REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION  RIGHTS AGREEMENT (this "Agreement") is made
and entered  into May 13, 1997 among GST  EQUIPMENT  FUNDING,  INC.,  a Delaware
corporation ("GST Funding"),  GST USA, INC., a Delaware corporation ("GST USA"),
GST TELECOMMUNICATIONS, INC., a Canadian corporation ("GST"), and MORGAN STANLEY
& CO.  INCORPORATED,  DILLON,  READ & CO.  INC.  and TD  SECURITIES  (USA)  INC.
(collectively referred to as the "Placement Agents").

                  This  Agreement is made  pursuant to the  Placement  Agreement
dated May 8, 1997 (the "Placement  Agreement"),  among GST Funding, GST USA, GST
and the  Placement  Agents,  which  provides  for the sale by GST Funding to the
Placement  Agents of  $265,000,000  principal  amount of GST  Funding's  13 1/4%
Senior Secured Notes Due 2007 (the "Notes") to be issued by GST Funding pursuant
to the  provisions  of an Indenture  dated as of May 13, 1997 (the  "Indenture")
among GST Funding,  GST USA, GST and United States Trust Company of New York, as
trustee (the  "Trustee").  In order to induce the Placement Agents to enter into
the Placement Agreement,  GST Funding, GST USA and GST have agreed to provide to
the Placement Agents and their direct and indirect  transferees the registration
rights with respect to the Notes set forth in this  Agreement.  The execution of
this Agreement is a condition to the closing under the Placement Agreement.

                  In consideration of the foregoing, the parties hereto agree as
follows:

                  1.       DEFINITIONS.

                  As used in this Agreement, the following capitalized defined
terms shall have the following meanings:

                  "1933 ACT" shall mean the Securities Act of 1933, as amended.

                  "1934 ACT" shall mean the Securities  Exchange Act of 1934, as
         amended.

                  "CLOSING  DATE" shall mean the Closing  Date as defined in the
         Placement Agreement.

                  "EXCHANGE  DATE"  shall have the  meaning set forth in Section
         2(a)(ii) hereof.

                  "EXCHANGE  NOTES"  shall  mean  securities  issued  under  the
         Indenture by GST Funding or by GST USA, as the case may be,  containing
         terms  identical to the Notes (except that the Exchange  Notes will not
         contain terms with respect to transfer  restrictions)  to be offered to
         Holders of Notes in exchange for Notes pursuant to the Exchange Offer.

                  "EXCHANGE  OFFER" shall mean the exchange offer by GST Funding
         or GST USA, as the case may be, of Exchange Notes for Registrable Notes
         pursuant to Section 2(a) hereof.

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                  "EXCHANGE OFFER  REGISTRATION" shall mean a registration under
         the 1933 Act effected pursuant to Section 2(a) hereof.

                  "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange
         offer registration statement on Form S-4 (or, if applicable, on another
         appropriate   form)  and  all  amendments   and   supplements  to  such
         registration statement, in each case including the Prospectus contained
         therein,  all  exhibits  thereto  and  all  material   incorporated  by
         reference therein.

                  "GST"  shall have the meaning  set forth in the  preamble  and
         shall also include GST's successors.

                  "GST FUNDING" shall have the meaning set forth in the preamble
         and shall also include GST Funding's successors.

                  "GST USA" shall have the meaning set forth in the preamble and
         shall also include GST USA's successors.

                  "HOLDER" shall mean the Placement Agents,  for so long as they
         own any Registrable  Notes, and each of their  successors,  assigns and
         direct  and  indirect  transferees  who  become  registered  owners  of
         Registrable  Notes under the  Indenture;  PROVIDED that for purposes of
         Sections 4 and 5 hereof, the term "Holder" shall include  Participating
         Broker-Dealers.

                  "INDENTURE" shall have the meaning set forth in the preamble.

                  "MAJORITY HOLDERS" shall mean the Holders of a majority of the
         aggregate principal amount of outstanding  Registrable Notes;  PROVIDED
         that  whenever  the  consent or  approval  of  Holders  of a  specified
         percentage  of  Registrable  Notes is required  hereunder,  Registrable
         Notes  held by GST  Funding or any of its  affiliates  (as such term is
         defined  in Rule 405  under  the 1933 Act)  (other  than the  Placement
         Agents or subsequent  holders of Registrable  Notes if such  subsequent
         holders  are  deemed  to be such  affiliates  solely by reason of their
         holding of such Registrable  Notes) shall not be counted in determining
         whether  such  consent  or  approval  was given by the  Holders of such
         required percentage or amount.

                  "PARTICIPATING BROKER-DEALER" shall have the meaning set forth
         in Section 4(a) hereof.

                  "PERSON" shall mean an individual,  partnership,  corporation,
         trust or  unincorporated  organization,  or a  government  or agency or
         political subdivision thereof.

                  "PLACEMENT  AGENTS"  shall have the  meaning  set forth in the
         preamble.

                  "PLACEMENT  AGREEMENT" shall have the meaning set forth in the
         preamble.

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                  "PROSPECTUS"   shall  mean  the   prospectus   included  in  a
         Registration Statement,  including any preliminary prospectus,  and any
         such   prospectus  as  amended  or   supplemented   by  any  prospectus
         supplement, including a prospectus supplement with respect to the terms
         of the offering of any portion of the  Registrable  Notes  covered by a
         Shelf  Registration   Statement,   and  by  all  other  amendments  and
         supplements to such prospectus, and in each case including all material
         incorporated by reference therein.

                  "REGISTRABLE NOTES" shall mean the Notes;  PROVIDED,  HOWEVER,
         that  the  Notes  shall  cease  to be  Registrable  Notes  (i)  when  a
         Registration  Statement  with  respect  to such  Notes  shall have been
         declared  effective  under the 1933 Act and such Notes  shall have been
         disposed of or exchanged pursuant to such Registration Statement,  (ii)
         when such Notes have been sold to the public  pursuant  to Rule  144(k)
         (or any similar  provision then in force,  but not Rule 144A) under the
         1933 Act or (iii) when such Notes shall have ceased to be outstanding.

