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                                                                    Exhibit 10.2

July 25, 2000

Ms. Lota Zoth
[address redacted]

Dear Lota:

This letter confirms our offer to you of employment by PSINet Inc. (the
"Company"), and sets forth the terms and conditions which shall govern such
employment as outlined below. This offer shall remain open until 12:00 PM on
Friday, July 28, 2000.

1. EMPLOYMENT.

a) The Company agrees to employ you as Senior Vice President and Corporate
Controller of PSINet Inc., reporting to the Chief Financial Officer (CFO) of the
Company or his designee. This is a corporate officer position and as an officer
of the Company you must stand for election by the Board of Directors each year.
You accept the employment and agree to begin work on or before Monday, August 7,
2000 (the actual date you begin work will be your "Start Date"), and remain in
the employ of the Company, and, except during vacation periods and sickness, to
provide during standard business hours a minimum of forty (40) hours per week of
management services to the Company, as determined by and under the direction of
the CFO.

b) During your employment you will, except during vacations, periods of illness,
and other absences beyond your reasonable control, devote your best efforts,
skill and attention to the performance of your duties on behalf of the Company.

2. TERM OF EMPLOYMENT. The term of the employment shall commence on your Start
Date, and shall continue for a period of two (2) years. The Company agrees to
notify you 6 months prior to the expiration of this term regarding its
intentions with respect to the renewal of your employment following expiration
of this term.

3. BASE SALARY. The Company shall pay you a base salary at the rate of $195,000
per annum. Your base salary shall be subject to additional increases at the
discretion of the Company's Board of Directors. Your base salary shall be
payable in such installments as the Company regularly pays its other salaried
employees, subject to such deductions and withholdings as may be required by law
or by further agreement with you.

4. OTHER COMPENSATION.

a) BONUS. The Company will pay you a bonus upon the successful completion of the
objectives established for your performance, which will be measured on or about
December 31, 2000. The performance criteria will be issued separately by the
CFO, and may be changed, with mutual fairness, from time to time as situations
develop. The target bonus for the period ending December 31, 2000 will be the
appropriate pro-rata


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amount (based on the number of weeks from your Start Date through December 31,
2000) of an annual bonus of up to $65,000. Separate criteria will be established
for your entitlement for the year starting January 1, 2001.

b) INCENTIVE STOCK OPTIONS. Effective upon your Start Date, PSINet Inc. shall
grant you options, subject to Board approval, to purchase 65,000 shares of
PSINet Inc.'s common stock (the "Options") pursuant to its Executive Stock
Incentive Plan (the "Plan"). Such Options shall be evidenced by an option
agreement in such form as required by the Plan and subject to the terms of the
Plan. Among other terms and provisions prescribed by the Plan, the option
agreement shall provide that (a) the exercise price of the Options shall be the
price per share of the Company's common stock as reported by the NASDAQ Stock
Market at the close of business on your Start Date, (b) the Options shall not be
exercisable after the expiration of ten (10) years from the date such Options
are granted, and (c) the stock shall vest ratably, monthly, over forty-eight
(48) months, provided that for each month's vesting purposes you continue to be
employed full time by the Company or one of its subsidiaries during such month.

c) CAR ALLOWANCE. During your term of employment, the Company will provide you
with a car allowance of $900 per month.

5. EMPLOYEE BENEFITS. You shall be provided employee benefits, including
(without limitation) 401(k), four (4) weeks' paid vacation per year, and life,
health, accident and disability insurance under the Company's plans, policies
and programs available to employees in accordance with the provisions of such
plans, policies, and programs.

6. TERMINATION.

a) Your employment with the Company may be terminated by the Company at any time
for "Cause" as defined in Section 6(c) hereof. Upon such termination, the
Company will provide you with written notice whether it has elected to use the
non-competition restrictions set forth in Section 7(a) hereof. Your employment
may also be terminated by the Company at any time without Cause provided the
Company shall have given you thirty days (30) days' prior written notice of such
termination. That written notice must state whether the Company has elected to
use the non-Competition restriction (which decision may not be rescinded). Your
employment may be terminated by you at any time for any reason, provided you
shall have given the Company at least thirty (30) days' prior written notice of
such termination. By the thirtieth day the Company must notify you in writing
whether it has elected to use the non-Competition restriction. Such decision may
not be rescinded. Failure of the Company to so notify you shall result in the
non-Competition restriction not being in place.

b) Subject to your compliance with your obligations under Section 7 hereof, in
the event that your employment terminates or is terminated by you or the Company
for any reason other than for Cause, and the Company has elected to use the
non-Competition restriction, you shall be entitled, for a period of twelve (12)
months after termination of


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employment, to the following (collectively, the "Termination Payments"): (i)
your then current rate of base salary as provided in Section 3; (ii) all life
insurance and health benefits, disability insurance and benefits and
reimbursement theretofore being provided to you; and (iii) Company
contributions, to the extent permitted by applicable law, to a SEP-IRA, Keogh or
other retirement mechanism selected by you sufficient to provide the same level
of retirement benefits you would have received if you had remained employed by
the Company during such twelve (12) month period. The Company shall make up the
difference in cash payments directly to you to the extent that applicable law
would not permit it to make such contributions.

c) The Company shall have "Cause" for termination of your employment by reason
of any breach of your agreement not to compete pursuant to Section 7 hereof,
your committing an act materially adversely affecting the Company which
constitutes reckless or willful misconduct, your conviction of a felony, or any
material breach by you of this Agreement.

