EXHIBIT 10.20













                            POST-COMPLETION AGREEMENT


                                     BETWEEN


                                   FOCAS, INC.

                                       AND

                            ELECTRIC LIGHTWAVE, INC.





<PAGE>



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


<PAGE>



ARTICLE V             SYSTEM DESIGN..............................................................................17
                      -------------

                      5.1      FOCAS DESIGN RESPONSIBILITY.......................................................17
                               ---------------------------
                      5.2      ELI DESIGN RESPONSIBILITIES.......................................................18
                               ---------------------------
                      5.3      UTILITY COMPANY INFORMATION.......................................................18
                               ---------------------------
                      5.4      NOTICE OF ADVERSE CLAIMS..........................................................19
                               ------------------------
                      5.5      WORKING DRAWINGS..................................................................19
                               ----------------
                      5.6      SCHEDULING........................................................................20
                               ----------
                      5.7      WARRANTY OF WORK..................................................................20
                               ----------------
                      5.8      DESIGN PERFORMANCE COMMENCEMENT...................................................21
                               -------------------------------

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

                      6.1      SCOPE OF WORK.....................................................................21
                               -------------
                      6.2      REGENERATION FACILITIES...........................................................21
                               -----------------------
                      6.3      WORK STANDARDS....................................................................21
                               --------------
                      6.4      TIME..............................................................................22
                               ----
                      6.5      PERMITS AND APPROVALS.............................................................22
                               ---------------------
                      6.6      SYSTEM MATERIALS..................................................................22
                               ----------------
                      6.7      INTERFACE BETWEEN FOCAS AND ELI...................................................22
                               -------------------------------
                      6.8      TITLE AND RISK OF LOSS............................................................23
                               ----------------------
                      6.9      SYSTEM WARRANTIES.................................................................23
                               -----------------
                      6.10     USE OF CONTRACTORS................................................................23
                               ------------------
                      6.11     INSPECTION OF CONSTRUCTION........................................................24
                               --------------------------
                      6.12     AS-BUILT DRAWINGS.................................................................25
                               -----------------
                      6.13     COMPLETION OF SYSTEM CONSTRUCTION.................................................25
                               ---------------------------------
                      6.14     WARRANTY OF WORK..................................................................26
                               ----------------
                      6.15     CONSTRUCTION PERFORMANCE COMMENCEMENT.............................................26
                               -------------------------------------

ARTICLE VII           PROPERTY RIGHTS, OBLIGATIONS AND MAINTENANCE...............................................26
                      --------------------------------------------

                      7.1      AVOIDANCE OF ENCUMBRANCES.........................................................26
                               -------------------------
                      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...................................28
                               -----------------------------------------------
                      7.8      UTILITY COMPANY MAINTENANCE RESPONSIBILITIES......................................28
                               --------------------------------------------
                      7.9      MAINTENANCE OF REGENERATION FACILITIES AND SYSTEM ELECTRONICS.....................29
                               -------------------------------------------------------------





                                                     - ii -


<PAGE>



                      7.10     RESTORATION PLANS.................................................................29
                               -----------------
                      7.11     PERFORMANCE COMMENCEMENT..........................................................29
                               ------------------------

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...................................................................32
                               ---------------
                      8.4      COOPERATION.......................................................................34
                               -----------
                      8.5      REGULATORY COMPLIANCE.............................................................35
                               ---------------------
                      8.6      CERTIFICATES......................................................................35
                               ------------
                      8.7      INDEPENDENT STATUS................................................................35
                               ------------------
                      8.8      TRANSACTIONS WITH AFFILIATES......................................................35
                               ----------------------------
                      8.9      FURTHER ASSURANCES................................................................35
                               ------------------
                      8.10     AUDIT RIGHTS......................................................................35
                               ------------
                      8.11     INTERFERENCE......................................................................36
                               ------------
                      8.12     INDEPENDENT SYSTEM OPERATOR.......................................................36
                               ---------------------------
                      8.13     PERFORMANCE IN STEAD..............................................................36
                               --------------------
                      8.14     UTILITY AGREEMENTS................................................................36
                               ------------------

ARTICLE IX            INSURANCE..................................................................................36
                      ---------

