Document:

<PAGE>

                                                                   Exhibit 10.17

                                  Schedules

                                     to

                             Bell Capacity Right

                              of USE Agreement

<PAGE>

                                                                   Exhibit 10.17

                                   SCHEDULE 1

                              DESCRIPTION OF SYSTEM

A trans-Atlantic cable system known as FLAG Atlantic-1 which is to operate from
London and Paris to New York and will include a trans-Atlantic subsea element
and backhaul elements in Europe and the United States.

The subsea element will involve the construction of four landing stations ("the
Landing Stations"), a six fibre pair ring system across the Atlantic Ocean, with
six fibre pairs connecting the US Landing Stations and six fibre pairs
connecting the European Landing Stations. The Landing Stations are currently
expected to be at (i) Cornwall (UK), (ii) St. Brieuc (France), (iii) Makamah
Beach on the North shore of Long Island, New York (US) and (iv) Long Beach on
the South shore of Long Island, New York (US). Each fibre pair will be designed
for a minimum capacity of 40 wavelengths with each wavelength running at 10
Gbps.

The backhaul elements will seamlessly connect the Landing Stations to the
digital/optical input/output port on the digital/optical distribution frame
("Terminal Point") in the heart of London, Paris, New York and, at the absolute
discretion of FA-1, in New Jersey.

The initial stage of the system will consist of the Northern subsea link from
Cornwall to the North shore of Long Island, the Cornwall to Brittany
Trans-Channel link and the backhaul elements (which include the terrestrial link
between the North shore and the South shore of Long Island). The full system
will consist of the initial stage and the Southern subsea link from Brittany to
the south shore of Long Island ("Full System").

The system will be installed initially with at least 160 Gbps of capacity but
will be designed with technology capable of upgrade to 2.4 terabits per second.

The base system has been designed to provide restoration within its own
capabilities by way of protection switching. This has been achieved by means of
a redundant multi-loop architecture within the system. This architecture
provides redundancy in the event of a failure of any component within the
system.

The system will:

      -     have the ability to carry commercial traffic between any two points
            (consisting of one or many segments) which meets ITU-T G.826
            recommendations.
      -     have automatic self-healing ring protection between any two points
            (consisting of one or many segments)
      -     have network management capability for the system as a whole

                                                                              17
<PAGE>

                                   SCHEDULE 2A

1.    Capacity

      ---------------------------------------------------------------------
      Route - From the Terminal               Capacity           Purchase
      Point facilities in London or                              Price US$
      Paris (at the option of BELL                             (excl. taxes)
      ATLANTIC) to either of the
      Terminal Point facilities in
      New York or, if applicable, in
      New Jersey (at the option of
      BELL ATLANTIC).
      ---------------------------------------------------------------------
      Tranche 1                       16 STM-1s multiplexed     $      ***
                                      at STM-4 level
      ----------------------------------------------------------------------
      Tranche 2                       16 STM-1s multiplexed     $      ***
                                      at STM-4 level
      ----------------------------------------------------------------------
      Tranche 3                       32 STM-1s multiplexed     $      ***
                                      at STM-4 level
      ----------------------------------------------------------------------
      Tranche 4                       64 STM-1s multiplexed     $      ***
                                      at STM-4 level
      ----------------------------------------------------------------------

----------
Confidential treatment has been requested with respect to the portions of this
agreement marked with three asterisks (***) and the redacted material has
been filed separately with the Securities and Exchange Commission.

                                                                              18
<PAGE>

                                   SCHEDULE 2B

      ---------------------------------------------------------------------
      Route - From the Terminal               Capacity           Purchase
      Point facilities in London or                              Price US$
      Paris (at the option of BELL                             (excl. taxes)
      ATLANTIC) to either of the
      Terminal Point facilities in
      New York or, if applicable, in
      New Jersey (at the option of
      BELL ATLANTIC).
      ---------------------------------------------------------------------
      Tranche 1                       12 STM-1s multiplexed     $     ***
                                      at STM-4 level and 1 x
                                      STM-1
      ---------------------------------------------------------------------
      Tranche 2                       12 STM-1s multiplexed     $     ***
                                      at STM-4 level and 1 x
                                      STM-1
      ---------------------------------------------------------------------
      Tranche 3                       26 STM-1s multiplexed     $     ***
                                      at STM-4 level
      ---------------------------------------------------------------------
      Tranche 4                       52 STM-1s multiplexed     $     ***
                                      at STM-4 level
      ---------------------------------------------------------------------
      Tranche 5                       104 STM-1s multiplexed    $     ***
                                      at STM-4 level
      ---------------------------------------------------------------------

                                                                              19
<PAGE>

                                   SCHEDULE 3

                        (Payment schedule for Tranche 1)

----------------------------------------------------
Date                                     Percentage
                                         of Purchase
                                         Price ($US)
----------------------------------------------------
On receipt of a notice  from FA-1 that       ***%
FA-1 Financial  Closure (as defined in
clause 23.3) has occurred
----------------------------------------------------
31 December 1999                             ***%
----------------------------------------------------
1 April 2000                                 ***%
----------------------------------------------------
1 July 2000                                  ***%
----------------------------------------------------
1 October 2000                               ***%
----------------------------------------------------
Initial RFS Date                             ***%
----------------------------------------------------
Date on which FA-1 notifies BELL             ***%
ATLANTIC that the Full System is able
to carry commercial traffic
----------------------------------------------------

                                                                              20
<PAGE>

                                   SCHEDULE 4

                      Provisions for Collocation Agreement

If BELL ATLANTIC desires to install equipment at a Terminal Point in order to
connect to the Capacity, the Parties agree to negotiate in good faith a
Collocation Agreement which shall be based on the following principles:

1.    BELL ATLANTIC shall be granted a license to place its equipment in racks
      at the Terminal Point premises from the Initial RFS Date until the
      termination or expiration of this Agreement. BELL ATLANTIC will pay a
      price per rack per annum for use of the racks no more than the price per
      rack paid to FA-1 by its most favoured purchasers, payable annually in
      advance.

2.    BELL ATLANTIC shall be permitted to use the racks only for the purpose of
      connecting to the System.

3.    Access to the Terminal Point premises will be available to BELL ATLANTIC's
      authorised personnel on a 24*365 basis subject to compliance with
      reasonable safety, security and access rules.

4.    Commercial terms for services (such as installation, first line
      maintenance, shifts and changes) and for utilities (such as power heating
      lighting) to be provided by FA-1 at the Terminal Point are to be
      negotiated.

5.    Assignment or sublicensing of the racks by BELL ATLANTIC shall be
      permitted only where the Capacity has been assigned, provided that this
      limitation shall not prohibit Bell Atlantic from permitting its Affiliates
      (as defined in clause 13.1) to use the racks to connect to the System.

