AMENDED AND RESTATED

                                MASTER AGREEMENT

                                      Among

                               Tomen America Inc.,

                          GST Telecommunications Inc.,

                                GST Telecom Inc.,

                             Pacwest Network, Inc.,

                             Pacwest Network L.L.C.,

                         GST New Mexico Lightwave, Inc.,

                        GST Pacific Lightwave, Inc., and

                           GST Tucson Lightwave, Inc.



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<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>      <C>                                                                                                  <C> 

                                                                                                               Page
                                                                                                               ----

1.       Interpretation.........................................................................................  2
         1.1      Definitions...................................................................................  2
         1.2      Monetary Denomination.........................................................................  2

2.       Tomen Participation in GSI and GST Network Projects....................................................  2
         2.1      Exclusive Right...............................................................................  2
         2.2      Termination of Exclusive Right................................................................  3
         2.3      Other Cooperation.............................................................................  3

3.       Participation as Procurement Agent; Equipment Purchase Agreements......................................  3

4.       Debt Financing for Network Projects....................................................................  4

5.       Rights Related to Development Company Fundings.........................................................  5
         5.1      GSI Equity Securities Purchase................................................................  6
         5.2      Contractor and Construction Manager...........................................................  6

6.       Purchase of GSI Shares; Grant of Options and Warrants..................................................  6

7.       Network Project Financings.............................................................................  7

8.       Access to Information..................................................................................  7

9.       No Restrictions........................................................................................  7

10.      Expenses...............................................................................................  7

11.      Public Announcements...................................................................................  8

12.      Representations and Warranties.........................................................................  8
         12.1     Organization..................................................................................  8
         12.2     Authorization; Binding Agreement..............................................................  8
         12.3     Proceedings...................................................................................  8
         12.4     No Brokers....................................................................................  8
         12.5     Agreement Will Not Cause Breach...............................................................  8
         12.6     Disclosure....................................................................................  9

13.      Indemnification........................................................................................  9

14.      Miscellaneous.......................................................................................... 10
         14.1     Notices....................................................................................... 10
         14.2     Successors and Assigns........................................................................ 11
         14.3     Waiver........................................................................................ 11
         14.4     Governing Law................................................................................. 11



                                                    i

<PAGE>


                                                                                                               Page
                                                                                                               ----
         14.5     Counterparts.................................................................................. 11
         14.6     Effect of Section Headings.................................................................... 11
         14.7     Amendments.................................................................................... 11
         14.8     Entire Agreement.............................................................................. 11
         14.9     No Third Party Beneficiaries.................................................................. 11
         14.10    Further Assurances............................................................................ 11
         14.11    Partial Invalidity............................................................................ 12
         14.12    Plural Terms.................................................................................. 12
         14.13    Interpretation................................................................................ 12
         14.14    Arbitration................................................................................... 12
         14.15    Attorneys' Fees............................................................................... 13
         14.16    Confidential Information...................................................................... 13

SCHEDULE 1 - DEFINITIONS........................................................................................1-1

</TABLE>




                                       ii
<PAGE>
                              AMENDED AND RESTATED
                                MASTER AGREEMENT


                  THIS AMENDED AND RESTATED MASTER AGREEMENT
("Agreement") is made and entered into as of May 24, 1996 by the parties set
forth on the signature page hereof and amends that certain Master Agreement
dated October 24, 1994 by and among Tomen America Inc., a New York corporation
("Tomen America"), GST Telecommunications, Inc., a Canadian corporation
(formerly known as "Greenstar Telecommunications Inc.") ("GSI"), GST Telecom
Inc., a Delaware corporation and wholly-owned subsidiary of GSI ("GST"), GST
Pacwest Network L.L.C., an Oregon limited liability company, Pacwest Network
Inc., a Washington corporation (Pacwest Network L.L.C. and Pacwest Network, Inc.
are referred to collectively herein as "Pacwest") and GST Pacific Lightwave,
Inc., a Washington corporation (formerly known as "Pacific Lightwave, Inc.")
("PLI"), with respect to the following facts and circumstances.

         A. GSI and GST have or are developing plans to develop alternative
access network telecommunications projects or expand existing alternative access
network telecommunication projects ("Network Projects") in North, Central and
South America (the "Territory");

         B. Tomen is willing to: (1) provide up to one hundred million dollars
($100,000,000) of debt financing (including amounts previously disbursed with
respect to the PLI Project defined below) to Affiliates of GSI and GST which
will develop the Network Projects (the "Development Companies"); and (2) act as
equipment and materials procurement agent ("Procurement Agent") for such Network
Projects.

         C. GSI and GST are willing to grant Tomen the exclusive right to
participate in financing and procurement for each of the Network Projects in the
Territory.

         D. The Network Project developed by PLI (the "PLI Project"), was the
initial Network Project developed pursuant to these arrangements and serves as
the model for the parties' other joint Network Projects.

         E. The parties wish to make certain changes in the terms and conditions
of Tomen Corporation's and its Affiliates' ("Tomen's") rights to acquire equity
interests in Greenstar.

                  Subject to the terms and conditions of this Agreement and the
other Related Documents, and in reliance upon the representations, warranties,
covenants and agreements of the parties in this Agreement and the other Related
Documents, the parties hereto agree as follows:





<PAGE>



                  1. Interpretation.

                           1.1 Definitions. Unless otherwise indicated in this
Agreement or any other Related Document, each term set forth in Schedule 1, when
used in this Agreement or any other Related Document, shall have the respective
meaning given to that term in Schedule 1 or in the provision of this Agreement
or other Related Document referenced in Schedule 1.