                  "REGISTRATION  EXPENSES"  shall  mean  any  and  all  expenses
         incident to  performance  of or compliance by GST Funding,  GST USA and
         GST with this Agreement,  including  without  limitation:  (i) all SEC,
         stock  exchange or National  Association  of Securities  Dealers,  Inc.
         registration  and filing fees,  (ii) all fees and expenses  incurred in
         connection  with  compliance  with  state  securities  or blue sky laws
         (including  reasonable  fees  and  disbursements  of  counsel  for  any
         Underwriters  or Holders in connection with blue sky  qualification  of
         any of the Exchange Notes or Registrable Notes),  (iii) all expenses of
         any Persons in preparing or assisting in  preparing,  word  processing,
         printing and distributing any Registration  Statement,  any Prospectus,
         any amendments or supplements  thereto,  any  underwriting  agreements,
         securities  sales  agreements  and  other  documents  relating  to  the
         performance  of and  compliance  with this  Agreement,  (iv) all rating
         agency  fees,  if any, (v) all fees and  disbursements  relating to the
         qualification of the Indenture under  applicable  securities laws, (vi)
         the fees and  disbursements  of the Trustee and its counsel,  (vii) the
         fees and disbursements of counsel for GST Funding, GST USA and GST and,
         in  the  case  of  a  Shelf  Registration   Statement,   the  fees  and
         disbursements  of one counsel for the Holders  (which  counsel shall be
         selected by the Majority  Holders and which counsel may also be counsel
         for the Placement  Agents) and (viii) the fees and disbursements of the
         independent  public  accountants  of GST  Funding,  GST  USA  and  GST,
         including the expenses of any special audits or "cold comfort"  letters
         required  by or  incident  to  such  performance  and  compliance,  but
         excluding fees and expenses of counsel to the Underwriters  (other than
         fees and  expenses  set forth in clause  (ii) above) or the Holders and
         underwriting  discounts and  commissions  and transfer  taxes,  if any,
         relating to the sale or disposition of Registrable Notes by a Holder.

                  "REGISTRATION STATEMENT" shall mean any registration statement
         of GST Funding, GST USA or GST that covers any of the Exchange Notes or
         Registrable  Notes pursuant to the provisions of this Agreement and all
         amendments  and  supplements  to  any  such   Registration   Statement,
         including  post-effective   amendments,  in  each  case  including  the
         Prospectus  contained  therein,  all exhibits  thereto and all material
         incorporated by reference therein.

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                  "SEC" shall mean the Securities and Exchange Commission.

                  "SHELF  REGISTRATION"  shall  mean  a  registration   effected
         pursuant to Section 2(b) hereof.

                  "SHELF   REGISTRATION   STATEMENT"   shall   mean  a   "shelf"
         registration  statement of GST Funding,  GST USA or GST pursuant to the
         provisions  of Section 2(b) hereof which covers all of the  Registrable
         Notes (but no other  securities  unless  approved by the Holders  whose
         Registrable Notes are covered by such Shelf Registration  Statement) on
         an  appropriate  form under Rule 415 under the 1933 Act, or any similar
         rule that may be adopted by the SEC, and all amendments and supplements
         to such registration statement, including post-effective amendments, in
         each case  including the  Prospectus  contained  therein,  all exhibits
         thereto and all material incorporated by reference therein.

                  "TIA" shall have the meaning set forth in Section 3(l) hereof.

                  "TRUSTEE" shall have the meaning set forth in the preamble and
         its successors under the Indenture.

                  "UNDERWRITTEN  REGISTRATION" or "UNDERWRITTEN  OFFERING" shall
         mean  a  registration  in  which  Registrable  Notes  are  sold  to  an
         Underwriter for reoffering to the public.

                  "UNDERWRITERS"  shall have the  meaning set forth in Section 3
         hereof.

                  2.       REGISTRATION UNDER THE 1933 ACT.

                  (a) To the  extent not  prohibited  by any  applicable  law or
applicable  interpretation of the Staff of the SEC, GST Funding, GST USA and GST
shall cause to be filed an Exchange Offer  Registration  Statement  covering the
offer by GST  Funding or GST USA, as the case may be, to the Holders to exchange
all of the  Registrable  Notes for  Exchange  Notes,  to have such  Registration
Statement  remain  effective  until the  closing  of the  Exchange  Offer and to
consummate  the Exchange  Offer on or prior to the date that is six months after
the Closing Date. GST Funding or GST USA, as the case may be, shall commence the
Exchange Offer promptly after the Exchange Offer Registration Statement has been
declared  effective  by the SEC and use its best  efforts  to have the  Exchange
Offer  consummated not later than 60 days after such effective date. GST Funding
or GST USA, as the case may be, shall commence the Exchange Offer by mailing the
related  exchange  offer  Prospectus and  accompanying  documents to each Holder
stating,  in addition to such other  disclosures  as are required by  applicable
law:

                  (i) that the  Exchange  Offer is being made  pursuant  to this
         Agreement  and that all  Registrable  Notes  validly  tendered  will be
         accepted for exchange;

                  (ii) the dates of  acceptance  for exchange  (which shall be a
         period  of at least 20  business  days  from the date  such  notice  is
         mailed) (each such date being an "Exchange Date");

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<PAGE>

                  (iii)  that any  Registrable  Note not  tendered  will  remain
         outstanding  and continue to accrue  interest,  but will not retain any
         rights under this Agreement;

                  (iv)  that  Holders   electing  to  have  a  Registrable  Note
         exchanged  pursuant to the Exchange Offer will be required to surrender
         such   Registrable   Note,   together  with  the  enclosed  letters  of
         transmittal,  to the  institution  and at the  address  (located in the
         Borough of  Manhattan,  The City of New York)  specified  in the notice
         prior to the close of business on the last Exchange Date; and

                  (v) that Holders will be entitled to withdraw their  election,
         not later than the close of  business  on the last  Exchange  Date,  by
         sending to the institution  and at the address  (located in the Borough
         of Manhattan, The City of New York) specified in the notice a telegram,
         telex,  facsimile transmission or letter setting forth the name of such
         Holder,  the  principal  amount  of  Registrable  Notes  delivered  for
         exchange and a statement that such Holder is  withdrawing  his election
         to have such Notes exchanged.

                  As soon as  practicable  after  the last  Exchange  Date,  GST
         Funding or GST USA, as the case may be, shall:

                  (i) accept for exchange  Registrable Notes or portions thereof
         tendered and not validly withdrawn pursuant to the Exchange Offer; and

                  (ii)  deliver,  or cause to be  delivered,  to the Trustee for
         cancellation all Registrable  Notes or portions thereof so accepted for
         exchange by GST Funding or GST USA, as the case may be, and issue,  and
         cause the Trustee to promptly  authenticate and mail, to each Holder an
         Exchange Note of equal principal amount.

GST  Funding,  GST USA and GST shall use their  best  efforts  to  complete  the
Exchange   Offer  as  provided  above  and  shall  comply  with  the  applicable
requirements  of the  1933  Act,  the  1934 Act and  other  applicable  laws and
regulations in connection with the Exchange Offer.  The Exchange Offer shall not
be  subject  to any  conditions,  other  than that the  Exchange  Offer does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
GST Funding or GST USA, as the case may be, shall inform the Placement Agents of
the names and addresses of the Holders to whom the Exchange  Offer is made,  and
the Placement Agents shall have the right, subject to applicable law, to contact
such Holders and otherwise  facilitate  the tender of  Registrable  Notes in the
Exchange Offer.