6.    Only appropriately qualified staff of BELL ATLANTIC may enter the Terminal
      Points.

7.    Cable shall not be installed by BELL ATLANTIC except under the direct
      supervision of FA-1.

8.    BELL ATLANTIC shall submit suitable documentation evidencing that the
      equipment meets appropriate industry specifications and safety
      requirements.

9.    BELL ATLANTIC must provide evidence to FA-1 that it will be able to
      operate the equipment during BELL ATLANTIC labour disputes.

                                                                              21
<PAGE>

                                   SCHEDULE 5

                                  O&M PAYMENTS

BELL ATLANTIC shall pay ***. The operation and maintenance costs of the
System shall include, without limitation:

o     ***

The operation and maintenance costs shall not include ***

o     ***

On the Initial RFS Date FA-1 shall provide to BELL ATLANTIC a budgetary estimate
of the costs from the date of activation until the end of the then calendar
year. Thereafter FA-1 shall provide such budgetary estimate on 31st October of
each year. Within three months of the end of each year FA-1 shall provide to
BELL ATLANTIC the actual costs for such year and any adjustments necessary will
be effected by a debit or credit for the next quarter (and, if necessary,
subsequent quarters), as appropriate. In no event shall BELL ATLANTIC be
required to pay more than $*** per STM-1 per annum. FA-1 shall provide
satisfactory evidence of the actual costs and the amount of capacity activated
on the System referred to above and for this purpose FA-1 shall keep appropriate
records for a period of three years after the relevant invoice for inspection by
an auditor if required. ***

                                                                              22
<PAGE>

                                   SCHEDULE 6A

                                DELIVERY SCHEDULE

BELL ATLANTIC shall be entitled to Capacity on the System if Schedule 2A is
applicable on the following basis:

-------------------------------------------------------------------------------
Availability Schedule      Date                      Capacity Available To
                                                     Activate (STM-1s)
-------------------------------------------------------------------------------
Tranche1                   ***                                  ***
-------------------------------------------------------------------------------
Optional Additional Capacity

-------------------------------------------------------------------------------
Tranche 2                  ***                                  ***
-------------------------------------------------------------------------------
Tranche 3                  ***                                  ***
-------------------------------------------------------------------------------
Tranche 4                  ***                                  ***
-------------------------------------------------------------------------------

                                                                              23
<PAGE>

                                   SCHEDULE 6B

                                DELIVERY SCHEDULE

BELL ATLANTIC shall be entitled to Capacity on the System if Schedule 2B is
applicable on the following basis:

-------------------------------------------------------------------------------
Availability Schedule         Date                      Capacity Available To
                                                        Activate (STM-1s)
-------------------------------------------------------------------------------
Tranche1                      ***                                ***
-------------------------------------------------------------------------------
Optional Additional Capacity
-------------------------------------------------------------------------------
Tranche 2                     ***                                ***
-------------------------------------------------------------------------------
Tranche 3                     ***                                ***
-------------------------------------------------------------------------------
Tranche 4                     ***                                ***
-------------------------------------------------------------------------------
Tranche 5                     ***                                ***
-------------------------------------------------------------------------------

                                                                              24
<PAGE>

                                   SCHEDULE 7

                                ACCEPTANCE TESTS

1. Bringing-into-service-tests ("BIS Tests") (clause 2.1.2)

The BIS Tests will involve prolonged bit-error rate and pointer (or similar)
method of measuring the timing of the System. The BIS Tests will demonstrate
that the bit-error rate at the end of the life of the System is two times the
bit-error rate under ITU-T recommendation G.829.

2. Operation and Maintenance of the System (clause 5.1)

                               SYSTEM POWER BUDGET

                                    Contents

1.    SYSTEM POWER BUDGET
2.    CHROMATIC DISPERSION MANAGEMENT OF WDM SYSTEM

     Table A   Power Budget available on FLAG Atlantic repeatered submarine
               Segments for Transmission at 40*10 Gbit/s

     Table B   Power Budget for FLAG Atlantic non-repeatered Segment D.

                                                                              25
<PAGE>

                               SYSTEM POWER BUDGET

1.    SYSTEM POWER BUDGET

      The Power Budget has been calculated to guarantee all the transmission
      performance requirements of the System over its design life.

      Calculations are presented to obtain better than the minimum required BER
      performance using the ITU-T Recommendation G826 to derive a worst case BER
      limit for the System.

      The following table contains the performance budget and the following
      paragraphs detail the values listed in the tables1. Values in the table
      are expressed in dB and are combined linearly.

      Line 1:     Mean Q value has been calculated using simple SNR calculation
                  with nominal design parameters.

      Line 1.1:   Propagation impairment is the sum of all allocated line design
                  margins and impairment described hereinafter.

                  o     non linear effects (SPM, SRS, XPM)
                  o     chromatic dispersion effect
                  o     mean polarisation effect including PDL, PDG and PMD

      Line 1.2:   Impairment relative to the effect of the relative levels and
                  the wavelength of the different channels. It includes, non
                  ideal pre-emphasis in the terminal. It also includes relative
                  wavelength misalignment between transmitter wavelength and BU
                  and receiver filters.

      Line 1.3:   Supervisory impairment is relative to system degradation due
                  to the line supervisory.

      Line 1.4:   Unallocated margin is supplier owned margin for allocation to
                  other margin if required. It includes manufacturing and
                  environment impairment.

      Line 2:     Time varying system performance includes fading effect due to
                  polarisation effect. This impairment is based on 5 times
                  standard deviation measured on similar test bed.

      Line 3:     Addition of the protection wavelengths.

      Line 4:     Computed from a minus (1.1) to (2).

      Line 5:     SLTE back to back Q.

      Line 6:     Segment Q value, computed from (4) and (5).

      Line 6.1:   BER corresponding to segment Q without FEC.

      Line 6.2:   BER corresponding after correction (using ITU G975 FEC
                  performance).

      Line 6.3:   Effective segment Q value including FEC improvement.

      Line 7:     Q limit for compliance with the requirement after correction
                  by FEC assumption is BER lower than 10-13 after correction,
                  performance achieved with 10-4 before correction, which is
                  equivalent to a Q factor of 11.2 dB with SLTE Release 1 or 9.5
                  dB with SLTE Release 2.

----------

                                                                              26
<PAGE>

      Line 8:     End of life impairments. These are system degradation which
                  could be present in the installed system at end of life. It
                  includes repair margin required in the tender, pump failure
                  and component and fibre ageing. As these effects are
                  interactive they have been put in the same line.

      Line 9:     Segment margin, (8) plus 1.0 dB, represents the minimum BOL
                  margin to meet the system performance at EOL with an extra
                  margin of 1 dB.

      Line 10:    Commissioning limit, (7) plus (9), is the minimum performance
                  to be demonstrated at the Provisional Acceptance.