                           1.2 Monetary Denomination. All references to
"dollars" or "$" mean the lawful currency of the United States of America.

                  2. Tomen Participation in GSI and GST Network Projects.

                       2.1 Exclusive Right.

                           (a) Commencing as of October 24, 1994, in each case
prior to providing any such information to any other party, GSI and GST and
their Affiliates (collectively, "Greenstar") will submit to Tomen for
consideration information concerning each Network Project Greenstar intends to
undertake in the Territory. Such information shall contain all necessary and
relevant terms and conditions regarding the Network Project including (without
limitation) a description of the proposed geographic location, a full business
plan (including information with respect to marketing, network facilities,
regulatory considerations, competitors and financial plans), operating budget,
historical information, financial information, any special considerations, the
proposed terms of Tomen's participation, and all other information required by
Tomen (in Tomen's reasonable judgment) to enable Tomen to determine whether to
participate in such Network Project. If additional information ("Additional
Information") shall be requested by Tomen, it shall be requested if practicable,
within forty-five (45) days of receipt of the information described in the
preceding sentence, and if not practicable, the period described in the
succeeding sentence to review and request information shall be extended up to
ten (10) days after receipt by Tomen of the Additional Information. Subject to
the terms of the preceding sentence, Tomen shall provide GSI and GST with notice
within forty-five (45) days of Tomen's receipt of adequate information
concerning a proposed Network Project whether, subject to completion of due
diligence and obtaining all approvals of Tomen and its Affiliates, it will
provide financing and participate as Procurement Agent for such Network Project.
During the period from Greenstar's conception of the proposed Network Project to
the expiration of Tomen's review period described in the preceding two
sentences, Greenstar shall keep the information concerning the proposed Network
Project and Tomen's potential participation confidential from all other parties.
Tomen's decision to participate in any proposed Network Project shall be subject
to, in each case, Tomen's satisfaction in its sole discretion with the Network
Project and with the terms of its participation. In this connection, Tomen may
propose debt financing terms different from those set forth in Section 4 with
respect to a particular Network Project proposed by Greenstar; provided that, if
the parties cannot agree on any such different terms and Tomen is unwilling to
participate on the terms set forth in Section 4, such Network Project shall be
considered a declined project under Subsection 2.2(b).




                                        2

<PAGE>



                           (b) This Subsection 2.1 shall not apply to: (i) the
existing joint venture arrangement of Greenstar with IntelCom Group Inc. with
respect to the development of an alternative access fiber optic
telecommunication transmission network in the Phoenix, Arizona Metropolitan Area
through Phoenix Fiber Access, Inc.; (ii) the existing joint venture arrangements
of Greenstar with Starcom International Optics Corporation with respect to the
Fiber One network proposed to be constructed between Vancouver, British Columbia
and Seattle, Washington; (iii) the proposed joint venture, Kentucky Fiberlink,
Co., to provide telecommunications services to the Commonwealth of Kentucky; and
(iv) any other project or joint venture in which: (A) Greenstar is a passive
investor with no ability to control the financing of the project, or (B) the
participation of Tomen as contemplated by this Agreement is prohibited by
Canadian law, including without limitation, that the participation of Tomen
would render the proposed Network Project ineligible for any necessary Permits
from Canadian authorities. No Greenstar entity is subject to any agreement or
bound in any way (by means of a noncompetition agreement or otherwise) from
developing Network Projects with Tomen in any geographic area in the Territory
other than the Phoenix Arizona Metropolitan Area.

                       2.2 Termination of Exclusive Right. The obligation of
Greenstar to provide to Tomen the exclusive right set forth in Subsection 2.1
will terminate on the earlier to occur of:

                           (a) such time as Tomen has provided a total of debt
financing in the principal amount (such principal amount to include interest
during the construction period) of one hundred million dollars ($100,000,000) to
Network Projects; and

                           (b) such time as Tomen has declined to provide
financing for three Network Projects submitted by Greenstar, provided that such
rejected Network Projects are similar to those previously undertaken by
Greenstar and Greenstar is fully committed to pursuit of such Network Projects
and closes the financing for each such Network Project. Tomen's decision not to
provide financing for three such Network Projects shall terminate Tomen's
obligation hereunder to make available any further debt financing.

                       2.3 Other Cooperation. GSI and Tomen shall consult with
one another periodically with respect to GSI's business activities in areas
other than alternative access telecommunications networks to determine whether
Tomen and GSI may work together in such other areas.

              3. Participation as Procurement Agent; Equipment Purchase
Agreements.

                  (a) With respect to each Network Project in which Tomen elects
to participate, Tomen or an Affiliate of Tomen shall act as Procurement Agent.
In connection with serving as Procurement Agent: (i) Tomen has the right to
charge a commission negotiated with each supplier; (ii) the materials and
equipment provided for the Network Project will satisfy specifications provided
by the Development Company and the suppliers will be recognized suppliers of
such materials and equipment, provided that the Development



                                        3

<PAGE>



Company has the reasonable right to reject a particular supplier if the
Development Company or an Affiliate has had difficulty with the supplier or the
supplier's materials or equipment are known in the market to be substandard,
provided further that GSI or GST provides written notice to Tomen of its
objection to a particular supplier within five Business Days of the date Tomen
proposes such supplier, and (iii) the price charged to the Development Company,
including the commission payable to Tomen, will be competitive with the prices
available from other suppliers (understanding that competitive does not mean
lowest in each case or that it will be higher in each case, but rather means
reasonable compared to the prices available from other suppliers, considering
the features of such other equipment and materials and the terms, including
warranty and payment terms and timing of delivery, available from other
suppliers). To check that prices available through Tomen are competitive, not
more than once each year commencing as of October 23, 1995, GSI and GST have the
right to obtain independent quotes for materials and equipment (which subject to
any confidentiality restrictions shall be made available to Tomen), and Tomen
has the right to revise its pricing based on such other quotes, which revised
price shall be accepted by Greenstar if it is competitive as described above.

                           (b) From time to time the Procurement Agent may enter
into agreements with equipment vendors with respect to the equipment to be
purchased by a Development Company, and the Development Company and/or GST,
subject to its/their review and approval of such agreements, shall enter into
reciprocal agreements with the Procurement Agent on the same terms and
conditions. If GST shall be a party to any such agreements with Tomen or
equipment vendors, it shall enter into reciprocal agreements with the
Development Company on the same terms and conditions.

                  4. Debt Financing for Network Projects. (a) With respect to
each Network Project in which Tomen elects to participate, Tomen shall provide a
loan in the amount of 75% of the Project Costs of a Network Project (a "Project
Loan") on the following terms, subject to agreement otherwise with respect to a
particular Network Project: (i) extension of the Project Loan will be subject to
conditions, including those set forth in Article 3 of the PLI Credit Agreement;
(ii) the Project Loan will cover a construction and term period, with the
construction period not to exceed three years and the total term of the Project
Loan not to exceed nine years; (iii) interest will be calculated and payable
quarterly, with interest during the construction period to be paid from draws
under the Project Loan (except to the extent that the Development Company has
revenue from operations during the construction period, in which event interest
will be paid currently from such revenue); (iv) the interest rate for the
Project Loan will be 3 month LIBOR plus 300 basis points, subject to the
Development Company having the option to convert to a fixed interest rate during
the term period on any interest payment date, with the fixed rate being equal to
the Treasury index rate for a term nearest to the remaining loan term, plus 300
basis points plus the swap cost associated with the conversion to the fixed
interest rate; (v) principal repayment will commence at the beginning of the
fourth year of the term of the Project Loan, with principal repayment based on
amortization to be agreed on with respect to each Network Project over 24
quarterly payments and any outstanding principal and interest paid on the date
of the scheduled 24th payment; (vi) GST will make an equity contribution equal
to the 25% of the Project Costs prior to or at the same time as the initial
funding under the Project Loan;



