RESTATED AND AMENDED TRAFFIC AGREEMENT

                  THIS  AGREEMENT  dated  as of  the  21st  day of  June,  1994,
restated  and amended as of  November 1, 1995,  between  PACWEST  NETWORK,  INC.
("Licensee") and GST TELECOM INC. ("GST").

                               W I T N E S S E T H

                  WHEREAS, concurrently herewith Licensee and GST Pacwest Telcom
Hawaii,   Incorporated  ("GPTH""),  a  subsidiary  of  GST,  are  executing  and
delivering  that  certain  Restated  and  Amended  Usage  Agreement  (the "Usage
Agreement"),  pursuant to which Licensee is authorizing GPTH to utilize licenses
(the "Licenses") issued by the Federal Communications  Commission (the "FCC") to
Licensee in the  operation  of GPTH's  microwave  transmission  facilities  (the
"Facilities"); and

                  WHEREAS,  the Usage Agreement limits such authorization to 90%
of the total  transmission  capacity available through the Licenses and reserves
to Licensee such  transmission  capacity not  transferred to GPTH (the "Reserved
Capacity") for transfer by Licensee to other customers of Licensee in Licensee's
sole discretion; and

                  WHEREAS,  the parties hereto which to provide for transmission
over the Facilities utilizing the Reserved Capacity;

                  NOW THEREFORE, in consideration of the foregoing premises, the
mutual  promises  and  covenants  contained  herein and other good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:



<PAGE>

                  1. RESERVED CAPACITY.  GST shall make available the Facilities
to Licensee for microwave  transmission traffic utilizing the Reserved Capacity.
Such traffic shall be for Licensee or for Licensee's  customers as determined by
Licensee in its sole  discretion.  Licensee  shall deliver its own traffic,  and
shall require its customers to deliver their  traffic,  in a digital DS-1 format
or other  format  mutually  determined  by  Licensee  and GST at such  points of
presence as are mutually determined by Licensee and GST.

                  2. GST  COMPENSATION.  In  consideration  of the actions to be
taken by GST in operating  and  maintaining  the  Facilities  and in making them
available for traffic utilizing the Reserved Capacity, Licensee shall pay to GST
the sum of $3,000 per month.

                  3. CONTROL OF LICENSEE.

                     Notwithstanding the provisions of the Usage Agreement or of
this  Agreement  to the  contrary  without  the prior  written  approval  of the
Licensee,  GST shall not be  authorized  to do any of the following on behalf of
the Licensee:

                     (a) Grant a security interest in any of the property of the
Licensee, including the Licenses;

                     (b) Sell,  lease,  trade,  exchange or otherwise dispose of
any property of the Licensee, including the Licenses;

                     (c) Sell,  trade,  modify  or  surrender  any  governmental
authorizations necessary to the operation of the Facilities;


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                     (d)  Make  any  filings  regarding  the  Facilities  or the
Licenses with the FCC.

                  4. OPERATION OF FACILITIES AND COMPLIANCE WITH LAW.

                     Subject to the control of Licensee:

                     (a)  GST  shall   operate  and  maintain  the   Facilities,
providing  at its own cost  and  expense,  all  managerial,  administrative  and
technical expertise required in such operations. GST shall hire and supervise at
its own cost and expense all employees and independent contractors necessary for
the fulfillment of its responsibilities hereunder.

                     (b) GST  shall  maintain  the  Facilities  consistent  with
common carrier  industry  standards,  government  regulations and sound business
practices.

                     (c) GST  shall  at all  times  operate  the  Facilities  in
compliance with the Communications Act of 1934, as amended, (the "Communications
Act") and any other federal,  state or local rules,  regulations and policies of
other  governmental  agencies  with  authority  over  the  Licensee  and/or  the
Facilities,  as such laws,  rules,  regulations  and policies are in effect from
time to time.

                     5.   MODIFICATION   OF   FACILITIES.   GST   may   initiate
modification to the Facilities from time to time, at GST's cost and expense.  If
prior FCC approval of such  modifications  is required,  GST shall  request that
Licensee seek and obtain such  approval.  In such event,  GST shall consult with
Licensee and at GST's  expense,  shall prepare an  appropriate  application  for
Licensee to  approve,  sign and file with the FCC,  and no such change  shall be
implemented


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<PAGE>
prior to the grant of FCC consent.  Any  application  for a license to cover any
construction  permit shall  similarly be prepared by GST for approval and filing
by Licensee.

                  6.  FCC  FILINGS.   GST  shall   cooperate  with  Licensee  in
furnishing any  information  that may be requested by the FCC in connection with
the operation of the  Facilities,  including,  but not limited to, any technical
and/or  engineering  information.  GST shall  consult  with  Licensee  and shall
prepare for  Licensee's  approval and filing with the FCC,  appropriate  license
renewal  applications and such other reports,  documents,  and filings as may be
necessary  from time to time to keep the  Licenses  in full force and effect for
operation of the  Facilities.  Licensee shall  cooperate with GST in signing and
filing such  applications  and other  reports,  documents and filings as Manager
shall from time to time prepare and submit to Licensee.

