)
**********.

         A.       The  Contractor  shall  inform the  Purchaser  promptly of any
                  occurrence   covered  under  this   Article,   and  shall  use
                  reasonable  efforts to minimize any such  additional  costs or
                  delay.


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         B.       The  Contractor  shall  promptly  provide to the  Purchaser an
                  estimate of the anticipated additional costs and time required
                  to complete the Work.

         C.       As soon as  reasonably  practicable  after  the  actual  costs
                  become known to the Contractor, the Contractor shall provide a
                  statement of such actual costs to the Purchaser.

         D.       The Purchaser  thereafter  shall  reimburse the Contractor for
                  the actual,  reasonable  and necessary  costs  incurred by the
                  Contractor against submission of corresponding  invoices,  and
                  in accordance with Article 5 (Terms of Payment).

Article 13.   Termination for Default
         A.       Either  Party  may,  by  written  Notice  of  Termination  for
                  Default,  immediately  upon  receipt  or  such  later  date as
                  specified  in the notice,  terminate  the whole or any part of
                  this Contract in any one of the following circumstances:

                  1.      If a Party  materially  fails to comply with the Terms
                          and  Conditions  of this Contract and does not proceed
                          to cure such failure within a period of ********** (or
                          such  longer  period  as the  non-breaching  Party may
                          authorize in writing)  after receipt of written notice
                          to cure from the  non-breaching  Party specifying such
                          failure; or

                  2.       If the other Party **********.

         B.       If this Contract is terminated by the Purchaser as provided in
                  Article 13(A), the Purchaser,  in addition to any other rights
                  provided in this Article and upon payment to Contractor of all
                  monies due and owing as set forth in Article 13(C) below,  may
                  require the  Contractor  to transfer  title and deliver to the
                  Purchaser  in the  manner and to the  extent  directed  by the
                  Purchaser any completed equipment,  material or supplies,  and
                  such partially  completed cable and materials,  parts,  tools,
                  dies,  jigs,  fixtures,  plans,  drawings,   information,  and
                  contract  rights  (hereinafter   collectively   "Manufacturing
                  Materials") as the Contractor has had specifically produced or
                  specifically acquired for the performance of such part of this
                  Contract as has been  terminated  and which,  if this Contract
                  had been  completed,  would have been required to be furnished
                  to the Purchaser; and the Contractor shall, upon the direction
                  of  the  Purchaser,  protect  and  preserve  property  in  the
                  Contractor's   possession   in  which  the  Purchaser  has  an
                  interest.



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         C.       If the Contract is  terminated  by either Party as provided in
                  13(A), the Contractor shall be paid:

                 1.        the prices, less the applicable  discount,  specified
                           in the Provisioning Schedule for completed equipment,
                           material   and   supplies   delivered   and  services
                           performed; and

                 2.        the  amount  agreed  upon  by the  Purchaser  and the
                           Contractor for Manufacturing  Materials  delivered to
                           and approved by the Purchaser; and

                 3.        the Contractor's  actual,  reasonable,  and necessary
                           costs incurred for the protection and preservation of
                           property.

         D.      Force  Majeure  events  pursuant to Article 17 (Force  Majeure)
                 shall not constitute a default under this Article.

         E.       In the event of any  termination  of this Contract as provided
                  in Article  13(A),  neither  Party shall be relieved  from any
                  liability  for  damages  or  otherwise  which  may  have  been
                  incurred by reason of any breach of this Contract.

Article 14.   Termination for Convenience
         A.       On or before  **********,  the  performance of Work under this
                  Contract may be terminated by Purchaser in whole,  or in part,
                  at its discretion. Purchaser shall deliver to the Contractor a
                  written Notice of  Termination  specifying the extent to which
                  performance of Work under this Contract is terminated, and the
                  date upon  which  such  termination  becomes  effective.  Upon
                  termination,  the Purchaser will make payment to Contractor of
                  all monies due and owing as set forth in Article 14(D) below.

         B.      After  receipt  of such  Notice of  Termination,  and except as
                 otherwise directed by the Purchaser, the Contractor shall:

                  1.       Stop Work under this  Contract on the date and to the
                           extent specified in the Notice of Termination;

                  2.       Place no further  orders or contracts for  materials,
                           services or facilities except as may be necessary for
                           completion   of  such  portion  of  Work  under  this
                           Contract as is not terminated;

                  3.       Use  reasonable  best efforts to terminate all orders
                           and  contracts  to the extent that they relate to the
                           performance  of  Work  terminated  by the  Notice  of
                           Termination;


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                  4.       Assign to the Purchaser,  in the manner, at the time,
                           and to the extent  directed by the Purchaser,  all of
                           the Contractor's rights, title and interest under the
                           orders and contracts so terminated;

                  5.       Use  reasonable  efforts  to settle  all  outstanding
                           liabilities  and  all  claims  arising  out  of  such
                           termination  of  orders  and   contracts,   with  the
                           Purchaser's prior approval;

                  6.       Transfer  title and deliver to the  Purchaser  in the
                           manner,  at  the  time  and to the  extent  (if  any)
                           directed for the following:
                            (a)      the fabricated or unfabricated  parts, work
                                     in  process,   completed  work,   supplies,
                                     inventory and other material  produced as a
                                     part of, or  acquired in  connection  with,
                                     the  performance of the Work  terminated by
                                     the Notice of Termination; and
                            (b)      the completed or partially completed plans,
                                     drawings,  information  and other  property
                                     which, if this Contract had been completed,
                                     would have been required to be furnished to
                                     the Purchaser.

                  7.       Use  reasonable  best efforts to sell, in the manner,
                           at the time, to the extent and at the price or prices
                           directed or authorized by the Purchaser, any property
                           of the types  referred  to in  Article  13(B)6  above
                           provided, however, that the Contractor:
                            (a)      shall not be required  to extend  credit to
                                     any buyer; and
                            (b)      may  acquire  any such  property  under the
                                     conditions  prescribed  by and  at a  price
                                     approved  by the  Purchaser;  and  provided
                                     further  that  the  proceeds  of  any  such
                                     transfer or disposition shall be applied in
                                     reduction of any payments to be made by the
                                     Purchaser  to  the  Contractor  under  this
                                     Contract  or paid in such  other  manner as
                                     the Purchaser may direct.

                  8.       Complete  performance  of such part of the Work which
                           was not terminated by the Notice of Termination; and

                  9.       Take  such  action  as  may be  necessary,  or as the
                           Purchaser may reasonably  direct,  for the protection
                           and  preservation  of the  property  related  to this
                           Contract which is in the Contractor's  possession and
                           in which the Purchaser has acquired or may acquire an
                           interest.

         C.       After such Notice of Termination,  the Contractor shall submit
                  to the Purchaser a written termination claim. Such claim shall
                  be submitted promptly,  but, unless otherwise extended,  in no
                  event later than one year, but for a termination of the entire
                  Contract  within  six  months,  from  the  effective  date  of
                  termination.



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         D.      In the  settlement  of any such  partial  or total  termination
                 claim, the Purchaser shall pay to the Contractor the total of:

                  1.       the  Contract  Price for that part of the Work  which
                           has been completed;

                  2.       a fair  and  reasonable  proportion  of the  Contract
                           Price  for  that  part of the  Work  which  has  been
                           partially completed;

                  3.       the costs,  including  administrative  costs,  plus a
                           reasonable markup of materials and supplies purchased
                           in respect of the Contract  but not yet  incorporated
                           into the Work;

                  4.       the cost of settling and paying  claims rising out of
                           the  termination  of  Work  under  the  contracts  in
                           orders, as provided in Article 14(D)5 below which are
                           properly chargeable to the terminated portion of this
                           Contract, as previously approved Purchaser; and

                  5.       the  actual  and   reasonable   costs  of  settlement
                           including  accounting,   legal,  clerical  and  other
                           expenses  necessary for the preparation of settlement
                           claims  and  supporting  data  with  respect  to  the
                           terminated   portion   of  this   Contract   and  for
                           termination  and settlement of contracts  thereunder,
                           together with reasonable storage,  transportation and
                           other   costs   incurred  in   connection   with  the
                           protection and disposition of property proper to this
                           Contract.

         E.       In  arriving  at the amount due to the  Contractor  under this
                  Article 14 all  unliquidated  payments made to the Contractor,
                  any liability  which the Contractor may have to the Purchaser,
                  and the  agreed  price  for,  or the  proceeds  of sale of any
                  materials, supplies or other things acquired by the Contractor
                  or sold,  pursuant to the  provisions  of this Article 14, and
                  not otherwise  recovered by or credited to the Purchaser shall
                  be deducted.

         F.       In  addition,  if the Contract is only  partially  terminated,
                  prior  to  the  settlement  of  the  terminated  portion,  the
                  Contractor  may file with the  Purchaser  a request in writing
                  for an  equitable  adjustment  of the  Contract  Price for the
                  portion  of the  Contract  not  terminated  by the  Notice  of
                  Termination,  and any such  equitable  adjustments as mutually
                  agreed  shall  be  reflected  in  the  Provisioning  Schedule,
                  Appendix 1.

         G.       The  Purchaser  may,  from time to time,  under such terms and
                  conditions  as it  prescribes,  approve  partial  payments and
                  payments on account  against costs  incurred by the Contractor
                  in connection with the terminated portion of this Contract. If
                  such payments  total in excess of the amount finally agreed or
                  determined  to be due under this Article 14, such excess shall
                  be refunded, upon demand, by the Contractor to the Purchaser.



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         H.       For a period of **********  after final  settlement under this
                  Contract,  the Contractor shall preserve and make available to
                  the Purchaser and its  representatives  at reasonable times at
                  the Contractor's  office, but without charge to the Purchaser,
                  all  supporting  books,  records and documents  required to be
                  kept relating to the terminated Work.

Article 15.   Suspension
         A.       On or before  **********,  Purchaser may, at its  convenience,
                  order  the  Contractor  to  suspend  all or part  of the  Work
                  (hereafter  "Suspension")  for  such  period  of  time  as the
                  Purchaser  determines  to be  appropriate.  If, as a result of
                  such  Suspension,  the Contractor  incurs  additional costs or
                  losses in the  discharge  of its  responsibilities  under this
                  Contract,  and where such suspension,  losses or costs are not
                  caused by the  Contractor's act or omission and could not have
                  been reasonably  prevented by the  Contractor,  the Contractor
                  shall be allowed an equitable adjustment to the Contract Price
                  or the  Provisioning  Schedule in Appendix 1 and an  equitable
                  extension in the time required for performance.