                  (b)  In  the  event  that  (i)  GST  Funding,  GST  USA or GST
determines  that the Exchange  Offer  Registration  provided for in Section 2(a)
above is not available or may not be consummated  as soon as  practicable  after
the last Exchange Date because it would violate applicable law or the applicable
interpretations  of the Staff of the SEC, (ii) the Exchange Offer is not for any
other reason  consummated  by November 13, 1997 or (iii) the Exchange  Offer has
been  completed  and in the  opinion  of counsel  for the  Placement  Agents,  a
Registration  Statement must be filed and a Prospectus  must be delivered by the
Placement  Agents in connection with any offering or sale of Registrable  Notes,
GST Funding, GST USA and GST shall use their best

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<PAGE>

efforts to cause to be filed as soon as  practicable  after such  determination,
date or notice of such  opinion of counsel is given to GST  Funding,  GST USA or
GST, as the case may be, a Shelf Registration  Statement  providing for the sale
by the  Holders  of all  of  the  Registrable  Notes  and  to  have  such  Shelf
Registration  Statement declared effective by the SEC. In the event GST Funding,
GST USA or GST,  as the case may be, is  required  to file a Shelf  Registration
Statement  solely as a result of the matters  referred to in clause (iii) of the
preceding sentence,  GST Funding, GST USA or GST, as the case may be, shall file
and have  declared  effective  by the SEC both an  Exchange  Offer  Registration
Statement  pursuant to Section 2(a) with respect to all Registrable  Notes and a
Shelf  Registration  Statement (which may be a combined  Registration  Statement
with the Exchange Offer Registration Statement) with respect to offers and sales
of  Registrable  Notes held by the  Placement  Agents  after  completion  of the
Exchange Offer. GST Funding,  GST USA and GST agree to use their best efforts to
keep  the  Shelf  Registration   Statement   continuously  effective  until  the
expiration of the period  referred to in Rule 144(k) for the  Registrable  Notes
covered by such Shelf  Registration  Statement or such shorter  period that will
terminate when all of the  Registrable  Notes covered by the Shelf  Registration
Statement  have been sold  pursuant  to the Shelf  Registration  Statement.  GST
Funding,  GST USA and GST  further  agree  to  supplement  or  amend  the  Shelf
Registration  Statement if required by the rules,  regulations  or  instructions
applicable to the registration  form used by GST Funding or GST USA, as the case
may be, for such Shelf Registration Statement or by the 1933 Act or by any other
rules  and  regulations  thereunder  for  shelf  registration  or if  reasonably
requested by a Holder with respect to information  relating to such Holder,  and
to use their best efforts to cause any such  amendment to become  effective  and
such  Shelf  Registration  Statement  to  become  usable  as soon as  thereafter
practicable.  GST  Funding,  GST USA and GST agree to furnish to the  Holders of
Registrable Notes copies of any such supplement or amendment  promptly after its
being used or filed with the SEC.

                  (c) GST  Funding,  GST USA and GST shall pay all  Registration
Expenses in connection with the registration pursuant to Section 2(a) or Section
2(b) hereof.  Each Holder shall pay all  underwriting  discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Notes pursuant to the Shelf Registration Statement.

                  (d) An  Exchange  Offer  Registration  Statement  pursuant  to
Section 2(a) hereof or a Shelf  Registration  Statement pursuant to Section 2(b)
hereof will not be deemed to have become  effective  unless it has been declared
effective by the SEC;  PROVIDED,  HOWEVER,  that, if, after it has been declared
effective,  the offering of Registrable  Notes pursuant to a Shelf  Registration
Statement is  interfered  with by any stop order,  injunction  or other order or
requirement  of  the  SEC  or any  other  governmental  agency  or  court,  such
Registration  Statement will be deemed not to have become  effective  during the
period of such interference  until the offering of Registrable Notes pursuant to
such  Registration  Statement  may  legally  resume.  As  provided  for  in  the
Indenture,  in the event the  Exchange  Offer is not  consummated  and the Shelf
Registration  Statement  is not  declared  effective on or prior to November 13,
1997,  interest (in addition to the interest  otherwise due on the Notes) on the
Notes will accrue, at an annual rate of 0.5%, from November 13, 1997.

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<PAGE>

                  (e) Without  limiting the remedies  available to the Placement
Agents  and the  Holders,  GST  Funding,  GST USA and GST  acknowledge  that any
failure by GST Funding,  GST USA and GST to comply with their  obligations under
Section 2(a) and Section 2(b) hereof may result in material  irreparable  injury
to the Placement  Agents or the Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of any such failure,  the Placement  Agents or any Holder
may obtain such relief as may be required to specifically enforce GST Funding's,
GST USA's and GST's obligations under Section 2(a) and Section 2(b) hereof.

                  (f) During any consecutive  365-day period,  GST Funding,  GST
USA and GST may suspend availability of any Shelf Registration  Statement for no
more than two periods of up to 45 consecutive  days (except for the  consecutive
45-day  period  immediately  prior to the maturity of the Notes) and for no more
than an  aggregate  of 60 days  during any  365-day  period,  if GST's  Board of
Directors  determines  in good  faith  that  there is a valid  purpose  for such
suspension.

                  3. REGISTRATION PROCEDURES.

                  In connection with the respective  obligations of GST Funding,
GST USA and GST with respect to the Registration  Statements pursuant to Section
2(a)  and  Section  2(b)  hereof,  GST  Funding,  GST  USA  and  GST  shall,  as
expeditiously as possible:

                  (a) prepare and file with the SEC a Registration  Statement on
         the  appropriate  form  under the 1933  Act,  which  form  shall (i) be
         selected  by GST  Funding  or GST  USA,  (ii)  in the  case  of a Shelf
         Registration, be available for the sale of the Registrable Notes by the
         selling  Holders  thereof and (iii)  comply as to form in all  material
         respects with the  requirements  of the applicable form and include all
         financial statements required by the SEC to be filed therewith, and use
         their  best  efforts  to cause such  Registration  Statement  to become
         effective and remain effective in accordance with Section 2 hereof;

                  (b)  prepare  and  file  with  the  SEC  such  amendments  and
         post-effective  amendments  to each  Registration  Statement  as may be
         necessary  to  keep  such  Registration  Statement  effective  for  the
         applicable  period and cause each  Prospectus to be supplemented by any
         required  prospectus  supplement and, as so  supplemented,  to be filed
         pursuant  to Rule 424  under the 1933  Act;  and keep  each  Prospectus
         current  during the period  described  under  Section 4(3) and Rule 174
         under the 1933 Act that is  applicable  to  transactions  by brokers or
         dealers with respect to the Registrable Notes or Exchange Notes;

