EXHIBIT 10.19










                                    INITIAL

                            OPTICAL FIBER DESIGN AND

                             INSTALLATION AGREEMENT


                                     BETWEEN


                                   FOCAS, INC.

                                       AND

                            ELECTRIC LIGHTWAVE, INC.


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                                TABLE OF CONTENTS


                                                                                                               Page

ARTICLE I             DEFINITIONS.................................................................................1

ARTICLE II            DESCRIPTION OF TRANSACTION..................................................................8

                      2.1      Utility Agreements.................................................................8
                      2.2      Delegation of Certain ELI Duties to FOCAS..........................................9
                      2.3      ELI Duties.........................................................................9
                      2.4      Licenses Revocable.................................................................9
                      2.5      Regulatory Approval................................................................9
                      2.6      Conversion from Revocable License to Irrevocable License..........................10
                      2.7      Nonexclusive Use of Right of Way..................................................10
                      2.8      Reservation of Certain Utility Company Rights.....................................10
                      2.9      Utility Operations................................................................10
                      2.10     No Property or Possessory Interest................................................11
                      2.11     Right of Entry....................................................................11
                      2.12     Entry Conditions..................................................................12
                      2.13     Cooperation.......................................................................12
                      2.14     Disclaimer........................................................................12
                      2.15     Operation of System...............................................................12
                      2.16     Cable Route.......................................................................13

ARTICLE III           TERM.......................................................................................13

                      3.1      Term..............................................................................13
                      3.2      Termination of Agreement by ELI...................................................13

ARTICLE IV            PAYMENTS...................................................................................14

                      4.1      Quarterly Payments................................................................14
                      4.2      Quarterly Payment Due Dates.......................................................14
                      4.3      Supporting Documentation..........................................................14
                      4.4      Reimbursement of Costs............................................................14
                      4.5      Payment Procedure.................................................................15
                      4.6      Late Payment......................................................................15
                      4.7      Performance Criteria..............................................................15
                      4.8      Security Interest.................................................................17



                                      -i-
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ARTICLE V             SYSTEM DESIGN..............................................................................18

                      5.1      FOCAS Design Responsibility.......................................................18
                      5.2      ELI Design Responsibilities.......................................................19
                      5.3      Utility Company Information.......................................................19
                      5.4      Notice of Adverse Claims..........................................................20
                      5.5      Working Drawings..................................................................20
                      5.6      Scheduling........................................................................20
                      5.7      Warranty of Work..................................................................21
                      5.8      Design Performance Completion.....................................................21

ARTICLE VI            CONSTRUCTION...............................................................................21

                      6.1      Scope of Work.....................................................................21
                      6.2      Regeneration Facilities...........................................................22
                      6.3      Work Standards....................................................................22
                      6.4      Time..............................................................................22
                      6.5      Permits and Approvals.............................................................22
                      6.6      System Materials..................................................................23
                      6.7      Interface Between FOCAS and ELI...................................................23
                      6.8      Title and Risk of Loss............................................................23
                      6.9      System Warranties.................................................................23
                      6.10     Use of Contractors................................................................24
                      6.11     Inspection of Construction........................................................24
                      6.12     As-Built Drawings.................................................................25
                      6.13     Completion of System Construction.................................................26
                      6.14     Warranty of Work..................................................................26
                      6.15     Construction Performance Completion...............................................26

ARTICLE VII           PROPERTY RIGHTS, OBLIGATIONS AND MAINTENANCE...............................................27

                      7.1      Avoidance of Encumbrances.........................................................27
                      7.2      Payment of Ad Valorem Taxes.......................................................27
                      7.3      Sales or Use Taxes................................................................27
                      7.4      Liens.............................................................................27
                      7.5      Discontinuance or Relocation......................................................28
                      7.6      Relocation of Cable...............................................................28
                      7.7      Design and Installation of Relocated Facilities...................................29
                      7.8      Utility Company Maintenance Responsibilities......................................29
                      7.9      Maintenance of Regeneration Facilities and System Electronics.....................29
                      7.10     Restoration Plans.................................................................29
                      7.11     Performance Completion............................................................29


                                      -ii-
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ARTICLE VIII          REPRESENTATIONS, WARRANTIES AND COVENANTS..................................................29

                      8.1      Representations, Warranties and Covenants of ELI..................................29
                      8.2      Representations, Warranties and Covenants of FOCAS................................31
                      8.3      Confidentiality...................................................................33
                      8.4      Cooperation.......................................................................35
                      8.5      Regulatory Compliance.............................................................35
                      8.6      Certificates......................................................................35
                      8.7      Independent Status................................................................36
                      8.8      Transactions with Affiliates......................................................36
                      8.9      Further Assurances................................................................36
                      8.10     Audit Rights......................................................................36
                      8.11     Interference......................................................................36
                      8.12     Independent System Operator.......................................................36
                      8.13     Performance in Stead..............................................................37
                      8.14     Utility Agreements................................................................37

ARTICLE IX            INSURANCE..................................................................................37

                      9.1      Required Insurance Coverage.......................................................37
                      9.2      General Conditions................................................................38
                      9.3      Evidence of Insurance.............................................................38
                      9.4      Blanket Policies..................................................................39
                      9.5      Self-Insurance....................................................................39

ARTICLE X             ASSIGNMENT AND OTHER TRANSFERS.............................................................39

                      10.1     Transfers.........................................................................39
                      10.2     Financing.........................................................................39
                      10.3     Recognition of Transferees........................................................40
                      10.4     No Assumption or Release..........................................................40
                      10.5     Mergers and Acquisitions..........................................................40

ARTICLE XI            CONDEMNATION...............................................................................40

                      11.1     Taking............................................................................40
                      11.2     Notice of Taking..................................................................40



                                      -iii
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ARTICLE XII           ENVIRONMENTAL HAZARD LIABILITY.............................................................41

                      12.1     Responsibilities of FOCAS.........................................................41
                      12.2     Responsibilities of ELI...........................................................41
                      12.3     Warning...........................................................................41

ARTICLE XIII          LIABILITY AND INDEMNITY....................................................................41

                      13.1     FOCAS Indemnity...................................................................41
                      13.2     ELI Indemnity.....................................................................42
                      13.3     No Consequential Damages..........................................................42
                      13.4     Defense of Claims.................................................................42
                      13.5     Third-Party Claims................................................................43
                      13.6     Survival..........................................................................43
                      13.7     Applicability of Liability Limitations............................................43
                      13.8     Claims Against Third-Parties......................................................43
                      13.9     Anti-Indemnity Statute............................................................43

ARTICLE XIV           FORCE MAJEURE..............................................................................44

                      14.1     Excuse of Performance.............................................................44
                      14.2     Definition........................................................................44
                      14.3     Continuance after Force Majeure Event.............................................45

ARTICLE XV            DEFAULT AND TERMINATION....................................................................45

                      15.1     Termination Events................................................................45
                      15.2     Actions Following Occurrence of Termination Event.................................47
                      15.3     No Release........................................................................47

ARTICLE XVI           DISPUTE RESOLUTION.........................................................................48

                      16.1     Dispute Resolution................................................................48
                      16.2     Negotiation and Mediation.........................................................48
                      16.3     Confidentiality...................................................................48
                      16.4     Injunctive Relief.................................................................48
                      16.5     Continuing Obligation.............................................................48
                      16.6     Failure of Mediation..............................................................48


                                      -iv-
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ARTICLE XVII          MISCELLANEOUS..............................................................................49

                      17.1     Amendments........................................................................49
                      17.2     Binding Effect....................................................................49
                      17.3     Waivers...........................................................................49
                      17.4     Notices...........................................................................49
                      17.5     Severability......................................................................50
                      17.6     Interpretation....................................................................50
                      17.7     Governing Law and Choice of Forum.................................................50
                      17.8     Commissions.......................................................................50
                      17.9     Counterparts......................................................................51
                      17.10    Attorney Fees.....................................................................51
                      17.11    Costs.............................................................................51
                      17.12    No Third-Party Beneficiaries......................................................51
                      17.13    Entire Agreement..................................................................51
                      17.14    Survival..........................................................................51
                      17.15    Exhibits..........................................................................51
EXHIBITS

Exhibit "A"           Acceptance Testing Standards
Exhibit "B"           Cable Route
Exhibit "C"           Cable Specifications
Exhibit "D"           Performance Criteria
Exhibit "E"           Revenue Sharing Route
Exhibit "F"           Utility Company Agreements
Exhibit "G"           Utility Company Safety Rules
Exhibit "H"           Cable Warranty

                                     - v -
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                                     INITIAL
                              OPTICAL FIBER DESIGN
                           AND INSTALLATION AGREEMENT


                  THIS INITIAL OPTICAL FIBER DESIGN AND  INSTALLATION  AGREEMENT
("Agreement") is made and entered into effective as of the 7th day of May, 1998,
by and between  FOCAS,  INC.,  a Delaware  corporation  ("FOCAS"),  and ELECTRIC
LIGHTWAVE, INC., a Delaware corporation ("ELI").

                                R E C I T A L S :

         1. ELI has  secured or is in the  process of  securing  licenses to use
certain  rights of way in the State of  California  upon  which ELI  desires  to
construct  and  install or have  constructed  and  installed  an  optical  fiber
telecommunications transmission system over the entire Revenue Sharing Route (as
defined herein) estimated to cover approximately 1300 route miles.

         2. FOCAS, at its expense, upon the terms,  covenants and conditions set
forth in this Agreement, is willing to design,  engineer, and supply the optical
fiber  cable  and other  related  facilities  and  equipment  necessary  for the
construction  and  installation of the optical fiber,  and to participate in the
construction and installation of the optical fiber over a portion of the Revenue
Sharing Route which portion is estimated to cover approximately 920 route miles.

         3. ELI,  at its  expense,  upon the  terms,  covenants  and  conditions
contained  in  this   Agreement,   desires  that  FOCAS   perform  such  design,
engineering,  construction and  installation  services for ELI to the point that
the above-mentioned portion of the entire Revenue Sharing Route is completed.

         NOW,  THEREFORE,  in consideration of the mutual promises  contained in
this Agreement,  and for other good and valuable consideration,  the receipt and
legal  sufficiency  of which  are  hereby  acknowledged,  FOCAS and ELI agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

                  As used in this Agreement,  the following terms shall have the
meanings specified below:

                  "Acceptance of  Construction"  means the written  notification
from ELI to FOCAS,  pursuant  to  Section  6.11,  that  specified  work has been
inspected by ELI and found to have been  performed  substantially  in accordance
with the requirements of this Agreement.

                  "Acceptance  Testing Standards" means ELI's Acceptance Testing
Standards  set  forth  on  Exhibit  "A"  attached  to and  incorporated  in this
Agreement by reference.
<PAGE>

                  "Ad Valorem Taxes" means ad valorem  property  taxes,  special
assessments, local improvement district levies and other levies assessed against
the System or the Right of Way.

                  "Affected  Portion" means any portion of the System that is or
may: (1) be affected by a Taking;  (2) become the subject of a lien or transfer;
or (3) be damaged or  destroyed as the result of the  occurrence  of an event of
casualty.

                  "Affiliate"  means,  with  respect to either FOCAS or ELI, any
corporation  or other entity that  controls  such party,  is  controlled by such
party, or is with such party under common control of another entity.

                  "Approvals" means all permits, approvals and licenses from all
government  authorities having  jurisdiction or approval rights with respect to:
(1)  the  construction  and  installation  of the  System;  and  (2) the use and
occupation  of any  portion of the Right of Way along the Cable  Route where the
System is to be located or to be constructed.

                  "Approved  System  Segment"  means a System  Segment for which
Working  Drawings  have been  approved  under the  terms of this  Agreement  for
construction  and  installation  of  the  Cable,  the  Cable  Accessories,   the
Connecting Points and, as applicable,  the Regeneration  Facilities,  the System
Electronics  and other  facilities  and equipment  associated  with the Approved
System Segment.

                  "Cable"  means one or more  optical  fiber  telecommunications
cables  containing  single  mode,  nondispersion  shifted  optical  fibers to be
installed along the Cable Route pursuant to the terms of this Agreement.

                  "Cable  Accessories"  means  all  hardware  and  appurtenances
necessary for the attachment of the Cable to the Towers.

                  "Cable  Route"  means the  corridor in which the Cable for the
System will be deployed. An approximate location of the Cable Route is described
on Exhibit "B" attached to and incorporated in this Agreement by reference.

                  "Cable  Specifications"  means the drawings and specifications
regarding the Cable, the Cable  Accessories,  and related hardware and materials
to be  employed in the  installation  and  splicing of the Cable.  A copy of the
Cable  Specifications  is  attached to and  incorporated  by  reference  in this
Agreement as Exhibit "C."

                  "Cable  Use  License"  means  the  exclusive  right to use the
Commercial  Fibers  contained in the Cable that follows the portion of the Cable
Route contained in a particular  Utility  Company's service territory granted by
the Utility Company to ELI in a Utility Agreement.  A Cable Use License does not
grant to ELI any right to enter upon or to access  the  Towers,  the  Substation
Sites or the Right of Way of the Utility Company.

                                     - 2 -
<PAGE>

                  "Chief  Engineer"  means  with  respect  to FOCAS  or ELI,  as
applicable,  the person  designated to be responsible  for  managerial  decision
making with respect to the System and this  Agreement  and to give  technical or
managerial advice.

                  "Commercial  Fibers"  means  the  single  mode,  nondispersion
shifted  optical fibers along the entirety of the Revenue Sharing Route in which
ELI holds an exclusive license, lease or IRU.

                  "Connecting  Point"  means any  point  where  the  network  or
facilities of ELI or any Utility Company  connect to the System.  The connecting
point may be: (1) a splice point in the Cable created during the installation of
the Cable for a Utility Company to access its Dark Fibers; or (2) a splice point
in a connection box located  adjacent to a Regeneration  Facility created during
the installation of the Cable for ELI's access to the Commercial Fibers.

                  "CPUC" means the California Public Utilities Commission.

                  "Dark  Fiber  Lease   Services"  means  the  leasing  of  dark
Commercial  Fibers  or  capacity  in  dark  Commercial  Fibers  by ELI to  other
telecommunications  carriers or commercial  users.  Dark Fiber Lease Services do
not include the Dark Fibers leased by ELI to the Utility Companies.

                  "Dark  Fibers"  means the single mode,  nondispersion  shifted
optical fibers in the Cable along the entirety of each Developed  System Segment
leased to or reserved by the Utility Companies for the purposes and on the terms
described in the Utility Agreements.

                  "Developed System Segment" means a System Segment on which all
construction  and  installation  work has been completed and regarding  which an
Acceptance of Construction has been issued.

                  "Effective Date" means the date of execution of this Agreement
by FOCAS and ELI.

                  "Force  Majeure Event" shall have the meaning given in Section
14.2.

                  "Gross Revenues" means for any accounting period:


                                     - 3 -
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                                    (1) The sum of: (a) all  revenues  billed by
                  ELI for Transport Services and Dark Fiber Lease Services using
                  the  Commercial  Fibers  over all or any portion of the entire
                  Revenue  Sharing  Route;  (b)  any  other  proceeds  or  value
                  received or receivable by ELI from any  condemnation,  eminent
                  domain  or  other  Taking,   or  from  the   exploitation   or
                  commercialization  of  the  System  or any  interest  therein,
                  including,  but not  limited  to,  any  business  interruption
                  insurance  proceeds;  and (c) any  recoveries  obtained by ELI
                  from the Utility Companies or others in respect of the System.

                                    (2) Less the sum of: (a) any billed revenues
                  from  the  Revenue  Sharing  Route  actually  written  off (as
                  determined  consistent  with ELI's business  practices) net of
                  any cash receipts in respect of previously  written off billed
                  revenue;  (b) relocation costs allocable to and paid by ELI as
                  provided  under the terms of any Utility  Agreement  resulting
                  from a relocation required by a party other than ELI, FOCAS or
                  the applicable  Utility Company (as described in Section 7.6);
                  (c) Maintenance cost reimbursement payments made by ELI to the
                  Utility Companies under the terms of the Utility Agreements to
                  the extent  provided in Section 7.8; (d) the premiums paid for
                  business  interruption   insurance  relating  to  the  Revenue
                  Sharing Route,  if any; and (e) the cost of recovering any sum
                  of money from any of the Utility  Companies or any other party
                  if the  recovered  amount is  included in Gross  Revenues  (as
                  defined above).

                  "Hazardous  Substances"  means any waste,  pollutant  (as that
term is defined in 42 U.S.C.  ss.  9601(33) or in 33 U.S.C.  ss. 1362(13) or any
successor statutes thereto),  hazardous substance (as that term is defined in 42
U.S.C. ss. 9601(14) or any successor  statute thereto),  hazardous  chemical (as
that term is defined by 29 CFR Part  1910.1200(c)  or any  successor  regulation
thereto), toxic substance, hazardous waste (as that term is defined in 42 U.S.C.
ss. 6901 or any successor statute thereto), radioactive material, special waste,
petroleum,  including crude oil or any other hydrocarbon based substance, waste,
or breakdown or decomposition  product  thereof,  or any constituent of any such
substance or waste, including, but not limited to polychlorinated biphenyls, and
asbestos.

                  "Independent  System  Operator"  means any entity or agency to
which  any  Utility  Company  has  ceded  operational  control  of its  electric
transmission  system. An Independent  System Operator,  among other powers,  has
authority  to direct the  operation  of all  facilities  under its control  that
affect  the  reliability  of the  electric  transmission  system  and to approve
requests to take electric transmission equipment out of service.

                  "Irrevocable  License" means a Cable Use License or a Right of
Way License that has been  approved by the CPUC as described in Sections 2.5 and
2.6.

                  "IRU" means the exclusive  indefeasible right to use the Cable
and the optical fibers  contained  therein  reserved by ELI under the terms of a
Utility Agreement that grants to ELI a Right of Way License.

                                     - 4 -

<PAGE>


                  "Maintenance" means: (1) routine visual inspection, repair and
maintenance  of the Cable,  the Cable  Accessories,  the Towers and the Right of
Way; and (2) disaster restoration.

                  "Maps"  means  any  drawings  or maps  that  FOCAS,  a Utility
Company or ELI is required to prepare,  update or submit to any state or federal
regulatory agency as required by applicable statute, rule or regulation.

                  "Payment  Completion Date" means the date described in Section
4.1 of this Agreement.

                  "Payment  Factor" means the  percentage  factor  identified in
Section 4.1(b) which when multiplied against the Gross Revenues for a particular
accounting period produces the Quarterly Payment.

                  "Performance  Completion  Date"  means the date  described  in
Section 5.8 of this Agreement.

                  "Performance   Criteria"  means  those  minimum  annual  Gross
Revenues  described  in Section 4.7 and set forth on Exhibit "D" attached to and
incorporated in this Agreement by reference.

                  "Qualified  Contractor"  means a party  with whom ELI or FOCAS
contracts  to perform  any  portion of the work for the System over which ELI or
FOCAS,   as  applicable,   pursuant  to  the  terms  of  this   Agreement,   has
responsibility.  Each such  Qualified  Contractor  must  meet the  qualification
standards  imposed by ELI, FOCAS and the Utility  Companies for the type of work
to be undertaken by such Qualified Contractor.

                  "Quarterly  Payments"  means the quarterly  payments ELI shall
make to FOCAS under the terms of this Agreement as described in Section 4.1.

                  "Regeneration  Facilities" means each building along the Cable
Route  housing  any  System  Electronics  used  by ELI to  operate  the  System,
including  terminal and regenerator  equipment.  For purposes of this Agreement,
ELI shall  design,  engineer  and  construct  the  Regeneration  Facilities.  In
addition,   ELI  shall  own  or  lease  the  physical  structure   comprising  a
Regeneration  Facility, and shall own and install all System Electronics used in
connection with each Regeneration Facility.

                  "Revenue   Sharing   Route"  means  the  cable  path  for  the
Commercial Fibers over an estimated 1300 Route Miles. An approximate location of
the  Revenue  Sharing  Route  is  described  on  Exhibit  "E"  attached  to  and
incorporated in this Agreement by reference.


                                     - 5 -
<PAGE>


                  "Revocable  Licenses"  means a Cable Use License or a Right of
Way License  regarding which the CPUC has not granted approval to the applicable
Utility  Company to convert such license to an Irrevocable  License as described
in Sections 2.5 and 2.6.

