BP Exploration (alaska) Inc. Contract No. 92mr067a

TELECOMMUNICATIONS SERVICES


THIS AGREEMENT, effective the 1 day of April, 1992 regardless of the date actually signed by the parties, is between BP EXPLORATION (ALASKA) INC., hereinafter referred to as "Operator", and GCI NETWORK SYSTEMS, hereinafter referred to as "Contractor".


WHEREAS, BP Exploration (Alaska) Inc. is the Operator of the Endicott Development Area and Unit Operator of the Western Operating Area of the Prudhoe Bay Unit on the North Slope of Alaska, and is also engaged independently in the continuing exploration of oil and gas on the North Slope of Alaska, and in the Beaufort Sea areas with support facilities in Anchorage, Alaska; and in those capacities has need for an independent contractor to perform certain services in support of its drilling, production and exploration operations; and,


WHEREAS, Contractor has held itself out to be ready, willing and able to perform such services;


NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually agree as follows:


I. STATEMENT OF WORK


Operator requires the services of an independent contractor to operate
and maintain its telecommunication functions in the Anchorage
Headquarters building and other locations within the State of Alaska.
It is agreed that in connection with services per ATTACHMENT 6, Scope of
Work, that Operator and Contractor shall work very closely together in
the spirit of trust and cooperation towards achieving continual
improvement in the Telecommunication Services by effective business
management, project management and full exchange of relevant information
(e.g., costs, engineering, etc.).


Each of the parties hereto undertakes to do all things reasonably within
its power which are necessary to give effect to the spirit and intent of
this Contract and, in particular, neither party shall act unreasonably
or without giving due regard to the representations of the other party
when reaching any decision as to the giving or withholding of consent or
approval, or when exercising any other discretion pursuant to this
Contract.


In the performance of the Contract, Operator will, subject to business
confidentiality, freely disclose to the Contractor its activities,
engineering program, technical requirements and cost information and the
Contractor will freely disclose to Operator all information on its
resources, abilities and costs incurred in the provision of the Services.


Contract No. 92MR067A 0935/2-S2 4/1/92


Both parties will work together to ensure that for the benefit of the
Operator, sound engineering standards are achieved and maintained in the
most time and cost effective manner, and to ensure that for the benefit
of the Contractor, Operator provided, inasmuch as it is able, a good
flow of work paid for at fair rates.


Both parties will co-operate to ensure that available resources are used
in the most cost effective manner and to establish jointly operated
systems which fulfill the respective business and technical needs of
each party without duplication of effort.


To enable the achievement of the objectives described above, Operator
and Contractor shall jointly establish a Review Board which shall ensure
that all decisions and actions which relate to the Services fully
recognize the interests of both parties hereto their respective
obligations and areas of expertise.


Not withstanding the foregoing and for the avoidance of doubt, the
following principles shall apply with respect to this Contract:


1. Operator shall be ultimately responsible for determining the quality
strategy and standards with which the Contractor will be required to
comply.


2. The contractor shall be ultimately responsible for the management and
technical supervision of the performance of the services.


3. Where Operator's staff are integrated into the Contractor's team of
tdedicated Personnel, they shall work under the technical management of
the Contractor who shall be responsible for ensuring that all work under
such management meets the necessary technical quality standards.


4. Operator shall be ultimately responsible for determining the Services
which the Contractor is required to perform.


5. Whilst it is Operators intention that the Contractor shall undertake
as much of the Telecommunications Management as possible, this Contract
has no commitment value with respect to the amount of Services which
Operator will require the Contractor to perform, save as may be
established by the issue of associated Work Releases.


Furthermore, this Contract is non-exclusive and Operator reserves the
right to enter into contracts with other parties to perform similar
services: Operator shall however inform the Contractor of its reasons
for awarding such work to other contractors.


Contract No. 92MR067A 0935/2-S2 -2- 4/1/92


6. Subject to availability and to business confidentiality, Operator will
provide sufficient information to the Contractor with respect to its
long term and short term plans, to enable the Contractor to properly
control the resourcing of staff.


