GST EQUIPMENT FUNDING, INC.

                                  GST USA, INC.

                          GST TELECOMMUNICATIONS, INC.

                                       and

                    UNITED STATES TRUST COMPANY OF NEW YORK,

                                   as Trustee

                                    Indenture

                            Dated as of May 13, 1997

                      13 1/4% Senior Secured Notes due 2007


<PAGE>

                              CROSS-REFERENCE TABLE

TIA SECTIONS                                                INDENTURE SECTIONS

ss. 310(a)(1).............................................       7.10
       (a)(2).............................................       7.10
       (b)................................................       7.08
ss. 313(c)................................................       7.06; 12.02
ss. 314(a)................................................       4.20; 12.02
       (a)(4).............................................       4.19; 12.02
       (c)(1).............................................       12.03
       (c)(2).............................................       12.03
       (e)................................................       12.04
ss. 315(b)................................................        7.05; 12.02
ss. 316(a)(1)(A)..........................................        6.05
       (a)(1)(B)..........................................        6.04
       (b)................................................        6.07
ss. 317(a)(1).............................................        6.08
       (a)(2).............................................        6.09
ss. 318(a)................................................       12.01
       (c)................................................       12.01










Note:    The  Cross-Reference  Table shall not for any purpose be deemed to be a
         part of the Indenture.


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                                TABLE OF CONTENTS

                                                                            Page

RECITALS OF THE COMPANY......................................................1

                                   ARTICLE ONE
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.  DEFINITIONS...................................................1
SECTION 1.02.  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT............20
SECTION 1.03.  RULES OF CONSTRUCTION........................................20

                                   ARTICLE TWO
                                 THE SECURITIES

SECTION 2.01.  FORM AND DATING..............................................21
SECTION 2.02.  RESTRICTIVE LEGENDS..........................................22
SECTION 2.03.  EXECUTION, AUTHENTICATION AND DENOMINATIONS..................24
SECTION 2.04.  REGISTRAR AND PAYING AGENT...................................25
SECTION 2.05.  PAYING AGENT TO HOLD MONEY IN TRUST..........................26
SECTION 2.06.  TRANSFER AND EXCHANGE........................................27
SECTION 2.07.  BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES..................28
SECTION 2.08.  SPECIAL TRANSFER PROVISIONS..................................29
SECTION 2.09.  REPLACEMENT SECURITIES.......................................33
SECTION 2.10.  OUTSTANDING SECURITIES.......................................33
SECTION 2.11.  TEMPORARY SECURITIES.........................................33
SECTION 2.12.  CANCELLATION.................................................34
SECTION 2.13.  CUSIP, CINS AND ISIN NUMBERS.................................34
SECTION 2.14.  DEFAULTED INTEREST...........................................
SECTION 2.15.  ISSUANCE OF ADDITIONAL SECURITIES............................35

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.  RIGHT OF REDEMPTION..........................................
SECTION 3.02.  MANDATORY REDEMPTION.........................................35
SECTION 3.03.  NOTICES TO TRUSTEE...........................................35
SECTION 3.04.  SELECTION OF SECURITIES TO BE REDEEMED.......................36
SECTION 3.05.  NOTICE OF REDEMPTION.........................................36
SECTION 3.06.  EFFECT OF NOTICE OF REDEMPTION...............................37
SECTION 3.07.  DEPOSIT OF REDEMPTION PRICE..................................37

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SECTION 3.08.  PAYMENT OF SECURITIES CALLED FOR REDEMPTION...................37
SECTION 3.09.  SECURITIES REDEEMED IN PART...................................38

                         ARTICLE FOUR

                           COVENANTS

SECTION 4.01.  PAYMENT OF SECURITIES.........................................38
SECTION 4.02.  MAINTENANCE OF OFFICE OR AGENCY...............................38
SECTION 4.03.  LIMITATION ON INDEBTEDNESS....................................39
SECTION 4.04.  LIMITATION ON RESTRICTED PAYMENTS.............................41
SECTION 4.05.  LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
               AFFECTING RESTRICTED SUBSIDIARIES.............................44

SECTION 4.06.  LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
               RESTRICTED SUBSIDIARIES.......................................45

SECTION 4.07.  LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
               SUBSIDIARIES..................................................46

SECTION 4.08.  LIMITATION ON TRANSACTIONS 
               WITH SHAREHOLDERS AND AFFILIATES..............................46
SECTION 4.09.  LIMITATION ON LIENS...........................................47
SECTION 4.10.  LIMITATION ON SALE-LEASEBACK TRANSACTIONS.....................48
SECTION 4.11.  LIMITATION ON INVESTMENTS.....................................49
SECTION 4.12.  LIMITATION ON ASSET SALES.....................................49
SECTION 4.13.  IMPAIRMENT OF SECURITY
               INTEREST OR ABILITY TO ASSUME THE
               SECURITIES....................................................50
SECTION 4.14.  REPURCHASE OF SECURITIES UPON A CHANGE OF CONTROL.............51
SECTION 4.15.  EXISTENCE.....................................................51
SECTION 4.16.  PAYMENT OF TAXES AND OTHER CLAIMS.............................51
SECTION 4.17.  MAINTENANCE OF PROPERTIES AND INSURANCE.......................51
SECTION 4.18.  NOTICE OF DEFAULTS............................................52
SECTION 4.19.  COMPLIANCE CERTIFICATES.......................................52
SECTION 4.20.  COMMISSION REPORTS AND REPORTS TO HOLDERS.....................53
SECTION 4.21.  WAIVER OF STAY, EXTENSION OR USURY LAWS.......................53
SECTION 4.22.  ADDITIONAL AMOUNTS............................................53
SECTION 4.23.  ASSUMPTION OF SECURITIES BY GST USA...........................54

                         ARTICLE FIVE
                     SUCCESSOR CORPORATION

SECTION 5.01.  CONSOLIDATION, MERGER AND SALE OF ASSETS......................55
SECTION 5.02.  SUCCESSOR SUBSTITUTED.........................................56


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<PAGE>
                                   ARTICLE SIX
                              DEFAULT AND REMEDIES

SECTION 6.01.  EVENTS OF DEFAULT..............................................57
SECTION 6.02.  ACCELERATION...................................................58
SECTION 6.03.  OTHER REMEDIES.................................................59
SECTION 6.04.  WAIVER OF PAST DEFAULTS........................................59
SECTION 6.05.  CONTROL BY MAJORITY............................................59
SECTION 6.06.  LIMITATION ON SUITS............................................60
SECTION 6.07.  RIGHTS OF HOLDERS TO RECEIVE PAYMENT...........................60
SECTION 6.08.  COLLECTION SUIT BY TRUSTEE.....................................60
SECTION 6.09.  TRUSTEE MAY FILE PROOFS OF CLAIM...............................61
SECTION 6.10.  PRIORITIES.....................................................61
SECTION 6.11.  UNDERTAKING FOR COSTS..........................................61
SECTION 6.12.  RESTORATION OF RIGHTS AND REMEDIES.............................62
SECTION 6.13.  RIGHTS AND REMEDIES CUMULATIVE.................................62
SECTION 6.14.  DELAY OR OMISSION NOT WAIVER...................................62

                                          ARTICLE SEVEN

                                             TRUSTEE

SECTION 7.01.  GENERAL........................................................62
SECTION 7.02.  CERTAIN RIGHTS OF TRUSTEE......................................62
SECTION 7.03.  INDIVIDUAL RIGHTS OF TRUSTEE...................................64
SECTION 7.04.  TRUSTEE'S DISCLAIMER...........................................64
SECTION 7.05.  NOTICE OF DEFAULT..............................................64
SECTION 7.06.  REPORTS BY TRUSTEE TO HOLDERS..................................64
SECTION 7.07.  COMPENSATION AND INDEMNITY.....................................64
SECTION 7.08.  REPLACEMENT OF TRUSTEE.........................................65
SECTION 7.09.  SUCCESSOR TRUSTEE BY MERGER, ETC...............................66
SECTION 7.10.  ELIGIBILITY....................................................66
SECTION 7.11.  MONEY HELD IN TRUST............................................66
SECTION 7.12.  WITHHOLDING TAXES..............................................66

                                          ARTICLE EIGHT
                                     DISCHARGE OF INDENTURE

SECTION 8.01.  TERMINATION OF COMPANY'S OBLIGATIONS...........................66
SECTION 8.02.  DEFEASANCE AND DISCHARGE OF INDENTURE..........................67
SECTION 8.03.  DEFEASANCE OF CERTAIN OBLIGATIONS..............................70

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SECTION 8.04.  APPLICATION OF TRUST MONEY.....................................71
SECTION 8.05.  REPAYMENT TO ISSUER............................................72
SECTION 8.06.  REINSTATEMENT..................................................72
SECTION 8.07.  INSIDERS.......................................................72

                                          ARTICLE NINE
                               AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 9.01.  WITHOUT CONSENT OF HOLDERS.....................................72
SECTION 9.02.  WITH CONSENT OF HOLDERS........................................73
SECTION 9.03.  REVOCATION AND EFFECT OF CONSENT...............................74
SECTION 9.04.  NOTATION ON OR EXCHANGE OF SECURITIES..........................75
SECTION 9.05.  TRUSTEE TO SIGN AMENDMENTS, ETC................................75
SECTION 9.06.  CONFORMITY WITH TRUST INDENTURE ACT............................75

                                           ARTICLE TEN
                                       MEETINGS OF HOLDERS

SECTION 10.01.  PURPOSES FOR WHICH MEETINGS MAY BE CALLED.....................75
SECTION 10.02.  MANNER OF CALLING MEETINGS....................................76
SECTION 10.03.  CALL OF MEETINGS BY ISSUER OR HOLDERS.........................76
SECTION 10.04.  WHO MAY ATTEND AND VOTE AT MEETINGS...........................76
SECTION 10.05.  QUORUM; ACTION................................................77
SECTION 10.06.  REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE
                MEETING; VOTING RIGHTS; ADJOURNMENT...........................77

SECTION 10.07.  VOTING AT THE MEETING AND RECORD TO BE KEPT...................78
SECTION 10.08.  EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE
                HINDERED OR DELAYED BY CALL OF MEETING........................79
SECTION 10.09.  PROCEDURES NOT EXCLUSIVE......................................79

                                         ARTICLE ELEVEN
                                            SECURITY

SECTION 11.01.  SECURITY......................................................79

                                         ARTICLE TWELVE
                                          MISCELLANEOUS

SECTION 12.01.  TRUST INDENTURE ACT OF 1939...................................81
SECTION 12.02.  NOTICES.......................................................81

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SECTION 12.03.  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT............82
SECTION 12.04.  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.................83
SECTION 12.05.  RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR...................83
SECTION 12.06.  PAYMENT DATE OTHER THAN A BUSINESS DAY........................83
SECTION 12.07.  GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE............83
SECTION 12.08.  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.................84
SECTION 12.09.  NO RECOURSE AGAINST OTHERS....................................84
SECTION 12.10.  SUCCESSORS....................................................84
SECTION 12.11.  DUPLICATE ORIGINALS...........................................84
SECTION 12.12.  SEPARABILITY..................................................84
SECTION 12.13.  TABLE OF CONTENTS, HEADINGS, ETC..............................84

                                     SUPPLEMENTAL INDENTURE

SECTION 1.1  CERTAIN TERMS DEFINED IN THE INDENTURE..........................E-1
SECTION 1.2  ASSUMPTION OF THE SECURITIES BY GST USA.........................E-1
SECTION 1.3. SECURITY GUARANTEE..............................................E-1
SECTION 1.4. OBLIGATIONS UNCONDITIONAL.......................................E-3
SECTION 1.5. NOTICE TO TRUSTEE...............................................E-3
SECTION 1.6. THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT...................E-3
SECTION 1.7. NET WORTH LIMITATION............................................E-3
SECTION 2.   GOVERNING LAW; SUBMISSION TO JURISDICTION;
             AGENT FOR SERVICE...............................................E-4
SECTION 3.   COUNTERPARTS....................................................E-4
SECTION 4.   RATIFICATION....................................................E-4

EXHIBIT A    Form of Security................................................A-1
EXHIBIT B    Form of Certificate.............................................B-1
EXHIBIT C    Form of Certificate to be Delivered in Connection with
             Transfers Pursuant to Regulation S..............................C-1

EXHIBIT D    Form of Certificate to be Delivered in Connection with
             Transfers to Non-QIB Accredited Investors.......................D-1

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<PAGE>
                 INDENTURE,  dated  as of May  13,  1997,  among  GST  EQUIPMENT
FUNDING, INC., a Delaware corporation (the "COMPANY"), GST USA, INC., a Delaware
corporation  ("GST USA"), GST  TELECOMMUNICATIONS,  INC., a federally  chartered
Canadian  corporation  ("GST"), and UNITED STATES TRUST COMPANY OF NEW YORK (the
"TRUSTEE").

                             RECITALS OF THE COMPANY

                 The Company has duly  authorized  the execution and delivery of
this  Indenture  to provide for the  issuance  initially  of up to  $265,000,000
aggregate  principal  amount of the  Company's 13 1/4% Senior  Secured Notes due
2007 (the "SECURITIES") issuable as provided in this Indenture.

                 All things  necessary to make this Indenture a valid  agreement
of the Company,  GST USA and GST, in accordance with its terms,  have been done,
and the  Company,  GST USA and GST have done all  things  necessary  to make the
Securities,  when executed by the Company and authenticated and delivered by the
Trustee  hereunder and duly issued by the Company,  the valid obligations of the
Company as hereinafter provided.

                 This  Indenture  is subject to, and shall be  governed  by, the
provisions of the Trust Indenture Act of 1939, as amended,  that are required to
be a part of and to govern indentures qualified under the Trust Indenture Act of
1939, as amended.

                      AND THIS INDENTURE FURTHER WITNESSETH

                 For and in  consideration  of the  premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders, as follows.

                                   ARTICLE ONE
                   DEFINITIONS AND INCORPORATION BY REFERENCE

                 SECTION 1.01. DEFINITIONS.

                 "ACQUIRED EQUIPMENT" has the meaning provided in Section 11.01.

                 "ACQUIRED  EQUIPMENT COST" has the meaning specified in Section
11.01.

                 "ADDITIONAL AMOUNTS" has the meaning provided in Section 4.22.

                 "ADJUSTED  CONSOLIDATED NET INCOME" means, for any period,  the
aggregate net income (or loss) of GST and its Restricted  Subsidiaries  for such
period  determined in conformity  with GAAP;  PROVIDED that the following  items
shall be  excluded  in  computing  Adjusted  Consolidated  Net  Income  (without
duplication):  (i)  the  net  income  of  any  Person  (other  than  net  income
attributable to a Restricted  Subsidiary) in which any Person (other than GST or
any of

<PAGE>
its  Restricted  Subsidiaries)  has  an  interest  and  the  net  income  of any
Unrestricted  Subsidiary,  except to the  extent of the amount of  dividends  or
other distributions  actually paid to GST or any of its Restricted  Subsidiaries
by such other Person, or such Unrestricted Subsidiary,  during such period; (ii)
solely for the purposes of  calculating  the amount of Restricted  Payments that
may be made  pursuant to clause (C) of the first  paragraph of Section 4.04 (and
in such case, except to the extent includable pursuant to clause (i) above), the
net  income  (or  loss) of any  Person  accrued  prior to the date it  becomes a
Restricted  Subsidiary or is merged into or consolidated  with GST or any of its
Restricted  Subsidiaries or all or substantially  all of the property and assets
of such Person are acquired by GST or any of its Restricted Subsidiaries;  (iii)
the net income of any Restricted  Subsidiary to the extent that the  declaration
or payment of dividends or similar  distributions by such Restricted  Subsidiary
of such net income is not at the time permitted by the operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental  regulation applicable to such Restricted  Subsidiary;  (iv) any
gains or losses (on an after-tax basis)  attributable to Asset Sales; (v) except
for purposes of calculating  the amount of Restricted  Payments that may be made
pursuant to clause (C) of the first  paragraph of Section 4.04,  any amount paid
or accrued as dividends on Preferred  Stock of GST or any Restricted  Subsidiary
owned by Persons other than GST and any of its Restricted Subsidiaries; and (vi)
all extraordinary gains and extraordinary losses.

                 "ADJUSTED  CONSOLIDATED  NET TANGIBLE  ASSETS"  means the total
amount  of  assets  of GST  and its  Restricted  Subsidiaries  (less  applicable
depreciation,  amortization and other valuation reserves),  except to the extent
resulting from write-ups of capital  assets  (excluding  write-ups in connection
with  accounting for  acquisitions  in conformity  with GAAP),  after  deducting
therefrom (i) all current  liabilities  of GST and its  Restricted  Subsidiaries
(excluding intercompany items) and (ii) all goodwill,  trade names,  trademarks,
patents,  unamortized debt discount and expense and other like intangibles,  all
as set forth on the  quarterly or annual  consolidated  balance sheet of GST and
its Restricted Subsidiaries,  prepared in conformity with GAAP and most recently
filed with the Commission pursuant to Section 4.20.

                 "AFFILIATE"  means, as applied to any Person,  any other Person
directly or indirectly  controlling,  controlled by, or under direct or indirect
common control with,  such Person.  For purposes of this  definition,  "control"
(including,  with correlative meanings, the terms "controlling," "controlled by"
and  "under  common  control  with"),  as  applied  to  any  Person,  means  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction of the  management  and policies of such Person,  whether  through the
ownership of voting securities, by contract or otherwise.

                 "AGENT" means any Registrar, Paying Agent, authenticating agent
or co-Registrar.

                 "AGENT MEMBERS" has the meaning provided in Section 2.07(a).

                 "ASSET  ACQUISITION"  means (i) an  investment by GST or any of
its Restricted  Subsidiaries  in any other Person  pursuant to which such Person
shall  become  a  Restricted  Subsidiary  of GST or  shall  be  merged  into  or
consolidated with GST or any of its Restricted Subsidiaries;  PROVIDED that such
Person's primary business is related, ancillary or complementary

                                       2

<PAGE>

to the  businesses of GST and its  Restricted  Subsidiaries  on the date of such
investment or (ii) an acquisition  by GST or any of its Restricted  Subsidiaries
of the property and assets of any Person other than GST or any of its Restricted
Subsidiaries that constitute substantially all of a division or line of business
of such Person;  PROVIDED  that the  property  and assets  acquired are related,
ancillary  or  complementary  to  the  businesses  of  GST  and  its  Restricted
Subsidiaries on the date of such acquisition.

                 "ASSET  SALE"  means any sale,  transfer  or other  disposition
(including by way of merger,  consolidation or  sale-leaseback  transactions) in
one  transaction  or a  series  of  related  transactions  by  GST or any of its
Restricted  Subsidiaries  to any Person other than GST or any of its  Restricted
Subsidiaries  of  (i)  all  or  any of  the  Capital  Stock  of  any  Restricted
Subsidiary,  (ii) all or  substantially  all of the  property  and  assets of an
operating unit or business of GST or any of its Restricted Subsidiaries or (iii)
any  other  property  or  assets  of GST or any of its  Restricted  Subsidiaries
outside the  ordinary  course of business of GST or such  Restricted  Subsidiary
and, in each case,  that is not  governed  by the  provisions  of Article  Five;
PROVIDED that "Asset Sale" shall not include (A) sales or other  dispositions of
inventory,  receivables  and  other  current  assets;  or  (B)  sales  or  other
dispositions  of assets with a fair market  value (as  certified in an Officers'
Certificate) not in excess of $1 million;  or (C) sales of Acquired Equipment by
the Company to GST USA in accordance  with the terms of this  Indenture;  or (D)
sales  or  other  dispositions  of  assets  to the  extent  GST or a  Restricted
Subsidiary receives consideration at least equal to the fair market value of the
assets sold or disposed of, PROVIDED that the consideration received consists of
property or assets  (other than current  assets) of a nature or type or that are
used in a business (or a company having  property or assets of a nature or type,
or  engaged  in a  business)  similar  or  related  to the nature or type of the
property  and assets of, or  business  of, GST and its  Restricted  Subsidiaries
existing on the date of such sale or other disposition.

                 "ASSUMPTION  DATE"  means  the  date on  which  GST USA and GST
execute and deliver the supplemental indenture required by Section 4.23(a).

                 "AVERAGE LIFE" means, at any date of determination with respect
to any debt  security,  the  quotient  obtained by  dividing  (i) the sum of the
products of (a) the number of years from such date of determination to the dates
of each successive scheduled principal payment of such debt security and (b) the
amount of such principal payment by (ii) the sum of all such principal payments.

                 "BOARD OF  DIRECTORS"  means,  with respect to any Person,  the
Board of  Directors  of such Person or any  committee of such Board of Directors
duly authorized to act with respect to this Indenture.

                 "BOARD RESOLUTION" means, with respect to any Person, a copy of
a resolution,  certified by the Secretary or Assistant  Secretary of such Person
to have been duly  adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such  certification,  and  delivered to the
Trustee.

                                       3

<PAGE>
                 "BUSINESS DAY" means any day except a Saturday, Sunday or other
day on which  commercial  banks in The City of New  York,  or in the city of the
Corporate Trust Office of the Trustee, are authorized by law to close.

                 "CAPITAL STOCK" means, with respect to any Person,  any and all
shares,  interests,  participations  or other equivalents  (however  designated,
whether voting or non-voting) in equity of such Person,  whether now outstanding
or issued after the date of this Indenture,  including,  without limitation, all
Common Stock and Preferred Stock.

                 "CAPITALIZED  LEASE" means, as applied to any Person, any lease
of any  property  (whether  real,  personal  or mixed)  of which the  discounted
present value of the rental  obligations of such Person as lessee, in conformity
with GAAP,  is required to be  capitalized  on the balance sheet of such Person;
and "Capitalized  Lease  Obligations"  means the discounted present value of the
rental obligations under such lease.

                 "CHANGE  OF  CONTROL"  means  such  time as (i) a  "person"  or
"group"  (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
becomes  the  ultimate  "beneficial  owner" (as  defined in Rule 13d-3 under the
Exchange  Act) of Voting  Stock  representing  more than 30% of the total voting
power of the Voting Stock of GST on a fully diluted basis;  (ii) individuals who
on the Closing Date  constitute the Board of Directors of GST (together with any
new  directors  whose  election  by the  Board  of  Directors  of  GST or  whose
nomination for election by GST's shareholders was approved by a vote of at least
two-thirds  of the members of the Board of  Directors  then in office who either
were  members  of the Board of  Directors  of GST on the  Closing  Date or whose
election or nomination  for election was  previously so approved)  cease for any
reason to  constitute a majority of the members of the Board of Directors of GST
then in office;  or (iii) all of the Common  Stock of GST USA or the  Company is
not beneficially owned by GST.

                 "CLOSING  DATE"  means  the date on which  the  Securities  are
originally issued under this Indenture.

                 "COMMISSION" means the Securities and Exchange  Commission,  as
from time to time constituted, created under the Exchange Act or, if at any time
after the  execution  of this  instrument  such  Commission  is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.

                 "COMMON SHARES" means the common shares of GST.

                 "COMMON STOCK" means,  with respect to any Person,  any and all
shares,  interests,  participations  or other equivalents  (however  designated,
whether  voting or  non-voting)  of such  Person's  common  stock,  whether  now
outstanding  or issued  after  the date of this  Indenture,  including,  without
limitation, all series and classes of such common stock.

                                       4

<PAGE>

                 "COMPANY"  means the party named as such in the first paragraph
of this Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.

                 "COMPANY  ORDER" means a written request or order signed in the
name of the Issuer (i) by its Chairman, a Vice Chairman, its President or a Vice
President  and (ii) by its Chief  Financial  Officer,  Treasurer,  an  Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
PROVIDED,  HOWEVER,  that such written request or order may be signed by any two
of the officers or directors  listed in clause (i) above in lieu of being signed
by one of such  officers or  directors  listed in such clause (i) and one of the
officers listed in clause (ii) above.

                 "CONSOLIDATED  EBITDA"  means,  for any period,  the sum of the
amounts  for  such  period  of  (i)  Adjusted   Consolidated  Net  Income,  (ii)
Consolidated  Interest  Expense,  to the  extent  such  amount was  deducted  in
calculating Adjusted  Consolidated Net Income, (iii) income taxes, to the extent
such amount was deducted in calculating Adjusted  Consolidated Net Income (other
than  income  taxes  (either  positive  or  negative)   attributable  to  either
extraordinary  and  non-recurring  gains or  losses  or sales of  assets),  (iv)
depreciation  expense,  to the extent  such amount was  deducted in  calculating
Adjusted  Consolidated Net Income, (v) amortization  expense, to the extent such
amount was deducted in calculating  Adjusted  Consolidated Net Income,  and (vi)
all other non-cash items reducing  Adjusted  Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by GAAP to be, made),  less all non-cash items  increasing  Adjusted
Consolidated Net Income,  all as determined on a consolidated  basis for GST and
its  Restricted  Subsidiaries  in conformity  with GAAP;  PROVIDED  that, if any
Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,  Consolidated
EBITDA shall be reduced (to the extent not otherwise  reduced in accordance with
GAAP) by an amount  equal to (A) the  amount of the  Adjusted  Consolidated  Net
Income attributable to such Restricted Subsidiary multiplied by (B) the quotient
of (1) the  number of  shares of  outstanding  Common  Stock of such  Restricted
Subsidiary  not  owned  on the  last  day of  such  period  by GST or any of its
Restricted Subsidiaries divided by (2) the total number of shares of outstanding
Common Stock of such Restricted Subsidiary on the last day of such period.

                 "CONSOLIDATED  INTEREST  EXPENSE"  means,  for any period,  the
aggregate amount of interest in respect of Indebtedness  (including amortization
of original issue discount on any  Indebtedness  and the interest portion of any
deferred  payment  obligation,  calculated  in  accordance  with  the  effective
interest  method of accounting;  all  commissions,  discounts and other fees and
charges  owed  with  respect  to  letters  of  credit  and  bankers'  acceptance
financing;  the  net  costs  associated  with  Interest  Rate  Agreements;   and
Indebtedness  that is  Guaranteed  or  secured  by GST or any of its  Restricted
Subsidiaries)  and all but the  principal  component  of  rentals  in respect of
Capitalized  Lease  Obligations  paid,  accrued or scheduled to be paid or to be
accrued by GST and its Restricted  Subsidiaries  during such period;  excluding,
however, (i) any amount of such interest of any Restricted Subsidiary if the net
income of such Restricted  Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (iii) of the definition  thereof (but
only in the same proportion as the net income of such

                                       5

<PAGE>

Restricted  Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income  pursuant to clause  (iii) of the  definition  thereof)  and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Securities,  all as determined on a consolidated  basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.

                 "CONSOLIDATED  NET WORTH" means, at any date of  determination,
shareholders'  equity as set forth on the most recently  available  quarterly or
annual consolidated balance sheet of GST and its Restricted  Subsidiaries (which
shall  be as of a date  not  more  than  90  days  prior  to the  date  of  such
computation,  and which shall not take into account Unrestricted  Subsidiaries),
less  any  amounts  attributable  to  Redeemable  Stock or any  equity  security
convertible  into or exchangeable for  Indebtedness,  the cost of treasury stock
and the principal  amount of any promissory  notes  receivable  from the sale of
Capital  Stock of GST or any of its  Restricted  Subsidiaries,  each  item to be
determined in conformity  with GAAP  (excluding the effects of foreign  currency
exchange  adjustments  under Financial  Accounting  Standards Board Statement of
Financial Accounting Standards No. 52).

                 "CONVERTIBLE  NOTES"  means  the  13 7/8%   Convertible  Senior
Subordinated  Discount Notes due 2005 of GST issued  pursuant to the Convertible
Notes Indenture.

                 "CONVERTIBLE  NOTES  INDENTURE"  means  the  convertible  notes
indenture  dated December 19, 1995 among GST, as issuer,  GST USA, as guarantor,
and United States Trust Company of New York, as trustee.

                 "CORPORATE  TRUST  OFFICE"  means the office of the  Trustee at
which the corporate trust business of the Trustee shall, at any particular time,
be  principally  administered,  which office is, at the date of this  Indenture,
located at 114 West 47th Street, New York, New York 10036-1532.

                 "CURRENCY  AGREEMENT"  means  any  foreign  exchange  contract,
currency swap agreement or other similar  agreement or  arrangement  designed to
protect  GST or  any of its  Restricted  Subsidiaries  against  fluctuations  in
currency values to or under which GST or any of its Restricted Subsidiaries is a
party or a  beneficiary  on the date of this  Indenture  or becomes a party or a
beneficiary thereafter.

                 "DEFAULT"  means any event that is, or after  notice or passage
of time or both would be, an Event of Default.

                 "DEPOSITARY" means The Depository Trust Company,  its nominees,
and their respective successors.

                 "DEVELOPMENT  COMPANY"  means  a  Restricted  Subsidiary  whose
primary  business is the  development,  ownership and  operation of  alternative
access telecommunications networks.

                 "EVENT OF DEFAULT" has the meaning provided in Section 6.01.

                                       6

<PAGE>
                 "EXCESS PROCEEDS" has the meaning provided in Section 4.12.

                 "EXCHANGE  ACT" means the  Securities  Exchange Act of 1934, as
amended.

                 "EXCHANGE  SECURITIES"  means  any  securities  of  the  Issuer
containing  terms  identical  to  the  Securities  (except  that  such  Exchange
Securities  (i) shall be  registered  under the  Securities  Act,  (ii) will not
provide  for an increase  in the rate of  interest  (other than with  respect to
overdue  amounts)  and (iii) will not  contain  terms with  respect to  transfer
restrictions)  that are issued and exchanged for the Securities  pursuant to the
Registration Rights Agreement and this Indenture.

                 "FAIR  MARKET  VALUE"  means the price that would be paid in an
arm's-length  transaction  between  an  informed  and  willing  seller  under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as   determined  in  good  faith  by  the  Board  of  Directors  of  GST  (whose
determination shall be conclusive) and evidenced by a Board Resolution.

                 "GAAP" means generally  accepted  accounting  principles in the
United States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American  Institute of Certified Public  Accountants and
statements and pronouncements of the Financial  Accounting Standards Board or in
such other statements by such other entity as approved by a significant  segment
of the  accounting  profession.  All ratios and  computations  contained in this
Indenture  shall be computed in  conformity  with GAAP  applied on a  consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants  contained  herein and with other  provisions of this
Indenture  shall be made without  giving effect to (i) the  amortization  of any
expenses  incurred in connection  with the offering of the  Securities  and (ii)
except as  otherwise  provided,  the  amortization  of any  amounts  required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.

                 "GLOBAL SECURITIES" has the meaning provided in Section 2.01.

                 "GST" means the party named as such in the first  paragraph  of
this  Indenture  until a successor  replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.

                 "GST USA" means the party named as such in the first  paragraph
of this Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.

                 "GUARANTEE" means any obligation,  contingent or otherwise,  of
any  Person  directly  or  indirectly  guaranteeing  any  Indebtedness  or other
obligation  of any other  Person and,  without  limiting the  generality  of the
foregoing, any obligation,  direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or  advance or supply  funds for the  purchase or
payment of) such  Indebtedness or other obligation of such other Person (whether
arising by

                                       7

<PAGE>

virtue of partnership  arrangements,  or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay,  or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such  Indebtedness or other obligation of the
payment  thereof or to protect such obligee  against loss in respect thereof (in
whole or in  part);  PROVIDED  that  the  term  "Guarantee"  shall  not  include
endorsements  for collection or deposit in the ordinary course of business.  The
term "Guarantee" used as a verb has a corresponding meaning.

                 "GUARANTEED  INDEBTEDNESS"  has the meaning provided in Section
4.07.

                 "HOLDER" or  "SECURITYHOLDER"  means the then registered holder
of any Security.

                 "INCUR"  means,  with  respect to any  Indebtedness,  to incur,
create, issue, assume,  guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of,  contingently or otherwise,  such
Indebtedness,  including an  "incurrence"  of Indebtedness by reason of a Person
becoming a Restricted Subsidiary;  PROVIDED that neither the accrual of interest
nor the accretion of original  issue  discount shall be considered an Incurrence
of Indebtedness.

                 "INDEBTEDNESS" means, with respect to any Person at any date of
determination  (without  duplication),  (i) all  indebtedness of such Person for
borrowed  money,  (ii)  all  obligations  of such  Person  evidenced  by  bonds,
debentures,  notes or other similar  instruments,  (iii) all obligations of such
Person in respect of letters of credit or other similar  instruments  (including
reimbursement  obligations with respect  thereto),  (iv) all obligations of such
Person to pay the  deferred and unpaid  purchase  price of property or services,
which  purchase price is due more than six months after the date of placing such
property in service or taking  delivery and title  thereto or the  completion of
such  services,  except Trade  Payables,  (v) all  obligations of such Person as
lessee under Capitalized  Leases, (vi) all Indebtedness of other Persons secured
by a Lien on any  asset of such  Person,  whether  or not such  Indebtedness  is
assumed by such Person;  PROVIDED that the amount of such Indebtedness  shall be
the  lesser  of (A) the  fair  market  value  of  such  asset  at  such  date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness of
other  Persons  Guaranteed  by such  Person to the extent such  Indebtedness  is
Guaranteed  by such  Person and (viii) to the extent not  otherwise  included in
this  definition,  obligations  under  Currency  Agreements  and  Interest  Rate
Agreements.  The amount of  Indebtedness  of any Person at any date shall be the
outstanding  balance at such date of all unconditional  obligations as described
above and, with respect to contingent  obligations,  the maximum  liability upon
the occurrence of the contingency  giving rise to the  obligation,  PROVIDED (A)
that the amount outstanding at any time of any Indebtedness issued with original
issue  discount is the face  amount of such  Indebtedness  less the  unamortized
portion of the original issue discount of such  Indebtedness  at the time of its
issuance as determined in conformity with GAAP, (B) money borrowed and set aside
at the time of the  Incurrence  of any  Indebtedness  in order to  pre-fund  the
payment  of   interest  as  such   Indebtedness   shall  be  deemed  not  to  be
"Indebtedness"  and (C) that  Indebtedness  shall not include any  liability for
federal, state, local or other taxes.

                                       8

<PAGE>

                 "INDEBTEDNESS  TO  EBITDA  RATIO"  means,  as at  any  date  of
determination,  the ratio of (i) the aggregate amount of Indebtedness of GST and
its  Restricted  Subsidiaries  on  a  consolidated  basis  as  at  the  date  of
determination  (the "TRANSACTION  DATE") to (ii) the Consolidated  EBITDA of GST
for the then most recent four full fiscal  quarters for which  reports have been
filed  pursuant to Section  4.20 (such four full  fiscal  quarter  period  being
referred to herein as the "FOUR  QUARTER  PERIOD");  PROVIDED that (x) pro forma
effect shall be given to any  Indebtedness  Incurred  from the  beginning of the
Four Quarter Period through the  Transaction  Date  (including any  Indebtedness
Incurred on the Transaction  Date), to the extent outstanding on the Transaction
Date, (y) if during the period  commencing on the first day of such Four Quarter
Period through the Transaction Date (the "REFERENCE PERIOD"),  GST or any of its
Restricted  Subsidiaries  shall  have  engaged in any Asset  Sale,  Consolidated
EBITDA for such  period  shall be  reduced by an amount  equal to the EBITDA (if
positive), or increased by an amount equal to the EBITDA (if negative), directly
attributable  to the assets  which are the subject of such Asset Sale as if such
Asset  Sale had  occurred  on the first day of such  Reference  Period or (z) if
during such  Reference  Period GST or any of the Restricted  Subsidiaries  shall
have made any Asset Acquisition,  Consolidated EBITDA of GST shall be calculated
on a pro  forma  basis  as if  such  Asset  Acquisition  and any  Incurrence  of
Indebtedness to finance such Asset  Acquisition had taken place on the first day
of such Reference Period.

                 "INDENTURE"  means this Indenture as originally  executed or as
it may be amended or  supplemented  from time to time by one or more  indentures
supplemental  to  this  Indenture   entered  into  pursuant  to  the  applicable
provisions of this Indenture.