         B.       Every **********, during the period of Suspension, the Parties
                  shall meet formally and review the  circumstances  surrounding
                  the Suspension  including without limitation,  the anticipated
                  date of re-commencing Work.

         C.       Thereafter,  if  the  Suspension  continues  for  a  total  of
                  **********,  the  Contractor  may  terminate  the  Contract in
                  accordance   with  the  terms  as   specified  in  Article  14
                  (Termination for Convenience).

Article 16.   Title and Risk of Loss
         A.       Except as  provided  in  Article 18  (Intellectual  Property),
                  Article 20  (Safeguarding  of Information  and Technology) and
                  Article 21 (Export Control), title to all equipment, materials
                  and  supplies   provided  by  the  Contractor   hereunder  for
                  incorporation in or attachment to the System shall pass to and
                  vest  in the  Purchaser  upon  receipt  of  Final  Payment  in
                  accordance  with Article 5(B)3 and the issuance of Certificate
                  of  Provisional  Acceptance.  Risk of loss  or  damage  to all
                  equipment,  materials and supplies  provided by the Contractor
                  for incorporation in or attachment to the System shall pass to
                  and vest in the Purchaser upon Provisional  Acceptance or upon
                  placement of the System in Commercial Service, whichever comes
                  first. Prior to such vesting, unless provided for otherwise in
                  this  Contract,  the  risk  of  loss  shall  be  borne  by the
                  Contractor.  Upon  termination  of this  Contract  pursuant to
                  Articles 13 (Termination  for Default) or 14 (Termination  for
                  Convenience),  the Purchaser  may require,  upon full payment,
                  that title to the equipment, materials and supplies, which has
                  not previously passed to the Purchaser, pass to the Purchaser,
                  free  and  clear  of all  liens,  claims,  charges  and  other
                  encumbrances.


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         B.       Upon  Provisional  Acceptance or upon  placement in Commercial
                  Service of the System, the Contractor warrants that all parts,
                  materials,  and equipment  furnished by the  Contractor or its
                  subcontractors   hereunder   are  free   from   valid   liens,
                  encumbrances, and security interests arising by or through the
                  Contractor.

         C.       Once risk of loss has passed to the  Purchaser,  the Purchaser
                  shall  indemnify  and hold the  Contractor  harmless  from any
                  claims  by  third   parties   (other  than   Contractor,   its
                  subcontractors,  agents  or  employees)  for  damage  or  loss
                  including bodily injuries and deaths,  resulting from the use,
                  ownership, or operation of the System.

Article 17.   Force Majeure
                  A. The  Contractor  shall  not be  responsible  for any  loss,
                  damage, delay or failure of performance  resulting directly or
                  indirectly  from any  cause  which is  beyond  its  reasonable
                  control,  including  but not limited to: acts of God or of the
                  public  enemy;  acts  or  failure  to act of any  governmental
                  authority; war or warlike operations, civil war or commotions,
                  mobilizations or military call-up, and acts of similar nature;
                  revolution,  rebellions, sabotage, and insurrections or riots;
                  fires, floods,  epidemics,  quarantine restrictions;  strikes,
                  and  other  labor  actions;   freight  embargoes;   severe  or
                  unworkable weather; trawler or anchor damage; damage caused by
                  other marine  activity  such as fishing,  marine  research and
                  marine  development;  inability  to secure  raw  materials  or
                  components; delay in obtaining permits, permissions, licenses,
                  approvals,   consents  or  customs   clearance   of  supplies,
                  materials or equipment; acts or omissions of transporters;  or
                  the acts or  failure  to act of any of the  Purchaser,  of its
                  representatives or agents.

         B.       If any such Force  Majeure  causes an  increase in the time or
                  costs  required  for  performance  of  any of  its  duties  or
                  obligations,   the   Contractor   shall  be  entitled  to  the
                  following:  (i) an equitable adjustment in the Contract Price,
                  (ii) an  equitable  extension  of time for  completion  of the
                  Work, (iii)  reimbursement  for all such uninsured  additional
                  costs  incurred and (iv) relief from any  obligation or duties
                  as a result thereof.

                           1.  Notwithstanding  the above,  Contractor will take
                           the risk of loss for any trawler or anchor  damage or
                           damage caused by other marine  activity until risk of
                           loss passes to Purchaser under Article 16.

                           2. In addition,  there are **********  built into the
                           Plan of Work for use for reasonable business purposes
                           to   cover   unexpected    contingencies    affecting
                           Contractor and are to be fully utilized  before there
                           is any  equitable  adjustment  of time for any  Force
                           Majeure condition.


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         C.       The  Contractor  shall  inform  the  Purchaser  promptly  with
                  written  notification,  and in all cases within  ********** of
                  discovery and knowledge,  of any occurrence covered under this
                  Article and shall use its reasonable  efforts to minimize such
                  additional  costs or delays.  The  Contractor  shall  promptly
                  provide an estimate of the  anticipated  additional  costs and
                  the time  required to complete the Work.  Contractor  shall be
                  entitled  to an  extension  of  time  equal  to at  **********
                  resulting  from  the  Force  Majeure  condition.  As  soon  as
                  reasonably  practicable after the actual costs become known to
                  the  Contractor,  the Contractor  shall provide a statement of
                  such actual costs to the Purchaser.  Thereafter, the Purchaser
                  shall  reimburse the  Contractor for the actual costs incurred
                  by the Contractor against submission of corresponding invoices
                  in accordance with Article 5 (Terms of Payment).

         D.       Within ********** of receipt of such a notice from Contractor,
                  the Purchaser may provide a written response. The absence of a
                  response shall be deemed as acceptance of Contractor's  notice
                  and request for additional costs.

Article 18.   Intellectual Property
         A.       Ownership
                  All right,  title,  and  interest  in and to any  information,
                  computer    or    other    apparatus    programs,    software,
                  specifications,  drawings,  designs,  sketches,  tools, market
                  research   or    operating    data,    prototypes,    records,
                  documentation,  works of authorship or other  creative  works,
                  ideas,    concepts,    methods,    inventions,    discoveries,
                  improvements,  or other business,  financial  and/or technical
                  information  (whether or not protectable or registrable  under
                  any  applicable   intellectual   property  law)  developed  by
                  Contractor  in  the  course  of  its  performance  under  this
                  Contract, or otherwise furnished by Contractor to Purchaser as
                  part of the delivery of the System under this Contract, is and
                  shall  remain the sole  property  of  Contractor  (hereinafter
                  individually  and  collectively  referred to as  "Intellectual
                  Property").  Unless otherwise  expressed in this Contract,  no
                  license  is  implied or  granted  herein to  Purchaser  to any
                  Intellectual  Property by virtue of this Contract,  nor by the
                  transmittal or disclosure of any such Intellectual Property to
                  Purchaser. Any Intellectual Property disclosed,  furnished, or
                  conveyed  to  Purchaser  that is  marked as  "Proprietary"  or
                  "Confidential",  (or if  transmitted  orally is  identified as
                  being proprietary or  confidential),  or under the totality of
                  the  circumstances  ought to  reasonably  be  treated as being
                  proprietary  or  confidential  to  Contractor  even  if not so
                  marked or identified,  shall be treated in accordance with the
                  provision  of  Article 20  (Safeguarding  of  Information  and
                  Technology).

         B.       Licenses
                  Contractor  grants to  Purchaser a personal,  non-transferable
                  license  to use  Intellectual  Property  that is  conveyed  to
                  Purchaser when such use is unavoidably necessary for Purchaser
                  to  fulfill  its  obligations  under  this  Contract.  For the
                  purposes of this Article,  transfer  means **********. Such


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                  grant shall further include the right by Purchaser to use such
                  conveyed  Intellectual  Property  to  the  extent  unavoidably
                  necessary to use any System  supplied in  accordance  with the
                  terms of this Contract.  The licenses granted herein shall not
                  include   the  right  to   sub-license.   No   license   under
                  Contractor's  patents,  copyrights,  trade or  service  marks,
                  trade   secrets   or  other   intellectual   property   rights
                  protectable  under law in the  United  States  or any  foreign
                  country is granted to Purchaser.

         C.       Software
                  Contractor grants to the Purchaser a personal,  non-exclusive,
                  and  non-transferable   right  to  use  Intellectual  Property
                  conveyed to Purchaser by  Contractor  in the form of software,
                  including  object  codes  and  related   documentation.   Such
                  software  license  shall  not  be  applicable  to  commercial,
                  off-the-shelf  software,  or software provided or developed by
                  third  parties,  and shall be  limited to the right to use the
                  software  with the  equipment  in the  System  for  which  the
                  software was provided.

                  1.       Confidentiality
                           Purchaser  shall keep the  software  confidential  in
                           accordance   with   Article   20   (Safeguarding   of
                           Information  and  Technology)  and Article 21 (Export
                           Control)  and  agrees to use its best  efforts to see
                           that its  employees,  consultants,  and  agents,  and
                           other  users  of  such  software,   comply  with  the
                           provisions of this Contract. Purchaser also agrees to
                           refrain  from  taking  any  steps,  such  as  reverse
                           assembly  or  decompilation,  to derive a source code
                           equivalent  of any object code that is  furnished  by
                           Contractor.

                  2.       Backup Copies
                           Purchaser  may make and retain two archive  copies of
                           software  provided.  Any copy will  contain  the same
                           copyright  notice and proprietary  markings as are on
                           the  original  software  and shall be  subject to the
                           same restrictions as the originals.

                  3.       Termination of Software Licenses
                           In the event of use of software  furnished  hereunder
                           other than that  permitted  in  Article  18(C) or any
                           other   material   breach  of  this   Article  18  by
                           Purchaser,  Contractor,  at its option, may terminate
                           the rights  granted  to  Purchaser  pursuant  to this
                           Article,  upon  written  notice  to  Purchaser.  Upon
                           termination,   Purchaser   shall  either   return  or
                           destroy,  at  Contractor's   option,  all  copies  of
                           software furnished under this Contract.