7. The Contractor shall project and enhance Operators image and culture
as well as its own in any exposure to third parties relating to the
services.


8. Following consultation between the parties hereto, all systems required
for the satisfactory performance of the Services shall be established to
provide such management information as may be required by Operator.


9. This Contract shall begin with transition from Operator to Contractor
personnel position by position. Review of transition shall begin three
(3) months after the start of the Contract with periodic review as
additional positions are transitioned.


II. COMPENSATION


As total consideration for all work performed and/or services rendered
hereunder, Contractor agrees to invoice Operator and Operator agrees to
pay Contractor in accordance with the following:


1. COMPENSATION SCHEDULE - ATTACHMENT 8


2. LIMITATION OF COST


Nothing in this Agreement shall obligate Contractor to take any action
which will cause the amount for which Operator will be obligated
hereunder to exceed the sum of $6,760,000.00 and Operator shall not be
obligated to pay Contractor on account of any services furnished hereunder
any amount in excess of such sum provided, however, that this sum may be
increased by Operator solely at its discretion by amending this Agreement.


3. INVOICING AND PAYMENTS


a. INVOICING


(1) Within the first ten (10) days of each month, or as soon as
practicable, but not later than thirty (30) days thereafter,
Contractor will submit a separate invoice, in original and one (1)
duplicate, to Operator for each operating location (i.e. Anchorage,
Prudhoe Bay


Contract No. 92MR067A 0935/2-S2 -3- 4/1/92


or Endicott) where work is accomplished and/or services are
performed, supported by such documentation as Operator may
reasonably require setting out Contractor's charges for services
rendered during the previous month.


(2) Contractor agrees that invoices submitted to Operator related to
this Agreement shall bear this Contract Number and the name of the
operating location and that at all times hereafter no more than
one agreement no more than one operating location shall be billed
on any single invoice submitted.


(3) Contractor shall number invoices serially and submit the original
to:


BP Exploration (Alaska) Inc.
Accounts Payable
P.O. Box 196611
Anchorage, Alaska 99519-6611


or (PBU)


BP Exploration (Alaska) Inc.
PBU North Slope Accounting
PBU eoc
P.O. Box 196612
Anchorage, Alaska 99519-6612


or (Endicott)


BP Exploration (Alaska) Inc.
North Slope Accounting
Endicott Accounting
P.O. Box 196612
Anchorage, AK 99519-6612
b. PAYMENTS


Operator will make payments to Contractor against Contractor's
invoices within thirty (30) days after they are received within
Operator's Accounts Payable Department. However, Operator is entitled
to adjust Contractor's invoices for clerical errors or items which are
not adequately supported by documentation. Further, Operator reserves
the right to deduct from payments due to Contractor any charges paid
to third persons by Operator which are to be borne by Contractor under
the terms of this Agreement. Payment by Operator of Contractor's
invoices shall be without prejudice to


Contract No. 92MR067A 0935/2-S2 -4- 4/1/92


Operator's right to audit Contractor's records and challenge the
correctness of the invoices any time thereafter.


c. DISCREPANCY AND FEES


Operator shall notify Contractor on the check stub or by separate
letter of any deductions from its invoice. Contractor shall notify
Operator within ninety (90) days of payment date of any disputed
amount. In the event of notice after said ninety (90) day period,
Operator shall charge Contractor $25/Hour for research.


d. UNPAID INVOICES AND FEES


Contractor shall notify Operator of any invoices billed but not
paid within two (2) years of invoice date. In the event of notice
after said two (2) year period, Operator shall charge Contractor
$25/Hour for research.


e. FINAL PAYMENT


Prior to submitting an invoice for final payment Contractor shall
ensure that all bills for labor, material, resublet work, equipment
rental, taxes, insurance and all other charges arising in the
performance of work hereunder have been fully paid by or for
Contractor.