                                        4

<PAGE>



(vii) at the initial funding under the Network Project Credit Agreement Tomen
will be paid an upfront fee equal to 1.5% of the amount of the Project Loan;
(viii) Tomen will be paid a commitment fee of .5% per annum of the unused
principal portion of the committed amount of the Project Loan, payable quarterly
in arrears together with each quarterly interest payment; (ix) the security for
the Project Loan will include all of the assets of the Development Company and
all ownership interests in the Development Company; (x) the Project Loan may be
prepaid at any time without Tomen's consent, provided that (A) Tomen shall have
a right of first refusal to provide any refinancing, (B) at the time of the
prepayment Tomen shall be paid an amount equal to one-third of the net present
value of the interest rate savings, if any, of the refinancing loan compared to
the Project Loan, which if Tomen provides the refinancing loan will be added to
the principal amount thereof, and (C) if the Project Loan has variable interest,
the prepayment is on the last day of a LIBOR Interest Period, and if the
Development Company has elected to convert to a fixed interest loan, the
Development Company pays any costs or expenses in connection with the
prepayment; and (xi) any management fees payable by the Development Company will
be subordinated to the Development Company's obligations to Tomen with respect
to the Project Loan and the pledge agreement described in Subsection 4(b).

                           (b) At any time Tomen provides debt financing to more
than one Network Project, Greenstar shall cause each Development Company
involved in such Network Projects, at the time of the closing of the debt
financing of the second Network Project funded by Tomen and the closing of each
subsequent Network Project funded by Tomen, to enter into pledge agreements
pledging the Net Cash Flow of such Development Company to support the
Obligations of each other Development Company to Tomen and its Affiliates in the
event of a default of any other Development Company; provided however, that a
default or event of default on the part of one Development Company with respect
to its Network Project Credit Agreement by itself shall not constitute a default
or event of default with respect to the Network Project Credit Agreement between
any other Development Company and Tomen but rather the Net Cash Flow of such
second Development Company shall be available to cure the default or event of
default of the first Development Company.

                           (c) GST shall have the right to make additional
capital contributions to Development Companies. GST may also make loans to
Development Companies; provided that the maximum aggregate amount of such loans
shall be equal to twenty percent (20%) of the Project Budget of the Development
Company and such loans shall be unsecured and deeply subordinated to any
Obligations to Tomen and its Affiliates.

                           5. Rights Related to Development Company Fundings.
With respect to each Network Project in which Tomen elects to participate, Tomen
shall have the following rights.




                                        5

<PAGE>



                       5.1 GSI Equity Securities Purchase.

                           (a) Tomen or an Affiliate shall have the right (but
not the obligation), at the time of the initial funding of the initial Project
Loans for the Network Projects in Albuquerque, New Mexico and Tucson, Arizona,
to purchase, for a total purchase price of $800,000.00: (i) the number of shares
of GSI Common Stock, no par value ("GSI Common Stock") equal to the quotient of
the purchase price referred to in the preceding clause divided by the average of
the per share closing price for the GSI Common stock quoted on the AMEX as
published in the Western edition of the Wall Street Journal for the thirty (30)
market trading days preceding the date of the Credit Agreement between GST New
Mexico Lightwave, Inc. and GST Tucson Lightwave, Inc., respectively, as borrower
and Tomen as lender, and (ii) 46,155 warrants exercisable for one share of GSI
Common Stock.

                           (b) Tomen or an Affiliate shall have the right (but
not the obligation), at the time of the initial funding of each Project Loan
made after the Project Loans for the Albuquerque, New Mexico and Tucson, Arizona
Project Loans, to purchase for a total purchase price equal to 10% of the total
equity contribution to the Development Company by its shareholder(s): (i) the
number of shares of GSI Common Stock equal to the quotient of the purchase price
referred to in the preceding clause divided by the average of the per share
closing price for the GSI Common stock quoted on the AMEX as published in the
Western edition of the Wall Street Journal for the thirty (30) market trading
days preceding the date of the Credit Agreement between such Development Company
as borrower and Tomen as lender, and (ii) with respect to the Network Project to
be funded in Hawaii, 75,000 warrants, each exerciseable for one share of GSI
Common Stock, and with respect to other Network Projects, a number of such
warrants as shall be mutually agreed by Tomen and GSI.

                       5.2 Contractor and Construction Manager. Tomen shall have
the right to approve (which approval shall not be unreasonably withheld) the
contractor and construction manager for each Network Project in which Tomen
participates; provided that, Tomen shall approve or disapprove any proposed
contractor or construction manager within ten (10) Business Days after written
notice of such proposed contractor or construction manager is provided to Tomen
by Greenstar in the manner set forth in Section 14. If Tomen does not approve or
disapprove within such time period, the proposed contractor or construction
manager shall be deemed to be approved.

                  6. Purchase of GSI Shares; Grant of Options and Warrants. As
of October 24, 1994, Tomen and GSI entered into a Greenstar Telecommunications
Inc. Common Stock Purchase Agreement, which was amended by Amendment No. 1 to
Greenstar Telecommunications Inc. Common Stock Purchase Agreement effective as
of October 24, 1994 (the "GSI Stock Purchase Agreement") for: (a) the purchase
of certain GSI Common Stock and warrants exercisable for GSI Common Stock; and
(b) the granting of certain options to purchase GSI Common Stock and warrants
exercisable for GSI Common Stock.




                                        6

<PAGE>



                  7. Network Project Financings. Concurrently with the execution
of this Agreement, Tomen (as lender) is entering into Credit Agreements with GST
Tucson Lightwave, Inc., an Arizona corporation ("TLI"), and GST New Mexico
Lightwave, Inc., a New Mexico corporation ("NML") (both of which are
wholly-owned subsidiaries of GST), as borrowers, respectively.