                  "Right of Way" means the Utility  Companies' real property and
rights related thereto created pursuant to a grant, easement,  lease, license or
other agreement which are used for the Cable Route.

                  "Right of Way License" means the nonexclusive right to use the
Towers,  Substation  Sites and Right of Way of a particular  Utility  Company to
install and operate the System  granted by the Utility  Company to ELI under the
terms of a Utility  Agreement.  The Right of Way License  includes the exclusive
right to use the  Commercial  Fibers on such  Utility  Company's  portion of the
Cable Route.

                  "Route  Miles"  means  the  actual  miles   traversed  by  the
Commercial Fibers (including spurs) based on the "as-built"  drawings  described
in Section 6.12.

                  "Scheduled Completion Date" means January 31, 1999.

                  "Service Ready Date" means the date when the Commercial Fibers
for any particular  System  Segment are fully  installed and meet the Acceptance
Testing Standards, as evidenced by the issuance of an Acceptance of Construction
for that System Segment.

                  "Substation  Sites"  means those areas on or near the Right of
Way  where a Utility  Company  owns or leases  the land and  maintains  electric
transmission or distribution  equipment and on which ELI,  pursuant to the terms
of the Utility Agreements, may locate Regeneration Facilities.

                  "System" means all of the Cable,  the Cable  Accessories,  the
Connecting Points, the Regeneration Facilities, the System Electronics and other
improvements  and  equipment  forming a part of the  telecommunications  network
constructed or installed  pursuant to the terms of this Agreement over the Cable
Route.

                  "System  Electronics" means all items of equipment,  hardware,
software,  electronics,  optronics and any components  thereof owned by ELI that
are used to transmit or monitor telecommunications services over the System.

                  "System  Integrity" means the operation of a Utility Company's
electric  system in a manner  that is deemed to  minimize  the risk of injury to
persons and  property  and enable the Utility  Company to provide  adequate  and
reliable  electric  service  to its  customers,  as  determined  by the  Utility
Company.


                                     - 6 -
<PAGE>


                  "System Materials" means all Cable, Cable Accessories,  System
Electronics,  and other  equipment and materials  obtained by FOCAS or ELI under
the terms of this Agreement to construct or equip any portion of the System.

                  "System  Segment"  means a portion of the System with  defined
beginning and end points.

                  "Taking"  means the exercise of the power of eminent domain by
any public or  quasi-public  authority,  or any other entity  having the same or
similar authority to divest title to real or personal property from a person.

                  "Term"  means the period of time  beginning  on the  Effective
Date and  terminating on that date which is thirty (30) days after the twentieth
(20th)  year  anniversary  of the  date  the  entire  Revenue  Sharing  Route is
completed.

                  "Tower"  means a tower or pole  along  the  Cable  Route:  (1)
erected for electric  power  transmission,  including all  attendant  equipment,
structures and power sources; or (2) used for the attachment of electrical power
transmission or distribution facilities.

                  "Tower  Sites"  means those areas on the Right of Way on which
Towers are located.

                  "Transferee"  means any  individual  or entity to which either
FOCAS or ELI,  pursuant to Article X,  transfers or assigns any interest in this
Agreement.

                  "Transport Services" means individual circuits used or sold as
bulk  transport  by ELI to other  telecommunications  carriers or to  commercial
users for long-haul traffic on the Commercial Fibers.

                  "Utility Agreements" means the written agreements entered into
by ELI with the Utility Companies, or by ELI and FOCAS with any Utility Company,
which provide, among other things, for the design, engineering, construction and
installation of the System. Copies of the Utility Agreements are attached to and
incorporated by reference in this Agreement as Exhibit "F."

                  "Utility  Companies"  means Pacific Gas and Electric  Company,
PacifiCorp,   Southern   California   Edison,   and  any  other  electric  power
transmission  company with which ELI enters into a written  agreement for use of
Right of Way to construct and install a portion of the System.

                  "Utility   Operations"  means  the  procurement,   generation,
transmission, distribution, management or monitoring by a Utility Company of its
services, or any combination thereof, including, without limitation,  consulting
and advising with respect to the use thereof and providing all related equipment
and services.


                                     - 7 -
<PAGE>


                  "Working  Drawings"  means  the  construction  plans  for  the
installation of the System along the Cable Route.

                                   ARTICLE II
                           DESCRIPTION OF TRANSACTION
                           --------------------------

                  2.1  Utility  Agreements.  Under  the  terms  of  the  Utility
Agreements, the Utility Companies and ELI have or will agree to design, engineer
and install the System along the Cable Route.  ELI has entered into, or is about
to enter into a separate  Utility  Agreement with each of the Utility  Companies
relating to that  portion of the Right of Way owned or  controlled  by each such
Utility Company.  The duties and  responsibilities  of the Utility Companies and
ELI under the terms of the Utility Agreements are summarized below:

                           (a) Utility Companies. Under the terms of the Utility
         Agreements,  each Utility Company agrees to grant to ELI a Right of Way
         License, or a Cable Use License.

                                    (1) Under a Utility Agreement which grants a
                  Right of Way License to ELI, the applicable  Utility  Company:
                  (A)  grants  to ELI a license  to enter  upon the Right of Way
                  controlled  by  such  Utility  Company  for  the  purposes  of
                  designing,   engineering,   constructing  and  installing  the
                  System;  (B)  authorizes ELI and ELI's  employees,  agents and
                  contractors to enter on such Utility  Company's  Right of Way,
                  Towers and Substation Sites to exercise ELI's rights under the
                  terms of its  Utility  Agreement  with ELI;  (3) allows ELI to
                  reserve for ELI's  exclusive use an IRU in and to the Cable to
                  be installed on such Utility  Company's  Right of Way; and (4)
                  upon completion of the  construction  and  installation of the
                  System,  leases from ELI Dark Fibers in the Cable installed on
                  such Utility Company's Right of Way.

                                    (2) Under a Utility Agreement which grants a
                  Cable Use  License  to ELI,  the  applicable  Utility  Company
                  agrees  to:  (A)   design   and   install  an  optical   fiber
                  communications system using the Utility Company's Right of Way
                  along its portion of the Cable Route;  (B) upon  completion of
                  the  installation  of the Cable along its portion of the Cable
                  Route, grant to ELI an exclusive license to use the Commercial
                  Fibers in the Cable  installed by the Utility  Company on such
                  Utility  Company's  Right  of  Way;  and (C)  reserve  for the
                  Utility  Company's  own use the Dark Fibers to be installed on
                  such Utility Company's Right of Way.

                                      -8-
<PAGE>

                           (b) ELI.  Under the terms of the Utility  Agreements,
         ELI makes the following undertakings:

                                     (1) With  respect  to a  Utility  Agreement
                  that grants to ELI a Right of Way License,  ELI agrees to: (A)
                  design,  engineer,  construct and install the System; (B) upon
                  completion of the  construction and installation of the System
                  on such  Utility  Company's  portion of the Cable  Route,  and
                  subject  to  ELI's  reservation  of an  exclusive  IRU  to the
                  Commercial  Fibers  along  such  portion  of the Cable  Route,
                  transfer  legal  title to the Cable and the Cable  Accessories
                  installed  on the  Utility  Company's  Right  of  Way to  that
                  Utility  Company;  and (C) upon completion of the construction
                  and  installation  of the  System  on such  Utility  Company's
                  portion of the Cable Route,  lease to such Utility Company the
                  Dark Fibers in the Cable  installed on such Utility  Company's
                  Right of Way.

                                    (2) With respect to a Utility Agreement that
                  grants to ELI a Cable Use  License,  ELI agrees to: (A) supply
                  the Cable  for use in the  installation  of the  System on the
                  Utility  Company's  portion of the Cable  Route;  and (B) upon
                  completion of the  construction and installation of the System
                  along such portion of the Cable Route, transfer legal title to
                  the Cable and the Cable  Accessories  installed on the Utility
                  Company's Right of Way to that Utility Company.

                  2.2 Delegation of Certain ELI Duties to FOCAS. Under the terms
of this Agreement,  ELI delegates to FOCAS (as  contemplated by the terms of the
Utility  Agreements) certain of the duties and  responsibilities  assumed by ELI
under the terms of the Utility  Agreements.  In  consideration  of the Quarterly
Payments made by ELI to FOCAS under the terms of this  Agreement with respect to
the portion of the Cable Route for which FOCAS has responsibility: (a) FOCAS, at
its expense,  shall  manufacture or acquire and deliver the Cable for the System
for all of the  Cable  Route;  and  (b)  with  respect  only  to  those  Utility
Agreements  that grant a Right of Way License,  FOCAS,  at its  expense,  either
directly or indirectly through one or more approved Qualified Contractors and in
accordance  with the  requirements  of Article  V, shall  perform or cause to be
performed the design, engineering and installation work for the Cable, the Cable
Accessories and the Connecting Points.

                  2.3 ELI Duties.  As provided in and subject to the  provisions
of this Agreement, ELI, at its expense, shall design, engineer and construct the
Regeneration Facilities, and shall acquire and install all System Electronics.

                  2.4  Licenses  Revocable.  Under  the  terms  of  the  Utility
Agreements,  the Right of Way Licenses and the Cable Use Licenses are revocable,
until such time as each license is approved by the CPUC (as described in Section
2.5). Consequently,  until approval is obtained from the CPUC, the rights of ELI
and, hence FOCAS, under the terms of the Right of Way Licenses and the Cable Use
Licenses shall consist only of a revocable  right to use and shall be subject to
all terms,  covenants and conditions applicable to such licenses as contained in
the Utility Agreements.


                                      -9-
<PAGE>
                  2.5 Regulatory  Approval.  Each Utility  Company and ELI shall
jointly apply to the CPUC under Section 851 of the California  Public  Utilities
Code  for  an  Approval  authorizing  the  Utility  Company  to  enter  into  an
irrevocable Right of Way License or Cable Use License, as applicable,  with ELI.
FOCAS shall cooperate fully in the application process by providing,  at FOCAS's
sole cost and expense,  any information,  personnel or other resources a Utility
Company or ELI may  reasonably  request from time to time.  FOCAS's  cooperation
shall  include  assisting in the  preparation  of  applications,  discovery  and
testimony and making available to the Utility Companies, ELI, the CPUC and other
relevant  authorities  all  necessary  and  appropriate  FOCAS  information  and
personnel.  ELI shall provide FOCAS with a copy of all such applications made to
the CPUC under the terms of the Utility Agreements.  ELI makes no representation
or warranty  concerning the likelihood that any such Approval can be secured, or
with respect to the nature or extent of any conditions or limitations  which may
be imposed  thereby,  how long the application or approval  process may take, or
the costs that may be incurred in such process.

                  2.6 Conversion from Revocable License to Irrevocable  License.
If and when a Utility Company secures a final  non-reviewable  Approval from the
CPUC to enter into an irrevocable Right of Way License or Cable Use License,  as
applicable,  with  ELI  for the  purposes  and on the  terms  set  forth  in the
applicable Utility  Agreement,  the revocable nature of the license described in
the applicable Utility Agreement shall automatically convert into an Irrevocable
License.  Except as specifically described in the Utility Agreements,  each such
Irrevocable License shall be on the same terms,  covenants and conditions as the
Revocable License it replaces.  ELI shall provide written notice to FOCAS of the
conversion of each  Revocable  License to an Irrevocable  License,  which notice
shall specify the effective date thereof. Thereafter, use, as applicable, of the
Cable,  the Towers,  the Substation  Sites and the Right of Way by ELI and FOCAS
for such portion of the Cable Route shall be in accordance with the terms of the
Irrevocable License contemplated by the applicable Utility Agreement.

                  2.7  Nonexclusive  Use of Right of Way. Under the terms of the
Utility Agreements,  any use of a Utility Company's Towers, Substation Sites and
Right of Way granted to ELI is expressly made  nonexclusive.  In addition,  each
Utility Company  expressly  reserves the right to negotiate with any third-party
with respect to the use by such  third-party of such Utility  Company's  Towers,
Substation Sites and Right of Way, subject to the rights specifically granted to
ELI under the applicable Utility Agreement.

                  2.8  Reservation  of Certain  Utility  Company  Rights.  FOCAS
understands  and  acknowledges  that under the terms of the Utility  Agreements,
each Utility Company reserves for itself, its successors and assigns,  the right
to use such Utility Company's Towers,  Substation Sites and Right of Way, or any
portion thereof, for any purpose such Utility Company finds necessary,  together
with the right to enter upon or into such Towers,  Substation Sites and Right of
Way,  or any  portion  thereof,  at all  times,  and for  any and all  purposes.
Further,  each Utility Company may exercise such rights without any notice to or
consent  from ELI or FOCAS and  without  payment of any  compensation  to ELI or
FOCAS.

                                      -10-

<PAGE>
                  2.9   Utility   Operations.   FOCAS   also   understands   and
acknowledges  that  under  the  terms of the  Utility  Agreements,  if a Utility
Company  determines that  modifications to the Towers,  the Substation Sites, or
the Right of Way owned or  controlled  by such  Utility  Company  over,  upon or
through which the System is installed,  or any portion thereof, are necessary to
conduct  Utility  Operations in a manner that  adversely  affects the use of the
System,  the Utility  Company must  provide ELI with twelve (12)  months'  prior
written notice of its intention to make such  modifications.  The notice must be
accompanied with an alternate route plan for the Affected Portion of the System,
to the extent any such alternate route plan can be made available.  However, the
foregoing  right is not  available  after a  Revocable  License  converts  to an
Irrevocable License as described in Section 2.6.

                  2.10 No Property or Possessory Interest. Neither the Revocable
Licenses,  the  Irrevocable  Licenses,  ELI's  exercise of its rights  under any
Utility Agreement, or FOCAS's exercise of its rights under this Agreement, shall
confer upon FOCAS any  property  interest in any of the Towers,  the  Substation
Sites,  or the Right of Way,  whether  or not  owned in fee  simple by a Utility
Company  or a  third-party.  Notwithstanding  the  generality  of the  foregoing
sentence,  FOCAS,  subject  to the  terms  of this  Agreement  and  the  Utility
Agreements that grant a Right of Way License, shall have the right to enter upon
the Towers,  the Substation  Sites and the Right of Way to install the Cable and
the Cable Accessories,  and to construct the Connecting Points. FOCAS shall have
no such right of entry with respect to a Utility  Company's  Towers,  Substation
Sites and Right of Way that are subject to a Cable Use License only.

                  2.11 Right of Entry.  FOCAS shall notify ELI's Project Manager
and, if requested by ELI, the applicable  Utility Company whenever FOCAS intends
to enter upon the Towers, the Substation Sites and the Right of Way of a Utility
Company  that has  granted  a Right of Way  License  to ELI in  connection  with
FOCAS's performance under this Agreement in accordance with the following notice
requirements:

                           (a) FOCAS shall give not less than  seventy-two  (72)
         hours  prior  notice  by  telephone  to ELI at  (360)  816-4032  before
         entering any Right of Way for the purpose of surveying  and  inspecting
         or making  such  engineering  and other  tests as may be  necessary  or
         desirable  for  FOCAS to  complete  the  Working  Drawings,  including,
         without  limitation,  engineering,  design and  installation  plans and
         costs estimates for the work contemplated by this Agreement.

                           (b) FOCAS  shall give not less than one week's  prior
         telephone  notice to ELI at (360) 816-4032 before entering any Right of
         Way for the performance of any construction to be performed by FOCAS or
         by others consistent with and under the terms of Section 6.10.

                           (c) FOCAS shall give not less than  forty-eight  (48)
         hours prior  telephone  notice to ELI at (360) 816-4032 before entering
         any Right of Way for the purpose of inspection,  testing,  Maintenance,
         repair or exercise  of any other  right of FOCAS  under this  Agreement
         with respect to any portion of the System not attached to the Towers.

                                      -11-
<PAGE>

                           (d) In cases of emergency with respect to any portion
         of the installed  Cable,  FOCAS shall  provide as much prior  telephone
         notice as possible to ELI at (360) 816-4032.

                  2.12  Entry  Conditions.  ELI,  from  time to time by  written
notice to  FOCAS,  may  specify  additional  entry  conditions  or  requirements
relating to a Right of Way License arising out of the  relationship of a Utility
Company with a  particular  land owner,  including,  without  limitation,  prior
telephone  notice  to  the  land  owner,  no  entry  unless  accompanied  by the
applicable Utility Company's personnel, and entry only through a specific route.
FOCAS's right of entry to the Towers,  the Substation Sites and the Right of Way
subject to a Right of Way License is further subject to the conditions that: (a)
FOCAS shall comply with each Utility Company's  established safety rules, copies
of which are attached to and  incorporated  by  reference  in this  Agreement as
Exhibit "G," when  working  around the Towers,  cables or other  elements of the
Utility  Companies'  electric  power  transmission  system;  and (b) FOCAS shall
indemnify ELI with respect to such entry as further  provided in Section 13.1 of
this Agreement. If entry by FOCAS is scheduled to last more than one consecutive
day, a single  telephone  notice  describing the scope and duration of the entry
shall be sufficient notice. If such scope or duration changes, additional notice
consistent with the requirements of Section 2.11 shall be given.

                  2.13  Cooperation.  FOCAS  shall  cooperate  with ELI and each
Utility  Company in designing,  engineering,  constructing  and  installing  the
System.  FOCAS shall follow and comply with the applicable Cable  Specifications
and safety rules of each Utility Company in fulfilling FOCAS's obligations under
this Agreement.

                  2.14  Disclaimer.  ELI  makes no  representation  or  warranty
whatsoever (including no warranty of merchantability or fitness for a particular
purpose)  concerning  the nature,  adequacy or  suitability  of the Towers,  the
Substation Sites, or the Right of Way for the purposes intended by FOCAS.  FOCAS
acknowledges that neither ELI nor any of ELI's officers, employees or agents has
made,  nor is FOCAS  entering  into this  Agreement in reliance  upon,  any such
representation or warranty.

                  2.15 Operation of System. Following the Service Ready Date for
each Developed  System  Segment,  unless  expressly  provided  otherwise in this
Agreement,  FOCAS's rights under this Agreement to such Developed System Segment
shall be limited to the receipt of Quarterly  Payments  derived from the Revenue
Sharing Route as described in Section 4.1 and FOCAS's other rights under Article
IV.  ELI shall  have full  authority  and  responsibility  with  respect  to the
operation of the System and the marketing, pricing and sale of Transport Service
and Dark Fiber Lease  Services over the Revenue  Sharing  Route.  ELI shall keep
FOCAS generally  informed  regarding ELI's marketing efforts with respect to the
Revenue  Sharing Route and,  without  obligation,  shall accept input from FOCAS
regarding the marketing of services over the Revenue Sharing Route.

                                  -12-

<PAGE>

                  2.16 Cable Route.  FOCAS and ELI estimate  that the portion of
the  Revenue  Sharing  Route  for  which  FOCAS has  responsibility  under  this
Agreement  will  extend  a  distance  of 920  Route  Miles  when the  System  is
completed.  In the event Working  Drawings for the Cable Route project the total
distance  of the Cable  Route will  exceed  such  estimate by more than 10 Route
Miles, or fall short of such estimate by more than 10 Route Miles, FOCAS and ELI
shall meet  expeditiously  to discuss and  negotiate in good faith the effect of
such overage or shortfall. Among other things, FOCAS and ELI may agree to modify
the projected Cable Route,  adjust the Payment Factor identified in Section 4.1,
or modify  other  financial  considerations  between  them as  described in this
Agreement.

                                   ARTICLE III
                                      TERM
                                      ----

                  3.1 Term.  The Term of this  Agreement  shall  commence on the
Effective  Date and shall  continue,  unless sooner  terminated  pursuant to the
terms of this  Agreement,  until  midnight  Pacific  time on that date  which is
thirty (30) days after the  twentieth  (20th) year  anniversary  of the date the
entire  Revenue  Sharing  Route is completed.  ELI shall  exercise its rights to
renew or extend the term of any Utility  Agreement  to the extent  necessary  to
avoid  the  expiration  of the  term  of such  Utility  Agreement  prior  to the
expiration of the Term of this Agreement.

                  3.2 Termination of Agreement by ELI. With ten (10) days' prior
written  notice to FOCAS,  ELI may terminate  this  Agreement if by the sixtieth
(60th) day following the Effective Date:

                           (a) ELI and FOCAS,  in their  reasonable  discretion,
         determine that the operating requirements, protocols, rules or policies
         of any  Independent  System  Operator,  and the transfer of operational
         control of electric  transmission  systems to such  Independent  System
         Operator  make it  economically  infeasible  for:  (1) ELI and FOCAS to
         design or  construct  the System;  or (2) for ELI to use the System for
         the purposes contemplated by this Agreement and the Utility Agreements;
         or

                           (b) The Detailed Restoration Plans (as defined in the
         Utility  Agreements) in form and content  reasonably  acceptable to the
         Utility Companies and ELI have not been completed.