                  (c) in the  case  of a  Shelf  Registration,  furnish  to each
         Holder of Registrable  Notes, to counsel for the Placement  Agents,  to
         counsel  for the  Holders and to each  Underwriter  of an  Underwritten
         Offering of Registrable  Notes, if any, without charge,  as many copies
         of each  Prospectus,  including each  preliminary  Prospectus,  and any
         amendment or supplement thereto and such other documents as such Holder
         or  Underwriter  may  reasonably  request,  in order to facilitate  the
         public sale or other

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         disposition of the Registrable Notes; and GST Funding,  GST USA and GST
         consent to the use of such  Prospectus  and any amendment or supplement
         thereto  in  accordance  with  applicable  law by each  of the  selling
         Holders of Registrable  Notes and any such  Underwriters  in connection
         with the offering and sale of the  Registrable  Notes covered by and in
         the manner  described in such Prospectus or any amendment or supplement
         thereto in accordance with applicable law;

                  (d) use their best efforts (i) to register or qualify,  by the
         time the applicable Registration Statement is declared effective by the
         SEC, the Registrable  Notes under all applicable  state securities laws
         or blue sky laws of such  jurisdictions  as any  Holder of  Registrable
         Notes covered by a Registration  Statement shall reasonably  request in
         writing and (ii) to cooperate  with such Holder in connection  with any
         filings required to be made with the National Association of Securities
         Dealers,  Inc.  and do any and all other acts and  things  which may be
         reasonably  necessary or advisable to enable such Holder to  consummate
         the  disposition in each such  jurisdiction of such  Registrable  Notes
         owned by such Holder; PROVIDED,  HOWEVER, that none of GST Funding, GST
         USA or GST shall be required to (A) qualify as a foreign corporation or
         as a dealer  in  securities  in any  jurisdiction  where  it would  not
         otherwise  be required to qualify but for this Section  3(d),  (B) file
         any  general  consent to service  of process or (C)  subject  itself to
         taxation in any such jurisdiction if it is not otherwise so subject;

                  (e) in the case of a Shelf Registration, notify each Holder of
         Registrable  Notes,  counsel  for  the  Holders  and  counsel  for  the
         Placement  Agents  promptly  and,  if  requested  by any such Holder or
         counsel,  confirm  such  advice  in  writing  (i)  when a  Registration
         Statement has become  effective and when any  post-effective  amendment
         thereto  has been filed and becomes  effective,  (ii) of any request by
         the  SEC  or  any  state   securities   authority  for  amendments  and
         supplements  to  a   Registration   Statement  and  Prospectus  or  for
         additional  information  after the  Registration  Statement  has become
         effective,  (iii) of the  issuance  by the SEC or any state  securities
         authority  of  any  stop  order  suspending  the   effectiveness  of  a
         Registration  Statement or the initiation of any  proceedings  for that
         purpose,  (iv)  if,  between  the  effective  date  of  a  Registration
         Statement  and the  closing of any sale of  Registrable  Notes  covered
         thereby,  the representations and warranties of GST Funding, GST USA or
         GST contained in any underwriting agreement, securities sales agreement
         or other similar  agreement,  if any, relating to the offering cease to
         be true and correct in all material respects or if GST Funding, GST USA
         or GST receives any notification  with respect to the suspension of the
         qualification of the Registrable  Notes for sale in any jurisdiction or
         the initiation of any proceeding for such purpose, (v) of the happening
         of any  event  during  the  period a Shelf  Registration  Statement  is
         effective which makes any statement made in such Registration Statement
         or the  related  Prospectus  untrue in any  material  respect  or which
         requires  the making of any changes in such  Registration  Statement or
         Prospectus in order to make the  statements  therein not misleading and
         (vi)  of  any  determination  by GST  Funding,  GST  USA or GST  that a
         post-effective   amendment  to  a  Registration   Statement   would  be
         appropriate;

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<PAGE>

                  (f) make every  reasonable  effort to obtain the withdrawal of
         any order suspending the  effectiveness of a Registration  Statement at
         the  earliest  possible  moment and  provide  immediate  notice to each
         Holder of the withdrawal of any such order;

                  (g) in the  case  of a  Shelf  Registration,  furnish  to each
         Holder of Registrable  Notes,  without  charge,  at least one conformed
         copy of each Registration  Statement and any  post-effective  amendment
         thereto  (without  documents   incorporated  therein  by  reference  or
         exhibits thereto, unless requested);

                  (h) in the case of a Shelf  Registration,  cooperate  with the
         selling   Holders  of  Registrable   Notes  to  facilitate  the  timely
         preparation and delivery of certificates representing Registrable Notes
         to be sold and not  bearing  any  restrictive  legends  and enable such
         Registrable  Notes  to be in such  denominations  (consistent  with the
         provisions  of the  Indenture)  and  registered  in such  names  as the
         selling Holders may reasonably  request at least one business day prior
         to the closing of any sale of Registrable Notes;

                  (i) in the case of a Shelf  Registration,  upon the occurrence
         of any event  contemplated by Section  3(e)(v)  hereof,  use their best
         efforts  to  prepare a  supplement  or  post-effective  amendment  to a
         Registration  Statement  or the  related  Prospectus  or  any  document
         incorporated  therein by reference or file any other required  document
         so that, as thereafter  delivered to the purchasers of the  Registrable
         Notes,  such  Prospectus  will not  contain any untrue  statement  of a
         material  fact or omit to state a material  fact  necessary to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading.  GST Funding, GST USA and GST agree to notify the
         Holders to suspend use of the  Prospectus  as  promptly as  practicable
         after the occurrence of such an event,  and the Holders hereby agree to
         suspend use of the Prospectus until GST Funding, GST USA or GST, as the
         case may be, has amended or supplemented the Prospectus to correct such
         misstatement or omission;

                  (j)  within  a  reasonable  time  prior to the  filing  of any
         Registration Statement, any Prospectus, any amendment to a Registration
         Statement or amendment or  supplement  to a Prospectus  or any document
         which is to be incorporated by reference into a Registration  Statement
         or a  Prospectus  after  initial  filing of a  Registration  Statement,
         provide copies of such document to the Placement Agents and its counsel
         (and, in the case of a Shelf  Registration  Statement,  the Holders and
         their counsel) and make such of the representatives of GST Funding, GST
         USA and GST as shall be reasonably requested by the Placement Agents or
         its counsel (and, in the case of a Shelf  Registration  Statement,  the
         Holders or their  counsel)  available for  discussion of such document,
         and  shall  not  at  any  time  file  or  make  any  amendment  to  the
         Registration   Statement,   any  Prospectus  or  any  amendment  of  or
         supplement to a Registration  Statement or a Prospectus or any document
         which is to be incorporated by reference into a Registration  Statement
         or a Prospectus, of which the Placement Agents and its counsel (and, in
         the case of a Shelf  Registration  Statement,  the  Holders  and  their
         counsel)  shall not have  previously  been advised and furnished a copy
         or,  other than with respect to  documents  filed  pursuant to the 1934
         Act, to which the Placement Agents or their counsel (and, in