                  8. Access to Information. Upon reasonable notice and at
reasonable intervals, GSI, GST, PLI, TLI, NML, and each other Development
Company shall, and shall cause their officers, directors, employees, partners,
auditors, agents and Affiliates to: (a) afford Tomen's officers, employees and
authorized agents and representatives and its Affiliates reasonable access
during normal business hours to the offices, properties and records of
Greenstar, including, without limitation, access to engineers, surveyors and
other agents of Tomen and cooperation in all reasonable respects in the conduct
of any surveys, reviews, environmental investigations and audits; and (b)
furnish to Tomen's officers, employees and authorized agents and representatives
and its Affiliates such additional financial and operating data and other
information regarding Greenstar (or legible copies thereof) as Tomen may from
time to time reasonably request and that can be provided without unreasonable
cost to or effort on the part of Greenstar. Without limiting the generality of
the foregoing provisions, GSI, GST, PLI, TLI, NML and each other Development
Company shall, and shall cause their Affiliates to, cooperate in all reasonable
respects with Tomen's investigation of Greenstar and such other Companies and
provide copies of such documents as Tomen may request to confirm the title to
any and all properties or assets (real, personal, tangible, intangible or other)
of Greenstar and such other Companies or used, or intended to be used by the
Network Projects. Notwithstanding anything to the contrary in the Related
Documents, no investigation by Tomen shall affect the representations and
warranties of GSI, GST, PLI, TLI or NML under this Agreement.

                  9. No Restrictions. Except as provided in this Section 9,
there are no restrictions on Tomen with respect to its participation in projects
not related to Greenstar. Tomen is free to pursue opportunities relating to
(without limitation) alternative access telecommunications networks that become
available to Tomen either alone or with third parties; provided, however, that
(a) once Greenstar presents a Network Project to Tomen, Tomen shall not
participate in the debt or equity financing of such project without Greenstar
unless Greenstar informs Tomen that it no longer has any interest in pursuing
the Network Project, and (b) once each year Greenstar may provide Tomen with a
list of cities in which Greenstar reasonably expects to develop Network Projects
during the following twelve months and any information then available to
Greenstar with respect to the planned Network Projects, and Tomen shall not,
without Greenstar's consent, offer to provide debt or equity financing for an
alternative access telecommunications network under development by another party
in such city during such twelve month period.

                  10. Expenses. At any closings pursuant to Network Project
Credit Agreements, Tomen's transaction expenses with respect to the negotiation,
execution and delivery of the associated agreements, including legal, consulting
and financial advisory fees



                                        7

<PAGE>



and other out of pocket expenses of Tomen, will be paid from the proceeds of the
loan made pursuant to the related Network Project Credit Agreement, in the
maximum amount of $250,000 (it being the anticipation of the parties that the
actual amount will be less than such amount).

                  11. Public Announcements. Neither Tomen, on the one hand, or
Greenstar on the other, shall make any public announcement concerning the
transactions contemplated hereby except with the prior consent of the other or
as may be required by law. Tomen or Greenstar, as the case may be, shall have
the right to review and provide comments on the form of any public announcement
prior to issuance of such announcement by the other.

                  12. Representations and Warranties. Tomen, GSI, GST, PLI, TLI
and NML and Pacwest each represent to the other as follows:

                           12.1 Organization. It is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation. It is duly qualified, authorized or licensed and in
good standing in each of the jurisdictions where the nature of its business or
the character of the properties owned, leased or operated by it requires such
qualification, authorization or licensing.

                           12.2 Authorization; Binding Agreement. This Agreement
has been duly executed and delivered by it and constitutes the valid and binding
obligation of it, enforceable against it in accordance with its terms. The
execution and delivery of this Agreement have been duly authorized by all
necessary action, and the individual or individuals executing and delivering
this Agreement on behalf of it is or are duly authorized to do so, and to bind
it thereby, all in accordance with its charter documents.

                           12.3 Proceedings. There is no litigation, action,
suit or proceeding pending or, to the best of such party's knowledge, threatened
by or against such party or which could reasonably be anticipated to adversely
affect, either individually or in the aggregate the transactions contemplated by
this Agreement.

                           12.4 No Brokers. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by such
party directly and no Person may be deemed to be acting on behalf of such party
in such a manner as to give rise to any valid claim against any of the parties
for a brokerage commission, finder's fee or other like payment except that
Pacwest is entitled to a finder's fee pursuant to Section 9.4 of the GST
Shareholder Agreement. GSI and GST are responsible for paying such finder's fee
to Pacwest.

                           12.5 Agreement Will Not Cause Breach. The execution
and delivery of this Agreement and the other Related Documents and the
consummation of the transactions contemplated hereby and thereby will not result
in or constitute any of the following: (i) a breach of any term or provision of
any Related Document by such party; (ii) a default, breach or violation or an
event that, with notice or lapse of time or both, would be a default,



                                        8

<PAGE>



breach or violation of any of such party's organizing documents or any
contractual obligation, license, commitment or arrangement to which such party
is a party or by which such party is bound; (iii) an event that would permit any
Person to terminate any contractual obligation or to accelerate the maturity of
any indebtedness or other contractual obligation of such party; or (iv) the
creation or imposition of any lien.

                           12.6 Disclosure. No representation, warranty or other
statement made by such party in this Agreement contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements herein taken as a whole not misleading in light of the circumstances
under which they were made.

                  13. Indemnification.

                           (a) Greenstar, jointly and severally, will indemnify
and hold harmless Tomen, each of Tomen's directors, partners, officers and
Affiliates, and each of such partners', officers' and Affiliates' officers,
directors, partners, employees, representatives and Affiliates (collectively,
the "Tomen Indemnitees"), against any losses, claims, damages or liabilities,
joint or several, to which any Tomen Indemnitee may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) (i) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Greenstar public document, including without limitation, press releases and all
documents required to be filed with the SEC, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and/or (ii) are suffered or incurred by a
Tomen Indemnitee, directly or indirectly, by reason of or arising out of any
litigation instituted by any shareholder of Greenstar other than a Tomen
Indemnitee, and Greenstar will reimburse each Tomen Indemnitee for any legal or
other expenses reasonably incurred by such Tomen Indemnitee in connection with
investigating or defending any such action or claim; provided, however, that
Greenstar shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any public
document, including without limitation, press releases and all documents
required to be filed with the SEC, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to Greenstar
by Tomen expressly for use in any Greenstar public document, including without
limitation, press releases and all documents required to be filed with the SEC.

                           (b) In the event that any third party claim is
asserted against a Tomen Indemnitee with respect to which such Tomen Indemnitee
is entitled to indemnification hereunder, such Tomen Indemnitee will, within
thirty (30) days after learning of such claim (provided, however, that if a
claim arises by virtue of litigation, then in no event less than twenty (20)
days prior to the date in which an appearance or answer is due, whichever is
earlier), notify Greenstar of such claim in writing. Greenstar shall, within
twenty (20) days after receipt from the Tomen Indemnitee of notice of such
claim, conduct at its expense the defense against such claim in its own name, or
if necessary in the name of the



                                        9

<PAGE>



Tomen Indemnitee, subject to the Tomen Indemnitee's reasonable approval of any
voluntary resolution of such claim. In the event that Greenstar fails to conduct
such defense or to provide notice to Tomen that it will conduct such defense,
the Tomen Indemnitee will have the right to conduct such defense and to
compromise and settle the claim in its sole discretion and be entitled to
indemnification from Greenstar pursuant to this Section 13. The Tomen Indemnitee
and Greenstar will cooperate with the Person conducting such defense and make
available to such Person such assistance and materials as may be reasonably
requested by it, all at the expense of Greenstar.