                 "INITIAL   NOTE"  means  the  $35  million   principal   amount
promissory note due May 13, 2000 issued to the Company by GST USA and guaranteed
by GST;  PROVIDED that the  principal  amount shall be reduced to the extent the
principal  amount exceeds the principal  amount of the  Securities  less (x) the
principal amount of Pledged  Securities and cash then held in the Pledge Account
(other than the Interest Collateral), together with accrued interest thereon and
(y) the principal amount of all Intercompany Notes then held as security for the
Securities  plus the amount of interest  that will  accrue on such  Intercompany
Notes by May 13, 2000.

                 "INSTITUTIONAL  ACCREDITED  INVESTOR" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1),  (2), (3)
or (7) of Regulation D under the Securities Act.

                 "INTERCOMPANY  NOTES"  means the  promissory  notes due May 13,
2000 issued to the Company by GST USA and guaranteed by GST.

                 "INTEREST  COLLATERAL"  has the  meaning  provided  in  Section
11.01.

                 "INTEREST PAYMENT DATE" means each semiannual  interest payment
date on May 1 and November 1 of each year, commencing November 1, 1997.

                 "INTEREST RATE  AGREEMENT"  means any interest rate  protection
agreement,  interest  rate future  agreement,  interest  rate option  agreement,
interest rate swap agreement, interest rate

                                       9

<PAGE>

cap agreement,  interest rate collar agreement, interest rate hedge agreement or
other  similar  agreement or  arrangement  designed to protect GST or any of its
Restricted  Subsidiaries  against  fluctuations  in interest rates in respect of
Indebtedness  to or under which GST or any of its Restricted  Subsidiaries  is a
party or a  beneficiary  on the date of this  Indenture  or becomes a party or a
beneficiary hereafter;  PROVIDED that the notional principal amount thereof does
not exceed the principal  amount of the  Indebtedness  of GST and its Restricted
Subsidiaries that bears interest at floating rates.

                 "INTERNATIONAL ASSET" has the meaning provided in Section 4.11.

                 "INTERNATIONAL  BUSINESS"  has the meaning  provided in Section
4.11.

                 "INVESTMENT"  in  any  Person  means  any  direct  or  indirect
advance,  loan or other extension of credit (including,  without limitation,  by
way of Guarantee or similar arrangement;  but excluding advances to customers in
the ordinary course of business that are, in conformity  with GAAP,  recorded as
accounts receivable on the balance sheet of GST or its Restricted  Subsidiaries)
or capital  contribution  to (by means of any transfer of cash or other property
to others or any  payment for  property  or  services  for the account or use of
others),  or any  purchase  or  acquisition  of  Capital  Stock,  bonds,  notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the fair market value of the Capital Stock (or any other  Investment)  held
by GST and its  Restricted  Subsidiaries  of any Person  that has ceased to be a
Restricted  Subsidiary by reason of any transaction permitted by clause (iii) of
Section 4.06. For purposes of the definition of  "Unrestricted  Subsidiary"  and
Section 4.04, (i) "Investment" shall include the fair market value of the assets
(net  of  liabilities  to GST or any  of  its  Restricted  Subsidiaries)  of any
Restricted  Subsidiary of GST at the time that such Restricted Subsidiary of GST
is designated an Unrestricted Subsidiary and shall exclude the fair market value
of the assets (net of  liabilities) of any  Unrestricted  Subsidiary at the time
that such Unrestricted  Subsidiary is designated a Restricted  Subsidiary of GST
and (ii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market  value at the time of such  transfer,  in each case as
determined by the Board of Directors of GST in good faith.

                 "ISSUER"  means the Company,  until GST USA becomes the obligor
on the  Securities on the Assumption  Date,  after which the term "Issuer" means
GST USA.

                 "LIEN"  means  any   mortgage,   pledge,   security   interest,
encumbrance,  lien or charge of any kind  (including,  without  limitation,  any
conditional  sale or other  title  retention  agreement  or lease in the  nature
thereof,  any sale with  recourse  against  the seller or any  Affiliate  of the
seller, or any agreement to give any security interest).

                 "NACT"   means  NACT   Telecommunications,   Inc.,  a  Delaware
corporation.

                 "NET CASH PROCEEDS"  means, (a) with respect to any Asset Sale,
the  proceeds  of  such  Asset  Sale in the  form  of cash or cash  equivalents,
including  payments in respect of deferred  payment  obligations  (to the extent
corresponding to the principal, but not interest,

                                       10

<PAGE>

component thereof) when received in the form of cash or cash equivalents (except
to the extent such  obligations are financed or sold with recourse to GST or any
Restricted  Subsidiary)  and  proceeds  from the  conversion  of other  property
received  when  converted  to  cash or cash  equivalents,  net of (i)  brokerage
commissions and other fees and expenses  (including fees and expenses of counsel
and  investment  bankers)  related to such Asset Sale,  (ii)  provisions for all
taxes  (whether  or not such taxes will  actually  be paid or are  payable) as a
result  of such  Asset  Sale  without  regard  to the  consolidated  results  of
operations  of GST and its  Restricted  Subsidiaries,  taken as a  whole,  (iii)
payments made to repay  Indebtedness or any other obligation  outstanding at the
time of such Asset Sale that either (A) is secured by a Lien on the  property or
assets  sold or (B) is  required  to be paid as a result  of such  sale and (iv)
appropriate  amounts to be provided  by GST or any  Restricted  Subsidiary  as a
reserve  against any  liabilities  associated  with such Asset Sale,  including,
without  limitation,  pension  and other  post-employment  benefit  liabilities,
liabilities   related  to  environmental   matters  and  liabilities  under  any
indemnification  obligations  associated with such Asset Sale, all as determined
in conformity  with GAAP and (b) with respect to any issuance or sale of Capital
Stock,  the  proceeds  of such  issuance  or  sale  in the  form of cash or cash
equivalents,  including payments in respect of deferred payment  obligations (to
the extent corresponding to the principal, but not interest,  component thereof)
when received in the form of cash or cash equivalents (except to the extent such
obligations  are  financed  or  sold  with  recourse  to GST  or any  Restricted
Subsidiary)  and proceeds from the  conversion of other  property  received when
converted to cash or cash  equivalents,  net of  attorneys'  fees,  accountants'
fees,  underwriters'  or placement  agents' fees,  discounts or commissions  and
brokerage,  consultant and other fees incurred in connection  with such issuance
or sale and net of taxes paid or payable as a result thereof.

                 "1995 INDENTURES"  means,  collectively,  the Convertible Notes
Indenture and the Senior Notes Indenture.

                 "NON-U.S.  PERSON" means a person who is not a U.S. person,  as
defined in Regulation S.

                 "OFFER TO PURCHASE"  means an offer to purchase  Securities  by
the Issuer  from the  Holders  commenced  by mailing a notice to the Trustee and
each Holder stating:  (i) the covenant pursuant to which the offer is being made
and that all Securities  validly  tendered will be accepted for payment on a pro
rata basis;  (ii) the purchase price and the date of purchase  (which shall be a
Business  Day no earlier  than 30 days nor later than 60 days from the date such
notice is mailed)  (the  "PAYMENT  DATE");  (iii) that any Security not tendered
will continue to accrue interest  pursuant to its terms;  (iv) that,  unless the
Issuer defaults in the payment of the purchase price, any Security  accepted for
payment  pursuant to the Offer to Purchase shall cease to accrue interest on and
after the Payment Date; (v) that Holders  electing to have a Security  purchased
pursuant to the Offer to Purchase will be required to surrender  such  Security,
together with the form entitled  "Option of the Holder to Elect Purchase" on the
reverse side thereof completed,  to the Paying Agent at the address specified in
the  notice  prior to the close of  business  on the  Business  Day  immediately
preceding the Payment Date; (vi) that Holders will be entitled to withdraw their
election if the Paying Agent  receives,  not later than the close of business on
the third  Business  Day  immediately  preceding  the Payment  Date, a telegram,
facsimile transmission

                                       11

<PAGE>

or  letter  setting  forth  the name of such  Holder,  the  principal  amount of
Securities   delivered  for  purchase  and  a  statement  that  such  Holder  is
withdrawing  his  election  to have such  Securities  purchased;  and (vii) that
Holders whose  Securities  are being  purchased  only in part will be issued new
Securities  equal  in  principal  amount  to the  unpurchased  portion  thereof;
PROVIDED that each Security purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples  thereof.  On the Payment Date,
the  Issuer  shall (i) accept for  payment  on a pro rata  basis  Securities  or
portions  thereof tendered  pursuant to an Offer to Purchase;  (ii) deposit with
the Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so accepted;  and (iii) deliver,  or cause to be delivered,  to
the Trustee all  Securities  or portions  thereof so accepted  together  with an
Officers' Certificate specifying the Securities or portions thereof accepted for
payment by the Issuer.  The Paying Agent shall  promptly  mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee  shall  promptly  authenticate  and mail to such  Holders a new Security
equal  in  principal   amount  to  any  unpurchased   portion  of  the  Security
surrendered;  PROVIDED that each Security purchased and each new Security issued
shall be in a principal  amount of $1,000 or  integral  multiples  thereof.  The
Issuer  will  publicly  announce  the results of an Offer to Purchase as soon as
practicable  after the Payment  Date.  The Trustee shall act as the Paying Agent
for an Offer to  Purchase.  The Issuer  will  comply  with Rule 14e-1  under the
Exchange Act and any other  securities  laws and  regulations  thereunder to the
extent such laws and regulations are applicable, in the event that the Issuer is
required to repurchase Securities pursuant to an Offer to Purchase.

                 "OFFICER" means,  with respect to any Person,  (i) the Chairman
of the Board, the Vice Chairman of the Board, the President, any Vice President,
the Chief Financial Officer,  and (ii) the Treasurer or any Assistant Treasurer,
or the Secretary or any Assistant Secretary, in each case of such Person.

                 "OFFICERS'  CERTIFICATE"  means  a  certificate  signed  by one
Officer listed in clause (i) of the definition thereof and one Officer listed in
clause  (ii)  of the  definition  thereof;  PROVIDED,  HOWEVER,  that  any  such
certificate may be signed by any two of the Officers listed in clause (i) of the
definition  thereof in lieu of being signed by one Officer  listed in clause (i)
of the  definition  thereof  and  one  Officer  listed  in  clause  (ii)  of the
definition thereof. Each Officers' Certificate (other than certificates provided
pursuant to TIA Section 314(a)(4)) shall include the statements  provided for in
TIA Section 314(e).

                 "OFFSHORE  GLOBAL SECURITY" has the meaning provided in Section
2.01.

                 "OFFSHORE  PHYSICAL  SECURITIES"  has the  meaning  provided in
Section 2.01.

                 "OPINION OF COUNSEL"  means a written  opinion  signed by legal
counsel  who may be an employee  of or counsel to the  Company,  GST USA or GST.
Each such Opinion of Counsel  shall include the  statements  provided for in TIA
Section 314(e).

                                       12

<PAGE>
                 "PAYING AGENT" has the meaning provided in Section 2.04, except
that, for the purposes of Article Eight,  the Paying Agent shall not be GST or a
Subsidiary  of GST or an  Affiliate  of any of  them.  The term  "Paying  Agent"
includes any additional Paying Agent.

                 "PAYMENT  DATE" has the meaning  provided in the  definition of
"Offer to Purchase."

                 "PERMITTED  INVESTMENT" means (i) an Investment in a Restricted
Subsidiary or a Person which will, upon the making of such Investment,  become a
Restricted  Subsidiary or be merged or consolidated  with or into or transfer or
convey all or substantially  all its assets to, GST or a Restricted  Subsidiary;
PROVIDED  that  such  person's  primary   business  is  related,   ancillary  or
complementary  to the businesses of GST and its Restricted  Subsidiaries  on the
date of such Investment; (ii) a Temporary Cash Investment; (iii) payroll, travel
and similar  advances  to cover  matters  that are  expected at the time of such
advances  ultimately  to be treated as expenses in  accordance  with GAAP;  (iv)
loans or advances to employees  made in the ordinary  course of business that do
not exceed $1 million in the aggregate at any time  outstanding;  and (v) stock,
obligations or securities received in satisfaction of judgments.

                 "PERMITTED  LIENS"  means  (i) Liens  for  taxes,  assessments,
governmental  charges  or  claims  that are  being  contested  in good  faith by
appropriate legal proceedings  promptly instituted and diligently  conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity  with GAAP shall have been made; (ii) statutory Liens of landlords
and carriers,  warehousemen,  mechanics,  suppliers,  materialmen,  repairmen or
other similar Liens arising in the ordinary  course of business and with respect
to amounts not yet  delinquent or being  contested in good faith by  appropriate
legal proceedings  promptly instituted and diligently  conducted and for which a
reserve  or  other  appropriate  provision,  if any,  as shall  be  required  in
conformity with GAAP shall have been made; (iii) Liens incurred or deposits made
in the ordinary  course of business in connection  with  workers'  compensation,
unemployment  insurance and other types of social security;  (iv) Liens incurred
or deposits made to secure the performance of tenders,  bids, leases,  statutory
or  regulatory  obligations,  bankers'  acceptances,  surety and  appeal  bonds,
government   contracts,   performance  and   return-of-money   bonds  and  other
obligations  of a similar  nature  incurred in the  ordinary  course of business
(exclusive of  obligations  for the payment of borrowed  money);  (v) easements,
rights-of-way,   municipal   and  zoning   ordinances   and   similar   charges,
encumbrances,  title  defects  or other  irregularities  that do not  materially
interfere  with the ordinary  course of business of GST or any of its Restricted
Subsidiaries;  (vi) Liens (including  extensions and renewals thereof) upon real
or personal  property  acquired  after the Closing Date;  PROVIDED that (a) such
Lien is created  solely for the purpose of securing  Indebtedness  Incurred,  in
accordance  with  Section  4.03,  (1) to finance  the cost  (including,  without
limitation,  the  cost  of  design,  development,   construction,   acquisition,
installation  or  integration) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition,  the completion of construction or the commencement of
full operation of such property or (2) to refinance any Indebtedness  previously
so secured,  (b) the principal amount of the  Indebtedness  secured by such Lien
does not  exceed  100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any

                                       13

<PAGE>
improvements on such item;  (vii) leases or subleases  granted to others that do
not  materially  interfere  with the ordinary  course of business of GST and its
Restricted Subsidiaries,  taken as a whole; (viii) Liens encumbering property or
assets  under  construction  arising  from  progress  or partial  payments  by a
customer of GST or its  Restricted  Subsidiaries  relating  to such  property or
assets;  (ix) any interest or title of a lessor in the  property  subject to any
Capitalized  Lease or operating  lease;  (x) Liens  arising from filing  Uniform
Commercial Code financing  statements  regarding leases;  (xi) Liens on property
of, or on shares of stock or Indebtedness  of, any  corporation  existing at the
time such corporation becomes, or becomes a part of, any Restricted  Subsidiary;
PROVIDED that such Liens do not extend to or cover any property or assets of GST
or any Restricted  Subsidiary other than the property or assets acquired;  (xii)
Liens in favor of GST or any  Restricted  Subsidiary;  (xiii) Liens arising from
the  rendering  of a final  judgment  or  order  against  GST or any  Restricted
Subsidiary that does not give rise to an Event of Default;  (xiv) Liens securing
reimbursement  obligations  with  respect  to letters  of credit  that  encumber
documents and other property relating to such letters of credit and the products
and  proceeds  thereof;  (xv) Liens in favor of customs and revenue  authorities
arising as a matter of law to secure  payment of  customs  duties in  connection
with the  importation  of  goods;  (xvi)  Liens  encumbering  customary  initial
deposits and margin deposits, and other Liens that are either within the general
parameters  customary in the  industry  and  incurred in the ordinary  course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts,  options,  future contracts,  futures
options or similar agreements or arrangements  designed to protect GST or any of
its Restricted  Subsidiaries from fluctuations in interest rates or the price of
commodities;  (xvii) Liens arising out of  conditional  sale,  title  retention,
consignment or similar arrangements for the sale of goods entered into by GST or
any of its  Restricted  Subsidiaries  in the  ordinary  course  of  business  in
accordance with the past practices of GST and its Restricted  Subsidiaries prior
to the Closing Date; and (xviii) Liens on or sales of receivables.

                 "PERSON" means an individual, a corporation,  a partnership,  a
limited  liability  company,  an  association,  a trust or any  other  entity or
organization,  including a government or political  subdivision  or an agency or
instrumentality thereof.

                 "PHOENIX FIBER" means Phoenix Fiber Access,  Inc., a subsidiary
of GST USA.

                 "PHYSICAL SECURITIES" has the meaning provided in Section 2.01.

                 "PLEDGE  ACCOUNT"  means  the  accounts  established  with  the
Trustee  pursuant  to the terms of the Pledge  Agreement  for the deposit of the
Pledged Securities  purchased by the Company with the net proceeds from the sale
of the Securities.

                 "PLEDGE  AGREEMENT"  means the  Collateral  Pledge and Security
Agreement,  dated as of the  Closing  Date,  made by the Company in favor of the
Trustee, as such agreement may be amended,  restated,  supplemented or otherwise
modified from time to time.

                 "PLEDGED  SECURITIES"  means the securities which shall consist
of U.S. Government Obligations,  purchased by the Company with the proceeds from
the sale of the Securities or the

                                       14

<PAGE>

proceeds  from  such  securities,  to be  held  in the  Pledge  Account,  all in
accordance with the terms of the Pledge Agreement.

                 "PREFERRED  STOCK" means,  with respect to any Person,  any and
all shares, interests,  participations or other equivalents (however designated,
whether voting or non-voting)  of such Person's  preferred or preference  stock,
whether now outstanding or issued after the date of this  Indenture,  including,
without  limitation,  all series and  classes of such  preferred  or  preference
stock.

                 "PRINCIPAL" of a debt security, including the Securities, means
the principal amount due on the Stated Maturity as shown on such debt security.

                 "PRIVATE PLACEMENT LEGEND" means the legend initially set forth
on the Securities in the form set forth in Section 2.02(a).

                 "PROTECTED PROPERTY" has the meaning provided in Section 4.09.

                 "QIB"  means a  "qualified  institutional  buyer" as defined in
Rule 144A.

                 "REDEEMABLE  PREFERRED  SHARES"  means the Series A Convertible
Preference Shares of GST outstanding on the Closing Date.

                 "REDEEMABLE  STOCK" means any class or series of Capital  Stock
of any Person  that by its terms or  otherwise  is (i)  required  to be redeemed
prior to the Stated Maturity of the Securities, (ii) redeemable at the option of
the  holder of such  class or series of  Capital  Stock at any time prior to the
Stated Maturity of the Securities or (iii)  convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or  Indebtedness  having a
scheduled maturity prior to the Stated Maturity of the Securities; PROVIDED that
any Capital Stock that would not constitute  Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital  Stock upon the  occurrence of an "asset sale" or "change of
control"  occurring  prior to the Stated  Maturity of the  Securities  shall not
constitute  Redeemable  Stock  if  the  "asset  sale"  or  "change  of  control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions  contained in Section 4.12 and Section
4.14 and such  Capital  Stock  specifically  provides  that such Person will not
repurchase  or redeem any such stock  pursuant  to such  provision  prior to the
Issuer's  repurchase  of  such  Securities  as are  required  to be  repurchased
pursuant to Section 4.12 and Section 4.14.

                 "REDEMPTION DATE", when used with respect to any Security to be
redeemed,  means  the date  fixed for such  redemption  by or  pursuant  to this
Indenture.

                 "REDEMPTION  PRICE",  when used with respect to any Security to
be redeemed,  means the price at which such Security is to be redeemed  pursuant
to this Indenture.

                 "REGISTRAR" has the meaning provided in Section 2.04.

                                       15

<PAGE>

                 "REGISTRATION  RIGHTS AGREEMENT" means the Registration  Rights
Agreement, dated May 13, 1997, among the Company, GST USA, GST, Morgan Stanley &
Co. Incorporated, Dillon, Read & Co. Inc. and TD Securities (USA) Inc.

                 "REGISTRATION  STATEMENT" means the  Registration  Statement as
defined and described in the Registration Rights Agreement.

                 "REGULAR RECORD DATE" for the interest  payable on any Interest
Payment  Date means the April 15 or October 15 (whether or not a Business  Day),
as the case may be, next preceding such Interest Payment Date.

                 "REGULATION S" means Regulation S under the Securities Act.

                 "RESPONSIBLE  OFFICER",  when used with respect to the Trustee,
means the chairman or any vice chairman of the board of directors,  the chairman
or any vice chairman of the executive  committee of the board of directors,  the
chairman  of the  trust  committee,  the  president,  any  vice  president,  any
assistant vice president, the secretary, any assistant secretary, the treasurer,
any assistant  treasurer,  the cashier, any assistant cashier, any trust officer
or assistant  trust officer,  the controller or any assistant  controller or any
other officer of the Trustee customarily  performing  functions similar to those
performed by any of the above designated officers and in each case having direct
responsibility  for the administration of this Indenture or the Pledge Agreement
and also means, with respect to a particular  corporate trust matter,  any other
officer to whom such matter is referred  because of his or her  knowledge of and
familiarity with the particular subject.

                 "RESTRICTED PAYMENTS" has the meaning provided in Section 4.04.

                 "RESTRICTED  SUBSIDIARY" means any Subsidiary of GST other than
an Unrestricted Subsidiary.

                 "RULE 144A" means Rule 144A under the Securities Act.

                 "SECURITIES"  means any of the  securities,  as  defined in the
first paragraph of the recitals  hereof,  that are  authenticated  and delivered
under this Indenture.  For all purposes of this Indenture, the term "Securities"
shall include the Securities  initially issued on the Closing Date, any Exchange
Securities  to be  issued  and  exchanged  for any  Securities  pursuant  to the
Registration Rights Agreement and this Indenture and any other Securities issued
after the Closing Date under this Indenture. For purposes of this Indenture, all
Securities shall vote together as one series of Securities under this Indenture.

                 "SECURITIES ACT" means the Securities Act of 1933.

                 "SECURITY GUARANTEE" means the full and unconditional Guarantee
by  GST of (x)  the  Initial  Note  and  the  Intercompany  Notes  prior  to the
Assumption Date and (y) the Securities

                                       16

<PAGE>
after the  Assumption  Date,  as set forth in the  supplemental  indenture to be
delivered under Section 4.23.

                 "SECURITY REGISTER" has the meaning provided in Section 2.04.

                 "SENIOR NOTES" means the 13 7/8% Senior Discount Notes due 2005
of GST USA issued pursuant to the Senior Notes Indenture.

                 "SENIOR NOTES INDENTURE" means the senior notes indenture dated
December 19, 1995 among GST USA, as issuer, GST, as guarantor, and United States
Trust Company of New York, as trustee.

                 "SHELF  REGISTRATION  STATEMENT"  means the Shelf  Registration
Statement as defined and described in the Registration Rights Agreement.

                 "SIGNIFICANT  SUBSIDIARY"  means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent  fiscal  year of GST,  accounted  for more  than 10% of the  consolidated
revenues of GST and its  Restricted  Subsidiaries  or (ii) as of the end of such
fiscal year,  was the owner of more than 10% of the  consolidated  assets of GST
and its Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements of GST for such fiscal year.

                 "STATED MATURITY" means, (i) with respect to any debt security,
the date  specified  in such debt  security as the fixed date on which the final
installment  of principal of such debt security is due and payable and (ii) with
respect to any  scheduled  installment  of  principal of or interest on any debt
security,  the date  specified in such debt  security as the fixed date on which
such installment is due and payable.

                 "SUBSIDIARY"   means,   with   respect  to  any   Person,   any
corporation,  association or other business entity of which more than 50% of the
voting power of the outstanding  Voting Stock is owned,  directly or indirectly,
by such Person and one or more other Subsidiaries of such Person.

                 "SUBSIDIARY  GUARANTEE"  has the  meaning  provided  in Section
4.07.

                 "SUBSIDIARY  GUARANTOR"  means  a  Restricted  Subsidiary  that
executes and delivers a Subsidiary Guarantee.

                 "TEMPORARY  CASH  INVESTMENT"  means any of the following:  (i)
direct  obligations  of the United  States of  America or any agency  thereof or
obligations fully and unconditionally guaranteed by the United States of America
or any agency thereof,  (ii) time deposit accounts,  certificates of deposit and
money  market  deposits  maturing  within  180 days of the  date of  acquisition
thereof  issued by a bank or trust company which is organized  under the laws of
the  United  States  of  America,  any  state  thereof  or any  foreign  country
recognized  by the United  States,  and which bank or trust company has capital,
surplus and undivided profits aggregating

                                       17

<PAGE>

in excess of $50 million (or the foreign  currency  equivalent  thereof) and has
outstanding  debt  which is rated "A" (or such  similar  equivalent  rating)  or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a  registered  broker-dealer  or mutual fund  distributor,  (iii)  repurchase
obligations  with a term of not more than 30 days for  underlying  securities of
the types  described  in clause (i) above  entered  into with a bank meeting the
qualifications  described in clause (ii) above, (iv) commercial paper,  maturing
not more than 90 days  after the date of  acquisition,  issued by a  corporation
(other than an Affiliate  of the Issuer)  organized  and in existence  under the
laws of the United States of America,  any state thereof or any foreign  country
recognized by the United States of America with a rating at the time as of which
any  investment  therein  is made of "P-1"  (or  higher)  according  to  Moody's
Investors  Service,  Inc.  or "A-1" (or higher)  according  to Standard & Poor's
Ratings  Service,  and (v) securities with maturities of six months or less from
the date of acquisition  issued or fully and  unconditionally  guaranteed by any
state,  commonwealth  or  territory of the United  States of America,  or by any
political  subdivision or taxing  authority  thereof,  and rated at least "A" by
Standard & Poor's Ratings Service or Moody's Investors Service, Inc.

                 "TIA" or "TRUST INDENTURE ACT" means the Trust Indenture Act of
1939,  as amended (15 U.S. Code ss.ss.  77aaa-77bbbb),  as in effect on the date
this Indenture was executed, except as provided in Section 9.06.

                 "TOMEN" means Tomen Corporation or its Affiliates.

                 "TOMEN   FACILITY"  means,   collectively,   the  Tomen  Master
Agreement  together with all other  agreements  (including  credit  agreements),
instruments  and  documents   executed  or  delivered  pursuant  thereto  or  in
connection therewith, in each case as such agreements,  instruments or documents
may be amended, supplemented,  extended, renewed, replaced or otherwise modified
from time to time.

                 "TOMEN  MASTER  AGREEMENT"  means the  Master  Agreement  dated
October 24, 1994,  among Tomen  America Inc.,  GST (formerly  known as Greenstar
Telecommunications  Inc.),  GST Telecom Inc.,  Pacwest  Network,  Inc.,  Pacwest
Network L.L.C. and Pacific Lightwave, Inc.

                 "TRADE  PAYABLES"  means  any  accounts  payable  or any  other
indebtedness  or monetary  obligations to trade  creditors  created,  assumed or
Guaranteed by GST or any of its Restricted  Subsidiaries arising in the ordinary
course of business in connection  with the  acquisition  of goods or services by
GST or its Restricted Subsidiaries.

                 "TRANSACTION DATE" means, with respect to the Incurrence of any
Indebtedness  by  GST  or any of its  Restricted  Subsidiaries,  the  date  such
Indebtedness is to be Incurred and, with respect to any Restricted Payment,  the
date such Restricted Payment is to be made.

                                       18

<PAGE>

                 "TRUSTEE"  means the party named as such in the first paragraph
of  this  Indenture  until  a  successor  replaces  it in  accordance  with  the
provisions  of  Article  Seven  of this  Indenture  and  thereafter  means  such
successor.

                 "UNITED STATES BANKRUPTCY CODE" means the Bankruptcy Reform Act
of 1978,  as amended and as codified in Title 11 of the United  States Code,  as
amended from time to time hereafter, or any successor federal bankruptcy law.

                 "UNRESTRICTED   SUBSIDIARY"   means   (i)  NACT  or  any  other
Subsidiary  of GST that at the time of  determination  shall  be  designated  an
Unrestricted  Subsidiary by the Board of Directors of GST in the manner provided
below and (ii) any Subsidiary of an Unrestricted Subsidiary;  PROVIDED that NACT
shall be deemed to be a  Restricted  Subsidiary  for  purposes  of Section  4.04
(except  that NACT  shall be an  Unrestricted  Subsidiary  for  purposes  of the
limitation  on  Investments  by GST and  its  Restricted  Subsidiaries)  and the
definition  of "Asset  Sale." The Board of  Directors of GST may  designate  any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary),
other than GST USA or a Subsidiary Guarantor,  to be an Unrestricted  Subsidiary
unless such  Subsidiary  owns any Capital Stock of, or owns or holds any Lien on
any  property  of,  GST or any  Restricted  Subsidiary;  PROVIDED  that  (A) any
Guarantee  by GST or  any  Restricted  Subsidiary  of  any  Indebtedness  of the
Subsidiary   being  so  designated   shall  be  deemed  an  Incurrence  of  such
Indebtedness and an Investment by GST or such Restricted  Subsidiary at the time
of such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such  Subsidiary  has  assets  greater  than
$1,000,  that such designation  would be permitted under Section 4.04 and (C) if
applicable,  the Incurrence of  Indebtedness  and the Investment  referred to in
clause (A) above would be permitted  under  Section 4.03 and Section  4.04.  The
Board of Directors of GST may  designate  any  Unrestricted  Subsidiary  to be a
Restricted  Subsidiary of GST;  PROVIDED that immediately after giving effect to
such designation (x) the Liens and Indebtedness of such Unrestricted  Subsidiary
outstanding  immediately after such designation are permitted to be Incurred for
all purposes of this Indenture and (y) no Default or Event of Default shall have
occurred and be  continuing.  Any such  designation by the Board of Directors of
GST shall be evidenced to the Trustee by promptly filing with the Trustee a copy
of the Board  Resolution  giving  effect to such  designation  and an  Officers'
Certificate  certifying  that  such  designation  complied  with  the  foregoing
provisions.

                 "U.S.  GLOBAL  SECURITY"  has the  meaning  provided in Section
2.01.

                 "U.S.  GOVERNMENT  OBLIGATIONS"  means  securities that are (i)
direct  obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii)  obligations of a Person  controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is  unconditionally  guaranteed as a full faith and
credit  obligation by the United States of America,  which,  in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated  Maturity of the  Securities,  and shall also include a depository
receipt  issued by a bank or trust company as custodian with respect to any such
U.S. Government  Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such

                                       19

<PAGE>

custodian for the account of the holder of a depository  receipt;  PROVIDED that
(except  as  required  by law)  such  custodian  is not  authorized  to make any
deduction from the amount payable to the holder of such depository  receipt from
any  amount  received  by  the  custodian  in  respect  of the  U.S.  Government
Obligation  or the  specific  payment of  interest on or  principal  of the U.S.
Government Obligation evidenced by such depository receipt.

                 "U.S.  PERSON"  has the  meaning  ascribed  thereto in Rule 902
under the Securities Act.

                 "U.S. PHYSICAL  SECURITIES" has the meaning provided in Section
2.01.

                 "VOTING STOCK" means with respect to any Person,  Capital Stock
of any class or kind  ordinarily  having the power to vote for the  election  of
directors,  managers  or other  voting  members  of the  governing  body of such
Person.

                 "WHOLLY  OWNED"  means,  with respect to any  Subsidiary of any
Person,  such  Subsidiary  if all of  the  outstanding  Capital  Stock  in  such
Subsidiary  (other  than any  director's  qualifying  shares or  Investments  by
foreign nationals  mandated by applicable law) is owned by such Person or one or
more Wholly Owned Subsidiaries of such Person.

                 SECTION  1.02.  INCORPORATION  BY REFERENCE OF TRUST  INDENTURE
ACT.  Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

                 "INDENTURE SECURITIES" means the Securities;

                 "INDENTURE SECURITY HOLDER" means a Holder or a Securityholder;

                 "INDENTURE TO BE QUALIFIED" means this Indenture;

                 "INDENTURE  TRUSTEE"  or  "INSTITUTIONAL   TRUSTEE"  means  the
Trustee; and

                 "OBLIGOR" on the indenture  securities  means the Company,  and
after  the  Assumption  Date,  GST  USA  and  GST or any  other  obligor  on the
Securities.

                 All other TIA terms used in this  Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise  defined herein have the meanings  assigned to them
therein.

                 SECTION  1.03.  RULES  OF  CONSTRUCTION.   Unless  the  context
otherwise requires:

                 (i) a term has the meaning assigned to it;

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<PAGE>

                 (ii) an accounting  term not otherwise  defined has the meaning
         assigned to it in accordance with GAAP;

                 (iii) "or" is not exclusive;

                 (iv) words in the singular include the plural, and words in the
         plural include the singular;

                 (v) provisions apply to successive events and transactions;

                 (vi) "herein," "hereof" and other words of similar import refer
         to this Indenture as a whole and not to any particular Article, Section
         or other subdivision; and

                 (vii) all  references to Sections or Articles refer to Sections
         or Articles of this Indenture unless otherwise indicated.

                                   ARTICLE TWO
                                 THE SECURITIES

                 SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication  shall be substantially in the form annexed hereto
as  Exhibit  A  with  such  appropriate  insertions,   substitutions  and  other
variations as are required or permitted under this Indenture. The Securities may
have  notations,  legends  or  endorsements  required  by  law,  stock  exchange
agreements to which the Issuer is subject or usage. The Issuer shall approve the
form  of  the  Securities  and  any  notation,  legend  or  endorsement  on  the
Securities. Each Security shall be dated the date of its authentication.

                 The  terms  and  provisions   contained  in  the  form  of  the
Securities  annexed  hereto  as  Exhibit  A shall  constitute,  and  are  hereby
expressly made, a part of this Indenture.  Each of the Company, GST USA, GST and
the Trustee,  by its execution and delivery of this Indenture,  expressly agrees
to the terms and provisions of the  Securities  applicable to it and to be bound
thereby.

                 Securities  offered  and sold in reliance on Rule 144A shall be
issued  in  the  form  of  permanent  global   Securities  in  registered  form,
substantially in the form set forth in Exhibit A (the "U.S.  GLOBAL  SECURITY"),
deposited with the Trustee,  as custodian for the  Depositary,  duly executed by
the  Issuer  and  authenticated  by the  Trustee as  hereinafter  provided.  The
aggregate  principal amount of the U.S. Global Security may from time to time be
increased  or decreased by  adjustments  made on the records of the Trustee,  as
custodian for the Depositary or its nominee, as hereinafter provided.

                 Securities  offered  and  sold  in  offshore   transactions  in
reliance on  Regulation  S shall be issued in the form of one or more  temporary
global  Securities in  registered  form  substantially  in the form set forth in
Exhibit A (each a "TEMPORARY OFFSHORE GLOBAL SECURITY")

                                       21

<PAGE>

deposited with the Trustee,  as custodian for the  Depositary,  duly executed by
the Issuer and authenticated by the Trustee as hereinafter provided. At any time
following June 22, 1997 (the "OFFSHORE  SECURITIES EXCHANGE DATE"), upon receipt
by the  Trustee  and the Issuer of a  certificate  substantially  in the form of
Exhibit B hereto,  on or more  permanent  global  Securities in registered  form
substantially in the form set forth in Exhibit A (the "PERMANENT OFFSHORE GLOBAL
SECURITY";  and  together  with the  Temporary  Offshore  Global  Security,  the
"OFFSHORE GLOBAL  SECURITIES")  duly executed by the Issuer and authenticated by
the Trustee as  hereinafter  provided  shall be deposited  with the Trustee,  as
custodian for the  Depositary,  and the Registrar shall reflect on its books and
records  the  date and a  decrease  in the  principal  amount  of the  Temporary
Offshore  Global  Security  in an amount  equal to the  principal  amount of the
beneficial interest in the Temporary Offshore Global Security transferred.

                 Securities   which  are  offered  and  sold  to   Institutional
Accredited  Investors which are not QIBs (excluding  Non-U.S.  Persons) shall be
issued in the form of permanent  certificated  Securities in registered  form in
substantially the form set forth in Exhibit A (the "U.S. PHYSICAL  SECURITIES").
Securities  issued  pursuant to Section  2.07 in exchange  for  interests in the
Offshore  Global  Security  shall  be in  the  form  of  permanent  certificated
Securities in registered form  substantially  in the form set forth in Exhibit A
(the "OFFSHORE PHYSICAL SECURITIES").

                 The Offshore Physical  Securities and U.S. Physical  Securities
are sometimes collectively herein referred to as the "PHYSICAL SECURITIES".  The
U.S. Global Security and the Offshore Global Security are sometimes  referred to
as the "GLOBAL SECURITIES".