Upon  either  such  termination,  ELI shall  reimburse  FOCAS for any actual and
direct costs,  incurred by FOCAS under the terms of this  Agreement  through the
date of the notice of termination.  ELI shall make such reimbursement payment to
FOCAS within thirty (30) days after  receipt from FOCAS of an invoice  detailing
FOCAS's  reimbursable  costs as provided in this Section 3.2. ELI shall have the
audit rights described in Section 8.10 in reviewing FOCAS's  reimbursable  costs
under this Section 3.2.

                                      -13-

<PAGE>


                                   ARTICLE IV
                                    PAYMENTS
                                    --------

                  4.1 Quarterly Payments. In consideration of the performance by
FOCAS  of its  obligations  specified  in  this  Agreement,  ELI  shall  pay the
Quarterly Payments to FOCAS according to the following specifications:

                           (a) The  Quarterly  Payment  shall be  calculated  by
         multiplying the Gross Revenues for the applicable three month period by
         the Payment Factor.

                           (b) Until the  cumulative  amount of ELI's  Quarterly
         Payments to FOCAS under this Agreement equals * DOLLARS (*), per actual
         Route Mile of the Cable  Route  (the date as of which  such  cumulative
         amount is paid is referred to as the "Payment  Completion  Date"),  the
         Payment Factor shall be * percent (*%).

                           (c) After the Payment Completion Date, ELI shall have
         no further Quarterly Payment obligations pursuant to this Agreement.

                  4.2  Quarterly  Payment Due Dates.  Throughout  the Term,  the
Quarterly  Payments  shall be due and payable within thirty (30) days after each
three month period following the Effective Date,  beginning with the three month
period immediately following the month during which ELI first receives any Gross
Revenues.

                  4.3 Supporting Documentation.  Each Quarterly Payment shall be
accompanied by a quarterly report detailing the Gross Revenues,  identified into
categories  of  revenues,  including  Dark Fiber Lease  Services  and  Transport
Services.  ELI and FOCAS shall  agree on a reporting  format to be used prior to
the due date of ELI's first Quarterly Payment.

                  4.4  Reimbursement of Costs. On or before the twentieth (20th)
working day of each calendar month  following the Effective  Date, ELI and FOCAS
shall  prepare  and submit to each  other,  if  applicable,  an invoice  for all
identified  reimbursable  costs pursuant to Articles III, V, VI and VII and XIII
incurred by or for the account of the  invoicing  party  during the  immediately
preceding calendar month, together with all other identified  reimbursable costs
previously  incurred by the invoicing  party and not  previously  invoiced.  For
purposes  of this  Section  4.4,  "incurred"  means the  actual  and  reasonable
payments  made by the invoicing  party to  contractors,  vendors,  suppliers and
other  third-parties,  as well as reasonable  expenses booked or recorded by the
invoicing party for costs relating to its own personnel,  materials and supplies
charged to such work,  including  actual and direct costs including fully loaded
labor costs (calculated at 1.3 times base compensation). The full amount of each
such invoice  shall be due and payable by the invoiced  party within thirty (30)
days  following  receipt  thereof.  If the  invoiced  party  disputes any amount
invoiced  under this Section  4.4,  the amount not in dispute  shall be promptly
paid and any disputed amount that is ultimately  determined to have been payable
shall be paid promptly following  resolution of the dispute. Any dispute that is
not resolved by mutual  agreement of the parties shall be resolved in accordance
with Article XVI.

*  Confidential   information  has  been  omitted  pursuant  to  a  request  for
confidential  treatment.  Such  material  has  been  filed  separately  with the
Securities and Exchange Commission.


                                      -14-
<PAGE>


                  4.5 Payment Procedure.  Any fees payable to FOCAS or ELI under
this  Agreement  shall be made by check payable to FOCAS or ELI, as  applicable,
and sent to the following addresses:

                  If to FOCAS, to:                 FOCAS, Inc.
                                                   1685 Bluegrass Lakes Parkway
                                                   Alpharetta, Georgia 30201
                                                   Attn:    Treasurer

                  If to ELI, to:                   Electric Lightwave, Inc.
                                                   8100 N.E. Parkway Drive, #200
                                                   Vancouver, Washington 98662
                                                   Attn:    Finance Department

Either  party may, at its option,  and upon not less than five (5) working  days
prior written notice to the other, change the place of payment described above.

                  4.6 Late  Payment.  If any  payment  under  the  terms of this
Agreement is not received by the party  entitled to payment  within fifteen (15)
days  after the date it  becomes  due,  the payor  shall  pay to the  payee,  in
addition to the amount due, a late fee charge in an amount equal to five percent
(5%) of the amount due. The late  payment  charge shall not apply to amounts not
paid because of a good faith dispute between the parties.

                  4.7      Performance Criteria.

                           (a)  Annual  Requirement.  ELI  shall  achieve  Gross
         Revenues  from  the  Revenue  Sharing  Route in an  amount  equal to or
         greater than the applicable  Performance  Criteria set forth on Exhibit
         "D" attached to this Agreement. The Gross Revenues requirement shall be
         measured  annually  beginning  with the twelve (12) month  period which
         begins  thirty  (30) days after the  entire  Revenue  Sharing  Route is
         completed. Notwithstanding the foregoing or any other provision of this
         Agreement   to  the   contrary,   in  the  event  ELI  cannot   provide
         telecommunications  services along any material  portion of the Revenue
         Sharing  Route for more than a  continuous  period of twelve (12) hours
         due to a failure of the cable,  an event of casualty or a Force Majeure
         Event  which  is  not  adequately  covered  by  business   interruption
         insurance,  the Performance  Criteria for the applicable year (as shown
         of Exhibit "D") shall be reduced  proportionately  based on a fraction,
         the numerator of which is the number of days (rounded up to the nearest
         one-half  day) the Revenue  Sharing Route is  non-operational,  and the
         denominator of which is three hundred sixty-five (365).

                                      -15-


<PAGE>

                           (b) Performance Audits. FOCAS shall have the right to
         make a  performance  audit within sixty (60) days of the  conclusion of
         each annual period. If FOCAS determines that ELI has failed to meet the
         annual  Performance  Criteria,  FOCAS shall give ELI written  notice of
         such failure.  ELI shall have thirty (30) working days after receipt of
         written  notice  from  FOCAS in which to:  (1)  review  the  results of
         FOCAS's audit; (2) provide any new information or data that might alter
         FOCAS's  audit  conclusions;  and  (3)  consider  a  resolution  of any
         differences of opinion concerning the results of the performance audit,
         or both.

                           (c)  Rights of FOCAS  and ELI.  If at the end of such
         thirty  (30)  working  day  period,  FOCAS and ELI have not  reached an
         agreement to resolve any differences of opinion  concerning the results
         of a performance  audit,  FOCAS and ELI shall have the rights described
         below:

                                    (1)  ELI,  at  its  option,   may  cure  the
                  Performance  Criteria  shortfall by paying FOCAS the Quarterly
                  Payments that, in the aggregate,  would be required if ELI had
                  met  the  Performance   Criteria  for  the  annual  period  in
                  question.

                                    (2)  If  ELI   elects   not  to   cure   the
                  Performance  Criteria shortfall,  or in the event of a default
                  by ELI as  described  in Section  15.1(b)(5),  this  Agreement
                  shall continue and FOCAS, at its option and without  prejudice
                  to its  rights to  Quarterly  Payments  (as  provided  in this
                  Article  IV),  may  succeed  to ELI's  interest  in the unused
                  Commercial  Fibers  over the  entire  Revenue  Sharing  Route,
                  subject to the terms,  covenants and conditions of the Utility
                  Agreements.  If FOCAS  elects to succeed to ELI's  interest in
                  the  unused  Commercial  Fibers,  ELI  shall  have the  right,
                  subject to the terms of this Agreement, to continue its use of
                  the  Commercial  Fibers  then  being  used  by ELI to  provide
                  Transport Services and Dark Fiber Lease Services. In addition,
                  during the  balance  of the Term,  ELI shall have the right to
                  lease  unused dark fiber  capacity in the System from FOCAS on
                  the same terms offered by FOCAS to other  carriers for similar
                  services using comparable  capacity and for a comparable term.
                  Such right to lease unused dark fiber  capacity is not a right
                  of first  refusal in favor of ELI,  and FOCAS may lease unused
                  dark fiber  capacity to other  telecommunications  carriers or
                  users. During any period when ELI continues to use any portion
                  of  the  Commercial   Fibers  (as  provided  in  this  Section
                  4.7(c)(2)),  ELI shall continue to make the Quarterly Payments
                  required in this Article IV.

                                    (3) In the event FOCAS  exercises  its right
                  to succeed to ELI's interest in the unused  Commercial  Fibers
                  as provided  above,  ELI shall  cooperate  with FOCAS to allow
                  co-location of other users of the  Commercial  Fibers in ELI's
                  Regeneration  Facilities,  based on the availability of space.
                  FOCAS or such other users shall pay ELI then  existing  market
                  rates for co-location services.

                                      -16-
<PAGE>

                                    (4) If at the time of  FOCAS's  election  to
                  succeed to ELI's interest in the unused  Commercial Fibers (as
                  provided above) the applicable  Payment Factor under the terms
                  of this  Agreement  is the  percentage  described  in  Section
                  4.1(b),  all  revenues  obtained by FOCAS from the use of such
                  unused   Commercial   Fibers  shall  be  applied  towards  the
                  cumulative amount of Quarterly  Payments  described in Section
                  4.1(b).  Thereafter,  when  the  cumulative  amount  of  ELI's
                  Quarterly  Payments and FOCAS's revenues obtained from the use
                  of the  Commercial  Fibers  available  to FOCAS  (as  provided
                  above)  exceeds the  cumulative  amount  described  in Section
                  4.1(b), ELI's obligation to make Quarterly Payments under this
                  Agreement shall cease and the Payment Completion Date shall be
                  deemed to have  occurred.  ELI  shall  have the  right,  on an
                  annual  basis  until the  Payment  Completion  Date,  to audit
                  FOCAS's  books and  records  relating  to  FOCAS's  use of the
                  Commercial Fibers.

                                    (5)  Notwithstanding  any other provision of
                  this  Agreement,  the rights and  obligations of FOCAS and ELI
                  described in this Section  4.7(c)  shall  constitute  the sole
                  remedy  of  FOCAS  for  a  failure  by  ELI  to  satisfy   the
                  Performance  Criteria.  No such failure in and of itself shall
                  constitute  a breach of this  Agreement  or  entitle  FOCAS to
                  damages for breach of contract.

                           (d) Dispute  Resolution.  Nothing in this Section 4.7
         shall  prevent  either FOCAS or ELI from  seeking a  resolution  of any
         dispute  hereunder  pursuant to the  provisions  of Article XVI of this
         Agreement.

                           (e) Early  Service  Gross  Revenues.  Gross  Revenues
         generated by ELI using the  Commercial  Fibers before the Service Ready
         Date for the entire  System,  and paid to FOCAS pursuant to Section 4.2
         of this Agreement,  shall be aggregated for purposes of this subsection
         as a credit against the Performance  Criteria in year one as identified
         on Exhibit "D" attached to this Agreement.

                  4.8      Security Interest.

                           (a) Consents.  ELI shall promptly  determine  whether
         any consent of a lender or other party is required  for ELI to grant to
         FOCAS the security interest  described in Section 4.8(b). If consent is
         required, ELI shall use reasonable efforts to obtain such consent.


                                  -17-

<PAGE>

                            (b)  Grant  of  Security  Interest.  Subject  to the
         determination that consent is not required and, if consent is required,
         subject to ELI obtaining all such required consents,  ELI hereby grants
         to FOCAS a security  interest in the Gross  Revenues  and all  accounts
         arising thereunder,  now or hereafter existing, and all proceeds of the
         foregoing to the extent of FOCAS's  interest in the Gross  Revenues (as
         described  in this  Agreement).  Such  security  interest  shall become
         effective upon ELI's determination that: (1) consent, as provided above
         in this Section 4.8 is not required;  or (2) all required consents have
         been obtained.

                           (c)  Financing  Statements.  Following  the effective
         date of the grant of the security interest described in Section 4.8(b),
         ELI shall  execute  and deliver to FOCAS any  Uniform  Commercial  Code
         Financing Statements or Continuation Statements necessary to perfect or
         continue  the  perfection  of FOCAS's  security  interest  in the Gross
         Revenues.

                           (d)  Enforcement  of  Security  Interest.  FOCAS  may
         exercise its remedies with respect to the security  interest granted in
         Section 4.8(b) only upon the occurrence and continuance of a default by
         ELI under Section 15.1(b)(5) of this Agreement.



                                    ARTICLE V
                                  SYSTEM DESIGN
                                  -------------

                  5.1 FOCAS Design  Responsibility.  Subject to the terms of the
applicable Utility Agreement,  FOCAS, at FOCAS's cost and expense,  shall design
and  engineer the Cable and the Cable  Accessories  to follow the portion of the
Cable  Route for which FOCAS has  responsibility  under this  Agreement  and any
modifications to the Towers,  the Substation Sites or the Right of Way necessary
to accommodate the Cable, the Cable Accessories and the Connecting  Points.  The
design  shall  include  only  those   modifications  to  the  Towers  needed  to
accommodate  installation  of the Cable and the Cable  Accessories and shall not
include any  upgrade by any Utility  Company,  unless  requested  by the Utility
Company  and paid for  separately  by the  Utility  Company  to FOCAS.  Any such
additional upgrade work shall not materially  interfere with or delay the design
or  construction of any System  Segment.  In addition,  the design shall include
optical  fiber  drop-offs  at each  Regeneration  Facility  site  including  the
Connecting Points adjacent to the Regeneration  Facilities.  FOCAS shall furnish
ELI with copies of any  computer  models,  analyses,  and design  specifications
developed for  modifications to the Towers.  In fulfilling its  responsibilities
under this Section 5.1, FOCAS shall follow:  (a) the Cable  Specifications;  (b)
the  Utility  Companies'  established  procedures  for working in and around the
Towers and their  electric  transmission  facilities,  including the  applicable
safety  rules set forth on  Exhibit  "G"  attached  to this  Agreement;  (c) the
Utility  Companies'  design  specifications  relating  to the  Dark  Fibers  and
associated  Connecting Points; (d) the Utility Companies'  engineering standards
and specifications for the Towers; (e) ELI's design  specifications  relating to
the Connecting  Points for optical fiber drop-offs  adjacent to the Regeneration
Facilities;  and (f) FOCAS's  customary  design and  engineering  standards  and
specifications.  FOCAS shall reimburse ELI for any design, engineering,  drawing
review, or analysis that ELI performs for the System in the place of FOCAS under
the terms of this Agreement as provided in Section 4.4.

                                      -18-

<PAGE>

                  5.2 ELI  Design  Responsibilities.  ELI,  at  ELI's  cost  and
expense,  shall design and engineer the  Regeneration  Facilities and all System
Electronics.  The design shall  include the  extension of fiber optic cable from
the  Regeneration  Facilities  out  to the  Connecting  Points  adjacent  to the
Regeneration Facilities. ELI shall reimburse FOCAS for any design,  engineering,
drawing  review,  or analysis that FOCAS performs for the System in the place of
ELI under the terms of this Agreement as provided in Section 4.4.

                  5.3 Utility Company Information.  To facilitate FOCAS's design
and  engineering  responsibilities  under this  Agreement,  ELI shall furnish to
FOCAS,  to the extent  available  from the Utility  Companies,  with  reasonable
promptness  after request from FOCAS,  and upon the  condition  that FOCAS shall
reimburse ELI for ELI's reasonable cost of obtaining and delivering the same:

                           (a)  Copies  of  all  Utility   Company   established
         procedures  for  working  in and  around  the  Towers and copies of all
         Utility  Company  transmission  facilities  and  design  specifications
         relating to the Dark Fibers and associated Connecting Points.

                           (b) Copies of all  available  Maps,  charts and other
         engineering data and documentation  pertaining to specified portions of
         the Right of Way and the physical  conditions  thereof,  including  the
         location and nature of all Towers,  power stations,  Substation  Sites,
         and other  improvements,  as well as all relevant  engineering data and
         plans relating thereto;

                           (c) Copies of all available title  documentation with
         respect to specified  sections of the Right of Way (including  existing
         easements,  rights of use or other  use or  occupancy  rights,  if any,
         previously  granted),  the Tower Sites,  the Substation Sites and other
         existing  agreements  respecting the Right of Way  (including,  without
         limitation, utility crossings) and restrictions on the right to use and
         to occupy the same for the purposes intended by this Agreement;

                           (d) Any available  information  on pending or planned
         relocation  projects by the Utility Companies or others along specified
         sections  of  the  Right  of Way  and  information  regarding  material
         scheduling  restraints on obtaining temporary  clearances on particular
         System Segments along the Right of Way;

                           (e) Maps and other available documentation sufficient
         to describe  the  identity  and  location  of other users of  specified
         portions of the Right of Way, the Tower Sites, the Substation Sites and
         the Towers,  as well as identification of areas within the Right of Way
         which might contain  title or possession  problems due to the nature of
         the ownership,  third-party right of way ownership (including,  without
         limitation, reversionary or reentry rights of underlying fee owners) or
         third-party rights to use the Towers; and

                                      -19-

<PAGE>

                           (f) A copy of each Map of any  portion  of the  Cable
         Route each year  throughout the Term,  when prepared and filed with any
         government  agency, and a copy of any amendments or supplements to each
         Map which may be prepared and so filed from time to time.

                  5.4 Notice of Adverse Claims.  ELI shall promptly notify FOCAS
in writing of any adverse claims,  actual or threatened,  affecting the Right of
Way,  the Towers,  the Tower  Sites,  the  Substation  Sites,  the  Regeneration
Facilities, or the Cable Route.

                  5.5 Working Drawings.  When FOCAS has completed the design for
any  System  Segment,  FOCAS  shall  either  prepare,  or cause  any  applicable
contractor to prepare,  and submit to ELI Working  Drawings for the construction
of  that  System  Segment.   The  Working   Drawings  shall  include  plans  and
specifications  for the Cable, the Cable  Accessories and the Connecting  Points
(including  Connecting Points for the Dark Fibers at locations designated by the
applicable  Utility  Company).  Within thirty (30) working days of submission of
the  Working  Drawings,  ELI shall  approve  the same in whole or in part (which
approval  shall not be  unreasonably  withheld) or raise any  objections  to the
Working Drawings,  which objections shall be stated in writing and in reasonable
detail and include a statement of the necessary modifications required to obtain
approval.  If ELI fails to respond  within such thirty (30)  working day period,
ELI shall be deemed to have approved the Working  Drawings.  Upon receipt of any
objections to the Working Drawings,  FOCAS shall use its reasonable  efforts to:
(i) correct, or cause the applicable contractor to correct, the Working Drawings
with respect to which such objections were noted by making  appropriate  changes
thereto and to  re-submit  the same to ELI for  approval or  objection as stated
above;  or (ii) dispute such  objection by referring  the matter in question for
determination  to the Chief Engineers of FOCAS and ELI (without  thereby waiving
any  rights  with  respect  to the matter in  controversy).  Approval  by ELI of
Working Drawings  submitted by FOCAS shall constitute ELI's approval solely with
respect  to ELI's  telecommunications  system  and  shall in no way be deemed to
constitute   an   opinion   of  ELI  with   respect   to  the   effect   of  the
telecommunications system on any Utility Company's electric transmission system.

                  5.6  Scheduling.  ELI  and  FOCAS  shall  jointly  develop  an
implementation  plan  for  the  design  and  construction  of  the  System.  The
implementation  plan shall  include a master  schedule  for all phases of System
design, engineering,  placement of Regeneration Facilities, bidding, permitting,
clearances,  construction,  testing and required  Approvals.  The implementation
plan  shall also  sequence  the work  along the Cable  Route in an  orderly  and
efficient  manner that complies with the terms and  requirements  of the Utility
Agreements.  ELI shall have primary  responsibility  for planning and scheduling
work associated with the  Regeneration  Facilities,  SONET  procurement,  System
Electronics  procurement and  installation,  and System turn-up.  Subject to the
terms of the applicable Utility Agreement, FOCAS shall have primary planning and
scheduling  responsibilities  for Cable  installation  and splicing.  The master
schedule shall be managed by ELI's Project Management Group. ELI and FOCAS shall
each designate a project  management  representative to coordinate efforts under
this Section 5.6. ELI shall make capital investments to provision the Commercial
Fibers with electronics,  optronics, buildings, other infrastructure,  and fiber
connectivity  with local exchange  carrier  networks and  interexchange  carrier
networks,  at a level  sufficient to meet the revenue  projections  set forth on
Exhibit "D."