                      9.1      REQUIRED INSURANCE COVERAGE.......................................................36
                               ---------------------------
                      9.2      GENERAL CONDITIONS................................................................37
                               ------------------
                      9.3      EVIDENCE OF INSURANCE.............................................................37
                               ---------------------
                      9.4      BLANKET POLICIES..................................................................38
                               ----------------
                      9.5      SELF-INSURANCE....................................................................38
                               --------------

ARTICLE X             ASSIGNMENT AND OTHER TRANSFERS.............................................................38
                      ------------------------------

                      10.1     TRANSFERS.........................................................................38
                               ---------
                      10.2     FINANCING.........................................................................39
                               ---------
                      10.3     RECOGNITION OF TRANSFEREES........................................................39
                               --------------------------
                      10.4     NO ASSUMPTION OR RELEASE..........................................................39
                               ------------------------
                      10.5     MERGERS AND ACQUISITIONS..........................................................39
                               ------------------------

ARTICLE XI            CONDEMNATION...............................................................................39
                      ------------

                      11.1     TAKING............................................................................39
                               ------
                      11.2     NOTICE OF TAKING..................................................................40
                               ----------------





                                                     - iii -


<PAGE>



ARTICLE XII           ENVIRONMENTAL HAZARD LIABILITY.............................................................40
                      ------------------------------

                      12.1     RESPONSIBILITIES OF FOCAS.........................................................40
                               -------------------------
                      12.2     RESPONSIBILITIES OF ELI...........................................................40
                               -----------------------
                      12.3     WARNING...........................................................................40
                               -------

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

                      13.1     FOCAS INDEMNITY...................................................................41
                               ---------------
                      13.2     ELI INDEMNITY.....................................................................41
                               -------------
                      13.3     NO CONSEQUENTIAL DAMAGES..........................................................41
                               ------------------------
                      13.4     WAIVER OF SUBROGATION.............................................................42
                               ---------------------
                      13.5     DEFENSE OF CLAIMS.................................................................42
                               -----------------
                      13.6     THIRD-PARTY CLAIMS................................................................42
                               ------------------
                      13.7     SURVIVAL..........................................................................42
                               --------
                      13.8     APPLICABILITY OF LIABILITY LIMITATIONS............................................42
                               --------------------------------------
                      13.9     CLAIMS AGAINST THIRD-PARTIES......................................................43
                               ----------------------------
                      13.10    ANTI-INDEMNITY STATUTE............................................................43
                               ----------------------

ARTICLE XIV           FORCE MAJEURE..............................................................................43
                      -------------

                      14.1     EXCUSE OF PERFORMANCE.............................................................43
                               ---------------------
                      14.2     DEFINITION........................................................................43
                               ----------
                      14.3     CONTINUANCE AFTER FORCE MAJEURE EVENT.............................................44
                               -------------------------------------

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

                      15.1     TERMINATION EVENTS................................................................45
                               ------------------
                      15.2     ACTIONS FOLLOWING OCCURRENCE OF TERMINATION EVENT.................................46
                               -------------------------------------------------
                      15.3     NO RELEASE........................................................................47
                               ----------

ARTICLE XVI           DISPUTE RESOLUTION.........................................................................47
                      ------------------

                      16.1     DISPUTE RESOLUTION................................................................47
                               ------------------
                      16.2     NEGOTIATION AND MEDIATION.........................................................47
                               -------------------------
                      16.3     CONFIDENTIALITY...................................................................48
                               ---------------
                      16.4     INJUNCTIVE RELIEF.................................................................48
                               -----------------
                      16.5     CONTINUING OBLIGATION.............................................................48
                               ---------------------
                      16.6     FAILURE OF MEDIATION..............................................................48
                               --------------------






                                                     - iv -


<PAGE>



ARTICLE XVII          MISCELLANEOUS..............................................................................48
                      -------------

