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Exhibit 10.4

                             Arbinet Holdings, Inc.
                         33 Whitehall Street, 19th Floor
                               New York, New York

                                                               December 27, 1999

Mr. Robert S. Vaters
7 Barnsdale Road
Short Hills, New Jersey  07078

Dear Bob:

On behalf of Arbinet Holdings, Inc. (the "Company"), I am pleased to extend to
you an offer of employment in accordance with the following terms:

1. Title and Position. Effective immediately following your acceptance of this
offer you will serve as an executive of the Company, initially as Executive Vice
President and Chief Financial Officer of the Company. You will report to the
Chief Executive Officer of the Company.

2. Duties and Obligations. During your employment, you will devote your full
business time, interest and effort to the performance of your duties with the
Company; provided that the foregoing shall not prevent you from serving on the
Board of Directors of no more than two (2) companies as long as these activities
do not interfere with the performance of your duties hereunder or create a
conflict of interest with the Company.

3. Employment Relationship. Should you decide to accept the Company's offer,
your employment will be for a term of one (1) year and your employment may be
terminated by either you or the Company at any time for any reason (or no
reason), by providing sixty (60) days prior written notice to the other party.
Further, your participation in any Company benefit or equity program does not
constitute an agreement by the Company to employ or continue to employ you for
any period of time.

4. Salary. While you are employed on a full-time basis by the Company, the
Company will pay you a base salary which annualizes to (i) $250,000 or (ii) upon
and after an initial public offering of the Company's equity securities (an
"IPO"), $250,000, payable in accordance with the usual payroll practices of the
Company including the
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withholding of all income and employment taxes. Your base salary will be
reviewed by the CEO on an annual basis and may be subject to adjustment upward
based on various factors including, without limitation, your performance and the
Company's achievement of its business plan (as determined by the Board), but in
no case will the annual increase be less than the annual rate of increase in the
Consumer Price Index. You will be entitled to a $50,000 "sign-on" bonus.

5. Equity.

      (a) The Board (or a duly authorized committee thereof) will grant to you,
in the form of stock options ("Options"), the right to purchase 350,000 shares
of Common Stock of the Company, at the lowest available employee plan price as
of the acceptance of this offer (the current price as approved by the board of
directors on December 9, 1999 being $0.25), subject to the following vesting
schedule: such Options will become exercisable as to 1/48th of the Options on
the last day of each full month you are employed by the Company (the "Vesting
Dates"), provided you are employed by the Company on the applicable Vesting
Dates; provided, further, that (i) if an IPO occurs during the first year of
your employment, vesting will accelerate to effect 12 months of vesting as of
the end of the month in which the IPO closing occurs, and unvested Options would
vest 1/36th per month over the 36 months after the month in which the IPO
closing occurs and (ii) all Options will vest immediately prior a "change in
control" event (which will not include an IPO or a private equity financing
transaction). To the maximum extent permissible, these will be incentive stock
options as defined by the Internal Revenue Code of 1986, as amended (the
"Code"), and the Arbinet Holdings, Inc. 1997 Stock Incentive Plan (the "Stock
Plan").

      (b) Except as otherwise provided in the Stock Plan and Section 7 below,
you shall forfeit to the Company (without compensation) all unvested Options on
the date your employment with the Company terminates.

6. Benefits. You will participate, to the extent eligible and subject to
confirming coverage with the applicable underwriter (if any), in all of the
Company's employee benefit programs generally provided to the other executive
officers, in accordance with the terms thereof as in effect from time to time;
provided that your annual vacation shall not exceed 4 weeks.

7. Termination of Employment. (a) In the event your employment hereunder is
terminated by the Company without cause, the Company will pay you, subject to
your compliance with Section 8 and 9 below, (i) any unpaid base salary through
the date of termination and any accrued vacation; (ii) severance pay equal to
twelve (12) months' base salary at the rate in effect on the date of
termination, (iii) an amount reimbursing you for the applicable premium payment
for any COBRA coverage payable under a Company health or welfare plan for you
and your dependents during the twelve (12) month period following the date of
termination (the "Twelve Month Period"); and (iv) an amount equal to any
employer contribution that would have been made by the Company
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to any retirement plan of the Company on your behalf had you remained employed
by the Company during the Twelve Month Period assuming you contributed the
maximum amount to such plan. Notwithstanding the foregoing, the amounts paid to
you pursuant to subsection (iii) and (iv) of this Section 7(a) shall not exceed
$25,000.

      (b) In the event your employment hereunder is terminated for any other
reason, the Company will pay you any unpaid base salary and compensation for
accrued vacation through the date of the termination.