                 The definitive Securities shall be typed, printed, lithographed
or engraved or produced by any  combination  of these methods or may be produced
in any other manner  permitted by the rules of any securities  exchange on which
the Securities may be listed,  all as determined by the officers  executing such
Securities, as evidenced by their execution of such Securities.

                 SECTION  2.02.  RESTRICTIVE  LEGENDS.  (a)  Unless  and until a
Security is exchanged for an Exchange  Security in connection  with an effective
Registration  Statement pursuant to the Registration Rights Agreement,  the U.S.
Global Security,  the Temporary  Offshore Global Security and each U.S. Physical
Security shall bear the legend set forth below on the face thereof:

THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE U.S.  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "SECURITIES  ACT"),  AND  ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED  STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.  PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING  SENTENCE.  BY ITS ACQUISITION  HEREOF, THE
HOLDER  (1)  REPRESENTS  THAT (A) IT IS A  "QUALIFIED  INSTITUTIONAL  BUYER" (AS
DEFINED IN RULE 144A  UNDER THE  SECURITIES  ACT) OR (B) IT IS AN  INSTITUTIONAL
"ACCREDITED  INVESTOR"  (AS  DEFINED  IN  RULE  501(a)(1),  (2),  (3)  OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN

                                       22

<PAGE>

"INSTITUTIONAL  ACCREDITED  INVESTOR")  OR (C) IT IS  NOT A U.S.  PERSON  AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE  TRANSACTION IN COMPLIANCE  WITH REGULATION S
UNDER THE  SECURITIES  ACT, (2) AGREES THAT IT WILL NOT,  WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER
OF THIS NOTE, RESELL OR OTHERWISE  TRANSFER THIS NOTE EXCEPT (A) TO GST FUNDING,
GST OR ANY  SUBSIDIARY  THEREOF,  (B) INSIDE THE  UNITED  STATES TO A  QUALIFIED
INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL  ACCREDITED INVESTOR THAT, PRIOR TO
SUCH  TRANSFER,  FURNISHES  TO THE TRUSTEE A SIGNED  LETTER  CONTAINING  CERTAIN
REPRESENTATIONS  AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED  FROM THE  TRUSTEE)  AND, IF SUCH
TRANSFER IS IN RESPECT OF AN  AGGREGATE  PRINCIPAL  AMOUNT OF NOTES OF LESS THAN
$100,000,  AN OPINION OF COUNSEL  ACCEPTABLE  TO GST  FUNDING OR GST USA, AS THE
CASE MAY BE, THAT SUCH TRANSFER IS IN COMPLIANCE  WITH THE  SECURITIES  ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE  SECURITIES  ACT,  (E)  PURSUANT TO THE  EXEMPTION  FROM  REGISTRATION
PROVIDED BY RULE 144 UNDER THE  SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL  DELIVER  TO EACH  PERSON  TO WHOM  THIS  NOTE IS  TRANSFERRED  A NOTICE
SUBSTANTIALLY  TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE  WITHIN THE TIME PERIOD  REFERRED TO ABOVE,  THE HOLDER MUST CHECK THE
APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF  RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.  IF THE PROPOSED TRANSFEREE
IS AN  INSTITUTIONAL  ACCREDITED  INVESTOR,  THE  HOLDER  MUST,  PRIOR  TO  SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND GST FUNDING OR GST USA, AS THE CASE MAY BE,
SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY  REQUIRE TO CONFIRM THAT SUCH  TRANSFER IS BEING MADE  PURSUANT TO AN
EXEMPTION  FROM,  OR  IN  A  TRANSACTION   NOT  SUBJECT  TO,  THE   REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT.  AS  USED  HEREIN,  THE  TERMS  "OFFSHORE
TRANSACTION,"  "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A

                                       23

<PAGE>

PROVISION  REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.

                  (b) Each Global Security, whether or not an Exchange Security,
shall also bear the following legend on the face thereof:

         UNLESS THIS NOTE IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
         DEPOSITORY  TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR  REGISTRATION
         OF TRANSFER,  EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN
         THE NAME OF CEDE & CO. OR TO SUCH OTHER  ENTITY AS IS  REQUESTED  BY AN
         AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
         REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE  DEPOSITORY  TRUST
         COMPANY (AND ANY PAYMENT  HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
         ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED   REPRESENTATIVE  OF  THE
         DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
         VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
         OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         TRANSFERS  OF THIS GLOBAL  SECURITY  SHALL BE LIMITED TO  TRANSFERS  IN
         WHOLE,  BUT NOT IN PART,  TO  NOMINEES  OF CEDE & CO. OR TO A SUCCESSOR
         THEREOF OR SUCH  SUCCESSOR'S  NOMINEE AND TRANSFERS OF PORTIONS OF THIS
         GLOBAL  SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE  WITH
         THE RESTRICTIONS SET FORTH IN SECTION 2.08 OF THE INDENTURE.

                  SECTION 2.03.  EXECUTION,  AUTHENTICATION  AND  DENOMINATIONS.
Subject to Article Four, the aggregate  principal amount of Securities which may
be authenticated  and delivered under this Indenture is unlimited.  Two Officers
shall execute the Securities for the Issuer by facsimile or manual  signature in
the name and on behalf of the Issuer.

                  If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee or  authenticating  agent  authenticates the
Security, the Security shall be valid nevertheless.

                  A  Security   shall  not  be  valid   until  the   Trustee  or
authenticating  agent manually signs the  certificate of  authentication  on the
Security.  The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

                                       24

<PAGE>
                  At any time and from time to time after the  execution of this
Indenture,  the  Trustee or an  authenticating  agent  shall  upon  receipt of a
Company  Order  authenticate  for original  issue  Securities  in the  aggregate
principal  amount  specified in such Company  Order;  PROVIDED  that the Trustee
shall be entitled to receive an Officers'  Certificate and an Opinion of Counsel
of the Company in connection with such authentication of Securities. The Opinion
of Counsel shall, if requested by the Trustee, be to the effect that:

                  (a)  the  form  and  terms  of  such   Securities   have  been
         established by or pursuant to a Board Resolution or, if applicable,  an
         indenture supplemental hereto in conformity with the provisions of this
         Indenture;

                  (b) such  supplemental  indenture,  if any,  when executed and
         delivered by the Company, GST USA, GST and the Trustee, will constitute
         a valid and binding obligation of the Company, GST USA and GST;

                  (c) such Securities,  when  authenticated and delivered by the
         Trustee  and issued by the  Company  in the  manner and  subject to any
         conditions specified in such Opinion of Counsel,  will constitute valid
         and binding  obligations of the Company in accordance  with their terms
         and will be entitled  to the  benefits  of this  Indenture,  subject to
         bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
         and similar  laws of general  applicability  relating  to or  affecting
         creditors' rights and to general equitable principles; and

                  (d) the  Company  has  been  duly  incorporated  in,  and is a
         validly  existing  corporation  in good standing under the laws of, the
         State of Delaware.

Such Company Order shall  specify the amount of  Securities to be  authenticated
and the date on which the original  issue of Securities  is to be  authenticated
and in case of an issuance of Securities pursuant to Section 2.15, shall certify
that such issuance is in compliance with Article Four.

                  The   Trustee   may   appoint  an   authenticating   agent  to
authenticate  Securities.  An authenticating  agent may authenticate  Securities
whenever  the  Trustee  may  do  so.  Each   reference  in  this   Indenture  to
authentication  by the Trustee includes  authentication  by such  authenticating
agent. An authenticating  agent has the same rights as an Agent to deal with the
Issuer or an  Affiliate of the Issuer.  The Trustee  shall not be liable for the
misconduct or negligence of any authenticating agent appointed with due care.

                  The  Securities  shall be  issuable  only in  registered  form
without coupons and only in  denominations of $1,000 in principal amount and any
integral multiple of $1,000 in excess thereof.

                  SECTION 2.04.  REGISTRAR  AND PAYING  AGENT.  The Issuer shall
maintain an office or agency where  Securities may be presented for registration
of  transfer  or for  exchange  (the  "REGISTRAR"),  an office  or agency  where
Securities may be presented for payment (the "PAYING

                                       25

<PAGE>

AGENT") and an office or agency where  notices and demands to or upon the Issuer
in respect of the Securities and this Indenture may be served, which shall be in
the Borough of Manhattan,  The City of New York and, in the event the Securities
are listed on the Luxembourg  Stock  Exchange,  in Luxembourg.  The Issuer shall
cause the Registrar to keep a register of the  Securities  and of their transfer
and  exchange  (the  "SECURITY  REGISTER").  The  Issuer  may  have  one or more
co-Registrars and one or more additional Paying Agents.

                  The Issuer shall enter into an  appropriate  agency  agreement
with any Agent not a party to this Indenture.  The agreement shall implement the
provisions of this  Indenture  that relate to such Agent.  The Issuer shall give
prompt  written  notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent.  If the Issuer  fails to maintain a
Registrar,  Paying Agent  and/or  agent for service of notices and demands,  the
Trustee  shall act as such  Registrar,  Paying Agent and/or agent for service of
notices and  demands for so long as such  failure  shall  continue  and shall be
entitled  to  compensation  therefor  pursuant to Section  7.07.  The Issuer may
remove any Agent upon  written  notice to such Agent and the  Trustee;  PROVIDED
that no such  removal  shall become  effective  until (i) the  acceptance  of an
appointment  by a successor  Agent to such Agent as evidenced by an  appropriate
agency  agreement  entered  into by the  Issuer  and such  successor  Agent  and
delivered  to the Trustee or (ii)  notification  to the Trustee that the Trustee
shall  serve  as such  Agent  until  the  appointment  of a  successor  Agent in
accordance  with clause (i) of this proviso.  The Issuer,  any Subsidiary of the
Issuer,  or any Affiliate of any of them may act as Paying  Agent,  Registrar or
co-  Registrar,  and/or  agent for  service  of notice  and  demands;  PROVIDED,
HOWEVER, that neither the Issuer, a Subsidiary of the Issuer nor an Affiliate of
any of them shall act as Paying Agent in connection  with the  defeasance of the
Securities or the discharge of this Indenture under Article Eight.

                  The  Company  initially  appoints  the  Trustee as  Registrar,
Paying Agent,  authenticating agent and agent for service of notice and demands.
The Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders and shall
otherwise  comply with TIA  ss.312(a).  If, at any time,  the Trustee is not the
Registrar,  the  Registrar  shall make  available  to the  Trustee  before  each
Interest  Payment  Date and at such other times as the  Trustee  may  reasonably
request,  the names and  addresses of the Holders as they appear in the Security
Register.

                  SECTION 2.05.  PAYING AGENT TO HOLD MONEY IN TRUST.  Not later
than 11:00 a.m. New York City time on each due date of the  principal,  premium,
if any, and interest on any Securities, the Issuer shall deposit, or cause to be
deposited, with the Paying Agent money in immediately available funds sufficient
to pay such principal, premium, if any, and interest so becoming due. The Issuer
shall  require  each Paying  Agent,  if any,  other than the Trustee to agree in
writing  that such  Paying  Agent  shall  hold in trust for the  benefit  of the
Holders or the  Trustee  all money held by the Paying  Agent for the  payment of
principal  of,  premium,  if any, and interest on the  Securities  (whether such
money has been paid to it by the Issuer or any other obligor on the Securities),
and that such Paying Agent shall  promptly  notify the Trustee in writing of any
default  by the Issuer (or any other  obligor on the  Securities)  in making any
such payment. The Issuer at any time may require a Paying Agent to pay all money
held by it to the

                                       26

<PAGE>

Trustee  and account  for any funds  disbursed,  and the Trustee may at any time
during the continuance of any payment default,  upon written request to a Paying
Agent,  require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds  disbursed.  Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Issuer or
any  Subsidiary  of the  Issuer or any  Affiliate  of any of them acts as Paying
Agent, it will, on or before each due date of any principal of, premium, if any,
or interest on the  Securities,  segregate and hold in a separate trust fund for
the  benefit of the  Holders a sum of money  sufficient  to pay such  principal,
premium,  if any, or  interest so becoming  due until such sum of money shall be
paid to such Holders or otherwise disposed of as provided in this Indenture, and
will  promptly  notify the Trustee in writing of its action or failure to act as
required by this Section 2.05.

                  SECTION  2.06.  TRANSFER  AND  EXCHANGE.  The  Securities  are
issuable  only in  registered  form. A Holder may transfer a Security by written
application  to the Registrar  stating the name of the proposed  transferee  and
otherwise complying with the terms of this Indenture.  No such transfer shall be
effected until, and such transferee shall succeed to the rights of a Holder only
upon  registration  of the transfer by the  Registrar in the Security  Register.
Prior to the  registration of any transfer by a Holder as provided  herein,  the
Issuer, the Trustee, and any agent of the Issuer shall treat the person in whose
name the Security is registered as the owner thereof for all purposes whether or
not the Security shall be overdue,  and neither the Issuer, the Trustee, nor any
such agent shall be affected by notice to the contrary.  Furthermore, any Holder
of or beneficial  owner of an interest in a Global Security shall, by acceptance
of such Global  Security,  be deemed to have agreed that transfers of beneficial
interests  in such Global  Security  may be effected  only  through a book-entry
system  maintained by the  Depositary  (or its agent),  and that  ownership of a
beneficial  interest in the Security shall be required to be reflected in a book
entry.  When Securities are presented to the Registrar or a co-Registrar  with a
request to register  the  transfer or to  exchange  them for an equal  principal
amount of Securities of other authorized denominations (including on exchange of
Securities for Exchange  Securities),  the Registrar shall register the transfer
or make the exchange as requested if its requirements for such  transactions are
met  (including  that such  Securities  are duly  endorsed or  accompanied  by a
written instrument of transfer in form satisfactory to the Trustee and Registrar
duly  executed by the Holder  thereof or by an  attorney  who is  authorized  in
writing  to  act on  behalf  of the  Holder);  PROVIDED  that  no  exchanges  of
Securities for Exchange  Securities  shall occur until a Registration  Statement
shall have been declared  effective by the  Commission  and that any  Securities
that are exchanged for Exchange Securities shall be cancelled by the Trustee. To
permit  registrations  of transfers and exchanges in accordance  with the terms,
conditions  and  restrictions  hereof,  the Issuer shall execute and the Trustee
shall  authenticate  Securities at the  Registrar's  request.  No service charge
shall be made to any Holder for any  registration  of  transfer  or  exchange or
redemption of the  Securities,  but the Issuer may require payment by the Holder
of a sum  sufficient  to cover any transfer tax or similar  governmental  charge
payable in connection  therewith  (other than any such  transfer  taxes or other
similar  governmental  charge payable upon  transfers,  exchanges or redemptions
pursuant to Section 2.11, 3.09, 4.12, 4.14 or 9.04).

                                       27

<PAGE>
                  The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business  15 days  before the day of the  mailing of a notice of  redemption  of
Securities selected for redemption under Section 3.04 and ending at the close of
business  on the day of such  mailing,  or (ii) to register  the  transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.

                  SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (a)
The U.S. Global  Security and Offshore  Global  Security  initially shall (i) be
registered  in the name of the  Depositary  for such  Global  Securities  or the
nominee of such  Depositary,  (ii) be delivered to the Trustee as custodian  for
such Depositary and (iii) bear legends as set forth in Section 2.02.

                  Members  of,  or  participants  in,  the  Depositary   ("AGENT
MEMBERS")  shall have no rights under this  Indenture with respect to any Global
Security  held  on  their  behalf  by  the  Depositary,  or the  Trustee  as its
custodian,  or under any Global  Security,  and the Depositary may be treated by
the  Issuer,  the  Trustee  and any agent of the  Issuer or the  Trustee  as the
absolute   owner  of  such  Global   Security  for  all   purposes   whatsoever.
Notwithstanding  the  foregoing,  nothing  herein shall prevent the Issuer,  the
Trustee or any agent of the Issuer or the  Trustee,  from  giving  effect to any
written certification,  proxy or other authorization furnished by the Depositary
or impair,  as between the Depositary  and its Agent  Members,  the operation of
customary  practices  governing the exercise of the rights of a beneficial owner
of any Security.

                  (b)  Transfers  of a  Global  Security  shall  be  limited  to
transfers of such Global Security in whole,  but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance  with the applicable  rules and
procedures of the  Depositary  and the  provisions of Section 2.08. In addition,
Physical  Securities  shall be transferred to all beneficial  owners in exchange
for their  beneficial  interests  in the U.S.  Global  Security or the  Offshore
Global Security, respectively, if (i) the Depositary notifies the Issuer that it
is unwilling or unable to continue as Depositary for the U.S. Global Security or
the Offshore Global Security,  as the case may be, and a successor depositary is
not  appointed  by the Issuer  within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing  and the Registrar has received a request
to the foregoing effect from the Depositary.

                  (c) Any  beneficial  interest in one of the Global  Securities
that is transferred to a person who takes delivery in the form of an interest in
the other Global Security will,  upon transfer,  cease to be an interest in such
Global  Security  and  become an  interest  in the other  Global  Security  and,
accordingly,  will thereafter be subject to all transfer  restrictions,  if any,
and other  procedures  applicable to  beneficial  interests in such other Global
Security for as long as it remains such an interest.

                  (d) In connection with any transfer  pursuant to paragraph (b)
of this Section 2.07 of a portion of the beneficial interests in the U.S. Global
Security to beneficial owners who are required to hold Physical Securities,  the
Registrar  shall reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the

                                       28

<PAGE>

principal  amount  of the  beneficial  interest  in the  Global  Security  to be
transferred,  and the Issuer shall execute,  and the Trustee shall  authenticate
and deliver, one or more U.S. Physical Securities of like tenor and amount.

                  (e) In  connection  with  the  transfer  of an  entire  Global
Security to  beneficial  owners  pursuant to paragraph (b) of this Section 2.07,
the  Global  Security  shall be  deemed to be  surrendered  to the  Trustee  for
cancellation,  and the Issuer shall execute,  and the Trustee shall authenticate
and deliver,  to each beneficial  owner identified by the Depositary in exchange
for its beneficial  interest in the Global Security an equal aggregate principal
amount of Physical Securities of authorized denominations.

                  (f) Any U.S.  Physical  Security  delivered in exchange for an
interest in the U.S.  Global  Security  pursuant to paragraph (b) or (d) of this
Section  2.07 shall,  except as otherwise  provided by paragraph  (d) of Section
2.08, bear the legend  regarding  transfer  restrictions  applicable to the U.S.
Physical Security set forth in Section 2.02.

                  (g) The  registered  holder  of a Global  Security  may  grant
proxies and otherwise authorize any person,  including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.

                  (h) QIBs that are  beneficial  owners of interests in a Global
Security may receive Physical Securities (which shall bear the Private Placement
Legend if required by Section  2.02) in  accordance  with the  procedures of the
Depositary.  In connection  with the execution,  authentication  and delivery of
such Physical Securities, the Registrar shall reflect on its books and records a
decrease in the principal  amount of the relevant  Global  Security equal to the
principal  amount of such Physical  Securities  and the Issuer shall execute and
the Trustee  shall  authenticate  and deliver  one or more  Physical  Securities
having an equal aggregate principal amount.

                  (i) Any Offshore Physical  Security  delivered in exchange for
an interest in the Offshore  Global  Security  pursuant to paragraph (b) of this
Section  shall,  except as otherwise  provided by paragraph (d) of Section 2.08,
bear the legend  regarding  transfer  restrictions  applicable  to the  Offshore
Physical Security set forth in Section 2.02.

                  SECTION 2.08. SPECIAL TRANSFER PROVISIONS.  Unless and until a
Security is exchanged for an Exchange  Security in connection  with an effective
Registration  Statement  pursuant  to the  Registration  Rights  Agreement,  the
following provisions shall apply:

                  (a) TRANSFERS TO QIBS.  The following  provisions  shall apply
with respect to the  registration  of any proposed  transfer of a U.S.  Physical
Security or an interest in the U.S. Global Security to a QIB (excluding Non-U.S.
Persons):

                  (i) If the  Security  to be  transferred  consists of (A) U.S.
         Physical Securities,  the Registrar shall register the transfer if such
         transfer is being made by a proposed

                                       29

<PAGE>

         transferor who has checked the box provided for on the form of Security
         stating,  or has  otherwise  advised  the Issuer and the  Registrar  in
         writing,  that the sale has been made in compliance with the provisions
         of Rule 144A to a transferee who has signed the certification  provided
         for on the form of  Security  stating,  or has  otherwise  advised  the
         Issuer and the Registrar in writing, that it is purchasing the Security
         for its own account or an account  with  respect to which it  exercises
         sole  investment  discretion  and that it and any such account is a QIB
         within the  meaning  of Rule 144A,  and is aware that the sale to it is
         being  made in  reliance  on Rule  144A  and  acknowledges  that it has
         received  such  information  regarding  the Issuer as it has  requested
         pursuant to Rule 144A or has determined not to request such information
         and that it is aware that the  transferor is relying upon its foregoing
         representations  in order  to claim  the  exemption  from  registration
         provided by Rule 144A or (B) an interest in the U.S.  Global  Security,
         the  transfer of such  interest  may be effected  only through the book
         entry system maintained by the Depositary.

                  (ii) If the proposed  transferee is an Agent  Member,  and the
         Security to be transferred consists of U.S. Physical  Securities,  upon
         receipt by the Registrar of the documents referred to in clause (i) and
         instructions   given  in  accordance  with  the  Depositary's  and  the
         Registrar's  procedures,  the Registrar  shall reflect on its books and
         records the date and an increase  in the  principal  amount of the U.S.
         Global Security in an amount equal to the principal  amount of the U.S.
         Physical Securities to be transferred, and the Trustee shall cancel the
         U.S. Physical Security so transferred.

                  (b)  TRANSFERS OF INTERESTS IN THE TEMPORARY  OFFSHORE  GLOBAL
SECURITY.  The following  provisions shall apply with respect to registration of
any proposed transfer of interests in the Temporary Offshore Global Security:

                  (i) The Registrar  shall register the transfer of any Security
         (A) if the proposed  transferee  is a Non-U.S.  Person and the proposed
         transferor  has delivered to the Registrar a certificate  substantially
         in the form of Exhibit C hereto or (B) if the proposed  transferee is a
         QIB and the proposed transferor has checked the box provided for on the
         form of Security  stating,  or has otherwise advised the Issuer and the
         Registrar in writing,  that the sale has been made in  compliance  with
         the  provisions  of  Rule  144A to a  transferee  who  has  signed  the
         certification  provided  for on the form of  Security  stating,  or has
         otherwise  advised the Issuer and the Registrar in writing,  that it is
         purchasing  the Security for its own account or an account with respect
         to which it exercises  sole  investment  discretion and that it and any
         such  account is a QIB within  the  meaning of Rule 144A,  and is aware
         that  the  sale to it is  being  made in  reliance  on  Rule  144A  and
         acknowledges that it has received such information regarding the Issuer
         as it has  requested  pursuant  to Rule 144A or has  determined  not to
         request such  information  and that it is aware that the  transferor is
         relying  upon its  foregoing  representations  in  order  to claim  the
         exemption from registration provided by Rule 144A.

                  (ii) If the  proposed  transferee  is an  Agent  Member,  upon
         receipt by the Registrar of the documents  referred to in clause (i)(B)
         above and instructions given in

                                       20

<PAGE>
         accordance with the  Depositary's and the Registrar's  procedures,  the
         Registrar  shall  reflect  on its  books  and  records  the date and an
         increase in the principal  amount of the U.S.  Global  Security,  in an
         amount equal to the principal  amount of the Temporary  Offshore Global
         Security to be  transferred,  and the Trustee shall decrease the amount
         of the Temporary Offshore Global Security.

                  (c) TRANSFERS TO NON-U.S.  PERSONS AT ANY TIME.  The following
         provisions  shall apply with respect to any transfer of a Security to a
         Non-U.S. Person:

                  (i) Prior to June 22, 1997,  the Registrar  shall register any
         proposed transfer of a Security to a Non-U.S.  Person upon receipt of a
         certificate  substantially  in the form of  Exhibit  C hereto  from the
         proposed transferor.

                  (ii) On and after June 22, 1997, the Registrar  shall register
         any  proposed  transfer to any  Non-U.S.  Person if the  Security to be
         transferred  is a U.S.  Physical  Security  or an  interest in the U.S.
         Global  Security,  upon receipt of a certificate  substantially  in the
         form of Exhibit C from the proposed transferor.

                  (iii)  (A) If  the  proposed  transferor  is an  Agent  Member
         holding a beneficial interest in the U.S. Global Security, upon receipt
         by the Registrar of (1) the documents required by paragraph (i) and (2)
         instructions  in accordance with the  Depositary's  and the Registrar's
         procedures,  the  Registrar  shall reflect on its books and records the
         date and a decrease in the principal amount of the U.S. Global Security
         in an amount equal to the principal  amount of the beneficial  interest
         in the U.S. Global Security to be transferred,  and (B) if the proposed
         transferee  is an  Agent  Member,  upon  receipt  by the  Registrar  of
         instructions   given  in  accordance  with  the  Depositary's  and  the
         Registrar's  procedures,  the Registrar  shall reflect on its books and
         records  the  date  and an  increase  in the  principal  amount  of the
         Offshore Global Security in an amount equal to the principal  amount of
         the U.S. Physical  Securities or the U.S. Global Security,  as the case
         may be, to be  transferred,  and the Trustee  shall cancel the Physical
         Security,  if any, so  transferred  or decrease  the amount of the U.S.
         Global Security.

                  (d) PRIVATE PLACEMENT LEGEND.  Upon the transfer,  exchange or
replacement  of  Securities  not  bearing  the  Private  Placement  Legend,  the
Registrar  shall  deliver  Securities  that do not  bear the  Private  Placement
Legend.  Upon the transfer,  exchange or replacement  of Securities  bearing the
Private Placement Legend,  the Registrar shall deliver only Securities that bear
the Private Placement Legend unless either (i) the circumstances contemplated by
the fourth  paragraph of Section 2.01 or paragraph  (f)(i)(A) or (c)(ii) of this
Section  2.08 exist or (ii) there is  delivered  to the  Registrar an Opinion of
Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that
neither  such legend nor the related  restrictions  on transfer  are required in
order to maintain compliance with the provisions of the Securities Act.

                  (e) GENERAL.  By its  acceptance  of any Security  bearing the
Private Placement Legend, each Holder of, or beneficial owner of an interest in,
such Security  acknowledges  the  restrictions  on transfer of such Security set
forth in this Indenture and in the Private Placement

                                       31

<PAGE>
Legend and agrees that it will  transfer  such Security only as provided in this
Indenture.  The Registrar  shall not register a transfer of any Security  unless
such transfer  complies with the  restrictions  on transfer of such Security set
forth in this  Indenture.  In  connection  with any transfer of Securities to an
Institutional  Accredited Investor,  each such Holder or beneficial owner agrees
by its  acceptance  of  Securities  to furnish to the Registrar or to the Issuer
such  certifications,  legal  opinions or other  information  as such Person may
reasonably  require to confirm that such  transfer is being made  pursuant to an
exemption from, or a transaction not subject to, the  registration  requirements
of the  Securities  Act;  PROVIDED that the  Registrar  shall not be required to
determine (but may rely on a  determination  made by the Issuer with respect to)
the sufficiency of any such certifications, legal opinions or other information.

                  The Registrar shall retain copies of all letters,  notices and
other written  communications  received pursuant to Section 2.07 or this Section
2.08.  The Issuer  shall have the right to inspect  and make  copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.

                  (f) TRANSFERS TO NON-QIB  INSTITUTIONAL  ACCREDITED INVESTORS.
The following  provisions  shall apply with respect to the  registration  of any
proposed transfer of a Security to any Institutional  Accredited  Investor which
is not a QIB (excluding Non-U.S. Persons):

                  (i) The Registrar shall register the transfer of any Security,
         whether or not such Security bears the Private Placement Legend, if (A)
         the  requested  transfer is after the time  period  referred to in Rule
         144(k)  under  the  Securities  Act as in  effect  at the  time of such
         transfer or (B) the proposed  transferee has delivered to the Registrar
         (1) a certificate substantially in the form of Exhibit D hereto and (2)
         if such  transfer  is in respect of an  aggregate  principal  amount of
         Securities  of less than  $100,000 an Opinion of Counsel  acceptable to
         the Issuer that such transfer is in compliance with the Securities Act.

                  (ii) If the proposed  transferor is an Agent Member  holding a
         beneficial  interest in the U.S. Global  Security,  upon receipt by the
         Registrar of (A) the documents,  if any,  required by paragraph (i) and
         (B)  instructions  given in accordance  with the  Depositary's  and the
         Registrar's  procedures  the  Registrar  shall reflect on its books and
         records  the date and a decrease  in the  principal  amount of the U.S.
         Global  Security  in an  amount  equal to the  principal  amount of the
         beneficial interest in the U.S. Global Security to be transferred,  and
         the Issuer  shall  execute,  and the  Trustee  shall  authenticate  and
         deliver, one or more U.S. Physical Securities of like tenor and amount.

                  (g)  TRANSFERS OF INTERESTS IN THE PERMANENT  OFFSHORE  GLOBAL
SECURITY  OR  OFFSHORE  PHYSICAL  SECURITIES  TO  U.S.  PERSONS.  The  following
provisions  shall  apply  with  respect  to any  transfer  of  interests  in the
Permanent  Offshore  Global  Security or Offshore  Physical  Securities  to U.S.
Persons:  The Registrar shall register the transfer of any such Security without
requiring any additional certification.

                                       32

<PAGE>

                   SECTION 2.09. REPLACEMENT SECURITIES. If a mutilated Security
is surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee
shall authenticate a replacement Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding; PROVIDED that the
requirements of the second paragraph of Section 2.10 are met. If required by the
Trustee or the Issuer, an indemnity bond must be furnished that is sufficient in
the judgment of both the Trustee and the Issuer to protect the Issuer, the
Trustee or any Agent from any loss that any of them may suffer if a Security is
replaced. The Issuer may charge such Holder for its expenses and the expenses of
the Trustee in replacing a Security. In case any such mutilated, lost, destroyed
or wrongfully taken Security has become or is about to become due and payable,
the Issuer in its discretion may pay the principal of, premium, if any, and
interest accrued on such Security instead of issuing a new Security in
replacement thereof.

                  Every replacement Security is an additional  obligation of the
Issuer and shall be entitled to the benefits of this Indenture.

                  SECTION 2.10. OUTSTANDING  SECURITIES.  Securities outstanding
at any time are all  Securities  that have  been  authenticated  by the  Trustee
except for those  cancelled by it, those  delivered to it for  cancellation  and
those described in this Section 2.10 as not outstanding.

                  If a Security is replaced  pursuant to Section 2.09, it ceases
to be  outstanding  unless and until the  Trustee and the Issuer  receive  proof
satisfactory  to  them  that  the  replaced  Security  is  held  by a BONA  FIDE
purchaser.

                  If the Paying  Agent (other than the Issuer or an Affiliate of
the Issuer) holds on the maturity date money sufficient to pay the principal of,
premium,  if any, and interest accrued on Securities  payable on that date, then
on and after that date such  Securities  cease to be outstanding and interest on
them shall cease to accrue.

                  A Security does not cease to be outstanding because the Issuer
or one of its  Affiliates  holds such  Security,  PROVIDED,  HOWEVER,  that,  in
determining  whether  the  Holders  of the  requisite  principal  amount  of the
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Issuer or any other
obligor  upon the  Securities  or any  Affiliate  of the Issuer or of such other
obligor shall be disregarded and deemed not to be  outstanding,  except that, in
determining  whether the Trustee  shall be  protected  in relying  upon any such
request,  demand,  authorization,  direction,  notice,  consent or waiver,  only
Securities which a Responsible Officer of the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's  right so to act with respect to such  Securities and that
the pledgee is not the Issuer or any other  obligor upon the  Securities  or any
Affiliate of the Issuer or of such other obligor.

                  SECTION   2.11.   TEMPORARY   SECURITIES.   Until   definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate  temporary Securities.  Temporary Securities shall be substantially
in the form of definitive Securities but may have

                                       33

<PAGE>

insertions,  substitutions,  omissions  and other  variations  determined  to be
appropriate by the Officers executing the temporary Securities,  as evidenced by
their  execution  of such  temporary  Securities.  If temporary  Securities  are
issued,  the Issuer will cause  definitive  Securities  to be  prepared  without
unreasonable  delay.  After  the  preparation  of  definitive  Securities,   the
temporary  Securities  shall be  exchangeable  for  definitive  Securities  upon
surrender  of the  temporary  Securities  at the  office or agency of the Issuer
designated  for such purpose  pursuant to Section  4.02,  without  charge to the
Holder. Upon surrender for cancellation of any one or more temporary  Securities
the Issuer  shall  execute and the  Trustee  shall  authenticate  and deliver in
exchange therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall be entitled to
the same benefits under this Indenture as definitive Securities.

                  SECTION 2.12. CANCELLATION. The Issuer at any time may deliver
to the Trustee for  cancellation  any Securities  previously  authenticated  and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and may  deliver to the  Trustee  for  cancellation  any  Securities  previously
authenticated  hereunder which the Issuer has not issued and sold. The Registrar
and the Paying Agent shall forward to the Trustee any Securities  surrendered to
them for transfer,  exchange or payment. The Trustee shall cancel all Securities
surrendered for transfer,  exchange,  payment or cancellation  and shall destroy
them in  accordance  with its normal  procedure.  The Issuer shall not issue new
Securities to replace Securities it has paid in full or delivered to the Trustee
for cancellation.

                  SECTION  2.13.  CUSIP,  CINS AND ISIN  NUMBERS.  The Issuer in
issuing the Securities may use "CUSIP",  "CINS",  "ISIN" or other identification
numbers (if then  generally  in use),  and,  if so, the Trustee  shall use CUSIP
numbers, CINS numbers, ISIN numbers or other identification numbers, as the case
may be, in notices of  redemption  or  exchange  as a  convenience  to  Holders;
PROVIDED that any such notice shall state that no  representation  is made as to
the  correctness  of such  numbers  either as  printed on the  Securities  or as
contained  in any notice of  redemption  or exchange  and that  reliance  may be
placed  only on the other  identification  numbers  printed  on the  Securities;
PROVIDED  FURTHER  that  failure  to  use  "CUSIP",   "CINS",  "ISIN"  or  other
identification  numbers in any notice of redemption or exchange shall not effect
the validity or sufficiency of such notice.

                  SECTION 2.14. DEFAULTED INTEREST.  If the Issuer defaults in a
payment of interest on the  Securities,  it shall pay, or shall deposit with the
Paying  Agent  money  in  immediately  available  funds  sufficient  to pay  the
defaulted  interest,  plus (to the extent  lawful) any  interest  payable on the
defaulted  interest,  to the  Persons who are  Holders on a  subsequent  special
record date. A special record date, as used in this Section 2.14 with respect to
the payment of any defaulted  interest,  shall mean the 15th day next  preceding
the date fixed by the Issuer for the payment of defaulted  interest,  whether or
not such day is a Business Day. At least 15 days before the  subsequent  special
record  date,  the Issuer  shall mail to each Holder and to the Trustee a notice
that states the subsequent  special record date, the payment date and the amount
of defaulted interest to be paid.

                                       34

<PAGE>

                  SECTION 2.15.  ISSUANCE OF ADDITIONAL  SECURITIES.  The Issuer
may,  subject to Article Four of this  Indenture,  issue  additional  Securities
under  this  Indenture.  The  Securities  issued  on the  Closing  Date  and any
additional Securities subsequently issued shall be treated as a single class for
all purposes under this Indenture.