                      17.1     AMENDMENTS........................................................................48
                               ----------
                      17.2     BINDING EFFECT....................................................................48
                               --------------
                      17.3     WAIVERS...........................................................................48
                               -------
                      17.4     NOTICES...........................................................................49
                               -------
                      17.5     SEVERABILITY......................................................................49
                               ------------
                      17.6     INTERPRETATION....................................................................49
                               --------------
                      17.7     GOVERNING LAW AND CHOICE OF FORUM.................................................50
                               ---------------------------------
                      17.8     COMMISSIONS.......................................................................50
                               -----------
                      17.9     COUNTERPARTS......................................................................50
                               ------------
                      17.10    ATTORNEY FEES.....................................................................50
                               -------------
                      17.11    COSTS.............................................................................50
                               -----
                      17.12    NO THIRD-PARTY BENEFICIARIES......................................................50
                               ----------------------------
                      17.13    ENTIRE AGREEMENT..................................................................50
                               ----------------
                      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



</TABLE>

                                                     - v -


<PAGE>



                            POST-COMPLETION AGREEMENT


                  THIS  POST-COMPLETION  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 :

         A. ELI and FOCAS have entered into that certain  Initial  Optical Fiber
Design  and   Installation   Agreement  of  even  date  herewith  (the  "Initial
Agreement")  concerning the initial design and  installation of a portion of the
System (as defined herein).

         B. ELI desires  that FOCAS hold  itself  available  to perform,  and to
perform  as  necessary,  certain  post-completion  service  with  respect to the
System.

         C. FOCAS,  upon the terms,  covenants and conditions  contained in this
Agreement,  is willing to hold itself available to perform, and to perform, such
post-closing services.

         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.

         "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.



                                      - 1 -


<PAGE>




         "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.

         "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.





                                      - 2 -


<PAGE>



         "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:

                  (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);




                                      - 3 -


<PAGE>



         (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.

         "Initial  Agreement" means the agreement described in Recital A of this
Agreement, the terms, covenants and conditions of which are incorporated in this
Agreement by reference.

         "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.

         "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  Commencement  Date"  means  the  day  following  the  Payment
Completion Date as defined in the Initial Agreement.




                                      - 4 -


<PAGE>



         "Payment  Completion  Date" shall have the meaning given in the Initial
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 Commencement Date" means the day following the Performance
Completion Date as defined in the Initial 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.

         "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.





                                      - 5 -


<PAGE>



         "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 the date agreed upon by FOCAS and ELI
under the provisions of Section 5.6 by which  construction of an Approved System
Segment under the terms of this Agreement should be completed.

         "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.

         "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.





                                      - 6 -


<PAGE>



         "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.

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





                                      - 7 -


<PAGE>



                                   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.

                      (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.

                                      - 8 -


<PAGE>
                           (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 the
Initial  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 the  Initial  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 the
Initial 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.

         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.

                                      - 9 -


<PAGE>


         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.

         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.




                                     - 10 -


<PAGE>



         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 the Initial Agreement,  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 the Initial  Agreement or 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.  Notwithstanding  the commencement of the Term on the Effective Date,
ELI's payment obligations under Section 4.1 shall not commence until the Payment
Commencement Date, and obligations of FOCAS and ELI under Articles V, VI and VII
shall not commence until the Performance Commencement Date.

         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.





                                     - 13 -


<PAGE>



                                   ARTICLE IV
                                    PAYMENTS

         4.1 QUARTERLY  PAYMENTS.  In consideration of the interest of FOCAS and
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) The Payment Factor shall be * percent (*).

         4.2 QUARTERLY PAYMENT DUE DATES. Throughout the period commencing as of
the  Payment  Commencement  Date and  throughout  the  balance of the Term,  the
Quarterly  Payments  shall be due and payable within thirty (30) days after each
three month period  following  the Payment  Commencement  Date. It is understood
that the Payment  Commencement Date may occur during (rather than at the end of)
a  three-month  period under the Initial  Agreement.  In such case,  the Payment
Factor   shall   apply  with   respect  to  Gross   Revenues   after  such  date
notwithstanding that the period applicable to the first payment may be less than
three (3) full months.

         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 Performance  Commencement 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
         (including  Gross Revenues  under the Initial  Agreement in the year in
         which the Payment  Commencement  Date occurs) 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)  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.

         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.

                      (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.






                                     - 17 -


<PAGE>


                                  
                                    ARTICLE V
                                  SYSTEM DESIGN

         5.1 FOCAS DESIGN RESPONSIBILITY. Subject to the terms of the applicable
Utility Agreement, in the event of any replacement or relocation of any material
portion of the System  following the Performance  Commencement  Date,  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.