                  4.       Indemnification
                           In the event of use of software  furnished  hereunder
                           other than  permitted  in Article  18(C) or any other
                           material breach of this Article 18 by Purchaser,  the
                           Purchaser   shall   indemnify  and  hold   Contractor
                           harmless  from any defect of the  software as well as
                           from  any  and  all  third  party  claims   resulting
                           therein.


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         D.       Trademarks, Tradenames, etc.
                  No  right  is  granted   herein  to   Purchaser   to  use  any
                  identification  (such  as,  but  not  limited  to  tradenames,
                  trademarks,  service  marks  or  symbols,  and  abbreviations,
                  contractions,   or  simulations  thereof)  owned  or  used  by
                  Contractor  or its parent  company and  affiliates to identify
                  Contractor or its parent  company and affiliates or any of its
                  products  or  services.  Purchaser  agrees  that it will  not,
                  without the prior written  permission of Contractor,  use such
                  identification in advertising, publicity, packaging, labeling,
                  or in  any  other  manner  to  identify  itself  or any of its
                  products, services, or organizations, or represent directly or
                  indirectly that any product, service, or organization of it is
                  a product,  service,  or  organization  of  Contractor  or its
                  parent company or  affiliates,  or that any product or service
                  of  Purchaser  is made in  accordance  with  or  utilizes  any
                  Intellectual  Property of Contractor or its parent  company or
                  affiliates.

         E.       Disclaimer, Limitation of Liability
                  Contractor  represents  that any  information or  Intellectual
                  Property  furnished in connection  with this Contract shall be
                  true and accurate to the best of its knowledge and belief, but
                  Contractor   shall   not  be   held  to  any   liability   for
                  unintentional errors or omissions therein except under Article
                  10(A).  Except  as  expressly  provided,  Contractor  makes no
                  representations or warranties, expressly or implied. By way of
                  example,  but not of  limitation,  Contractor  and its  parent
                  company and  affiliates  make  **********,  or that the use of
                  information  or  Intellectual  Property  disclosed or provided
                  hereunder  will not infringe any patent or other  intellectual
                  property right of a third party. Contractor and its parent and
                  affiliates  shall not be held to any liability with respect to
                  any  claim by  Purchaser  or any  third  party  claim  against
                  Purchaser on account of, or arising from,  Purchaser's  use of
                  information or Intellectual  Property disclosed or provided by
                  Contractor.

         F.       Joint Development
                  In the event that the disclosure of  Intellectual  Property by
                  Contractor or the exchange of other information results in the
                  creation  or   development   of  new   information   from  the
                  substantial  contribution  of  one  or  more  of  Contractor's
                  employees,   agents,  or  consultants  with  one  or  more  of
                  Purchaser's  employees,  agents,  or  consultants  during  the
                  course of this Contract,  then such newly created  information
                  shall be subject to the terms of Article 20  (Safeguarding  of
                  Information   and   Technology).   Any  such  newly  developed
                  information   shall  be   jointly   owned   by  the   Parties.
                  Notwithstanding  the above, the Parties  acknowledge and agree
                  that  between  them  the   ownership  of  any  newly   created
                  information comprising inventions, discoveries,  improvements,
                  conceived, first reduced to


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                  practice,  made or developed in anticipation of, in the course
                  or as a result of Work, shall be determined in accordance with
                  Title 35 of the United States Code.  With respect to any newly
                  created  information that is patented and jointly owned by the
                  Parties,  each Party shall have equal  rights to license  such
                  patents or assign  their  interests to third  parties  without
                  accounting  to or  obtaining  the  consent of the other  Party
                  hereto.  The Parties  shall by mutual  agreement  decide which
                  Party shall file any United  States  Patent  application.  The
                  Party filing such  application  shall do so at its own expense
                  and  shall  have the  right  to  elect to file in any  foreign
                  country it so chooses. Each Party agrees that it will, without
                  charge to the other, have its employees, agent, consultants or
                  other  associates,  sign all papers and do all acts necessary,
                  desirable,  or  convenient  to enable the filing  party at its
                  expense to file and prosecute applications for patents on such
                  inventions,  discoveries,  or  improvements,  and to  maintain
                  patents granted thereon.

Article 19.   Infringement
         A.      The  Contractor  agrees to defend or settle at its own  expense
                 all suits for infringement of any patent, copyright,  trademark
                 or other form of intellectual  property right in any country of
                 the world, for any material (or the manufacture of any material
                 or the normal use thereof) provided by the Contractor or on its
                 behalf  pursuant to this  Contract and will hold the  Purchaser
                 harmless  from all expense of  defending  any such suit and all
                 payments  for  final  judgment  assessed  on  account  of  such
                 infringement, except such infringement or claim arising from:

                  1.      The   Contractor's   adherence   to  the   Purchaser's
                          directions   to  use   materials   or   parts  of  the
                          Purchaser's selection; or

                  2.      Such material or parts  furnished to the Contractor by
                          the Purchaser,  other than in each case,  items of the
                          Contractor's design or selection or the same as any of
                          the   Contractor's   commercial   merchandise   or  in
                          processes  or machines of the  Contractor's  design or
                          selection  used in the  manufacture  of such  standard
                          products or parts; or

                  3.      Use of the  equipment  other  than  for  the  purposes
                          indicated in, or reasonably to be inferred from,  this
                          Contract or in conjunction with other products; or

                  4.      Modification   of  the  equipment  by  the  Purchaser,
                          without   prior   expressed    written   approval   by
                          Contractor.

         B.      The  Purchaser  will,  at its own  expense,  defend  all  suits
                 against the Contractor for such excepted  infringement and hold
                 the Contractor  harmless from all expense of defending any such
                 suit and from all payments by final judgment  assessed  against
                 the Contractor on account of such excepted infringement.


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         C.      The  Contractor  and the  Purchaser  agree to give  each  other
                 prompt  written  notice of claims  and suits for  infringement,
                 full  opportunity  and  authority  to assume the sole  defense,
                 including appeals and, upon request and at its own expense, the
                 other  agrees  to  furnish  all   information   and  assistance
                 available to it for such defense.

         D.      If any part or equipment  provided by the  Contractor or on its
                 behalf is held to constitute an  infringement  (excluding  such
                 excepted  infringements  specified  in  Article  19(A))  and is
                 subject  to an  injunction  restraining  its  use or any  order
                 providing for its delivery up to or destruction, the Contractor
                 shall at its own expense either:

                  1.      Procure  for the  Purchaser  the right to  retain  and
                          continue to use such part or equipment;

                  2.      Replace or modify the System or such part or equipment
                          so that it becomes non-infringing; or

                  3.      If the  remedies  specified  in  Articles  19(D)1  and
                          19(D)2 are not feasible, accept return of such part or
                          equipment  and  provide  a full  refund  of the  price
                          thereof.

         E.       In no event shall the Purchaser make any admission in relation
                  with any claim for infringement.

Article 20.   Safeguarding of Information and Technology
         A.      In   performance   of  this   Contract,   it  may  be  mutually
                 advantageous   to  the   Parties   hereto   to  share   certain
                 specifications,  designs,  plans,  drawings,  software,  market
                 research or  operating  data,  prototypes,  or other  business,
                 financial,  and or/technical  information  related to products,
                 services,  or systems which are  proprietary  to the disclosing
                 party  or its  affiliates  (and  in  the  case  of  Contractor,
                 Contractor's   parent   company)("Information").   The  Parties
                 recognize and agree that Information  includes information that
                 was supplied in contemplation hereof prior to execution of this
                 Contract,   and  further   agree  that   Information   includes
                 information in both tangible and intangible form.

         B.      Unless  such  Information  was  previously  known to the  Party
                 receiving  such  Information  free of any obligation to keep it
                 confidential,  or such  Information has been or is subsequently
                 made public through other than  unauthorized  disclosure by the
                 receiving Party or is independently  developed by the receiving
                 Party (as documented by the records of the receiving Party), it
                 shall  be  kept   confidential  by  the  Party  receiving  such
                 Information,  shall  be used  only in the  performance  of this
                 Contract,  and may not be used for any  other  purposes  except
                 upon such terms as may


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                 be agreed upon in writing by the Party owning such Information.
                 The  receiving  Party may disclose  such  Information  to other
                 persons,    upon   the   furnishing   Party's   prior   written
                 authorization,  but solely to perform  acts which this  Article
                 expressly  authorizes the receiving Party to perform itself and
                 further provided such other person agrees in writing (a copy of
                 which writing will be provided to the  furnishing  Party at its
                 request) to the same conditions  respecting  disclosure and use
                 of  Information  contained  in this  Article  and to any  other
                 reasonable conditions requested by the furnishing Party.

Article 21.   Export Control
The Parties acknowledge that any products,  software,  and technical information
(including,  but not limited to, services and training) provided by either Party
under this Contract are or may be subject to export laws and  regulations of the
United States and the destination  country(ies)  and any use or transfer of such
products,  software and technical  information  must be  authorized  under those
regulations.  The Parties agree that they will not use, distribute,  transfer or
transmit the products,  software or technical  information (even if incorporated
into other products) except in compliance with export regulations.  If requested
by either  Party,  the other Party agrees to sign all  necessary  export-related
documents as may be required to comply with export regulations

Article 22.   Liquidated Damages
The Contractor shall pay to the Purchaser by way of pre-estimated and liquidated
damages  for the  delay  and not as a  penalty,  an  assessed  amount  equal  to
********** under the following limited circumstances:

         A.       If the System **********:

                  1.       Article 6 (Contract Variations);

                  2.       Article 17 (Force Majeure); or

                  3.       Other  arrangements  as agreed  between the Purchaser
                           and the Contractor; OR

         B.       If **********.

Article 23.   Limitation of Liability/Indemnification
         A.       NOTWITHSTANDING ANY OTHER PROVISION IN THIS CONTRACT,  NEITHER
                  PARTY  SHALL IN ANY  EVENT BE  LIABLE  FOR ANY  CONSEQUENTIAL,
                  INCIDENTAL,  INDIRECT OR SPECIAL  DAMAGES  INCLUDING,  BUT NOT
                  LIMITED TO, LOSS OF REVENUE, LOSS OF


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                  BUSINESS  OPPORTUNITY OR THE COSTS  ASSOCIATED WITH THE USE OF
                  RESTORATION   FACILITIES   RESULTING  FROM  THEIR  FAILURE  TO
                  PERFORM, PURSUANT TO THE TERMS & CONDITIONS OF THIS CONTRACT.