                                      -20-

<PAGE>

                  5.7 Warranty of Work. FOCAS and its Qualified Contractors, and
their  subcontractors  and agents who  perform  work to design or  engineer  the
System shall  warrant  their work in  accordance  with  industry  standards  and
practices and the terms of this Agreement  (including,  without limitation,  the
Cable  Specifications).  FOCAS shall,  at its own cost and expense,  enforce the
provisions of such warranties following completion of the work. The warranty for
the Cable shall be FOCAS's  standard  manufacturer's  warranty  which shall be a
minimum of three (3) years of operation.  In addition,  FOCAS shall warrant that
all design and  engineering  work performed by or for FOCAS (as provided in this
Article V) is consistent with industry standards and shall conform to reasonable
standards of care, skill and diligence.  Such warranty shall extend for a period
of one (1) year following the Service Ready Date for the entire System. FOCAS is
not hereby warranting any design or engineering work for the System performed or
to be  performed by a Utility  Company.  ELI's sole and  exclusive  remedy for a
breach of the  warranty  described  in this  Section 5.7 shall be the repair and
replacement  of the warranted  item or items or the  correction of the warranted
work. FOCAS shall be given a reasonable time, not to exceed thirty (30) days, to
remedy the item or work in need of repair,  replacement  or  correction.  In the
event FOCAS fails to complete the repair, replacement or other correction within
such thirty (30) day period,  ELI may complete the repair,  replacement or other
corrective  work and invoice  FOCAS for the cost  incurred by ELI in  performing
such work as provided in Section 4.4.

                  5.8 Design Performance Completion. Upon the Service Ready Date
for the entire Cable Route  evidencing  completion of all System  Segments (both
Cable and System  Electronics) for the Cable Route (the "Performance  Completion
Date"),  except as provided in Section 5.7, neither FOCAS nor ELI shall have any
further performance obligations under this Article V.


                                   ARTICLE VI
                                  CONSTRUCTION
                                  ------------


                  6.1  Scope of Work.  Subject  to the  terms of the  applicable
Utility  Agreement,  FOCAS  shall be  responsible  to provide and to install the
Cable, the Cable  Accessories,  the Connecting  Points,  the construction of any
modifications to the Towers,  the Substation Sites or the Right of Way necessary
to accommodate the Cable, the Cable  Accessories and the Connecting  Points over
the  portion of the Cable Route for which  FOCAS has  responsibility  under this
Agreement. The installation work undertaken by FOCAS shall be performed by FOCAS
or one or more  Qualified  Contractors.  ELI shall have the right to approve the
appointment and qualifications of each Qualified Contractor, which consent shall
not be unreasonably withheld or delayed. In order to permit FOCAS to perform its
construction  responsibilities  under this  Agreement,  FOCAS and the  Qualified
Contractors  shall have access to the Right of Way, the Towers,  the Tower Sites
and the Substation  Sites,  subject to the notice  requirements of Sections 2.11
and  2.12.  Modification  to the  Towers  shall be  limited  to those  needed to
accommodate  installation of the Cable and the Cable Accessories,  and shall not
include any upgrade sought by the Utility Companies for other purposes.

                                      -21-

<PAGE>

                  6.2 Regeneration Facilities.  ELI shall be responsible for the
construction of all  Regeneration  Facilities and the installation of all System
Electronics. The construction and installation work shall be performed by ELI or
one or more  Qualified  Contractors.  FOCAS  shall have the right to approve the
appointment and qualifications of each Qualified Contractor, which consent shall
not be unreasonably withheld or delayed.

                  6.3 Work Standards. All work to be performed hereunder by ELI,
FOCAS and all Qualified  Contractors  shall be performed in a good,  workmanlike
manner and in compliance with the  requirements of this Agreement and applicable
electrical  safety codes,  prudent utility  practice,  and all applicable  other
laws, ordinances,  codes,  regulations and Approvals of any government authority
having jurisdiction thereover.  Work in areas adjacent to electrically energized
equipment shall be performed in accordance with the applicable Utility Company's
established safety rules set forth on Exhibit "G" attached to this Agreement.

                  6.4 Time. Installation of the Cable, the Cable Accessories and
the Connecting Points by FOCAS under the terms of this Agreement,  to the extent
practicable and within the reasonable  control of FOCAS, shall be carried out by
FOCAS in accordance with the  implementation  plan and master schedule  prepared
pursuant to Section 5.6. The  implementation  plan and master  schedule shall be
updated  and  revised at regular  intervals  by FOCAS with the  approval of ELI,
which approval shall not be unreasonably  withheld or delayed. Such updating and
revision shall include,  without  limitation,  adjustment for delays caused by a
Force Majeure  Event.  Unless  otherwise  agreed,  extensions of time under such
updates and revisions shall not operate to extend the Scheduled  Completion Date
or to amend the terms and  requirements  regarding the  completion of the System
described in Section 6.13.

                  6.5 Permits  and  Approvals.  FOCAS  shall use its  reasonable
efforts to secure on a timely basis, at FOCAS's expense, all necessary Approvals
from government  authorities having jurisdiction or approval rights with respect
to FOCAS's  installation of the Cable, the Cable  Accessories and the Connecting
Points.  The foregoing  provision  does not impose any  requirement  on FOCAS to
obtain the CPUC  Approval  described in Section 2.5.  FOCAS shall  indemnify and
save ELI  harmless  from any and all claims,  including  the expense  reasonably
incurred by ELI to defend itself against such claims,  resulting from or arising
out of  FOCAS's  failure  to obtain  such  Approvals.  ELI shall use  reasonable
efforts to obtain on a timely  basis all  necessary  Approvals  from  government
authorities  having   jurisdiction  or  approval  rights  with  respect  to  the
construction of the  Regeneration  Facilities and the installation of the System
Electronics.  ELI  shall  indemnify  and save  FOCAS  harmless  from any and all
claims,  including  the expense  reasonably  incurred by FOCAS to defend  itself
against such claims,  resulting  from or arising out of ELI's  failure to obtain
such  Approvals.  FOCAS  and ELI  shall  cooperate  with  each  other  and shall
coordinate  efforts  with  the  Utility  Companies  to  cause  their  respective
personnel and contractors to render all reasonable assistance in the procurement
of the Approvals.

                                      -22-

<PAGE>

                  6.6 System  Materials.  Subject to the terms of the applicable
Utility  Agreements,  FOCAS, at its expense,  shall provide all System Materials
necessary to install the Cable,  including the Cable  Accessories  and the Cable
and other System Materials  required to complete the System, up to and including
the Connecting Points.  ELI, at its expense,  shall provide all System Materials
necessary to construct and install the  Regeneration  Facilities  and the System
Electronics,  and other System  Materials  required to complete the System up to
the  Connecting  Points.  All  System  Materials  shall  comply  with the  Cable
Specifications  and  shall  meet the  specifications  described  in the  Working
Drawings.

                  6.7  Interface  Between  FOCAS  and ELI.  FOCAS  and ELI shall
cooperate and mutually agree upon the respective  responsibilities of each party
with  respect to the  interface  or  interconnection  between the portion of the
System for which ELI has construction and installation responsibilities, and the
portion  of the  System  for  which  FOCAS  has  construction  and  installation
responsibilities.

                  6.8      Title and Risk of Loss.

                           (a) Cable and Cable Accessories.  At all times during
         the course of  construction,  up until the time of the  issuance  of an
         Acceptance of Construction  with respect to any System  Segment,  FOCAS
         shall  retain  title to and shall bear the risk of loss or damage  with
         respect to the Cable and all associated  System Materials used by FOCAS
         to  install  the  Cable.   Upon  the  issuance  of  an   Acceptance  of
         Construction  with  respect to any System  Segment,  legal title to the
         Cable and the Cable  Accessories  shall pass to the applicable  Utility
         Company. Notwithstanding such transfer of title to the Utility Company,
         after  issuance of an  Acceptance of  Construction,  ELI shall bear the
         risk of  loss  or  damage  with  respect  to the  Cable  and the  Cable
         Accessories.

                           (b) Regeneration  Facilities and System  Electronics.
         Title to and risk of loss associated with the  Regeneration  Facilities
         (other than to the underlying real property) and the System Electronics
         shall  remain  with  ELI both  before  and  after  the  issuance  of an
         Acceptance of Construction.

                  6.9 System  Warranties.  In  procuring  and  obtaining  System
Materials  pursuant to Section 6.6,  each of FOCAS and ELI shall use  reasonable
efforts to obtain  from the vendors and  suppliers  thereof,  for the benefit of
FOCAS,  the  applicable  Utility  Company  and ELI,  warranties  that the System
Materials  shall be: (a) of the kind and  quality  described  in the  applicable
Working  Drawings and the purchase  orders and contracts  therefor;  (b) free of
defects in workmanship, material, design and title; (c) of good and merchantable
quality; and (d) where appropriate,  fit for their intended purpose. FOCAS shall
administer  for  the  benefit  of  FOCAS,  the  Utility  Companies  and  ELI the
manufacturer's  and other warranties for the Cable and its associated  hardware.
If requested by ELI,  FOCAS shall assign all such  warranties  for the Cable and
its associated  hardware to ELI or the  applicable  Utility  Company.  ELI shall
administer the  manufacturer's  and other  warranties with respect to the System
Electronics  both before and after the issuance of an Acceptance of Construction
associated with such System Segment.

                                      -23-

<PAGE>


                  6.10 Use of  Contractors.  FOCAS shall have the right,  at its
cost and  expense,  to have any of the  design,  engineering,  construction  and
installation  work to be  provided  by FOCAS  under the terms of this  Agreement
performed  by one  or  more  Qualified  Contractors;  provided  that  each  such
Qualified  Contractor retained by FOCAS to install the Cable shall be subject to
the prior approval of ELI and the applicable  Utility Company.  No such contract
or  subcontract  shall  create a  contractual  relationship  between  ELI or the
Utility  Companies  and the  Qualified  Contractor,  and  FOCAS  shall be solely
responsible for the engagement and management of the Qualified Contractors.

                  6.11     Inspection of Construction.

                           (a) Inspections During Construction.  ELI may perform
         routine   inspections  of  any   construction   over  which  FOCAS  has
         responsibility  while construction is in progress.  A representative of
         the applicable  Utility Company may be on-site during all  construction
         work to  perform  functions  such as safety  watch,  protection  of its
         electric transmission system, and to obtain clearances.

                           (b)  Cable  Testing.   FOCAS  shall  test  the  Cable
         installed by FOCAS in accordance with the Acceptance  Testing Standards
         to  verify  that  the  Cable  is  operating  in  accordance   with  the
         specifications set forth in Exhibit "A." Testing shall progress segment
         by segment along the Cable Route as Cable  splicing  progresses so that
         test  results  may  be  reviewed  in a  timely  manner.  ELI  and  each
         applicable Utility Company shall have the right, but not the obligation
         to have a  representative  present to observe  the  testing,  and FOCAS
         shall provide ELI prior notice of FOCAS's testing schedule. Within five
         (5) working days of the  conclusion  of any such  testing,  FOCAS shall
         provide ELI with a copy of the test results.  ELI shall have the right,
         but not the obligation,  at its sole expense,  to conduct its own tests
         on the Cable to verify  that it is  operating  in  accordance  with the
         Acceptance  Testing  Standards  set  forth  on  Exhibit  "A,"  and  for
         conformance with the applicable Working Drawings and other construction
         requirements of this Agreement. ELI shall have thirty (30) working days
         following  receipt of  FOCAS's  test  results to conduct  its own Cable
         inspections and tests.

                                      -24-

<PAGE>

                           (c)  Acceptance  of  Construction.  After such thirty
         (30) working day period,  ELI shall furnish  FOCAS with either:  (i) an
         Acceptance  of  Construction  with respect to the  installation  of the
         Cable,  the Cable  Accessories  and the  Connecting  Points  along such
         Approved  System  Segment;   or  (ii)  a  statement  setting  forth  in
         reasonable  detail any  objections to or defects in such  installation.
         ELI's  failure to furnish a written  notification  within such  fifteen
         (15) day working period, shall be deemed to constitute an Acceptance of
         Construction for purposes of this Agreement.

                           (d) Statement of Objections. Upon receipt of any such
         statement of objections,  FOCAS shall either: (1) correct, or cause the
         applicable  Qualified Contractor to correct, the objections or defects,
         whereupon  ELI shall  re-inspect  the same within  fifteen (15) working
         days following receipt from FOCAS that the work has been corrected, and
         if found  corrected,  issue an  Acceptance  of  Construction  as stated
         above;  or (2)  dispute  such  statement  of  objections  or defects by
         referring the disputed issues for  determination to the Chief Engineers
         of FOCAS and ELI  (without  thereby  waiving any rights with respect to
         the issues in controversy).  Notwithstanding the foregoing,  acceptance
         of the construction and installation work associated with the Cable and
         the Cable  Accessories  for any System Segment by ELI shall  constitute
         ELI's approval solely with respect to ELI's  telecommunications  system
         and shall in no way be  deemed to  constitute  an  opinion  of ELI with
         respect to the effect of the  telecommunications  system on any Utility
         Company's electric transmission system.

                  6.12  As-Built  Drawings.  Within  fifteen  (15)  working days
following the issuance of an Acceptance of Construction  for any System Segment,
constructed  by FOCAS,  FOCAS,  at  FOCAS's  cost,  shall  submit,  or cause the
applicable  Qualified  Contractor to submit,  to ELI "as-built"  drawings of the
Cable, the Cable  Accessories and the Connecting  Points in paper and electronic
file formats  (AutoCadd Version 13). FOCAS shall also provide to ELI, at no cost
to ELI, Cable splicing and splice data records for ELI's fiber database records.
Within  fifteen  (15)  working days  following  the  delivery of the  "as-built"
drawings,  ELI shall inspect the Cable, the Cable Accessories and the Connecting
Points along such Developed  System Segment for conformance  with the "as-built"
drawings. Within fifteen (15) working days following such inspection,  ELI shall
furnish FOCAS with either: (a) an acceptance of the drawings with respect to the
Cable,  the Cable  Accessories  and the  Connecting  Points;  or (b) a statement
setting forth in reasonable  detail any  reasonable  objections to or defects in
the drawings  thereof.  Failure of ELI to issue  written  notification  to FOCAS
within  such  fifteen  (15)  working  day period  shall be deemed to  constitute
acceptance of such drawings by ELI for purposes of this Agreement.  Upon receipt
of any such statement of reasonable  objections or defects,  FOCAS shall either:
(i) promptly amend, or cause the applicable  Qualified  Contractor to amend, the
"as-built" drawings,  if so requested by ELI; (ii) correct the defects, or cause
the applicable Qualified Contractor to correct the defects,  whereupon ELI shall
re-inspect the same within fifteen (15) working days following notice from FOCAS
that the work has been corrected and, if found corrected, issue an acceptance of
the drawings as provided above; or (iii) dispute such statement of objections or
defects by referring  the disputed  issues for  determination,  without  thereby
waiving  any rights  with  respect to the  issues in  controversy,  to the Chief
Engineers of FOCAS and ELI. Notwithstanding the foregoing, ELI's approval of any
"as-built"  drawings or statement of any objections to such "as-built"  drawings
shall signify approval of or objections with respect to ELI's telecommunications
system along such Developed System Segment only and shall in no way be deemed to
represent an opinion of ELI with respect to the effect of the telecommunications
system on any Utility Company's electric transmission system.

                                      -25-

<PAGE>

                  6.13 Completion of System Construction. FOCAS shall diligently
seek to complete the installation of all Cable, Cable Accessories and Connecting
Points over which FOCAS has construction  responsibility under the terms of this
Agreement by the  Scheduled  Completion  Date. If the Service Ready Date has not
occurred by the ninetieth (90th) day following the Scheduled Completion Date and
Section  14.1 does not apply,  ELI, at its option,  may notify  FOCAS in writing
that ELI or ELI's  designee will assume all or part of the project  construction
administration,  and FOCAS  shall work with ELI to  transfer to ELI that part of
the  construction  project  administration  as may be  requested  by ELI. If ELI
participates in such construction, FOCAS shall promptly reimburse ELI the direct
and actual costs incurred by ELI in such  participation  as described in Section
4.4. ELI shall provide reasonable supporting documentation for its costs.

                  6.14 Warranty of Work. Each of FOCAS and ELI shall cause their
respective  contractors,  subcontractors  and agents who perform work to install
the System (including,  without limitation each Qualified Contractor) to warrant
their work in accordance with industry  standards and practices and the terms of
this Agreement (including, without limitation, the Cable Specifications).  FOCAS
or ELI,  as  applicable,  shall,  at its  own  cost  and  expense,  enforce  the
provisions  of such  warranties  following  completion  of the  work.  A copy of
FOCAS's manufacturer's warranty for the Cable is attached to and incorporated by
reference in this  Agreement as Exhibit  "H." In addition,  FOCAS shall  warrant
that all  installation  work (as provided in this Article VI) is consistent with
industry standards and shall conform to reasonable  standards of care, skill and
diligence. Such warranty shall extend for a period of one (1) year following the
Service Ready Date for the entire System.  ELI's sole and exclusive remedy for a
breach of the  warranty  described  in this Section 6.14 shall be the repair and
replacement  of the warranted  item or items or the  correction of the warranted
work.  FOCAS is not  hereby  warranting  any  installation  work for the  System
performed  or to be  performed  by a  Utility  Company.  FOCAS  shall be given a
reasonable  time,  not to exceed thirty (30) days, to remedy the item or work in
need of repair,  replacement or correction. In the event FOCAS fails to complete
the repair,  replacement or other correction within such thirty (30) day period,
ELI may complete the repair,  replacement or other  corrective  work and invoice
FOCAS  for the cost  incurred  by ELI in  performing  such work as  provided  in
Section 4.4.

                  6.15 Construction  Performance Completion.  Effective upon the
Performance  Completion Date, except as provided in Section 6.14,  neither FOCAS
nor ELI shall have any further performance obligations under this Article VI.

                                      -26-

<PAGE>


                                   ARTICLE VII
                  PROPERTY RIGHTS, OBLIGATIONS AND MAINTENANCE
                  --------------------------------------------

                  7.1  Avoidance  of  Encumbrances.  FOCAS  shall not  create or
permit any lien or other encumbrance  against the Right of Way, the Towers,  the
Substation Sites, the Cable, the Cable  Accessories,  the Connecting Points, the
Regeneration Facilities, the System Electronics,  the Commercial Fibers, any IRU
(or  comparable  lease or other  right),  or the Gross  Revenues.  ELI shall not
create or permit any lien or other  encumbrance  against  the Right of Way,  the
Towers,  the Substation Sites, or create or permit any lien or other encumbrance
not existing as of the Effective Date affecting  ELI's right,  title or interest
in  and to  the  Cable,  the  Cable  Accessories,  the  Connecting  Points,  the
Regeneration Facilities, the System Electronics,  the Commercial Fibers, any IRU
(or comparable  lease or other right),  or the Gross Revenues.  Such covenant by
ELI shall not affect ELI's right to market over the System,  or to sell,  lease,
assign or swap  rights in and to the  Commercial  Fibers as  provided in Section
10.1(b).  The  foregoing  covenant  shall not be  breached  by the  creation  of
mechanic's,   materialman's,   or  similar  liens  in  the  ordinary  course  of
construction or installation, provided that such liens are satisfied, bonded, or
otherwise  provided for in due course by the party  hereto which is  responsible
for the creation or imposition of such liens.

                  7.2 Payment of Ad Valorem Taxes. ELI or the applicable Utility
Company  shall pay any Ad Valorem Taxes  assessed  against the System during the
Term. FOCAS shall not be required to pay any such Ad Valorem Taxes.