                           (c) The obligations of Greenstar under this Section
13 shall be in addition to any liability which Greenstar may otherwise have.

                  14. Miscellaneous.

                           14.1 Notices. All notices, notifications and other
communications required or permitted by this Agreement shall be in writing and
shall be delivered by hand, telegraphically transmitted, sent by facsimile (with
a copy sent by overnight mail), or mailed by overnight courier to the parties at
the following addresses (or such other address for a party as shall be specified
by notice given pursuant hereto):

    If to Tomen:                         Tomen America Inc.
                                         1285 Avenue of the Americas
                                         New York, NY  10019
                                         Attn:  Takashi Yoshida
                                         Facsimile No. (212) 397-3351

    with a copy to:                      Orrick, Herrington & Sutcliffe
                                         400 Sansome Street
                                         San Francisco, CA  94111
                                         Attn:  Michael R. Meyers
                                         Facsimile No. (415) 773-5759

    If to GSI, GST, Pacwest, PLI,
    TLI or NML:                          c/o GST Telecommunications Inc.
                                         4317 NE Thurston Way
                                         Vancouver, WA  98662
                                         Attn:  John Warta
                                         Facsimile No. (360) 604-2878

    with a copy to:                      Olshan Grundman Frome & Rosenzweig, LLP
                                         505 Park Avenue
                                         New York, NY  10022
                                         Attn:  Stephen Irwin
                                         Facsimile No. (212) 755-1467




                                       10

<PAGE>



                  Notices delivered by hand, telegraphically transmitted, or
sent by facsimile shall be deemed given the day so delivered, transmitted or
sent. Notices delivered or mailed as provided herein shall be deemed given on
the date of actual receipt. Failure to deliver to counsel for a party as
provided above a copy of a notice shall not constitute failure to give notice
hereunder.

                           14.2 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the successors and permitted
assigns of Tomen, GSI, GST, Pacwest, PLI, TLI and NML. No party may assign or
transfer this Agreement or any interest herein, in whole or in part, by
operation of law or otherwise, except upon the prior written consent of the
other parties, which prior consent may be withheld in the sole discretion of
such parties.

                           14.3 Waiver. No delay or omission by a party hereto
in exercising any right or remedy provided for herein shall constitute waiver of
such right or remedy and shall not be construed as a bar to or a waiver of any
such right or remedy on any future occasion.

                           14.4 Governing Law. This Agreement shall be governed
by, interpreted under, and construed and enforced in accordance with the laws of
the State of New York, except that body of law relating to choice of law.

                           14.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

                           14.6 Effect of Section Headings. Section headings
appearing in this Agreement are inserted for convenience or reference only, and
shall in no way be construed to be interpretations of text.

                           14.7 Amendments. This Agreement may only be modified
or amended by an instrument in writing duly executed and delivered by the
parties or their duly authorized representatives.

                           14.8 Entire Agreement. The terms and conditions set
forth herein constitute the complete and exclusive statement of the agreement
between Tomen, GSI, GST, Pacwest, PLI, TLI and NML relating to the subject
matter of this Agreement, superseding all previous negotiations and
understandings, and may not be contradicted by evidence of any prior or
contemporaneous agreement.

                           14.9 No Third Party Beneficiaries. The parties do not
intend to confer any benefit hereunder on any other than the parties hereto.

                           14.10 Further Assurances. The parties agree to do
such further acts and things and to execute and deliver such additional
agreements and instruments as the other



                                       11

<PAGE>



may reasonably require to consummate, evidence or confirm the agreements
contained herein in the manner contemplated hereby.

                           14.11 Partial Invalidity. If any provision of this
Agreement is found to be invalid by any court, the invalidity of such provision
shall not affect the validity of the remaining provisions hereof.

                           14.12 Plural Terms. All terms defined in this
Agreement in the singular form shall have comparable meanings when used in the
plural form and vice versa.

                           14.13 Interpretation. Each party and its counsel have
reviewed this Agreement and accordingly the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.

                           14.14 Arbitration.

                           (a) Any controversy, claim or dispute between the
parties hereto arising out of or related to this Agreement or the breach hereof,
which cannot be settled amicably by the parties, shall be submitted for
arbitration in accordance with the provisions contained herein and in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("Rules"); provided, however, that notwithstanding any provisions of such Rules,
the parties shall have the right to take depositions and obtain discovery
regarding the subject matter of the Arbitration, as provided in the New York
Civil Practice Laws and Rules. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction. The arbitrators
shall determine all questions of fact and law relating to any controversy, claim
or dispute hereunder, including but not limited to whether or not any such
controversy, claim or dispute is subject to the Arbitration provisions contained
herein.

                           (b) Any party desiring arbitration shall serve on the
other party and the New York Office of the American Arbitration Association, in
accordance with the aforesaid Rules, its Notice of Intent to Arbitrate
("Arbitration Notice"), accompanied by the name of the arbitrator selected by
the party serving the Arbitration Notice. A second arbitrator shall be chosen by
the other party, and a third arbitrator shall be chosen by the two arbitrators
so selected. If the party upon whom the Arbitration Notice is served fails to
select an arbitrator and fails to advise the other party of selection within
fifteen (15) days after the receipt of the Arbitration Notice, the second
arbitrator shall be selected by the first arbitrator. If the two arbitrators so
chosen cannot agree upon a third arbitrator within ten (10) days after the
appointment of a second arbitrator, the third arbitrator shall be selected in
accordance with the Rules. The arbitration proceedings provided hereunder are
hereby declared to be self-executing, and it shall not be necessary to petition
a court to compel arbitration.

                           (c) If a controversy, claim or dispute arises between
the parties which is subject to the arbitration provisions hereunder, and there
exists or later arises a controversy, claim or dispute between the parties and
any third party, which controversy,



                                       12

<PAGE>



claim or dispute arises out of or relates to the same transaction or series of
transactions, said third party controversy, claim or dispute shall be
consolidated with the arbitration proceedings hereunder; provided, however, that
any such third party must be a party to an agreement with Tomen, GSI, GST,
Pacwest, PLI, TLI or NML which provides for arbitration of disputes thereunder
in accordance with rules and procedures substantially the same in all material
respects as provided for herein, or, if not, must consent to arbitration as
provided for hereunder.