2.    CHROMATIC DISPERSION MANAGEMENT OF WDM SYSTEM

      As with single channel 5 Gbit/s amplified systems, WDM systems use
      Dispersion Shifted Fibre compensated by Non Dispersion Shifted sections
      approximately every 400 to 600 km. In order to limit the impact of channel
      interaction arising from the combination of high repeater output power and
      fibre Kerr non linearities, the chromatic dispersion of the fibre is more
      negative than that used for previous 5 Gbit/s systems (- 2ps/nm/km instead
      of - 0.2 ps/nm/km). This lower value implies a length of compensation
      fibre longer than the one used in the 5 Gbit/s equating to approximately
      one repeater span every 9 repeater spans. As the European segments are
      shorter than the equalisation span, submerged compensation is not needed
      and the chromatic dispersion is compensated in the terminal equipment.

                                [GRAPHIC OMITTED]

      The above figure shows an example of the compensation in the line cable.
      This map may be adjusted according to the progress in the development to
      optimise the transmission performance. Moreover additional compensation
      will be require in the SLTE.

3.    POWER BUDGET TABLES

      The following tables give the power budgets for the Segments of the FLAG
      Atlantic-1 Submarine System.

                                                                              27
<PAGE>

<TABLE>
<CAPTION>
================================================================================================
        Segment                                              A             B              C
        ----------------------------------------------------------------------------------------
<S>     <C>                                                <C>           <C>           <C>
        Wavelength Number (10 Gbit/s)                        40            40            40
        ----------------------------------------------------------------------------------------
 Line   Length (km)                                         6004          338           6477
        ----------------------------------------------------------------------------------------
        Repeater number                                     144            4             162
------------------------------------------------------------------------------------------------

<CAPTION>
                          Parameter                      SOL   EOL     SOL   EOL      SOL   EOL
------------------------------------------------------------------------------------------------
<S>     <C>                                              <C>   <C>     <C>   <C>     <C>    <C>
   1    Mean Q value (Simple SNR calculation)            16.8  16.2    27.3  24.3    16.8   16.2
------------------------------------------------------------------------------------------------
  1.1   Propagation Impairments including SRS            2.2   2.2     2.2   2.2      2.2   2.2
        penalty, mean PDL penalty, mean PDG penalty
        and mean PMD penalty
  1.2   Wavelength tolerance impairment and non          0.4   0.4     0.4   0.4      0.4   0.4
        optical pre-emphasis impairment
  1.3   Supervisory impairment                           0.5   0.5     0.5   0.5      0.5   0.5
  1.4   Manufacturing and environment impairment         0.9   0.9     1.0   1.0      0.9   0.9
------------------------------------------------------------------------------------------------
   2    Time varying system performance                  1.2   1.2     1.2   1.2      1.2   1.2
------------------------------------------------------------------------------------------------
   3    Protection wavelength insertion                  0.3   0.3     0.3   0.3      0.3   0.3
------------------------------------------------------------------------------------------------
   4    Line Q value (1-1.1-1.2-1.3-1.4-2)               11.4  10.7    21.7  18.8    11.4   10.7
------------------------------------------------------------------------------------------------
   5    Specified TTE Q value (back to back Q)           24.1  22.9    24.1  22.9    24.1   22.9
------------------------------------------------------------------------------------------------
   6    Segment Q value (computed from 4 & 5)            11.2  10.5    19.8  17.4    11.2   10.5
  6.1   BER corresponding to segment Q without FEC      2E-04         1E-22          2E-04
  6.2   BER corresponding to segment Q with FEC       < 1E-13       < 1E-13        < 1E-13
  6.3   Effective Segment Q value with FEC            > 17.3        > 17.3         > 17.3
------------------------------------------------------------------------------------------------
   7    Q limit for compliance with requirement          9.5   9.5     11.2  11.2     9.5   9.5
        after FEC correction
------------------------------------------------------------------------------------------------
   8    Repairs margins                                        0.7           2.4            0.7
        Components and fibre ageing penalty
        Pump(s) failure penalty
        Non optimal decision threshold
------------------------------------------------------------------------------------------------
   9    Segment margins                                  1.7   1.0     3.4   1.0      1.7   1.0
------------------------------------------------------------------------------------------------
  10    Commissioning Limit                              11.2          14.6          11.2
================================================================================================
</TABLE>

 Table A - Power Budget available on FLAG Atlantic-1 System repeatered submarine
                    Segments for Transmission at 40*10 Gbit/s

                                                                              28
<PAGE>

        =================================================================
                              FLAG ATLANTIC SEGMENT D
                       40 channels per fibre pair, 10 Gbit/s
        -----------------------------------------------------------------
         CABLE POWER BUDGET
           Cable Length                                          25 km
           SOL Cable Attenuation                              0.216 dB/km
           SOL Cable Loss                                       5.4 dB
           EOL Cable Attenuation                               0.22 dB/km
           EOL Cable Loss                                       5.5 dB
           Repair margin                                        3.0 dB
           Installation penalties                               1.0 dB
         SOL Total Cable Loss                                   6.4 dB
         EOL Total Cable Loss                                   9.5 dB
        -----------------------------------------------------------------
         EQUIPMENT POWER BUDGET
           SOL Minimum total launched power at point S'        14.0 dBm
           EOL Minimum total launched power at point S'        14.0 dBm
           Channel equalisation accuracy                        1.0 dB
           SOL Minimum channel power at point S'              - 3.0 dBm
           EOL Minimum channel power at point S'              - 3.0 dBm
           SOL back-to-back 10-12 sensitivity at point R'     - 34.5 dBm
           EOL back-to-back 10-12 sensitivity at point R'     - 34.0 dBm
           Propagation penalty                                   2.0 dB
         SOL Equipment Power Budget                             29.5 dB
         EOL Equipment Power Budget                             29.0 dB
        -----------------------------------------------------------------
         SOL System Margin                                      23.1 dB
         EOL System Margin                                      19.5 dB
        =================================================================

       Table B - Power Budget for FLAG Atlantic non-repeatered Segment D.

                                                                              29
<PAGE>

                                   SCHEDULE 8

                             GOVERNMENT REQUIREMENTS

To the extent that this Agreement is subject to them, Seller shall comply with
the applicable provisions of the following: Exec. Order No. 11246, Exec. Order
No. 11625, Exec. Order No. 12138, Exec. Order No. 11701, Exec. Order No. 11758,
Section 503 of the Rehabilitation Act of 1973 as amended by PL93-516 and
PL102-569, Vietnam Era Veteran's Readjustment Assistance Act of 1974, Veteran's
Compensation, Education and Employment Amendments of 1982, and the rules,
regulations and relevant orders of the Secretary of Labor pertaining to the
Executive Orders and Statutes listed above. The following table describes the
clauses which are included in this Agreement.