                                       9

<PAGE>

         the  case of a Shelf  Registration  Statement,  the  Holders  or  their
         counsel)  shall  reasonably   object,   except  for  any  amendment  or
         supplement or document,  a copy of which has been previously  furnished
         to the  Placement  Agents and its counsel  (and, in the case of a Shelf
         Registration Statement,  the Holders and their counsel),  which counsel
         for GST Funding,  GST USA and GST shall advise GST Funding, GST USA and
         GST, in the form of a written  legal  opinion,  is required in order to
         comply with applicable law;

                  (k)  obtain  a  CUSIP  number  for  all   Exchange   Notes  or
         Registrable  Notes,  as the case may be, not later  than the  effective
         date of a Registration Statement;

                  (l)  cause  the  Indenture  to be  qualified  under  the Trust
         Indenture Act of 1939, as amended (the "TIA"),  in connection  with the
         registration  of the Exchange Notes or Registrable  Notes,  as the case
         may be,  cooperate  with the  Trustee  and the  Holders to effect  such
         changes to the  Indenture as may be required for the Indenture to be so
         qualified in accordance with the terms of the TIA and execute,  and use
         their best efforts to cause the Trustee to execute all documents as may
         be required to effect  such  changes and all other forms and  documents
         required  to be filed  with the SEC to enable  the  Indenture  to be so
         qualified in a timely manner;

                  (m) in the case of a Shelf  Registration,  make  available for
         inspection by a representative of the Holders of the Registrable Notes,
         any Underwriter participating in any disposition pursuant to such Shelf
         Registration Statement, and attorneys and accountants designated by the
         Holders,  at reasonable times and in a reasonable manner, all financial
         and other records,  pertinent  documents and properties of GST Funding,
         GST USA and GST,  and  cause the  respective  officers,  directors  and
         employees  of GST  Funding,  GST USA and GST to supply all  information
         reasonably requested by any such representative,  Underwriter, attorney
         or accountant in connection with a Shelf Registration Statement;

                  (n) in the  case  of a  Shelf  Registration,  use  their  best
         efforts to cause all  Registrable  Notes to be listed on any securities
         exchange or any automated  quotation system on which similar securities
         issued by GST USA or GST are then listed if  requested  by the Majority
         Holders,  to the  extent  such  Registrable  Notes  satisfy  applicable
         listing requirements;

                  (o) use their  best  efforts  to cause the  Exchange  Notes or
         Registrable  Notes,  as the case may be, to be rated by two  nationally
         recognized statistical rating organizations (as such term is defined in
         Rule 436(g)(2) under the 1933 Act);

                  (p) if reasonably requested by any Holder of Registrable Notes
         covered by a  Registration  Statement,  (i) promptly  incorporate  in a
         Prospectus supplement or post-effective amendment such information with
         respect  to  such  Holder  as such  Holder  reasonably  requests  to be
         included  therein and (ii) make all required filings of such Prospectus
         supplement or such post-effective amendment as soon as GST Funding, GST

                                       10

<PAGE>
         USA or GST has received  notification of the matters to be incorporated
         in such filing; and

                  (q) in the  case  of a Shelf  Registration,  enter  into  such
         customary  agreements  and take all such other  actions  in  connection
         therewith  (including  those  requested by the Holders of a majority of
         the  Registrable  Notes being sold) in order to expedite or  facilitate
         the disposition of such Registrable  Notes  including,  but not limited
         to, an Underwritten Offering and in such connection,  (i) to the extent
         possible,  make such  representations and warranties to the Holders and
         any Underwriters of such Registrable Notes with respect to the business
         of  GST  Funding,   GST  USA  and  GST  and  their  subsidiaries,   the
         Registration  Statement,   Prospectus  and  documents  incorporated  by
         reference or deemed incorporated by reference, if any, in each case, in
         form,  substance  and  scope  as are  customarily  made by  issuers  to
         underwriters in underwritten offerings and confirm the same if and when
         requested,  (ii) obtain opinions of counsel to GST Funding, GST USA and
         GST (which counsel and opinions, in form, scope and substance, shall be
         reasonably  satisfactory to the Holders and such Underwriters and their
         respective counsel) addressed to each selling Holder and Underwriter of
         Registrable Notes, covering the matters customarily covered in opinions
         requested  in  underwritten  offerings,  (iii)  obtain  "cold  comfort"
         letters  from  the  independent  certified  public  accountants  of GST
         Funding, GST USA and GST (and, if necessary, any other certified public
         accountant of any subsidiary of GST Funding, GST USA and GST, or of any
         business  acquired by GST Funding,  GST USA or GST for which  financial
         statements and financial data are or are required to be included in the
         Registration   Statement)   addressed  to  each   selling   Holder  and
         Underwriter of Registrable  Notes, such letters to be in customary form
         and covering matters of the type customarily  covered in "cold comfort"
         letters in connection  with  underwritten  offerings,  and (iv) deliver
         such documents and  certificates as may be reasonably  requested by the
         Holders of a majority  in  principal  amount of the  Registrable  Notes
         being sold or the Underwriters,  and which are customarily delivered in
         underwritten  offerings,  to  evidence  the  continued  validity of the
         representations  and  warranties  of GST Funding,  GST USA and GST made
         pursuant  to  clause  (i)  above and to  evidence  compliance  with any
         customary conditions contained in an underwriting agreement.

                  In the case of a Shelf  Registration  Statement,  GST Funding,
GST USA or GST may require  each Holder of  Registrable  Notes to furnish to GST
Funding,  GST USA or GST such information  regarding the Holder and the proposed
distribution by such Holder of such Registrable Notes as GST Funding, GST USA or
GST may from time to time reasonably request in writing.

                  In the case of a Shelf  Registration  Statement,  each  Holder
agrees that, upon receipt of any notice from GST Funding,  GST USA or GST of the
happening of any event of the kind  described in Section  3(e)(v)  hereof,  such
Holder will forthwith discontinue disposition of Registrable Notes pursuant to a
Registration  Statement  until  such  Holder's  receipt  of  the  copies  of the
supplemented or amended Prospectus  contemplated by Section 3(i) hereof, and, if
so  directed by GST  Funding,  GST USA or GST,  such Holder will  deliver to GST
Funding, GST

                                       11

<PAGE>

USA or GST (at its expense) all copies in its  possession,  other than permanent
file copies then in such Holder's  possession,  of the Prospectus  covering such
Registrable Notes current at the time of receipt of such notice. If GST Funding,
GST USA or GST  shall  give  any such  notice  to  suspend  the  disposition  of
Registrable Notes pursuant to a Registration Statement, GST Funding, GST USA and
GST shall extend the period  during which the  Registration  Statement  shall be
maintained effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and including
the date when the Holders  shall have  received  copies of the  supplemented  or
amended Prospectus necessary to resume such dispositions.