                                  ARTICLE THREE

                                   REDEMPTION

                  SECTION 3.01.  RIGHT OF REDEMPTION.  (a) The Securities may be
redeemed at the option of GST USA in whole or in part,  at any time or from time
to time,  on or after  May 1,  2002 and  prior  to  maturity,  at the  following
Redemption  Prices  (expressed in percentages of their principal  amount),  plus
accrued and unpaid  interest,  if any, to the  Redemption  Date  (subject to the
right of Holders of record on the  relevant  Regular  Record  Date that is on or
prior to the  Redemption  Date to receive  interest  due on an Interest  Payment
Date) if redeemed during the 12-month  period  commencing May 1 of the years set
forth below:

YEAR                             REDEMPTION PRICE

2002                                 106.6250%

2003                                 103.3125%

2004 and thereafter                  100.0000%


                  (b) In addition,  the  Securities  may be redeemed as a whole,
but not in part, at the option of GST, at any time after the Assumption Date, at
100% of their  principal  amount on the Redemption  Date,  together with accrued
interest thereon, if any, to the Redemption Date, in the event GST has become or
would  become  obligated  to pay, on the next date on which any amount  would be
payable with  respect to the Security  Guarantee,  any  Additional  Amounts as a
result  of  a  change  in  the  laws  (including  any  regulations   promulgated
thereunder) of Canada (or any political  subdivision or taxing authority thereof
or therein),  or change in any official  position  regarding the  application or
interpretation or such laws or regulations, which change is announced or becomes
effective on or after the Closing Date.

                  SECTION 3.02. MANDATORY REDEMPTION. If on May 13, 2000 GST USA
is prohibited by the 1995 Indentures from assuming all indebtedness  represented
by, and becoming the direct  obligor on, the  Securities or GST is prohibited by
the 1995  Indentures  from  guaranteeing  the  Securities as required by Section
4.23,  the Company will redeem on such date the portion of the  Securities  that
cannot be assumed or guaranteed at 101% of their  principal  amount plus accrued
and unpaid interest to the date of redemption.

                  SECTION 3.03. NOTICES TO TRUSTEE.  If GST USA elects to redeem
Securities  pursuant  to Section  3.01(a),  GST elects to redeem the  Securities
pursuant to Section  3.01(b) or the  Company is  required  to redeem  Securities
pursuant to Section 3.02, the Company, GST USA

                                       35

<PAGE>

or GST,  as the  case  may be,  shall  notify  the  Trustee  in  writing  of the
Redemption Date and the principal amount of Securities to be redeemed.

                  The  Company,  GST USA or GST, as the case may be,  shall give
each notice  provided for in this Section  3.03 in an Officers'  Certificate  at
least 25 days before mailing the notice to Holders required  pursuant to Section
3.05 (unless a shorter period shall be satisfactory to the Trustee).

                  SECTION 3.04. SELECTION OF SECURITIES TO BE REDEEMED.  If less
than all of the  Securities  are to be redeemed at any time  pursuant to Section
3.01(a) or Section 3.02,  the Trustee shall select the Securities to be redeemed
in compliance with the  requirements,  as certified to it by the Issuer,  of the
principal  national  securities  exchange,  if any, on which the  Securities are
listed or, if the Securities are not listed on a national  securities  exchange,
on a PRO RATA basis,  by lot or by such other  method as the Trustee in its sole
discretion  shall  deem  fair  and  appropriate;   PROVIDED,  HOWEVER,  that  no
Securities of $1,000 in principal amount or less shall be redeemed in part.

                  The  Trustee  shall  make the  selection  from the  Securities
outstanding   and  not   previously   called  for   redemption.   Securities  in
denominations  of $1,000 in principal  amount may only be redeemed in whole. The
Trustee may select for redemption  portions (equal to $1,000 in principal amount
or any integral multiple thereof) of Securities that have  denominations  larger
than $1,000 in principal  amount.  Provisions  of this  Indenture  that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.  The Trustee shall notify the Issuer and the  Registrar  promptly in
writing of the Securities or portions of Securities to be called for redemption.

                  SECTION  3.05.  NOTICE  OF  REDEMPTION.  With  respect  to any
redemption  of  Securities,  at least 30 days but not more than 60 days before a
Redemption Date in the case of the redemption under Section 3.01 and at least 10
but not  more  than 30 days  prior to May 13,  2000 in the case of a  redemption
under Section 3.02,  the Issuer shall mail a notice of redemption by first class
mail to each Holder whose Securities are to be redeemed.

                  The notice shall  identify the  Securities  to be redeemed and
shall state:

                  (a)      the Redemption Date;

                  (b)      the Redemption Price;

                  (c)      the name and address of the Paying Agent;

                  (d) that Securities  called for redemption must be surrendered
         to the Paying Agent in order to collect the Redemption Price;

                  (e) that,  unless the Issuer defaults in making the redemption
         payment,  interest on Securities called for redemption ceases to accrue
         on and after the Redemption Date

                                       36

<PAGE>
         and the only  remaining  right of the Holders is to receive  payment of
         the Redemption  Price plus accrued interest to the Redemption Date upon
         surrender of the Securities to the Paying Agent;

                  (f) that,  if any  Security  is being  redeemed  in part,  the
         portion of the principal amount (equal to $1,000 in principal amount or
         any  integral  multiple  thereof) of such  Security to be redeemed  and
         that,  on and  after  the  Redemption  Date,  upon  surrender  of  such
         Security, a new Security or Securities in principal amount equal to the
         unredeemed portion thereof will be reissued; and

                  (g) that,  if any  Security  contains a CUSIP,  CINS,  ISIN or
         other   identification   number  as  provided  in  Section   2.13,   no
         representation is being made as to the correctness of the CUSIP,  CINS,
         ISIN or other identification number either as printed on the Securities
         or as contained in the notice of  redemption  and that  reliance may be
         placed  only  on  the  other  identification  numbers  printed  on  the
         Securities.

                  At the Issuer's  request  (which request may be revoked by the
Issuer at any time prior to the time at which the Trustee  shall have given such
notice to the Holders), made in writing to the Trustee at least five days before
mailing the notice to Holders  referred to in Section 3.01 or 3.02,  the Trustee
shall  give such  notice of  redemption  in the name and at the  expense  of the
Issuer.  If,  however,  the Issuer gives such notice to the Holders,  the Issuer
shall concurrently deliver to the Trustee an Officers'  Certificate stating that
such notice has been given.

                  SECTION 3.06.  EFFECT OF NOTICE OF REDEMPTION.  Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the  Redemption  Date  and  at  the  Redemption  Price.  Upon  surrender  of any
Securities to the Paying Agent,  such Securities shall be paid at the Redemption
Price, plus accrued interest, if any, to the Redemption Date.

                  Notice of redemption  shall be deemed to be given when mailed,
whether or not the Holder  receives  the notice.  In any event,  failure to give
such  notice,  or any  defect  therein,  shall not affect  the  validity  of the
proceedings for the redemption of Securities held by Holders to whom such notice
was properly given.

                  SECTION  3.07.  DEPOSIT  OF  REDEMPTION  PRICE.  Prior  to any
Redemption  Date, the Issuer shall deposit,  or cause to be deposited,  with the
Paying  Agent  (or,  if the  Issuer  is acting as its own  Paying  Agent,  shall
segregate and hold in trust as provided in Section 2.05) money sufficient to pay
the Redemption Price of and accrued interest on all Securities to be redeemed on
that date other than  Securities or portions  thereof  called for  redemption on
that  date  that  have  been   delivered  by  the  Issuer  to  the  Trustee  for
cancellation.

                  SECTION 3.08. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.  If
notice of redemption has been given in the manner provided above, the Securities
or portion of  Securities  specified in such notice to be redeemed  shall become
due and payable on the Redemption  Date at the Redemption  Price stated therein,
together with accrued interest to such Redemption Date,

                                       37

<PAGE>

and on and after such date  (unless the Issuer  shall  default in the payment of
such Securities at the Redemption  Price and accrued  interest to the Redemption
Date,  in which case the  principal,  until paid,  shall bear  interest from the
Redemption Date at the rate prescribed in the Securities), such Securities shall
cease to accrue  interest.  Upon  surrender of any Security  for  redemption  in
accordance with a notice of redemption, such Security shall be paid and redeemed
by the Issuer at the Redemption Price,  together with accrued interest,  if any,
to the Redemption Date;  PROVIDED that installments of interest shall be payable
to the  Holders  registered  as such at the close of  business  on the  relevant
Regular Record Date that is on or prior to the Redemption Date.

                  SECTION 3.09.  SECURITIES  REDEEMED IN PART. Upon surrender of
any Security that is redeemed in part,  the Issuer shall execute and the Trustee
shall  authenticate  and deliver to the Holder a new Security equal in principal
amount to the unredeemed portion of such surrendered Security.

                                  ARTICLE FOUR

                                    COVENANTS

                  SECTION 4.01. PAYMENT OF SECURITIES.  The Issuer shall pay the
principal of,  premium,  if any, and interest on the Securities on the dates and
in the manner provided in the Securities and this  Indenture.  An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the  Trustee or Paying  Agent  (other than the Issuer,  a  Subsidiary  of the
Issuer, or any Affiliate of any of them) holds on that date money designated for
and  sufficient to pay the  installment.  If the Issuer or any Subsidiary of the
Issuer or any Affiliate of any of them,  acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due date
if the entity acting as Paying Agent  complies with the last sentence of Section
2.05.  As  provided  in Section  6.09,  upon any  bankruptcy  or  reorganization
procedure  relative to the Issuer,  the Trustee  shall serve as the Paying Agent
and conversion agent, if any, for the Securities.

                  The Issuer shall pay interest on overdue  principal,  premium,
if any, and interest on overdue installments of interest,  to the extent lawful,
at the rate per annum specified in the Securities.

                  SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan,  the City of New York, an office or agency
(which  may be an  office  of the  Trustee,  Registrar  or  co-Registrar  or any
Affiliate of any of them) where  Securities may be surrendered for  registration
of transfer or exchange or for  presentation  for payment and where  notices and
demands to or upon the Issuer in respect of the  Securities  and this  Indenture
may be served.  The Issuer will give prompt written notice to the Trustee of the
location,  and any change in the location,  of such office or agency.  If at any
time the Issuer  shall fail to maintain  any such  required  office or agency or
shall fail to furnish the Trustee with the address thereof,  such presentations,
surrenders,  notices  and  demands  may be made or served at the  address of the
Trustee set forth in Section 12.02.

                                       38

<PAGE>

                  The  Issuer may also from time to time  designate  one or more
other offices or agencies  where the  Securities may be presented or surrendered
for  any  or  all  such  purposes  and  may  from  time  to  time  rescind  such
designations.  The Issuer will give prompt  written notice to the Trustee of any
such  designation  or  rescission  and of any change in the location of any such
other office or agency.

                  The Company hereby  initially  designates the Corporate  Trust
Office of the  Trustee,  located in the  Borough of  Manhattan,  the City of New
York, as such office of the Issuer in accordance with Section 2.04.

                  SECTION 4.03.  LIMITATION ON  INDEBTEDNESS.  (a) GST will not,
and  will  not  permit  any  of  its  Restricted   Subsidiaries  to,  Incur  any
Indebtedness (other than the Securities and Indebtedness existing on the Closing
Date);  PROVIDED  that GST and GST USA may Incur  Indebtedness  if, after giving
effect to the Incurrence of such Indebtedness and the receipt and application of
the proceeds  therefrom,  the Indebtedness to EBITDA Ratio would be greater than
zero and less than 5:1.  The Company may not Incur any  Indebtedness  other than
the Securities.

                  Notwithstanding   the   foregoing,   GST  and  any  Restricted
Subsidiary (except as specified below) may Incur each and all of the following:

                  (i) Indebtedness  outstanding at any time (including,  but not
         limited to,  Indebtedness  under the Tomen  Facility)  in an  aggregate
         principal  amount  not to  exceed  $320  million,  less any  amount  of
         Indebtedness permanently repaid as provided under Section 4.12;

                  (ii) Indebtedness (A) to GST evidenced by a promissory note or
         (B) to any of its Restricted Subsidiaries; PROVIDED that any subsequent
         event which results in any such Restricted  Subsidiary  ceasing to be a
         Restricted  Subsidiary or any subsequent  transfer of such Indebtedness
         (other than to GST or another  Restricted  Subsidiary) shall be deemed,
         in each case, to constitute  an  Incurrence  of such  Indebtedness  not
         permitted by this clause (ii);

                  (iii) Indebtedness issued in exchange for, or the net proceeds
         of  which  are  used  to   refinance   or  refund,   then   outstanding
         Indebtedness,  other than Indebtedness Incurred under clause (i), (ii),
         (iv),  (v),  (vii) or (viii) of this  paragraph,  and any  refinancings
         thereof in an amount not to exceed the amount so refinanced or refunded
         (plus premiums,  accrued  interest,  fees and expenses);  PROVIDED that
         Indebtedness  the proceeds of which are used to refinance or refund the
         Securities and Security  Guarantee or  Indebtedness  that is PARI PASSU
         with,  or  subordinated  in right of  payment  to, the  Securities  and
         Security  Guarantee  shall only be permitted under this clause (iii) if
         (A) in case the  Securities  and Security  Guarantee are  refinanced in
         part,  or the  Indebtedness  to be  refinanced  is PARI  PASSU with the
         Securities or Security Guarantee,  such new Indebtedness,  by its terms
         or by the terms of any agreement or  instrument  pursuant to which such
         new Indebtedness is outstanding,  is expressly made PARI PASSU with, or
         subordinate  in  right of  payment  to,  the  remaining  Securities  or
         Security Guarantee, (B) in case the Indebtedness to be

                                       39

<PAGE>

         refinanced  is  subordinated  in right of payment to the  Securities or
         Security Guarantee, such new Indebtedness, by its terms or by the terms
         of any agreement or instrument  pursuant to which such new Indebtedness
         is  outstanding,  is expressly made  subordinate in right of payment to
         the  Securities  or Security  Guarantee at least to the extent that the
         Indebtedness  to be refinanced  is  subordinated  to the  Securities or
         Security Guarantee and (C) such new Indebtedness,  determined as of the
         date of Incurrence of such new  Indebtedness,  does not mature prior to
         the Stated  Maturity of the  Indebtedness to be refinanced or refunded,
         and the Average Life of such new  Indebtedness is at least equal to the
         remaining  Average  Life  of  the  Indebtedness  to  be  refinanced  or
         refunded; and PROVIDED FURTHER that in no event may Indebtedness of GST
         or GST USA be refinanced by means of any Indebtedness of any Restricted
         Subsidiary of GST USA pursuant to this clause (iii);

                  (iv)  Indebtedness  (A) in respect of  performance,  surety or
         appeal  bonds  provided in the ordinary  course of business,  (B) under
         Currency  Agreements and Interest Rate  Agreements;  PROVIDED that such
         agreements do not increase the Indebtedness of the obligor  outstanding
         at any time other than as a result of fluctuations in foreign  currency
         exchange rates or interest rates or by reason of fees,  indemnities and
         compensation  payable  thereunder;  and  (C)  arising  from  agreements
         providing for indemnification,  adjustment of purchase price or similar
         obligations,  or from Guarantees or letters of credit,  surety bonds or
         performance  bonds  securing  any  obligations  of  GST  or  any of the
         Restricted  Subsidiaries  pursuant  to  such  agreements,  in any  case
         Incurred in connection with the disposition of any business,  assets or
         Restricted  Subsidiary of GST (other than  Guarantees  of  Indebtedness
         Incurred by any Person  acquiring all or any portion of such  business,
         assets or  Restricted  Subsidiary  for the  purpose of  financing  such
         acquisition),  in a principal  amount not to exceed the gross  proceeds
         actually  received by GST or any  Restricted  Subsidiary  in connection
         with such disposition;

                  (v)  Indebtedness  of GST  not to  exceed,  at  any  one  time
         outstanding,  two times the Net Cash Proceeds received by GST after the
         Closing  Date from the  issuance  and sale of its Capital  Stock (other
         than  Redeemable  Stock) to a Person other than a Subsidiary  of GST to
         the extent such Net Cash Proceeds have not been used pursuant to clause
         (C)(2) of the first  paragraph  or clauses  (iii),  (iv) or (vi) of the
         second paragraph of Section 4.04 to make a Restricted Payment; PROVIDED
         that such  Indebtedness does not mature prior to the Stated Maturity of
         the Securities and has an Average Life longer than the Securities;

                  (vi)  Indebtedness  Incurred to finance  the cost  (including,
         without  limitation,  the cost of  design,  development,  construction,
         acquisition, installation or integration) of network assets (including,
         without   limitation,   equipment   and  real  property  and  leasehold
         improvements  that are necessary to install or operate  network assets;
         PROVIDED  that in no event shall the cost of any such real property and
         leasehold  improvements financed hereby exceed 20% of the total cost of
         the related network assets) or inventory  purchased or leased by GST or
         any of its Restricted Subsidiaries after the Closing Date;

                                       40

<PAGE>

                  (vii)  Indebtedness  of GST  or  GST  USA  under  one or  more
         revolving  credit  or  working  capital   facilities  in  an  aggregate
         principal  amount  outstanding  at any time not to exceed the lesser of
         (A) $50  million  and (B) 75% of the  consolidated  book  value  of the
         accounts receivable of GST and its Restricted Subsidiaries; and

                  (viii)  Indebtedness  of  GST or GST  USA  to the  extent  the
         proceeds thereof are promptly (a) used to purchase  Securities tendered
         in an Offer to Purchase  made as a result of a Change of Control or (b)
         deposited to defease the Securities under Article Eight.

                  (b) For  purposes  of  determining  any  particular  amount of
Indebtedness under this Section 4.03, (1) Indebtedness  Incurred under the Tomen
Facility on or prior to the Closing  Date shall be treated as Incurred  pursuant
to clause (i) of the second  paragraph of this Section 4.03 and (2)  Guarantees,
Liens or obligations with respect to letters of credit  supporting  Indebtedness
otherwise  included in the  determination of such particular amount shall not be
included.  For purposes of determining compliance with this Section 4.03, in the
event that an item of  Indebtedness  meets the  criteria of more than one of the
types  of  Indebtedness  described  in the  above  clauses,  GST,  in  its  sole
discretion,  shall  classify such item of  Indebtedness  and only be required to
include the amount and type of such Indebtedness in one of such clauses.

                  SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. GST will not,
and will not permit any Restricted  Subsidiary to,  directly or indirectly,  (i)
declare or pay any dividend or make any distribution on its Capital Stock (other
than  dividends  or  distributions  payable  solely  in  shares  of its or  such
Restricted  Subsidiary's Capital Stock (other than Redeemable Stock) of the same
class held by such  holders or in options,  warrants or other  rights to acquire
such  shares of  Capital  Stock)  held by  Persons  other than GST or any of its
Restricted  Subsidiaries  (and other than pro rata dividends or distributions on
Common Stock of  Restricted  Subsidiaries),  (ii)  purchase,  redeem,  retire or
otherwise  acquire  for value  any  shares of  Capital  Stock of GST  (including
options,  warrants or other rights to acquire such shares of Capital Stock) held
by Persons other than any Wholly Owned  Restricted  Subsidiaries  of GST,  (iii)
make any  voluntary  or optional  principal  payment,  or  voluntary or optional
redemption,  repurchase,  defeasance,  or other  acquisition  or retirement  for
value,  of  Indebtedness  of GST USA or GST  that is  subordinated  in  right of
payment to the Securities or the Security Guarantee, as the case may be, or (iv)
make any  Investment,  other than a Permitted  Investment,  in any Person  (such
payments  or any other  actions  described  in clauses  (i)  through  (iv) being
collectively  "RESTRICTED PAYMENTS") if, at the time of, and after giving effect
to, the proposed  Restricted  Payment:  (A) a Default or Event of Default  shall
have  occurred  and be  continuing,  (B) GST could  not Incur at least  $1.00 of
Indebtedness  under the first  paragraph  of Section  4.03 or (C) the  aggregate
amount of all  Restricted  Payments  (the amount,  if other than in cash,  to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive  and  evidenced  by a Board  Resolution)  made after the Closing Date
shall  exceed  the  sum of  (1)  50% of the  aggregate  amount  of the  Adjusted
Consolidated Net Income (or, if the Adjusted  Consolidated Net Income is a loss,
minus 100% of such  amount)  (determined  by  excluding  income  resulting  from
transfers  of  assets  by  GST or a  Restricted  Subsidiary  to an  Unrestricted
Subsidiary)  accrued on a  cumulative  basis  during  the  period  (taken as one
accounting period) beginning on

                                       41

<PAGE>

the first day of the fiscal quarter  immediately  following the Closing Date and
ending on the last day of the last fiscal quarter preceding the Transaction Date
for  which  reports  have  been  filed  pursuant  to  Section  4.20 plus (2) the
aggregate  Net Cash  Proceeds  received by GST after the  Closing  Date from the
issuance and sale  permitted by this  Indenture of its Capital Stock (other than
Redeemable  Stock)  to a  Person  who is not a  Subsidiary  of GST,  or from the
issuance to a Person who is not a Subsidiary of GST of any options,  warrants or
other  rights to acquire  Capital  Stock of GST (in each case,  exclusive of any
Redeemable Stock or any options, warrants or other rights that are redeemable at
the option of the holder,  or are required to be  redeemed,  prior to the Stated
Maturity  of the  Securities),  in each case  except to the extent such Net Cash
Proceeds  are used to Incur  Indebtedness  pursuant  to clause (v) of the second
paragraph  of Section  4.03,  plus (3) an amount  equal to the net  reduction in
Investments  (other than  reductions in Permitted  Investments and reductions in
Investments made pursuant to clause (vi) of the second paragraph of this Section
4.04) in any  Person  resulting  from  payments  of  interest  on  Indebtedness,
dividends,  repayments of loans or advances,  or other  transfers of assets,  in
each case to GST or any  Restricted  Subsidiary  (except  to the extent any such
payment is included in the calculation of Adjusted  Consolidated Net Income), or
from  redesignations  of Unrestricted  Subsidiaries  as Restricted  Subsidiaries
(valued in each case as provided in the  definition  of  "Investments"),  not to
exceed  the  amount of  Investments  previously  made by GST and its  Restricted
Subsidiaries in such Person.

                  The foregoing provision shall not be violated by reason of:

                  (i) the payment of any dividend  within 60 days after the date
         of declaration  thereof if, at said date of  declaration,  such payment
         would comply with the foregoing paragraph;

                  (ii)  the   redemption,   repurchase,   defeasance   or  other
         acquisition   or  retirement   for  value  of   Indebtedness   that  is
         subordinated  in right of payment to the  Intercompany  Notes or, after
         GST USA assumes the Securities,  the Securities or Security  Guarantee,
         including  premium,  if any, and accrued and unpaid interest,  with the
         proceeds of, or in exchange  for,  Indebtedness  Incurred  under clause
         (iii) of the second paragraph of Section 4.03;

                  (iii)  the  repurchase,  redemption  or other  acquisition  of
         Capital  Stock of GST in  exchange  for,  or out of the  proceeds  of a
         substantially  concurrent  offering of,  shares of Capital Stock (other
         than Redeemable Stock) of GST;

                  (iv) the  acquisition of  Indebtedness of GST USA or GST which
         is subordinated in right of payment to the Intercompany Notes or, after
         GST USA assumes the Securities,  the Securities or Security  Guarantee,
         in exchange for, or out of the proceeds of, a substantially  concurrent
         offering of, shares of the Capital Stock of GST (other than  Redeemable
         Stock);

                                       42

<PAGE>

                  (v) payments or  distributions,  in the nature of satisfaction
         of   dissenters'   rights,   pursuant  to  or  in  connection   with  a
         consolidation,  merger or transfer of assets that complies with Article
         Five;

                  (vi)  Investments  in any  Person or  Persons  (other  than an
         Affiliate  (other  than a  Subsidiary)  of the  Company),  the  primary
         business  of  which  is  related,  ancillary  or  complementary  to the
         business  of GST and its  Restricted  Subsidiaries  on the date of such
         Investments, in an aggregate amount not to exceed $50 million plus, (a)
         in any fiscal year,  an amount not to exceed 10% of GST's  Consolidated
         EBITDA (if positive) for the immediately  preceding fiscal year, (b) an
         amount not to exceed the Net Cash  Proceeds  received  by GST after the
         Closing Date from the issuance and sale  permitted by this Indenture of
         its Capital Stock (other than Redeemable Stock) to a Person that is not
         a Subsidiary  of GST,  except to the extent such Net Cash  Proceeds are
         used to Incur Indebtedness pursuant to clause (v) under Section 4.03 or
         to make  Restricted  Payments  pursuant  to clause  (C)(2) of the first
         paragraph  or clause  (iii) or (iv) of this  paragraph  of this Section
         4.04  and (c) the net  reduction  in  Investments  in any  Person  made
         pursuant to this clause  (vi),  except to the extent such  reduction is
         included  in the  calculation  of  Adjusted  Consolidated  Net  Income;
         PROVIDED that the net reduction in any such Investment shall not exceed
         the amount of Investments previously made in such Person;

                  (vii)  Investments  by GST  or a  Restricted  Subsidiary  made
         pursuant  to the second  paragraph  of Section  4.11,  in an  aggregate
         amount not to exceed $25 million; and

                  (viii)  cash  payments in lieu of the  issuance of  fractional
         Common Shares upon conversion  (including mandatory  conversion) of the
         Convertible  Notes provided for in the  Convertible  Notes Indenture or
         the Redeemable  Preferred Shares;  PROVIDED that, except in the case of
         clauses  (i) and  (iii),  no  Default  or Event of  Default  shall have
         occurred and be continuing or occur as a consequence  of the actions or
         payments set forth herein.

                  Each Restricted  Payment  permitted  pursuant to the preceding
paragraph (other than the Restricted  Payment referred to in clause (ii) thereof
and an exchange of Capital Stock for Capital Stock or  Indebtedness  referred to
in clause (iii) or (iv) thereof), and the Net Cash Proceeds from any issuance of
Capital Stock referred to in clauses  (iii),  (iv) and (vi) shall be included in
calculating  whether the conditions of clause (C) of the first paragraph of this
Section 4.04 have been met with respect to any subsequent  Restricted  Payments.
In the event the  proceeds of an  issuance of Capital  Stock of GST are used for
the   redemption,   repurchase  or  other   acquisition  of  the  Securities  or
Indebtedness that is PARI PASSU with the Securities or Security Guarantee,  then
the Net Cash  Proceeds of such  issuance  shall be included in clause (C) of the
first  paragraph of this  Section 4.04 only to the extent such  proceeds are not
used for such redemption, repurchase or other acquisition of Indebtedness.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries to, directly or indirectly,  make any Restricted Payment other than
Investments  in Pledged  Securities,  cash,  the Initial  Note and  Intercompany
Notes, in each case pledged to secure the Securities.

                                       43

<PAGE>

                  SECTION  4.05.   LIMITATION  ON  DIVIDEND  AND  OTHER  PAYMENT
RESTRICTIONS  AFFECTING  RESTRICTED  SUBSIDIARIES.  GST will  not,  and will not
permit any  Restricted  Subsidiary  to,  create or otherwise  cause or suffer to
exist or become effective any consensual  encumbrance or restriction of any kind
on the ability of any  Restricted  Subsidiary  to (i) pay  dividends or make any
other  distributions  permitted by  applicable  law on any Capital Stock of such
Restricted Subsidiary owned by GST or any other Restricted Subsidiary,  (ii) pay
any  Indebtedness  owed to GST or any other  Restricted  Subsidiary,  (iii) make
loans or advances to GST or any other Restricted Subsidiary or (iv) transfer any
of its property or assets to GST or any other Restricted Subsidiary.

                  The foregoing  provisions  shall not restrict any encumbrances
or restrictions:

                  (i)  existing on the  Closing  Date in this  Indenture  or any
         other  agreement  in effect on the Closing  Date,  and any  extensions,
         refinancings,  renewals or  replacements of such  agreements;  PROVIDED
         that  the   encumbrances  and  restrictions  in  any  such  extensions,
         refinancings,  renewals or  replacements  are no less  favorable in any
         material respect to the Holders than those encumbrances or restrictions
         that  are then in  effect  and that  are  being  extended,  refinanced,
         renewed or replaced;

                  (ii) existing under or by reason of applicable law;

                  (iii)  existing  with respect to any Person or the property or
         assets of such  Person  acquired by GST or any  Restricted  Subsidiary,
         existing  at  the  time  of  such   acquisition  and  not  incurred  in
         contemplation  thereof,  which  encumbrances  or  restrictions  are not
         applicable  to any Person or the property or assets of any Person other
         than such Person or the property or assets of such Person so acquired;

                  (iv) in the case of clause (iv) of the first paragraph of this
         Section 4.05, (A) that restrict in a customary  manner the  subletting,
         assignment  or  transfer  of any  property  or  asset  that is a lease,
         license,  conveyance  or  contract or similar  property  or asset,  (B)
         existing by virtue of any transfer of, agreement to transfer, option or
         right with respect to, or Lien on, any property or assets of GST or any
         Restricted Subsidiary not otherwise prohibited by this Indenture or (C)
         arising or agreed to in the ordinary  course of business,  not relating
         to any Indebtedness, and that do not, individually or in the aggregate,
         detract  from the value of property or assets of GST or any  Restricted
         Subsidiary in any manner material to GST or any Restricted Subsidiary;

                  (v)  with  respect  to a  Restricted  Subsidiary  and  imposed
         pursuant to an  agreement  that has been  entered  into for the sale or
         disposition  of all or  substantially  all of the Capital  Stock of, or
         property and assets of, such Restricted Subsidiary;

                  (vi) with respect to any Development Company, imposed pursuant
         to or in connection with any Indebtedness  Incurred by such Development
         Company to finance at least 50% of the total financing required for the
         development  and  construction  of all of  such  Development  Company's
         alternative access networks or any Indebtedness Incurred

                                       44

<PAGE>

         to  refinance  or replace  such  Indebtedness;  PROVIDED  that (a) such
         Indebtedness (including such refinancing  Indebtedness) is permitted to
         be Incurred under Section 4.03, (b) such  encumbrances and restrictions
         are no more restrictive in any material respect than those encumbrances
         and restrictions  existing under the Tomen Facility as in effect on the
         Closing  Date and (c) such  encumbrances  and  restrictions  shall only
         apply to such Development  Company for so long as such Indebtedness (or
         such refinancing Indebtedness) remains outstanding; or

                  (vii) with respect to any  Development  Company (a "RESTRICTED
         DEVELOPMENT  COMPANY"),  imposed  pursuant to or in connection with any
         Indebtedness  Incurred  by  another  Development  Company to finance at
         least 50% of the  total  financing  required  for the  development  and
         construction  of all of such other  Development  Company's  alternative
         access  networks or any  Indebtedness  Incurred to refinance or replace
         such Indebtedness; PROVIDED that (a) such encumbrances and restrictions
         shall not apply to such  Restricted  Development  Company  prior to the
         occurrence  of  an  event  of  default  under  such   Indebtedness  (or
         refinancing  Indebtedness),   (b)  such  Indebtedness  (including  such
         refinancing  Indebtedness)  is permitted to be Incurred  under  Section
         4.03, (c) such encumbrances and restrictions are no more restrictive in
         any material  respect than those  contemplated by the Tomen Facility as
         in  effect  on the  Closing  Date  and (d) at  least  50% of the  total
         financing  required for the development and construction of all of such
         Restricted   Development  Company's  alternative  access  networks  was
         provided by the holder of the  Indebtedness  of such other  Development
         Company.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries  to,  create  or  otherwise  cause or  suffer  to  exist or  become
effective any of the matters referred to in the first paragraph of this section.

                  Nothing  contained in this  Section 4.05 shall  prevent GST or
any Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise  permitted in Section 4.09 or (2) restricting the sale
or other  disposition  of  property  or assets  of GST or any of its  Restricted
Subsidiaries  that  secure   Indebtedness  of  GST  or  any  of  its  Restricted
Subsidiaries.

                  SECTION  4.06.  LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL
STOCK OF  RESTRICTED  SUBSIDIARIES.  GST will not sell,  and will not permit any
Restricted  Subsidiary,  directly or indirectly,  to issue or sell any shares of
Capital Stock of a Restricted Subsidiary  (including options,  warrants or other
rights to purchase shares of such Capital Stock) except

                  (i) to GST or a Wholly Owned Restricted Subsidiary;

                  (ii)  issuances  or sales to  foreign  nationals  of shares of
         Capital  Stock  of  foreign  Restricted  Subsidiaries,  to  the  extent
         required by applicable law;

                  (iii) if,  immediately after giving effect to such issuance or
         sale,  such  Restricted   Subsidiary  would  no  longer   constitute  a
         Restricted Subsidiary; or

                                       45

<PAGE>

                  (iv)  a  sale  of  Common  Stock  of  Phoenix  Fiber,  and  in
         connection and  concurrently  with such sale, a sale of Common Stock of
         GST Tucson Lightwave, Inc.; PROVIDED that the proceeds of any such sale
         under this clause (iv) shall be applied in  accordance  with clause (A)
         or (B) of the first paragraph of Section 4.12.

                  The  Company  will not sell,  and will not  permit  any of its
Subsidiaries,  directly  or  indirectly,  to issue or sell any shares of Capital
Stock of a  Subsidiary  of the  Company  (including  options,  warrants or other
rights to purchase shares of such Capital Stock).

                  SECTION  4.07.   LIMITATION  ON  ISSUANCES  OF  GUARANTEES  BY
RESTRICTED SUBSIDIARIES. GST will not permit any Restricted Subsidiary, directly
or indirectly,  to Guarantee any  Indebtedness of GST or any Indebtedness of GST
USA  ("GUARANTEED   INDEBTEDNESS"),   unless  (i)  such  Restricted   Subsidiary
simultaneously  executes and delivers a supplemental indenture to this Indenture
providing  for  a  Guarantee  (a  "SUBSIDIARY  GUARANTEE")  of  payment  of  the
Securities by such  Restricted  Subsidiary and (ii) such  Restricted  Subsidiary
waives  and will not in any  manner  whatsoever  claim  or take the  benefit  or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights  against the  Company,  GST or GST USA as a result of any payment by such
Restricted  Subsidiary  under  its  Subsidiary  Guarantee;  PROVIDED  that  this
paragraph shall not be applicable to any Guarantee of any Restricted  Subsidiary
that (x) existed at the time such Person became a Restricted  Subsidiary and (y)
was not  Incurred  in  connection  with,  or in  contemplation  of,  such Person
becoming a Restricted  Subsidiary.  If the Guaranteed  Indebtedness  is (A) PARI
PASSU with the  Intercompany  Notes,  the Securities or the Security  Guarantee,
then the Guarantee of such Guaranteed  Indebtedness shall be PARI PASSU with, or
subordinated   to,  the  Subsidiary   Guarantee  or  (B)   subordinated  to  the
Intercompany Notes, the Securities or the Security Guarantee, then the Guarantee
of  such  Guaranteed  Indebtedness  shall  be  subordinated  to  the  Subsidiary
Guarantee  at  least  to  the  extent  that  the  Guaranteed   Indebtedness   is
subordinated to the Intercompany Notes, the Securities or Security Guarantee, as
the case may be.

                  Notwithstanding the foregoing,  any Subsidiary  Guarantee by a
Restricted  Subsidiary  may provide by its terms that it shall be  automatically
and  unconditionally  released  and  discharged  upon (i) any sale,  exchange or
transfer,  to any  Person  not an  Affiliate  of GST of all of  GST's  and  each
Restricted Subsidiary's Capital Stock in, or all or substantially all the assets
of,  such  Restricted  Subsidiary  (which  sale,  exchange  or  transfer  is not
prohibited by this  Indenture) or (ii) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guarantee,  except a discharge
or release by or as a result of payment under such Guarantee.

                  The  Company  will  not  permit  any of its  Subsidiaries  to,
directly or indirectly, Guarantee any Indebtedness.

                  SECTION 4.08. LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES.  GST will not,  and will not permit any  Restricted  Subsidiary  to,
directly or indirectly,  enter into, renew or extend any transaction (including,
without limitation, the purchase, sale, lease or exchange of property or assets,
or the rendering of any service) with any holder (or any Affiliate

                                       46

<PAGE>

of such  holder)  of 5% or more of any  class  of  Capital  Stock  of GST or any
Restricted Subsidiary or with any Affiliate of GST or any Restricted Subsidiary,
except  upon  fair  and  reasonable  terms  no  less  favorable  to GST or  such
Restricted  Subsidiary than could be obtained,  at the time of such  transaction
or, if such transaction is pursuant to a written  agreement,  at the time of the
execution of the  agreement  providing  therefor,  in a comparable  arm's-length
transaction with a Person that is not such a holder or an Affiliate.