                          Annual Contract Value              Clauses
                          ---------------------              -------

                          Under $10,000                       5*
                          $10,000 - $50,000            1, 2, 5*, 6, 7, 8,
                          $50,000 - $500,000           1, 2, 3**, 4**, 5, 6,
                                                           7, 8, 9
                          Over $500,000                1, 2, 3**, 4**, 5, 6,
                                                           7, 8***, 9

1.    Equal Employment Opportunity Provisions

      In accordance with Executive Order 11246, dated September 24, 1965 and
      Subpart 22.8 of Subchapter D of Chapter 1 of Title 48 of the Code of
      Federal Regulations as may be amended from time to time, the Parties
      incorporate herein by this reference the regulations and clauses required
      by those provisions to be made a part of government contracts and
      subcontracts.

2.    Certification of Non-segregated Facilities

      Seller certifies that it does not and will not maintain any facilities it
      provides for its employees in a segregated manner, or permit its employees
      to perform their services at any location under its control, where
      segregated facilities are maintained; and that it will obtain a similar
      certification, prior to the award of any non-exempt subcontract.

3.    Certification of Affirmative Action Program

      The Seller affirms that it has developed and is maintaining an Affirmative
      Action Plan as required by Subpart 22.8 of Subchapter D of Chapter 1 of
      Title 48 of the Code of Federal Regulations.

4.    Certification of Filing of Employer's Information Reports

      Seller agrees to file annually on or before the 31st day of March complete
      and accurate reports on Standard Form 100 (EEO-1) or such forms as may be
      promulgated in its place.

5.    Utilization of Small Business Concerns and Small Disadvantaged Business
      Concerns

                                                                              30
<PAGE>

      (a)   It is the policy of the United States that small business concerns
            and small business concerns owned and controlled by socially and
            economically disadvantaged individuals shall have the maximum
            practicable opportunity to participate in performing contracts let
            by any Federal agency.
      (b)   FA-1 hereby agrees to carry out this policy in the awarding of
            subcontracts to the fullest extent consistent with efficient
            contract performance. FA-1 further agrees to co-operate in any
            studies or surveys as may be conducted by the United States Small
            Business Administration or the awarding agency of the United States
            as may be necessary to determine the extent of the Seller's
            compliance with this clause.
      (c)   As used in this contract, the term "Small Business Concern" shall
            mean a small business as defined pursuant to section 3 of the Small
            business Act and relevant regulations promulgated pursuant thereto.
            The term "Small Business Concern" owned and controlled by socially
            and economically disadvantaged individuals" shall mean a small
            business concern -

            (1)   Which is at least fifty-one percent (51%) owned by one or more
                  socially and economically disadvantaged individuals; or, in
                  the case of any publicly owned business, at least fifty-one
                  percent (51%) of the stock of which is owned by one or more
                  socially and economically disadvantaged individuals; and

            (2)   Whose management and daily business operations are controlled
                  by one or more of such individuals. The Seller shall presume
                  that socially and economically disadvantaged individuals
                  include Black Americans, Hispanic Americans, Native Americans,
                  Asian-Pacific Americans, Asian-Indian Americans and other
                  minorities, or any other individual found to be disadvantaged
                  by the Administration pursuant to section 8 (a) of the Small
                  Business Act.

      (d)   Sellers acting in good faith may rely on written representations by
            their subcontractors regarding their status as either a Small
            Business Concern or a Small Business Concern owned and controlled by
            socially and economically disadvantaged individuals.

6.    Utilization of Women-Owned Small Businesses

      (a)   "Women-owned small businesses," as used in this clause, means
            businesses that are at least 51 percent owned by women who are
            United States citizens and who also control and operate the
            business. "Control," as used in this clause, means exercising the
            power to make policy decisions. "Operate," as used in this clause,
            means being actively involved in the day-to-day management of the
            business.
      (b)   It is the policy of the United States that women-owned small
            businesses shall have the maximum practicable opportunity to
            participate in performing contracts awarded by any Federal agency.
      (c)   The Seller agrees to use its best efforts to give women-owned small
            businesses the maximum practicable opportunity to participate in the
            subcontracts it awards to the fullest extent consistent with the
            efficient performance of its contract.

7.    Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era
      In accordance with Exec. Order 11701, dated January 24, 1973, and Subpart
      22.13 of Subchapter D of Chapter 1 of Title 48 of the Code of Federal
      Regulations, as may be amended from time to time, the parties

                                                                              31
<PAGE>

      incorporate herein by this reference the regulations and contract clauses
      required by those provisions to be made a part of Government contracts and
      subcontracts.

8.    Affirmative Action for Handicapped Workers In accordance with Exec. Order
      11758, dated January 15, 1974, and Subpart 22.14 of Subchapter D of
      Chapter 1 of Title 48 of the Code of Federal Regulations as may be amended
      from time to time, the parties incorporate herein by this reference the
      regulations and contract clauses required by those provisions to be made a
      part of Government contracts and subcontracts.

9.    Employment Reports on Special Disabled Veterans and Veterans of the
      Vietnam Era

      (a)   The Seller agrees to report at least annually, as required by the
            Secretary of Labor, on:
            (1)   The number of special disabled veterans and the number of
                  veterans of the Vietnam era in the work force of the Seller by
                  job category and hiring location; and
            (2)   The total number of new employees hired during the period
                  covered by the report, and of that total, the number of
                  special disabled veterans, and the number of veterans of the
                  Vietnam era.
      (b)   The above items shall be reported by completing the form entitled
            "Federal Contractor Veterans' Employment Report VETS-100."
      (c)   Reports shall be submitted no later than March 31 of each year.
      (d)   The employment activity report required by paragraph (a) (2) of this
            section shall reflect total hires during the most recent 12-month
            period as of the ending date selected for the employment profile
            report required by paragraph (a) (1) of this section. The Seller may
            select an ending date: (1) As of the end of any pay period January
            through March 1st of the year the report is due, or (2) as of
            December 31, if the Seller has previous written approval from the
            Equal Employment Opportunity Commission to do so for purposes of
            submitting the Employer Information Report EEO-1 (Standard Form
            100).
      (e)   The count of veterans reported according to paragraphs (a) above
            shall be based on voluntary disclosure. Each Seller subject to the
            reporting requirements at 3 U.S.C. 2012(d) shall invite all special
            disabled veterans and veterans of the Vietnam era who wish to
            benefit under the affirmative action program at 38 U.S.C. 2012 to
            identify themselves to the Seller. The invitation shall state that
            the information is voluntarily provided, that the information will
            be kept confidential, that disclosure or refusal to provide the
            information will not subject the applicant or employee to any
            adverse treatment, and that the information will be used only in
            accordance with the regulations promulgated under 38 U.S.C. 2012.
            Nothing in this paragraph (e) shall preclude an employee from
            informing the Seller at a future time of his or her desire to
            benefit from this program. Nothing in this paragraph (e) shall
            relieve the Seller from liability for discrimination under 38 U.S.C
            2012.

  *   Applies only if this Agreement has further subcontracting opportunities.
 **   Applies only to businesses with 50 or more employees.
***   Seller must also adopt and comply with a small business and small
      disadvantaged business subcontracting plan pursuant to Title 48 of the
      Code of Federal Regulations.