                  7.3      Sales or Use Taxes.

                           (a)  FOCAS.  FOCAS  shall pay or cause to be paid all
         sales  and  use  taxes  associated  with  or  attributable  to  FOCAS's
         provision and installation of the Cable, the Cable  Accessories and the
         Connecting Points. FOCAS shall indemnify and hold ELI harmless from and
         against all sales and use taxes  associated with or attributable to the
         provision and installation of the Cable, the Cable  Accessories and the
         Connecting Points.

                           (b) ELI.  ELI shall pay or cause to be paid all sales
         and use taxes  associated  with or  attributable to ELI's provision and
         installation of the Regeneration Facilities and the System Electronics.
         ELI shall  indemnify and hold FOCAS harmless from and against all sales
         and use taxes  associated  with or  attributable  to the  provision and
         installation of the Regeneration Facilities and the System Electronics.

                  7.4      Liens.

                           (a) Release of Liens.  In the event the System or any
         portion  thereof  becomes  subject  to  any  mechanics',  artisans'  or
         materialmen's lien, the following provisions shall apply:

                                      -27-

<PAGE>

                                     (1)  If  such a lien  is  chargeable  to or
                  through  FOCAS,  FOCAS  shall  promptly  cause  the same to be
                  discharged  and  released  of record (by  payment,  posting of
                  bond, court deposit or other means) without cost to ELI or the
                  applicable Utility Company.  FOCAS shall indemnify ELI against
                  all costs and expenses  (including  reasonable  attorney fees)
                  reasonably incurred in discharging and releasing such lien. If
                  any such lien is not so discharged and released  within ninety
                  (90) days after notice  thereof by ELI to FOCAS,  then ELI may
                  pay or secure the release or discharge  thereof at the expense
                  of FOCAS.

                                    (2)  If  such  a lien  is  chargeable  to or
                  through  ELI,  ELI  shall   promptly  cause  the  same  to  be
                  discharged  and  released  of record (by  payment,  posting of
                  bond, court deposit or other means) without cost to FOCAS. ELI
                  shall   indemnify   FOCAS   against  all  costs  and  expenses
                  (including  reasonable  attorney fees) reasonably  incurred in
                  discharging  and releasing  such lien. If any such lien is not
                  so  discharged  and  released  within  ninety  (90) days after
                  notice  thereof by FOCAS to ELI,  then FOCAS may pay or secure
                  the release or discharge thereof at the expense of ELI.

                           (b) Contest of Liens. Nothing in this Agreement shall
         preclude  FOCAS or ELI from  contesting  any lien  described in Section
         7.4(a)  above or the contract or action upon which the same arose after
         the same shall have been bonded or  otherwise  released  of record,  as
         provided above.

                           (c) Facilities as  Collateral.  Neither FOCAS nor ELI
         shall create or permit a pledge or  encumbrance of any of its interests
         in the System  which in any manner  impairs or could impair the use and
         operation of the System for internal or  commercial  telecommunications
         purposes.

                  7.5  Discontinuance or Relocation.  Each Utility Company shall
be entitled to  discontinue  its use of or to relocate  any part of its electric
transmission system,  including the Towers, or to discontinue use of any portion
of the Right of Way or the Substation Sites. However, as provided in the Utility
Agreements,  a Utility  Company may not take any action to release or relinquish
voluntarily its underlying property interests along the Right of Way, whether by
a Taking or  otherwise,  without first  notifying  ELI. In the event of any such
discontinuance  or  relocation,  during  or  after  construction  of any  System
Segment,  ELI  shall  give  written  notice  to  FOCAS  as  soon  as  reasonably
practicable.  The notice of discontinuance or relocation shall be accompanied by
a plan of any alternative route, if available.

                  7.6  Relocation of Cable.  In the event the Cable or the Cable
Route  requires  relocation  or  replacement,  the  cost of such  relocation  or
replacement shall be allocated as provided in the Utility Agreements;  provided,
however, if FOCAS requests the relocation,  FOCAS shall pay all of ELI's and the
applicable  Utility  Company's  relocation  costs. If the relocation is required
other than by ELI, FOCAS or a Utility Company, the relocation costs allocable to
and paid by ELI as provided under the terms of the applicable  Utility Agreement
shall be deducted from Gross Revenues for the applicable  accounting period when
calculating the Quarterly Payment.

                                      -28-

<PAGE>

                  7.7 Design and  Installation of Relocated  Facilities.  In the
event of the  relocation  of any portion of the System  after the Service  Ready
Date for the Affected Portion, FOCAS shall have the same design and installation
responsibilities  for the relocated  Cable,  Cable  Accessories  and  Connecting
Points as described  in Articles V and VI. In the event of any such  relocation,
FOCAS  shall  be  compensated  for  such  materials  and  for  such  design  and
installation  services in  accordance  with the cost  allocations  described  in
Section 7.6 in a reasonable  amount  which is  consistent  with then  prevailing
market rates, terms and conditions.

                  7.8 Utility Company  Maintenance  Responsibilities.  Under the
terms of the Utility  Agreements,  each Utility  Company is responsible  for the
Maintenance of the Cable,  the Cable  Accessories,  the Connecting  Points,  the
Towers, the Substation Sites and the Right of Way along its portion of the Cable
Route. ELI is required, under the terms of the Utility Agreements,  to reimburse
the Utility  Companies for such Maintenance  costs.  All such Maintenance  costs
allocable to and paid by ELI under the terms of the Utility  Agreements,  net of
casualty  insurance and other  recoveries by ELI,  shall be a deduction from the
Gross  Revenues  obtained  by ELI from the use of the System for the  purpose of
calculating the Quarterly Payments.

                  7.9   Maintenance  of   Regeneration   Facilities  and  System
Electronics.  ELI, at ELI's sole cost,  shall be responsible for the Maintenance
of the Regeneration Facilities and the System Electronics.

                  7.10  Restoration  Plans.  ELI shall not agree to the terms of
the detailed  restoration plan contemplated by each Utility  Agreement,  without
the prior written  consent of FOCAS,  which  consent  shall not be  unreasonably
withheld or delayed.

                  7.11   Performance  Completion.   Except  to  the   extent  of
obligations  incurred or undertaken by FOCAS or ELI which are  outstanding as of
the Performance Completion Date, effective upon the Performance Completion Date,
neither FOCAS nor ELI shall have any further performance  obligations under this
Article VII.


                                  ARTICLE VIII
                    REPRESENTATIONS, WARRANTIES AND COVENANTS
                    -----------------------------------------


                  8.1  Representations,  Warranties  and  Covenants  of ELI. ELI
represents and warrants to FOCAS, and covenants with FOCAS, as follows:

                           (a) Authority.  ELI is a corporation  duly organized,
         validly  existing and in good  standing  under the laws of the State of
         Delaware,  and has all requisite corporate power and authority to enter
         into this  Agreement and to perform  according to the terms,  covenants
         and conditions contained in this Agreement.

                                      -29-

<PAGE>

                           (b)  Restrictions.  The execution and  performance of
         this Agreement,  any instrument or document required by this Agreement,
         and the consummation of the transactions contemplated by this Agreement
         will not violate any article, bylaw or other corporate restriction,  or
         to the best of ELI's  knowledge,  any statute,  ordinance,  law, order,
         ruling,  certificate  or  license,  regulation  or demand of any court,
         regulatory agency or other tribunal to which ELI is subject.

                           (c) Binding  Obligation.  This  Agreement,  when duly
         executed by ELI, shall constitute a valid, legal and binding obligation
         of ELI, and shall be enforceable in accordance with its terms,  subject
         to  the   effect  of  any   bankruptcy,   insolvency,   reorganization,
         liquidation, moratorium, receivership, conservatorship, readjustment of
         debts,  or  other  similar  laws  affecting  the  rights  of  creditors
         generally.

                           (d)  Government  Approvals.  ELI  has  all  necessary
         government approvals to enter into and to perform its obligations under
         this  Agreement,  excepting  approvals,  if any,  required  from  local
         government authorities regarding ELI's use of the System located within
         the jurisdiction of any such government authority,  which approvals ELI
         shall use reasonable efforts to obtain.

                           (e)  Proceedings.  Except for  matters now pending or
         that may hereafter be brought by or before the CPUC or other regulatory
         bodies having jurisdiction over ELI and the activities  contemplated by
         this  Agreement   relating  to  the  provision  of   telecommunications
         services,  no  litigation or  government  proceeding is pending,  or to
         ELI's   knowledge,   threatened   which  might  adversely  affect  this
         Agreement,  the transactions  contemplated by this Agreement,  or ELI's
         rights  under,  or ability to perform  pursuant  to the terms of,  this
         Agreement.  ELI shall  promptly  notify FOCAS of any  material  adverse
         claims, actual or threatened, affecting any part of the System or ELI's
         telecommunications business in the State of California.

                           (f) Conduct of Business.  ELI will operate the System
         in a safe  manner  and will use  reasonable  efforts  to  comply in all
         material  respects with  applicable  laws,  regulations  and government
         orders.  ELI shall use reasonable  efforts,  consistent with reasonable
         commercial  practices,  to maximize Gross  Revenues  generated from the
         Revenue Sharing Route.

                           (g) Compliance with Government Requirements.  ELI has
         not violated any rule,  order or  regulation  issued by any  government
         authority  with respect to ELI, its  business or  operations  which may
         materially  and  adversely  affect ELI's ability to execute and perform
         its obligations under this Agreement.

                                      -30-

<PAGE>

                           (h) Financing  Restrictions.  This Agreement does not
         violate  any  terms,  covenants,  conditions  or  restrictions  in  any
         mortgages, bonds and other indentures of ELI.

                           (i) Resources and Capacity.  ELI possesses sufficient
         financial,  managerial, and technical capacity and resources to perform
         its obligations under the terms of this Agreement.

                           (j) Relationship with  Contractors.  ELI shall timely
         perform  all of its duties and  obligations  to ELI's  contractors  and
         subcontractors,  including,  without  limitation,  the  payment of sums
         owing to such  contractors  and  subcontractors,  who  perform  work or
         supply  materials to complete ELI's design,  engineering,  construction
         and installation obligations under this Agreement.

                           (k) Enforcement of Utility Agreements.  ELI covenants
         that it shall use its best  efforts to enforce  the  provisions  of the
         Utility  Agreements  including  but not  limited to the  provisions  of
         Sections 2.6, 9.9 and 9.10(a)(2) of the Utility  Agreement with Pacific
         Gas and Electric Company dated effective as of December 31, 1997 to the
         end that the Utility  Company  shall pay to ELI,  and ELI in turn shall
         pay to FOCAS from the funds paid by the  Utility  Company to ELI net of
         ELI's cost of  enforcement,  FOCAS's  costs  (based on a rate of $* per
         Route Mile) arising from any revocation,  relocation, or discontinuance
         to the fullest extent of the provisions of such Utility Agreements.

                           (l) Consents of Utility Companies.  ELI shall use its
         best  efforts to obtain  the  consent  of each  Utility  Company to the
         succession by FOCAS to ELI's interest in the unused  Commercial  Fibers
         subject to the  Utility  Agreement  with such  Utility  Company (on the
         terms  described in Section 4.7 of this Agreement)  either:  (1) in the
         provisions   of  the   Utility   Agreement;   or  (2)  by  a   separate
         acknowledgment   from  the  Utility  Company  promptly   following  the
         effective date of such Utility Agreement.

                  8.2 Representations,  Warranties and Covenants of FOCAS. FOCAS
represents and warrants to ELI, and covenants with ELI, as follows:

                           (a) Authority.  FOCAS is corporation  duly organized,
         validly  existing and in good  standing  under the laws of the State of
         Delaware,  and has all requisite corporate power and authority to enter
         into this  Agreement and to perform  according to the terms,  covenants
         and conditions contained in this Agreement.

                           (b)  Restrictions.  The execution and  performance of
         this Agreement,  any instrument or document required by this Agreement,
         and the consummation of the transactions contemplated by this Agreement
         will not violate any article, bylaw or other corporate restriction,  or
         to the best of FOCAS's knowledge, any statute,  ordinance,  law, order,
         ruling,  certificate  or  license,  regulation  or demand of any court,
         regulatory agency or other tribunal to which FOCAS is subject.

*  Confidential   information  has  been  omitted  pursuant  to  a  request  for
confidential  treatment.  Such  material  has  been  filed  separately  with the
Securities and Exchange Commission.


                                      -31-

<PAGE>

                           (c) Binding  Obligation.  This  Agreement,  when duly
         executed  by  FOCAS,  shall  constitute  a  valid,  legal  and  binding
         obligation of FOCAS,  and shall be enforceable  in accordance  with its
         terms,   subject   to  the  effect  of  any   bankruptcy,   insolvency,
         reorganization, liquidation, moratorium, receivership, conservatorship,
         readjustment  of debts,  or other similar laws  affecting the rights of
         creditors generally.

                           (d)  Government  Approvals.  FOCAS  has or  will  use
         reasonable  efforts to procure all  necessary  government  approvals to
         enter into and to perform its obligations under this Agreement.

                           (e)  Proceedings.  Except for  matters now pending or
         that may hereafter be brought by or before the CPUC or other regulatory
         bodies having  jurisdiction  over the activities  contemplated  by this
         Agreement relating to the provisions of telecommunications services, no
         litigation or governmental proceeding,  including,  without limitation,
         before the CPUC, is pending, or to FOCAS's knowledge,  threatened which
         might adversely affect this Agreement, the transactions contemplated by
         this Agreement, or FOCAS's rights under, or ability to perform pursuant
         to the terms of, this Agreement. FOCAS shall promptly notify ELI of any
         material adverse claims, actual or threatened, affecting any portion of
         the System.

                           (f)   Conduct  of   Business.   In   performing   its
         obligations under this Agreement,  FOCAS will use reasonable efforts to
         comply in all material  respects with all applicable laws,  regulations
         and government orders.

                           (g) Compliance with Government  Requirements.  To its
         knowledge,  FOCAS has not violated any rule, order or regulation issued
         by any  government  authority  with  respect to FOCAS,  its business or
         operations which may materially and adversely affect FOCAS's ability to
         execute and perform its obligations under this Agreement.

                           (h) Financing  Restrictions.  This Agreement does not
         violate  any  terms,  covenants,  conditions  or  restrictions  in  any
         mortgages, bonds and other indentures of FOCAS.

                           (i)   Resources   and   Capacity.   FOCAS   possesses
         sufficient financial,  managerial, and technical capacity and resources
         to perform its obligations under the terms of this Agreement.

                           (j) Relationship with Contractors. FOCAS shall timely
         perform all of its duties and  obligations to FOCAS's  contractors  and
         subcontractors,  including,  without  limitation,  the  payment of sums
         owing to such  contractors  and  subcontractors,  who  perform  work or
         supply materials to complete FOCAS's design, engineering,  construction
         and installation obligations under this Agreement.

                                      -32-

<PAGE>


                  8.3  Confidentiality.  For  purposes of this  Section 8.3, the
term "Information" shall mean all information furnished by FOCAS and ELI to each
other, or by or to their  respective  representatives,  including drafts and the
final form of this Agreement,  whether or not reduced to writing or specifically
identified as intellectual property,  non-public,  confidential, or proprietary,
and all analyses,  compilations,  data,  studies, or other documents prepared by
FOCAS or ELI  containing,  or based in whole or in part on,  any such  furnished
information,  or  reflecting  review  of, or  interest  in,  all or part of such
information.  As used in this Agreement,  a "representative" of FOCAS or ELI, as
the case may be, shall mean any and all directors,  officers,  employees, agents
or representatives,  including, without limitation, contractors, subcontractors,
attorneys,  accountants,  consultants and financial advisors of FOCAS or ELI, as
the case may be. In consideration of being furnished with the Information, FOCAS
and ELI agree that:

                           (a)  Nondisclosure.  The  Information  will  be  kept
         confidential  and will not,  without the prior  written  consent of the
         party providing the information, be disclosed by the other party or any
         of its representatives,  in any manner whatsoever, in whole or in part,
         and will not be used by a party or any of its representatives  directly
         or indirectly  for any purpose other than  activities  contemplated  by
         this Agreement.  Moreover,  FOCAS and ELI will transmit the Information
         only to those  representatives who need to know the Information for the
         purpose of performing or exercising each party's obligations and rights
         under this Agreement.

                           (b) Authorized Disclosure.  Without the prior written
         consent of the other party,  neither party or its representatives  will
         disclose  to any other  person the fact that the  Information  has been
         made  available,  or any of the terms,  conditions  or other facts with
         respect to this Agreement, except as required by law and then only with
         prior written notice given, as soon as possible, to the other party and
         in compliance with the provisions of Section 17.4. The term "person" as
         used in this Agreement shall be interpreted broadly to include, without
         limitation, any corporation, company, group, partnership or individual.

                           (c)  Nonconfidential  Information.  This  Section 8.3
         shall be inoperative as to any portion of the Information which: (1) is
         or becomes generally  available to the public other than as a result of
         a disclosure by a party or its  representatives;  (2) becomes available
         to  a  party  in  good  faith  from  a  third-party  not  subject  to a
         confidential  obligation to the party; or (3) was known to a party on a
         nonconfidential basis prior to its disclosure by the other party or one
         of its representatives.

                                      -33-
<PAGE>

                           (d)  Compelled  Disclosure.  In the event that either
         party or anyone to whom the party transmits the Information relating to
         this  Agreement  is  requested or becomes  legally  compelled  (by oral
         questions,  interrogatories,  requests for  information  or  documents,
         subpoena,  civil  investigative  demand,  or any  similar  process)  to
         disclose any of the  Information,  the party so compelled  will provide
         prompt  written  notice of such  event to the  other  party so that the
         notified party may seek a protective order or other appropriate remedy,
         waive  compliance with the provisions of this Agreement or both. In the
         event that such  protective  order or other  remedy is not  obtained or
         that the notified party waives  compliance  with the provisions of this
         Agreement,  the legally  compelled party will furnish only that portion
         of  the  Information  which  is  legally  required  and  will  exercise
         reasonable  efforts  to obtain  reliable  assurance  that  confidential
         treatment will be accorded the Information.

                           (e) Public  Records Law. It is understood  that FOCAS
         and  ELI  are or may  in  the  future  be  subject  to  public  records
         disclosure  laws,  and that  these  laws  will  govern  the  disclosure
         responsibilities  of FOCAS  and ELI  notwithstanding  the terms of this
         Agreement.  To the  extent  reasonably  practical,  FOCAS  and ELI will
         notify  each other of any public  records  requests  of any part of the
         Information,  and will give the other party a reasonable opportunity to
         contest the public records request.

                           (f)  Non-Waiver.  The  failure or delay by a party in
         exercising any rights,  power or privilege under this Section 8.3 shall
         not  operate  as a waiver  thereof  nor  shall any  single  or  partial
         exercise  thereof  preclude any other or further exercise of any right,
         power or privilege hereunder.

                           (g) Public  Communications.  All press  releases  and
         other public  communications  of any sort relating to this Agreement or
         the  transactions  described  herein  shall  be  subject  to the  prior
         approval  of the  applicable  Utility  Company  and both FOCAS and ELI,
         which  approval by FOCAS or ELI shall not be  unreasonably  withheld or
         delayed.  Excluded  from the  foregoing  are  disclosures  required  by
         securities  laws  and  rules or  regulations  of  securities  exchanges
         applicable to the parties or their publicly-held Affiliates.

                           (h) Equitable Relief. FOCAS and ELI shall be entitled
         to  equitable   relief,   including   injunctive  relief  and  specific
         performance,  in  the  event  of  any  breach  of  the  confidentiality
         provisions of this  Agreement.  Such remedies shall not be deemed to be
         the exclusive  remedies for a breach of this Agreement by FOCAS, ELI or
         their respective representatives, but shall be in addition to all other
         remedies available by law or equity. A breach of the provisions of this
         Section  8.3 may subject  that party who has  provided  Information  to
         irreparable harm and injury.

                           (i)  Ownership  of   Information.   The   Information
         acquired  from the other party or any of its  representatives  shall be
         and shall  remain  the  exclusive  property  of the  disclosing  party.
         Neither  the  disclosure  of  Information,  or the  execution  of  this
         Agreement  shall be  construed  as a  license  to the  party  receiving
         Information to make use of, or sell the Information or products derived
         from the  Information,  or to make use of it in any way that damages or
         competitively disadvantages the party disclosing the Information.