                  The foregoing  limitation does not limit,  and shall not apply
to (i) transactions (A) approved by a majority of the  disinterested  members of
the Board of Directors  of GST or (B) for which GST or a  Restricted  Subsidiary
delivers to the Trustee a written opinion of a nationally  recognized investment
banking  firm  stating that the  transaction  is fair to GST or such  Restricted
Subsidiary from a financial  point of view; (ii) any transaction  solely between
GST and any of its Wholly Owned Restricted Subsidiaries or solely between Wholly
Owned  Restricted  Subsidiaries;  (iii) the payment of reasonable  and customary
regular fees (including through the issuance of shares of Common Stock of GST or
options,  warrants or other  rights to acquire  such shares) to directors of GST
who are not  employees of GST or any of its  Subsidiaries;  (iv) any payments or
other  transactions  pursuant to any tax-sharing  agreement  between GST and any
other Person with which GST files a consolidated tax return or with which GST is
part of a consolidated  group for tax purposes;  or (v) any Restricted  Payments
not prohibited by Section 4.04.  Notwithstanding the foregoing,  any transaction
or series of  transactions  covered by the first  paragraph of this Section 4.08
and not covered by clauses (ii) through (vi) of this  paragraph,  the  aggregate
amount of which exceeds $500,000 in value,  must be approved or determined to be
fair in the manner provided for in clause (i)(A) or (B) above.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries to, directly or indirectly,  enter into, renew or extend any of the
transactions  described in the first  paragraph  of this section  other than any
transaction  between the Company and GST or any of its  Restricted  Subsidiaries
required or permitted by this Indenture and Pledge Agreement.

                  SECTION 4.09.  LIMITATION ON LIENS. GST will not, and will not
permit any Restricted  Subsidiary to, create,  incur,  assume or suffer to exist
any Lien on any of its assets or properties of any  character,  or any shares of
Capital  Stock  or  Indebtedness  of any  Restricted  Subsidiary  (collectively,
"PROTECTED  PROPERTY"),  without  making  effective  provision  for  all  of the
Securities (or in the case of a Lien on Protected  Property of GST, the Security
Guarantee) and all other amounts due under this Indenture to be directly secured
equally and ratably  with (or, if the  obligation  or liability to be secured by
such Lien is  subordinated in right of payment to the Securities or the Security
Guarantee,  prior to) the obligation or liability secured by such Lien; provided
that neither GST nor any Restricted  Subsidiary  will create,  Incur,  assume or
suffer to exist any Lien on the Pledged  Securities,  the Pledge  Account or any
Acquired  Equipment,  except Liens securing the Securities and the  Intercompany
Notes.

                  The foregoing limitation does not apply to

                  (i) Liens existing on the Closing Date;

                                       47

<PAGE>

                  (ii) Liens  granted  after the  Closing  Date on any assets or
         Capital  Stock  of GST  or its  Restricted  Subsidiaries  securing  the
         Initial  Note,  the  Intercompany  Notes  or  created  in  favor of the
         Company, the Trustee or the Holders of the Securities;

                  (iii)  Liens  with  respect  to  the  assets  of a  Restricted
         Subsidiary  granted by such  Restricted  Subsidiary  to GST or a Wholly
         Owned Restricted Subsidiary to secure Indebtedness owing to GST or such
         other Restricted Subsidiary;

                  (iv)  Liens  securing   Indebtedness   which  is  Incurred  to
         refinance secured  Indebtedness which is permitted to be Incurred under
         clause (iii) of the second  paragraph of Section  4.03;  PROVIDED  that
         such Liens do not extend to or cover any  property  or assets of GST or
         any Restricted  Subsidiary  other than the property or assets  securing
         the Indebtedness being refinanced;

                  (v) Liens upon or Capital  Leases with  respect to  inventory,
         property or equipment  acquired or held by GST or any of its Restricted
         Subsidiaries  to secure all or a part of the purchase price therefor or
         GST's or such  Restricted  Subsidiary's  obligations  under such lease;
         PROVIDED  that such  Liens do not  extend to or cover any  property  or
         assets of GST or any  Restricted  Subsidiary  other than the inventory,
         property or equipment acquired;

                  (vi) Liens on assets or property of, or the Capital  Stock of,
         a Development Company securing  Indebtedness  Incurred under clause (i)
         of the second  paragraph of Section 4.03 to finance at least 50% of the
         total financing for the development and construction of the alternative
         access networks owned by such Development Company;  PROVIDED such Liens
         do not extend to or cover any other property or assets of GST or any of
         its Restricted Subsidiaries; or

                  (vii) Permitted Liens.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or properties  of any character  other than Liens granted in favor of the
Trustee or the Holders of the Securities.

                  SECTION 4.10. LIMITATION ON SALE-LEASEBACK  TRANSACTIONS.  GST
will not,  and will not  permit any  Restricted  Subsidiary  to,  enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter  acquired,  whereby GST or a Restricted  Subsidiary  sells or
transfers such assets or properties and then or thereafter leases such assets or
properties  or any part thereof or any other assets or  properties  which GST or
such Restricted Subsidiary, as the case may be, intends to use for substantially
the same purpose or purposes as the assets or properties sold or transferred.

                  The foregoing restriction does not apply to any sale-leaseback
transaction if

                                       48

<PAGE>

                  (i) the lease is for a period,  including  renewal rights,  of
         not in excess of three years;

                  (ii) the lease  secures or relates  to  industrial  revenue or
         pollution control bonds;

                  (iii) the  transaction  is solely  between  GST and any Wholly
         Owned  Restricted  Subsidiary or solely between Wholly Owned Restricted
         Subsidiaries; or

                  (iv) GST or such Restricted Subsidiary, within 12 months after
         the sale or transfer of any assets or properties is completed,  applies
         an amount  not less than the net  proceeds  received  from such sale in
         accordance  with  clause (A) or (B) of the first  paragraph  of Section
         4.12.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries to, enter into any sale-leaseback transaction.

                  SECTION  4.11.  LIMITATION ON  INVESTMENTS.  GST will not, and
will not permit any  Restricted  Subsidiary  to, (i) make any  Investment in any
Person (including an Unrestricted Subsidiary) that during its most recent fiscal
year derived or in its current fiscal year is expected by the Board of Directors
of GST to derive  more than  $250,000 in  revenues  from,  or in its most recent
fiscal  year spent or in its  current  fiscal  year is  expected by the Board of
Directors  of GST to spend  more than  $250,000  on,  operations  or  activities
located outside the continental United States (other than in the State of Hawaii
or  between  the  continental  United  States  and  the  State  of  Hawaii)  (an
"INTERNATIONAL BUSINESS") or (ii) acquire or own (directly or indirectly), other
than through an Unrestricted  Subsidiary,  any entity, business or asset that is
primarily located outside the continental United States (other than in the State
of Hawaii) or any right with respect to any of the foregoing (an  "INTERNATIONAL
ASSET").

                  Notwithstanding  the  foregoing,  and subject to Section 4.04,
GST and its Restricted  Subsidiaries  may make an Investment in an  Unrestricted
Subsidiary  which  owns,  intends to acquire  or has rights  with  respect to an
International Business or International Asset provided that the aggregate amount
of such  Investments  does not exceed (i) $25  million  plus,  (A) in any fiscal
year, an amount not to exceed 10% of GST's Consolidated EBITDA (if positive) for
the  immediately  preceding  fiscal year and (B) an amount not to exceed the Net
Cash Proceeds  received by GST after the Closing Date from the issuance and sale
permitted by this Indenture of its Capital Stock (other than  Redeemable  Stock)
to a  Person  who is not a  Subsidiary  of GST,  less  (ii)  the  amount  of any
Investments  made  pursuant  to  the  first  paragraph,  or  the  amount  of any
Restricted  Payment made  pursuant to clause  (iii),  (iv) or (vi) of the second
paragraph,  of  Section  4.04;  PROVIDED  that  the  International  Business  or
International  Assets are  related,  ancillary or  complementary  to the primary
business of GST and its Restricted Subsidiaries on the date of such Investment.

                  SECTION  4.12.  LIMITATION  ON ASSET SALES.  GST will not, and
will not permit any Restricted  Subsidiary to, consummate any Asset Sale, unless
(i) the consideration  received by GST or such Restricted Subsidiary is at least
equal to the fair market value of the assets sold

                                       49

<PAGE>

or disposed of and (ii) at least 85% of the  consideration  received consists of
cash or Temporary Cash Investments;  PROVIDED,  HOWEVER,  that clause (ii) shall
not apply to long-term assignments of capacity in a network. In the event and to
the  extent  that  the  Net  Cash  Proceeds  received  by GST or its  Restricted
Subsidiaries from one or more Asset Sales occurring on or after the Closing Date
in any period of 12 consecutive  months exceed 10% of Adjusted  Consolidated Net
Tangible Assets  (determined as of the date closest to the  commencement of such
12-month  period  for  which  a  consolidated  balance  sheet  of  GST  and  its
Subsidiaries  has been  prepared),  then GST shall or shall  cause the  relevant
Restricted  Subsidiary  to (i) within 12 months after the date Net Cash Proceeds
so received exceed 10% of Adjusted Consolidated Net Tangible Assets (A) apply an
amount   equal  to  such  excess  Net  Cash   Proceeds  to   permanently   repay
unsubordinated  Indebtedness of GST or GST USA or Indebtedness of any Restricted
Subsidiary  (other than GST USA),  in each case owing to a Person other than GST
or any of its  Restricted  Subsidiaries  or (B) invest an equal  amount,  or the
amount  not so  applied  pursuant  to  clause  (A) (or enter  into a  definitive
agreement  committing  to so  invest  within  12  months  after the date of such
agreement),  in  property  or  assets  of a nature or type or that are used in a
business (or in a company  having  property  and assets of a nature or type,  or
engaged in a business)  similar or related to the nature or type of the property
and assets of, or the business of, GST and its Restricted  Subsidiaries existing
on the date of such  investment  (as  determined  in good  faith by the Board of
Directors of GST,  whose  determination  shall be conclusive  and evidenced by a
Board  Resolution)  and (ii) apply (no later than the end of the 12-month period
referred  to in clause  (i)) such  excess Net Cash  Proceeds  (to the extent not
applied  pursuant to clause (i)) as provided in the following  paragraph of this
Section 4.12. The amount of such excess Net Cash Proceeds required to be applied
(or to be committed to be applied)  during such 12-month  period as set forth in
clause (i) of the  preceding  sentence and not applied as so required by the end
of such period shall constitute "Excess Proceeds."

                  If, as of the first day of any calendar  month,  the aggregate
amount  of Excess  Proceeds  not  theretofore  subject  to an Offer to  Purchase
pursuant  to this  Section  4.12 totals at least $5.0  million,  the Issuer must
commence,  not  later  than  the  fifteenth  Business  Day of  such  month,  and
consummate  an  Offer  to  Purchase  from the  Holders  on a pro  rata  basis an
aggregate  principal  amount of Securities  equal to the Excess Proceeds on such
date,  at a  purchase  price  equal  to  101%  of the  principal  amount  of the
Securities, plus, in each case, accrued interest to the Payment Date.

                  The Company will not, and will not permit any  Subsidiary  to,
consummate any Asset Sale except as permitted under the Pledge Agreement.

                  SECTION 4.13.  IMPAIRMENT  OF SECURITY  INTEREST OR ABILITY TO
ASSUME THE SECURITIES.  Except as specifically provided in the Pledge Agreement,
none of GST, GST USA nor the Company shall, nor shall they permit any Subsidiary
to, take or knowingly  omit to take any action which (i) might or would have the
result of materially impairing the security interest with respect to the Pledged
Securities,  any Acquired Equipment,  the Initial Note or Intercompany Notes for
the benefit of the Trustee and the Holders of the Securities,  (ii) grant to any
Person  other than the Trustee or the Holders of the  Securities,  any  interest
whatsoever in the Pledged Securities,  other amounts in the Pledge Account,  any
Acquired Equipment, the

                                       50

<PAGE>
Initial Note or any  Intercompany  Note or (iii) would prevent,  or restrict GST
USA from assuming,  or GST from guaranteeing,  the Securities on May 13, 2000 or
earlier if permitted by the 1995 Indentures.

                  SECTION  4.14.  REPURCHASE  OF  SECURITIES  UPON A  CHANGE  OF
CONTROL. The Issuer must commence,  within 30 days of the occurrence of a Change
of  Control,  and  consummate  an  Offer to  Purchase  for all  Securities  then
outstanding,  at a purchase price equal to 101% of the principal amount thereof,
plus accrued interest to the Payment Date. Prior to the mailing of the notice to
Holders  commencing  such  Offer to  Purchase,  but in any event  within 30 days
following any Change of Control,  the Issuer  covenants to (i) repay in full all
indebtedness  of the Issuer that would prohibit the repurchase of the Securities
pursuant to such Offer to Purchase or (ii) obtain any requisite  consents  under
instruments  governing  any  such  indebtedness  of the  Issuer  to  permit  the
repurchase of the Securities. The Issuer shall first comply with the covenant in
the preceding  sentence before it shall repurchase  Securities  pursuant to this
Section 4.14.

                  SECTION 4.15. EXISTENCE.  Subject to compliance with the terms
of Articles Four and Five of this Indenture, GST will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
the existence of each of its  Restricted  Subsidiaries  in  accordance  with the
respective  organizational  documents  of GST and each such  Subsidiary  and the
rights (whether pursuant to charter, partnership certificate, agreement, statute
or otherwise), material licenses and franchises of GST and each such Subsidiary;
PROVIDED  that GST shall not be required to preserve any such right,  license or
franchise,  or the  existence of any  Restricted  Subsidiary  (other than of the
Issuer),  if the maintenance or preservation  thereof is no longer  desirable in
the conduct of the business of GST and its  Restricted  Subsidiaries  taken as a
whole.

                  SECTION 4.16.  PAYMENT OF TAXES AND OTHER CLAIMS. GST will pay
or discharge and shall cause each of its  Subsidiaries  to pay or discharge,  or
cause to be paid or discharged,  before the same shall become delinquent (i) all
material taxes,  assessments and governmental charges levied or imposed upon (a)
GST or any such  Subsidiary,  (b) the income or  profits of any such  Subsidiary
which is a  corporation  or (c) the property of GST or any such  Subsidiary  and
(ii) all material  lawful  claims for labor,  materials  and supplies  that,  if
unpaid,  might  by law  become  a lien  upon  the  property  of GST or any  such
Subsidiary;  PROVIDED  that GST shall not be  required to pay or  discharge,  or
cause to be paid or discharged,  any such tax,  assessment,  charge or claim the
amount,  applicability  or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.

                  SECTION 4.17.  MAINTENANCE OF PROPERTIES  AND  INSURANCE.  GST
will cause all  properties  used or useful in the conduct of its business or the
business of any of its  Restricted  Subsidiaries,  to be maintained  and kept in
reasonable  condition,  repair and working order and supplied with all necessary
equipment  and  will  cause  to  be  made  all  necessary   repairs,   renewals,
replacements,  betterments and  improvements  thereof,  all as in the reasonable
business  judgment of GST may be necessary  so that the  business  carried on in
connection therewith may be properly and advantageously  conducted at all times;
PROVIDED  that  nothing  in this  Section  4.17  shall  prevent  GST or any such
Subsidiary from discontinuing the use, operation or maintenance

                                       51

<PAGE>

of any of such properties or disposing of any of them, if such discontinuance or
disposal  is, in the  reasonable  business  judgment  of GST,  desirable  in the
conduct of the business of GST or such Subsidiary.

                  GST will provide or cause to be  provided,  for itself and its
Restricted  Subsidiaries,   insurance  (including  appropriate   self-insurance)
against loss or damage of the kinds customarily  insured against by corporations
similarly  situated and owning like properties,  including,  but not limited to,
products  liability  insurance and public  liability  insurance,  with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality  thereof,  in such amounts,  with such  deductibles  and by such
methods  as  shall be  customary  for  corporations  similarly  situated  in the
industry in which GST or such Restricted Subsidiary, as the case may be, is then
conducting business.

                  SECTION 4.18. NOTICE OF DEFAULTS. In the event that GST or the
Issuer  becomes  aware of any  Default or Event of  Default,  GST or the Issuer,
promptly after it becomes aware thereof, will give written notice thereof to the
Trustee.

                  SECTION 4.19. COMPLIANCE  CERTIFICATES.  (a) GST shall deliver
to the Trustee,  within 90 days after the end of GST's fiscal year, an Officers'
Certificate  stating  whether or not the signers know of any Default or Event of
Default that occurred during such fiscal year. Such certificates shall contain a
certification from the principal executive officer,  principal financial officer
or principal  accounting  officer of GST that a review has been conducted of the
activities of GST and the Restricted  Subsidiaries  and GST's and the Restricted
Subsidiaries'  performance  under this Indenture and that, to the best knowledge
of such officer,  GST has complied with all conditions and covenants  under this
Indenture.  For  purposes  of  this  Section  4.19,  such  compliance  shall  be
determined  without  regard  to any  period  of grace or  requirement  of notice
provided  under this  Indenture.  If any such officer knows of such a Default or
Event of Default,  the  certificate  shall describe any such Default or Event of
Default and its status.

                  (b) GST shall deliver to the Trustee, within 90 days after the
end of its fiscal  year, a  certificate  signed by GST's  independent  certified
public  accountants  stating (i) that their  audit  examination  has  included a
review of the  terms of this  Indenture  and the  Securities  as they  relate to
accounting  matters,  (ii)  that  they  have  read  the  most  recent  Officers'
Certificate  delivered to the Trustee  pursuant to paragraph (a) of this Section
4.19 and (iii) whether,  in connection  with their audit  examination,  anything
came to their  attention  that caused them to believe that GST or the Issuer was
not in compliance with any of the terms, covenants,  provisions or conditions of
Article  Four and Section 5.01 of this  Indenture as they pertain to  accounting
matters  and, if any  Default or Event of Default  has come to their  attention,
specifying  the nature  and  period of  existence  thereof;  PROVIDED  that such
independent  certified public accountants shall not be liable in respect of such
statement  by reason of any failure to obtain  knowledge  of any such Default or
Event  of  Default  that  would  not be  disclosed  in the  course  of an  audit
examination  conducted in accordance with generally  accepted auditing standards
in effect at the date of such examination.

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<PAGE>

                  (c) Within 90 days of the end of each of GST's  fiscal  years,
GST shall  deliver to the Trustee a list of all  Significant  Subsidiaries.  The
Trustee  shall have no duty with  respect to any such list  except to keep it on
file and make it available for inspection by the Holders upon reasonable  notice
to the Trustee and during normal business hours.

                  SECTION 4.20.  COMMISSION  REPORTS AND REPORTS TO HOLDERS.  At
all times from and after the earlier of (i) the date of the  commencement  of an
Exchange Offer or the  effectiveness  of the Shelf  Registration  Statement (the
"REGISTRATION")  and (ii) six months  after the Closing  Date,  in either  case,
whether or not the Company is then required to file reports with the Commission,
the  Company  shall  file  with  the  Commission  all  such  reports  and  other
information  as it would be  required  to file with the  Commission  by Sections
13(a) or 15(d) under the Exchange Act if it were subject  thereto.  In addition,
at all times prior to the earlier of the date of the Registration and six months
after the Closing Date,  the Company shall,  at cost,  deliver to each Holder of
the Securities  quarterly and annual reports  substantially  equivalent to those
which would be required by the Exchange Act. In addition,  at all times prior to
the Registration, upon the request of any Holder or any prospective purchaser of
the Securities  designated by a Holder,  the Company shall supply to such Holder
or such prospective purchaser the information required under Rule 144A under the
Securities  Act.  Whether  or not GST is  required  to  file  reports  with  the
Commission,  if  any  Securities  are  outstanding,  GST  shall  file  with  the
Commission  all such  reports and other  information  as it would be required to
file with the  Commission by Sections 13(a) or 15(d) under the Exchange Act. The
Company and GST shall supply the Trustee and each Holder of  Securities or shall
supply to the Trustee for forwarding to each Holder, without cost to such Holder
or the Trustee, copies of such reports or other information.

                  SECTION 4.21. WAIVER OF STAY, EXTENSION OR USURY LAWS. Each of
the Issuer and GST  covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage  of, any stay or extension law or any usury law or
other law that would  prohibit or forgive the Issuer or GST, as the case may be,
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities as contemplated  herein,  wherever enacted, now or at any time
hereafter in force,  or that may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) each of the Issuer and
GST  hereby  expressly  waives  all  benefit  or  advantage  of any such law and
covenants  that it will not hinder,  delay or impede the  execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.

                  SECTION  4.22.  ADDITIONAL  AMOUNTS.  Any payments made by GST
under or respect to the  Securities  pursuant to the Security  Guarantee will be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost,  assessment or other governmental
charge (including  penalties,  interest and other  liabilities  related thereto)
imposed or levied by or on behalf of the Government of Canada or of any province
or territory  thereof or by any  authority or agency  therein or thereof  having
power to tax (hereinafter "TAXES"), unless GST is required to withhold or deduct
Taxes  by law or by the  interpretation  or  administration  thereof.  If GST is
required to withhold or deduct any

                                       53

<PAGE>

amount for or on account of Taxes from any payment made under or with respect to
the Securities,  GST will pay such additional amounts ("ADDITIONAL  AMOUNTS") as
may be necessary,  so that the net amount  received by each Holder of Securities
(including  Additional  Amounts) after such withholding or deduction will not be
less than the amount such Holder would have  received if such Taxes had not been
withheld or deducted;  PROVIDED,  HOWEVER,  that no  Additional  Amounts will be
payable with respect to a payment  made to a Holder (an  "EXCLUDED  HOLDER") (i)
with which GST does not deal at arm's  length  (within the meaning of the Income
Tax Act (Canada)) at the time of making such  payment,  or (ii) which is subject
to such Taxes by reason of its being  connected  with Canada or any  province or
territory  thereof  otherwise than solely by reason of the Holder's  activity in
connection with purchasing the Securities,  by the mere holding of Securities or
by reason of the receipt of payments thereunder.  GST will, upon written request
of any Holder (other than an Excluded  Holder),  reimburse such Holder,  for the
amount of (i) any Taxes so levied or imposed and paid by such Holder as a result
of payments made under or with respect to the  Securities  and (ii) any Taxes so
levied or imposed with respect to any  reimbursement  under the foregoing clause
(i), but  excluding  any such Taxes on such  Holder's net income so that the net
amount  received by such Holder after such  reimbursement  will not be less than
the net amount the Holder would have received if Taxes on such reimbursement had
not been imposed.

                  At least 30 days prior to each date on which any payment under
or with respect to the  Securities is due and payable,  if GST will be obligated
to pay Additional Amounts with respect to such payment,  GST will deliver to the
Trustee an Officers'  Certificate  stating the fact that such Additional Amounts
will be  payable  and the  amounts  so  payable  and will set forth  such  other
information  necessary to enable the Trustee to pay such  Additional  Amounts to
Holders on the payment date.  Whenever in this Indenture there is mentioned,  in
any context,  the payment of principal (or premium,  if any),  Redemption Price,
interest or any other amount payable under or with respect to any Security, such
mention shall be deemed to include mention of the payment of Additional  Amounts
to the extent that,  in such context,  Additional  Amounts are, were or would be
payable in respect thereof.

                  SECTION 4.23.  ASSUMPTION OF SECURITIES BY GST USA. (a) On May
13, 2000, or earlier if permitted  under the terms of the 1995  Indentures,  GST
USA and GST will execute and deliver a supplemental  indenture to this Indenture
in the form attached  hereto as Exhibit E and GST USA will execute and deliver a
Collateral Pledge and Security Agreement substantially in the form of the Pledge
Agreement in favor of the Trustee granting to the Trustee for the benefit of the
Holders of the  Securities a first  priority  security  interest in all Acquired
Equipment that secured the Intercompany  Notes or was held by the Company on the
Assumption Date.

                  (b) On the  Assumption  Date,  GST  USA  will  deliver  to the
Trustee an Opinion of Counsel to the effect  that,  after  giving  effect to the
assumption of the Securities by GST USA pursuant to the  supplemental  indenture
delivered pursuant to clause (a) above:

                  (i) each of the Securities  and this  Indenture  constitutes a
         valid and binding  obligation of GST USA in  accordance  with its terms
         and the  Securities  are  entitled to the  benefits of this  Indenture,
         subject to bankruptcy, insolvency, fraudulent transfer,

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<PAGE>

         reorganization,  moratorium  and similar laws of general  applicability
         relating to or  affecting  creditors'  rights and to general  equitable
         principles;

                  (ii)  each of this  Indenture  and  the  indenture  supplement
         delivered  under  clause  (a) above  constitutes  a valid  and  binding
         obligation of GST in accordance with its terms,  subject to bankruptcy,
         insolvency, fraudulent transfer, reorganization, moratorium and similar
         laws of  general  applicability  relating  to or  affecting  creditors'
         rights and to general equitable principles; and

                  (iii) GST USA has  granted to the  Trustee  for the benefit of
         the holders of the  Securities  a valid and  perfected  first  priority
         security   interest  in  all  Acquired   Equipment   that  secured  the
         Intercompany Notes or was held by the Company on the Assumption Date to
         secure  the  payment of  principal  of and  interest  on, and any other
         amounts owing in respect of, the Securities.

                  (c) On the  Assumption  Date,  upon delivery of the Opinion of
Counsel  pursuant to clause (b) above,  GST USA will  liquidate  the Company and
will cause the Company to distribute all of its assets (if any) to GST USA.

                                  ARTICLE FIVE
                              SUCCESSOR CORPORATION

                  SECTION  5.01.  CONSOLIDATION,  MERGER  AND  SALE  OF  ASSETS.
Neither GST nor GST USA shall  consolidate  with,  merge with or into,  or sell,
convey,  transfer, lease or otherwise dispose of all or substantially all of its
property  and  assets  (as an  entirety  or  substantially  an  entirety  in one
transaction  or a series of related  transactions)  to, any Person (other than a
consolidation or merger with or into a Wholly Owned Restricted Subsidiary with a
positive  net  worth;  PROVIDED  that,  in  connection  with any such  merger or
consolidation,  no  consideration  (other  than  Common  Stock in the  surviving
Person,  GST or GST USA) shall be issued or distributed to the  stockholders  of
GST or GST  USA) or  permit  any  Person  to  merge  with or into GST or GST USA
unless:

                  (i) GST or GST USA  shall  be the  continuing  Person,  or the
         Person (if other than GST or GST USA) formed by such  consolidation  or
         into  which GST or GST USA is merged or that  acquired  or leased  such
         property and assets of GST or GST USA shall be a corporation  organized
         and validly  existing under the laws of the United States of America or
         any jurisdiction  thereof and shall expressly assume, by a supplemental
         indenture,   executed  and  delivered  to  the  Trustee,   all  of  the
         obligations  of GST or GST  USA,  as the  case  may  be,  on all of the
         Securities, the Intercompany Notes and the Security Guarantee and under
         this Indenture;

                  (ii) immediately after giving effect to such  transaction,  no
         Default or Event of Default shall have occurred and be continuing;

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<PAGE>

                  (iii) immediately after giving effect to such transaction on a
         PRO FORMA  basis,  GST, GST USA or any Person  becoming  the  successor
         obligor of the  Securities or the Security  Guarantee,  as the case may
         be,  shall have a  Consolidated  Net Worth equal to or greater than the
         Consolidated  Net  Worth  of GST or  GST  USA,  as  the  case  may  be,
         immediately prior to such transaction;

                  (iv) immediately  after giving effect to such transaction on a
         PRO  FORMA  basis  GST or GST USA,  as the case may be,  or any  Person
         becoming  the  successor  obligor  of the  Securities  or the  Security
         Guarantee,  as  the  case  may  be,  could  Incur  at  least  $1.00  of
         Indebtedness under the first paragraph of Section 4.03(a); and

                  (v)  GST or GST  USA,  as the  case  may be,  delivers  to the
         Trustee an Officers' Certificate (attaching the arithmetic computations
         to demonstrate  compliance  with clauses (iii) and (iv)) and Opinion of
         Counsel,  in each  case  stating  that  such  consolidation,  merger or
         transfer and such supplemental  indenture  complies with this provision
         and that all conditions  precedent provided for herein relating to such
         transaction have been complied with;  PROVIDED,  HOWEVER,  that clauses
         (iii) and (iv) above do not apply if, in the good  faith  determination
         of the Board of  Directors of GST or GST USA, as the case may be, whose
         determination  shall be evidenced by a Board Resolution,  the principal
         purpose  of  such   transaction  is  to  change  the   jurisdiction  of
         incorporation  of GST to a state in the United  States or of GST USA to
         another state of the United States;  and PROVIDED FURTHER that any such
         transaction  shall not have as one of its  purposes  the evasion of the
         foregoing limitations.

                  The  restrictions  and  conditions  described in the preceding
paragraph  shall also apply to the Company  except that  clauses  (iii) and (iv)
shall not apply to a merger or  consolidation  of GST USA and the Company or the
sale,  conveyance or other disposition of all or substantially all of the assets
of the Company to GST USA.

                  SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or
merger,  or any  sale,  conveyance,  transfer  or  other  disposition  of all or
substantially  all of the property and assets of the Company,  GST USA or GST in
accordance with Section 5.01 of this Indenture,  the successor  Person formed by
such  consolidation  or into which the  Company,  GST USA or GST is merged or to
which such sale, conveyance, transfer or other disposition is made shall succeed
to, and be  substituted  for,  and may  exercise  every  right and power of, the
Company,  GST USA or GST, as the case may be, under this Indenture with the same
effect as if such  successor  Person had been named as the  Company,  GST USA or
GST, as the case may be, herein;  PROVIDED that the Company,  GST USA or GST, as
the case may be, shall not be released from its obligations to pay the principal
of, premium, if any, or interest on the Securities in the case of a lease of all
or substantially all of its property and assets.

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                                   ARTICLE SIX
                              DEFAULT AND REMEDIES

                  SECTION 6.01.  EVENTS OF DEFAULT.  An "EVENT OF DEFAULT" shall
occur with respect to the Securities if:

                  (a) the Issuer  defaults  in the payment of  principal  of (or
         premium, if any, on) any Security when the same becomes due and payable
         at maturity, upon acceleration, redemption or otherwise;

                  (b) the Issuer  defaults  in the  payment of  interest  on any
         Security  when the  same  becomes  due and  payable,  and such  default
         continues for a period of 30 days;  PROVIDED that a failure to make any
         of the first six scheduled  interest  payments on the Securities on the
         applicable  Interest  Payment Date will  constitute an Event of Default
         with no grace or cure period;

                  (c) the Company, GST USA or GST defaults in the performance of
         or breaches any other covenant or agreement of the Company,  GST USA or
         GST in this Indenture or under the Securities,  the Security Guarantee,
         the Initial  Note or any  Intercompany  Note and such default or breach
         continues for a period of 30  consecutive  days after written notice by
         the Trustee or the Holders of 25% or more in aggregate principal amount
         of Securities;

                  (d)  there  occurs  with  respect  to any  issue or  issues of
         Indebtedness of GST or any Significant Subsidiary having an outstanding
         principal  amount of $5 million or more in the  aggregate  for all such
         issues of all such  Persons,  whether such  Indebtedness  now exists or
         shall hereafter be created, (I) an event of default that has caused the
         holder thereof to declare such Indebtedness to be due and payable prior
         to its Stated Maturity and such Indebtedness has not been discharged in
         full or such  acceleration has not been rescinded or annulled within 30
         days of such  acceleration  and/or (II) the failure to make a principal
         payment  at the final (but not any  interim)  fixed  maturity  and such
         defaulted  payment shall not have been made,  waived or extended within
         30 days of such payment default;

                  (e) any final judgment or order (not covered by insurance) for
         the payment of money in excess of $5 million in the  aggregate  for all
         such final  judgments or orders against all such Persons  (treating any
         deductibles,  self-insurance  or retention as not so covered)  shall be
         rendered  against  the  Company,   GST  USA,  GST  or  any  Significant
         Subsidiary and shall not be paid or discharged,  and there shall be any
         period of 30 consecutive  days following entry of the final judgment or
         order that causes the aggregate  amount for all such final judgments or
         orders  outstanding and not paid or discharged against all such Persons
         to exceed $5 million  during which a stay of  enforcement of such final
         judgment or order,  by reason of a pending  appeal or otherwise,  shall
         not be in effect;

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                  (f) a court  having  jurisdiction  in the  premises  enters  a
         decree or order for (A) relief in respect of the Company,  GST USA, GST
         or  any  Significant  Subsidiary  in  an  involuntary  case  under  any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in  effect,  (B)  appointment  of  a  receiver,  liquidator,  assignee,
         custodian,  trustee,  sequestrator or similar  official of the Company,
         GST USA, GST or any Significant Subsidiary (other than a liquidation of
         the  Company  into GST USA in  connection  with the  assumption  of the
         Securities) or for all or substantially  all of the property and assets
         of the Company,  GST USA, GST or any Significant  Subsidiary or (C) the
         winding up or liquidation  of the affairs of the Company,  GST USA, GST
         or any Significant  Subsidiary (other than a liquidation of the Company
         into GST USA in connection with the assumption of the Securities)  and,
         in each case,  such decree or order shall remain unstayed and in effect
         for a period of 30 consecutive days;

                  (g) the Company,  GST USA, GST or any  Significant  Subsidiary
         (A)  commences  a  voluntary  case  under  any  applicable  bankruptcy,
         insolvency or other similar law now or hereafter in effect, or consents
         to the entry of an order for  relief in an  involuntary  case under any
         such law, (B) consents to the appointment of or taking  possession by a
         receiver,  liquidator,  assignee,  custodian,  trustee, sequestrator or
         similar  official  of the  Company,  GST  USA,  GST or any  Significant
         Subsidiary  (other than a  liquidation  of the Company  into GST USA in
         connection  with  the  assumption  of the  Securities)  or  for  all or
         substantially  all of the property and assets of the Company,  GST USA,
         GST or any Significant Subsidiary or (C) effects any general assignment
         for the benefit of creditors;

                  (h) the  Trustee or the  Company  does not have at all times a
         first priority perfected  security interest in all Pledged  Securities,
         the Pledge  Account,  all  Acquired  Equipment,  the  Initial  Note and
         Intercompany  Notes or the  Company,  GST USA or GST asserts in writing
         that  the  security  arrangements  under  this  Indenture,  the  Pledge
         Account,  the Initial Note and the  Intercompany  Notes are not in full
         force and effect; or

                  (i) GST USA  shall  not have  become a direct  obligor  on the
         Securities  (other than  Securities  to be redeemed as described  under
         Section 3.02 for which the Company shall have  deposited the redemption
         price) and GST shall not have become a guarantor of the  Securities  by
         May 13, 2000.

                  SECTION 6.02. ACCELERATION. If an Event of Default (other than
an Event of Default  specified  in clause (f) or (g) of Section 6.01 that occurs
with  respect  to the  Company,  GST USA or GST or  clause  (h))  occurs  and is
continuing  under this Indenture,  the Trustee or the Holders of at least 25% in
aggregate principal amount of the outstanding  Securities,  by written notice to
the Issuer (and to the Trustee if such notice is given by the Holders), may, and
the Trustee at the request of such  Holders  shall,  declare the  principal  of,
premium,  if any, and accrued interest,  on the Securities to be immediately due
and payable.  Upon a declaration of acceleration,  such principal,  premium,  if
any, and accrued interest shall be immediately due and payable.  In the event of
a declaration  of  acceleration  because an Event of Default set forth in clause
(d) of  Section  6.01  has  occurred  and is  continuing,  such  declaration  of
acceleration shall

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be automatically  rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (d) shall be remedied or cured by GST or the
relevant  Significant  Subsidiary  or  waived  by the  holders  of the  relevant
Indebtedness  within 60 days after the declaration of acceleration  with respect
thereto.  If an Event of Default  specified in clause (f) or (g) of Section 6.01
occurs  with  respect  to the  Company,  GST USA or GST or an Event  of  Default
specified in clause (h) occurs,  the principal of, premium,  if any, and accrued
interest  on the  Securities  then  outstanding  shall IPSO FACTO  become and be
immediately  due and payable without any declaration or other act on the part of
the Trustee or any Holder.

                  SECTION 6.03.  OTHER  REMEDIES.  If an Event of Default occurs
and is  continuing,  the Trustee may, and at the direction of the Holders of not
less than a  majority  of the  outstanding  principal  amount of the  Securities
shall,  pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of,  premium,  if any, or interest on the Securities or
to enforce the performance of any provision of the Securities or this Indenture.

                  The  Trustee  may  maintain a  proceeding  even if it does not
possess any of the Securities or does not produce any of them in the proceeding.