                                                                              32<PAGE>
                                                                   Exhibit 10.18

                                  Schedules to

                               GTE Capacity Right

                                of USE Agreement

<PAGE>
                                                                   Exhibit 10.18

                                   SCHEDULE 1

                              DESCRIPTION OF SYSTEM

A trans-Atlantic cable system known as FLAG Atlantic-1 which is to operate from
London and Paris to New York and will include a trans-Atlantic subsea element
and backhaul elements in Europe and the United States.

The subsea element will involve the construction of four landing stations ("the
Landing Stations"), a six fibre pair ring system across the Atlantic Ocean, with
six fibre pairs connecting the US Landing Stations and six fibre pairs
connecting the European Landing Stations. The Landing Stations are currently
expected to be at (i) Cornwall (UK), (ii) St. Brieuc (France), (iii) Makamah
Beach on the North shore of Long Island, New York (US) and (iv) Long Beach on
the South shore of Long Island, New York (US). Each fibre pair will be designed
for a minimum capacity of 40 wavelengths with each wavelength running at 10
Gbps.

The backhaul elements will seamlessly connect the Landing Stations to the
digital/optical input/output port on the digital/optical distribution frame
("Terminal Point") in the heart of London, Paris, New York and, at the absolute
discretion of FA-1, in New Jersey.

The initial stage of the system will consist of the Northern subsea link from
Cornwall to the North shore of Long Island, the Cornwall to Brittany
Trans-Channel link and the backhaul elements (which include the terrestrial link
between the North shore and the South shore of Long Island). The full system
will consist of the initial stage and the Southern subsea link from Brittany to
the south shore of Long Island ("Full System").

The system will be installed initially with at least 160 Gbps of capacity but
will be designed with technology capable of upgrade to 2.4 terabits per second.

The base system has been designed to provide restoration within its own
capabilities by way of protection switching. This has been achieved by means of
a redundant multi-loop architecture within the system. This architecture
provides redundancy in the event of a failure of any component within the
system.

The system will:

      -     have the ability to carry commercial traffic between any two points
            (consisting of one or many segments) which meets ITU-T G.826
            recommendations.
      -     have automatic self-healing ring protection between any two points
            (consisting of one or many segments)
      -     have network management capability for the system as a whole

                                                                              16
<PAGE>

                                   SCHEDULE 2A

1.    Capacity

      --------------------------------------------------------------------------
      Route - From the Terminal                Capacity              Purchase
      Point facilities in London or                                  Price US$
      Paris (at the option of GTE)                                 (excl. taxes)
      to either of FLAG's Terminal
      Point facilities in New York
      or, if applicable, in New
      Jersey (at the option of GTE).
      --------------------------------------------------------------------------
      Tranche 1                          8 STM-1s multiplexed           ***
                                         at STM-4 level

      --------------------------------------------------------------------------
      Tranche 2                          8 STM-1s multiplexed           ***
                                         at STM-4 level

      --------------------------------------------------------------------------
      Tranche 3                          16 STM-1s multiplexed          ***
                                         at STM-4 level

      --------------------------------------------------------------------------
      Tranche 4                          32 STM-1s multiplexed          ***
                                         at STM-4 level

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

-------------
Confidential treatment has been requested with respect to the portions of
this agreement marked with three asterisks (***) and the redacted material
has been filed separately with the Securities and Exchange Commission.

                                                                              17
<PAGE>

                                   SCHEDULE 2B

      --------------------------------------------------------------------------
      Route - From the Terminal              Capacity                Purchase
      Point facilities in London or                                  Price US$
      Paris (at the option of GTE)                                 (excl. taxes)
      to either of the Terminal
      Point facilities in New York
      or, if applicable, in New
      Jersey (at the option of GTE).
      --------------------------------------------------------------------------
      Tranche 1                          4 STM-1s multiplexed           ***
                                         at STM-4 level and 3 x
                                         STM-1

      --------------------------------------------------------------------------
      Tranche 2                          4 STM-1s multiplexed           ***
                                         at STM-4 level and 2 x
                                         STM-1

      --------------------------------------------------------------------------
      Tranche 3                          12 STM-1s multiplexed          ***
                                         at STM-4 level and 1 x
                                         STM-1

      --------------------------------------------------------------------------
      Tranche 4                          24 STM-1s multiplexed          ***
                                         at STM-4 level and 2 x
                                         STM-1

      --------------------------------------------------------------------------
      Tranche 5                          52 STM-1s multiplexed          ***
                                         at STM-4 level

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

                                                                              18
<PAGE>

                                   SCHEDULE 3

                        (Payment schedule for Tranche 1)

--------------------------------------------------------------------------------
Date                                                                Percentage
                                                                   of Purchase
                                                                   Price ($US)
--------------------------------------------------------------------------------
On receipt of a notice from FA-1 that                                 ***%
FA-1 Financial Closure (as defined in
clause 23.3) has occurred
--------------------------------------------------------------------------------
31 December 1999                                                      ***%
--------------------------------------------------------------------------------
1 April 2000                                                          ***%
--------------------------------------------------------------------------------
1 July 2000                                                           ***%
--------------------------------------------------------------------------------
1 October 2000                                                        ***%
--------------------------------------------------------------------------------
Initial RFS Date                                                      ***%
--------------------------------------------------------------------------------
Date on which FA-1 notifies GTE that                                  ***%
the Full System is able to carry
commercial traffic
--------------------------------------------------------------------------------

                                                                              19
<PAGE>

                                   SCHEDULE 4

                      Provisions for Collocation Agreement

If GTE desires to install equipment at a Terminal Point in order to connect to
the Capacity, the Parties agree to negotiate in good faith a Collocation
Agreement which shall be based on the following principles:

1.    GTE shall be granted a license to place its equipment in racks at the
      Terminal Point premises from the Initial RFS Date until the termination or
      expiration of this Agreement. GTE will pay a price per rack per annum for
      use of the racks no more than the price per rack paid to FA-1 by its most
      favoured purchasers, payable annually in advance.

2.    GTE shall be permitted to use the racks only for the purpose of connecting
      to the System.

3.    Access to the Terminal Point premises will be available to GTE's
      authorised personnel on a 24*365 basis subject to compliance with
      reasonable safety, security and access rules.

4.    Commercial terms for services (such as installation, first line
      maintenance, shifts and changes) and for utilities (such as power heating
      lighting) to be provided by FA-1 at the Terminal Point are to be
      negotiated.

5.    Assignment or sublicensing of the racks by GTE shall be permitted only
      where the Capacity has been assigned, provided that this limitation shall
      not prohibit Bell Atlantic from permitting its Affiliates (as defined in
      clause 13.1) to use the racks to connect to the System.