         B.       THE MAXIMUM  LIABILITY  OF EITHER  PARTY  UNDER THIS  CONTRACT
                  SHALL BE  LIMITED TO DIRECT  DAMAGES  PROVEN NOT TO EXCEED ONE
                  HUNDRED PERCENT (100%) OF THE CONTRACT PRICE.

         C.       Contractor,  at its expense, shall defend,  indemnify and hold
                  harmless Purchaser,  its agents,  subcontractors and employees
                  against any and all claims,  demands, and judgments for losses
                  or damages to real or tangible  property or for bodily  injury
                  or death to any person due to any act or omission, arising out
                  of, or in  connection  with this  Contract  to the extent such
                  damage,  injury  or death  was  caused  by the  negligence  or
                  willful  misconduct  of the  Contractor,  its  subcontractors,
                  employees  or agents.  The defense,  indemnification  and save
                  harmless   obligation  is  specifically   conditioned  on  the
                  following:  (i) Purchaser  providing  prompt  notification  in
                  writing of any such claim or demand;  (ii)  Contractor  having
                  control of the defense of any such action, claim or demand and
                  of all  negotiations  for its  settlement or  compromise;  and
                  (iii) Purchaser  cooperating in a reasonable way to facilitate
                  the  defense of such claim or demand or the  negotiations  for
                  its settlement.

         D.       Purchaser,  at its expense,  shall defend,  indemnify and hold
                  harmless Contractor, its agents,  subcontractors and employees
                  against any and all claims,  demands, and judgments for losses
                  or damages to real or tangible  property or for bodily  injury
                  or death to any person due to any act or omission, arising out
                  of, or in connection  with this  Contract,  to the extent such
                  damage,  injury  or death  was  caused  by the  negligence  or
                  willful  misconduct  of  the  Purchaser,  its  subcontractors,
                  employees  or agents.  The defense,  indemnification  and save
                  harmless   obligation  is  specifically   conditioned  on  the
                  following:  (i) Contractor  providing  prompt  notification in
                  writing  of any such claim or demand;  (ii)  Purchaser  having
                  control of the defense of any such action, claim or demand and
                  of all  negotiations  for its  settlement or  compromise;  and
                  (iii) Contractor cooperating in a reasonable way to facilitate
                  the  defense of such claim or demand or the  negotiations  for
                  its settlement.

Article 24.   [Intentionally Left Blank]

Article 25.   Design and Performance Responsibility
         A.       The Contractor  shall be solely  responsible for the design of
                  and for  all  details  of the  System  and  for  the  adequacy
                  thereof.



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         B.       The Contractor's responsibility for design of the System shall
                  not in any way be diminished nor shall the Contractor's design
                  approach  be   restricted   or  limited  by  the   Purchaser's
                  acceptance of the Contractor's  guidance or recommendations as
                  to engineering standards and design specifications,  or by the
                  Purchaser's  suggestions or  recommendations  on any aspect of
                  the design.

         C.       Purchaser  shall use all  reasonable  efforts in assisting the
                  Contractor to obtain in a timely manner  accurate  information
                  required for the Contractor to perform the Work, including but
                  not  limited to,  information  available  from  parties to any
                  Construction and Maintenance agreements for the System.

Article 26.   Product Changes
Prior to  Provisional  Acceptance of the System,  the Contractor may at any time
make changes to the System  furnished  pursuant to this Contract,  or modify the
drawings and published  specifications relating thereto, or substitute equipment
of later design,  provided the changes,  modifications,  or substitutions  under
normal and  proper use do not impact  upon the form,  fit,  or  function  of the
System as provided in the System Performance Requirements.

Article 27.   Risk and Insurance
         A.       Upon request,  the Contractor shall furnish the Purchaser with
                  certificates,  or other satisfactory evidence, that all of the
                  responsibilities  and  risks  of  the  Contractor  herein  are
                  covered by insurance  policies or by  self-insurance  and that
                  such insurance is being maintained,  including but not limited
                  to:

                   1.       General Liability insurance  sufficient to cover all
                            losses  and  claims  for  injuries  or  death to any
                            person (including any employee of the Contractor) or
                            damage  to  any  property  (including  that  of  the
                            Purchaser)  under this  Contract  until  Provisional
                            Acceptance;

                   2.       Marine  Cargo or  equivalent  is required to protect
                            against all risks of physical  loss or damage to the
                            plant,  equipment and supplies to be included in the
                            System  (other than War Risks)  beginning  with when
                            each such item is ready for shipping and ending when
                            the  submersible  plant  and  equipment  are  placed
                            overside  the  cable  laying  vessel  and  when  the
                            equipment  and supplies  are  delivered to the cable
                            stations,  central  offices,  or  network  operation
                            center;

                   3.       Sea  Bed  or  equivalent  coverage  is  required  to
                            protect against all risks of physical loss or damage
                            to the submersible plant and equipment  described in
                            Article 27(A)2 above until


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                            Provisional   Acceptance   (upon  written   request,
                            Contractor  shall assist  Purchaser in obtaining the
                            continuation of such Sea Bed coverage); and

                   4.       War Risks or  equivalent  coverage  is  required  to
                            protect   against   damage  to,  seizure  by  and/or
                            destruction  of the System by means of war,  piracy,
                            takings at sea and other  warlike  operations  until
                            discharge of the  submersible  plant and  equipment.
                            For the purposes of this Article  "discharge  of the
                            submersible  plant and equipment" shall be deemed to
                            take place when the plant and equipment  reaches the
                            sea  bottom,  as far as the  submersible  plant  and
                            equipment  is  concerned,  and  when  the  plant  is
                            off-loaded in the respective  terminal  country,  as
                            far as non-submersible plant is concerned.

         B.       The  Contractor  may  organize  such  levels  of  deductibles,
                  excesses and self-insurance as it considers appropriate.

Article 28.   Plant and Work Rules
Employees and agents of each Party shall,  while on the premises of the other or
its subcontractors, comply with all plant rules and governmental regulations.

Article 29.   Right of Access
         A.       The Contractor  shall, upon reasonable  notice,  during normal
                  business  hours and in a manner to avoid any disruption of the
                  work on the premises including performance of other contracts,
                  permit access by the Purchaser or its Quality  Assurance  (QA)
                  Representative  (other than a competitor of the Contractor) to
                  the  Contractor's  premises  where the work will be performed,
                  and will use its best  endeavors to secure rights of access to
                  premises  of  its  subcontractors   where  the  work  will  be
                  performed,  having subcontracts or orders in the amount of, or
                  equivalent to U.S. $********** or more, in accordance with the
                  Contractor's contractual arrangements with its subcontractors,
                  and allow the Purchaser or its QA Representative to:

                  1.       audit the Contractor's  quality  assurance system and
                           its application to the Work,  including  manufacture,
                           development   and  raw   materials   and   components
                           provision;

                  2.       inspect   all  parts  of  the  Work  to  the   extent
                           reasonably  practicable  to ensure that their quality
                           meets the Specifications.

                  This right of access shall allow for the Purchaser  and/or its
                  QA  representative  (up to a total of three (3) persons).  The
                  Purchaser shall provide the name(s),  nationality and title of
                  each such visitor prior to the visit. The Contractor shall not
                  be   responsible   for  any   costs,   including   travel  and
                  accommodation costs, of the Purchaser or its representatives.



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         B.       The right of access shall also allow for the Purchaser  and/or
                  representatives  (up to a total of three  (3)  persons)  to be
                  aboard   the   vessel(s)   during    installation,    provided
                  accommodations  are  available.  The  Contractor  shall not be
                  responsible   for  any   costs   of  the   Purchaser   or  its
                  representatives, except for food and lodging expenses on board
                  the vessel  which  includes  one (1) daily  telex or fax.  All
                  other travel and accommodation  costs for the Purchaser or its
                  QA Representatives shall be for the account of the Purchaser.

         C.       Any right of access  shall not be  construed  as creating  any
                  obligation  requiring the Contractor or its  subcontractors to
                  disclose  trade secrets or proprietary  information.  Further,
                  such right of access may be  conditioned on the execution of a
                  confidentiality and non-disclosure agreement and/or subject to
                  routine building security measures.

Article 30.   Quality Assurance
All  equipment,  material and supplies  provided  under this  Contract  shall be
inspected  and tested by  representatives  designated  by the  Contractor to the
extent  reasonably  practical  to  assure  that the  quality  of the  equipment,
materials and supplies  being  incorporated  is sufficient to realize the System
Performance  Requirements.  The inspection and test program established for such
equipment, materials and supplies shall be consistent with the Specifications or
if not specified therein, with the commercial practices normally employed by the
Contractor in the construction of submarine cable systems.

Article 31.   Documentation
The Contractor shall furnish to the Purchaser  documentation as set forth in the
Provisioning Schedule in the English language for the System. Such documentation
shall be provided prior to the Provisional Acceptance testing.

Article 32.   Training
The Contractor will make available  training for Purchaser's  personnel to learn
to  operate  and  maintain  the  System.  Such  training  as  described  in  the
Specifications  at the  Contractor's  training  locations  or as may be mutually
agreed.  The number of trainees and duration of the training sessions will be as
provided  for  in the  Specifications.  All  training  will  be in  the  English
language;  however,  training in another  language will be made  available  upon
request and at Purchaser's  expense. The Contractor shall not be held liable for
any loss or damage  caused to the System or to other  properties,  or for bodily
injuries,  resulting from negligence or intentional act in the use,  maintenance
or  operation  of the  System by the  Purchaser's  personnel  who  attended  the
training sessions.

Article 33.   Settlement of Disputes/Arbitration
         A.       The  Parties  shall  endeavor  to  settle  amicably  by mutual
                  discussions any disputes,  differences,  or claims  whatsoever
                  related to this Contract. The Parties will internally escalate
                  all disputes, in writing, to the


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                  highest  levels  of  their  respective   organizations  before
                  initiating or resorting to Mediation or Arbitration. A meeting
                  shall be  promptly  held  between  the  Parties,  attended  by
                  individuals  with  decision-making   authority  regarding  the
                  dispute, to attempt in good faith to negotiate a resolution of
                  the dispute.

