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                                    [LOGO]


October 1, 1996



Mr. Edward D. Postal
9329 Crimson Leaf Terrace
Potomac, Maryland  20854

Dear Ed:

This letter confirms our offer to you of employment by PSINet Inc. (the 
"Company"), contingent upon successful completion of final reference checks 
and subject to ratification and election by the Board of Directors, and sets 
forth the terms and conditions which shall govern such employment as outlined 
below.  This offer shall remain open until Tuesday, October 1, 1996 at 
5:00 PM. 

1.  EMPLOYMENT:

a)  The Company will employ you as Vice President and Chief Financial Officer 
reporting to the President and CEO.  This is a corporate vice president 
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 as soon as possible, which we anticipate will be by October 10, 1996; 
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 
hours per week of management services to the Company, as determined by and 
under the direction of the President & CEO. 

b)  In connection with your employment by the Company, your principal place 
of employment shall be the greater Washington, D.C. area and you shall not be 
required permanently to relocate to a principal place of business outside the 
greater Washington, D.C. area during the term of your employment hereunder.

c)  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.


                                 PSINet Inc.
                   510 Huntmar Park Drive, Herndon, VA 22070 
          tel. 703.904.4100 * fax. 703.904.4200 * http://www.psi.net


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2.  TERM OF EMPLOYMENT. The term of the employment shall commence on the date 
hereof and shall continue for a period of three (3) years.

3.  COMPENSATION:

a)  BASE SALARY.  The Company shall pay you a base salary at the rate of 
$185,000 per annum.  On each of January 1, 1998, and January 1 of 1999 your 
base salary shall be increased at a minimum by an amount equal to 5% of your 
then current base salary.  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.

b)  PERFORMANCE BONUS.  The Company will pay you a bonus upon the successful 
completion of the objectives established for your performance for the 
applicable year.  The performance criteria will be issued separately by the 
President, at the beginning of each year, and may be changed, with mutual 
fairness, from time to time as situations develop.  The performance bonus for 
the period ending December 31, 1996 will equal ten thousand dollars ($10,000) 
plus a special bonus of up to fifty thousand dollars ($50,000).  Bonuses for 
the years ending December 31, 1997, 1998 and 1999 will be $35,000 at the 
first tier and an additional $25,000 at the second tier, for a  performance 
bonus of not less than $60,000.  Separate criteria will be established for 
your entitlement to each tier's bonus money. The performance bonus may be 
adjusted upward at any time by the Compensation Committee of the Company's 
Board of Directors.  

c)  CAR ALLOWANCE. The Company will provide you with either a company car or 
a car allowance.

d)  INCENTIVE STOCK OPTIONS.  Effective upon the start of your employment, 
the Company shall grant you options to purchase 100,000 shares of the 
Company's common stock (the "Options") pursuant to the Company's Executive 
Stock Incentive Plan, as amended. Such Options shall be evidenced by an 
option agreement in such form as required by 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 closing price per share of 
the Company's common stock as reported by the NASDAQ Stock Market on the day 
of the start of your employment, (b) the Options shall not be exerciseable 
after the expiration of ten years from the date such Options are granted, and 
(c) the stock shall vest ratably, monthly, over a forty-eight (48) month 
period, provided that for each months' vesting purposes you continue 

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to be employed by the Company or a subsidiary of the Company during such 
month.  

In addition to the terms of the Plan which govern these stock options, in the 
event of a change of control as defined in Section 8(c) below, vesting will 
be accelerated on the number of options necessary so that a total of one half 
of the then outstanding, unvested options will be vested.

4.  EMPLOYEE BENEFITS.  You shall be provided employee benefits, including 
(without limitation) 401(k), 4 weeks paid vacation, 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.

5.  TERMINATION:

a)  Your employment with the Company may be terminated by the Company at any 
time for "Cause" as defined in Section 5(c) hereof. Upon such termination, 
the Company will provide written notice whether it has elected to use the 
non-competition restrictions set forth in Section 6(a) hereof.  Your 
employment may also be terminated by the Company at any time without Cause 
provided the Company shall have given you thirty (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).  If you are terminated without cause, you will be paid 
26 weeks of severance, plus a pro-rata bonus and benefits will continue for 
the same period.  In addition, 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. Termination by  
your resignation does not entitle you to any severance benefits.  By the 30th 
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 6 hereof, 
in the event that your employment terminates or is terminated by you or the 
Company for any reason, and the Company has elected to use the 
non-Competition restriction, you shall be entitled, for a period of 
twenty-four (24) months after termination of 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 


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you had remained employed by the Company during such 24-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 your termination of your employment by 
reason of any breach of your agreement not to compete pursuant to Section 6 
hereof, your committing an act materially adversely affecting the Company 
which constitutes reckless conduct or wanton or willful misconduct, your 
conviction of a felony,  or any material breach by you of this Agreement.

6.  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 
twenty-four (24) 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 
communication 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 communication 
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 Director's to 
engage in activities which would otherwise be prohibited by Section 6(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 6(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 
provisions in Section 6(a) above cannot be remedied by the recovery of 


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damages, and agree that in the event of any such breach or threatened breach 
which is not cured with such 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 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 12% per annum.  The Company may elect (once) to continue paying the 
Termination Payments before a final decision has been made by the court.

7.  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 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.

8.  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.  In the event of a Change of Control, (as 
defined in Section 8(c) below), this agreement shall terminate.  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 8, 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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c)  As used in this Agreement, "Change in Control" shall mean:  (i) the 
shareholders of the Company approve an agreement for the sale of all or 
substantially all of the assets of the Company;  or (ii) the shareholders of 
the Company approve a merger or consolidation of the Company with any other 
corporation (and the Company implements it), other than (A) a merger or 
consolidation which would result in the voting securities of the Company 
outstanding immediately prior thereto continuing to represent more than 80% 
of the combined voting power of the voting securities of the Company, or such 
surviving entity, outstanding immediately after such merger or consolidation, 
or (B) a merger or consolidation effected to implement a recapitalization of 
the Company (or similar transaction) in which no "person" (as defined below) 
acquires more than 30% of the combined voting power of the Company's 
then-outstanding securities;  or (iii) any "person," as such term is used in 
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended 
(the "Exchange Act") (other than (A) the Company, (B) any corporation owned, 
directly or indirectly, by the Company or the shareholders of the Company in 
substantially the same proportions as their ownership of stock of the Company 
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the 
Exchange Act), directly or indirectly, of securities of the Company 
representing 30% or more of the combined voting power of the Company's then 
outstanding securities.  

9.  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 6 shall be restricted, a 
proportional reduction shall be made in the payments under Section 5b.

10. 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.

11. 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 for at the head of this agreement or such other 
address as such party may designate in writing to the other.

12. GOVERNING LAW. THIS LETTER AGREEMENT SHALL BE SUBJECT TO, 
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH 


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THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS PRINCIPLES OF 
CONFLICTS OF LAW.

13. 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.                                         
    

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                  POSTAL EMPLOYMENT AGREEMENT SIGNATURE PAGE
                                           


    Please confirm your agreement with the forgoing 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/ William L. Schrader                         
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    William L. Schrader, Chairman, President & CEO



Accepted and Agreed to as of 
the day first above written:



By:   /s/ Edward D. Postal                       
    --------------------------------------------------
    Edward D. Postal