6.    Only appropriately qualified staff of GTE may enter the Terminal Points.

7.    Cable shall not be installed by GTE except under the direct supervision of
      FA-1.

8.    GTE shall submit suitable documentation evidencing that the equipment
      meets appropriate industry specifications and safety requirements.

9.    GTE must provide evidence to FA-1 that it will be able to operate the
      equipment during GTE labour disputes.

                                                                              20
<PAGE>

                                   SCHEDULE 5

                                  O&M PAYMENTS

GTE shall pay ***. The operation and maintenance costs of the System shall
include, without limitation:

o

The operation and maintenance costs shall not include ***

On the Initial RFS Date FA-1 shall provide to GTE a budgetary estimate of the
costs from the date of activation until the end of the then calendar year.
Thereafter FA-1 shall provide such budgetary estimate on 31st October of each
year. Within three months of the end of each year FA-1 shall provide to GTE the
actual costs for such year and any adjustments necessary will be effected by a
debit or credit for the next quarter (and, if necessary, subsequent quarters),
as appropriate. In no event shall GTE be required to pay more than $*** per
STM-1 per annum. FA-1 shall provide satisfactory evidence of the actual costs
and the amount of capacity activated on the System referred to above and for
this purpose FA-1 shall keep appropriate records for a period of three years
after the relevant invoice for inspection by an auditor if required. ***

                                                                              21
<PAGE>

                                   SCHEDULE 6A

                                DELIVERY SCHEDULE

GTE shall be entitled to Capacity on the System if Schedule 2A is applicable on
the following basis:

--------------------------------------------------------------------------------
Availability Schedule             Date                     Capacity Available To
                                                           Activate (STM-1s)
--------------------------------------------------------------------------------
Tranche 1                         ***                              ***
--------------------------------------------------------------------------------
Optional Additional Capacity
--------------------------------------------------------------------------------
Tranche 2                         ***                              ***
--------------------------------------------------------------------------------
Tranche 3                         ***                              ***
--------------------------------------------------------------------------------
Tranche 4                         ***                              ***
--------------------------------------------------------------------------------

                                                                              22
<PAGE>

                                   SCHEDULE 6B

                                DELIVERY SCHEDULE

GTE shall be entitled to Capacity on the System if Schedule 2B is applicable on
the following basis:

--------------------------------------------------------------------------------
Availability Schedule             Date                     Capacity Available To
                                                           Activate (STM-1s)
--------------------------------------------------------------------------------
Tranche 1                          ***                              ***
--------------------------------------------------------------------------------
Optional Additional Capacity
--------------------------------------------------------------------------------
Tranche 2                          ***                              ***
--------------------------------------------------------------------------------
Tranche 3                          ***                              ***
--------------------------------------------------------------------------------
Tranche 4                          ***                              ***
--------------------------------------------------------------------------------
Tranche 5                          ***                              ***
--------------------------------------------------------------------------------

                                                                              23
<PAGE>

                                   SCHEDULE 7

                                ACCEPTANCE TESTS

1. Bringing-into-service-tests ("BIS Tests") (clause 2.1.2)

The BIS Tests will involve prolonged bit-error rate and pointer (or similar)
method of measuring the timing of the System. The BIS Tests will demonstrate
that the bit-error rate at the end of the life of the System is two times the
bit-error rate under ITU-T recommendation G.829.

2. Operation and Maintenance of the System (clause 5.1)

                               SYSTEM POWER BUDGET

                                    Contents

1.    SYSTEM POWER BUDGET
2.    CHROMATIC DISPERSION MANAGEMENT OF WDM SYSTEM

     Table A   Power Budget available on FLAG Atlantic repeatered submarine
               Segments for Transmission at 40*10 Gbit/s

     Table B   Power Budget for FLAG Atlantic non-repeatered Segment D.

                                                                              24
<PAGE>

                               SYSTEM POWER BUDGET

1.    SYSTEM POWER BUDGET

      The Power Budget has been calculated to guarantee all the transmission
      performance requirements of the System over its design life.

      Calculations are presented to obtain better than the minimum required BER
      performance using the ITU-T Recommendation G826 to derive a worst case BER
      limit for the System.

      The following table contains the performance budget and the following
      paragraphs detail the values listed in the tables1. Values in the table
      are expressed in dB and are combined linearly.

      Line 1:     Mean Q value has been calculated using simple SNR calculation
                  with nominal design parameters.

      Line 1.1:   Propagation impairment is the sum of all allocated line design
                  margins and impairment described hereinafter.

                  o     non linear effects (SPM, SRS, XPM)
                  o     chromatic dispersion effect
                  o     mean polarisation effect including PDL, PDG and PMD

      Line 1.2:   Impairment relative to the effect of the relative levels and
                  the wavelength of the different channels. It includes, non
                  ideal pre-emphasis in the terminal. It also includes relative
                  wavelength misalignment between transmitter wavelength and BU
                  and receiver filters.

      Line 1.3:   Supervisory impairment is relative to system degradation due
                  to the line supervisory.

      Line 1.4:   Unallocated margin is supplier owned margin for allocation to
                  other margin if required. It includes manufacturing and
                  environment impairment.

      Line 2:     Time varying system performance includes fading effect due to
                  polarisation effect. This impairment is based on 5 times
                  standard deviation measured on similar test bed.

      Line 3:     Addition of the protection wavelengths.

      Line 4:     Computed from a minus (1.1) to (2).

      Line 5:     SLTE back to back Q.

      Line 6:     Segment Q value, computed from (4) and (5).

      Line 6.1:   BER corresponding to segment Q without FEC.

      Line 6.2:   BER corresponding after correction (using ITU G975 FEC
                  performance).

      Line 6.3:   Effective segment Q value including FEC improvement.

      Line 7:     Q limit for compliance with the requirement after correction
                  by FEC assumption is BER lower than 10^-13 after correction,
                  performance achieved with 10^4 before correction, which

                                                                              25
<PAGE>

                  is equivalent to a Q factor of 11.2 dB with SLTE Release 1 or
                  9.5 dB with SLTE Release 2.

                                                                              26
<PAGE>

      Line 8:     End of life impairments. These are system degradation which
                  could be present in the installed system at end of life. It
                  includes repair margin required in the tender, pump failure
                  and component and fibre ageing. As these effects are
                  interactive they have been put in the same line.

      Line 9:     Segment margin, (8) plus 1.0 dB, represents the minimum BOL
                  margin to meet the system performance at EOL with an extra
                  margin of 1 dB.

      Line 10:    Commissioning limit, (7) plus (9), is the minimum performance
                  to be demonstrated at the Provisional Acceptance.