                                      -34-

<PAGE>


                  8.4  Cooperation.  FOCAS  and ELI  shall  cooperate  with each
other, in good faith, and shall use reasonable efforts to:

                           (a)  System  Design  and  Deployment.   Expeditiously
         complete the design and  installation of the System as provided in this
         Agreement;
                           (b) Conflicts  Resolution.  Negotiate  reasonable and
         mutually beneficial resolutions to all conflicts that may arise between
         FOCAS  and  ELI  relating  to the  design,  installation,  Maintenance,
         operation and use of the System or any other duty,  right or obligation
         of either of them relating to or arising out of this Agreement;

                           (c) Approvals and  Consents.  Obtain all  regulatory,
         government,  third-party and shareholder approvals,  consents,  permits
         and  franchises as may be necessary or prudent for the operation of the
         System as described in this Agreement; and

                           (d)   Coordination   and  Cooperation   with  Utility
         Companies.   Coordinate   efforts  under  this   Agreement  with  ELI's
         obligations  under the Utility  Agreements,  and to cooperate  with the
         Utility Companies to design, engineer, construct and install the System
         in accordance with the requirements of and pursuant to the terms of the
         Utility   Agreements,   including,   without   limitation,   the  Cable
         Specifications and each Utility Company's safety rules.

                  8.5  Regulatory  Compliance.  FOCAS  and  ELI  shall  each  be
responsible  to comply  with the  regulatory  requirements  relating  to its own
business practices and operations.

                  8.6 Certificates.  Upon request of either FOCAS or ELI, at any
time and from time to time,  the other party  without  charge and within  thirty
(30) days  following  receipt of such  request,  shall certify in writing to the
requesting  party:  (a) that this  Agreement is in full force and effect and has
not been  supplemented,  modified or amended (or if there have been supplements,
modifications  or  amendments,  specifying  same);  (b)  whether,  to  the  best
knowledge  of the  party  issuing  such  certificate,  any sums are then due and
payable by ELI to FOCAS or by FOCAS to ELI  pursuant to any  provisions  of this
Agreement (and if such sums remain unpaid, the amount thereof);  (c) whether, to
the best knowledge of the party issuing such certificate,  the other party is in
default in the performance of any term,  covenant or condition of this Agreement
(or, if defaults exist,  specifying each particular in which it is asserted such
other party is in default); (d) if such certificate is issued in connection with
any financing of any portion of the System,  the requesting  party is authorized
to enter into the financing  transaction and that the other party will adhere to
and perform its obligations  under Article X, following its receipt of notice of
the  transfer;  and  (e) as to  other  matters  as  the  party  requesting  such
certificate may reasonably request.

                                      -35-

<PAGE>


                  8.7  Independent  Status.  FOCAS and ELI  reserve  no  control
whatsoever over the employment,  discharge, compensation of or services rendered
by the employees or  contractors of each other,  notwithstanding  the ability of
FOCAS and ELI to exercise  certain  rights to enforce the various  standards and
specifications agreed upon pursuant to this Agreement. Nothing in this Agreement
shall be construed as  inconsistent  with the foregoing  independent  status and
relationship  or as creating or implying a partnership or joint venture  between
FOCAS and ELI.

                  8.8  Transactions  with Affiliates.  All transactions  with an
Affiliate  involving the System  entered into by either FOCAS or ELI shall be at
arm's-length,  for market prices and shall comply with any applicable regulatory
requirements.

                  8.9  Further  Assurances.   FOCAS  and  ELI,  with  reasonable
promptness, shall each execute and deliver such further instruments,  documents,
applications  and  requests or  petitions  for  authority as may be necessary or
prudent to  implement or carry out more  effectively  the terms,  covenants  and
conditions of this Agreement.

                  8.10 Audit  Rights.  FOCAS shall have the right to audit ELI's
books and records relating solely to the Quarterly Payments and the satisfaction
of the Performance Criteria,  including,  without limitation, the Gross Revenues
derived from the  operation of the Revenue  Sharing  Route,  and ELI's costs for
which ELI, under the terms of Section 4.4 of this Agreement, seeks reimbursement
or  contribution  from  FOCAS.  Any  such  audit  shall be  conducted:  (a) by a
reputable public accountant or, as applicable, a member of the internal auditing
staff of FOCAS or ELI; and (b) during  reasonable  business hours in such manner
as not to  interfere  with the normal  business  activities  of the party  being
audited.

                  8.11  Interference.  Whenever a Utility Company notifies FOCAS
or ELI that the System or any portion  thereof  materially  interferes  with the
operation of such Utility  Company's  equipment  or with  existing  equipment of
current  licensees,  or  constitutes  a hazard to the  service  rendered  by the
Utility  Company  or  other  licensee,  or  fails to  comply  with the  codes or
regulations  herein before  referred to, FOCAS and ELI shall cooperate with each
other and use  reasonable  efforts to  cooperate  with and  assist  the  Utility
Company  to remedy the  interference  or hazard.  Under no  circumstances  shall
either ELI,  FOCAS,  or their  respective  employees  or  Qualified  Contractors
disturb,  tamper  with or contact  any Utility  Company  equipment,  without the
Utility Company's  consent.  ELI and FOCAS shall each avoid contact with Utility
Company's  lines,  wires  and  transformers,  whether  or not they  appear to be
energized.

                  8.12 Independent System Operator. ELI shall provide FOCAS with
a copy of the organizational documents,  protocols and operating policies of the
Independent System Operator relevant to FOCAS's obligations under this Agreement
and not protected by confidentiality covenants when available to ELI.

                                      -36-

<PAGE>

                  8.13   Performance   in  Stead.   Should   either  party  (the
"Non-performing Party") fail to make any payment or to do any act as provided in
this Agreement,  then the other party (the "Other Party"),  at the Other Party's
option,   without  any   obligation   to  do  so,  and  without   releasing  the
Non-performing  Party from any obligation  under this Agreement may: (a) make or
do the same in such manner and to such extent the Other Party may deem necessary
to protect the Other Party's  rights under this  Agreement or any of the Utility
Agreements;  (b)  commence,  appear  in and  defend  any  action  or  proceeding
purporting to affect the Other Party's rights or interests  under this Agreement
or to the System;  (c) pay,  purchase,  contest or compromise  any  encumbrance,
charge or lien which,  in the sole  judgment of the Other Party,  affects or may
affect the Other  Party's  rights or  interests  under this  Agreement or to the
System; and (d) in exercising any such powers, incur any liability,  expend such
reasonable  amounts  as the  Other  Party,  in its  sole  discretion,  may  deem
necessary.

                  8.14 Utility Agreements. No amendments shall be made to any of
the Utility Agreements which affect FOCAS without FOCAS's prior written consent,
which consent shall not be unreasonably withheld or delayed.

                                   ARTICLE IX
                                    INSURANCE
                                    ---------

                  9.1 Required Insurance  Coverage.  Without limiting any of the
liabilities or other obligations of FOCAS or ELI, both parties shall procure and
cause their respective  contractors,  including,  without limitation,  Qualified
Contractors,  to procure and maintain in force at their own cost and expense the
following  insurance  coverages during any period of construction and throughout
the Term, as applicable:

                           (a)  Workers  Compensation  and  Employers  Liability
         Insurance.  Workers Compensation Insurance to cover obligations imposed
         by  applicable  federal  and state  statutes  and  Employers  Liability
         Insurance with a minimum limit of $1,000,000.00 for injury or death for
         each accident.

                           (b)  Commercial   Liability   Insurance.   Commercial
         Liability   Insurance   with  a  minimum   combined   single  limit  of
         $10,000,000.00  each occurrence.  The policy shall include coverage for
         bodily injury  liability,  property damage  liability,  personal injury
         liability,  products liability,  completed  operations  liability,  and
         contractual  liability for liability assumed under this Agreement.  The
         policy shall contain a severability of interest provision.

                           (c)  Automobile   Liability   Insurance.   Automobile
         Liability   Insurance   with  a  minimum   combined   single  limit  of
         $3,000,000.00  for each accident for bodily injury and property damage,
         to include coverage for all owned, non-owned and hired vehicles.

                                      -37-

<PAGE>

                           (d) Professional  Liability  Insurance.  Professional
         Liability Insurance for engineering  activities performed by each party
         under the terms of this  Agreement.  The limit of coverage shall not be
         less than $1,000,000.00 for each claim.

                  9.2 General Conditions. The following general conditions apply
to the extent FOCAS or ELI do not self-insure:

                           (a)  FOCAS  Policies.  The  policies  required  to be
         maintained by FOCAS and its  contractors  pursuant to Sections  9.1(b),
         (c) and (d)  shall:  (1)  include  ELI as an  additional  insured;  (2)
         provide that ELI shall not by reason of its  inclusion as an additional
         insured,  incur  liability  to the insurer for payment of premiums  for
         such insurance;  and (3) provide that such insurance is primary and not
         excess without right of  contribution  from any other  insurance  which
         might be otherwise available to ELI.

                           (b)  ELI  Policies.   The  policies  required  to  be
         maintained by ELI and its contractors  pursuant to Sections 9.1(b), (c)
         and (d) shall: (1) include FOCAS as an additional insured;  (2) provide
         that  FOCAS  shall  not by  reason of its  inclusion  as an  additional
         insured,  incur  liability  to the insurer for payment of premiums  for
         such insurance;  and (3) provide that such insurance is primary and not
         excess without right of  contribution  from any other  insurance  which
         might be otherwise available to FOCAS.

                  9.3 Evidence of Insurance.  Prior to commencing work under the
terms of this  Agreement,  FOCAS,  ELI and their  respective  contractors  shall
furnish a  certificate  of insurance as evidence  attesting  that the  insurance
required under this Article IX is in effect.  Each policy of insurance  required
hereunder  shall state that coverage shall not be cancelled  except after thirty
(30) days' prior written notice to the other party. The certificate of insurance
must be signed by a person  authorized  by that insurer to bind  coverage on its
behalf and shall be submitted:

                  If to FOCAS, to:                 FOCAS, Inc.
                                                   1685 Bluegrass Lakes Parkway
                                                   Alpharetta, Georgia 30201
                                                   Attn:    Jack Bottoms

                  If to ELI, to:                   Electric Lightwave, Inc.
                                                   8100 N.E. Parkway Drive, #200
                                                   Vancouver, Washington 98662
                                                   Attn:    Finance Department

Either party may inspect original policies or require complete  certified copies
at any time.  Upon  request,  each of FOCAS and ELI shall furnish the other with
the same  evidence  of  insurance  for its  contractors  and  subcontractors  as
required by this Article IX.

                                      -38-

<PAGE>
                  9.4  Blanket  Policies.  Nothing  in this  Article IX shall be
construed  to  prevent  either  FOCAS  or  ELI  from  satisfying  its  insurance
obligations  pursuant to this  Agreement  under a blanket  policy or policies of
insurance which meet or exceed the requirements of this Article IX.

                  9.5  Self-Insurance.  Notwithstanding  any  provision  in this
Article IX to the contrary,  FOCAS may self-insure  and ELI,  through its parent
Citizens Utilities Company,  may self-insure all or any portion of the insurance
required under this Agreement.

                                    ARTICLE X
                         ASSIGNMENT AND OTHER TRANSFERS
                         ------------------------------

                  10.1  Transfers.  This  Agreement and the rights granted under
this  Agreement  are being  granted in reliance on the  financial  standing  and
technical  experience of FOCAS and ELI and are thus granted personally to ELI by
FOCAS and to FOCAS by ELI. Neither FOCAS nor ELI may assign any right under this
Agreement, whether in whole or in part, without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the generality of the foregoing:

                           (a)  Either  party  may  assign  its  rights  in this
         Agreement in whole or in part without the consent of the other party to
         an  Affiliate,  provided  that such  assignment  shall not  relieve the
         assigning party of any of its obligations under this Agreement; and

                           (b) ELI, without prior notice to or the prior consent
         of FOCAS, shall have the right to sell, lease, assign or swap rights in
         and to the Commercial Fibers to commercial users of  telecommunications
         services  and to other  telecommunications  services  providers  in the
         ordinary course of business.  All such transactions shall be subject to
         the terms of this Agreement,  and no such transaction shall relieve ELI
         of its obligations under this Agreement.

                  10.2  Financing.  In  the  event  that  ELI  or  FOCAS,  after
obtaining the consent of the other party  pursuant to Section 10.1,  assigns its
interest under this Agreement  pursuant to a  sale-leaseback  or other financing
transaction,  the non-transferring  party agrees that, upon written notice to it
specifying:  (a) the name and  address of the  Transferee;  and (b) the name and
address of the Transferee's agent who is entitled to receive notice on behalf of
the Transferee,  the  non-transferring  party will  simultaneously  give to such
agent any  notices  required  to be given to the  transferring  party under this
Agreement. The non-transferring party shall accept payment or performance by the
Transferee's  agent of any  obligation of the  transferring  party provided such
payment or performance  shall be made within the applicable cure periods allowed
by this  Agreement.  The  Transferee's  agent  shall  have the right to cure any
default by the transferring  party within the applicable cure periods allowed by
this Agreement.  Subject to the terms of Section 10.1 and this Section 10.2, the
Transferee  may further  assign or transfer  any rights or interests it may have
under  this  Agreement  from time to time,  in whole or in part,  with the prior
written  consent  of the  non-transferring  party,  which  consent  shall not be
unreasonably withheld or delayed.

                                      -39-

<PAGE>

                  10.3 Recognition of Transferees. ELI and FOCAS shall recognize
each other's  authorized  Transferees as provided this Article X, so long as all
of the  obligations  of the  transferring  party under this  Agreement are being
performed and such  Transferee  agrees to be bound by and to observe and perform
the obligations of the transferring party under this Agreement.

                  10.4 No Assumption or Release.  Except as set forth in Section
10.3, no assignment  under this Article X shall be deemed to be an assumption by
the  Transferee  of  the  obligations  of  the  transferring  party  under  this
Agreement.  The transferring party shall not in any event be released,  relieved
or discharged  of or from any of the  obligations  assumed under this  Agreement
unless specifically agreed to by the non-transferring party.

                  10.5 Mergers and Acquisitions.  Notwithstanding  any provision
of this Agreement to the contrary,  neither FOCAS nor ELI shall be restricted or
prohibited by this  Agreement  from  participating  in or completing any mergers
with or acquisitions  of businesses  similar to or comparable in nature with the
business in which they are now engaged, provided that the successor by merger to
either FOCAS or ELI shall be subject to the terms,  covenants and  conditions of
this  Agreement  and shall be  deemed to have  assumed  all  obligations  of the
merging party hereunder.


                                   ARTICLE XI
                                  CONDEMNATION
                                  ------------


                  11.1 Taking.  Should any portion of the Towers, the Substation
Sites or the  Right of Way  owned or  controlled  by a  Utility  Company  be the
subject of a Taking, the Revocable License or the Irrevocable  License,  as then
applicable,  granted to ELI under the terms of the applicable Utility Agreement,
to the extent  appropriated by such Taking,  shall terminate.  In the event of a
Taking,  the Cable Route shall be relocated as provided in Sections 7.5, 7.6 and
7.7.

                  11.2 Notice of Taking.  ELI shall promptly notify FOCAS of any
Taking  threatened  or filed against any portion of the Towers,  the  Substation
Sites or the  Right of Way.  Under  the  terms of the  Utility  Agreements,  the
applicable Utility Company, to the extent reasonably  available,  is required to
procure  alternate  Right  of Way  within  which  the  System  may be  relocated
following such Taking. FOCAS shall cooperate with ELI and the applicable Utility
Company to  relocate  any portion of the System  affected  by a taking,  whether
before or after the completion of the installation of the Cable.

                                      -40-

<PAGE>


                                   ARTICLE XII
                         ENVIRONMENTAL HAZARD LIABILITY

                  12.1  Responsibilities of FOCAS. If any Hazardous Substance is
unlawfully  introduced  or  released  by  FOCAS  or any of  its  contractors  or
subcontractors  which  affects any portion of the  System,  FOCAS shall  defend,
indemnify  and hold ELI and the  applicable  Utility  Company  harmless from and
against  any and all  expenses,  claims,  fines and  actions  arising out of the
existence,  introduction or release of any such Hazardous Substance,  including,
without limitation,  attorney fees and costs. In addition, FOCAS shall also bear
all costs of removing,  neutralizing,  containing or otherwise  remediating  any
such Hazardous Substance.

                  12.2  Responsibilities  of ELI. If any Hazardous  Substance is
unlawfully  introduced  or  released  by  ELI  or  any  of  its  contractors  or
subcontractors  which  affects  any  portion of the  System,  ELI shall  defend,
indemnify and hold FOCAS and the applicable  Utility  Company  harmless from and
against  any and all  expenses,  claims,  fines and  actions  arising out of the
existence,  introduction or release of any such Hazardous Substance,  including,
without  limitation,  attorney fees and costs. In addition,  ELI shall also bear
all costs of removing,  neutralizing,  containing or otherwise  remediating  any
such Hazardous Substance.

                  12.3 Warning.  The California  Health and Safety Code requires
businesses to provide warnings prior to exposing  individuals to material listed
by the Governor of California as chemicals  "known to the State of California to
cause cancer,  birth defects or reproductive harm." The Utility Companies use or
may use  chemicals  on the  Governor's  list at many  of  their  facilities  and
locations.  Accordingly,  in exercising  its rights and  performing  the work or
services  contemplated  by  this  Agreement,   FOCAS  and  its  contractors  and
subcontractors  and their  respective  employees  and  agents  may be exposed to
chemicals on the Governor's  list.  FOCAS shall be responsible for notifying all
such persons that work performed  hereunder may result in exposures to chemicals
on the Governor's list.


                                  ARTICLE XIII
                             LIABILITY AND INDEMNITY
                             -----------------------

                  13.1 FOCAS Indemnity.  FOCAS shall indemnify,  defend and hold
harmless ELI, its parent corporation,  officers,  agents and employees (the "ELI
Indemnitees") of and from any claim, demand,  lawsuit, or action of any kind for
injury to or death of persons, including, but not limited to, employees of FOCAS
or ELI, and damage or  destruction of property,  including,  but not limited to,
property of FOCAS,  any Utility Company or ELI, or other loss or damage incurred
by ELI, arising out of: (a) negligent acts or omissions or willful misconduct of
FOCAS, its agents,  officers,  directors,  employees or contractors;  or (b) the
breach by FOCAS of any of its obligations  under this Agreement.  The obligation
to indemnify shall extend to and encompass all costs incurred by ELI and any ELI
Indemnitee in defending such claims,  demands,  lawsuits or actions,  including,
but not limited to,  attorney,  witness and expert  witness fees,  and any other
litigation related expenses.  FOCAS's obligations  pursuant to this Section 13.1
shall not extend to claims,  demands,  lawsuits or actions for  liability to the
extent  attributable  to the  negligence  or willful  misconduct of ELI, the ELI
Indemnitees,  or their respective contractors,  successors or assigns, or to the
acts of  third-parties.  FOCAS shall pay any cost that may be incurred by ELI or
the ELI Indemnitees in enforcing this indemnity,  including  reasonable attorney
fees.

                                      -41-

<PAGE>



                  13.2 ELI  Indemnity.  ELI  shall  indemnify,  defend  and hold
harmless FOCAS, its officers,  agents and employees (the "FOCAS Indemnitees") of
and from any  claim,  demand,  lawsuit,  or action of any kind for  injury to or
death of persons,  including, but not limited to, employees of FOCAS or ELI, and
damage or destruction of property,  including,  but not limited to,  property of
either FOCAS or ELI, or other loss or damage incurred by FOCAS,  arising out of:
(a)  negligent  acts or  omissions  or willful  misconduct  of ELI,  its agents,
officers,  directors,  employees or contractors; or (b) the breach by ELI of any
of its  obligations  under this  Agreement.  The  obligation to indemnify  shall
extend to and encompass all costs incurred by FOCAS and any FOCAS  Indemnitee in
defending such claims, demands, lawsuits or actions,  including, but not limited
to, attorney,  witness and expert witness fees, and any other litigation related
expenses.  ELI's  obligations  pursuant to this Section 13.2 shall not extend to
claims, demands, lawsuits or actions for liability to the extent attributable to
the negligence or willful misconduct of FOCAS, the FOCAS  Indemnitees,  or their
respective contractors, successors or assigns, or the acts of third-parties. ELI
shall pay any cost that may be  incurred  by FOCAS or the FOCAS  Indemnitees  in
enforcing this indemnity, including reasonable attorney fees.

