120
      Albany Street

                    Suite
      450, Tower II

                    New
      Brunswick, NJ 08901

                    Tel:
      732-509-9100 Fax: 732-509-9101

                    www.thexchange.com

                  


          

        

      

       

      March 15,
2004

       

       

      Steven
Heap

      12408
Fairfax Station Road

      Clifton,
VA 20124

      


      Dear
Steve:

       

      On behalf
of Arbinet-thexchange, I am pleased to offer you the position of CTO & Vice
President Business Development based in Herndon, Virginia. You will report to me
effective March 16, 2004.

      


      Your
starting compensation will be $150,000 per annum paid semi­-monthly and you
will be eligible for a bonus of up to 25% of your salary based upon the
achievement of the Company's and individual assigned performance goals. The
bonus will be paid as Profit Sharing of 10%
of
Net Income (paid quarterly, in arrears) for businesses you launch,
provided that such Incentive Compensation does not exceed $100,000 per annum,
but shall be no less than $25,000
annually. You will be paid a one-time signing bonus of $10,000 upon the start of
your employment. This position is considered a full-time, exempt position for
purposes of federal wage-hour law, which means that you will not be
eligible for overtime time pay for hours actually worked in excess of 40 hours
in a given work week.

      


      You will
also be eligible to participate in the Company's employee stock option plan.
Under the option plan and subject to the Company's board of directors and
compensation committee approval, the Company will grant you an option to
purchase 650,000 shares of common stock of the Company at a per share exercise
price to be set by the Board of Directors. These options will be granted on the
first day of employment pursuant to a stock option agreement and vest over a
4-year period. Twenty-five percent of these options will vest after your
completion of one year of employment with the Company. The remaining options
will vest monthly (for so long as you remain employed by the Company) over the
subsequent three years (please see attached vesting schedule). These options
will be subject to various restrictions, including restrictions on transfer,
forfeiture and repurchase provisions. Further details regarding the option plan
will be provided to you once you have been granted options.

      


      In
addition to your compensation, you will be eligible to receive benefits that are
offered to all full-time Arbinet-thexchange employees. These benefits
are
described in the enclosed materials along with a copy of the employee handbook,
which describes the Company's policies and procedures that will govern certain
aspects of your employment. Please be
sure to review the handbook and sign and return the acknowledgement of
receipt page at the end of the handbook to Human Resources on or prior to your
first day of employment.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

      

      
        	 	
                Steven
      Heap

                March
      15, 2004

                Page
      2 of 3

              


      

       

      The
Company's vacation year runs from January 1st to December 31st and you will be
eligible for a 3-week vacation, which is accrued based on your date of hire as
explained in the handbook. Requests for holiday and vacation must be approved by
your manager to ensure adequate staffing of the department.

       

      It is
understood that your employment at the Company, will be on an "at will" basis.
This means that you or the Company may terminate our employment relationship at
any time, for any reason, with or without cause, and without
notice. Nothing in this letter creates any express or implied contract to the
contrary. This at-will relationship will remain in effect throughout your
employment with the Company and can be changed only by an express written
agreement.

       

      In the
event that your employment is terminated without cause, the Company will pay you
(i) any unpaid base salary through the date of termination and any accrued
vacation; (ii) severance pay equal to six (6) months base salary at the rate in
effect on the date of termination and (iii) COBRA
coverage payable under the Company health or welfare plan for you and your
dependents during the six (6) month period following the date of
termination.

      


      In the
event that your employment is terminated for any other reason, including cause,
the Company will pay you any unpaid base salary and compensation for accrued
vacation through the date of
termination. For the purposes of this letter "cause" shall mean any of
the following: (i) your willful misconduct in the performance of your duties to
the Company, or your willful failure to implement any legal policy of the
Company, (ii) conviction of or plea of guilty or any plea other than "not
guilty" to a felony, (iii) the violation by you of any material provision of
this letter which either is not cured within ten days after a written notice is
given to you by the Company or constitutes a habitual breach, (iv) your
dishonesty, misappropriation or fraud with regard to the property of the Company
or its affiliates or (v) failure to achieve assigned performance
goals.

      


      Your
offer of employment is contingent on verification of your employment eligibility
as required by the Immigration Reform and Control Act of 1986,
which requires us to verify your employment eligibility. On the first day of
work, please bring documents that show both your identification and
authorization to work in the United States. These documents can be a U.S. birth
certificate or social security card and driver's license; a U.S. passport;
or a Certificate of Naturalization.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                
                  Steven
      Heap

                  March 15,
      2004

                  Page 3 of
      3

                

              


      

       

       

       

      This
offer constitutes the entire understanding between you and the Company and
supersedes all previous verbal and written representations and agreements
relating to your employment by the Company.

       

      If you
agree to these terms, please sign and return this offer letter, to Kathy
Cunningham, Human Resources Manager by Tuesday, March 16, 2004.

      Accepted
by:

       

      
        
          	
                  Sincerely,

                	 
      
	
                  /s/
      J. Curt Hockemeier 

                	 
      
	
                  J.
      Curt Hockemeier 

                	 
      
	
                  President
      and Chief Executive Officer

                	 
      


        

      

       

      
        
          	
                  Accepted
      by:

                	 
	
                  /s/
      Steven Heap

                	 
	
                  Date:
      3/15/2004