GST TELECOM INC.
                    GST PACWEST TELECOM HAWAII, INCORPORATED
                             4317 N.E. Thurston Way
                           Vancouver, Washington 98662

                                                     December 1, 1995

Pacwest Network, Inc.
1701 Broadway
Suite 307
Vancouver, Washington  98663

Gentlemen:

                  Reference  is made to (i) that  certain  Restated  and Amended
Usage Agreement  dated as of June 21, 1994,  restated and amended as of November
1,  1995  (the  "Usage  Agreement"),   by  and  between  Pacwest  Network,  Inc.
("Pacwest") and GST Pacwest Telecom Hawaii, Incorporated;  and (ii) that certain
Restated and Amended Traffic  Agreement dated as of June 21, 1994,  restated and
amended as of November 1, 1995 (the "Traffic Agreement"), by and between Pacwest
and GST Telecom Inc. ("Telecom").

                  The following constitutes our agreement:

                  1. If at any time after the date hereof,  John Warta ceases to
be a full time employee of Telecom, its parent  corporations,  GST USA, Inc. and
GST  Telecommunications,  Inc. ("GST") and/or their subsidiaries  (collectively,
the "GST Companies"), the Usage Agreement and the Traffic Agreement shall remain
in full force and effect in accordance with their terms, and the parties thereto
shall continue to perform their duties and obligations  under such agreements in
the same manner as they have theretofore been performed, for a period ending not
less than one year after the such  cessation  of  employment.  If,  during  such
period,  GST in its discretion  shall  determine  that its  operations  would be
facilitated  by the transfer of the  "Licenses"  (as such term is defined in the
Usage Agreement),  it shall communicate such determination in writing to Pacwest
and Pacwest shall promptly file with the Federal Communications  Commission (the
"FCC") an application to transfer or assign the Licenses to an executive officer
of one of the GST  Companies  or to one of the GST  Companies,  which  executive
officer or Company  shall be  designated  by the Board of  Directors  of GST and
shall be eligible  to hold the  Licenses  (the  "Designated  Transferee").  Upon
approval of such  application,  the Licenses  shall be promptly  transferred  or
assigned to the  Designated  Transferee.  Pacwest  shall also  promptly seek FCC
authority to transfer to the Designated  Transferee all of its right,  title and
interest in, to and under the Usage Agreement and



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the Traffic  Agreement  and upon the receipt of such  authority  the  Designated
Transferee  shall assume and perform the  liabilities and obligations of Pacwest
thereunder.  The  Designated  Transferee  shall  also  enter  into an  agreement
substantially  in the form of this Agreement,  which would be given effect under
the circumstances described herein.

                  2.  The  parties  will  seek to  effect  the  transfer  of the
Licenses  to the  Designated  Transferee  in a manner  that  will  minimize  any
operation  and impact  upon the GST  Companies.  The costs of any such  transfer
shall be borne entirely by the GST Companies and the GST Companies shall defend,
indemnify and hold harmless Pacwest, its members and managers,  from and against
any and all  losses,  damages,  obligations,  liabilities,  costs  and  expenses
(including without limitation  reasonable attorneys' fees) incident to any suit,
action,  investigation,  claim or  proceeding  relating to or arising out of the
transfer of the Licenses in the manner contemplated by this Agreement.

                  3. The  foregoing  provisions  of this  Agreement  are and are
intended to be subject to all applicable  requirements of the Communications Act
of 1934, as amended, and shall be so effectuated and construed.

                  If the foregoing  correctly sets forth your  understanding  of
our  agreement,  kindly so  indicate by  executing  three  counterparts  of this
Agreement in the place provided for your signature.

                                        Very truly yours,

                                        GST TELECOM INC.

                                        By: /s/ Robert H. Hanson
                                            ------------------------------------
                                                Robert H. Hanson, Vice President

                                        GST PACWEST TELECOM HAWAII, INCORPORATED

                                        By: /s/ Robert H. Hanson
                                            ------------------------------------
                                                Robert H. Hanson, Vice President

ACKNOWLEDGED AND AGREED:

PACWEST NETWORK, INC.

By: /s/ John Warta
    -------------------------
        John Warta, President


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