                  SECTION  6.04.  WAIVER OF PAST  DEFAULTS.  Subject to Sections
6.02,  6.07 and 9.02, the Holders of at least a majority in principal  amount of
the outstanding Securities,  by written notice to the Issuer and to the Trustee,
may waive all past  Defaults  and  Events of  Default  and  rescind  and annul a
declaration  of  acceleration  (except a Default in the payment of principal of,
premium,  if any, or interest on any  Security as specified in clause (a) or (b)
of Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot  be  modified  or  amended  without  the  consent  of the  holder of each
outstanding Security affected) if (i) all existing Events of Default, other than
the nonpayment of principal of,  premium,  if any, or interest on the Securities
that have become due solely by such declaration of acceleration, have been cured
or waived and (ii) the rescission would not conflict with any judgment or decree
of a court of competent  jurisdiction.  Upon any such waiver, such Default shall
cease to exist,  and any Event of Default  arising  therefrom shall be deemed to
have been cured,  for every purpose of this Indenture;  but no such waiver shall
extend to any  subsequent  or other  Default  or Event of  Default or impair any
right consequent thereto.

                  SECTION 6.05.  CONTROL BY MAJORITY.  The Holders of at least a
majority in aggregate principal amount of the outstanding  Securities may direct
the time, method and place of conducting any proceeding for any remedy available
to the  Trustee  or  exercising  any trust or power  conferred  on the  Trustee.
However,  the Trustee may refuse to follow any direction that conflicts with law
or this Indenture,  that may involve the Trustee in personal liability,  or that
the Trustee  determines in good faith may be unduly prejudicial to the rights of
Holders of Securities  not joining in the giving of such  direction and may take
any  other  action  it  deems  proper  that is not  inconsistent  with  any such
direction received from Holders of Securities pursuant to this Section 6.05.

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<PAGE>
                  SECTION 6.06. LIMITATION ON SUITS. A Holder may not pursue any
remedy with respect to this Indenture or the Securities unless:

                  (i)  the  Holder  gives  the  Trustee   written  notice  of  a
         continuing Event of Default;

                  (ii) the Holders of at least 25% in aggregate principal amount
         of  outstanding  Securities  make a written  request to the  Trustee to
         pursue the remedy;

                  (iii) such Holder or Holders offer and, if requested  provide,
         the Trustee  indemnity  satisfactory  to the Trustee against any costs,
         liabilities or expenses  which may be incurred in compliance  with such
         request;

                  (iv) the Trustee  does not comply  with the request  within 60
         days after  receipt of the written  request and the offer of indemnity;
         and

                  (v) during  such 60-day  period,  the Holders of a majority in
         aggregate  principal  amount of the outstanding  Securities do not give
         the Trustee a direction that is inconsistent with the request.

                  For  purposes  of  Section  6.05 of this  Indenture  and  this
Section  6.06,  the Trustee  shall comply with TIA Section  316(a) in making any
determination of whether the Holders of the required aggregate  principal amount
of  outstanding  Securities  have  concurred  in any request or direction of the
Trustee to pursue any  remedy  available  to the  Trustee  or the  Holders  with
respect to this Indenture or the Securities or otherwise under the law.

                  A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.

                  SECTION   6.07.   RIGHTS  OF  HOLDERS   TO  RECEIVE   PAYMENT.
Notwithstanding  any other provision of this Indenture,  the right of any Holder
of a Security  to receive  payment of the  principal  of,  premium,  if any,  or
interest  on such  Security,  or to bring suit for the  enforcement  of any such
payment,  on or after  the due date  expressed  in such  Security,  shall not be
impaired or affected without the consent of such Holder.

                  SECTION  6.08.  COLLECTION  SUIT BY  TRUSTEE.  If an  Event of
Default in payment of  principal,  premium or interest  specified in clause (a),
(b) or (c) of Section  6.01  occurs and is  continuing,  the Trustee may recover
judgment in its own name and as trustee of an express  trust  against the Issuer
or any  other  obligor  of the  Securities  for the whole  amount of  principal,
premium,  if any, and accrued interest remaining unpaid,  together with interest
on overdue principal,  premium,  if any, and, to the extent that payment of such
interest is lawful,  interest on overdue installments of interest,  in each case
at the rate  specified in the  Securities,  and such further  amount as shall be
sufficient  to cover  the  costs  and  expenses  of  collection,  including  the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel.

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<PAGE>

                  SECTION  6.09.  TRUSTEE MAY FILE PROOFS OF CLAIM.  The Trustee
may file such proofs of claim and other  papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee,  its agents and counsel,  and any other  amounts due the Trustee  under
Section 7.07) and the Holders  allowed in any judicial  proceedings  relative to
the  Issuer (or any other  obligor  of the  Securities),  its  creditors  or its
property and shall be entitled and  empowered to collect and receive any monies,
securities or other property  payable or deliverable upon conversion or exchange
of the  Securities or upon any such claims and to distribute  the same,  and any
custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator  or  other
similar  official in any such judicial  proceeding is hereby  authorized by each
Holder to make such  payments to the Trustee  and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders,  to pay to
the  Trustee  any amount due to it for the  reasonable  compensation,  expenses,
disbursements and advances of the Trustee,  its agent and counsel, and any other
amounts due the Trustee under Section 7.07.  Nothing herein  contained  shall be
deemed to empower the Trustee to  authorize or consent to, or accept or adopt on
behalf of any Holder,  any plan of  reorganization,  arrangement,  adjustment or
composition  affecting the Securities or the rights of any Holder thereof, or to
authorize  the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

                  SECTION 6.10.  PRIORITIES.  If the Trustee  collects any money
pursuant to this Article Six, it shall pay out the money in the following order:

                  FIRST: to the Trustee for all amounts due under Section 7.07;

                  SECOND:  to the Holders  for  amounts  then due and unpaid for
         principal  of,  premium,  if any,  and  interest on the  Securities  in
         respect  of  which or for the  benefit  of which  such  money  has been
         collected,  ratably,  without  preference  or  priority  of  any  kind,
         according  to the  amounts  due  and  payable  on such  Securities  for
         principal, premium, if any, and interest, respectively; and

                  THIRD:  to the Issuer or any other obligors of the Securities,
         as their interests may appear, or as a court of competent  jurisdiction
         may direct.

                  The Trustee,  upon prior written notice to the Issuer, may fix
a record  date and  payment  date for any  payment to Holders  pursuant  to this
Section 6.10.

                  SECTION  6.11.  UNDERTAKING  FOR  COSTS.  In any  suit for the
enforcement  of any right or remedy under this  Indenture or in any suit against
the  Trustee  for any  action  taken or omitted  by it as  Trustee,  a court may
require any party  litigant in such suit to file an undertaking to pay the costs
of the suit, and the court may assess  reasonable  costs,  including  reasonable
attorneys' fees, against any party litigant in the suit having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section  6.11  does  not  apply  to a suit by the  Trustee,  a suit by a  Holder
pursuant to Section  6.07 of this  Indenture,  or a suit by Holders of more than
10% in principal amount of the outstanding Securities.

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                  SECTION  6.12.  RESTORATION  OF RIGHTS  AND  REMEDIES.  If the
Trustee or any Holder has  instituted  any  proceeding  to enforce  any right or
remedy  under  this  Indenture  and such  proceeding  has been  discontinued  or
abandoned for any reason, or has been determined  adversely to the Trustee or to
such Holder,  then, and in every such case, subject to any determination in such
proceeding,  the Issuer, the Trustee and the Holders shall be restored severally
and respectively to their former  positions  hereunder and thereafter all rights
and remedies of the Issuer,  Trustee and the Holders shall continue as though no
such proceeding had been instituted.

                  SECTION  6.13.  RIGHTS  AND  REMEDIES  CUMULATIVE.  Except  as
otherwise  provided  with respect to the  replacement  or payment of  mutilated,
destroyed,  lost or  wrongfully  taken  Securities  in Section 2.09, no right or
remedy  herein  conferred  upon or  reserved to the Trustee or to the Holders is
intended  to be  exclusive  of any other  right or remedy,  and every  right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or  otherwise.  The  assertion or employment of any right or remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

                  SECTION  6.14.  DELAY  OR  OMISSION  NOT  WAIVER.  No delay or
omission  of the  Trustee  or of any  Holder  to  exercise  any  right or remedy
accruing  upon any Event of  Default  shall  impair  any such right or remedy or
constitute  a waiver of any such Event of Default  or an  acquiescence  therein.
Every right and remedy  given by this Article Six or by law to the Trustee or to
the Holders may be  exercised  from time to time,  and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

                                  ARTICLE SEVEN

                                     TRUSTEE

                  SECTION 7.01. GENERAL.  The duties and responsibilities of the
Trustee shall be as provided by the TIA and as set forth herein. Notwithstanding
the  foregoing,  no provision  of this  Indenture  shall  require the Trustee to
expend or risk its own funds or otherwise  incur any financial  liability in the
performance  of any of its duties  hereunder,  or in the  exercise of any of its
rights or  powers,  if it shall  have  reasonable  grounds  for  believing  that
repayment of such funds or adequate  indemnity against such risk or liability is
not reasonably assured to it. Whether or not herein expressly so provided, every
provision of this  Indenture  relating to the conduct or affecting the liability
of or affording  protection to the Trustee shall be subject to the provisions of
this Article Seven.

                  SECTION  7.02.  CERTAIN  RIGHTS  OF  TRUSTEE.  Subject  to TIA
Sections 315(a) through (d):

                  (i) the Trustee may rely and shall be  protected  in acting or
         refraining  from acting upon any  resolution,  certificate,  statement,
         instrument,  opinion,  report,  notice,  request,  direction,  consent,
         order, bond, debenture, note, other evidence of indebtedness

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<PAGE>

         or other  paper or  document  believed  by it to be genuine and to have
         been signed or  presented  by the proper  person.  The Trustee need not
         investigate  any fact or matter  stated in the document and may in good
         faith  conclusively  rely as to the  truth  of the  statements  and the
         correctness of the opinions therein;

                  (ii) before the Trustee acts or refrains  from acting,  it may
         require an Officers'  Certificate or an Opinion of Counsel. The Trustee
         shall  not be liable  for any  action it takes or omits to take in good
         faith in reliance on such  certificate,  opinion and/or an accountants'
         certificate;

                  (iii) the Trustee may act through its attorneys and agents and
         shall  not be  responsible  for the  misconduct  or  negligence  of any
         attorney or agent appointed with due care;

                  (iv) the Trustee  shall be under no obligation to exercise any
         of the rights or powers  vested in it by this  Indenture at the request
         or  direction of any of the  Holders,  unless such  Holders  shall have
         offered to the Trustee security or indemnity reasonably satisfactory to
         it against the costs,  expenses and liabilities  that might be incurred
         by it in compliance with such request or direction;

                  (v) the Trustee shall not be liable for any action it takes or
         omits to take in good faith that it believes to be authorized or within
         its  rights or  powers  or for any  action it takes or omits to take in
         accordance with the direction of the Holders of a majority in principal
         amount of the outstanding  Securities  relating to the time, method and
         place of  conducting  any  proceeding  for any remedy  available to the
         Trustee,  or exercising any trust or power  conferred upon the Trustee,
         under this  Indenture;  PROVIDED  that the  Trustee's  conduct does not
         constitute negligence or bad faith;

                  (vi)  whenever in the  administration  of this  Indenture  the
         Trustee shall deem it desirable  that a matter be proved or established
         prior to  taking,  suffering  or  omitting  any action  hereunder,  the
         Trustee (unless other evidence be herein specifically  prescribed) may,
         in the  absence  of bad  faith  on its  part,  rely  upon an  Officers'
         Certificate;

                  (vii) the Trustee shall not be bound to make any investigation
         into the  facts  or  matters  stated  in any  resolution,  certificate,
         statement,  instrument,  opinion,  report, notice, request,  direction,
         consent,  order, bond, debenture,  note, other evidence of indebtedness
         or other paper or document,  but the Trustee,  in its  discretion,  may
         make such further inquiry or  investigation  into such facts or matters
         as it may see fit,  and, if the Trustee  shall  determine  to make such
         further inquiry or  investigation,  it shall be entitled to examine the
         books,  records and premises of the Company,  GST USA or GST personally
         or by agent or attorney; and

                  (viii) any request or direction of the Company, GST USA or GST
         mentioned herein shall be sufficiently evidenced by a Company Order and
         any resolution of the Board of Directors may be sufficiently  evidenced
         by a Board Resolution.

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                  SECTION 7.03.  INDIVIDUAL RIGHTS OF TRUSTEE.  The Trustee,  in
its  individual  or any other  capacity,  may  become  the owner or  pledgee  of
Securities  and may  otherwise  deal  with the  Company,  GST USA,  GST or their
Affiliates  with the same rights it would have if it were not the  Trustee.  Any
Agent may do the same with like rights.  However,  the Trustee is subject to TIA
Sections 310(b) and 311.

                  SECTION 7.04. TRUSTEE'S  DISCLAIMER.  The Trustee (i) makes no
representation  as to  the  validity  or  adequacy  of  this  Indenture  or  the
Securities,  (ii) shall not be accountable  for the Company's use or application
of the proceeds from the Securities  and (iii) shall not be responsible  for any
statement in the Securities other than its certificate of authentication.

                  SECTION 7.05.  NOTICE OF DEFAULT.  If any Default or any Event
of Default  occurs and is continuing  and if such Default or Event of Default is
known to an  officer  assigned  to  administer  corporate  trust  matters of the
Trustee,  the Trustee  shall mail to each Holder in the manner and to the extent
provided in TIA Section  313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
PROVIDED,  HOWEVER,  that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Security, the Trustee shall be
protected in  withholding  such notice if and so long as the board of directors,
the executive  committee or a trust  committee of directors  and/or  Responsible
Officers of the Trustee in good faith  determine  that the  withholding  of such
notice is in the interest of the Holders.

                  SECTION  7.06.  REPORTS BY TRUSTEE TO HOLDERS.  Within 60 days
after each May 15,  beginning  with May 15, 1998, the Trustee shall mail to each
Holder as provided in TIA Section  313(c) a brief report that  complies with TIA
Section 313(a) dated as of such May 15, if required by TIA Section 313(a).

                  SECTION 7.07. COMPENSATION AND INDEMNITY. The Issuer shall pay
to the Trustee  from time to time such  compensation  as shall be agreed upon in
writing for its services.  The  compensation of the Trustee shall not be limited
by any law on  compensation of a trustee of an express trust.  The Company,  and
after  the  Assumption  Date,  GST USA and GST,  jointly  and  severally,  shall
reimburse  the Trustee upon request for all  reasonable  out-of-pocket  expenses
(including  costs of collection)  and advances  incurred or made by the Trustee.
Such expenses  shall  include the  reasonable  compensation  and expenses of the
Trustee's agents and counsel.

                  The  Issuer  shall  indemnify  the  Trustee  for,  and hold it
harmless  against,  any loss or  liability  or  expense  incurred  by it without
negligence  or bad  faith  on its part in  connection  with  the  acceptance  or
administration  of this  Indenture  and its duties under this  Indenture and the
Securities,  including,  without limitation, the costs and expenses of defending
itself  against any claim or liability and of complying  with any process served
upon it or any of its officers in connection with the exercise or performance of
any of its powers or duties under this Indenture and the Securities.

                  To secure the  Issuer's  payment  obligations  in this Section
7.07,  the  Trustee  shall have a lien prior to the  Securities  on all money or
property held or collected by the Trustee, in

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its capacity as Trustee, except money or property held in trust to pay principal
of, premium, if any, and interest on particular Securities.

                  If the Trustee incurs  expenses or renders  services after the
occurrence  of an Event of  Default  specified  in clause  (f) or (g) of Section
6.01,  the expenses and the  compensation  for the services  will be intended to
constitute  expenses  of  administration  under  Title 11 of the  United  States
Bankruptcy  Code or any  applicable  federal  or  state  law for the  relief  of
debtors.

                  SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal
of the Trustee and  appointment  of a successor  Trustee shall become  effective
only upon the successor Trustee's  acceptance of appointment as provided in this
Section 7.08.

                  The Trustee may resign at any time by so notifying  the Issuer
in writing at least 30 days prior to the date of the proposed  resignation.  The
Holders of a majority in  principal  amount of the  outstanding  Securities  may
remove the  Trustee by so  notifying  the  Trustee in writing  and may appoint a
successor  Trustee  with the consent of the  Issuer.  The Issuer may at any time
remove the Trustee, by Company Order given at least 30 days prior to the date of
the proposed  removal if: (i) the Trustee is no longer  eligible  under  Section
7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent;  (iii) a receiver
or other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.

                  If the Trustee  resigns or is removed,  or if a vacancy exists
in the office of Trustee for any reason,  the Issuer  shall  promptly  appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in  principal  amount of the  outstanding  Securities  may
appoint a successor  Trustee to replace the successor  Trustee  appointed by the
Issuer.  If the  successor  Trustee  does not  deliver  its  written  acceptance
required by the next  succeeding  paragraph  of this Section 7.08 within 30 days
after the retiring  Trustee  resigns or is removed,  the retiring  Trustee,  the
Issuer or the  Holders  of a majority  in  principal  amount of the  outstanding
Securities may petition any court of competent  jurisdiction for the appointment
of a successor Trustee.

                  A successor Trustee shall deliver a written  acceptance of its
appointment  to the retiring  Trustee and to the Issuer.  Immediately  after the
delivery of such  written  acceptance,  subject to the lien  provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the  successor  Trustee,  (ii) the  resignation  or removal  of the  retiring
Trustee shall become  effective  and (iii) the successor  Trustee shall have all
the rights,  powers and duties of the Trustee under this Indenture.  A successor
Trustee shall mail notice of its succession to each Holder.

                  If the Trustee is no longer  eligible  under Section 7.10, any
Holder who satisfies  the  requirements  of TIA Section  310(b) may petition any
court  of  competent  jurisdiction  for  the  removal  of the  Trustee  and  the
appointment of a successor Trustee.

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                  The  Issuer  shall  give  notice  of any  resignation  and any
removal  of the  Trustee  and each  appointment  of a  successor  Trustee to all
Holders.  Each notice shall  include the name of the  successor  Trustee and the
address of its Corporate Trust Office.

                  Notwithstanding  replacement  of the Trustee  pursuant to this
Section  7.08,  the  Issuer's  obligations  under  Section  7.07 shall  continue
indefinitely for the benefit of the retiring Trustee.

                  SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates  with,  merges or converts into, or transfers all or  substantially
all of its corporate trust business to, another  corporation or national banking
association,  the  resulting,  surviving or transferee  corporation  or national
banking  association without any further act shall be the successor Trustee with
the same  effect  as if the  successor  Trustee  had been  named as the  Trustee
herein.

                  SECTION 7.10. ELIGIBILITY.  This Indenture shall always have a
Trustee who satisfies the  requirements  of TIA Section  310(a)(1).  The Trustee
shall have a combined  capital and surplus of at least  $25,000,000 as set forth
in its most recent published annual report of condition.

                  SECTION  7.11.  MONEY HELD IN TRUST.  The Trustee shall not be
liable for interest on any money  received by it except as the Trustee may agree
in  writing  with the  Issuer.  Money held in trust by the  Trustee  need not be
segregated  from other funds except to the extent required by law and except for
money held in trust under Article Eight of this Indenture.

                  SECTION 7.12. WITHHOLDING TAXES. The Trustee, as agent for the
Issuer,  shall  exclude and withhold from each payment of principal and interest
and other amounts due hereunder or under the Securities any and all  withholding
taxes  applicable  thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection  therewith,  whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the  Securities,  to withhold  such amounts and timely pay
the  same to the  appropriate  authority  in the  name of and on  behalf  of the
holders  of the  Securities,  that it will file any  necessary  withholding  tax
returns or  statements  when due,  and that,  as promptly as possible  after the
payment  thereof,  it will  deliver  to each  holder of a  Security  appropriate
documentation  showing  the  payment  thereof,  together  with  such  additional
documentary evidence as such holders may reasonably request from time to time.

                                  ARTICLE EIGHT
                             DISCHARGE OF INDENTURE

                  SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.  Except as
otherwise provided in this Section 8.01, the Issuer may terminate the Company's,
GST USA's and GST's obligations under the Securities and this Indenture if:

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                  (i) all  Securities  previously  authenticated  and  delivered
         (other  than  destroyed,  lost or  stolen  Securities  that  have  been
         replaced  or  Securities  that are paid  pursuant  to  Section  4.01 or
         Securities for whose payment money or securities have  theretofore been
         held in trust and  thereafter  repaid to the  Issuer,  as  provided  in
         Section 8.05) have been delivered to the Trustee for  cancellation  and
         the Issuer has paid all sums payable by it hereunder; or

                  (ii) (A) the Securities  mature within one year or all of them
         are to be called for  redemption  within  one year  under  arrangements
         satisfactory  to the Trustee for giving the notice of  redemption,  (B)
         the Issuer  irrevocably  deposits in trust with the Trustee during such
         one-year period,  under the terms of an irrevocable  trust agreement in
         form and substance  satisfactory to the Trustee,  as trust funds solely
         for  the  benefit  of the  Holders  for  that  purpose,  money  or U.S.
         Government  Obligations  sufficient  (in the  opinion  of a  nationally
         recognized  firm  of  independent  public  accountants  expressed  in a
         written  certification  thereof  delivered  to  the  Trustee),  without
         consideration  of any  reinvestment  of any  interest  thereon,  to pay
         principal, premium, if, any, and interest on the Securities to maturity
         or redemption, as the case may be, and to pay all other sums payable by
         it  hereunder,  (C) no Default or Event of Default  with respect to the
         Securities  shall have  occurred and be  continuing on the date of such
         deposit,  (D) such deposit will not result in a breach or violation of,
         or constitute a default under, this Indenture or any other agreement or
         instrument to which the Company,  GST USA or GST is a party or by which
         it is  bound  and  (E) the  Issuer  has  delivered  to the  Trustee  an
         Officers'  Certificate and an Opinion of Counsel,  in each case stating
         that all  conditions  precedent  provided  for herein  relating  to the
         satisfaction and discharge of this Indenture have been complied with.

                  With  respect  to  the  foregoing  clause  (i),  the  Issuer's
obligations  under  Section 7.07 shall  survive.  With respect to the  foregoing
clause (ii), the Issuer's  obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07,  2.08,  2.09,  2.14, 4.01, 4.02, 4.22, 7.07, 7.08, 8.04, 8.05 and 8.06 and
Article  Eleven shall survive until the  Securities  are no longer  outstanding.
Thereafter,  only the Issuer's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.  After any such  irrevocable  deposit,  the Trustee upon request  shall
acknowledge  in writing  the  discharge  of the  Company's,  GST USA's and GST's
obligations  under the Securities and this Indenture  except for those surviving
obligations specified above.

                  SECTION  8.02.  DEFEASANCE  AND  DISCHARGE OF  INDENTURE.  The
Issuer  will be  deemed to have  paid and the  Company,  GST USA and GST will be
discharged  from any and all  obligations  in respect of the  Securities  on the
123rd day (or, to the extent  applicable under clause (B) below, one year) after
the deposit referred to in clause (A) of this Section 8.02 if:

                  (A) the  Issuer  has  irrevocably  deposited  or  caused to be
         irrevocably  deposited with the Trustee (or another trustee  satisfying
         the  requirements  of Section  7.10) and conveyed all right,  title and
         interest  for  the  benefit  of the  Holders,  under  the  terms  of an
         irrevocable  trust agreement in form and substance  satisfactory to the
         Trustee as trust  funds in trust,  specifically  pledged to the Trustee
         for the benefit of the Holders as

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<PAGE>

         security  for  payment  of the  principal  of,  premium,  if  any,  and
         interest,  if any,  on the  Securities,  and  dedicated  solely to, the
         benefit  of the  Holders,  in and to (1) money in an  amount,  (2) U.S.
         Government Obligations that, through the payment of interest,  premium,
         if any,  and  principal  in respect  thereof in  accordance  with their
         terms, will provide,  not later than one day before the due date of any
         payment  referred to in this  clause  (A),  money in an amount or (3) a
         combination  thereof  in an  amount  sufficient,  in the  opinion  of a
         nationally  recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay and
         discharge,  without  consideration of the reinvestment of such interest
         and after  payment  of all  federal,  state  and  local  taxes or other
         charges and assessments in respect thereof payable by the Trustee,  the
         principal of, premium,  if any, and accrued interest on the outstanding
         Securities  at the  Stated  Maturity  of such  principal  or  interest;
         PROVIDED  that the Trustee  shall have been  irrevocably  instructed to
         apply such money or the proceeds of such U.S. Government Obligations to
         the payment of such  principal,  premium,  if any,  and  interest  with
         respect to the Securities;

                  (B) the Issuer shall have  delivered to the Trustee (i) either
         (x) an Opinion of Counsel to the effect that Holders will not recognize
         income, gain or loss for United States federal income tax purposes as a
         result of the  Issuer's  exercise of its option under this Section 8.02
         and will be subject  to United  States  federal  income tax on the same
         amount and in the same  manner and at the same times as would have been
         the  case if such  option  had not been  exercised,  which  Opinion  of
         Counsel must be based upon (and  accompanied  by a copy of) a ruling of
         the United States  Internal  Revenue  Service to the same effect unless
         there has been a change in applicable  United States federal income tax
         law after the Closing Date such that a ruling is no longer  required or
         (y) a ruling  directed to the Trustee  received  from the United States
         Internal  Revenue  Service  to the same  effect  as the  aforementioned
         Opinion of Counsel; (ii) an Opinion of Counsel or a ruling from Revenue
         Canada,  Taxation to the effect that Holders will not recognize income,
         gain or loss for Canadian federal, provincial or territorial income tax
         or other tax  purposes as a result of such deposit and  defeasance  and
         will be subject to Canadian federal or provincial  income tax and other
         tax on the same  amounts,  in the same  manner and at the same times as
         would have been the case had such deposit and  defeasance  not occurred
         (and for purposes of such opinion,  such Canadian  counsel shall assume
         that Holders of the Securities  include Holders who are not resident in
         Canada);  and (iii) an Opinion  of  Counsel to the effect  that (x) the
         creation  of the  defeasance  trust  does not  violate  the  Investment
         Company Act of 1940 and (y) after the passage of 123 days following the
         deposit (except, with respect to any trust funds for the account of any
         Holder who may be deemed to be an "insider"  for purposes of the United
         States  Bankruptcy  Code,  after one year  following the deposit),  the
         trust  funds will not be  subject  to the effect of Section  547 of the
         United States  Bankruptcy Code or Section 15 of the New York Debtor and
         Creditor Law in a case commenced by or against the Company,  GST USA or
         GST under either such  statute,  and either (I) the trust funds will no
         longer remain the property of the Issuer or GST (and therefore will not
         be  subject  to the effect of any  applicable  bankruptcy,  insolvency,
         reorganization  or similar laws affecting  creditors' rights generally)
         or (II) if a court were to rule under any such law

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<PAGE>

         in any case or proceeding that the trust funds remained property of the
         Issuer or GST (a) assuming such trust funds  remained in the possession
         of the Trustee prior to such court ruling to the extent not paid to the
         Holders, the Trustee will hold, for the benefit of the Holders, a valid
         and  perfected  security  interest  in  such  trust  funds  that is not
         avoidable in bankruptcy or otherwise  (except for the effect of Section
         552(b) of the United  States  Bankruptcy  Code on interest on the trust
         funds  accruing after the  commencement  of a case under such statute),
         (b) the  Holders  will be entitled to receive  adequate  protection  of
         their  interests  in such trust  funds if such trust  funds are used in
         such case or  proceeding  and (c) no  property,  rights in  property or
         other interests  granted to the Trustee or the Holders in exchange for,
         or with  respect  to,  such  trust  funds  will be subject to any prior
         rights of holders of other  Indebtedness of the Company,  GST USA, GST,
         or any of its Subsidiaries;

                  (C)  immediately  after giving effect to such deposit on a PRO
         FORMA basis,  no Default or Event of Default shall have occurred and be
         continuing  on the date of such deposit or during the period  ending on
         the 123rd day (or one year)  after the date of such  deposit,  and such
         deposit  shall not result in a breach or violation  of, or constitute a
         default under,  any other agreement or instrument to which the Company,
         GST USA, GST or any of their  respective  Subsidiaries is a party or by
         which the Company, GST USA, GST or any of their respective Subsidiaries
         is bound;

                  (D) if the Securities are then listed on a national securities
         exchange,  the Issuer shall have delivered to the Trustee an Opinion of
         Counsel to the effect  that the  Securities  will not be  delisted as a
         result of such deposit, defeasance and discharge; and

                  (E) the  Issuer has  delivered  to the  Trustee  an  Officers'
         Certificate  and an Opinion of Counsel,  in each case  stating that all
         conditions  precedent  provided for herein  relating to the  defeasance
         contemplated by this Section 8.02 have been complied with.

                  Notwithstanding the foregoing, prior to the end of the 123-day
(or one year) period  referred to in clause  (B)(iii)(y)  of this Section  8.02,
none of the Company's, GST USA's or GST's obligations under this Indenture shall
be  discharged.  Subsequent to the end of such 123-day (or one year) period with
respect to this Section 8.02, the Company's,  GST USA's and GST's obligations in
Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 4.22,
7.07,  7.08, 8.05 and 8.06 and Article Eleven shall survive until the Securities
are no longer outstanding. Thereafter, only the Issuer's obligations in Sections
7.07,  8.05 and 8.06 shall survive.  If and when a ruling from the United States
Internal  Revenue Service or an Opinion of Counsel  referred to in clause (B)(i)
of this Section 8.02 may be provided  specifically without regard to, and not in
reliance upon, the  continuance of the Issuer's  obligations  under Section 4.01
and  GST's  obligations  under  the  Security   Guarantee,   then  the  Issuer's
obligations  under such  Section 4.01 and GST's  obligations  under the Security
Guarantee  shall cease upon delivery to the Trustee of such ruling or Opinion of
Counsel and compliance with the other conditions  precedent  provided for herein
relating to the defeasance contemplated by this Section 8.02.

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<PAGE>
                  After any such irrevocable  deposit,  the Trustee upon request
shall acknowledge in writing the discharge of the Company's, GST USA's and GST's
obligations  under the Securities and this Indenture  except for those surviving
obligations in the immediately preceding paragraph.

                  SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS.  The Company,
GST USA and GST may omit to comply with any term,  provision  or  condition  set
forth in clauses  (iii) and (iv) of Section 5.01 and Sections 4.03 through 4.21,
and clause (c) of Section 6.01 with respect to clauses (iii) and (iv) of Section
5.01 and  Sections  4.03 through  4.21,  and clauses (d), (e) and (h) of Section
6.01 shall be deemed not to be Events of Default,  in each case with  respect to
the outstanding Securities if:

                  (i) the  Issuer  has  irrevocably  deposited  or  caused to be
         irrevocably  deposited with the Trustee (or another trustee  satisfying
         the  requirements  of Section  7.10) and conveyed all right,  title and
         interest to the Trustee for the benefit of the Holders, under the terms
         of an irrevocable trust agreement in form and substance satisfactory to
         the  Trustee  as trust  funds in  trust,  specifically  pledged  to the
         Trustee for the  benefit of the Holders as security  for payment of the
         principal of, premium, if any, and interest, if any, on the Securities,
         and  dedicated  solely to, the  benefit of the  Holders,  in and to (A)
         money in an amount, (B) U.S.  Government  Obligations that, through the
         payment of interest and principal in respect thereof in accordance with
         their terms,  will provide,  not later than one day before the due date
         of any payment  referred  to in this clause (i),  money in an amount or
         (C) a combination thereof in an amount sufficient,  in the opinion of a
         nationally  recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay and
         discharge,  without  consideration of the reinvestment of such interest
         and after  payment  of all  federal,  state  and  local  taxes or other
         charges and assessments in respect thereof payable by the Trustee,  the
         principal  of,  premium,  if  any,  and  interest  on  the  outstanding
         Securities  on the  Stated  Maturity  of such  principal  or  interest;
         PROVIDED  that the Trustee  shall have been  irrevocably  instructed to
         apply such money or the proceeds of such U.S. Government Obligations to
         the payment of such  principal,  premium,  if any,  and  interest  with
         respect to the Securities;

                  (ii) such deposit will not result in a breach or violation of,
         or constitute a default under, this Indenture or any other agreement or
         instrument  to  which  the  Company,  GST  USA,  GST or  any  of  their
         respective Subsidiaries is a party or by which it is bound;

                  (iii) no Default or Event of Default  shall have  occurred and
         be continuing on the date of such deposit;

                  (iv) the Issuer  has  delivered  to the  Trustee an Opinion of
         Counsel to the effect  that (A) the  creation of the  defeasance  trust
         does not violate the  Investment  Company Act of 1940,  (B) the Holders
         have a valid  first-priority  security interest in the trust funds, (C)
         the Holders will not recognize  income,  gain or loss for United States
         federal  income  tax  purposes  as a  result  of such  deposit  and the
         defeasance of the obligations referred to in

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<PAGE>

         the first  paragraph of this Section 8.03 and will be subject to United
         States federal income tax on the same amount and in the same manner and
         at the same  times  as would  have  been the case if such  deposit  and
         defeasance had not occurred, (D) the Holders will not recognize income,
         gain or loss for Canadian federal, provincial or territorial income tax
         or other tax purposes as a result of such deposit and the defeasance of
         the obligations referred to in the first paragraph of this Section 8.03
         and will be subject to Canadian  federal or  provincial  income tax and
         other tax on the same  amount  and in the same  manner  and at the same
         times as would have been the case if such  deposit and  defeasance  had
         not  occurred  and (E)  after the  passage  of 123 days  following  the
         deposit (except, with respect to any trust funds for the account of any
         Holder who may be deemed to be an "insider"  for purposes of the United
         States  Bankruptcy  Code,  after one year  following the deposit),  the
         trust  funds will not be  subject  to the effect of Section  547 of the
         United States  Bankruptcy Code or Section 15 of the New York Debtor and
         Creditor Law in a case  commenced by or against the Issuer or GST under
         either  such  statute,  and either  (1) the trust  funds will no longer
         remain the property of the Issuer (and therefore will not be subject to
         the effect of any applicable bankruptcy, insolvency,  reorganization or
         similar laws affecting  creditors'  rights generally) or (2) if a court
         were to rule  under  any such law in any  case or  proceeding  that the
         trust funds  remained  property of the Issuer (x)  assuming  such trust
         funds  remained in the  possession  of the Trustee  prior to such court
         ruling to the extent not paid to the  Holders,  the Trustee  will hold,
         for the benefit of the Holders, a valid and perfected security interest
         in such trust funds that is not  avoidable in  bankruptcy  or otherwise
         (except  for  the  effect  of  Section  552(b)  of  the  United  States
         Bankruptcy  Code on  interest  on the trust  funds  accruing  after the
         commencement  of a case under such  statute),  (y) the Holders  will be
         entitled to receive  adequate  protection  of their  interests  in such
         trust funds if such trust funds are used in such case or proceeding and
         (z) no property,  rights in property or other interests  granted to the
         Trustee or the Holders in exchange  for, or with respect to, such trust
         funds  will  be  subject  to any  prior  rights  of  holders  of  other
         Indebtedness of GST, GST USA, the Company or any of its Subsidiaries;

                  (v) if the Securities are then listed on a national securities
         exchange,  the Issuer shall have delivered to the Trustee an Opinion of
         Counsel to the effect that such deposit and  defeasance  will not cause
         the Securities to be delisted; and

                  (vi) the  Issuer has  delivered  to the  Trustee an  Officers'
         Certificate  and an Opinion of Counsel,  in each case  stating that all
         conditions  precedent  provided for herein  relating to the  defeasance
         contemplated by this Section 8.03 have been complied with.

                  SECTION 8.04.  APPLICATION OF TRUST MONEY.  Subject to Section
8.06,  the Trustee or Paying Agent shall hold in trust money or U.S.  Government
Obligations  deposited  with it pursuant to Section  8.01,  8.02 or 8.03, as the
case may be,  and shall  apply  the  deposited  money  and the  money  from U.S.
Government  Obligations in accordance  with the Securities and this Indenture to
the payment of principal of,  premium,  if any, and interest on the  Securities;
but such money need not be  segregated  from  other  funds  except to the extent
required by law.