                           (d) All arbitration proceedings shall be held in New
York, New York.

                           (e) A demand for arbitration shall be made within
reasonable time after the claim, dispute or other matter in question has arisen
and in no event shall it be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statutes of limitations.

                           (f) For the purposes of this Subsection 14.14, a
"party" shall be Tomen, on the one hand, or GSI, GST, Pacwest, PLI, TLI and/or
NML, on the other hand.

                           14.15 Attorneys' Fees. In the event of any litigation
or arbitration to enforce the provisions of this Agreement, the prevailing party
in such litigation or arbitration shall be entitled to reasonable attorneys'
fees and costs as fixed by court or arbitration.

                           14.16 Confidential Information. (a) "Confidential
Information" means, collectively, any financial information, customer
information, contracts, service or product data, "know-how," or other like
information provided by the Providing Party to the Receiving Party which is of a
secret and proprietary nature, is in written form and marked as "CONFIDENTIAL",
and is treated by the Providing Party as a trade secret. Each party, when
receiving Confidential Information from the other party shall be referred to as
the "Receiving Party" and when disclosing or providing access to Confidential
Information to the other party shall be referred to as the "Providing Party."

                           (b) Each Receiving Party agrees to keep the
Confidential Information of the Providing Party disclosed to it hereunder
confidential; not to communicate Confidential Information of the Providing Party
to any third party without the approval of the Disclosing Party except to its
agents, representatives, advisors, consultants and employees; to direct its
agents, representatives, advisors, consultants and employees not to disclose to
any person the fact that the Confidential Information has been made available to
the Receiving Party, any of the terms, conditions or other facts with respect to
any possible transactions, including the status thereof except as otherwise set
forth herein; and not to utilize Confidential Information of the Providing Party
except for purposes of the business relationship with the Providing Party.

                           (c) The restrictions provided herein concerning use
or disclosure of Confidential Information by the Receiving Party shall not apply
with respect to Confidential Information which:



                                       13

<PAGE>




                                    (i) was disclosed to the Receiving Party by
a third party having the right to disclose the same;

                                    (ii) either was published or otherwise
available to the public at the time of its receipt by the Receiving Party or
became published or available to the public at a subsequent date by means other
than a breach of this Subsection 14.16, but in such event only as of said
subsequent date;

                                    (iii) was known to, developed or obtained by
the Receiving Party independently of any disclosure to it hereunder, as shown by
documents in the Receiving Party's possession; or

                                    (iv) is disclosed by the Receiving Party to
its counsel, as required by law, or in a legal proceeding.

                           (d) Upon the Providing Party's request, the Receiving
Party shall deliver to the Providing Party any tangible materials containing
Confidential Information, including all copies thereof, and all such materials
shall remain the property of the Providing Party. This paragraph shall survive
termination of this Agreement.

                           (e) Tomen and its Affiliates are authorized to (i)
discuss with their advisors, agents, representatives and consultants prospective
business transactions between Tomen and Greenstar or Pacwest in order to assess
the feasibility thereof, and (ii) disclose Confidential Information to the
extent required to perform the obligations of Procurement Agent.

                           (f) Except as provided in (d) above, this Subsection
14.16 shall terminate two (2) years from the date of disclosure of the
Confidential Information.

                           (g) Each Receiving Party understands and acknowledges
that any breach or threatened breach of any of its obligations under this
Subsection 14.16 will cause irreparable harm to the Providing Party for which
damages would not be a fully adequate remedy, and therefore, in the event of any
such breach, in addition to other available remedies, the Providing Party shall
have the right to obtain specific performance of this Subsection 14.16 and
injunctive relief.





                                       14

<PAGE>



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

TOMEN AMERICA INC.,                     GST TELECOMMUNICATIONS INC., 
a New York corporation                  a Canadian corporation


By:  /s/ Takashi Yoshida                By:  /s/ Clifford V. Sander
------------------------                ----------------------------------------
Name:  Takashi Yoshida                  Name:     Clifford V. Sander
Title:    Vice President                Its:      Senior Vice President

                                        GST TELECOM INC.,
                                        a Delaware corporation


                                        By:  /s/ Clifford V. Sander
                                        ----------------------------------------
                                        Name:     Clifford V. Sander
                                        Its:      Vice President

                                        GST PACIFIC LIGHTWAVE, INC.,
                                        a Washington corporation


                                        By:  /s/ Clifford V. Sander
                                        ----------------------------------------
                                        Name:     Clifford V. Sander
                                        Its:      Vice President

                                        PACWEST NETWORK L.L.C.,
                                        an Oregon limited liability company
                                        By its sole members:

                                             /s/ John Warta
                                        ----------------------------------------
                                                      John Warta


                                             /s/ Clifford V. Sander
                                        ----------------------------------------
                                                      Clifford V. Sander

                                        PACWEST NETWORK, INC.,
                                        a Washington corporation


                                        By:  /s/ John Warta
                                        ----------------------------------------
                                        Name:     John Warta
                                        Its:      President



                                       15

<PAGE>






                                       GST TUCSON LIGHTWAVE, INC.,
                                       an Arizona corporation


                                       By:  /s/ Clifford V. Sander
                                       -----------------------------------------
                                       Name:     Clifford V. Sander
                                       Title:    Vice President, CFO, Treasurer
                                                 & Assistant Secretary



                                       GST NEW MEXICO LIGHTWAVE, INC.,
                                       a New Mexico corporation


                                       By:  /s/ Clifford V. Sander
                                       -----------------------------------------
                                       Name:     Clifford V. Sander
                                       Title:    Vice President, CFO, Treasurer
                                                 & Assistant Secretary








                                       16

<PAGE>



                                   SCHEDULE 1

                                   DEFINITIONS



                  "Act" means the U.S. federal Securities Act of 1933, as
amended.

                  "Additional Information" has the meaning given in Section
2.1(a) of the Master Agreement.

                  "Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations under the Securities Exchange Act of 1934, as amended provided,
however, that in no case shall Tomen be deemed to be an Affiliate of Greenstar.

                  "AMEX" means the American Stock Exchange.

                  "Applicable Easement" means any Easement that is necessary at
any given time in light of the stage of development, construction or operation
of a Network Project to construct, test, operate, maintain, repair, own or use
the Network Project as contemplated by the Operative Documents, to enter into
any Operative Document or to consummate any transaction contemplated thereby.