Acceptance by Contractor of final payment from Operator shall
constitute an unconditional and complete release in full
satisfaction of all claims by Contractor against Operator,
notwithstanding any other provisions to the contrary contained
in this Agreement.


III. TERM OF AGREEMENT


1. TERM


The term of this Agreement shall commence on the effective date
specified above and shall continue through March 31, 1997 unless
extended or terminated earlier in accordance with other provisions
of this Agreement.


2. OPTION TO EXTEND SERVICES


Operator may require Contractor to continue to perform the services
within the limits of this Agreement. Extensions shall be in 30-day
increments, not to exceed three (3) such extensions, or 90 days.
Operator may exercise this option at any time within the term of this
Agreement by giving written notice to Contractor and


Contract No. 92MR067A 0935/2-S2 -5- 4/1/92


such notice shall be made effective by an amendment to this Agreement.
The rates in effect immediately prior to such extension, as set forth
in Section 11, shall apply to any extension made pursuant to this
option provision.


3. TERMINATION OR CONVENIENCE


Operator may terminate this Agreement, in whole or in part, at any
time for any reason whatsoever by giving written notice to
Contractor. If this agreement is so terminated, Contractor shall be
paid by Operator only for that portion of the services actually
performed and for documented expenses incurred by Contractor and
authorized by Operator prior to the date of termination. Operator
shall not be held liable for any other damages or for loss of
anticipated profit on account of such termination. Notwithstanding
any partial termination of services, Contractor shall continue to
perform and complete any remaining services required. Specifically,
the following details the conditions relating to this Contract:


a. MAINTENANCE OF EXISTENCE - If Contractor shall fail to
preserve and keep in full force and effect their respective
existences, maintain all material permits, rights and franchises,
or comply with all laws, the failure to comply with which would
have a materially adverse effect on Contractor's operation,
financial condition, property or business.


b. CHANGE OF OWNERSHIP - If Contractor enters into any merger or
consolidation, effects any material change in its capital or
ownership structure, sells, lease or otherwise transfer all or
substantially all of its assets, or if more than 49% of the
outstanding shares of Contractor are sold or transferred to a
single entity or controlling group after this Agreement is executed.


c. FAILURE TO PAY INDEBTEDNESS - If Contractor shall fail to pay all
or any portion of any material indebtedness when due, whether by
acceleration or otherwise, and such failure shall continue
unremedied (and not be waived by the holder of such indebtedness)
for a period of fifteen (15) business days after the applicable
grace period, if any, specified in the agreement or instrument
related to such indebtedness.


d. INSOLVENCY - If Contractor shall no pay, or admit in writing its
inability to pay its debts as they mature or apply for, consent to
or acquiesce in, the appointment of a trustee or receiver for
Contractor for any part of its property, or Contractor shall
authorize any such action; or in the absence of any such
application, consent or acquiescence, a trustee or receiver shall
be appointed for Contractor or for a substantial part of its and
shall not be discharged within a period of sixty (60) days; or any
bankruptcy,


Contract No. 92MR067A 0935/2-S2 -6- 4/1/92


reorganization, debt arrangement or other proceeding under any
bankruptcy or insolvency law or any dissolution or liquidation
proceeding shall be instituted by or against Contractor and if
instituted by or against it, shall be consented to or acquiesced
in by it or shall be dismissed within a period of sixty (60) days
or Contractor's board of directors shall authorize such action.


e. CESSATION OF OPERATIONS - If contractor shall cease operation for
more than thirty (30) consecutive days.


f. INSECURITY - If reasonable grounds for insecurity arise with
respect to the performance of Contractor, Operator may in writing
demand adequate assurance of due performance. An Event of Default
occurs if Contractor, after receipt of such justified demand,
shall fail to provide within fifteen (15) business days, such
assurance of due performance.


g. CONSEQUENCE OF DEFAULT - If any Event of Default shall occur and
continue, for a period of fifteen (15) business days after written
notice from Operator to Contractor, Operator may by further
written notice to Contractor declare this Agreement terminated.