7. AGREEMENT NOT TO COMPETE.

a) In consideration of your employment pursuant to this Agreement and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, you covenant to and agree with the Company that, so long as you
are employed by the Company under this Agreement and for a period of twelve (12)
months following the termination of such employment (but only if the Company has
elected to enforce the restriction), you shall not, without the prior written
consent of the Company, either for yourself or for any other person, firm or
corporation, manage, operate, control, participate in the management, operation
or control of or be employed by any other person or entity which is engaged in
providing Internet-related network or communications services competitive with
the Internet-related network or communications services offered to customers by
the Company as of the date of termination or within six (6) months thereafter.
The foregoing shall in no event restrict you from: (i) writing or teaching,
whether on behalf of for-profit, or not-for-profit institution(s); (ii)
investing (without participating in management or operation) in the securities
of any private or publicly traded corporation or entity; or (iii) after
termination of employment, becoming employed by a hardware, software or other
vendor to the Company, provided that such vendor does not offer network or
communications services that are competitive with the Internet-related network
or communications services offered by the Company as of the date of termination
of employment or within six (6) months thereafter.

b) You may request permission from the Company's Board of Directors to engage in
activities which would otherwise be prohibited by Section 7(a). The Company
shall respond to such request within thirty (30) days after receipt. The Company
will notify you in writing if it becomes aware of any breach or threatened
breach of any of the provisions in Section 7(a), and you shall have thirty (30)
days after receipt of such notice in which to cure or prevent the breach, to the
extent that you are able to do so. You and the Company acknowledge that any
breach or threatened breach by you of any of the


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provisions in Section 7(a) above cannot be remedied by the recovery of damages,
and agree that in the event of any such breach or threatened breach which is not
cured with such thirty (30) day period, the Company may pursue injunctive relief
for any such breach or threatened breach. If a court of competent jurisdiction
determines that you breached any of such provisions, you shall not be entitled
to any Termination Payments from and after date of the breach. In such event,
you shall promptly repay any Termination Payments previously made plus interest
thereon from the date of such payment(s) at twelve percent (12%) per annum. If,
however, the Company has suspended making such Termination Payments and a court
of competent jurisdiction finally determines that you did not breach such
provision or determines such provision to be unenforceable as applied to your
conduct, you shall be entitled to receive any suspended Termination Payment,
plus interest thereon from the date when due at twelve percent (12%) per annum.
The Company may elect (once) to continue paying the Termination Payments before
a final decision has been made by the court.

8. INTELLECTUAL PROPERTY; OWNERSHIP OF WORK PRODUCT. All copyrights, patents,
trade secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by you during the course of performing the Company's work (collectively
the "Work Product") shall belong exclusively to the Company and shall, to the
extent possible, be considered a work made for hire for the Company within the
meaning of Title 17 of the United States Code. You hereby automatically assign,
and shall assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest you may have
in such Work Product, including any copyrights or other intellectual property
rights pertaining thereto. Upon request of the Company, you shall take such
further actions, including execution and delivery of instruments of conveyance,
as may be appropriate to give full and proper effect to such assignment.

9. NONDISCLOSURE AGREEMENT. You agree to sign the Company's Nondisclosure
Agreement before commencing employment with PSINet Inc.

10.TRANSFERABILITY.

a) As used in this Agreement, the term "Company" shall include any successor to
all or part of the business or assets of the Company who shall assume and agree
to perform this Agreement.

This Agreement shall inure to the benefit of and be enforceable by you and your
personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees.

b) Except as provided under paragraph (a) of this Section 10, neither this
Agreement nor any of the rights or obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.


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11. SEVERABILITY. The invalidity or unenforceability of any particular provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision were omitted. If a court of competent jurisdiction determines that any
particular provision of this Agreement is invalid or unenforceable, the court
shall restrict the provision so as to be enforceable. However, if the provisions
of Section 7 shall be restricted, a proportional reduction shall be made in the
payments under Section 6.

12. ENTIRE AGREEMENT; WAIVERS. This letter Agreement contains the entire
agreement of the parties concerning the subject matter hereof and supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written. No waiver or modification of any
provision of this Agreement shall be effective unless in writing and signed by
both parties.

13. NOTICES. Any notices, requests, instruction or other document to be given
hereunder shall be in writing and shall be sent certified mail, return receipt
requested, addressed to the party intended to be notified at the address of such
party as set forth at the head of this agreement or such other address as such
party may designate in writing to the other.

14. GOVERNING LAW. THIS LETTER AGREEMENT SHALL BE SUBJECT TO, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA WITHOUT
REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAW.

15. COUNTERPARTS. This letter Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be one and the same instrument.

Please confirm your agreement with the foregoing by signing and returning one
copy of this letter Agreement to the undersigned, whereupon this letter
agreement shall become a binding agreement between you and the Company.

Sincerely,

PSINet Inc.

By:  /s/Lawrence E. Hyatt

     LAWRENCE E. HYATT
     EXECUTIVE VICE PRESIDENT AND CFO

Accepted and Agreed to as of July 28, 2000:

By:  /s/Lota Zoth

     LOTA ZOTH


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