         B.       If within ********** after such meeting,  the Parties have not
                  succeeded in negotiating a resolution of the dispute, then the
                  Parties shall commence non-binding mediation  ("Mediation") by
                  each Party  providing  the other Party a written  statement of
                  the subject of the dispute and the relief requested. They will
                  jointly  appoint a  mutually  acceptable  neutral  person  not
                  affiliated  with  either  of  the  Parties  (the  "Mediator"),
                  seeking   assistance   in  such  regard   from  the   American
                  Arbitration  Association  ("AAA") if they have been  unable to
                  agree upon such appointment within ********** from the initial
                  meeting.

                  The Parties shall  cooperate with the Mediator and one another
                  in scheduling the Mediation  proceeding.  Both Parties consent
                  to appear at any scheduled  Mediation.  The Mediation shall be
                  held, as soon as possible, but not later than ********** after
                  the initial meeting, in Seattle,  Washington.  The fees of the
                  Mediator shall be shared equally by the Parties.

          C.      If the Parties are not  successful  in  resolving  the dispute
                  through  the  Mediation,  then the  Parties  shall  submit the
                  dispute  to  be  settled  by  arbitration   according  to  the
                  Commercial  Arbitration  Rules  of  the  AAA  ("Arbitration").
                  Unless the Parties  agree to have the Mediator act as the sole
                  arbitrator,  there shall be three (3)  arbitrators,  with each
                  Party  appointing one (1) arbitrator with the Mediator serving
                  as the third arbitrator ("Arbitration Tribunal").

                  1.       The Arbitration  Tribunal shall apply the laws of the
                           State of Alaska and shall render a written  decision.
                           The Arbitration  Tribunal will not have the authority
                           to award punitive damages.

                  2.       Each  Party  shall  bear  its own  expenses,  but the
                           Parties  shall  share  equally  the  expenses  of the
                           Arbitration Tribunal.

         D.       This Contract shall be enforceable,  and any arbitration award
                  shall be final,  and judgment  thereon shall be entered in any
                  court of competent jurisdiction.  In any such Arbitration, the
                  decision in any prior  arbitration  under this Contract  shall
                  not be deemed  conclusive of the rights as among themselves of
                  the  Parties  hereunder.  The  Arbitration  shall  be  held in
                  Seattle, Washington.



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Article 34.   Applicable Law
This Contract shall be construed and governed in accordance with the laws of the
State of Alaska, United States, excluding its conflicts of law provisions.

Article 35.   Notices
Any notice  required  or  permitted  to be made under this  Contract,  including
invoicing,  shall be in writing and shall be deemed to have been duly given when
it has been delivered by hand, by overnight  mail, or facsimile with  telephonic
confirmation of receipt,  with a paper copy by U.S. mail (collectively U.S. mail
and overnight mail shall be called  "Mail") to the Party as specified  herein or
as later  designated in writing by such Party.  All notices shall be made in the
English language.

Changes to the respective  name,  address or fax number shown below, may be made
at any time by giving thirty (30) days' prior written notice in accordance  with
this Article.

Notices shall be sent to the following addresses:

To Contractor:
         Submarine Systems International Ltd.
         Attention: Mr. Lou Riegler
         Room S120
         340 Mt. Kemble Ave.
         Morristown, New Jersey 07960 U.S.A.
         Fax: +1 973-326-2704
         Tel:  +1 973-326-3552

To Purchaser:
         GCI Communication Corp.
         2250 Denali Street (Suite 1000)
         Anchorage, Alaska  99503-2721
         Attn:  Mr. Jimmy R. Sipes
         Vice President
         Telephony Network Engineering
         Fax:  +1 907-265-5673
         Tel:  + 1 907-265-5557

         For Invoices, a copy also to:

         GCI Communication Corp.
         2250 Denali Street (Suite 1000)
         Anchorage, Alaska  99503-2721
         Attn:  Accounts Payable
         Fax:  +1 907-265-5420
         Tel:   +1 907-265-5600



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Article 36.   Publicity
No  information  relating to this Contract  shall be released by either Party to
any newspaper, magazine, journal or other written, oral or visual medium without
the prior written approval of an authorized  representative  of the other Party,
which consent shall not be  unreasonably  delayed or withheld,  and except as to
disclosure  to the parties'  applicable  regulatory  authorities,  shareholders,
agents, advisors and financial institutions.  Notwithstanding the foregoing, the
parties  acknowledge  that the general terms and  conditions of the  transaction
must be disclosed under the securities disclosure laws, rules and regulations.

Article 37.   Assignment
         A.       Except as provided in this Article, neither Party shall assign
                  this  Contract or any right or interest  under this  Contract,
                  nor delegate any work or obligation to be performed under this
                  Contract  ("Assignment"),  without  the  other  Party's  prior
                  written  consent  which  shall not be  unreasonably  withheld.
                  Nothing  herein  shall  preclude  a  Party  from  employing  a
                  subcontractor  in  carrying  out its  obligations  under  this
                  Contract.  A  Party's  use of  such  subcontractor  shall  not
                  release the Party from its obligations under this Contract.

         B.       Each Party has the right to assign this  Contract or to assign
                  its rights and  delegate its duties  under this  Contract,  in
                  whole or in part,  at any time and without  the other  Party's
                  consent, to any present or future affiliated company, or to an
                  entity   controlled   by,   under  the  same  control  as,  or
                  controlling,  the assignor. The assigning Party shall give the
                  other Party hereto prior written notice of the assignment.

Article 38.   Relationship of the Parties
All work  performed  by one Party under this  Contract  shall be performed as an
independent contractor and not as an agent of the other and no persons furnished
by the  performing  Party shall be  considered  the  employees  or agents of the
other.  The performing Party shall be responsible for its own and its employees'
compliance with all laws, rules and regulations while performing work under this
Contract.  The  Parties  shall not be deemed  to be  partners  by virtue of this
Contract.

Article 39.   Successors Bound
This  Contract  shall be binding on the  Contractor  and the Purchaser and their
respective successors and assigns.

Article 40.   Paragraph Captions
The  captions of the  Articles do not form part of this  Contract  and shall not
have any effect on the interpretation thereof.

Article 41.   Severability
If any of the  provisions  of this Contract  shall be invalid or  unenforceable,
such invalidity or unenforceability shall not invalidate or render unenforceable
the entire Contract, but rather the entire Contract shall be construed as if not
containing the particular invalid or



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unenforceable  provision or  provisions  and the rights and  obligations  of the
Contractor and the Purchaser shall be construed and enforced accordingly. In the
event such  invalid or  unenforceable  provision  is an  essential  and material
element of this  Contract,  the Parties shall  promptly  negotiate a replacement
provision.

Article 42.   Survival of Obligations
The Parties'  rights and  obligations,  which,  by their  nature would  continue
beyond the termination,  cancellation or expiration of this Contract, including,
but not  limited  to,  those  contained  in  Article 10  (Warranty),  Article 11
(Contractor   Support),   Article  18   (Intellectual   Property),   Article  20
(Safeguarding  of Information  and Technology)  Article 21 (Export  Control) and
Article 23 (Limitations of Liability),  shall survive termination,  cancellation
or expiration hereof.

Article 43.   Non-Waiver
No waiver of any of the terms and conditions of this  Contract,  nor the failure
of either Party  strictly to enforce any such term or condition,  on one or more
occasions  shall be  construed  as a waiver of the same or of any other  term or
condition of this Contract on any other occasion.

Article 44.   Language
This Contract has been executed in the English  language and English will be the
controlling language for this Contract.

Article 45.   Performance Guarantee
         A. Contractor shall, by **********, provide a performance guarantee (in
         a  format  mutually  and  reasonably  acceptable  to  the  Parties)  to
         Purchaser having a value of **********.

         B. The  performance  guarantee  shall be reduced to  **********  on the
         Provisional  Acceptance  date,  and it shall  remain in force until the
         date of Final Acceptance (as specified in Article 9(D)1).

         C.  The  Purchaser  shall be  entitled  to  demand  payment  under  the
         performance  guarantee  if **********.

Article 46.   Entire Agreement
This Contract  supersedes all prior oral or written  understandings  between the
Parties and constitutes the entire  agreement with respect to the subject matter
herein.  Such terms and conditions  shall not be modified or amended except by a
writing signed by authorized representatives of both Parties.



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This Contract is executed by duly authorized  representatives  of the Parties as
set forth below.

Submarine Systems International Ltd.                    GCI Communication Corp.


By:/s/ David Vanrossum                                  By:/s/Richard Dowling
   Signature                                               Signature

Title: Vice President and CFO                           Title: Senior Vice
                                                               President

Date: July 14, 1997                                     Date: July 15, 1997




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<PAGE>
<TABLE>
                     Appendix 1: Alaska United Fiber System

                    Summary of the Pricing Schedule - Offer B
<CAPTION>
                                                                 FOB        CIF       Taxes      Total
<S>        <C>                                                   <C>        <C>        <C>        <C>
1.1        Wet Plant - Seattle, Washington                       ***        ***        ***        ***
1.2        Wet Plant - Lena Point, Alaska                        ***        ***        ***        ***
1.3        Wet Plant - Whittier, Alaska                          ***        ***        ***        ***

2.0        Marine Services                                       ***        ***        ***        ***

3.1        TSE - Seattle, Washington                             ***        ***        ***        ***
3.2        TSE - Lena Point, Alaska                              ***        ***        ***        ***
3.3        TSE - Whittier, Alaska                                ***        ***        ***        ***

4.1        Land Cable - Seattle, Washington                      ***        ***        ***        ***
4.2        Land Cable - Lena Point, Alaska                       ***        ***        ***        ***
4.3        Land Cable - Whittier, Alaska                         ***        ***        ***        ***

5.0        Other                                                 ***        ***        ***        ***

           Total                                                 ***        ***        ***        ***

           Remove Repeater                                       ***        ***        ***        ***

           Subtotal                                              ***        ***        ***        ***

           Discount ***                                          ***        ***        ***        ***

           Grand Total (Discounted Price)                        ***        ***        ***        ***
</TABLE>