IV. SPECIAL PROVISIONS


1. TECHNICAL COGNIZANCE


Operator's Technical Representative having cognizance over all work
performed under this Agreement, including health, safety and security
matters, shall be Kenneth F. Beckley, (907) 564-4223, or his designee.


2. ADMINISTRATIVE COGNIZANCE


All contractual and administrative matters pertaining to this
Agreement shall be under the cognizance of Operator's Manager,
Contracts, Alaska, or his designee. The following individual is
designated for administrative cognizance over this Agreement:


NAME: Martha L. Galbreath
COMPANY: BP Exploration (Alaska) Inc.
ADDRESS: P.O. Box 196612
Anchorage, Alaska 99519-6612
TELEPHONE: (907) 564-5706


Contract No. 92MR067A 0935/2-S2 -7- 4/1/92


NO CHANGES AND/OR DEVIATIONS SHALL BE MADE TO THE PROVISIONS OF THIS
AGREEMENT UNLESS AMENDED PURSUANT TO PARAGRAPH V.21.


3. CONTRACTOR'S REPRESENTATIVE


Contractor hereby designates the following individual for the purposes
of coordinating all matters relevant to this Agreement and having
authority to make binding commitments in the name of Contractor:


NAME: Anthony J. Lewkowski
COMPANY: GCI Network Systems
ADDRESS: 1551 Lore Road
Anchorage, AK 99507
TELEPHONE: (907) 522-1776
FAX: (907 267-8173


4. MATERIAL SAFETY DATA SHEET


Contractor shall provide material safety data sheet(s) (OSHA Form 20
or equivalent) to Operator prior to locating any toxic or hazardous
substance identified in the Alaska Hazard Communication Law, AS
18.60.030 et seq., on Operator's property to Operator's representative
as follows:


BP Exploration (Alaska), Inc.
Attn: Safety Manager (North Slope work)/
Transportation Supervisor (Anchorage work)
P. O. Box 196612
Anchorage, Alaska 99519-6612


Contractor is responsible for ensuring that its employees receive
training as required by the Alaska Hazard Communication Law.
Contractor shall ensure that any hazardous substance, as identified
under the Alaska Hazard Communication Law, supplied by Contractor
for work at Operator's facilities is properly labeled in accordance
with that statute.


5. CONTRACTOR'S INSURANCE


Contractor shall, at its sole expense, secure and maintain insurance
in strict accordance with the provisions set forth in ATTACHMENT 2,
Standard Insurance Requirements, attached hereto and made a part hereof.


6. NOTICES


Contract No. 92MR067A 0935/2-S2 -8- 4/1/92


a. NOTICE ADDRESSES


All notices will be addressed to the parties hereto as follows:


OPERATOR


BP Exploration (Alaska) Inc.
Materials Management Department
Manager, Contracts, Alaska
P.O. Box 196612
Anchorage, Alaska 99519-6612


CONTRACTOR


Anthony J. Lewkowski
GCI Network Systems
1551 Lore Road
Anchorage, AK 99507


COPY TO:


William C. Behnke
GCI Network Systems
1551 Lore Road
Anchorage, AK 99507


b. SENDING NOTICES


All notices, requests, and/or other communications provided
for or permitted to be given by any party hereunder shall be done
in writing for delivery in person or by mail, telegraph,
facsimile, or telex, properly addressed to each party to whom
given, with postage and charges prepaid. A notice shall be
deemed given only when received by the party to whom such notice
is directed, except that any notice given by registered or
certified mail, or by telex, facsimile, or telegraph, shall be
deemed given to and received by the party to whom directed within
twenty-four (24) hours after such notice is filed with an
operating U. S. Post Office, telegraph or telex company (as
applicable), or when actually received, whichever first occurs.