                  "Applicable Permit" means any Permit, including any zoning,
environmental protection, pollution, sanitation, FCC, state, safety, sitting,
building or other Permit, (a) that is necessary at any given time in light of
the stage of development, construction or operation of a Network Project to
construct, test, operate, maintain, repair, own or use the Network Project as
contemplated by the Operative Documents, to enter into any Operative Document or
to consummate any transaction contemplated thereby, or (b) that is necessary so
that none of the Development Company, Lender nor any Affiliate of any of them
may be deemed by any Governmental Authority to be subject to regulation under
the Communications Act or under any state laws or regulations as a result of the
construction and operation of the Network Project.

                  "Arbitration Notice" has the meaning given in Section 14.14 of
the Master Agreement.

                  "Business Day" means any day other than a Saturday, Sunday or
other day on which banks are authorized to be closed in San Francisco,
California or New York, New York and, with respect to the determination of the
LIBOR Rate, which is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.

                  "Closing Date" means the closing date of a financing of a
Development Company by Tomen.




                                       1-1

<PAGE>



                  "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

                  "Collateral" means all real and personal property which is
subject or is or is intended to become subject to the security interests or lien
granted by any of the Collateral Documents.

                  "Collateral Documents" means the pledge agreement, the
security agreements, the Consents, the other security agreements to be entered
into pursuant to a credit agreement between Tomen and a Development Company, the
construction deeds of trust and any financing statements and the like filed or
recorded in connection with the foregoing.

                  "Collocation Agreements" means the agreements entered into or
to be entered into between a Development Company and local exchange carriers
with respect to physical or virtual collocation.

                  "Communications Act" means the Communication Act of 1934, as
amended.

                  "Confidential Information" has the meaning given in Section
14.16 of the Master Agreement.

                  "Consents" shall mean a consent to assignment as collateral
executed by each party to the Project Documents (other than Lender) in the form
set forth in the Credit Documents.

                  "Credit Documents" means with respect to the financing by
Tomen of a Network Project, the credit agreement, the note(s), the Collateral
Documents and the Consents.

                  "Development Companies" means corporations which are direct or
indirect subsidiaries of GSI and/or GST which develop Network Projects financed
by Tomen.

                  "Dollars" and "$" means United States dollars or such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts in the United States of
America.

                  "Easements" means any easement, other right of way or license
provided or agreed to by a Governmental Authority or other Person.

                  "Equity Securities" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests or other
equity interests in and of such Person (regardless of how designated and whether
or not voting or non-voting) and (b) all warrants, options and other rights to
acquire any of the foregoing.




                                       1-2

<PAGE>



                  "FCC" means the Federal Communications Commission and its
successors.

                  "Governmental Authority" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity, (including any
zoning authority, the FCC, or any arbitrator with authority to bind a party at
law.

                  "Governmental Rule" means any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive, guidelines,
policy or similar form of decision of any Governmental Authority.

                  "Greenstar" means GSI, GUS, GST, PLI and their Affiliates.

                  "GSI" means GST Telecommunications Inc. (formerly known as
"Greenstar Telecommunications Inc."), a corporation organized under the laws of
Canada.

                  "GSI Common Stock" means the common stock, no par value, of
GSI.

                  "GSI Stock Purchase Agreement" means the Greenstar
Telecommunications Inc. Stock Purchase Agreement between GSI and Tomen, dated
October 24, 1994.

                  "GST" means GST Telecom Inc., a Delaware corporation.

                  "GUS" means Greenstar USA, Inc., a Delaware corporation.

                  "Interest Period" means (a) the period commencing on the
Closing Date and ending on the numerically corresponding day in the third
succeeding calendar month and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period and ending on the numerically
corresponding day in the third succeeding calendar month; provided, however,
that (1) the initial Interest Period with respect to each construction loan
other than the initial construction loan shall commence on the date on which
such subsequent construction loan is advanced and end on the last day of the
then current Interest Period as established above; (2) any Interest Period which
would otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day unless, such next Business Day falls in another
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day; (3) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and (4) no Interest
Period shall end after the Maturity Date.

                  "Leases" means any lease of property necessary or entered into
in connection with a Network Project.

                  "Lender" means Tomen and its successors and assigns.



                                       1-3

<PAGE>




                  "Lender Representative" means an individual designated by
Lender from time to time to act as liaison with a Development Company.

                  "LIBOR Rate" means a rate per annum determined by Lender
(which determination shall, absent manifest error, be conclusive) to be equal to
the rate at which deposits in Dollars are offered to Lender in the London
interbank eurodollar currency market at approximately 11:00 a.m. (London time),
two Business Days prior to the first day of the relevant Interest Period (for
delivery on the first day of such Interest Period) and for a term equal to such
Interest Period.

                  "Maturity Date" means the maturity date under the Credit
Documents between a Development Company as borrower and Tomen as lender.

                  "Net Cash Flow" means with respect to a Development Company
and the applicable period:

                  (a)      the sum of:

                           (i) the gross receipts of the Development Company
from all sources (other than capital contributions, proceeds from the Credit
Agreement with Tomen or a Tomen Affiliate or other loans), including but not
limited to receipts from (1) the sale of products and services, (2) interest and
other investment income on investments and reserves, and (3) insurance proceeds;

                           (ii) any amounts released from reserves, the
distribution of which is permissible and in accordance with the provisions of
the Credit Agreement; and

                           (iii) any Net Cash Flow from a prior period not
distributed but the distribution of which is permissible;

less (b) the sum of:

                           (i) all costs and expenses which the Development
Company paid during such period in connection with the construction, ownership,
management (except as provided herein), operation and maintenance of the Network
Project, including, but not limited to, (1) utility costs, (2) business taxes
and real and personal property tax and assessments, and fees and expenses in
connection with the preparation of the Development Company's tax returns, (3)
insurance premiums, (4) the actual documented costs of Network Project
management, not to include management fees paid to Greenstar or any Affiliate in
excess of such actual costs, (5) expenditures for capital improvements and the
repair, maintenance and restoration of the improvements (including any portion
of the same to the extent not covered by insurance proceeds), (6) expenditures
required or deemed advisable to be made under or in connection with any contract
of the Development Company, and (7) all other costs and expenses, including
capital expenditures and the purchase of spare parts and other inventory and
replacement items, required to be made by the Development Company (but excluding
any such amounts to the extent paid out of reserves); and



                                       1-4

<PAGE>




                           (ii) all principal and interest and other sums and
amounts payable by the Development Company to repay any Loan from Tomen payable
for the applicable or pertinent period.

                  "Network Project Credit Agreement" means a credit agreement
between Tomen, as lender and a Development Company, as borrower, to finance an
alternative access network telecommunications project.