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<PAGE>
<TABLE>
                                      Appendix 1: Alaska United Fiber System

                                    Submerged Plant - Seattle, Washington to BU
<CAPTION>
                                                                   Unit
                                             Type     Quantity    Price     FOB      CIF   Taxes      Total
<S>         <C>                               <C>      <C>         <C>      <C>      <C>    <C>       <C>
1.1.1.0     Installed Cable
1.1.1.1     LW                                ***      ***         ***      ***      ***    ***       ***
1.1.1.2     SPA                               ***      ***         ***      ***      ***    ***       ***
1.1.1.3     LWA                               ***      ***         ***      ***      ***    ***       ***
1.1.1.4     DA                                ***      ***         ***      ***      ***    ***       ***

1.1.2.0     Spare Cable
1.1.2.1     LW                                ***      ***         ***      ***      ***    ***       ***
1.1.2.2     SPA                               ***      ***         ***      ***      ***    ***       ***
1.1.2.3     LWA                               ***      ***         ***      ***      ***    ***       ***
1.1.2.4     DA                                ***      ***         ***      ***      ***    ***       ***

1.1.3.0     Transitions
1.1.3.1     LW/SPA                            ***      ***         ***      ***      ***    ***       ***
1.1.3.2     LWA/SPA                           ***      ***         ***      ***      ***    ***       ***
1.1.3.3     LWA/DA                            ***      ***         ***      ***      ***    ***       ***

1.1.4.0     Total Cable to Cable Joints
1.1.4.1     LW Cbl-to-Cbl Joint               ***      ***         ***      ***      ***    ***       ***
1.1.4.2     SPA Cbl-to-Cbl Joint              ***      ***         ***      ***      ***    ***       ***
1.1.4.3     Polysleeves                       ***      ***         ***      ***      ***    ***       ***

1.1.5.0     End Seals
1.1.5.1     A-838244                          ***      ***         ***      ***      ***    ***       ***
1.1.5.2     A-838260                          ***      ***         ***      ***      ***    ***       ***
1.1.5.3     A-838611                          ***      ***         ***      ***      ***    ***       ***
</TABLE>




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<PAGE>
<TABLE>

                                      Appendix 1: Alaska United Fiber System

                                    Submerged Plant - Seattle, Washington to BU
<CAPTION>
                                                                                      Unit
                                                                 Type    Quantity    Price     FOB    CIF     Taxes     Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>       <C>
1.1.6.0          Repeater and BU Integration
1.1.6.1          Unarmored                                        ***     ***         ***      ***    ***      ***       ***
1.1.6.2          Armored                                          ***     ***         ***      ***    ***      ***       ***
1.1.6.3          Branching Unit                                   ***     ***         ***      ***    ***      ***       ***

1.1.7.0          Undersea Quality Assurance                       ***     ***         ***      ***    ***      ***       ***

1.1.8.0          Integrated Repeaters, BU's, & Couplings
1.1.8.1          Integrated Repeaters 2x0                         ***     ***         ***      ***    ***      ***       ***
1.1.8.2          Integrated Branching Unit (PSBU)                 ***     ***         ***      ***    ***      ***       ***
1.1.8.3          Integrated Couplings                             ***     ***         ***      ***    ***      ***       ***

1.1.9.0          Spare Repeaters, BU's, & Couplings
1.1.9.1          Spare Repeaters 2x0                              ***     ***         ***      ***    ***      ***       ***
1.1.9.2          Spare Branching Unit (PSBU)                      ***     ***         ***      ***    ***      ***       ***
1.1.9.3          Spare Couplings                                  ***     ***         ***      ***    ***      ***       ***

1.1              Total Submerged Plan - Seattle Washington                                     ***    ***      ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>


                                      Appendix 1: Alaska United Fiber System

                                    Submerged Plant - Lena Point, Alaska to BU
<CAPTION>
                                                                                      Unit
                                                                 Type    Quantity    Price     FOB    CIF     Taxes     Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>       <C>
1.2.1.0          INSTALLED CABLE
1.2.1.1          LW                                               ***     ***         ***      ***    ***      ***       ***
1.2.1.2          SPA                                              ***     ***         ***      ***    ***      ***       ***
1.2.1.3          LWA                                              ***     ***         ***      ***    ***      ***       ***
1.2.1.4          DA                                               ***     ***         ***      ***    ***      ***       ***

1.2.2.0          SPARE CABLE
1.2.2.1          LW                                               ***     ***         ***      ***    ***      ***       ***
1.2.2.2          SPA                                              ***     ***         ***      ***    ***      ***       ***
1.2.2.3          LWA                                              ***     ***         ***      ***    ***      ***       ***
1.2.2.4          DA                                               ***     ***         ***      ***    ***      ***       ***

1.2.3.0          TRANSITIONS
1.2.3.1          LW/SPA                                           ***     ***         ***      ***    ***      ***       ***
1.2.3.2          LWA/SPA                                          ***     ***         ***      ***    ***      ***       ***
1.2.3.3          LWA/DA                                           ***     ***         ***      ***    ***      ***       ***

1.2.4.0          TOTAL CABLE TO CABLE JOINTS
1.2.4.1          LW CBL-TO-CBL JOINT                              ***     ***         ***      ***    ***      ***       ***
1.2.4.2          SPA CBL-TO-CBL JOINT                             ***     ***         ***      ***    ***      ***       ***
1.2.4.3          POLYSLEEVES                                      ***     ***         ***      ***    ***      ***       ***

1.2.5.0          END SEALS
1.2.5.1          A-838244                                         ***     ***         ***      ***    ***      ***       ***
1.2.5.2          A-838260                                         ***     ***         ***      ***    ***      ***       ***
1.2.5.3          A-838611                                         ***     ***         ***      ***    ***      ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>

                                      Appendix 1: Alaska United Fiber System

                                    Submerged Plant - Lena Point, Alaska to BU
<CAPTION>
                                                                                      Unit
                                                                 Type    Quantity    Price     FOB    CIF    Taxes     Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>     <C>       <C>
1.2.6.0          REPEATER AND BU INTEGRATION
1.2.6.1          UNARMORED                                        ***     ***         ***      ***    ***     ***       ***
1.2.6.2          ARMORED                                          ***     ***         ***      ***    ***     ***       ***
1.2.6.3          BRANCHING UNIT                                   ***     ***         ***      ***    ***     ***       ***

1.2.7.0          UNDERSEA QUALITY ASSURANCE                       ***     ***         ***      ***    ***     ***       ***

1.2.8.0          INTEGRATED REPEATERS, BU'S & COUPLINGS
1.2.8.1          INTEGRATED REPEATERS 2x0                         ***     ***         ***      ***    ***     ***       ***
1.2.8.2          INTEGRATED BRANCHING UNIT (PSBU)                 ***     ***         ***      ***    ***     ***       ***
1.2.8.3          INTEGRATED COUPLINGS                             ***     ***         ***      ***    ***     ***       ***

1.2.9.0          SPARE REPEATERS, BU'S, & COUPLINGS
1.2.9.1          SPARE REPEATERS 2x0                              ***     ***         ***      ***    ***     ***       ***
1.2.9.2          SPARE BRANCHING UNITS (PSBU)                     ***     ***         ***      ***    ***     ***       ***
1.2.9.3          SPARE COUPLINGS                                  ***     ***         ***      ***    ***     ***       ***

1.2              TOTAL SUBMERGED PLAN - LENA POINT, ALASKA
                                                                                               ***    ***     ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>


                                      Appendix 1: Alaska United Fiber System

                                     Submerged Plant - Whittier, Alaska to BU
<CAPTION>
                                                                                      Unit
                                                                  Type    Quantity    Price    FOB    CIF     Taxes    Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>      <C>
1.3.1.0          INSTALLED CABLE
1.2.1.1          LW                                               ***     ***         ***      ***    ***      ***      ***
1.3.1.2          SPA                                              ***     ***         ***      ***    ***      ***      ***
1.3.1.3          LWA                                              ***     ***         ***      ***    ***      ***      ***
1.3.1.4          DA                                               ***     ***         ***      ***    ***      ***      ***

1.3.2.0          SPARE CABLE
1.3.2.1          LW                                               ***     ***         ***      ***    ***      ***      ***
1.3.2.2          SPA                                              ***     ***         ***      ***    ***      ***      ***
1.3.2.3          LWA                                              ***     ***         ***      ***    ***      ***      ***
1.3.2.4          DA                                               ***     ***         ***      ***    ***      ***      ***

1.3.3.0          TRANSITIONS
1.3.3.1          LW/SPA                                           ***     ***         ***      ***    ***      ***      ***
1.3.3.2          LWA/SPA                                          ***     ***         ***      ***    ***      ***      ***
1.3.3.3          LWA/DA                                           ***     ***         ***      ***    ***      ***      ***

1.3.4.0          TOTAL CABLE TO CABLE JOINTS
1.3.4.1          LW CBL-TO-CBL JOINT                              ***     ***         ***      ***    ***      ***      ***
1.3.4.2          SPA CBL-TO-CBL JOINT                             ***     ***         ***      ***    ***      ***      ***
1.3.4.3          POLYSLEEVES                                      ***     ***         ***      ***    ***      ***      ***

1.3.5.0          END SEALS
1.3.5.1          A-838244                                         ***     ***         ***      ***    ***      ***      ***
1.3.5.2          A-838260                                         ***     ***         ***      ***    ***      ***      ***
1.3.5.3          A-838611                                         ***     ***         ***      ***    ***      ***      ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>
                                      Appendix 1: Alaska United Fiber System

                                     Submerged Plant - Whittier, Alaska to BU
<CAPTION>
                                                                                      Unit
                                                                  Type    Quantity    Price    FOB    CIF     Taxes    Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>     <C>
1.3.6.0          REPEATER AND BU INTEGRATION
1.3.6.1          UNARMORED                                        ***     ***         ***      ***    ***      ***     ***
1.3.6.2          ARMORED                                          ***     ***         ***      ***    ***      ***     ***
1.3.6.3          BRANCHING UNIT                                   ***     ***         ***      ***    ***      ***     ***

1.3.7.0          UNDERSEA QUALITY ASSURANCE                       ***     ***         ***      ***    ***      ***     ***