         5.2 ELI DESIGN  RESPONSIBILITIES.  In the event of any  replacement  or
relocation of the System  following the  Performance  Completion  Date,  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;


                                     - 18 -
<PAGE>
                      (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

                      (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 under the terms of this Agreement 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.





                                     - 19 -


<PAGE>



         5.6 SCHEDULING.  ELI and FOCAS shall jointly develop an  implementation
plan for the design and  construction  of any System Segments under the terms of
this Agreement.  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  and set a  Scheduled  Completion  Date for the  System
Segment. 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."

         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.






                                     - 20 -


<PAGE>



         5.8 DESIGN  PERFORMANCE  COMMENCEMENT.  The performance  obligations of
FOCAS  and  ELI  under  this  Article  V  shall  commence  on  the   Performance
Commencement Date.

                                   ARTICLE VI
                                  CONSTRUCTION

         6.1  SCOPE OF WORK.  Subject  to the  terms of the  applicable  Utility
Agreement, in the event of any replacement or relocation of any material portion
of the System  following  the  Performance  Commencement  Date,  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.

         6.2  REGENERATION  FACILITIES.  In  the  event  of any  replacement  or
relocation  of any  material  portion of the System  following  the  Performance
Commencement  Date,  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  under this Agreement 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.





                                     - 21 -


<PAGE>



         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 Cable, Cable Accessories and Connecting Points under the
terms of this Agreement. 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  Regeneration  Facilities and the  installation  of System
Electronics  under the terms of this  Agreement.  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.

         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 under the terms of this Agreement, 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  under  the  terms of this
Agreement,  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.





                                     - 22 -


<PAGE>



         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.

         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.





                                     - 23 -


<PAGE>



         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.

                      (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.




                                     - 24 -


<PAGE>



         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.

         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.





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         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 under the terms of this Agreement (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 COMMENCEMENT. The performance obligations
of FOCAS  and ELI  under  this  Article  VI shall  commence  on the  Performance
Commencement Date.

                                   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.





                                     - 26 -


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         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:

                           (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.





                                     - 27 -


<PAGE>



                      (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.

         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.






                                     - 28 -


<PAGE>




         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 COMMENCEMENT. The performance obligations of FOCAS and
ELI under this Article VII shall commence on the Performance Commencement Date.

                                  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.

                      (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.






                                     - 29 -


<PAGE>



                      (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.

                      (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.



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





                                     - 30 -


<PAGE>


     
                 (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.

                      (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.






                                     - 31 -


<PAGE>




                      (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.

         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.






                                     - 32 -


<PAGE>



                      (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.

                      (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.





                                     - 33 -


<PAGE>



                      (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.

         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





                                     - 34 -


<PAGE>



                      (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.

         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.





                                     - 35 -


<PAGE>



         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.

         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.





                                     - 36 -


<PAGE>



                                   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.

                      (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.





                                     - 37 -


<PAGE>




         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.

         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:




                                     - 38 -


<PAGE>




                      (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.

         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.


                                     - 39 -

<PAGE>

                                   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.

                                   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.

                                     - 40 -
<PAGE>
                                  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.

         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.





                                     - 41 -


<PAGE>



         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.

         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.





                                                     - 42 -


<PAGE>



         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.

                                   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;





                                     - 43 -


<PAGE>



                      (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

                      (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.





                                     - 44 -


<PAGE>



                                   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;

                           (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.





                                     - 45 -


<PAGE>



                      (b) DEFAULT. A material default under the terms, covenants
         or conditions  of the Initial  Agreement by FOCAS or ELI, or 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.

         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.





                                     - 46 -


<PAGE>



                      (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.

                                   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.





                                                     - 47 -


<PAGE>



         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.

                                  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.





                                                     - 48 -


<PAGE>



         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

         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.





                                     - 49 -


<PAGE>



         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.

         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.





                                     - 50 -


<PAGE>



         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
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.

         DATED effective as of the date first above written.


                       FOCAS:

                       FOCAS, INC., a Delaware corporation


                       By: /s/ James Rosati
                       Title:  Chairman


                       ELI:

                       ELECTRIC LIGHTWAVE, INC., a Delaware corporation


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


G:\5093\194\POST0505.AGR




                                     - 51 -


<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                 *



*  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.