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                  SECTION 8.05.  REPAYMENT TO ISSUER.  Subject to Sections 7.07,
8.01,  8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Issuer  upon  request  any excess  money held by them at any time and  thereupon
shall be relieved from all liability with respect to such money. The Trustee and
the Paying  Agent shall pay to the Issuer any money held by them for the payment
of principal, premium, if any, or interest that remains unclaimed for two years;
PROVIDED that the Trustee or such Paying Agent before being required to make any
payment  may  cause to be  published  at the  expense  of the  Issuer  once in a
newspaper of general  circulation  in the City of New York and, in the event the
Securities are listed on the Luxembourg Stock Exchange, in Luxembourg or mail to
each Holder entitled to such money at such Holder's address (as set forth in the
Security  Register)  notice that such money  remains  unclaimed and that after a
date  specified  therein  (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed  balance of such money then remaining will
be repaid to the Issuer.  After payment to the Issuer,  Holders entitled to such
money  must look to the  Issuer  for  payment  as  general  creditors  unless an
applicable law designates  another Person,  and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.

                  SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S.  Government  Obligations  in  accordance  with
Section  8.01,  8.02 or  8.03,  as the  case  may be,  by  reason  of any  legal
proceeding  or by reason of any order or judgment  of any court or  governmental
authority enjoining,  restraining or otherwise prohibiting such application, the
Company's,  GST  USA's  and  GST's  obligations  under  this  Indenture  and the
Securities  shall be revived and  reinstated  as though no deposit had  occurred
pursuant to Section  8.01,  8.02 or 8.03, as the case may be, until such time as
the  Trustee  or  Paying  Agent is  permitted  to apply  all such  money or U.S.
Government  Obligations  in accordance  with Section 8.01,  8.02 or 8.03, as the
case may be; PROVIDED that, if the Company,  GST USA or GST has made any payment
of principal of, premium,  if any, or interest on any Securities  because of the
reinstatement of its obligations,  the Company,  GST USA or GST, as the case may
be,  shall be  subrogated  to the rights of the  Holders of such  Securities  to
receive such payment from the money or U.S.  Government  Obligations held by the
Trustee or Paying Agent.

                  SECTION 8.07.  INSIDERS.  With respect to the determination of
the Persons  constituting  beneficial  owners of Securities and whether any such
Person is an "insider" for purposes of Sections 8.02(B)(iii)(y) and 8.03(iv)(E),
the Trustee may rely on an Officers' Certificate.

                                  ARTICLE NINE
                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

                  SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, GST USA
and GST, when  authorized by resolutions  of their Boards of Directors,  and the
Trustee may amend or supplement this Indenture or the Securities  without notice
to or the consent of any Holder:

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                  (a) to cure any  ambiguity,  defect or  inconsistency  in this
         Indenture;  PROVIDED  that such  amendments  or  supplements  shall not
         adversely affect the interests of the Holders in any material respect;

                  (b) to comply with Article Five;

                  (c) to  comply  with any  requirements  of the  Commission  in
         connection with the qualification of this Indenture under the TIA;

                  (d) to evidence and provide for the  acceptance of appointment
         hereunder by a successor Trustee; or

                  (e) to make any change  that,  in the  opinion of the Board of
         Directors of GST evidenced by a Board  Resolution,  does not materially
         and adversely affect the rights of any Holder.

                  SECTION  9.02.  WITH  CONSENT OF HOLDERS.  Subject to Sections
6.04 and 6.07 and without prior notice to the Holders,  the Company, GST USA and
GST,  when  authorized  by their  Boards of Directors  (as  evidenced by a Board
Resolution),  and the Trustee may amend this Indenture and the  Securities  with
the written consent of the Holders of a majority in aggregate  principal  amount
of the  outstanding  Securities,  and the  Holders  of a majority  in  aggregate
principal amount of the outstanding  Securities by written notice to the Trustee
may waive future compliance by the Company, GST USA or GST with any provision of
this Indenture or the Securities.

                  Notwithstanding  the provisions of this Section 9.02,  without
the consent of each Holder affected, an amendment or waiver,  including a waiver
pursuant to Section 6.04, may not:

                  (i) change the Stated  Maturity  of the  principal  of, or any
         installment of interest on, any Security;

                  (ii) reduce the principal of, or premium,  if any, or interest
         on, any  Security or  adversely  affect any right of  repayment  at the
         option of any Holder of any Security;

                  (iii) change the place or currency of payment of principal of,
         or premium, if any, or interest on, any Security;

                  (iv) impair the right to institute suit for the enforcement of
         any  payment  on or after the  Stated  Maturity  (or,  in the case of a
         redemption, on or after the Redemption Date) of any Security;

                  (v)  reduce  the  percentage  of  outstanding  Securities  the
         consent  of  whose  Holders  is  required  for  any  such  supplemental
         indenture or for any waiver of  compliance  with certain  provisions of
         this Indenture or certain Defaults and their consequences  provided for
         in this Indenture;

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                  (vi) waive a default in the payment of principal of,  premium,
         if any, or interest on the Securities;

                  (vii) amend or modify the terms of the Pledge Agreement;

                  (viii) release GST from its Security Guarantee; or

                  (ix) modify any of the provisions of this Section 9.02, except
         to  increase  any such  percentage  or to provide  that  certain  other
         provisions of this  Indenture  cannot be modified or waived without the
         consent of the Holder of each outstanding Security affected thereby.

                  It shall not be necessary for the consent of the Holders under
this Section  9.02 to approve the  particular  form of any  proposed  amendment,
supplement or waiver,  but it shall be  sufficient if such consent  approves the
substance thereof.

                  After an  amendment,  supplement  or waiver under this Section
9.02 becomes effective,  the Issuer shall mail to the Holders affected thereby a
notice briefly  describing the amendment,  supplement or waiver. The Issuer will
mail supplemental  indentures to Holders upon request. Any failure of the Issuer
to mail such  notice,  or any defect  therein,  shall not,  however,  in any way
impair or affect the validity of any such supplemental indenture or waiver.

                  SECTION  9.03.  REVOCATION  AND  EFFECT OF  CONSENT.  Until an
amendment  or  waiver  becomes  effective,  a  consent  to it by a  Holder  is a
continuing  consent by the Holder and every  subsequent  Holder of a Security or
portion  of a  Security  that  evidences  the same debt as the  Security  of the
consenting Holder,  even if notation of the consent is not made on any Security.
However,  any such Holder or subsequent  Holder may revoke the consent as to its
Security or portion of its Security.  Such revocation shall be effective only if
the Trustee  receives the notice of  revocation  before the date the  amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver shall
become  effective on receipt by the Trustee of written consents from the Holders
of the requisite percentage in principal amount of the outstanding Securities.

                  The Issuer may,  but shall not be  obligated  to, fix a record
date for the  purpose of  determining  the  Holders  entitled  to consent to any
amendment,   supplement   or  waiver.   If  a  record   date  is  fixed,   then,
notwithstanding the last two sentences of the immediately  preceding  paragraph,
those  persons who were  Holders at such  record date (or their duly  designated
proxies) and only those persons shall be entitled to consent to such  amendment,
supplement or waiver or to revoke any consent  previously given,  whether or not
such  persons  continue to be Holders  after such record  date.  No such consent
shall be valid or effective for more than 90 days after such record date.

                  After an amendment, supplement or waiver becomes effective, it
shall bind every Holder unless it is of the type described in any of clauses (i)
through  (ix) of Section  9.02.  In case of an  amendment  or waiver of the type
described in clauses (i) through (ix) of Section 9.02,

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the amendment or waiver shall bind each Holder who has consented to it and every
subsequent  Holder of a Security  that  evidences the same  indebtedness  as the
Security of the consenting Holder.

                  SECTION  9.04.  NOTATION ON OR EXCHANGE OF  SECURITIES.  If an
amendment, supplement or waiver changes the terms of a Security, the Trustee may
require the Holder to deliver  such  Security to the  Trustee.  At the  Issuer's
expense the Trustee may place an appropriate  notation on the Security about the
changed  terms  and  return  it to the  Holder  and the  Trustee  may  place  an
appropriate notation on any Security thereafter authenticated. Alternatively, if
the Issuer or the Trustee so determines, the Issuer in exchange for the Security
shall issue and the Trustee shall  authenticate a new Security that reflects the
changed terms.

                  SECTION  9.05.  TRUSTEE TO SIGN  AMENDMENTS,  ETC. The Trustee
shall be entitled to receive,  and shall be fully  protected in relying upon, an
Opinion of Counsel  stating that the execution of any  amendment,  supplement or
waiver  authorized  pursuant to this Article Nine is  authorized or permitted by
this Indenture.  Subject to the preceding sentence,  the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

                  SECTION  9.06.  CONFORMITY  WITH TRUST  INDENTURE  ACT.  Every
supplemental  indenture  executed pursuant to this Article Nine shall conform to
the requirements of the TIA as then in effect.

                                   ARTICLE TEN
                               MEETINGS OF HOLDERS

                  SECTION 10.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

                  A meeting of  Holders  may be called at any time and from time
to time pursuant to the  provisions of this Article Ten for any of the following
purposes:

                  (a) to give any notice to the Issuer or to the Trustee,  or to
         give any  directions  to the Trustee,  or to waive or to consent to the
         waiving  of  any  Default  or  Event  of  Default   hereunder  and  its
         consequences,  or to take any other  action  authorized  to be taken by
         Holders pursuant to any of the provisions of Article Six;

                  (b) to remove  the  Trustee  or  appoint a  successor  Trustee
         pursuant to the provisions of Article Seven;

                  (c) to consent to an amendment,  supplement or waiver pursuant
         to the provisions of Section 9.02; or

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                  (d) to take any other action  authorized  to be taken by or on
         behalf of the Holders of any specified  aggregate  principal  amount of
         the  Securities  under  any  other  provision  of  this  Indenture,  or
         authorized or permitted by law.

                  SECTION 10.02. MANNER OF CALLING MEETINGS.

                  The  Trustee may at any time call a meeting of Holders to take
any action specified in Section 10.01, to be held at such time and at such place
in The City of New York,  New York or elsewhere  as the Trustee will  determine.
Notice of every  meeting of  Holders,  setting  forth the time and place of such
meeting and in general  terms the action  proposed to be taken at such  meeting,
will be mailed by the Trustee, first-class postage prepaid, to the Issuer and to
the  Holders at their last  addresses  as they will  appear on the  registration
books of the  Registrar not less than 10 nor more than 60 days prior to the date
fixed for a meeting.

                  Any  meeting of Holders  will be valid  without  notice if the
Holders of all  outstanding  Securities are present in Person or by proxy, or if
notice is waived  before or after the meeting by the Holders of all  outstanding
Securities,  and if the  Issuer  and the  Trustee  are  either  present  by duly
authorized representatives or have, before or after the meeting, waived notice.

                  SECTION 10.03. CALL OF MEETINGS BY ISSUER OR HOLDERS.

                  In  case  at  any  time  the  Issuer,   pursuant  to  a  Board
Resolution, or the Holders of not less than 10% in aggregate principal amount of
the outstanding  Securities will have requested the Trustee to call a meeting of
Holders  to take any  action  specified  in Section  10.01,  by written  request
setting  forth in  reasonable  detail  the  action  proposed  to be taken at the
meeting,  and the Trustee will not have mailed the notice of such meeting within
20 days  after  receipt  of such  request,  then the  Issuer or the  Holders  of
Securities in the amount above specified may determine the time and place in The
City of New  York,  New York or  elsewhere  for such  meeting  and may call such
meeting  for the  purpose  of taking  such  action,  by mailing or causing to be
mailed notice thereof as provided in Section 10.02, or by causing notice thereof
to be published at least once in each of two  successive  calendar weeks (on any
Business  Day during  such week) in a  newspaper  or  newspapers  printed in the
English language,  customarily  published at least five days a week of a general
circulation  in The City of New York,  State of New York  and,  in the event the
Securities are listed on the Luxembourg Stock Exchange, in Luxembourg, the first
such  publication to be not less than 10 nor more than 60 days prior to the date
fixed for the meeting.

                  SECTION 10.04. WHO MAY ATTEND AND VOTE AT MEETINGS.

                  To be entitled  to vote at any  meeting of  Holders,  a Person
will (i) be a registered  Holder of one or more Securities,  or (ii) be a Person
appointed  by an  instrument  in writing as proxy for the  registered  Holder or
Holders of Securities. The only Persons who will be entitled to be present or to
speak at any meeting of Holders will be the Persons entitled to vote at such

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meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Issuer or GST and their counsel.

                  SECTION 10.05. QUORUM; ACTION.

                  The Persons entitled to vote a majority in principal amount of
the outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities,  be dissolved. In any other
case the  meeting  may be  adjourned  for a period  of not less  than 10 days as
determined  by the  chairman of the  meeting  prior to the  adjournment  of such
meeting.  In the  absence  of a  quorum  at any  such  adjourned  meeting,  such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting  prior to the  adjournment  of such
adjourned  meeting.  Notice of the reconvening of any adjourned meeting shall be
given as provided in Section  10.02,  except that such notice need be given only
once and not less  than  five days  prior to the date on which  the  meeting  is
scheduled to be reconvened.  Notice of the  reconvening of an adjourned  meeting
shall state expressly the percentage of the principal  amount of the outstanding
Securities which shall constitute a quorum.

                  Subject to the  foregoing,  at the  reconvening of any meeting
adjourned for a lack of a quorum,  the Persons entitled to vote 25% in principal
amount of the outstanding  Securities at the time shall  constitute a quorum for
the taking of any action set forth in the notice of the original meeting.

                  At a meeting or an adjourned  meeting duly  reconvened  and at
which a quorum  is  present  as  aforesaid,  any  action  or  matter,  except as
otherwise specified herein, shall be effectively passed and decided if passed or
decided by the Persons  entitled  to vote not less than a majority in  principal
amount of outstanding Securities represented and voting at such meeting.

                  Any action or matter  passed or decision  taken at any meeting
of Holders of Securities  duly held in accordance  with this Section 10.05 shall
be  binding  on all  the  Holders  of  Securities,  whether  or not  present  or
represented at the meeting.

                  SECTION 10.06.  REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF
THE MEETING; VOTING RIGHTS; ADJOURNMENT.

                  Notwithstanding  any other  provision of this  Indenture,  the
Trustee may make such  reasonable  regulations  as it may deem advisable for any
action by or any  meeting  of  Holders,  in regard  to proof of the  holding  of
Securities and of the  appointment of proxies,  and in regard to the appointment
and duties of inspectors of votes,  and submission  and  examination of proxies,
certificates  and other  evidence of the right to vote,  and such other  matters
concerning  the  conduct  of the  meeting  as it will  think  appropriate.  Such
regulations may fix a record date and time for determining the Holders of record
of  Securities  entitled to vote at such  meeting,  in which case those and only
those Persons who are Holders of Securities at the record date and

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<PAGE>

time so  fixed,  or their  proxies,  will be  entitled  to vote at such  meeting
whether or not they will be such Holders at the time of the meeting.

                  The Trustee  will,  by an  instrument  in  writing,  appoint a
temporary  chairman of the meeting,  unless the meeting will have been called by
the Issuer or by Holders as provided in Section 10.03,  in which case the Issuer
or the  Holders  calling  the  meeting,  as the case may be, will in like manner
appoint a temporary chairman.  A permanent chairman and a permanent secretary of
the meeting  will be elected by vote of the  Holders of a majority in  principal
amount of the Securities represented at the meeting and entitled to vote.

                  At any  meeting  each  Holder or proxy  will,  subject  to the
provisions  of Section  10.04  hereof,  be  entitled to one vote for each $1,000
principal  amount of Securities  held or  represented  by him or her;  PROVIDED,
HOWEVER,  that no vote will be cast or counted at any  meeting in respect of any
Securities  challenged  as not  outstanding  and  ruled by the  chairman  of the
meeting to be not  outstanding.  The chairman may adjourn any such meeting if he
is unable to  determine  whether any Holder or proxy will be entitled to vote at
such meeting.  The chairman of the meeting will have no right to vote other than
by virtue of Securities  held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Holders.  Any meeting of
Holders duly called pursuant to the provisions of Section 10.02 or Section 10.03
may be  adjourned  from time to time by vote of the  Holders  of a  majority  in
aggregate  principal  amount of the  Securities  represented  at the meeting and
entitled to vote,  and the meeting may be held as so adjourned  without  further
notice.

                  SECTION 10.07. VOTING AT THE MEETING AND RECORD TO BE KEPT.

                  The vote  upon any  resolution  submitted  to any  meeting  of
Holders will be by written ballots on which will be subscribed the signatures of
the Holders of Securities or/of their representatives by proxy and the principal
amount of the  Securities  voted by the ballot.  The  permanent  chairman of the
meeting will appoint two  inspectors of votes,  who will count all votes cast at
the  meeting  for or  against  any  resolution  and will  make and file with the
secretary  of the meeting  their  verified  written  reports in duplicate of all
votes cast at the  meeting.  A record in duplicate  of the  proceedings  of each
meeting of Holders  will be prepared by the  secretary  of the meeting and there
will be attached to such record the original  reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge  of the facts,  setting  forth a copy of the notice of the meeting and
showing  that such notice was mailed as provided  in Section  10.02.  The record
will be signed and verified by the affidavits of the permanent  chairman and the
secretary  of the meeting and one of the  duplicates  will be  delivered  to the
Issuer and the other to the Trustee to be preserved  by the Trustee,  the latter
to have attached thereto the ballots voted at the meeting.

                  Any record so signed and verified will be conclusive  evidence
of the matters therein stated.

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                  SECTION  10.08.  EXERCISE  OF RIGHTS OF TRUSTEE OR HOLDERS MAY
NOT BE HINDERED OR DELAYED BY CALL OF MEETING.

                  Nothing  contained  in this  Article  Ten  will be  deemed  or
construed to authorize or permit,  by reason of any call of a meeting of Holders
or any rights expressly or impliedly  conferred hereunder to make such call, any
hindrance  or delay in the  exercise  of any right or rights  conferred  upon or
reserved to the Trustee or to the Holders  under any of the  provisions  of this
Indenture or of the Securities.

                  SECTION 10.09. PROCEDURES NOT EXCLUSIVE.

                  The procedures set forth in this Article Ten are not exclusive
and the rights and  obligations of the Issuer,  GST, the Trustee and the Holders
under other Articles of this Indenture (including, without limitation,  Articles
Six, Seven,  Eight and Nine) will in no way be limited by the provisions of this
Article Ten.

                                 ARTICLE ELEVEN

                                    SECURITY

                  SECTION 11.01.  SECURITY. (a) On the Closing Date, the Company
shall  (i)  enter  into the  Pledge  Agreement  and  comply  with the  terms and
provisions thereof and (ii) purchase the Pledged Securities to be pledged to the
Trustee for the benefit of the Holders in an amount equal to the net proceeds to
be received by the Company from the sale of the Securities  (plus all cash owned
by the Company on the Closing Date).  On the Closing Date, the Company shall use
a portion of the net  proceeds of the  initial  issuance  of the  Securities  to
purchase Pledged Securities  sufficient to fund the first six scheduled interest
payments on the Securities (the "INTEREST  COLLATERAL").  The Pledged Securities
shall be pledged by the  Company to the  Trustee  for the benefit of the Holders
and shall be held by the  Trustee  in the  Pledge  Account  pending  disposition
pursuant to the Pledge Agreement.

                  (b) Each Holder, by its acceptance of a Security, consents and
agrees to the terms of the Pledge Agreement (including,  without limitation, the
provisions  providing for foreclosure and release of the Pledged  Securities) as
the same may be in effect or may be amended from time to time in accordance with
its terms,  and  authorizes  and  directs  the  Trustee to enter into the Pledge
Agreement and to perform its respective  obligations and exercise its respective
rights  thereunder in accordance  therewith.  The Company will do or cause to be
done all such  acts and  things  as may be  necessary  or  proper,  or as may be
required by the provisions of the Pledge Agreement, to assure and confirm to the
Trustee the security interest in the Pledged Securities  contemplated hereby, by
the Pledge Agreement or any part thereof,  as from time to time constituted,  so
as to render the same  available for the security and benefit of this  Indenture
and of the  Securities  secured  hereby,  according  to the intent and  purposes
herein  expressed.  The Company shall take, or shall cause to be taken,  any and
all actions  reasonably  required  (and any action  requested by the Trustee) to
cause  the  Pledge  Agreement  to  create  and  maintain,  as  security  for the
obligations of the Company

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under this Indenture and the Securities,  valid and  enforceable  first priority
security interests in and on all the Pledged Securities, the Pledge Account, the
Initial Note, the Intercompany  Notes and the Acquired Equipment in favor of the
Trustee,  superior to and prior to the rights of third Persons and subject to no
other Liens.

                  (c)  Upon  written  request  by the  Company  to the  Trustee,
Pledged  Securities (other than Interest  Collateral) shall be released from the
Pledge Account to the Company in order to finance the cost  (including,  without
limitation,  the  cost  of  design,  development,   construction,   acquisition,
installation  or  integration)  (collectively,  "ACQUIRED  EQUIPMENT  COST")  of
telecommunications  inventory  or  equipment  purchased or leased by the Company
("ACQUIRED  EQUIPMENT") or to refinance on the Closing Date up to $50 million of
indebtedness  of GST USA and its  subsidiaries  secured by  Acquired  Equipment.
Immediately upon the acquisition of Acquired Equipment,  the Company shall grant
a first priority security interest in such Acquired Equipment to the Trustee for
the  benefit  of the  Holders  of the  Securities.  GST USA shall  purchase  all
Acquired  Equipment  from the Company at a purchase  price equal to the Acquired
Equipment Cost for such Acquired  Equipment and the purchase price shall be paid
in the form of an Intercompany  Note in a principal amount equal to the Acquired
Equipment Cost,  issued by GST USA and fully and  unconditionally  guaranteed by
GST.  Each  Intercompany  Note  shall be secured  by a first  priority  security
interest in all Acquired Equipment purchased by GST USA. The Company shall grant
a first priority security interest in all Intercompany  Notes to the Trustee for
the benefit of the Holders of the  Securities.  On the Assumption  Date, GST USA
shall  grant  a first  priority  security  interest  in all  Acquired  Equipment
securing  Intercompany  Notes or then held by the Company to the Trustee for the
benefit of the Holders of the Securities.

                  (d) The  release of any  Pledged  Securities  pursuant  to the
Pledge  Agreement will not be deemed to impair the security under this Indenture
in  contravention  of the  provisions  hereof if and to the extent  the  Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement.  To
the extent  applicable,  the Company shall cause TIA Section 314(d)  relating to
the release of property or securities from the Lien and security interest of the
Pledge  Agreement  (other than pursuant to Sections 8(b),  8(c) or 8(d) thereof)
and relating to the  substitution  therefor of any property or  securities to be
subjected  to the Lien and  security  interest  of the  Pledge  Agreement  to be
complied with. Any certificate or opinion  required by TIA Section 314(d) may be
made by an Officer of the  Company,  except in cases  where TIA  Section  314(d)
requires  that such  certificate  or opinion be made by an  independent  Person,
which  Person  shall be an  independent  engineer,  appraiser  or  other  expert
selected by the Company.

                  (e) The Company  shall cause TIA Section  314(b),  relating to
opinions  of  counsel  regarding  the Lien  under the  Pledge  Agreement,  to be
complied  with.  The Trustee may, to the extent  permitted by Sections  7.01 and
7.02 hereof,  accept as  conclusive  evidence of  compliance  with the foregoing
provisions the appropriate statements contained in such instruments.

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                  (f) The Trustee  may,  and at the request of the Holders of at
least 25% in aggregate principal amount of Securities then outstanding shall, on
behalf of the Holders,  take all actions it deems  necessary or  appropriate  in
order to (i) enforce any of the terms of the Pledge  Agreement  and (ii) collect
and  receive any and all amounts  payable in respect of the  obligations  of the
Company  thereunder.  The Trustee  shall have power to institute and to maintain
such suits and  proceedings  as the  Trustee may deem  expedient  to preserve or
protect its interests and the interests of the Holders in the Pledged Securities
(including  power to institute and maintain suits or proceedings to restrain the
enforcement  of  or  compliance  with  any  legislative  or  other  governmental
enactment,  rule or order that may be  unconstitutional  or otherwise invalid if
the  enforcement of, or compliance  with,  such  enactment,  rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee).

                                 ARTICLE TWELVE

                                  MISCELLANEOUS

                  SECTION  12.01.  TRUST  INDENTURE  ACT OF  1939.  Prior to the
effectiveness of the Registration  Statement,  this Indenture shall  incorporate
and be governed by the provisions of the TIA that are required to be part of and
to govern  indentures  qualified under the TIA. After the  effectiveness  of the
Registration Statement, this Indenture shall be subject to the provisions of the
TIA that are required to be a part of this  Indenture  and shall,  to the extent
applicable, be governed by such provisions.

                  SECTION 12.02.  NOTICES.  Any notice or communication shall be
sufficiently  given if in  writing  and  delivered  in person or mailed by first
class mail addressed as follows:

                  IF TO THE COMPANY:

                           GST Equipment Funding, Inc.
                           4317 N.E. Thurston Way
                           Vancouver, Washington  98662
                           Attention:  Chief Executive Officer

                  IF TO GST USA:

                           GST USA, Inc.
                           4317 N.E. Thurston Way
                           Vancouver, Washington  98662
                           Attention:  Chief Executive Officer

                  IF TO GST:

                           GST Telecommunications, Inc.
                           4317 N.E. Thurston Way

                                       81

<PAGE>
                         Vancouver, Washington  98662
                         Attention:  Chief Executive Officer

                  IF TO THE TRUSTEE:

                          United States Trust Company of New York
                          114 West 47th Street
                          New York, New York  10036-1532
                          Attention:  Corporate Trust Division

                  The  Company,  GST USA,  GST or the  Trustee  by notice to the
other may designate  additional or different addresses for subsequent notices or
communications.

                  Any notice or communication mailed to a Holder shall be mailed
to him at his address as it appears on the Security Register by first class mail
and shall be sufficiently  given to him if so mailed within the time prescribed.
Copies of any such  communication  or notice to a Holder shall also be mailed to
the Trustee and each Agent at the same time.

                  Failure to mail a notice or  communication  to a Holder or any
defect in it shall not affect its  sufficiency  with  respect to other  Holders.
Except for a notice to the Trustee,  which is deemed  given only when  received,
and except as otherwise provided in this Indenture, if a notice or communication
is mailed in the  manner  provided  in this  Section  12.02,  it is duly  given,
whether or not the addressee receives it.

                  Where this Indenture  provides for notice in any manner,  such
notice may be waived in writing by the Person  entitled to receive  such notice,
either  before or after the event,  and such waiver shall be the  equivalent  of
such notice.  Waivers of notice by Holders shall be filed with the Trustee,  but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such waiver.

                  In case by reason of the suspension of regular mail service or
by reason of any other  cause it shall be  impracticable  to give such notice by
mail,  then such  notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

                  SECTION  12.03.  CERTIFICATE  AND  OPINION  AS  TO  CONDITIONS
PRECEDENT. Upon any request or application by the Company, GST USA or GST to the
Trustee to take any action under this  Indenture,  the  Company,  GST USA or GST
shall furnish to the Trustee:

                  (i) an Officers'  Certificate  stating that, in the opinion of
         the signers,  all conditions  precedent,  if any,  provided for in this
         Indenture relating to the proposed action have been complied with; and

                  (ii) an Opinion of Counsel  stating  that,  in the  opinion of
         such Counsel, all such conditions precedent have been complied with.

                                       82

<PAGE>

                  SECTION 12.04.  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each  certificate  or opinion  with  respect to  compliance  with a condition or
covenant provided for in this Indenture shall include:

                  (i) a statement that each person  signing such  certificate or
         opinion has read such covenant or condition and the definitions  herein
         relating thereto;

                  (ii) a brief  statement  as to the  nature  and  scope  of the
         examination  or  investigation  upon  which the  statement  or  opinion
         contained in such certificate or opinion is based;

                  (iii) a statement that, in the opinion of each such person, he
         has made such  examination or  investigation  as is necessary to enable
         him to express an informed  opinion as to whether or not such  covenant
         or condition has been complied with; and

                  (iv) a statement  as to whether or not, in the opinion of each
         such  person,  such  condition  or  covenant  has been  complied  with;
         PROVIDED, HOWEVER, that, with respect to matters of fact, an Opinion of
         Counsel may rely on an Officers'  Certificate or certificates of public
         officials.

                  SECTION  12.05.  RULES BY TRUSTEE,  PAYING AGENT OR REGISTRAR.
The Trustee may make reasonable  rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.

                  SECTION  12.06.  PAYMENT DATE OTHER THAN A BUSINESS DAY. If an
Interest Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Security  shall not be a Business Day, then payment of principal
of, premium, if any, or interest on such Security,  as the case may be, need not
be made on such date, but may be made on the next  succeeding  Business Day with
the same force and effect as if made on the Interest Payment Date, Payment Date,
Redemption Date, or at the Stated Maturity or date of maturity of such Security;
PROVIDED  that no  interest  shall  accrue  for the  period  from and after such
Interest Payment Date, Payment Date, Redemption Date, Stated Maturity or date of
maturity, as the case may be.

                  SECTION 12.07.  GOVERNING  LAW;  CONSENT TO  JURISDICTION  AND
SERVICE.  This Indenture and the Securities shall be governed by the laws of the
State of New York.  Each of the  Company,  GST USA and GST will  appoint  Olshan
Grundman  Frome & Rosenzweig  LLP, 505 Park  Avenue,  New York,  New York 10022,
Attention:  David  Adler,  Esq. as its agent for service of process in any suit,
action or proceeding  with respect to this  Indenture or the  Securities and for
actions brought under federal or state securities laws brought in any federal or
state court located in The City of New York and each of the Company, GST USA and
GST agrees to submit to the jurisdiction of any such court.

                  SECTION 12.08. NO ADVERSE  INTERPRETATION OF OTHER AGREEMENTS.
This  Indenture  may not be used to interpret  another  indenture,  loan or debt
agreement of the

                                       83

<PAGE>

Company, GST USA, GST or any of their Subsidiaries.  Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

                  SECTION 12.09. NO RECOURSE AGAINST OTHERS. No recourse for the
payment  of the  principal  of,  premium,  if  any,  or  interest  on any of the
Securities,  or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation,  covenant or agreement of the Company,
GST USA or GST  contained in this  Indenture,  or in any of the  Securities,  or
because of the creation of any Indebtedness  represented  thereby,  shall be had
against  any  incorporator  or  against  any past,  present  or future  partner,
shareholder,  other  equityholder,  officer,  director,  employee or controlling
person,  as such,  of the Company,  GST USA or GST or of any  successor  Person,
either directly or through the Company,  GST USA or GST or any successor Person,
whether  by  virtue  of any  constitution,  statute  or rule  of law,  or by the
enforcement  of any  assessment  or penalty  or  otherwise;  it being  expressly
understood that all such liability is hereby  expressly waived and released as a
condition of, and as a  consideration  for, the execution of this  Indenture and
the issue of the Securities.

                  SECTION 12.10. SUCCESSORS.  All agreements of the Company, GST
USA and GST in this  Indenture and the  Securities  shall bind their  respective
successors.  All  agreements  of the  Trustee in this  Indenture  shall bind its
successors.

                  SECTION 12.11.  DUPLICATE ORIGINALS.  The parties may sign any
number of copies of this Indenture.  Each signed copy shall be an original,  but
all of them together represent the same agreement.

                  SECTION  12.12.  SEPARABILITY.  In case any  provision in this
Indenture or in the Securities shall be invalid,  illegal or unenforceable,  the
validity,  legality and enforceability of the remaining  provisions shall not in
any way be affected or impaired thereby.

                  SECTION 12.13. TABLE OF CONTENTS,  HEADINGS, ETC. The Table of
Contents,  Cross-Reference  Table and  headings of the  Articles and Sections of
this Indenture have been inserted for  convenience of reference only, are not to
be  considered  a part hereof and shall in no way modify or restrict  any of the
terms and provisions hereof.

                                       84

<PAGE>

                                   SIGNATURES

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Indenture to be duly executed, all as of the date first written above.

                                     GST EQUIPMENT FUNDING, INC.

                                     By:/s/ Stephen Irwin
                                        ---------------------------------------
                                        Name:  Stephen Irwin
                                        Title: Senior Vice President

                                     GST USA, INC.

                                     By:/s/ Stephen Irwin
                                        ---------------------------------------
                                        Name:  Stephen Irwin
                                        Title: Senior Vice President

                                    GST TELECOMMUNICATIONS, INC.

                                    By: /s/ Stephen Irwin
                                        ---------------------------------------
                                        Name:  Stephen Irwin
                                        Title: Vice-Chairman and Secretary

                                   UNITED STATES TRUST COMPANY
                                   OF NEW YORK

                                   By:  /s/ Louis P. Young
                                        ---------------------------------------
                                        Name:  Louis P. Young
                                       Title:  Vice President



<PAGE>

                                                                       EXHIBIT A

                                 [FACE OF NOTE]

                           GST EQUIPMENT FUNDING, INC.

                      13 1/4% Senior Secured Note due 2007

                                                 [CUSIP _______] [CINS ________]

No. ____________                                                      $_________




                  GST  EQUIPMENT  FUNDING,  INC.,  a Delaware  corporation  (the
"COMPANY"  or  together  with any  successor  under  the  Indenture  hereinafter
referred to, the "ISSUER") for value received, promises to pay to __________, or
its registered assigns, the principal sum of $__________ on May 1, 2007.

                  Interest  Payment  Dates:  May 1 and  November  1,  commencing
November 1, 1997.

                  Regular Record Dates: April 15 and October 15.

                  Reference  is hereby  made to the further  provisions  of this
Note set forth on the reverse  hereof,  which further  provisions  shall for all
purposes have the same effect as if set forth at this place.



<PAGE>
                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed manually or by facsimile by its duly authorized officer.

Date: ____________                             GST EQUIPMENT FUNDING, INC.

                                               By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                                               By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                    (Trustee's Certificate of Authentication)

This is one of the 13 1/4%  Senior  Secured  Notes  due  2007  described  in the
within-mentioned Indenture.

                         UNITED STATES TRUST COMPANY OF

                                              NEW YORK, as Trustee

                                              By:
                                                  ------------------------------
                                                      Authorized Signatory


                                       A-2

<PAGE>

                             [REVERSE SIDE OF NOTE]

                           GST EQUIPMENT FUNDING, INC.

                      13 1/4% Senior Secured Note due 2007

1.  PRINCIPAL AND INTEREST.

                  On or after May 13, 2000,  or earlier if permitted by the 1995
Indentures  (the  "ASSUMPTION  DATE"),  the Notes  will be  unconditionally  and
irrevocably  assumed by GST USA, Inc. a Delaware  corporation  ("GST USA"),  and
guaranteed (the "NOTE GUARANTEE") by GST  Telecommunications,  Inc., a federally
chartered Canadian  corporation  ("GST").  As used in this Note, the term issuer
means the Company until GST USA becomes the obligor  hereunder,  after which the
term "Issuer" means GST USA or any successor thereto.  Upon GST USA's assumption
of this note, the Company will be liquidated  and all of its assets  distributed
to its sole stockholder, GST USA.

                  The Issuer will pay the principal of this Note on May 1, 2007.

                  The Issuer promises to pay interest on the principal amount of
this Note on each Interest  Payment  Date,  as set forth below,  at the rate per
annum shown above.

                  Interest on the Notes shall  accrue at the rate of 13 1/4% per
annum (the "INTEREST RATE") and will be payable in U.S. dollars semiannually (to
the  Holders of record of the Notes at the close of  business on the April 15 or
October  15  immediately  preceding  the  Interest  Payment  Date)  on May 1 and
November 1 of each year, commencing November 1, 1997.