      (c) In addition, in all termination events, except as specifically
provided in Section 5 hereof, the Company will pay you any other amounts or
benefits owing to you under the then applicable employee benefit plans and
programs of the Company in accordance with such plans and programs

      For purposes of this letter "cause" shall mean any of the following: (w)
your willful misconduct in the performance of your duties to the Company, or
your willful failure to implement any legal policy of the company, (x)
conviction of or plea of guilty or any other plea other than "not guilty" to a
felony; (y) the violation by you of any material provisions 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; or (z) your dishonesty,
misappropriation or fraud with regard to the property of the Company or its
affiliates.

8. Confidential Information. While providing your services, you will have access
to and will obtain confidential information as to the Company, its affiliates,
its employees and its customers and you may during the course of your employment
develop certain information, inventions or other intellectual property. As a
condition of your employment with the Company, you will be required to enter
into the Company's employee Inventions and Confidentiality Agreement (the
"Confidentiality Agreement"). The Confidentiality Agreement exists to assure the
Company and its investors that the Company's valuable intellectual property and
its rights thereto are protected.

9. Non-Competition/Non-Solicitation. (a) You agree that during the employment
term hereunder and for a period of one (1) year following the date your
employment terminates (the "Restricted Period"), you will not enter into
Competition with the Company. "Competition" shall mean participating, directly
or indirectly, as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in any
capacity whatsoever in a business in competition with any business conducted by
the Company or its affiliates (a "Competitor")in any jurisdiction where the
Company and/or its affiliates conduct as of the date your employment terminates
such business, which shall be deemed to include, without limitation, any
business activity or jurisdiction which is covered by or included in a written
proposal or business plan existing on the date of the termination of the
employment term hereunder; provided, however, that such participation shall not
include (i) the mere ownership of not more than one percent (1%) of the total
outstanding stock of a publicly held company;
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(ii) the performance of services for any enterprise to the extent such services
are not performed, directly or indirectly, for a business unit of the enterprise
in the aforesaid Competition; or (iii) any activity engaged in with the prior
written approval of the Board.

      (b) You agree that, during the Restricted Period, you will not, directly
or indirectly (i) solicit, recruit or hire any non-administrative or
non-clerical employee of the Company for the purpose of being employed by you or
by any Competitor of the Company on whose behalf you are acting as an agent,
representative or employee and that you will not convey any confidential
information or trade secrets about other employees of the Company to any other
person or (ii) influence or attempt to influence customers or suppliers of the
Company or its affiliates to direct their business to any Competitor of the
Company.

      (c) You acknowledge that Section 8 and 9 above are reasonable and
necessary for the protection of the business of the Company and its affiliates
and that part of the compensation paid under this letter is in consideration for
the provisions contained in Sections 8 and 9. If any restriction set forth with
regard to competition or solicitation of employees or customers is found by any
court of competent jurisdiction, to be unenforceable because it extends for too
long a period of time or over too great a range of activities or over too broad
a geographic area, it shall be interpreted to extend over a maximum period of
time, range of activities or geographic area as to which it may be enforceable.
You further acknowledge and consent that the Company would by reason of such
competition or solicitation of employees or customers be entitled to injunctive
relief in a court of appropriate jurisdiction prohibiting you from competing
with the Company or its affiliates or engaging in solicitation in violation of
this letter.

10. Governing Law/Miscellaneous. This letter is subject to the laws of the State
of New York. This letter, along with the Confidentiality Agreement, sets forth
the terms of your employment with the Company and supercedes all prior
agreements, arrangements and communications, whether oral or written, between
the Company and you. This letter may not be altered, modified or amended except
by written instrument signed by an individual authorized to sign on behalf of
the Company (other than you) and by you. This letter may not be assigned in
whole or in part, except that the Company may assign it to an acquiror of all or
substantially all of the assets of the Company. This letter shall be binding on
the successors and permitted assignees of the parties hereto.
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            This offer is made to you based on your representation to the
Company that your acceptance of employment with the Company and performance of
the contemplated services does not and will not conflict with or result in any
breach or default under any agreement, contract or arrangement to which you are
a party or violate any other legal restriction. If you find this offer of
employment acceptable, please sign the enclosed copy of this letter and return
it to us.

                                    Very truly yours,
                                    Arbinet Holdings, Inc.


                                    By: /s/ Anthony Craig
                                        ----------------------------------
                                        Name: Anthony Craig
                                        Title: Chairman & CEO

Agreed and accepted:


/s/ Robert S. Vaters
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Robert S. Vaters

Dated: 12/27/99
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