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                          (ROYAL BANK LETTERHEAD)

                                                                 EXHIBIT 10.4
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                                                  Royal Bank of Canada
                                                  5001 Yonge Street, 2nd Floor
                                                  North York, Ontario  M2N 6P6

                                                  Tele:  (416) 512-4567
                                                  Fax :  (416) 512-4540

September 26, 1997

David Thornley
PSINET LIMITED
100 Sheppard Avenue East, 6th Floor
North York, Ontario
M2N 6N5

Dear David:

                                Re: Lease 16-66615
                                ------------------

As discussed, enclosed please find the following Lease documentation (in 
duplicate) covering the Workstations, Chairs and Keyboard Tables supplied by 
Groupe Lacasse:

-- Leasing Schedule - (full signature)
-- Appendix "A" - (initials only)
-- Copies of Invoices - (initials only)
-- Appendix "B" - Obsolescence - (initials only - 2nd page)
-- Equipment Acceptance Notice - (full signature)
-- Personally Approved Payments - Authorization (full signature)
-- Statement of Insurance - (full signature)
-- Insurance Requirements - to be faxed to your Insurance Agent

Would you kindly arrange for execution per the attached Resolution and return 
all documents to my attention at your very earliest.

I will require the original Invoices, please request same from the supplier, 
Groupe Lacasse.

Please note that the funds cannot be disbursed to you until the executed 
documents are returned to me. Please do not hesitate to contact me if you 
have any questions.

Yours truly,


/s/_______________
Carol Sterioff
Assistant Manager
Business Development


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[LETTERHEAD]


                                 RESOLUTION REGARDING
                                 BANKING AND SECURITY
                                           



                           PSINET LIMITED                      (the "Company")
--------------------------------------------------------------
                         (Name of Company)

Address:      7300 WARDEN AVENUE, SUITE 213, MARKHAM, ONTARIO, L3R 9Z6  
        ----------------------------------------------------------------------

INCORPORATING STATUTE:  CANADA BUSINESS CORPORATIONS ACT   
                      --------------------------------------------------------


RESOLVED:

    1.   That ROYAL BANK OF CANADA (the "Bank") is appointed banker for the
         Company.

    2.   That (a)  either the President or Secretary for amounts up to 
                   $20,000.00;
              (b)  either the Pesident or Secretary together with any one
                   of the following:
                   William L. Schrader, David Kunkel, Harold S. Wills
                   For amounts in excess of $20,000.00
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         Are authorized on behalf of the Company from time to time:
    
    (a)  to withdraw or order transfers of funds from the Company's accounts by
         any means including the making, drawing, accepting, endorsing or
         signing of cheques, promissory notes, bills of exchange, other orders
         for the payment of money or other instruments or giving of other
         instructions;

    (b)  to borrow money and obtain other credit from the Bank in such amounts
         and on such terms as may be deemed appropriate, whether by loan,
         advance, overdraft or by any other means;
         
    (c)  to mortgage, hypothecate, change, pledge, convey, assign, transfer or
         create a security interest in any or all of the property, real and
         personal, immoveable and moveable, undertaking and rights of the
         Company, present and future, to secure the payment and performance of
         any or all of the present and future liabilities and obligations of
         the Company to the Bank;
         
    (d)  to sign any agreements or other documents or instruments with or in
         favour of the Bank, including the Bank's general financial services
         agreement and contracts relating to products or services provided by
         the Bank to the Company;
         
    (e)  to do, or to authorize any person or persons to do, any one or more of
         the following:

    (f)  to receive from the Bank any cash or any securities, instruments or
         other property of the Company held by the Bank, whether for
         safekeeping or as security, or to give instructions to the Bank for
         the delivery or other transfer of any such cash, securities,
         instruments or other property to any person named in those
         instructions;


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[LETTERHEAD]

                                      COMPANIES

                            LIST OF OFFICERS AND DIRECTORS
                                           

To: Royal Bank of Canada


                           I, the undersigned, Secretary of
                                           
                                           
                                    PSINET LIMITED
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                                  (Name of Company)

hereby certify that the following are its officers and directors, namely:

                             OFFICERS (NAMES AND TITLES)
                                           
         William L. Schrader -    Chairman of the Board
         Nadir Desai         -    President
         Wesley Roitman      -    Secretrary & Treasurer


                                      DIRECTORS
                                           
                   Michael G. Beairsto
                   William L. Schrader
                   Nadir Desai
                   Wesley Roitman
                   David Kunkle

Dated         November          25th   ,         1996      
      ---------------------  ------------  ----------------
              (month)           (day)           (year)

  CORPORATE SEAL
 (Nova Scotia and
Prince Edward Island)                                           

                                             /s/ Wesley Roitman
                                             ---------------------------------
                                                 Wesley Roitman  -  Secretary 


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LEASING SCHEDULE                            Number 16-66615

            Royal Bank of Canada, as Lessor, hereby leases to:  PSINET LIMITED
            as Lessee, the Equipment hereinafter described, in consideration 
            of the rental and for the term hereinafter set forth, the whole 
            pursuant to and subject to the terms and conditions set forth in 
            that certain Leasing Agreement entered into between Lessor and  
            Lessee as of the 30th day of June 1997
              
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1. Equipment  Quantity  Make and Description     Model Number   Serial Number 

                        81 Complete Workstations, 81 Chairs, 81 Articulated
                        Keyboard Tables supplied by Groupe Lacasse as more
                        fully described under the attached Appendix "A"

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2. Term    Term                                                         36
           ----------------------------------------------------------------
           Commencement Date of Term                        Sept. 29, 1997
           ----------------------------------------------------------------
           Termination Date of Term                          June 28, 2000
           ----------------------------------------------------------------
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3. Rental  Aggregate Rental                                    $150,856.52
           ----------------------------------------------------------------
           Monthly Rental Instalment                             $4,190.46
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           Goods & Services Tax                                    $293.33
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           Provinicial Sales Tax, if any, 
             at rate current on date hereof                         $335.24
           ----------------------------------------------------------------
           Total Monthly Rental Instalment                        $4,819.03
           ----------------------------------------------------------------
           Interim Rental Factor                                          0
           ----------------------------------------------------------------
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4. Option to Purchase

           Option to Purchase Date                           Purchase Price
           ----------------------------------------------------------------
               June 28, 2000                                    $13,465.49

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5. Settlement Value 

             Twelve Month
             Period                1   2   3   4  5  6  7  8  9 10 11 12 
           --------------------------------------------------------------
             Percentage of Net
$134,654.85  Equipment Cost      100% 71% 38%  *  0% 0% 0% 0% 0% 0% 0% 0%
           ----------------------------------------------------------------
                             *- end of 33 months until end of term - 10%

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6. Place of Use

                   Ontario


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7. Depreciation    Class Number:       8
                   Capital Cost allowance Rate:  20% declining balance

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The parties hereto have each executed this Leasing Schedule on the respective
dates set forth below and this Schedule shall be deemed to have been executed on
the later of such dates.

ROYAL BANK OF CANADA              PSINET LIMITED
------------------------------   ---------------------------------
per                               per  /s/ illegible
------------------------------   ---------------------------------
per                               per  /s/ illegible
------------------------------   ---------------------------------
per                               per                 
------------------------------   ---------------------------------


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   Exhibit 10.4 The following Exhibits have been omitted, which the Company
agrees to furnish supplementally to the Commission upon request:
 

    Appendix A: Leasing Schedule

    Appendix B to Leasing Schedule #16-66615