                  If an exchange  offer  registered  under the Securities Act is
not  consummated,  and a shelf  registration  statement under the Securities Act
with  respect  to  resales  of  the  Notes  is  not  declared  effective  by the
Commission,  on or before  November 13, 1997 in accordance with the terms of the
Registration  Rights  Agreement  dated May 13, 1997 among the Company,  GST USA,
GST,  Morgan  Stanley  & Co.  Incorporated,  Dillon,  Read  & Co.  Inc.  and  TD
Securities  (USA) Inc.,  interest (in addition to the interest  otherwise due on
the Notes) will  accrue,  at an annual rate of 0.5%,  from  November  13,  1997;
PROVIDED that failure to cause such  exchange  offer to be  consummated  or such
shelf registration  statement to be declared effective shall be deemed not to be
a default  or breach of a  covenant  for  purposes  of  Section  6.01(c)  of the
Indenture.  The  Holder  of  this  Note  is  entitled  to the  benefits  of such
Registration  Rights  Agreement.  To the extent there is a conflict between this
Note and such Registration Rights Agreement,  such Registration Rights Agreement
shall control to the extent permitted by applicable law.

                  Interest on the Notes will accrue from the most recent date to
which  interest  has been paid or, if no  interest  has been paid,  from May 13,
1997;  PROVIDED that, if there is no existing default in the payment of interest
and this Note is authenticated between a Regular Record

                                      A-3

<PAGE>

Date  referred to on the face hereof and the next  succeeding  Interest  Payment
Date,  interest shall accrue from such Interest  Payment Date.  Interest will be
computed on the basis of a 360-day year of 12 30-day months.

                  The  Issuer  shall  pay  interest  on  overdue  principal  and
premium, if any, and (to the extent lawful) interest on overdue  installments of
interest at the rate per annum borne by the Notes.

2.  METHOD OF PAYMENT.

                  The Issuer will pay  principal as provided  above and interest
(except  defaulted  interest) on the  principal  amount of the Notes as provided
above on each May 1 and November 1 to the persons who are Holders (as  reflected
in the Security Register at the close of business on the April 15 and October 15
immediately preceding the Interest Payment Date), in each case, even if the Note
is cancelled on  registration of transfer or registration of exchange after such
record date; PROVIDED that, with respect to the payment of principal, the Issuer
will not make payment to the Holder unless this Note is  surrendered to a Paying
Agent.

                  The  Issuer  will  pay  principal,  premium,  if  any,  and as
provided  above,  interest in money of the United  States of America that at the
time of payment is legal  tender for payment of public and private  debts.  If a
payment date is a date other than a Business Day at a place of payment,  payment
may be made at that place on the next  succeeding day that is a Business Day and
no interest shall accrue for the intervening period.

3.  PAYING AGENT AND REGISTRAR.

                  Initially,  the  Trustee  will  act as  authenticating  agent,
Paying  Agent and  Registrar.  The Issuer may change any  authenticating  agent,
Paying Agent or Registrar  without  notice.  The Issuer,  any  Subsidiary or any
Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.

4.  INDENTURE; LIMITATIONS.

                  The Company  issued the Notes under an  Indenture  dated as of
May  13,   1997  (the   "INDENTURE"),   among   the   Company,   GST  USA,   GST
Telecommunications,  Inc.,  and United  States  Trust  Company  of New York,  as
trustee  (the  "TRUSTEE").  Capitalized  terms herein are used as defined in the
Indenture  unless  otherwise  indicated.  The terms of the Notes  include  those
stated in the Indenture and those made part of the Indenture by reference to the
Trust  Indenture  Act. The Notes are subject to all such terms,  and Holders are
referred to the  Indenture  and the Trust  Indenture  Act for a statement of all
such  terms.  To the extent  permitted  by  applicable  law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.

                  The Notes are general secured,  unsubordinated indebtedness of
the  Issuer,  will rank PARI PASSU in right of  payment  with all  existing  and
future secured, unsubordinated indebtedness

                                      A-4

<PAGE>

of the Issuer and will be senior in right of payment to all  existing and future
subordinated indebtedness of the Issuer.

5.  REDEMPTION.

                  The Notes will be redeemable, at the Issuer's option, in whole
or in part,  at any time and from time to time on or after May 1, 2002 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class  mail to each  Holders'  last  address as it appears in the Security
Register,  at the following Redemption Prices (expressed in percentages of their
principal amount),  plus accrued and unpaid interest,  if any, to the Redemption
Date (subject to the right of Holders of record on the relevant  Regular  Record
Date that is on or prior to the  Redemption  Date to receive  interest due on an
Interest  Payment Date that is on or prior to the  Redemption  Date) if redeemed
during the 12-month period  commencing on May 1 of the applicable year set forth
below:

          YEAR                                        REDEMPTION  PRICE
          2002                                           106.6250%
          2003                                           103.3125%
          2004 and thereafter                            100.0000%

                  In addition,  the Securities  may be redeemed as a whole,  but
not in part,  at the  option of GST,  at any time  after GST USA has  become the
obligor  on the  Notes  and GST  has  guaranteed  the  Notes,  at 100% of  their
principal amount on the Redemption Date, together with accrued interest thereon,
if any,  to the  Redemption  Date,  in the event GST has become or would  become
obligated  to pay,  on the next date on which any amount  would be payable  with
respect to the Note Guarantee any Additional  Amounts as a result of a change in
the laws  (including any regulations  promulgated  thereunder) of Canada (or any
political  subdivision or taxing authority thereof or therein), or change in any
official  position  regarding the application or  interpretation or such laws or
regulations,  which  change is  announced  or becomes  effective on or after the
Closing Date.

                  If on May  13,  2000,  GST  USA  is  prohibited  by  the  1995
Indentures  from assuming all of the  indebtedness  represented by, and becoming
direct obligor on, the Notes,  or GST is prohibited by the 1995  Indentures from
issuing the Note  Guarantee,  the  Company  will redeem the portion of the Notes
that can not be assumed or  guaranteed  at 101% of their  principal  amount plus
accrued and unpaid interest to the applicable Redemption Date.

6.  NOTICE OF REDEMPTION.

                  Notice of any optional  redemption  will be mailed at least 30
days but not more than 60 days  before the  Redemption  Date,  and notice of any
mandatory  redemption  will be mailed at least 10 days but not more than 30 days
before the Redemption Date, in each case, to each Holder of Notes to be redeemed
at such Holder's last address as it appears in the Security  Register.  Notes in
original denominations larger than $1,000 may be redeemed in part; PROVIDED that
Notes  will only be  issued  in  denominations  of  $1,000  principal  amount or
integral multiples thereof.

                                      A-5

<PAGE>

On and after the Redemption Date, interest ceases to accrue on Notes or portions
of Notes called for redemption, unless the Issuer defaults in the payment of the
Redemption Price.

7.  REPURCHASE UPON CHANGE IN CONTROL.

                  Upon the  occurrence  of any Change of  Control,  each  Holder
shall have the right to  require  the  repurchase  of its Notes by the Issuer in
cash pursuant to the offer  described in the Indenture at a purchase price equal
to 101% of the principal  amount  thereof plus accrued and unpaid  interest,  if
any, to the date of purchase (the "CHANGE OF CONTROL PAYMENT").

                  A notice of such  Change of Control  will be mailed  within 30
days after any Change of Control occurs to each Holder at his last address as it
appears in the Security Register.  Notes in original  denominations  larger than
$1,000  may be sold to the  Issuer in part;  PROVIDED  that  Notes  will only be
issued  in  denominations  of $1,000  principal  amount  or  integral  multiples
thereof.  On and after the applicable Payment Date, interest ceases to accrue on
Notes or portions of Notes  surrendered  for purchase by the Issuer , unless the
Issuer defaults in the payment of the Change of Control Payment.

8.  DENOMINATIONS; TRANSFER; EXCHANGE.

                  The  Notes  are  in   registered   form  without   coupons  in
denominations of $1,000 of principal amount and integral  multiples  thereof.  A
Holder may  register the  transfer or exchange of Notes in  accordance  with the
Indenture.  The Registrar may require a Holder,  among other things,  to furnish
appropriate  endorsements  and transfer  documents and to pay any taxes and fees
required by law or permitted by the  Indenture.  The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need not
register  the transfer or exchange of any Notes for a period of 15 days before a
selection of Notes to be redeemed is made.

9.  PERSONS DEEMED OWNERS.

                  A  Holder  shall  be  treated  as the  owner of a Note for all
purposes.

10.  UNCLAIMED MONEY.

                  If money for the  payment of  principal,  premium,  if any, or
interest remains  unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Issuer. After that, Holders entitled to the money must
look to the Issuer for payment,  unless an  applicable  law  designates  another
Person,  and all  liability of the Trustee and such Paying Agent with respect to
such money shall cease.

11.  DISCHARGE PRIOR TO REDEMPTION OR MATURITY.

                  If  the  Issuer  deposits  with  the  Trustee  money  or  U.S.
Government  Obligations  sufficient  to pay the then  outstanding  principal of,
premium, if any, and accrued interest on the

                                      A-6

<PAGE>

Notes  (a) to  redemption  or  maturity,  the  Company,  GST USA and GST will be
discharged from the Indenture and the Notes, except in certain circumstances for
certain sections thereof,  and (b) to the Stated Maturity,  the Company, GST USA
and GST will be discharged from certain covenants set forth in the Indenture.

12.  AMENDMENT; SUPPLEMENT; WAIVER.

                  Subject to certain exceptions,  the Indenture or the Notes may
be  amended  or  supplemented  with the  consent  of the  Holders  of at least a
majority in  principal  amount of the Notes then  outstanding,  and any existing
default or  compliance  with any provision may be waived with the consent of the
Holders  of  at  least  a  majority  in  principal  amount  of  the  Notes  then
outstanding. Without notice to or the consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things,  cure
any  ambiguity,  defect  or  inconsistency  and make any  change  that  does not
materially and adversely affect the rights of any Holder.

13.  RESTRICTIVE COVENANTS.

                  The Indenture  imposes  certain  limitations on the ability of
GST and its Restricted  Subsidiaries,  among other things,  to incur  additional
indebtedness; create liens; engage in sale-leaseback transactions; pay dividends
or make  distributions  in respect of their capital stock;  make  investments or
make certain  other  restricted  payments;  sell assets;  issue or sell stock of
Restricted   Subsidiaries;   enter  into   transactions   with  stockholders  or
affiliates;  acquire assets or businesses located outside the continental United
States and Hawaii; or, with respect to GST, GST USA and the Company consolidate,
merge or sell all or substantially  all of its assets.  Within 90 days after the
end of the last quarter of each fiscal  year,  GST must report to the Trustee on
compliance with such limitations.

14.  SUCCESSOR PERSONS.

                  Generally, when a successor person or other entity assumes all
the  obligations  of its  predecessor  under the Notes  and the  Indenture,  the
predecessor person will be released from those obligations.

15.  DEFAULTS AND REMEDIES.

                  The following events constitute  "Events of Default" under the
Indenture:  (a) default in the payment of principal of (or premium,  if any, on)
any Note when the same becomes due and payable at maturity,  upon  acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable,  and such default continues for a period of 30
days;  PROVIDED that a failure to make any of the first six  scheduled  interest
payments on the Notes on the applicable Interest Payment Date will constitute an
Event of Default with no grace or cure period;  (c) the Company,  GST USA or GST
defaults in the  performance  of or breaches any other  covenant or agreement of
the  Company,  GST USA or GST in the  Indenture  or under  the  Notes,  the Note
Guarantee, the Initial Note or the Intercompany

                                      A-7

<PAGE>

Notes and such default or breach  continues for a period of 30 consecutive  days
after  written  notice by the Trustee or the Holders of 25% or more in aggregate
principal  amount of the Notes;  (d) there  occurs with  respect to any issue or
issues  of  Indebtedness  of  GST  or  any  Significant   Subsidiary  having  an
outstanding principal amount of $5,000,000 or more in the aggregate for all such
issues  of all such  Persons,  whether  such  Indebtedness  now  exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such  Indebtedness to be due and payable prior to its Stated Maturity
and such  Indebtedness has not been discharged in full or such  acceleration has
not been rescinded or annulled within 30 days of such  acceleration  and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such  payment  default;  (e) any final  judgment or order (not
covered by  insurance)  for the payment of money in excess of  $5,000,000 in the
aggregate  for all such  final  judgments  or orders  against  all such  Persons
(treating any deductibles,  self-insurance or retention as not so covered) shall
be rendered against the Company, GST USA, GST or any Significant  Subsidiary and
shall not be paid or discharged, and there shall be any period of 30 consecutive
days  following  entry of the final  judgment or order that causes the aggregate
amount  for all such  final  judgments  or  orders  outstanding  and not paid or
discharged  against all such Persons to exceed $5,000,000 during which a stay of
enforcement  of such final  judgment or order,  by reason of a pending appeal or
otherwise,  shall  not be in  effect;  (f) a court  having  jurisdiction  in the
premises enters a decree or order for (A) relief in respect of the Company,  GST
USA,  GST or  any  Significant  Subsidiary  in an  involuntary  case  under  any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company, GST USA, GST or any Significant
Subsidiary  (other than a liquidation  of the Company into GST USA in connection
with  the  assumption  of the  Notes)  or for  all or  substantially  all of the
property and assets of the Company,  GST USA, GST or any Significant  Subsidiary
or (C) the winding up or liquidation of the affairs of the Company, GST USA, GST
or any Significant  Subsidiary (other than a liquidation of the Company into GST
USA in  connection  with the  assumption  of the Notes) and, in each case,  such
decree  or  order  shall  remain  unstayed  and in  effect  for a  period  of 30
consecutive days; or (g) the Company, GST USA, GST or any Significant Subsidiary
(A) commences a voluntary  case under any applicable  bankruptcy,  insolvency or
other  similar law now or  hereafter  in effect,  or consents to the entry of an
order for relief in an involuntary  case under any such law, (B) consents to the
appointment  of  or  taking  possession  by a  receiver,  liquidator,  assignee,
custodian,  trustee,  sequestrator or similar official of the Company,  GST USA,
GST or any Significant  Subsidiary (other than a liquidation of the Company into
GST  USA in  connection  with  the  assumption  of  the  Notes)  or  for  all or
substantially all of the property and assets of the Company, GST USA, GST or any
Significant  Subsidiary or (C) effects any general assignment for the benefit of
creditors;  (h) the  Trustee or the  Company  does not have at all times a first
priority  perfected  security  interest  in all Pledged  Securities,  the Pledge
Account, all Acquired Equipment, the Initial Note and Intercompany Notes or GST,
GST USA or the Company asserts in writing that the security  arrangements  under
the Indenture,  the Pledge Account,  the Initial Note and the Intercompany Notes
are not in full force and effect;  or (i) GST USA shall not have become a direct
obligor  on the Notes  (other  than  Notes to be  redeemed  as  described  under
"Mandatory Redemption" for which the Company shall have deposited the redemption
price) and GST shall not have become a guarantor of the Notes by May 13, 2000.

                                      A-8

<PAGE>

                  If an  Event  of  Default  (other  than an  Event  of  Default
specified  in clause (f) or (g) above that occurs with  respect to the  Company,
GST USA, or GST or clause (h)) occurs and is continuing under the Indenture, the
Trustee or the  Holders  of at least 25% in  aggregate  principal  amount of the
Notes, then outstanding, by written notice to the Company (and to the Trustee if
such  notice is given by the  Holders),  may,  and the Trustee at the request of
such  Holders  shall,  declare the  principal  amount of,  premium,  if any, and
accrued interest,  if any, on the Notes to be immediately due and payable.  If a
bankruptcy  or  insolvency  default with respect to the Company,  GST USA or GST
occurs and is continuing,  the principal of the Notes automatically  becomes due
and  payable.  Holders  may not  enforce the  Indenture  or the Notes  except as
provided in the Indenture.  The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Notes.  Subject to certain  limitations,
Holders of at least a majority in principal amount of the Notes then outstanding
may direct the Trustee in its exercise of any trust or power.

16.  ADDITIONAL AMOUNTS.

                  Any  payments  by GST under or with  respect  to the Notes may
require the payment of  Additional  Amounts as may become  payable under Section
4.22 of the Indenture.

17.  TRUSTEE DEALINGS WITH COMPANY OR GUARANTOR.

                  The Trustee  under the  Indenture,  in its  individual  or any
other capacity, may make loans to, accept deposits from and perform services for
GST or the Issuer or their  Affiliates  and may  otherwise  deal with GST or the
Issuer or their Affiliates as if it were not the Trustee.

18.  NO RECOURSE AGAINST OTHERS.

                  No  incorporator  or any  past,  present  or  future  partner,
shareholder,  other equity holder,  officer,  director,  employee or controlling
person as such, of the Company,  GST USA or GST or of any successor Person shall
have any liability for any obligations of the Company,  GST USA or GST under the
Notes or the Indenture or for any claim based on, in respect of or by reason of,
such  obligations or their creation.  Each Holder by accepting a Note waives and
releases  all  such  liability.   Such  waiver  and  release  are  part  of  the
consideration for the issuance of the Notes.

                                      A-9

<PAGE>

19.  AUTHENTICATION.

                  This  Note   shall  not  be  valid   until  the   Trustee   or
authenticating  agent signs the certificate of  authentication on the other side
of this Note.

21.  ABBREVIATIONS.

                  Customary abbreviations may be used in the name of a Holder or
an assignee,  such as: TEN COM (= tenants in common),  TEN ENT (= tenants by the
entireties),  JT TEN (= joint  tenants  with  right of  survivorship  and not as
tenants in common),  CUST (=  Custodian)  and U/G/M/A (= Uniform Gifts to Minors
Act).

                  The Company will  furnish to any Holder upon  written  request
and  without  charge  a copy  of the  Indenture.  Requests  may be  made  to GST
Equipment Funding,  Inc., 4317 N.E. Thurston Way,  Vancouver,  Washington 98662,
Attention: Chief Executive Officer.

                                      A-10

<PAGE>

                            [FORM OF TRANSFER NOTICE]

                  FOR VALUE RECEIVED the  undersigned  registered  holder hereby
sell(s), assign(s) and transfer(s) unto

INSERT TAXPAYER IDENTIFICATION NO.

Please print or typewrite  name and address  including  zip code of assignee the
within  Note and all rights  thereunder,  hereby  irrevocably  constituting  and
appointing  attorney to transfer said Note on the books of the Company with full
power of substitution in the premises.

                              [THE FOLLOWING PROVISION TO BE INCLUDED
                              ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,

                              PERMANENT OFFSHORE GLOBAL SECURITIES AND
                              PERMANENT OFFSHORE PHYSICAL SECURITIES]

         In  connection  with any transfer of this Note  occurring  prior to the
date which is the earlier of (i) the date of an effective  Registration  or (ii)
the end of the period  referred to in Rule 144(k) under the Securities  Act, the
undersigned  confirms that without utilizing any general solicitation or general
advertising that:

                                   [CHECK ONE]

[    ]            (a) this  Note is being  transferred  in  compliance  with the
         exemption  from  registration  under  the  Securities  Act of 1933,  as
         amended, provided by Rule 144A thereunder.

                                       OR

[     ]           (b) this Note is being  transferred  other than in  accordance
         with (a) above and documents are being  furnished which comply with the
         conditions of transfer set forth in this Note and the Indenture.

                                      A-11

<PAGE>

If none of the foregoing boxes is checked,  the Trustee or other Registrar shall
not be obligated to register  this Note in the name of any Person other than the
Holder  hereof  unless  and  until  the  conditions  to  any  such  transfer  of
registration  set forth herein and in Section 2.08 of the  Indenture  shall have
been satisfied.

Date:
                                            ------------------------------------
                                            NOTICE:   The   signature   to  this
                                            assignment  must correspond with the
                                            name as written upon the face of the
                                            within-mentioned instrument in every
                                            particular,  without  alteration  or
                                            any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

         The undersigned represents and warrants that it is purchasing this Note
for its own  account  or an account  with  respect  to which it  exercises  sole
investment  discretion  and  that  it  and  any  such  account  is a  "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended,  and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges  that it has received such information  regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request  such  information  and that it is aware that the  transferor  is
relying upon the undersigned's  foregoing  representations in order to claim the
exemption from registration provided by Rule 144A.

Dated:

                                            ------------------------------------
                                            NOTICE:   To  be   executed   by  an
                                            executive officer

                                      A-12

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you  wish  to  have  this  Note  purchased  by the  Company
pursuant to Section 4.12 or Section 4.14 of the Indenture, check the Box: |_|

                  If you wish to have a portion  of this Note  purchased  by the
Company  pursuant to Section  4.12 or Section 4.14 of the  Indenture,  state the
amount (in principal amount):

$----------------.

Date:

Your Signature:

       (Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:  ______________________________



<PAGE>

                               FORM OF CERTIFICATE



United States Trust Company
  of New York
114 West 47th Street
New York, New York 10036-1532

Attention:  Corporate Trust Division

                         Re:   GST Equipment Funding, Inc. (the "COMPANY")
                               13 1/4% Senior Secured Notes
                               DUE 2007 (THE "SECURITIES")

Ladies and Gentlemen:

                This  letter  relates  to U.S.  $_________  principal  amount of
Securities  represented  by a Note (the  "LEGENDED  NOTE")  which bears a legend
outlining  restrictions upon transfer of such Legended Note. Pursuant to Section
2.02 of the Indenture (the "INDENTURE") dated as of May 13, 1997 relating to the
Securities,  we hereby  certify that we are (or we will hold such  Securities on
behalf of) a person  outside the United States to whom the  Securities  could be
transferred  in accordance  with Rule 904 of Regulation S promulgated  under the
U.S. Securities Act of 1933, as amended.  Accordingly,  you are hereby requested
to exchange the legended certificate for an unlegended certificate  representing
an identical  principal amount of Securities,  all in the manner provided for in
the Indenture.

                You and the  Company  are  entitled to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.  Terms used in this certificate have
the meanings set forth in Regulation S.

                                           Very truly yours,

                                           [Name of Holder]

                                           By:
                                              ---------------------------------
                                                  Authorized Signature



<PAGE>

                                                                       EXHIBIT C

                       Form of Certificate to be Delivered
                          in Connection with Transfers

                            PURSUANT TO REGULATION S

                                                                 ------ --, ----



United States Trust Company
  of New York
114 West 47th Street
New York, New York 10036-1532
Attention:  Corporate Trust Division

                         Re:   GST Equipment Funding, Inc. (the "COMPANY")
                               13 1/4% Senior Secured Notes
                               DUE 2007 (THE "SECURITIES")

Ladies and Gentlemen:

                In  connection   with  our  proposed  sale  of   U.S.$__________
aggregate principal amount of the Securities, we confirm that such sale has been
effected  pursuant to and in accordance  with  Regulation S under the Securities
Act of 1933, as amended, and, accordingly, we represent that:

                (1) the offer of the  Securities was not made to a person in the
United States;

                (2) at the time the buy order was originated, the transferee was
outside the United States or we and any person  acting on our behalf  reasonably
believed that the transferee was outside the United States;

                (3) no  directed  selling  efforts  have  been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and

                (4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.


<PAGE>
                You and the  Company  are  entitled to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.  Terms used in this certificate have
the meanings set forth in Regulation S.

                              Very truly yours,

                              [Name of Transferor]

                              By:
                                 ------------------------------
                                      Authorized Signature

                                      C-2

<PAGE>
                                                                       EXHIBIT D

                            Form of Certificate to be
                          Delivered in Connection with

                    TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                                                                 ------ --, ----


United States Trust Company
  of New York
114 West 47th Street
New York, New York 10036-1532

Attention:  Corporate Trust Division

                         Re:   GST Equipment Funding, Inc. (the "COMPANY")
                               13 1/4% Senior Secured Notes
                               DUE 2007 (THE "SECURITIES")

Ladies and Gentlemen:

                In  connection  with  our  proposed   purchase  of  $___________
aggregate principal amount of the Securities, we confirm that:

                1. We understand that any subsequent  transfer of the Securities
         is subject  to certain  restrictions  and  conditions  set forth in the
         Indenture  dated as of May 13,  1997  relating to the  Securities  (the
         "INDENTURE")  and the  undersigned  agrees to be bound  by,  and not to
         resell,   pledge  or  otherwise   transfer  the  Securities  except  in
         compliance  with, such  restrictions  and conditions and the Securities
         Act of 1933, as amended (the "SECURITIES ACT").

                2. We understand  that the offer and sale of the Securities have
         not been  registered  under the Securities Act, and that the Securities
         may not be  offered  or  sold  except  as  permitted  in the  following
         sentence. We agree, on our own behalf and on behalf of any accounts for
         which we are acting as hereinafter  stated,  that if we should sell any
         Securities,  we  will  do so  only  (A)  to  GST,  the  Company  or any
         subsidiary  thereof,  (B)  in  accordance  with  Rule  144A  under  the
         Securities  Act  to  a  "qualified  institutional  buyer"  (as  defined
         therein),  (C) to an  institutional  "accredited  investor" (as defined
         below) that, prior to such transfer, furnishes (or has furnished on its
         behalf  by a U.S.  broker-dealer)  to you and to the  Company  a signed
         letter substantially in the form of this letter, (D) outside the United
         States in accordance with Rule 904 of Regulation S under the Securities
         Act, (E) pursuant to the  provisions  of Rule 144 under the  Securities
         Act or (F) pursuant to an effective  registration  statement  under the
         Securities Act, and we further agree to provide

                                      D-1

<PAGE>

         to any  person  purchasing  any  of the  Securities  from  us a  notice
         advising such  purchaser  that resales of the Securities are restricted
         as stated herein.

                3. We understand that, on any proposed resale of any Securities,
         we  will  be  required   to  furnish  to  you  and  the  Company   such
         certifications,  legal  opinions and other  information  as you and the
         Company  may  reasonably  require to  confirm  that the  proposed  sale
         complies with the foregoing  restrictions.  We further  understand that
         the  Securities  purchased  by us will bear a legend  to the  foregoing
         effect.

                4. We are an institutional  "accredited investor" (as defined in
         Rule  501(a)(1),  (2), (3) or (7) of Regulation D under the  Securities
         Act) and have such  knowledge and  experience in financial and business
         matters  as to be  capable  of  evaluating  the merits and risks of our
         investment in the Securities,  and we and any accounts for which we are
         acting  are  each  able  to  bear  the  economic  risk  of  our  or its
         investment.

                5. We are acquiring the  Securities  purchased by us for our own
         account or for one or more accounts (each of which is an  institutional
         "ACCREDITED  INVESTOR") as to each of which we exercise sole investment
         discretion.

                You and the  Company  are  entitled to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.

                              Very truly yours,

                              [Name of Transferee]

                              By:
                                 ---------------------------------------------
                                       Authorized Signature

                                      D-2

<PAGE>

                                                                       EXHIBIT E

                             SUPPLEMENTAL INDENTURE

                SUPPLEMENTAL INDENTURE (the "SUPPLEMENTAL INDENTURE"),  dated as
of _______,  19__ among GST USA, INC., a Delaware  corporation  ("GST USA"), GST
TELECOMMUNICATIONS, INC., a federally chartered Canadian corporation ("GST") and
UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the "TRUSTEE").

                              W I T N E S S E T H:

                WHEREAS,  in accordance  with Section  4.23(a) of the Indenture,
dated as of May 13, 1997,  among GST Equipment  Funding,  Inc., GST USA, GST and
the Trustee (the "INDENTURE"),  relating to the 13 1/4% Senior Secured Notes due
2007 of the Company (the "SECURITIES"),  GST USA and GST are required to deliver
this  Supplemental  Indenture  providing for GST USA to assume the  indebtedness
represented  by, and become the direct obligor on, the Securities and for GST to
guarantee  (the  "SECURITY  GUARANTEE")  the  performance  of all  of GST  USA's
obligations under the Securities and the Indenture;

                WHEREAS,  the terms of the 1995  Indenture  do not  prohibit GST
USA's assuming the indebtedness  represented by, and becoming the direct obligor
on, the Securities or GST's issuance of the Security Guarantee;

                WHEREAS, the Boards of Directors of each of GST USA and GST have
authorized and approved delivery of this Supplemental Indenture; and

                WHEREAS,  all other things  necessary to make this  Supplemental
Indenture a valid  supplement  to the  Indenture  according to its terms and the
terms of the Indenture have been done.

                NOW, THEREFORE, the parties hereto agree as follows:

                SECTION  1.1  CERTAIN  TERMS  DEFINED  IN  THE  INDENTURE.   All
capitalized terms used herein without  definition herein shall have the meanings
ascribed thereto in the Indenture.

                SECTION 1.2  ASSUMPTION  OF THE  SECURITIES  BY GST USA. GST USA
hereby, effective on the date of this Indenture Supplement,  unconditionally and
irrevocably  assumes the  indebtedness  represented by, and agrees to become the
direct obligor on, the Securities.

                SECTION 1.3.  SECURITY  GUARANTEE.  Subject to the provisions of
this Indenture  Supplement,  effective on the date of this Indenture Supplement,
GST hereby fully,  unconditionally and irrevocably guarantees to each Holder and
to the Trustee on behalf of the

                                      E-1

<PAGE>

Holders:  (i) the due and punctual payment of the principal of, premium, if any,
on and  interest  on each  Security,  when and as the same shall  become due and
payable, whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on the overdue  principal  of and  interest,  if any, on the
Securities,  to the extent lawful,  and the due and punctual  performance of all
other  obligations  of GST USA to the Holders or the Trustee,  all in accordance
with the terms of such  Security and the  Indenture  and (ii) in the case of any
extension of time of payment or renewal of any  Securities  or any of such other
obligations,  that the same will be promptly  paid in full when due or performed
in accordance with the terms of the extension or renewal, at Stated Maturity, by
acceleration or otherwise. GST hereby waives diligence,  presentment,  demand of
payment,  filing of claims with a court in the event of merger or  bankruptcy of
GST USA, any right to require a proceeding first against GST USA, the benefit of
discussion,  protest or notice  with  respect to any such  Security  or the debt
evidenced thereby and all demands  whatsoever,  and covenants that this Security
Guarantee  will not be discharged  as to any such Security  except by payment in
full of the  principal  thereof and interest  thereon and as provided in Section
8.01  and  Section  8.02  of the  Indenture  (subject  to  Section  8.06  of the
Indenture). The maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Six of the  Indenture  for the purposes of this  Security
Guarantee.  In the event of any declaration of acceleration of such  obligations
as provided in Article Six of the Indenture,  such  obligations  (whether or not
due and payable) shall  forthwith  become due and payable by GST for the purpose
of  this  Security  Guarantee.  In  addition,  without  limiting  the  foregoing
provisions,  upon the effectiveness of an acceleration  under Article Six of the
Indenture,  the  Trustee  shall  promptly  make  a  demand  for  payment  on the
Securities  under  the  Security   Guarantee  provided  for  in  this  Indenture
Supplement.

                If the Trustee or the Holder of any  Security is required by any
court or  otherwise  to return to GST USA or GST,  or any  custodian,  receiver,
liquidator,  trustee,  sequestrator or other similar official acting in relation
to GST USA or GST, any amount paid to the Trustee or such Holder in respect of a
Security, this Security Guarantee,  to the extent theretofore discharged,  shall
be  reinstated  in full force and  effect.  GST further  agrees,  to the fullest
extent that it may lawfully do so, that, as between it, on the one hand, and the
Holders and the  Trustee,  on the other hand,  the  maturity of the  obligations
guaranteed hereby may be accelerated as provided in Article Six of the Indenture
for  the  purposes  of  this  Security  Guarantee,   notwithstanding  any  stay,
injunction  or other  prohibition  extant under any  applicable  bankruptcy  law
preventing such acceleration in respect of the obligations Guaranteed hereby.

                GST hereby irrevocably waives any claim or other rights which it
may now or  hereafter  acquire  against  GST USA that arise from the  existence,
payment,  performance  or  enforcement  of its  obligations  under this Security
Guarantee  and the  Indenture,  including,  without  limitation,  any  right  of
subrogation,  reimbursement,  exoneration,  contribution,  indemnification,  any
right to  participate  in any claim or remedy of the Holders  against GST USA or
any  collateral  which any such  Holder or the  Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract,  statute or common law, including,  without  limitation,  the
right to take or receive


                                       E-2

<PAGE>
from GST USA, directly or indirectly, in cash or other property or by set-off or
in any other  manner,  payment  or  security  on  account of such claim or other
rights.  If any  amount  shall  be paid  to GST in  violation  of the  preceding
sentence and the  principal  of,  premium,  if any, and accrued  interest on the
Securities shall not have been paid in full, such amount shall be deemed to have
been paid to GST for the  benefit  of, and held in trust for the benefit of, the
Holders,  and shall  forthwith  be paid to the  Trustee  for the  benefit of the
Holders to be credited and applied upon the principal of,  premium,  if any, and
accrued interest on the Securities. GST acknowledges that it received direct and
indirect benefits from the issuance of the Securities pursuant to the Indenture,
and that such Securities were issued, in part, on the promise that this Security
Guarantee  would be issued,  and that the  waivers  set forth in this  Indenture
Supplement are knowingly made in consideration of such benefits.

                 SECTION 1.4. OBLIGATIONS UNCONDITIONAL.  Subject to Section 1.7
of this Indenture Supplement,  nothing contained in this Indenture Supplement or
elsewhere in the Indenture or in the  Securities is intended to or shall impair,
as among GST and the holders of the  Securities,  the  obligation of GST,  which
will be  absolute  and  unconditional,  upon  failure by GST USA,  to pay to the
holders of the Securities the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance  with
their  terms,  or is  intended  to or shall  affect the  relative  rights of the
holders of the  Securities  and creditors of GST, nor shall  anything  herein or
therein  prevent the holder of any  Security or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture.

                 Without  limiting  the  foregoing,  nothing  contained  in this
Indenture  Supplement  will  restrict the right of the Trustee or the holders of
the  Securities  to take any action to declare the Security  Guarantee to be due
and payable prior to the Stated  Maturity of the Securities  pursuant to Section
6.02 of the Indenture or to pursue any rights or remedies hereunder or under the
Indenture.

                 SECTION 1.5.  NOTICE TO TRUSTEE.  GST shall give prompt written
notice to the Trustee of any fact known to GST which would  prohibit  the making
of any  payment  to or by the  Trustee  in  respect  of the  Security  Guarantee
pursuant to the provisions of this Indenture Supplement.

                 SECTION 1.6. THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT. The
failure to make a payment  on  account of  principal  of,  premium,  if any,  or
interest  on the  Securities  by  reason  of any  provision  of  this  Indenture
Supplement  will not be construed as  preventing  the  occurrence of an Event of
Default.

                 SECTION 1.7. NET WORTH  LIMITATION.  Notwithstanding  any other
provision of this Indenture  Supplement,  the Indenture or the  Securities,  the
Security  Guarantee shall not be enforceable  against GST in an amount in excess
of the net  worth of GST at the time  that  determination  of such net worth is,
under applicable law, relevant to the enforceability of such guarantee. Such net
worth shall include any claim of GST against GST USA for  reimbursement  and any
claim against any grantor of a Subsidiary Guarantee for contribution.

                                       E-3

<PAGE>

                 SECTION 2. GOVERNING LAW; SUBMISSION TO JURISDICTION; AGENT FOR
SERVICE. This Indenture Supplement shall be governed by the laws of the State of
New  York.  GST  and  GST USA  each  hereby  appoints  Olshan  Grundman  Frome &
Rosenzweig  LLP, 505 Park Avenue,  New York,  New York 10022,  Attention:  David
Adler,  Esq.  as its  agent  for  service  of  process  in any  suit,  action or
proceeding  with respect to this Indenture  Supplement  and for actions  brought
under  federal or state  securities  laws  brought in any federal or state court
located  in The City of New York and each of GST USA and GST agrees to submit to
the jurisdiction of any such court.

                 SECTION 3.  COUNTERPARTS.  This  Supplemental  Indenture may be
signed in any number of counterparts,  each of which shall be an original,  with
the same  effect as if the  signatures  thereto  and  hereto  were upon the same
instrument.

                 SECTION  4.  RATIFICATION.  Except  that GST USA has become the
direct obligor on the  Securities  and GST has provided the Security  Guarantee,
each  provision of the  Indenture  shall remain in full force and effect and the
Indenture is in all respects  agreed to,  ratified and  confirmed by each of GST
USA, GST and the Trustee.

                                      E-4

<PAGE>

                 IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Supplemental Indenture to be duly executed as of the date first above written.

                                        GST USA, INC.

                                        By:
                                           -----------------------------------
                                           Name:
                                           Title:

                                        GST TELECOMMUNICATIONS, INC.

                                        By:
                                           -----------------------------------
                                           Name:
                                           Title:

                                        UNITED STATES TRUST COMPANY
                                        OF NEW YORK

                                        By:
                                           -----------------------------------
                                           Name:
                                           Title:

                                      E-5