2.    CHROMATIC DISPERSION MANAGEMENT OF WDM SYSTEM

      As with single channel 5 Gbit/s amplified systems, WDM systems use
      Dispersion Shifted Fibre compensated by Non Dispersion Shifted sections
      approximately every 400 to 600 km. In order to limit the impact of channel
      interaction arising from the combination of high repeater output power and
      fibre Kerr non linearities, the chromatic dispersion of the fibre is more
      negative than that used for previous 5 Gbit/s systems (- 2ps/nm/km instead
      of - 0.2 ps/nm/km). This lower value implies a length of compensation
      fibre longer than the one used in the 5 Gbit/s equating to approximately
      one repeater span every 9 repeater spans. As the European segments are
      shorter than the equalisation span, submerged compensation is not needed
      and the chromatic dispersion is compensated in the terminal equipment.

                                [GRAPHIC OMITTED]

      The above figure shows an example of the compensation in the line cable.
      This map may be adjusted according to the progress in the development to
      optimise the transmission performance. Moreover additional compensation
      will be require in the SLTE.

3.    POWER BUDGET TABLES

      The following tables give the power budgets for the Segments of the FLAG
      Atlantic-1 Submarine System.

                                                                              27
<PAGE>

<TABLE>
=========================================================================================================
<S>     <C>                                             <C>     <C>     <C>      <C>     <C>      <C>
        Segment                                               A               B                C
        -------------------------------------------------------------------------------------------------
        Wavelength Number (10 Gbit/s)                         40              40              40
        -------------------------------------------------------------------------------------------------
 Line   Length (km)                                          6004            338             6477
        -------------------------------------------------------------------------------------------------
        Repeater number                                      144              4               162
=========================================================================================================
                          Parameter                      SOL      EOL      SOL     EOL      SOL      EOL
---------------------------------------------------------------------------------------------------------
   1    Mean Q value (Simple SNR calculation)            16.8     16.2     27.3    24.3    16.8     16.2
---------------------------------------------------------------------------------------------------------
  1.1   Propagation Impairments including SRS            2.2      2.2      2.2     2.2      2.2      2.2
        penalty, mean PDL penalty, mean PDG penalty
        and mean PMD penalty
  1.2   Wavelength tolerance impairment and non          0.4      0.4      0.4     0.4      0.4      0.4
        optical pre-emphasis impairment
  1.3   Supervisory impairment                           0.5      0.5      0.5     0.5      0.5      0.5
  1.4   Manufacturing and environment impairment         0.9      0.9      1.0     1.0      0.9      0.9
---------------------------------------------------------------------------------------------------------
   2    Time varying system performance                  1.2      1.2      1.2     1.2      1.2      1.2
---------------------------------------------------------------------------------------------------------
   3    Protection wavelength insertion                  0.3      0.3      0.3     0.3      0.3      0.3
---------------------------------------------------------------------------------------------------------
   4    Line Q value (1-1.1-1.2-1.3-1.4-2)               11.4     10.7     21.7    18.8    11.4      10.7
---------------------------------------------------------------------------------------------------------
   5    Specified TTE Q value (back to back Q)           24.1     22.9     24.1    22.9    24.1      22.9
---------------------------------------------------------------------------------------------------------
   6    Segment Q value (computed from 4 & 5)            11.2     10.5     19.8    17.4    11.2      10.5
  6.1   BER corresponding to segment Q without FEC       2E-04             1E-22           2E-04
  6.2   BER corresponding to segment Q with FEC   less than 1E-13      less than 1E-13   less than 1E-13
  6.3   Effective Segment Q value with FEC      greater than 17.3     greater than 17.3  greater than 17.3
---------------------------------------------------------------------------------------------------------
   7    Q limit for compliance with requirement          9.5      9.5    11.2    11.2     9.5     9.5
        after FEC correction
---------------------------------------------------------------------------------------------------------
   8    Repairs margins                                           0.7             2.4             0.7
        Components and fibre ageing penalty
        Pump(s) failure penalty
        Non optimal decision threshold
---------------------------------------------------------------------------------------------------------
   9    Segment margins                                  1.7      1.0     3.4     1.0     1.7     1.0
---------------------------------------------------------------------------------------------------------
  10    Commissioning Limit                              11.2             14.6            11.2
=========================================================================================================
</TABLE>
     Table A - Power Budget available on FLAG Atlantic-1 System repeatered
              submarine Segments for Transmission at 40*10 Gbit/s

                                                                              28
<PAGE>

================================================================================
                              FLAG ATLANTIC SEGMENT D
                       40 channels per fibre pair, 10 Gbit/s
--------------------------------------------------------------------------------
 CABLE POWER BUDGET
    Cable Length                                                        25 km
    SOL Cable Attenuation                                            0.216 dB/km
    SOL Cable Loss                                                     5.4 dB
    EOL Cable Attenuation                                             0.22 dB/km
    EOL Cable Loss                                                     5.5 dB
    Repair margin                                                      3.0 dB
    Installation penalties                                             1.0 dB
 SOL Total Cable Loss                                                  6.4 dB
 EOL Total Cable Loss                                                  9.5 dB
--------------------------------------------------------------------------------
 EQUIPMENT POWER BUDGET
    SOL Minimum total launched power at point S'                       14.0 dBm
    EOL Minimum total launched power at point S'                       14.0 dBm
    Channel equalisation accuracy                                       1.0 dB
    SOL Minimum channel power at point S'                             - 3.0 dBm
    EOL Minimum channel power at point S'                             - 3.0 dBm
    SOL back-to-back 10-12 sensitivity at point R'                   - 34.5 dBm
    EOL back-to-back 10-12 sensitivity at point R'                   - 34.0 dBm
    Propagation penalty                                                 2.0 dB
 SOL Equipment Power Budget                                            29.5 dB
 EOL Equipment Power Budget                                            29.0 dB
--------------------------------------------------------------------------------
 SOL System Margin                                                     23.1 dB
 EOL System Margin                                                     19.5 dB
================================================================================
       Table B - Power Budget for FLAG Atlantic non-repeatered Segment D.

                                                                              29
<PAGE>

                                   SCHEDULE 8

                             GOVERNMENT REQUIREMENTS

To the extent that this Agreement is subject to them, Seller shall comply with
the applicable provisions of the following: Exec. Order No. 11246, Exec. Order
No. 11625, Exec. Order No. 12138, Exec. Order No. 11701, Exec. Order No. 11758,
Section 503 of the Rehabilitation Act of 1973 as amended by PL93-516 and
PL102-569, Vietnam Era Veteran's Readjustment Assistance Act of 1974, Veteran's
Compensation, Education and Employment Amendments of 1982, and the rules,
regulations and relevant orders of the Secretary of Labor pertaining to the
Executive Orders and Statutes listed above. The following table describes the
clauses which are included in this Agreement.

                 Annual Contract Value                        Clauses
                 ---------------------                        -------

                    Under $10,000                              5*
                    $10,000 - $50,000                 1, 2, 5*, 6, 7, 8,
                    $50,000 - $500,000          1, 2, 3**, 4**, 5, 6, 7, 8, 9
                    Over $500,000            1, 2, 3**, 4**, 5, 6, 7, 8***, 9

1.    Equal Employment Opportunity Provisions

      In accordance with Executive Order 11246, dated September 24, 1965 and
      Subpart 22.8 of Subchapter D of Chapter 1 of Title 48 of the Code of
      Federal Regulations as may be amended from time to time, the Parties
      incorporate herein by this reference the regulations and clauses required
      by those provisions to be made a part of government contracts and
      subcontracts.