7. UTILIZATION OF ALASKAN/NATIVE RESIDENT LABOR


Contract No. 92MR067A 0935/2-S2 -9- 4/1/92


Operator is committed to the use of qualified local Alaskan
residents, Alaskan native residents whenever possible. Therefore,
Contractor shall make every reasonable effort to recruit and employ
Alaskan & Alaskan native residents labor in performance of work
under this Agreement.


For the purposes of this Agreement, the term "Alaskan
Resident" shall mean a person whose permanent residence is in the
State of Alaska.


Contractor shall make every reasonable effort to recruit, employ
and train, where applicable, those Alaskan & Alaskan native
residents required to comply with the goals set forth in its
"Alaskan/ Alaskan Native Resident Utilization Plan", which is
incorporated into this Agreement and made a part hereof by
reference. As part of its Plan, Contractor has established a goal
of:


100% Alaskan Residents
--- (As a percentage of total workforce)


0% Alaskan Native Residents
--- (As a percentage of total workforce)


0% North Slope Borough Residents
--- (As a percentage of total workforce)


Contractor shall maintain those records necessary to assure accurate
accounting of the manpower utilized to perform work under this
Agreement. Further, Contractor shall prepare and submit monthly a
report of such Alaskan & Alaskan native resident labor to Operator.
This report will be submitted, in the format specified in ATTACHMENT
4, to Operator's cognizant Administrative Representative set forth
in this Agreement, with a copy to Operator's Technical
Representative, by no later than the tenth (10th) working day of
each month reflecting the actual manpower utilization for the
previous month. As part of this report Contractor shall prepare a
narrative explanation of each incidence where the stated utilization
goals are not met and the specific actions to be taken by Contractor
to rectify the situation.


Contractor shall incorporate similar requirements in all
solicitations for quotes and/or proposals and all subcontracts
and/or orders for services in support of this Agreement. Contractor
shall include subcontractor reports in its monthly report submittals.


All records, relative to Plan implementation and accomplishment of
both Contractor and its subcontractors, are subject to the audit
provisions of this Agreement.


Contract No. 92MR067A 0935/2-S2 -10- 4/1/92


8. OPTIONAL RIGHTS OF OPERATOR IN EVENT OF DEFAULT BY CONTRACTOR


In the event Operator is dissatisfied with the performance of
Contractor hereunder on account of unreasonably poor performance or
incompetency or other reason as a result of causes reasonably
within Contractors control, Operator shall specify in writing the
cause of dissatisfaction pursuant to Paragraph V.23., Termination
for Material Breach. Should Contractor fail or refuse to remedy
matters complained of within the period as Operator may specify in
such written notice, Operator shall have the right in an emergency
(as determined by Operators Technical Representative at his sole
discretion) to take over all or part of the operation of
Contractor's equipment and/or its maintenance facilities either or
both of which Operator may operate with its own personnel or
through another contractor. Should such operations be taken over
as aforesaid by Operator, the cost of the operations conducted by
Operator, excluding charges to Contractor for the use of the tools,
machinery and appliances of Contractor, shall be deducted from
payments otherwise due to Contractor hereunder, and the balance, if
any, shall be paid to Contractor. Operator shall return such
tools, machinery and appliances to Contractor when the operations
are completed in as good condition as when taken over by Operator,
normal wear and tear excepted.


Where, in Operator's reasonable opinion, Contractor's equipment is
supplied or otherwise made available for use in an incomplete,
unusable, or unsafe condition, Operator shall have the right to
refuse said equipment and not tender payment therefor until such
equipment is made complete, usable and in safe condition. Operator
shall owe Contractor nothing for any time which the equipment is so
deemed incomplete, unusable, or unsafe and any such time will
accrue against the guaranteed minimum number of hours for such
equipment.


In the event of any material breach, by Contractor, of the terms
and conditions hereof, under the circumstances set out in this
Paragraph IV.8., Operator may, if Contractor does not rectify such
breach within the specified period (Ref ...