                  13.3 No Consequential  Damages.  NOTWITHSTANDING ANY PROVISION
IN THIS AGREEMENT TO THE CONTRARY,  NEITHER FOCAS NOR ELI SHALL BE LIABLE TO THE
OTHER FOR  INCIDENTAL,  CONSEQUENTIAL,  SPECIAL,  PUNITIVE OR INDIRECT  DAMAGES,
INCLUDING WITHOUT LIMITATION,  LOSS OF USE, LOSS OF PROFITS,  COST OF CAPITAL OR
INCREASED OPERATING COSTS,  ARISING OUT OF THIS TRANSACTION WHETHER BY REASON OF
CONTRACT, INDEMNITY, STRICT LIABILITY,  NEGLIGENCE,  INTENTIONAL CONDUCT, BREACH
OF WARRANTY OR FROM BREACH OF THIS AGREEMENT.  The foregoing provision shall not
prohibit FOCAS or ELI from seeking and obtaining  general contract damages for a
breach  of  this  Agreement,  including,  without  limitation,  the  payment  or
application of any monetary obligation described in Article IV.

                  13.4   Defense  of  Claims.   Either   FOCAS  or  ELI  as  the
indemnifying party hereunder shall have the right to defend the other by counsel
of the indemnifying party's selection reasonably satisfactory to the indemnified
party, with respect to any claims within the indemnification obligations of this
Article XIII.  FOCAS and ELI shall give each other prompt notice of any asserted
claims or actions  indemnified  against,  shall cooperate with each other in the
defense of any such claims or  actions,  and shall not settle any such claims or
actions without the prior written consent of the other.

                                      -42-

<PAGE>


                  13.5 Third-Party Claims. Except as set forth in Sections 10.2,
13.1 and 13.2, nothing in this Agreement shall be construed to create rights in,
or duties or  liabilities  to, or any standard of care with  reference to, or to
grant remedies to, any person or entity not a party to this Agreement. FOCAS and
ELI by entering  into this  Agreement do not hold  themselves  out as furnishing
like or similar services to any other person or entity.

                  13.6 Survival. The obligations of the respective parties under
this Article XIII shall survive the  expiration or earlier  termination  of this
Agreement.

                  13.7 Applicability of Liability  Limitations.  The waivers and
disclaimers of liability, releases from liability,  exclusive remedy provisions,
and (except as expressly  stated to the  contrary  therein)  indemnity  and hold
harmless provisions expressed throughout this Agreement shall: (a) apply even in
the event of the fault,  negligence (in whole or in part), strict liability,  or
breach  of  contract  of the  party  released  or  whose  liability  is  waived,
disclaimed, limited, apportioned or fixed by such exclusive remedy provision, or
who is indemnified or held harmless;  and (b) extend to the  Affiliates,  parent
corporations,  directors,  officers, employees and agents of both FOCAS and ELI.
Such  provisions  shall  continue in full force and effect  notwithstanding  the
completion,   termination,   suspension,  cancellation  or  rescission  of  this
Agreement,  or  termination  of  the  rights  and  privileges  granted  by  this
Agreement. No parent corporation,  officer,  director,  employee, agent or other
individual representative of either FOCAS or ELI shall be personally responsible
for any liability arising under this Agreement.

                  13.8 Claims Against  Third-Parties.  Nothing  contained herein
shall  operate as a  limitation  on the right of either FOCAS or ELI to bring an
action for  damages  against any  third-party,  including  indirect,  special or
consequential  damages,  based on any acts or omissions of such  third-party  as
such acts or  omissions  may affect the  construction,  operation  or use of the
Commercial Fibers, the Dark Fibers or the System. FOCAS and ELI shall reasonably
cooperate with each other,  including,  without limitation,  executing documents
and doing  whatever  else may be reasonably  appropriate  to enable the other to
pursue any such action  against  such  third-party.  Each of FOCAS and ELI shall
assign such rights of claims, execute such documents and to whatever else may be
reasonably  necessary to enable the other to pursue any such action against such
third-party.  The  provisions  of this Section 13.8,  however,  shall not permit
either  FOCAS or ELI to bring an action for damages  against a  third-party  for
indirect,  special or  consequential  damages if such  third-party,  directly or
through one or more  intermediate  parties,  pursuant to this  Agreement,  has a
right of indemnification,  impleader, cross claim, contribution,  or other right
of recovery against FOCAS or ELI.

                  13.9  Anti-Indemnity  Statute.  FOCAS and ELI are aware of the
provisions  of Section  2782 of the  California  Civil Code.  FOCAS and ELI have
negotiated  and agreed to the  provisions  of this  Agreement  that  address the
apportionment of risk, such as the warranty,  insurance and liability provisions
of this Agreement.  For adequate consideration both FOCAS and ELI have concluded
this Agreement with the intent that the  apportionment of risk in this Agreement
be valid and  binding  under such code  section  and the laws of  California  in
general.

                                      -43-

<PAGE>


                                   ARTICLE XIV
                                  FORCE MAJEURE
                                  -------------

                  14.1 Excuse of Performance.  Notwithstanding  anything in this
Agreement to the contrary,  neither FOCAS nor ELI shall be liable or responsible
for a delay or failure in  performing  or  carrying  out any of its  obligations
(other  than its  obligations  to make  payments  under  Article  IV) under this
Agreement caused by a Force Majeure Event (as defined below).

                  14.2  Definition.  The term "Force  Majeure  Event" as used in
this Agreement  shall mean any cause beyond the  reasonable  control of FOCAS or
ELI, as applicable,  or beyond the reasonable control of any of their respective
contractors, subcontractors, suppliers or vendors, including without limitation:

                           (a)  Acts of God.  Acts  of God,  including,  but not
         necessarily  limited to,  lightning,  earthquakes,  adverse  weather of
         greater  duration or intensity than normally  expected for the job area
         and  time  of  year,   fires,   explosions,   floods,   other   natural
         catastrophes,  sabotage,  acts  of a  public  enemy,  wars,  blockades,
         embargoes, insurrections, riots or civil disturbances;

                           (b) Labor Disputes.  Labor disputes,  including,  but
         not necessarily limited to, strikes, work slowdowns,  work stoppages or
         labor  disruptions,   labor  or  material   shortages,   or  delays  or
         disruptions of transportation;

                           (c)  Court  Orders.   Orders  and  judgments  of  any
         federal, state or local court, administrative agency or government body
         materially and adversely affecting use of the Revenue Sharing Route;

                           (d)  Government  or  Regulatory  Agencies.  Orders or
         judgments  of  any  government  or  regulatory  agency  materially  and
         adversely affecting use of the Revenue Sharing Route.

                           (e)  Independent  System  Operator.  Actions  of  any
         Independent System Operator having operational control over any Utility
         Company's electric  transmission  system which materially and adversely
         affects the use of the System;

                           (f) Change in Law.  The  adoption of or change in any
         federal, state or local laws, rules, regulations,  ordinances,  permits
         or  licenses,  or changes in the  interpretation  of such laws,  rules,
         regulations,  ordinances,  permits  or  licenses,  by a court or public
         agency having appropriate  jurisdiction after the date of the execution
         of  this  Agreement   which  make   performance   hereunder   unlawful,
         impossible,  or economically infeasible or which frustrates the purpose
         and intent of this Agreement; or

                                      -44-

<PAGE>

                           (g)    Government    Approvals.    Any    suspension,
         termination,  interruption,  denial or failure to issue or renew by any
         government  authority  or other  party  having  approval  rights of any
         Approval   required  or  necessary   hereunder  for  the  construction,
         installation  or operation of the System or for either party to perform
         its obligations  hereunder,  except when such suspension,  termination,
         interruption,  denial or  failure  to issue or renew  results  from the
         negligent act or failure to act of the party claiming the occurrence of
         a Force Majeure Event.

                  14.3 Continuance after Force Majeure Event. If either FOCAS or
ELI cannot  fulfill any of its  obligations  under this Agreement by reason of a
Force  Majeure  Event,  such  party  shall  promptly  notify the other and shall
exercise due diligence to remove such inability  with all  reasonable  dispatch;
provided,  that  nothing  contained  in this  Section 14.3 shall be construed as
requiring  FOCAS or ELI to settle  any  strike,  work  stoppage  or other  labor
dispute  in which it may be  involved,  or to accept  any  permit,  certificate,
license or other  Approval on terms  deemed  unacceptable  to such party,  or to
enter into any contract or other  undertaking  on terms which the party deems to
be unduly burdensome or costly.


                                   ARTICLE XV
                             DEFAULT AND TERMINATION
                             -----------------------

                  15.1 Termination Events. The occurrence and continuance of the
following events may result in the termination of this Agreement, subject to the
provisions of this Article XV:

                           (a)  Change of  Conditions.  A change  of  conditions
         under which  FOCAS,  ELI or any portion of the  Revenue  Sharing  Route
         operates  which is beyond  the  control  of the  parties  such that the
         Revenue Sharing Route, or any material portion thereof, cannot continue
         to operate as contemplated  by the terms of this Agreement,  including,
         without limitation:

                                    (1) A change in the  financial  condition of
                  FOCAS or ELI that materially and adversely affects the ability
                  of FOCAS  or ELI to  perform  in  accordance  with the  terms,
                  covenants and conditions of this Agreement;

                                    (2) The  occurrence  of an event of casualty
                  which results in the physical destruction of ten percent (10%)
                  or more of the Revenue Sharing Route;

                                    (3)  Changes  in law  or in  the  regulatory
                  environment  that  materially and adversely  affect the use of
                  any portion of the Revenue Sharing Route;

                                      -45-

<PAGE>


                                     (4)  Actions  by  an   Independent   System
                  Operator that  materially and adversely  affect the use of any
                  portion of the Revenue Sharing Route;

                                    (5) The  occurrence of a Force Majeure Event
                  that  renders  FOCAS or ELI  unable to  perform  its  material
                  obligations  under this  Agreement for a continuous  period of
                  six (6) months;

                                    (6) The  inability  of a Utility  Company or
                  ELI to obtain any required material  Approvals for the use and
                  occupation of the Right of Way and the Towers by the System;

                                    (7) The  inability  of a Utility  Company or
                  FOCAS  to  obtain  any  required  material  Approvals  for the
                  installation  of the  Cable,  the  Cable  Accessories  and the
                  Connecting Points; or

                                    (8) The termination of any Utility Agreement
                  other than due to a default by ELI thereunder.

                           (b)  Default.  A  material  default  under the terms,
         covenants  or  conditions  of this  Agreement  by either  FOCAS or ELI,
         including, without limitation:

                                    (1) The  failure  of either  FOCAS or ELI to
                  make any payment  required  under the terms of this  Agreement
                  when due;

                                    (2)  Either  FOCAS or ELI  announces  to the
                  other its intention to terminate  this Agreement for strategic
                  or  other   reasons   that  are   unrelated  to  the  parties'
                  performance under this Agreement;

                                    (3) The willful  failure by either  FOCAS or
                  ELI to  perform  its  obligations  under  the  terms  of  this
                  Agreement;

                                    (4) Either  FOCAS or ELI, by willful acts or
                  omissions,  places either itself or the Revenue  Sharing Route
                  or any  portion  thereof  in a  position  or  condition  which
                  violates the terms, covenants and conditions of this Agreement
                  or effectively terminates this Agreement,  including,  without
                  limitation,  a willful  failure to cure a default after having
                  received written notice thereof from the other party; or

                                    (5) Either  FOCAS or ELI becomes  insolvent,
                  is dissolved or  liquidated,  files or has filed  against it a
                  petition  in   bankruptcy,   reorganization,   dissolution  or
                  liquidation  or  similar  action  (which  in  the  case  of an
                  involuntary  filing against a party is not stayed or dismissed
                  within  ninety  (90) days  after the  filing  thereof),  or is
                  adjudicated  a bankrupt,  or has a receiver  appointed for its
                  assets.

                                      -46-

<PAGE>


                  15.2 Actions Following Occurrence of Termination Event. Should
any termination event described in Section 15.1 occur,  FOCAS and ELI shall have
the following rights and obligations:

                           (a) Change of Conditions. If the termination event is
         a change in  conditions  described  in Section  15.1(a),  FOCAS and ELI
         shall meet  expeditiously  to discuss and  negotiate  in good faith the
         effect of the changed  condition on this  Agreement,  their  respective
         performance  obligations hereunder,  and their ability to perform under
         the  terms,  covenants  and  conditions  of this  Agreement.  By mutual
         consent,  FOCAS and ELI may terminate  this  Agreement,  or modify this
         Agreement  to  address  and  account  for the  changed  condition  in a
         mutually acceptable manner. If FOCAS and ELI cannot agree on a solution
         to the effect of the changed condition, either party, by written notice
         to the other,  may elect to terminate  this  Agreement;  provided  that
         nothing herein shall abrogate,  reduce,  alter, or adversely affect the
         right  of  either  FOCAS  or  ELI  to  receive,   or  their  respective
         obligations to make, the payments required by Article IV.

                           (b) Default.  If the  termination  event is a default
         described  in  Section  15.1(b),  the  nondefaulting  party  shall give
         written  notice  of  such  occurrence  to  the  defaulting  party.  The
         defaulting party shall be given a reasonable time to cure any breach or
         default as follows:

                                    (1) In the case of a monetary  default,  the
                  defaulting  party shall have thirty (30) days after receipt of
                  the written notice in which to effectuate a cure.

                                    (2) In the  case of a  nonmonetary  default,
                  the defaulting  party shall have sixty (60) days after receipt
                  of the written  notice in which to  effectuate a cure.  If the
                  nonmonetary default cannot be corrected within such sixty (60)
                  day period,  the  defaulting  party  shall have an  additional
                  reasonable  time in which to  effectuate a cure,  provided the
                  defaulting  party  commences   corrective  action  within  the
                  original  sixty  (60) day  period  and  thereafter  diligently
                  prosecutes  the  corrective  action  to  completion.   If  the
                  defaulting  party does not  timely  cure the breach or default
                  within the time periods  specified  above,  the  nondefaulting
                  party may  elect to  terminate  this  Agreement  by  providing
                  written notice of such election to the defaulting party.

                           (c)  Remedies.  In the event of an uncured  breach or
         default  described in Section 15.1(b),  the  nondefaulting  party shall
         have available to it all legal  remedies  available at law or in equity
         for breach of contract, including, without limitation, general contract
         damages.

                  15.3  No  Release.   No  termination  or  expiration  of  this
Agreement or the rights granted  hereunder shall release either FOCAS or ELI, as
applicable,  from any liability or obligation (whether for the Quarterly Payment
or other payments  described in Article IV,  payments of indemnity or otherwise)
which may have become due,  attached or accrued  prior to, or which  become due,
attach or accrue at the time or by reason of, such termination or expiration.

                                      -47-

<PAGE>

                                   ARTICLE XVI
                               DISPUTE RESOLUTION
                               ------------------


                  16.1 Dispute Resolution.  Except as may otherwise be set forth
expressly herein, all disputes arising under this Agreement shall be resolved as
set forth in this Article XVI.

                  16.2 Negotiation and Mediation. FOCAS and ELI shall attempt in
good faith to resolve any dispute  arising out of or relating to this  Agreement
promptly  by  negotiations  between  a Vice  President  of  FOCAS  or his or her
designated  representative  and an executive of similar authority of ELI. Either
FOCAS or ELI may give the other  party  written  notice of any  dispute.  Within
twenty (20) days after delivery of such notice, the designated  executives shall
meet at a mutually  acceptable  time and place,  and thereafter as often as they
reasonably deem necessary to exchange  information and to attempt to resolve the
dispute.  If the matter has not been  resolved  within  thirty  (30) days of the
first meeting,  either FOCAS or ELI may initiate a mediation of the controversy.
The  mediation  shall be  facilitated  by a mediator  that is acceptable to both
parties and shall conclude  within sixty (60) days of its  commencement,  unless
FOCAS and ELI agree to extend the mediation  process beyond such deadline.  Upon
agreeing on a mediator,  FOCAS and ELI shall enter into a written  agreement for
the mediation services.  The mediation shall be conducted in accordance with the
Commercial Mediation Rules of the American Arbitration Association.

                  16.3  Confidentiality.  All  negotiations  and  any  mediation
conducted pursuant to Section 16.2 shall be confidential and shall be treated as
compromise  and  settlement  negotiations,   to  which  Section  1152.5  of  the
California  Evidence  Code shall apply,  which Section is  incorporated  in this
Agreement by reference.

                  16.4   Injunctive   Relief.   Notwithstanding   the  foregoing
provisions,  either  FOCAS  or ELI  may  seek a  preliminary  injunction,  other
provisional judicial remedy, or other equitable remedies if in its judgment such
action is necessary to avoid irreparable damage or to preserve the status quo.

                  16.5  Continuing  Obligation.  FOCAS and ELI shall continue to
perform their  obligations  under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement.

                  16.6 Failure of Mediation.  If FOCAS and ELI, after good faith
efforts to mediate a dispute  under the terms of this  Agreement (as provided in
Section  16.2),  cannot  agree to a resolution  of the dispute  either party may
pursue  whatever  legal  remedies may be  available to such party,  at law or in
equity,  before a court of competent  jurisdiction and with venue as provided in
Section 17.7.

                                      -48-

<PAGE>


                                  ARTICLE XVII
                                  MISCELLANEOUS
                                  -------------

                  17.1  Amendments.  Neither this  Agreement nor any  provisions
hereof may be changed,  waived,  discharged or terminated orally and may only be
modified or amended by an instrument in writing, signed by both FOCAS and ELI.

                  17.2  Binding  Effect.  This  Agreement  shall be binding upon
FOCAS,  ELI and their  respective  successors and assigns.  This Agreement shall
inure to the  benefit of FOCAS,  ELI and,  to the extent  provided in Article X,
their respective successors and assigns.

                  17.3 Waivers. The failure by FOCAS or ELI at any time or times
hereafter to require strict performance by the other of any of the undertakings,
agreements or covenants  contained in this Agreement shall not waive,  affect or
diminish  any  right of FOCAS or ELI  under  this  Agreement  to  demand  strict
compliance and performance  therewith.  None of the undertakings,  agreements or
covenants  of FOCAS and ELI under  this  Agreement  shall be deemed to have been
waived unless such waiver is evidenced by an instrument in writing signed by the
party to be charged specifying such waiver.

                  17.4 Notices.  Unless otherwise  specifically provided in this
Agreement,  any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served,  telecopied,  or sent by
courier or United States  certified  mail and shall be deemed to have been given
when delivered in person or by courier service,  upon receipt of a telecopy,  or
five (5) days after deposit in the United States mail,  with postage prepaid and
properly addressed, as follows:

                  If to FOCAS, to:                FOCAS, Inc.
                                                  1685 Bluegrass Lakes Parkway
                                                  Alpharetta, Georgia 30201
                                                  Attn:    Jack Bottoms
                                                  Telephone:      (770) 664-4949
                                                  Facsimile:      (770) 664-4379

                                      -49-

<PAGE>


                  With copy to:                   Cookson America, Inc.
                                                  1 Cookson Place
                                                  Providence, Rhode Island 02903
                                                  Attn:    James V. Rosati
                                                  Telephone:      (401) 521-1000
                                                  Facsimile:      (401) 521-5273

                  If to ELI, to:                  Electric Lightwave, Inc.
                                                  8100 N.E. Parkway Drive, #200
                                                  Vancouver, Washington 98662
                                                  Attn:    Legal Department
                                                  Telephone:      (360) 892-1000
                                                  Facsimile:      (360) 816-3821

Such  addresses  may be changed by notice to the other  party  given in the same
manner as above provided.

                  17.5 Severability.  If any term or provision of this Agreement
shall, to any extent,  be determined by a court of competent  jurisdiction to be
void,  voidable or unenforceable,  such void,  voidable or unenforceable term or
provision shall not affect any other term or provision of this Agreement.

                  17.6  Interpretation.  Whenever the context shall require, the
plural shall include the singular, the whole shall include any part thereof, and
any gender shall include both other genders. The article, section and subsection
headings  contained in this  Agreement  are for  purposes of reference  only and
shall not limit,  expand or otherwise  affect the construction of any provisions
hereof. All references in this Agreement to articles,  sections and subsections,
unless  expressly  noted  otherwise,  are to articles,  sections and subsections
contained in this Agreement.  Unless the context requires otherwise,  references
in this Agreement to "party" shall be to either FOCAS or ELI, as applicable, and
references to "parties" shall be to both FOCAS and ELI.