1.3.8.0          INTEGRATED REPEATERS, BU'S & COUPLINGS
1.3.8.1          INTEGRATED REPEATERS 2x0                         ***     ***         ***      ***    ***      ***     ***
1.3.8.2          INTEGRATED BRANCHING UNIT (PSBU)                 ***     ***         ***      ***    ***      ***     ***
1.3.8.3          INTEGRATED COUPLINGS                             ***     ***         ***      ***    ***      ***     ***

1.3.9.0          SPARE REPEATERS, BU'S, & COUPLINGS
1.3.9.1          SPARE REPEATERS 2x0                              ***     ***         ***      ***    ***      ***     ***
1.3.9.2          SPARE BRANCHING UNITS (PSBU)                     ***     ***         ***      ***    ***      ***     ***
1.3.9.3          SPARE COUPLINGS                                  ***     ***         ***      ***    ***      ***     ***

1.3              TOTAL SUBMERGED PLAN - WHITTIER, ALASKA
                                                                                               ***    ***      ***     ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>


                                      Appendix 1: Alaska United Fiber System

                                          Marine Services - Total System
<CAPTION>
                                                                                      Unit
                                                                  Type    Quantity    Price    FOB    CIF      Taxes      Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>        <C>
2.1.0            MARINE SERVICES
2.1.1            OPERATIONS                                       ***     ***         ***      ***    ***      ***        ***
2.1.2            TRANSIT                                          ***     ***         ***      ***    ***      ***        ***
2.1.3            LOADING                                          ***     ***         ***      ***    ***      ***        ***
2.1.4            PORT CALLS                                       ***     ***         ***      ***    ***      ***        ***
2.1.5            MOB/DEMOB                                        ***     ***         ***      ***    ***      ***        ***

2.2.0            SEA PLOW VII
2.2.1            OPERATIONS                                       ***     ***         ***      ***    ***      ***        ***
2.2.2            TRANSIT                                          ***     ***         ***      ***    ***      ***        ***
2.2.3            MOB/DEMOB                                        ***     ***         ***      ***    ***      ***        ***

2.3.0            OTHER
2.3.1            SUPPORT TUG                                      ***     ***         ***      ***    ***      ***        ***
2.3.2            PLIB OPERATIONS                                  ***     ***         ***      ***    ***      ***        ***
2.3.3            SHORE END OPERATIONS                             ***     ***         ***      ***    ***      ***        ***
2.3.4            CABLE LOADING                                    ***     ***         ***      ***    ***      ***        ***
2.3.5            CABLE ENGINEERING                                ***     ***         ***      ***    ***      ***        ***
2.3.6            SPLICING OPERATIONS                              ***     ***         ***      ***    ***      ***        ***
2.3.7            MARINE COORDINATION                              ***     ***         ***      ***    ***      ***        ***
2.3.8            ROUTE SURVEY                                     ***     ***         ***      ***    ***      ***        ***

2.0              TOTAL MARINE SERVICES                                                         ***    ***      ***        ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>
                                      Appendix 1: Alaska United Fiber System

                                 Terminal Station Equipment - Seattle, Washington
<CAPTION>
3.1              TERMINAL STATION EQUIPMENT - SEATTLE,                                Unit
                 WASHINGTON                                       Type    Quantity    Price    FOB    CIF       Taxes     Total

<S>              <C>                                              <C>     <C>         <C>      <C>    <C>       <C>       <C>
3.1.1.0          TERMINAL TRANSMISSION EQUIPMENT
3.1.1.1          FT 2000, OC48, ADD DROP RING W/ NGLN W/ SPARES
                                                                  ***     ***         ***      ***    ***       ***       ***
3.1.1.2          ENGINEERING ORDER WIRES W/ SPARES                ***     ***         ***      ***    ***       ***       ***
3.1.1.3          CRAFT INTERFACE TERMINALS                        ***     ***         ***      ***    ***       ***       ***
3.1.1.4          DIGITAL DISTRIBUTION FRAME                       ***     ***         ***      ***    ***       ***       ***

3.1.2.0          POWER FEED EQUIPMENT
3.1.2.1          MEDIUM VOLTAGE PFE W/ SPARES                     ***     ***         ***      ***    ***       ***       ***
3.1.2.2          LOW VOLTAGE PFE W/ SPARES                        ***     ***         ***      ***    ***       ***       ***

3.1.3.0          OUT OF SERVICE MAINTENANCE - COTDR & HLLB SHELF
                                                                  ***     ***         ***      ***    ***       ***       ***

3.1.4.0          INSTALLATION                                     ***     ***         ***      ***    ***       ***       ***

3.1              SUBTOTAL TSE - SEATTLE, WASHINGTON
                                                                                               ***    ***       ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>

                                      Appendix 1: Alaska United Fiber System

                                  Terminal Station Equipment - Lena Point, Alaska
<CAPTION>
3.2              TERMINAL STATION EQUIPMENT - SEATTLE,                                Unit
                 WASHINGTON                                       Type    Quantity    Price    FOB    CIF       Taxes      Total

<S>              <C>                                              <C>     <C>         <C>      <C>    <C>       <C>        <C>
3.2.1.0          TERMINAL TRANSMISSION EQUIPMENT
3.2.1.1          FT 2000, OC48, ADD DROP RING W/ NGLN W/ SPARES
                                                                  ***     ***         ***      ***    ***       ***        ***
3.2.1.2          ENGINEERING ORDER WIRES W/ SPARES                ***     ***         ***      ***    ***       ***        ***
3.2.1.3          CRAFT INTERFACE TERMINALS                        ***     ***         ***      ***    ***       ***        ***
3.2.1.4          DIGITAL DISTRIBUTION FRAME                       ***     ***         ***      ***    ***       ***        ***

3.2.2.0          POWER FEED EQUIPMENT
3.2.2.1          MEDIUM VOLTAGE PFE W/ SPARES                     ***     ***         ***      ***    ***       ***        ***
3.2.2.2          LOW VOLTAGE PFE W/ SPARES                        ***     ***         ***      ***    ***       ***        ***

3.2.3.0          OUT OF SERVICE MAINTENANCE - COTDR & HLLB SHELF
                                                                  ***     ***         ***      ***    ***       ***        ***

3.2.4.0          INSTALLATION                                     ***     ***         ***      ***    ***       ***        ***

3.2              SUBTOTAL TSE - LENA POINT, ALASKA                                             ***    ***       ***        ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]



                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>

                                      Appendix 1: Alaska United Fiber System

                                   Terminal Station Equipment - Whittier, Alaska
<CAPTION>
3.3              TERMINAL STATION EQUIPMENT - SEATTLE,                                Unit
                 WASHINGTON                                       Type    Quantity    Price    FOB    CIF      Taxes     Total

<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>       <C>
3.3.1.0          TERMINAL TRANSMISSION EQUIPMENT
3.3.1.1          FT 2000, OC48, ADD DROP RING W/ NGLN W/ SPARES
                                                                  ***     ***         ***      ***    ***      ***       ***
3.3.1.2          ENGINEERING ORDER WIRES W/ SPARES                ***     ***         ***      ***    ***      ***       ***
3.3.1.3          CRAFT INTERFACE TERMINALS                        ***     ***         ***      ***    ***      ***       ***
3.3.1.4          DIGITAL DISTRIBUTION FRAME                       ***     ***         ***      ***    ***      ***       ***

3.3.2.0          POWER FEED EQUIPMENT
3.3.2.1          MEDIUM VOLTAGE PFE W/ SPARES                     ***     ***         ***      ***    ***      ***       ***
3.3.2.2          LOW VOLTAGE PFE W/ SPARES                        ***     ***         ***      ***    ***      ***       ***

3.3.3.0          OUT OF SERVICE MAINTENANCE - COTDR & HLLB SHELF
                                                                  ***     ***         ***      ***    ***      ***       ***

3.3.4.0          INSTALLATION                                     ***     ***         ***      ***    ***      ***       ***

3.3              SUBTOTAL TSE - WHITTIER, ALASKA                                               ***    ***      ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>

                                      Appendix 1: Alaska United Fiber System

                                    Land Cable and Installation - Total System
<CAPTION>
                                                                                      Unit
                                                                  Type    Quantity    Price    FOB    CIF      Taxes     Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>       <C>
4.1.0            LAND CABLE - SEATTLE, WASHINGTON
4.1.1            MV-900                                           ***     ***         ***      ***    ***      ***       ***
4.1.2            RL                                               ***     ***         ***      ***    ***      ***       ***
4.1.3            INSTALLATION                                     ***     ***         ***      ***    ***      ***       ***
4.1.4            OCEAN GROUND BED                                 ***     ***         ***      ***    ***      ***       ***
4.1              SUBTOTAL LAND CABLE - SEATTLE, WASHINGTON
                                                                                               ***    ***      ***       ***

4.2.0            LAND CABLE - LENA POINT, ALASKA
4.2.1            MV-900                                           ***     ***         ***      ***    ***      ***       ***
4.2.2            RL                                               ***     ***         ***      ***    ***      ***       ***
4.2.3            INSTALLATION                                     ***     ***         ***      ***    ***      ***       ***
4.2.4            OCEAN GROUND BED                                 ***     ***         ***      ***    ***      ***       ***
4.2              SUBTOTAL LAND CABLE - LENA POINT, ALASKA
                                                                                               ***    ***      ***       ***

4.3.0            LAND CABLE - WHITTIER, ALASKA
4.3.1            MV-900                                           ***     ***         ***      ***    ***      ***       ***
4.3.2            RL                                               ***     ***         ***      ***    ***      ***       ***
4.3.3            INSTALLATION                                     ***     ***         ***      ***    ***      ***       ***
4.3.4            OCEAN GROUND BED                                 ***     ***         ***      ***    ***      ***       ***
4.3              SUBTOTAL LAND CABLE - WHITTIER, ALASKA
                                                                                               ***    ***      ***       ***
</TABLE>
                 NOTE:  ALL LANDING POINTS ARE ASSUMED





             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]



                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>
                                      Appendix 1: Alaska United Fiber System