                  7.  NOTICES.  All  notices and other  communication  hereunder
shall be given in  writing  and  shall be  deemed  to have  been  duly  given if
delivered  personally,  if transmitted by telecopier to the number(s) designated
below or if mailed by first class United States mail,  postage  prepaid,  to the
address(es) designed below, or to such other address as either party may specify
from time to time.  All  notices  and other  communications  hereunder  shall be
deemed to have been given the date of receipt.

                  If to Licensee:

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


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<PAGE>



                                    Attn:  Chief Executive Officer
                                    Telecopier: (360) 254-6964

                  If to GST:

                                    GST Telecom Inc.
                                    4317 N.E. Thurston Way
                                    Vancouver, Washington  98662
                                    Attn:  Chief Executive Officer
                                    Telecopier: (360) 260-2075

                  8. TERM. The term of this  Agreement  commenced as of June 21,
1994 and shall  terminate  upon the  occurrence of any of the  following  events
(unless earlier terminated pursuant to the provisions of Paragraph 9 hereof):

                     (a) revocation or expiration  without renewal of all of the
Licenses; or

                     (b)  mutual  agreement  of the  parties to  terminate  this
Agreement.

                  9.  TERMINATION  FOR CAUSE.  Licensee  shall have the right to
terminate  this  Agreement upon notice to GST at any time during the term hereof
upon the occurrence of any of the following events:

                     (a)  any  material  failure  by GST to  perform  any of its
obligations under this Agreement;

                     (b) the insolvency of GST, appointment of a receiver of the
property of GST, or any assignment for the benefit of creditors of GST;

                     (c) the filing of a voluntary or involuntary petition by or
against GST under the Bankruptcy laws of the United States;


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<PAGE>

                     (d) the refusal by the FCC,  any other state,  federal,  or
local   regulatory   agency  having   jurisdiction   over  the  consummation  of
transactions  contemplated  hereby to permit the  consummation  of  transactions
contemplated  hereby to grant any  consent or approval  necessary  to permit the
parties to consummate such transactions and such refusal is no longer subject to
administrative or judicial reconsideration or review;

                     (e) Licensee's  good faith  determination  that the acts of
GST or the terms of this  Agreement  have been or are likely to be determined to
be inconsistent  with the rules and policies of the FCC or any other  government
agency having jurisdiction over the Licenses as such rules and policies apply to
the Licenses.

                  10. INDEMNIFICATION.

                     (a) GST shall indemnify and hold Licensee  harmless against
any and all damages, claims, actions or suits by third parties arising out of or
in connection with GST's performance of its obligations hereunder.

                     (b) In no event will either  party  hereto be liable to the
other party for any indirect,  special,  incidental or  consequential  losses or
damages,  including,  without limitation,  loss of revenue, loss of customers or
clients,  loss of  goodwill  or loss of profits  arising in any manner from this
Agreement and the performance or nonperformance of obligations hereunder.

                     11. NO WAIVER. No term or provision of this Agreement shall
be deemed  waived and no breach or default shall be deemed  excused  unless such
waiver or consent shall be in writing and


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<PAGE>

signed by the party claimed to have waived or consented. No consent by any party
to, or waiver of, a breach or default by the other,  whether express or implied,
shall  constitute  a consent  to,  waiver  of, or excuse  for any  different  or
subsequent breach or default.

                  12.  ASSIGNMENT.  Neither party shall assign this Agreement or
any of its rights or obligations  under this Agreement without the prior written
consent of the other party,  and any attempted  assignment or transfer by either
party not in compliance  with this  provision  shall be null and void AD INITIO.
This Agreement  shall bind and inure to the benefit of any permitted  successors
and assigns of the parties.

                  13.  APPLICABLE  LAW.  This  Agreement  shall be  construed in
accordance  with the laws of the State of Delaware,  not including the conflicts
of laws principles of that State.

                  14.  CONSTRUCTION.  It is  the  intent  of  the  parties  that
operation of the Facilities under this Agreement comply with the  Communications
Act, and all provisions of this Agreement shall be so construed.

                  15. SEVERABILITY.  If any provision of this Agreement shall be
declared  illegal,  invalid or unenforceable by any governmental  authority with
jurisdiction over GST,  Licensee,  and/or the Facilities,  then the remainder of
this  Agreement  shall  remain in full force and effect  without  the  offending
provision,  provided  that such  remainder  substantially  reflects the original
agreement of the parties.


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<PAGE>
                  16.   AMENDMENTS.   This   Agreement   represents  the  entire
understanding  of the parties  hereto with respect to the subject matter hereof,
supersedes  any and all prior  negotiations,  understands  and  agreements  with
respect thereto, and may be amended only by a writing signed by both parties.

                  17.  NO JOINT  VENTURE.  Nothing  in this  Agreement  shall be
construed to make  Licensee and GST joint  venturers or to impose upon either of
them any liability as such.

                  18.  LIMITATIONS ON LIABILITY.  Neither GST nor Licensee shall
have any  liability  for failure to comply with this  Agreement  if such failure
results from the occurrence of any contingency  beyond the reasonable control of
such party.

                  19. COUNTERPARTS. This Agreement may be executed in any number
of counterparts,  each of which shall be considered an original and all of which
taken  together shall  constitute  one Agreement  binding on both of the parties
hereto,  notwithstanding  that  both  parties  shall  not have  signed  the same
counterpart.

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

                                  PACWEST NETWORK, INC.
                                  ("Licensee")

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

                                  GST TELECOM INC.
                                     ("GST")

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


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