                  The  Holders  of   Registrable   Notes   covered  by  a  Shelf
Registration Statement who desire to do so may sell such Registrable Notes in an
Underwritten  Offering. In any such Underwritten Offering, the investment banker
or  investment  bankers and manager or managers (the  "Underwriters")  that will
administer  the  offering  will  be  selected  by the  Majority  Holders  of the
Registrable Notes included in such offering.

                  4. PARTICIPATION OF BROKER-DEALERS IN EXCHANGE OFFER.

                  (a) GST Funding,  GST USA and GST understand that the Staff of
the SEC has taken the position that any  broker-dealer  that  receives  Exchange
Notes for its own account in the Exchange  Offer in exchange for Notes that were
acquired by such  broker-dealer  as a result of  market-making  or other trading
activities  (a   "Participating   Broker-Dealer"),   may  be  deemed  to  be  an
"underwriter"  within the meaning of the 1933 Act and must  deliver a prospectus
meeting the  requirements  of the 1933 Act in connection with any resale of such
Exchange Notes.

                  GST Funding, GST USA and GST understand that it is the Staff's
position that if the  Prospectus  contained in the Exchange  Offer  Registration
Statement  includes a plan of  distribution  containing a statement to the above
effect  and the  means by which  Participating  Broker-Dealers  may  resell  the
Exchange Notes,  without naming the  Participating  Broker-Dealers or specifying
the amount of Exchange Notes owned by them,  such Prospectus may be delivered by
Participating  Broker-Dealers  to satisfy their prospectus  delivery  obligation
under the 1933 Act in  connection  with resales of Exchange  Notes for their own
accounts, so long as the Prospectus otherwise meets the requirements of the 1933
Act.

                  (b)  In  light  of  the  above,   notwithstanding   the  other
provisions  of this  Agreement,  GST  Funding,  GST USA and GST  agree  that the
provisions of this Agreement as they relate to a Shelf  Registration  shall also
apply to an Exchange Offer  Registration to the extent, and with such reasonable
modifications  thereto as may be, reasonably requested by the Placement Agent or
by one or more Participating Broker-Dealers,  in each case as provided in clause
(ii) below,  in order to expedite or facilitate the  disposition of any Exchange
Notes by Participating Broker-Dealers consistent with the positions of the Staff
recited in Section 4(a) above; PROVIDED that:

                  (i) GST  Funding,  GST USA and GST  shall not be  required  to
         amend or  supplement  the  Prospectus  contained in the Exchange  Offer
         Registration Statement, as

                                       12

<PAGE>

         would otherwise be  contemplated  by Section 3(i) hereof,  for a period
         exceeding  180 days after the last Exchange Date (as such period may be
         extended pursuant to the penultimate paragraph of Section 3 hereof) and
         Participating  Broker-Dealers  shall not be  authorized by GST Funding,
         GST USA or GST to deliver and shall not deliver such  Prospectus  after
         such period in connection with the resales contemplated by this Section
         4; and

                  (ii) the application of the Shelf Registration  procedures set
         forth in Section 3 hereof to an  Exchange  Offer  Registration,  to the
         extent not  required  by the  positions  of the Staff of the SEC or the
         1933  Act  and  the  rules  and  regulations  thereunder,  will  be  in
         conformity with the reasonable request to GST Funding,  GST USA and GST
         by the Placement  Agents or with the  reasonable  request in writing to
         GST Funding,  GST USA and GST by one or more broker-dealers who certify
         to the Placement Agents,  GST Funding,  GST USA and GST in writing that
         they anticipate  that they will be  Participating  Broker-Dealers;  and
         PROVIDED FURTHER that, in connection with such application of the Shelf
         Registration  procedures  set forth in Section 3 hereof to an  Exchange
         Offer Registration, GST Funding, GST USA and GST shall be obligated (A)
         to  deal  only  with  one   entity   representing   the   Participating
         Broker-Dealers, which shall be Morgan Stanley & Co. Incorporated unless
         it elects  not to act as such  representative,  (B) to pay the fees and
         expenses   of  only  one   counsel   representing   the   Participating
         Broker-Dealers,  which shall be counsel to the Placement  Agents unless
         such counsel elects not to so act and (C) to cause to be delivered only
         one, if any,  "cold  comfort"  letter with respect to the Prospectus in
         the form  existing on the last  Exchange  Date and with respect to each
         subsequent amendment or supplement,  if any, effected during the period
         specified in clause (i) above.

                  (c)  The  Placement  Agents  shall  have no  liability  to GST
Funding, GST USA, GST or any Holder with respect to any request that it may make
pursuant to Section 4(b) above.

                  5. INDEMNIFICATION AND CONTRIBUTION.

                  (a) Each of GST Funding,  GST USA and GST agrees,  jointly and
severally,  to indemnify and hold harmless the Placement Agents, each Holder and
each Person,  if any, who controls the Placement Agents or any Holder within the
meaning of either  Section 15 of the 1933 Act or Section 20 of the 1934 Act,  or
is under common control with, or is controlled  by, the Placement  Agents or any
Holder, from and against all losses, claims, damages and liabilities (including,
without  limitation,  any legal or other  expenses  reasonably  incurred  by the
Placement  Agents,  any Holder or any such  controlling or affiliated  Person in
connection with defending or  investigating  any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which Exchange
Notes or Registrable  Notes were  registered  under the 1933 Act,  including all
documents  incorporated  therein  by  reference,  or caused by any  omission  or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading,  or caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if GST Funding, GST USA or GST shall have
furnished any amendments or supplements thereto), or caused by

                                       13

<PAGE>

any omission or alleged  omission to state therein a material fact  necessary to
make the statements therein in light of the circumstances  under which they were
made  not  misleading,  except  insofar  as  such  losses,  claims,  damages  or
liabilities  are caused by any such  untrue  statement  or  omission  or alleged
untrue  statement or omission based upon  information  relating to the Placement
Agents or any Holder furnished to GST Funding,  GST USA or GST in writing by the
Placement Agents or any selling Holder expressly for use therein.  In connection
with any Underwritten  Offering permitted by Section 3 hereof, GST Funding,  GST
USA and GST will also  indemnify  the  Underwriters,  if any,  selling  brokers,
dealers and  similar  securities  industry  professionals  participating  in the
distribution,  their  officers and  directors  and each Person who controls such
Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent
as  provided  above  with  respect to the  indemnification  of the  Holders,  if
requested in connection with any Registration Statement.