2.    Certification of Non-segregated Facilities

      Seller certifies that it does not and will not maintain any facilities it
      provides for its employees in a segregated manner, or permit its employees
      to perform their services at any location under its control, where
      segregated facilities are maintained; and that it will obtain a similar
      certification, prior to the award of any non-exempt subcontract.

3.    Certification of Affirmative Action Program

      The Seller affirms that it has developed and is maintaining an Affirmative
      Action Plan as required by Subpart 22.8 of Subchapter D of Chapter 1 of
      Title 48 of the Code of Federal Regulations.

4.    Certification of Filing of Employer's Information Reports

      Seller agrees to file annually on or before the 31st day of March complete
      and accurate reports on Standard Form 100 (EEO-1) or such forms as may be
      promulgated in its place.

5.    Utilization of Small Business Concerns and Small Disadvantaged Business
      Concerns

                                                                              30
<PAGE>

      (a)   It is the policy of the United States that small business concerns
            and small business concerns owned and controlled by socially and
            economically disadvantaged individuals shall have the maximum
            practicable opportunity to participate in performing contracts let
            by any Federal agency.
      (b)   FA-1 hereby agrees to carry out this policy in the awarding of
            subcontracts to the fullest extent consistent with efficient
            contract performance. FA-1 further agrees to co-operate in any
            studies or surveys as may be conducted by the United States Small
            Business Administration or the awarding agency of the United States
            as may be necessary to determine the extent of the Seller's
            compliance with this clause.
      (c)   As used in this contract, the term "Small Business Concern" shall
            mean a small business as defined pursuant to section 3 of the Small
            business Act and relevant regulations promulgated pursuant thereto.
            The term "Small Business Concern" owned and controlled by socially
            and economically disadvantaged individuals" shall mean a small
            business concern -

            (1)   Which is at least fifty-one percent (51%) owned by one or more
                  socially and economically disadvantaged individuals; or, in
                  the case of any publicly owned business, at least fifty-one
                  percent (51%) of the stock of which is owned by one or more
                  socially and economically disadvantaged individuals; and

            (2)   Whose management and daily business operations are controlled
                  by one or more of such individuals. The Seller shall presume
                  that socially and economically disadvantaged individuals
                  include Black Americans, Hispanic Americans, Native Americans,
                  Asian-Pacific Americans, Asian-Indian Americans and other
                  minorities, or any other individual found to be disadvantaged
                  by the Administration pursuant to section 8 (a) of the Small
                  Business Act.

      (d)   Sellers acting in good faith may rely on written representations by
            their subcontractors regarding their status as either a Small
            Business Concern or a Small Business Concern owned and controlled by
            socially and economically disadvantaged individuals.

6.    Utilization of Women-Owned Small Businesses

      (a)   "Women-owned small businesses," as used in this clause, means
            businesses that are at least 51 percent owned by women who are
            United States citizens and who also control and operate the
            business. "Control," as used in this clause, means exercising the
            power to make policy decisions. "Operate," as used in this clause,
            means being actively involved in the day-to-day management of the
            business.
      (b)   It is the policy of the United States that women-owned small
            businesses shall have the maximum practicable opportunity to
            participate in performing contracts awarded by any Federal agency.
      (c)   The Seller agrees to use its best efforts to give women-owned small
            businesses the maximum practicable opportunity to participate in the
            subcontracts it awards to the fullest extent consistent with the
            efficient performance of its contract.

                                                                              31
<PAGE>

7.    Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era
      In accordance with Exec. Order 11701, dated January 24, 1973, and Subpart
      22.13 of Subchapter D of Chapter 1 of Title 48 of the Code of Federal
      Regulations, as may be amended from time to time, the parties incorporate
      herein by this reference the regulations and contract clauses required by
      those provisions to be made a part of Government contracts and
      subcontracts.

8.    Affirmative Action for Handicapped Workers In accordance with Exec. Order
      11758, dated January 15, 1974, and Subpart 22.14 of Subchapter D of
      Chapter 1 of Title 48 of the Code of Federal Regulations as may be amended
      from time to time, the parties incorporate herein by this reference the
      regulations and contract clauses required by those provisions to be made a
      part of Government contracts and subcontracts.

9.    Employment Reports on Special Disabled Veterans and Veterans of the
      Vietnam Era

      (a)   The Seller agrees to report at least annually, as required by the
            Secretary of Labor, on:

            (1)   The number of special disabled veterans and the number of
                  veterans of the Vietnam era in the work force of the Seller by
                  job category and hiring location; and
            (2)   The total number of new employees hired during the period
                  covered by the report, and of that total, the number of
                  special disabled veterans, and the number of veterans of the
                  Vietnam era.

      (b)   The above items shall be reported by completing the form entitled
            "Federal Contractor Veterans' Employment Report VETS-100."
      (c)   Reports shall be submitted no later than March 31 of each year.
      (d)   The employment activity report required by paragraph (a) (2) of this
            section shall reflect total hires during the most recent 12-month
            period as of the ending date selected for the employment profile
            report required by paragraph (a) (1) of this section. The Seller may
            select an ending date: (1) As of the end of any pay period January
            through March 1st of the year the report is due, or (2) as of
            December 31, if the Seller has previous written approval from the
            Equal Employment Opportunity Commission to do so for purposes of
            submitting the Employer Information Report EEO-1 (Standard Form
            100).
      (e)   The count of veterans reported according to paragraphs (a) above
            shall be based on voluntary disclosure. Each Seller subject to the
            reporting requirements at 3 U.S.C. 2012(d) shall invite all special
            disabled veterans and veterans of the Vietnam era who wish to
            benefit under the affirmative action program at 38 U.S.C. 2012 to
            identify themselves to the Seller. The invitation shall state that
            the information is voluntarily provided, that the information will
            be kept confidential, that disclosure or refusal to provide the
            information will not subject the applicant or employee to any
            adverse treatment, and that the information will be used only in
            accordance with the regulations promulgated under 38 U.S.C. 2012.
            Nothing in this paragraph (e) shall preclude an employee from
            informing the Seller at a future time of his or her desire to
            benefit from this program. Nothing in this paragraph (e) shall
            relieve the Seller from liability for discrimination under 38 U.S.C
            2012.

 *    Applies only if this Agreement has further subcontracting opportunities.
**    Applies only to businesses with 50 or more employees.

                                                                              32
<PAGE>

***   Seller must also adopt and comply with a small business and small
      disadvantaged business subcontracting plan pursuant to Title 48 of the
      Code of Federal Regulations.

                                                                              33

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