                                               Other - Total System
<CAPTION>
                                                                                      Unit
                                                                  Type    Quantity    Price    FOB    CIF      Taxes     Total
<S>              <C>                                              <C>     <C>         <C>      <C>    <C>      <C>       <C>
5.1.0            OTHER
5.1.1            ACCEPTANCE TRAINING                              ***     ***         ***      ***    ***      ***       ***
5.1.2            ENGINEERING SERVICES                             ***     ***         ***      ***    ***      ***       ***
5.1.3            WARRANTY                                         ***     ***         ***      ***    ***      ***       ***
5.1.4            PERFORMANCE GUARANTEE                            ***     ***         ***      ***    ***      ***       ***
5.1.5            PROJECT MANAGEMENT                               ***     ***         ***      ***    ***      ***       ***

5.2.0            TRAINING
5.2.1            TYPE A                                           ***     ***         ***      ***    ***      ***       ***
5.2.2            TYPE B                                           ***     ***         ***      ***    ***      ***       ***
5.2.3            TYPE C                                           ***     ***         ***      ***    ***      ***       ***

5.3.0            DOCUMENTATION
5.3.1            ORIGINAL                                         ***     ***         ***      ***    ***      ***       ***
5.3.2            COPIES                                           ***     ***         ***      ***    ***      ***       ***

5.0              SUBTOTAL - OTHER                                                              ***    ***      ***       ***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]




                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
<TABLE>

                            Appendix 2 - Alaska United Fiber System - Billing Schedule
<CAPTION>
         Jan     Feb    Mar     Apr     May     June   July    Aug     Sept   Oct     Nov     Dec    Subtotal
<S>      <C>            <C>             <C>                    <C>                            <C>    <C>
1997                                                           $***                                  $***
1998     $***           $***            $***                   $***                           $***   $***
Total                                                                                                $***
</TABLE>




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]





                    AT&T Submarine Systems Inc., PROPRIETARY
                     Use restricted to Company Instruction
<PAGE>
                                 SAMPLE INVOICE


                                    INVOICE
                           Alaska United Fiber System


Addresses                                       Invoice No.      ATTSSI9512xx
                                                Issue Date          12/x/1995
xxxxxxx  Central Billing Party                  Payment Due Date
Attn:  Mr(s).: xxxxxxx                          Customer Code
340 Mount Kemble Ave., Room N100
Morristown, NJ 07962

                                                      Remit Payment Wire To:
                                                 Submarine Systems International
                                                             **********
                                                             **********
                                                             **********
                                                             **********
                                                             **********




Billing for the xxxxxxx Cable Construction Activities for milestones achieved by
December x, **********. Per attached Milestone Achievement Certificate.


                                            Amount Due US$       xxxxxxxxxxxxxxx

                                                         Attachments

                                            1) Milestone Achievement Certificate

       PLEASE INDICATE INVOICE NUMBER(S) AND CUSTOMER CODE ON REMITTANCE

CERTIFIED CORRECT                          Please Refer Questions Related
                                           To this invoice to:  R. M. Grella
                                           Manager - SSI Finance
                                           340 Mt. Kemble Ave., Room N125
                                           P.O. Box 1923
                                           Morristown, NJ  07962-1923
                                           Telephone: (201) 326 4255
                                           Facsimile: (201) 326 2587

R. M. Grella
Manager - SSI Finance




<PAGE>
Commercial Volume                                             Appendix 4

                                   APPENDIX 4

       Responsibility For Submarine Cable Construction Approvals, Permits,
                            Permissions and Consents
                          (Alaska United Fiber System)

I.  Purchaser's Responsibilities:
       1. To obtain all necessary permissions **********.

       2. To obtain,  ********** necessary approvals,  permits,  permissions and
          consents to lay the System **********.

       3. To obtain the necessary Government Approvals **********.

       4. To bear the cost of **********.

       5. To obtain the necessary approvals,  permits,  permissions, and consent
          **********.

       6. To   obtain   Environmental   Impact   Statement(s),    permits,   and
          environmental approval(s) **********.

       7. To obtain all necessary approvals,  permits, permissions, and consents
          **********.

       8. To provide ********** crossing notification **********.

       9. Obtain the necessary permissions **********.

       10. To obtain customers clearance and make arrangements **********.

       11. To obtain import licenses/certificates, **********.




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


            Submarine Systems International Ltd. (SSI) - Proprietary
      Use Restricted to Article 20, Safeguard of Information Technoloty, of
                                 this Contract
July 11, 1997                           1             Alaska United Fiber System


<PAGE>
Commercial Volume                                             Appendix 4


II.    Contractor's Responsibilities 1. To pay necessary charges **********.

       2.   to obtain Work Permits **********.

       3. Notice to **********.

       4. To obtain from relevant third parties approval **********.

       5. To remove **********.

       6. To obtain temporary import clearance, **********.

       7. To jointly obtain import licenses with **********.

       8. To obtain,  as  necessary,  temporary  radio site and radio  frequency
          permits **********.

       9. To obtain terrestrial permits **********.

       10. To obtain excavation and road access permits **********.




             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]



            Submarine Systems International Ltd. (SSI) - Proprietary
      Use Restricted to Article 20, Safeguard of Information Technoloty, of
                                 this Contract
July 11, 1997                           2            Alaska United Fiber System
<PAGE>

<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
1       ALASKA UNITED FIBER SYSTEM                     **********
2         Contract Signing
3         Fiber/Cable Manufacture
4              Place Cable & Fiber Order
5              Fiber Manufacture/Delivery
6              Cable Manufacture - Hitachi
7                  Unit fiber Structure (UFS)
8                  Power Conductor (PC)
9                  Extrusion
10                 Post Survey SLD
11                 Partial Section Details
12                 Ship Tank Plan
13                 Section Assembly Guidelines
14                 Span Assembly
15                 SPA Production
16                 Armoring
17                 SPA/LW Tanking
18        Repeater Manufacture
19             Place Repeater Order
20             Manufacture
21             PSBU Manufacture
22        Repeater Delivery
23        Repeater/Cable Integration
24        Assembled System Test
</TABLE>


             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 1 of 6
<PAGE>
<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
25        Cable Ready-To-Load                          **********
26        PFE Manufacture/Ship
27             Seattle
28                 Place PFE Order
29                 Manufacture - Medium Voltage
30                 Factory Acceptance Test (FAT)
31                 Ship to Hut Manufacturing Site
32             Whittier
33                 Place PFE Order
34                 Manufacture - Medium Voltage
35                 FAT
36                 Ship to Hut Manufacturing Site
37             Lena Point
38                 Place PFE Order
39                 Manufacture - Low Voltage
40                 FAT
41                 Ship to Hut Manufacturing Site
42        Transmission Equipment Manufacture/Ship
43             Seattle
44                 Place TTE Order
45                 Manufacture
46                 FAT
47                 Ship to Hut Manufacturing Site
48             Whittier
</TABLE>



             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 2 of 6
<PAGE>
<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
49                 Place TTE Order                     **********
50                 Manufacture
51                 FAT
52                 Ship to Hut Manufacturing Site
53             Lena Point
54                 Place TTE Order
55                 Manufacture
56                 FAT
57                 Ship to Hut Manufacture Site
58        Land Cable Manufacture/Ship
59             Place Land Cable Order
60             Manufacture
61             Ship Land Cables to Sites
62        Containerized Hut MFG/TSE Installation
63             Seattle
64                 Manufacture Containerized Hut
65                 Install TSE in Containerized Hut
66                 Containerized Hut FAT
67                 Ship Containerized Hut to Landing Site
68             Whittier
69                 Manufacture Containerized Hut
70                 Install TSE in Containerized Hut
71                 Containerized Hut FAT
72                 Ship Containerized Hut to Landing Site
</TABLE>



             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 3 of 6
<PAGE>
<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
73             Lena Point                              **********
74                 Manufacture Containerized Hut
75                 Install TSE in Containerized Hut
76                 Containerized Hut FAT
77                 Ship Containerized Hut to Landing Site
78        TSE/Containerized Hut Installation
79             Seattle
80                 Installation
81                 SAT
82                 Type B Training
83             Whittier
84                 Installation
85                 SAT
86                 Type B Training
87             Lena Point
88                 Installation
89                 SAT
90        Land Construction
91             Seattle
92                 Land Cables/Equipment On-Site
93                 Land Construction Activities
94             Lena Point
95                 Land Cables/Equipment On-Site
96                 Land Construction Activities
</TABLE>



             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 4 of 6
<PAGE>
<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
97             Whittier                                **********
98                 Land Cables/Equipment On-Site
99                 Land Construction Activities
100       Training
101            Emergency Land Cable Joint Training
102                Lena Point & Whittier @ Lena Point
103       Cable Loading/Laying Activities
104            Transit to Cable Factory
105            Cable Loading
106            Transit to Whittier, Alaska
107            Land Segment 2 Shore End, Splice/Test
108            Lay/Bury 282 km Armored
109            Surface Lay 729 km Unarmored
110            Transit to Juneau/Coordination Meeting
111            Land Segment 3 Shore End, Splice/Test
112            Lay/Bury 142 km Armored
113            Surface Lay 210 km Armored
114            Lay/Bury 17 km Armored
115            Surface Lay 67 km Unarmored/Deploy BU 1
116            Surface Lay 1,208 km Unarmored
117            Transit to Seattle/Coordination Meeting
118            Land Segment 1 Shore End, Splice/Test
119            Lay/Bury 340 km Armored
120            Contingency
</TABLE>



             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]


Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 5 of 6
<PAGE>
<TABLE>
GCI Communication Corp.                         Submarine Systems International
                           ALASKA UNITED FIBER SYSTEM
                                  PLAN OF WORK

<CAPTION>
                                                            Start End              ***                         ***
ID      Work Activity                                  Days Date  Date Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1  Qtr 2  Qtr 3  Qtr 4  Qtr 1
<S>     <C>                                            <C>
121            Final Splice                            **********
122            Transit to Depot/Offload Spares
123            Transit to Seattle/Off Charter
124       Commissioning & Acceptance Tests
125            Commissioning Tests
126            Confidence Trial
127       Ready For Provisional Acceptance
</TABLE>



             [INFORMATION HAS BEEN REDACTED FROM THIS PAGE PURSUANT
         TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC.]

Date: 7/11/97           Task      Milestone   Rolled Up Task  Rolled Up Progress
Project Mgr-L. Riegler  Progress  Summary     Rolled Up Milestone

SSI Proprietary                  Page 6 of 6