                  (b)  Each  Holder  agrees,   severally  and  not  jointly,  to
indemnify and hold harmless GST Funding,  GST USA and GST, the Placement  Agents
and the other selling Holders, and each of their respective directors,  officers
who sign the  Registration  Statement and each Person,  if any, who controls GST
Funding,  GST USA or GST,  the  Placement  Agents and any other  selling  Holder
within  the  meaning  of either  Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from GST Funding, GST USA
and GST to the  Placement  Agents and the  Holders,  but only with  reference to
information  relating to such Holder furnished to GST Funding, GST USA or GST in
writing by such Holder expressly for use in any  Registration  Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).

                  (c)  In  case  any  proceeding   (including  any  governmental
investigation)  shall be  instituted  involving  any  Person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such Person (the  "indemnified  party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying  party") in writing and the
indemnifying  party, upon request of the indemnified party, shall retain counsel
reasonably  satisfactory to the  indemnified  party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel,  but the fees and expenses of such counsel  shall be at the expense
of such indemnified party unless (i) the indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such counsel or (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel  would be  inappropriate  due to actual or potential
differing  interests between them. It is understood that the indemnifying  party
shall not, in connection with any proceeding or related  proceedings in the same
jurisdiction,  be liable for (a) the fees and expenses of more than one separate
firm (in  addition  to any  local  counsel)  for the  Placement  Agents  and all
Persons,  if any, who control the Placement  Agents within the meaning of either
Section  15 of the 1933 Act or  Section  20 of the  1934  Act,  (b) the fees and
expenses of more than one separate  firm (in addition to any local  counsel) for
GST  Funding,  GST USA and GST,  their  directors,  their  officers who sign the
Registration  Statement and each Person,  if any, who controls GST Funding,  GST
USA

                                       14

<PAGE>

or GST within the meaning of either such  Section and (c) the fees and  expenses
of more  than one  separate  firm (in  addition  to any local  counsel)  for all
Holders and all Persons,  if any, who control any Holders  within the meaning of
either such Section,  and that all such fees and expenses shall be reimbursed as
they are incurred.  In such case involving the Placement  Agents and Persons who
control the Placement Agents, such firm shall be designated in writing by Morgan
Stanley & Co. Incorporated.  In such case involving the Holders and such Persons
who control  Holders,  such firm shall be  designated in writing by the Majority
Holders.  In all  other  cases,  such  firm  shall  be  designated  by GST.  The
indemnifying  party  shall not be liable for any  settlement  of any  proceeding
effected  without its written  consent  but, if settled  with such consent or if
there be a final judgment for the plaintiff,  the  indemnifying  party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.  Notwithstanding the foregoing  sentence,  if at
any time an  indemnified  party shall have  requested an  indemnifying  party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third  sentences of this  paragraph,  the  indemnifying  party
agrees that it shall be liable for any  settlement  of any  proceeding  effected
without its written  consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying  party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party for such
fees and expenses of counsel in  accordance  with such request prior to the date
of such  settlement.  No  indemnifying  party shall,  without the prior  written
consent of the  indemnified  party,  effect  any  settlement  of any  pending or
threatened  proceeding  in respect of which such  indemnified  party is or could
have  been a party  and  indemnity  could  have been  sought  hereunder  by such
indemnified party, unless such settlement  includes an unconditional  release of
such indemnified  party from all liability on claims that are the subject matter
of such proceeding.

                  (d) If the  indemnification  provided for in paragraph  (a) or
paragraph  (b) of this  Section  5 is  unavailable  to an  indemnified  party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying   party  under  such  paragraph,   in  lieu  of  indemnifying  such
indemnified party thereunder,  shall contribute to the amount paid or payable by
such  indemnified  party  as  a  result  of  such  losses,  claims,  damages  or
liabilities  in such  proportion as is appropriate to reflect the relative fault
of the  indemnifying  party or  parties  on the one hand and of the  indemnified
party  or  parties  on the  other  hand in  connection  with the  statements  or
omissions that resulted in such losses, claims, damages or liabilities,  as well
as any  other  relevant  equitable  considerations.  The  relative  fault of GST
Funding, GST USA, GST and the Holders shall be determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or the  omission  or  alleged  omission  to state a  material  fact  relates  to
information  supplied  by GST  Funding,  GST USA,  GST or by the Holders and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct  or  prevent  such  statement  or  omission.   The  Holders'  respective
obligations  to  contribute  pursuant  to  this  Section  5(d)  are  several  in
proportion  to the  respective  principal  amount of  Registrable  Notes of such
Holder that were registered pursuant to a Registration Statement.

                  (e) GST Funding,  GST USA,  GST, and each Holder agree that it
would not be just or equitable if  contribution  pursuant to this Section 5 were
determined by PRO RATA allocation or by any other method of allocation that does
not take account of the equitable

                                       15

<PAGE>
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses,  claims, damages and liabilities
referred to in  paragraph  (d) above shall be deemed to include,  subject to the
limitations set forth above, any legal or other expenses  reasonably incurred by
such  indemnified  party in connection with  investigating or defending any such
action or claim.  Notwithstanding  the  provisions  of this Section 5, no Holder
shall be required to indemnify or contribute  any amount in excess of the amount
by which the total  price at which  Registrable  Notes were sold by such  Holder
exceeds the amount of any damages that such Holder has  otherwise  been required
to pay by reason of such  untrue or alleged  untrue  statement  or  omission  or
alleged omission. No Person guilty of fraudulent  misrepresentation  (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 5 are not  exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified  party at law or
in equity.

                  (f) The indemnity  and  contribution  provisions  contained in
this Section 5 shall remain operative and in full force and effect regardless of
(i) any  termination of this  Agreement,  (ii) any  investigation  made by or on
behalf of the  Placement  Agents,  any  Holder  or any  person  controlling  the
Placement Agents or any Holder, or by or on behalf of GST Funding, GST USA, GST,
their officers or directors or any person  controlling  GST Funding,  GST USA or
GST,  (iii)  acceptance  of any of the  Exchange  Notes  and  (iv)  any  sale of
Registrable Notes pursuant to a Shelf Registration Statement.

                  6. MISCELLANEOUS.

                  (a) NO INCONSISTENT  AGREEMENTS.  None of GST Funding, GST USA
or GST has entered into,  and on or after the date of this  Agreement will enter
into, any agreement which is inconsistent with the rights granted to the Holders
of  Registrable  Notes  in  this  Agreement  or  otherwise  conflicts  with  the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
GST Funding's,  GST USA's or GST's other issued and outstanding securities under
any such agreements.