                  17.7 Governing Law and Choice of Forum. This Agreement and all
matters  relating  hereto shall be governed by,  construed  and  interpreted  in
accordance  with the laws of the State of California.  Any mediation  under this
agreement  shall be held in the State of  California,  County of San  Francisco.
Jurisdiction for any disputes arising out of this Agreement shall be exclusively
in the courts of the State of California,  state or federal,  and any litigation
shall be brought in San Francisco County, California.

                  17.8 Commissions.  FOCAS and ELI shall indemnify and hold each
other harmless  (including attorney fees and costs) from and against any and all
claims for  brokerage  and finder's  fees or  commissions  which may be asserted
against the other based on the actions or omissions of the  indemnifying  party.
FOCAS and ELI shall each pay any fees or  compensation  due to their  respective
consultants as advisors, if any, with respect to this transaction.

                                      -50-

<PAGE>

                  17.9  Counterparts.  This  Agreement  may be  executed  in any
number of counterparts,  each of which when so executed and delivered,  shall be
deemed an original,  but all such  counterparts  taken together shall constitute
only one instrument.

                  17.10 Attorney Fees. FOCAS and ELI agree that should either of
them  default  in any of the  covenants  or  agreements  contained  herein,  the
defaulting party shall pay all costs and expenses, including reasonable attorney
fees and  costs,  incurred  by the  nondefaulting  party to  protect  its rights
hereunder,  regardless  of  whether  an action is  commenced  or  prosecuted  to
judgment.

                  17.11 Costs.  Except as otherwise set forth in this Agreement,
FOCAS and ELI shall each be responsible for its own costs, including legal fees,
incurred in negotiating and finalizing this Agreement.

                  17.12  No  Third-Party  Beneficiaries.   Except  as  otherwise
expressly  provided in this  Agreement,  the terms,  covenants and conditions of
this  Agreement,  shall not be  construed as being for the benefit of any person
who is not a signatory to this Agreement.

                  17.13 Entire  Agreement.  This Agreement  expresses the entire
understanding of FOCAS and ELI relating to the subject matter hereof.  All prior
understandings,  written or oral, with respect to such subject matter are hereby
merged herein and superseded.

                  17.14  Survival.  In addition to the survival  provisions  set
forth elsewhere in this Agreement,  those Articles or Sections of this Agreement
which by their nature  should  survive  expiration or other  termination  of the
Agreement,  include  Section 5.7 (Warranty of Work),  Section 6.14  (Warranty of
Work),  Section 7.11 (Performance  Completion),  Section 8.3  (Confidentiality),
Article  XIII  (Liability  and  Indemnity),   Section  15.2  (Actions  Following
Occurrence of Termination Event), and Section 15.3 (No Release).

                  17.15  Exhibits.  The  exhibits to this  Agreement  referenced
above are an integral part of the agreement and understanding of the parties and
are incorporated in this Agreement by reference.  Any exhibits referred to above
in this Agreement  which are not attached hereto as of the Effective Date may be
attached to this Agreement following the Effective Date when approved as to form
by both FOCAS and ELI. The omission of any of the exhibits  from this  Agreement
as of the Effective Date shall not affect the enforceability of this Agreement.

                                      -51-


<PAGE>


                  DATED effective as of the date first above written.


                                FOCAS:

                                FOCAS, INC., a Delaware corporation


                                By: /s/ James V. Rosati

                                Title: Chairman



                                ELI:

                ELECTRIC LIGHTWAVE, INC., a Delaware corporation


                                By: /s/Daryl A. Ferguson
                                Title: Chief Executive Officer


G:\5093\194\INIT0504.AGR

                                      -52-

<PAGE>



                                   EXHIBIT "A"

                          ACCEPTANCE TESTING STANDARDS
                          ----------------------------


FOCAS shall meet or exceed the Acceptance Testing Standards set forth below.

ELI Network Span and Final Acceptance Requirements:

1.0 Design Criteria:

The  number  of cable  splices  at the  time of  original  construction  must be
designed to an average of 4 km between  splices.  Due to cable  cuts,  and cable
relocation,  additional  splices  are  allowed.  The number of  splices  must be
closely   monitored  to  insure   attenuation  and  reflection   tolerances  are
maintained.  FOCAS  will  endeavor  to keep the number of splices in a span to a
minimum.

Construction:

Cable must be constructed in accordance  with sound  commercial  practices.  The
National  Electrical  Code shall be followed  in every case  except  where local
regulations are more stringent, in which case local regulations shall govern.

2.0 Typical Fiber Cable Information:

Single mode fiber  specifications may vary, depending on the fiber manufacturer.
Typical levels of 0.40 dB per Km @ 1310nm and 0.30 per Km @ 1550nm are expected.

3.0 Span Requirements:

Span  documentation  must be performed  using the two  following  methods:  OTDR
(optical time domain  reflectometer) and insertion loss (stabilized light source
and power meter) measurement in each direction at 1550nm wavelength.

          o    Maximum  total span loss must not exceed  35.0 dB at 1550nm for a
               100 Km span.

          o    Maximum dB/Km loss must not exceed 0.30 dB/Km at 1550nm excluding
               splices

          o    In no case shall a fiber show a point discontinuity  greater than
               0.1dB.   Discontinuities   (known   as  steps,   or   attenuation
               non-uniformities)  shall be measured  with an optical time domain
               reflectometer  (OTDR)  to  determine  the  loss of the  localized
               attenuation.  The lease squares fit method of measurement must be
               used  to  determine   the  magnitude  of  the  loss  of  a  point
               discontinuity.

          o    Span  loss  will be the sum of cable  loss in dB/Km  plus  System
               splice loss in dB. The test results will be submitted to ELI in a
               format approved by ELI.



<PAGE>


          o    Maximum  span  dispersion  = 2250  ps/mn/Km  for a 100 Km span. o
               Performance  levels at the time of acceptance  must be maintained
               at  all  times.  o  Test  data  including  OTDR  hard  copies  or
               electronic  data must be submitted to Common  System  Engineering
               before Final  Acceptance.  ELI, at its discretion,  may choose to
               physically  monitor  any or all  testing  associated  with  Final
               Acceptance of the Commercial Fibers.

In the event the measured span measured  values exceeds the  calculated  values,
FOCAS will perform corrective  maintenance as required to restore the Commercial
Fibers to the calculated values.

4.0 Splice Loss:

The splice loss will average 0.10dB @ 1550 nm. All splicing will be performed by
FOCAS.  Further,  no  individual  splice will exceed  0.30dB.  Splices  shall be
measured using bi-directional methods to average absolute splice loss. All fiber
splicing  must be fusion  type.  The test  results will be submitted to ELI in a
format approved by ELI.

5.0 Compliance:

ELI,  at its  discretion,  may choose to  physically  monitor any or all testing
associated  with acceptance of the Commercial  Fibers.  Test data including OTDR
hard copies or electronic data must be submitted to ELI for review.  Traces will
be taken on each fiber after all work is completed, bi-directionally, at 1310 nm
and  1550 nm,  and  submitted  on 3 1/2 inch  floppy  disks.  Filenames  will be
approved by the Project  Engineer prior to traces being  submitted.  ELI has the
option to waive any specifications  and/or  requirements listed in the technical
specification criteria.

6.0 Waivers:

FOCAS must  provide  Cable with  attenuation  of not  greater  than 0.30 dB/Km @
1550nm and will not be required to perform  corrective  maintenance under 0.30dB
to reduce span attenuation.

7.0 Key Optical  Performance  Characteristics  Required for Single-Mode  Optical
Cables:

                                       A2

<PAGE>


7.1 Attenuation Single Mode Non-Shifted:

          o    The  attenuation  must not exceed  0.30 dB/Km when  measured at a
               wavelength  of  1.55  microns   (1550nm)   using  the  two  point
               measurement.  o The  attenuation  must not exceed 0.40 dB/Km when
               measured at a wavelength of 1.30 microns  (1310nm)  using the two
               point measurement.

7.2 Attenuation Single Mode Dispersion Shifted:

          o    The  attenuation  must not exceed  0.30 dB/Km when  measured at a
               wavelength  of  1.55  microns   (1550nm)   using  the  two  point
               measurement.

7.3 Attenuation versus Wavelength Single-Mode and Dispersion Shifted:

          o    The attenuation for the wavelength region form 1525 nm to 1575 nm
               must not  exceed  the  attenuation  at 1550 nm by more  than 0.05
               dB/Km.

7.4 Chromatic Dispersion Non-Dispersion Shifted (ps/nm-km):

          o    For  conventional   single  mode  fibers,   the  zero  dispersion
               wavelength must be 1300 to 1322.5nm. The maximum dispersion slope
               (SoMAX)  must be no greater  than  0.092ps/(km-nm  squared).  The
               nominal  zero  dispersion  wavelength  must be near  1310nm  zero
               dispersion range. The dispersion between 1530 and 1570 nm must be
               less than or equal to 18 ps/(nm km).

7.5 Cutoff Wavelength:

          o The cutoff wavelength of cabled fiber must be less than 1260 nm.

7.6 Core Diameter:

          o The core diameter must be typically 8.30 plus or minus 0.13.

7.7 Temperature:

          o Cable operating temperature range -40(degree) C to +85(degree) C.

FOCAS will insure that the Cable and related appurtenances meet all of the above
optical performance characteristics operating systems power level.

                                       A3


<PAGE>



                                   EXHIBIT "B"

                                   CABLE ROUTE
                                   -----------



An approximate description of the Cable Route is set out below:


Utility Company                     Route Description

PacifiCorp                          *

PG&E                                *

Southern California                 *
Edison                              


*  Confidential   information  has  been  omitted  pursuant  to  a  request  for
confidential  treatment.  Such  material  has  been  filed  separately  with the
Securities and Exchange Commission.




<PAGE>



                                   EXHIBIT "C"

                              CABLE SPECIFICATIONS
                              --------------------


                            SINGLE-MODE OPTICAL FIBER


GENERAL

The  fiber  is  optimized  for  use  in  the  1310  nm  wavelength  region.  The
information-carrying   capacity   of  the  fiber  is  at  its  highest  in  this
transmission  window;  it is also where dispersion is the lowest.  The fiber can
also be effectively used in the 1550 nm wavelength region.

The fiber  coating is  optimized  for use in many single and  multi-fiber  cable
designs including loose tube, ribbon,  slotted core and tight buffer cables. The
fiber coating shall provide fiber  protection and must be easy to work with. The
fiber coating must be capable of mechanical  stripping with an outside  diameter
of at least 245 (mu)m.

The fiber is  manufactured  using the Outside Vapor  Deposition  (OVD)  process,
which produces a totally synthetic, ultra-pure fiber. As a result, the fiber has
consistent geometric  properties,  high strength and low attenuation.  The Vapor
Axiel Deposition (VAD) process may also be used.

GENERAL FEATURES AND BENEFITS

     o  Versatility in 1310 nm and 1550 nm applications.

     o  Geometrical  properties  that allow for low splice  loss and high splice
        yields.

     o OVD and VAD manufacturing reliability and product consistency.

     o Optimized for use in ribbon, loose tube and other common cable designs.

<PAGE>





<TABLE>
<CAPTION>
<S>                       <C>                    <C>


OPTICAL SPECIFICATIONS

Attenuation

------------------------------------------------

Uncabled Fiber Attenuation Cells                 Point Discontinuity
------------------------------------------------
------------------------- ----------------------

                             Attenuation Cells   No point of discontinuity greater than 0.10 dB at either 1310 nm
                                  (dB/km)        or 1550 nm.
------------------------- ----------------------
------------------------- ----------------------

Wavelength (nm)                  Standard
------------------------- ----------------------
------------------------- ----------------------

                           Less than or equal to
         1310                       0.40         Attenuation at the Water Peak
------------------------- ----------------------
------------------------- ----------------------

                           Less than or equal to
         1550                       0.30         The attenuation at 1383 plus or minus 3 nm shall not exceed 2.1 dB/km.
------------------------- ----------------------

--------------------------------------------------------------

Attenuation vs. Wavelength
--------------------------------------------------------------
--------------------- ------------------- --------------------

       Range                Ref. lambda      Max Increase       The attenuation in a given wavelength range does
       (nm)                  (nm)            alpha (dB/km)      not exceed the attenuation of the reference
                                                                wavelength (lambda) by more than the value alpha.
--------------------- ------------------- --------------------
--------------------- ------------------- --------------------

     1285-1330               1310                0.1
--------------------- ------------------- --------------------
--------------------- ------------------- --------------------

     1525-1575               1550                0.05
--------------------- ------------------- --------------------

-----------------------------------------------------------------------------

Attenuation With Bending
-----------------------------------------------------------------------------
-------------------- ----------------- ----------------- --------------------

     Mandrel             Number of        Wavelength           Induced              The induced attenuation due to
    Diameter               Turns             (nm)            Attenuation            fiber wrapped around a mandrel
      (nm)                                                      (dB)                of a specified diameter.
-------------------- ----------------- ----------------- --------------------
-------------------- ----------------- ----------------- --------------------

                                                         Less than or equal to
       32                    1               1550               0.50
-------------------- ----------------- ----------------- --------------------
-------------------- ----------------- ----------------- --------------------

                                                          Less than or equal to
       75                   100              1310               0.05
-------------------- ----------------- ----------------- --------------------
-------------------- ----------------- ----------------- --------------------

                                                          Less than or equal to
       75                   100              1550               0.10
-------------------- ----------------- ----------------- --------------------

o  Cable Cutoff Wavelength (lambda ccf)                   o    Mode-Field Diameter
    (lambda ccf) less than 1260 nm                             9.30 plus or minus 0.50 mu m at 1310 nm
                                                              10.50 plus or minus 1.00 mu m at 1550 nm
o  Dispersion
    Zero Dispersion Wavelength (lambda o):  1300 nm Less than or equal to (lambda o) Less than or equal to 1322 nm

    Zero Dispersion Slope (So):  Less than or equal to 0.092 ps/(nm squared times km)

    Fiber Polarization Mode Dispersion Coefficient (PMD): Less than or equal to 0.5 psec divided by square root km


                                       C2

<PAGE>


--------------------------------------------------------------------------------------------------------------------

                             Dispersion Calculation
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------


The agreement sets forth a detailed calculation of dispersion.

--------------------------------------------------------------------------------------------------------------------


ENVIRONMENTAL SPECIFICATIONS

------------------------------------------ --------------------------------

          Environmental Test                   Induced                      Operating Temperature Range
               Condition                     Attenuation                    -60(degree)C to +85(degree)C
                                               (dB/km)
------------------------------------------ --------------------------------
------------------------------------------ -------------- -----------------

                                               1310 nm         1550 nm
------------------------------------------ -------------- -----------------
------------------------------------------ -------------- -----------------

                                             Less than or    Less than or
                                               equal to        equal to
Temperature Dependence                          0.05             0.05
-60(degree)to +85(degree)C
------------------------------------------ -------------- -----------------
------------------------------------------ -------------- -----------------

                                             Less than or    Less than or
                                               equal to        equal to
Temperature-Humidity Cycling                    0.05             0.05
-10(degree)C to +85(degree)C, up to 98% RH
------------------------------------------ -------------- -----------------
------------------------------------------ -------------- -----------------
                                             Less than or    Less than or
                                               equal to        equal to
Water Immersion, 23(degree)C                    0.05            0.05
------------------------------------------ -------------- -----------------
------------------------------------------ -------------- -----------------
                                             Less than or    Less than or
                                               equal to        equal to
Heat Aging, 85(degree)C                         0.05            0.05
------------------------------------------ -------------- -----------------


DIMENSIONAL SPECIFICATIONS

Standard Length (km/reel):   2.2 - 25.0


Glass Geometry                                                   Coating Geometry
Fiber Curl: greater than equal to 2.0 m radius of curvature      Coating Diameter:  245 plus or minus 10 mu m
Cladding Diameter:   125.0 + 1.0 mu m          Coating-Cladding Concentricity:  less than 12 mu m
Core-Clad Concentricity: less than or equal to 0.8 mu m
Cladding Non-Circularity: less than 1.0%

Defined as:        1- (Min. Cladding Diameter divided by Max. Cladding Diameter) x 100


                                       C3

<PAGE>


MECHANICAL SPECIFICATIONS

Proof Test:
The entire length of fiber is subjected to a tensile  proof stress  greater than
or equal to 100 kpsi (0.7 GN/m squared)

Cable Selection:
The Cable jacket shall comply with applicable  National  Electrical  Safety Code
(NESC) standards for storm loading.


PERFORMANCE CHARACTERIZATIONS Characterized parameters must be typical values.

Core Diameter:                               Refractive Index Difference:
8.3 mu m                                                0.36%

Numerical Aperture:                                   Effective Group Index of Refraction (Neff):
0.13                                                  1.4675 or 1.466 at 1310 nm
NA measured at the one percent power angle of a       1.4681 or 1.467 at 1550 nm
one-dimensional far-field scan at 1310 nm.

Zero Dispersion Wavelength (lambda omicron):          Fatigue Resistance Parameter (nd):
1312 nm                                               greater than or equal to 20

Zero Dispersion Slope (S omicron):                    Coating Strip Force:
0.092 ps divided by (nm2 times km)                    Dry:     greater than 0.3 lbf and less than 2.0 lbf
                                                      Wet:     14 days room temperature:   0.7 lbs. (3.2 N)

                                       C4

<PAGE>



                                   EXHIBIT "D"

                              PERFORMANCE CRITERIA



--------------------------------------------------------------------------------------------------------------------

          ($ in thousands)
--------------------------------------------------------------------------------------------------------------------
---------------------------------------- ------------------------------------- -------------------------------------

         Year (Measured from                       Revenue Forecast                    Performance Criteria
     Completion Date for entire
       Revenue Sharing Route)
---------------------------------------- ------------------------------------- -------------------------------------

Year 1 (months 1-12)                                *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 2 (months 13-24)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 3 (months 25-36)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 4 (months 37-48)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 5 (months 49-62)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 6 (months 63-72)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 7 (months 73-84)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 8 (months 85-96)                               *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 9 (months 97-108)                              *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 10 (months 109-120)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 11 (months 121-132)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 12 (months 133-144)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 13 (months 145-156)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 14 (months 157-168)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 15 (months 169-180)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 16 (months 181-192)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 17 (months 193-204)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 18 (months 205-216)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 19 (months 217-228)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

Year 20 (months 229-240)                            *                                     *
---------------------------------------- ------------------------------------- -------------------------------------

*  Confidential   information  has  been  omitted  pursuant  to  a  request  for
confidential  treatment.  Such  material  has  been  filed  separately  with the
Securities and Exchange Commission.



<PAGE>



                                   EXHIBIT "E"

                              REVENUE SHARING ROUTE

The revenue sharing route originates in the Portland, Oregon area and terminates
in Los  Angeles,  California,  passing  through  Sacramento  and San  Francisco,
California.



</TABLE>


<PAGE>



                                   EXHIBIT "F"

                           UTILITY COMPANY AGREEMENTS

                                [to be completed]


<PAGE>


                                   EXHIBIT "G"

                          UTILITY COMPANY SAFETY RULES

                                [to be completed]


<PAGE>


                                   EXHIBIT "H"

                                 CABLE WARRANTY



                              FOCAS MANUFACTURER'S
                                LIMITED WARRANTY


           FOCAS  warrants  that the Cable to be delivered  under the  foregoing
agreement  will be of the kind and quality  described  in the order or agreement
and will be free of defects in  workmanship  or  material  for a period of three
years from the date its  installation  is completed and accepted by ELI.  Should
any failure to conform to this  warranty  appear  within such three year period,
FOCAS will, upon notification  thereof and substantiation that the products have
been stored, installed and maintained in accordance with FOCAS's recommendations
and standard  industry  practice,  correct such defects by suitable repair to or
replacement of the product.  THIS WARRANTY IS EXCLUSIVE AND IT IS IN LIEU OF ANY
IMPLIED WARRANTY OF  MERCHANTABILITY,  FITNESS FOR A PARTICULAR PURPOSE OR OTHER
WARRANTY OF QUALITY,  WHETHER  EXPRESS OR IMPLIED,  EXCEPT THE WARRANTY OF TITLE
AND  AGAINST  PATENT   INFRINGEMENT.   FOCAS  SHALL  NOT  BE  LIABLE  UNDER  ANY
CIRCUMSTANCES FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES TO ANY PARTY WHATSOEVER.
FOCAS shall have no obligation or liability of any kind and it is further agreed
and understood that the consideration stated for those products described in the
foregoing  agreement is  consideration  for the limitation of FOCAS's  liability
hereunder.