                  "Network Projects" means alternative access network
telecommunications projects to be developed or existing alternative access
projects to be expanded by GSI and/or GST in the Territory.

                  "NML" means GST New Mexico Lightwave, Inc., a New Mexico
corporation.
                  "Obligations" means and includes, with respect to any Person,
all loans, advances, debts, liabilities, and obligations, howsoever arising,
owed by such Person to a lender of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, pursuant to the terms of a credit agreement or
any other credit document, including all interest, fees, charges, expenses,
attorneys' fees and accountants fees chargeable to such Person in connection
with its dealings with such lender and payable by such Person hereunder or
thereunder. The term "Obligations" shall also mean and include any amounts owing
to Lender which arise because payments as to past transactions are rescinded or
otherwise required to be surrendered by Lender after receipt.

                  "Operative Documents" means the Credit Documents, the Project
Documents and any other contracts or agreements related to the construction,
testing, maintenance, repair, operation or use of the Network Project entered
into by the Development Company and any other Person subsequent to the Closing
Date.

                  "Pacwest" means Pacwest Network L.C.C., an Oregon limited
liability company.

                  "Parts" means any part, appliance, instrument, appurtenance,
accessory or other property of any nature necessary or useful to the operation,
maintenance, service or repair of the project.

                  "Permit" means any action, approval, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from a Governmental Authority.

                  "Person" means and includes an individual, a partnership, a
firm, an association, a corporation (including a business trust), a joint stock
company, an unincorporated association, a joint venture, a Governmental
Authority or any other entity whether acting in an individual, fiduciary or
other capacity.

                  "PLI" means Pacific Lightwave, Inc., a Washington corporation.



                                       1-5

<PAGE>




                  "PNI" shall mean Pacwest Network, Inc., a Washington
corporation.

                  "Procurement Agent" means construction equipment and materials
procurement agent for the development and construction of the Network Projects.

                  "Project Budget" has the meaning given in Section 3.1(l)(ii)
of the PLI Credit Agreement.

                  "Project Costs" means (a) the cost of designing, equipping,
procuring, constructing, starting up and testing the Network Project, (b) the
cost of acquiring any lease, the Applicable Easements and any other necessary
interest in the Network Project, (c) local property taxes and insurance premiums
payable with respect to the Network Project during the Construction Loan
Availability Period, (d) interest payable on any Note for the Network Project
during the Construction Loan Availability Period, (e) reasonable initial working
capital requirements of the Project as approved by Lender, (f) the costs of
acquiring Permits for the Network Project during the Construction Loan
Availability Period, (g) other fees and expenses relating to the Network
Project, including financial, legal (excluding litigation) and consulting fees
and expenses, all as described in the Project Budget.

                  "Project Documents" means the material agreements and
documents relating to the development, construction, operation, maintenance and
repair of a Network Project.

                  "Project Loan" means a loan in the amount of 75% of the
Project Costs of a Network Project provided by Tomen to a Development Company
pursuant to a Network Project Credit Agreement.

                  "Project Revenues" means, with respect to a Network Project,
all income and receipts derived from the ownership or operation of the Network
Project, including payments due the Development Company under the construction
contracts, proceeds of any business interruption or other insurance, income
derived from the Network Project, together with any receipts derived from the
sale of any property pertaining to the Network Project or incidental to the
operation of the Network Project, all as determined in conformity with cash
accounting principles, the investment income on amounts in the accounts held by
or on behalf of the related Development Company, the proceeds of any drawing
under a letter of credit of which the Development Company is the beneficiary,
proceeds of any insurance, condemnation or litigation or arbitration awards
relating to the Network Project and proceeds from the Collateral Documents, but
not including sums paid to the Development Company in satisfaction of a
contractual obligation to indemnify the Development Company for third party
liability to the extent such sums do not exceed the actual damage, loss or cost
suffered by the Development Company in connection therewith.

                  "Providing Party" has the meaning given in Section 14.16 of
the Master Agreement.

                  "Purchase Price" has the meaning given in Section 5.1 of the
Master Agreement.



                                       1-6

<PAGE>



                  "Receiving Party" has the meaning given in Section 14.16 of
the Master Agreement.

                  "Related Documents" means the Master Agreement, the GSI Stock
Purchase Agreement, and, with respect to each Network Project, the Credit
Documents, the Collateral Documents, the Warrants, the GST Services Agreement
and all appurtenant documents.

                  "Rules" shall mean the Commercial Arbitration Rules of The
American Arbitration Association.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "Service District" means the geographic district to be served
by the Network Project.

                  "Territory" means North America, Central America and South
America.

                  "Tomen" means Tomen America and its Affiliates.

                  "Tomen America" means Tomen America Inc., a New York
corporation.

                  "U.S." means the United States of America.

                  "Warrant" means a warrant in the form of Exhibit A to the GSI
Stock Purchase Agreement.

                  "Warrant Shares" means shares of GSI Common Stock issuable
upon exercise of the Warrants pursuant to the GSI Stock Purchase Agreement.



                                      1-7

<PAGE>



                             RULES OF INTERPRETATION


                  1. All terms defined in the Agreement in the singular form
shall have comparable meanings in the plural form and vice versa.

                  2. The word "or" is not exclusive.

                  3. A reference to a Person includes such Person's permitted
successors and permitted assigns.

                  4. The words "include", "includes" and "including" and words
of similar import are not limiting or exclusive.

                  5. A reference in the Agreement to an Article, Section,
Exhibit, Schedule, Annex, Attachment or Appendix is to the Article, Section,
Exhibit, Schedule, Annex, Attachment or Appendix of such Agreement unless
otherwise indicated. Exhibits, Schedules, Annexes, Attachments or Appendices to
any document shall be deemed incorporated by reference in such document.

                  6. References to any document, instrument or agreement (a)
shall include all exhibits, schedules and other attachments thereto, (b) shall
include all documents, instruments or agreements issued or executed in
replacement thereof, and (c) shall mean such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified and supplemented
from time to time and in effect at any given time.

                  7. The words "hereof," "herein" and "hereunder" and words of
similar import when used in the Agreement shall refer to such Agreement as a
whole and not to any particular provision of such document.

                  8. References to "days" shall mean calendar days, unless the
term "Business Days" is used. References to a time of day shall mean such time
in New York, New York unless otherwise specified.

                  9. This Agreement is the result of negotiations between, and
have been reviewed by the parties and their respective counsel. Accordingly,
this Agreement shall be deemed to be the product of all parties thereto, and no
ambiguity shall be construed in favor of or against any party.