                  (b) AMENDMENTS AND WAIVERS.  The provisions of this Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given unless GST Funding,  GST USA and GST have  obtained the written
consent of Holders of at least a majority in aggregate  principal  amount of the
outstanding   Registrable  Notes  affected  by  such  amendment,   modification,
supplement,   waiver  or  consent;   PROVIDED,   HOWEVER,   that  no  amendment,
modification,   supplement,  waiver  or  consents  to  any  departure  from  the
provisions  of Section 5 hereof  shall be  effective  as  against  any Holder of
Registrable Notes unless consented to in writing by such Holder.

                  (c) NOTICES. All notices and other communications provided for
or permitted  hereunder  shall be made in writing by  hand-delivery,  registered
first-class mail, telex, telecopier,

                                       16

<PAGE>

or any courier  guaranteeing  overnight delivery (i) if to a Holder, at the most
current address given by such Holder to GST Funding, GST USA and GST by means of
a notice given in accordance  with the  provisions  of this Section 6(c),  which
address  initially  is, with respect to the  Placement  Agents,  the address set
forth in the Placement Agreement;  and (ii) if to GST Funding,  initially at GST
Funding's  address  set forth in the  Indenture  and  thereafter  at such  other
address,  notice of which is given in  accordance  with the  provisions  of this
Section 6(c); and if to GST USA, initially at GST USA's address set forth in the
Indenture  and  thereafter  at such other  address,  notice of which is given in
accordance with the provisions of this Section 6(c); and if to GST, initially at
GST's address set forth in the Indenture and  thereafter at such other  address,
notice of which is given in accordance with the provisions of this Section 6(c).

                  All such  notices and  communications  shall be deemed to have
been duly given at the time  delivered by hand,  if personally  delivered;  five
business days after being  deposited in the mail,  postage  prepaid,  if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next  business  day if timely  delivered  to an air courier  guaranteeing
overnight delivery.

                  Copies of all such notices,  demands, or other  communications
shall be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.

                  (d) SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the
benefit of and be binding upon the  successors,  assigns and transferees of each
of the  parties,  including,  without  limitation  and  without  the need for an
express assignment,  subsequent  Holders;  PROVIDED that nothing herein shall be
deemed to permit any  assignment,  transfer or other  disposition of Registrable
Notes in violation of the terms of the Placement Agreement. If any transferee of
any Holder shall acquire Registrable Notes, in any manner,  whether by operation
of law or otherwise,  such Registrable Notes shall be held subject to all of the
terms of this Agreement,  and by taking and holding such Registrable  Notes such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and  provisions  of this  Agreement  and such  person  shall be
entitled to receive the benefits hereof. The Placement Agents (in their capacity
as Placement  Agents) shall have no liability or obligation to GST Funding,  GST
USA or GST with respect to any failure by a Holder to comply with, or any breach
by any Holder of, any of the obligations of such Holder under this Agreement.

                  (e) PURCHASES AND SALES OF NOTES. GST Funding, GST USA and GST
shall  not,  and shall use their  best  efforts to cause  their  affiliates  (as
defined  in Rule 405  under the 1933 Act) not to,  purchase  and then  resell or
otherwise transfer any Notes.

                  (f) RATING OF NOTES. GST Funding,  GST USA and GST shall cause
the Notes or the  Exchange  Notes,  as the case may be,  to be rated by  Moody's
Investors Service, Inc. or Standard & Poor's Corporation within 18 months of the
Closing Date.

                  (g) THIRD PARTY BENEFICIARY.  The Holders shall be third party
beneficiaries to the agreements made hereunder between GST Funding,  GST USA and
GST, on the one hand,

                                       17

<PAGE>

and the  Placement  Agents,  on the other hand,  and each Holder  shall have the
right  to  enforce  such  agreements  directly  to  the  extent  it  deems  such
enforcement  necessary  or  advisable  to  protect  its  rights or the rights of
Holders hereunder.

                  (h) COUNTERPARTS. This Agreement may be executed in any number
of  counterparts  and by the parties  hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (i)  HEADINGS.   The  headings  in  this   Agreement  are  for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

                  (j) DESIGNATION OF PROCESS AGENT;  SUBMISSION TO JURISDICTION.
Each  of GST  Funding,  GST  USA and GST  hereby  (i)  acknowledges  that it has
irrevocably designated and appointed Olshan Grundman Frome & Rosenzweig LLP, 505
Park Avenue,  New York, New York 10022,  Attention:  David Adler, Esq. (together
with any successor,  the "Process  Agent"),  as its authorized  agent upon which
process  may be served  in any suit,  action  or  proceeding  arising  out of or
relating to this Agreement or the transactions  contemplated  herein that may be
instituted  in any federal or state  court in the State of New York,  or brought
under federal or state securities laws, and acknowledges  that the Process Agent
has  accepted  such  designation,  (ii) agrees that  service of process upon the
Process Agent and written notice of such service to GST Funding, GST USA or GST,
as the case may be (mailed or delivered to GST's Chief Executive  Officer at its
principal office at 4317 N.E. Thurston Way, Vancouver,  Washington 98662), shall
be deemed in every respect  effective  service of process upon GST Funding,  GST
USA or GST, as the case may be, in any such suit, action or proceeding and (iii)
agrees to take any and all action, including the execution and filing of any and
all  such  documents  and  instruments  as may be  necessary  to  continue  such
designation  and  appointment  of the Process  Agent in full force and effect so
long as any of the Notes shall be outstanding.  Each of GST Funding, GST USA and
GST hereby agrees to submit to the  nonexclusive  jurisdiction of any federal or
state  court in the State of New York in any such  suit,  action  or  proceeding
arising out of or relating to this  Agreement or the  transactions  contemplated
herein.

                  (k)  WAIVER  OF  IMMUNITY.  To  the  extent  that  GST  has or
hereafter  may acquire any immunity from  jurisdiction  of any court or from any
legal process (whether through service of notice,  attachment prior to judgment,
attachment in aid of execution,  execution or otherwise)  with respect to itself
or its property,  it hereby  irrevocably  waives such immunity in respect of its
obligations under this Agreement, to the extent permitted by law.

                  (l)  GOVERNING  LAW. This  Agreement  shall be governed by the
laws of the State of New York.

                  (m)  SEVERABILITY.  In the  event  that any one or more of the
provisions contained herein, or the application thereof in any circumstance,  is
held   invalid,   illegal  or   unenforceable,   the   validity,   legality  and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                                       18

<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
as of the date first written above.


                                    GST TELECOMMUNICATIONS, INC.

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

                                    GST USA, INC.


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

                                    GST EQUIPMENT FUNDING, INC.


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

 
Confirmed and accepted as
of the date first above written:

MORGAN STANLEY & CO. INCORPORATED
DILLON, READ & CO. INC.
TD SECURITIES (USA) INC.

By Morgan Stanley & Co. Incorporated

By /s/ James Avery
  ---------------------------------
  Name:  James Avery
  Title: Vice President