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Settlement and Release Agreement - Arbinet-thexchange Inc. and J. Curt Hockemeier

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     This Settlement and Release Agreement (the "Agreement") is made as of this
8th day of July, 2004, by and between J. Curt Hockemeier ("Hockemeier") and
Arbinet-thexchange, Inc., a Delaware corporation (the "Company").


     WHEREAS, Hockemeier issued a promissory note in favor of the Company in the
aggregate principal amount of $74,206.61 dated May 17, 2002 (the "Promissory
Note"); and

     WHEREAS, Hockemeier and the Company desire that all amounts due to the
Company from Hockemeier under the Promissory Note be paid in full; and

     WHEREAS, pursuant to the terms and provisions of this Agreement, Hockemeier
desires to transfer that number of shares (the "Shares") of the Company's common
stock, $0.001 par value per share (the "Common Stock"), equal to the outstanding
principal and accrued interest due and payable under the Promissory Note as of
the date hereof, such amount equal to $37,354.39 (the "Loan Amount") divided by
$1.16 (and rounded up to the nearest whole share) (i.e., 32,202 shares (the
"Shares")) in full payment of the Loan Amount.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

     1. Repayment of the Promissory Note.

     (a) Surrender of Shares. Subject to the terms and conditions hereof, the
Company hereby agrees to accept the Shares from Hockemeier and Hockemeier hereby
agrees to deliver the Shares to the Company, in full satisfaction of the Loan

     (b) Closing. The delivery of the Shares and the other transactions
contemplated by this Agreement shall take place simultaneously with the
execution and delivery of this Agreement at the Company's offices at 120 Albany
Street, Tower II, Suite 450, New Brunswick, NJ 08901 at 10:00 a.m. local time on
July 8, 2004 (the "Closing"), or, if otherwise agreed to by the Company and
Hockemeier, such other date, time and place as the parties shall mutually agree.

     (c) Mechanics at Closing. At the Closing, the following shall occur, which
shall be deemed to take place simultaneously and none of the below shall be
deemed to have been completed or any document delivered until all of the below
have been completed and all required documents delivered:

          (i) Hockemeier shall deliver to the Company valid stock certificates
evidencing Hockemeier's ownership of the Shares, such certificates to be held in
escrow pursuant to Section 2 below.


          (ii) Hockemeier shall deliver duly executed stock powers executed in
favor of the Company.

          (iii) The Company shall cancel the Promissory Note.

     (d) Representations and Warranties of Hockemeier. Hockemeier hereby
represents and warrants to the Company as follows:

          (i) Enforceability. This Agreement and any and all agreements and
documents to be executed by Hockemeier pursuant to this Agreement and the
transactions contemplated hereby, when executed and delivered by Hockemeier,
will constitute the valid, binding and enforceable obligation of Hockemeier.

          (ii) Authorization; No Contravention. The execution, delivery and
performance of the obligations of Hockemeier hereunder (A) do not violate,
conflict with or result in any breach or contravention of, or the creation of
any lien under, any material contractual obligation of Hockemeier or any
requirement of law applicable to Hockemeier, and (B) do not violate any orders
of any governmental authority against, or binding upon, Hockemeier.

          (iii) Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any governmental authority or any other person, and no lapse of
a waiting period under any requirement of law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the delivery of the Shares) by, or enforcement against, Hockemeier
in this Agreement and each of the other documents to which Hockemeier is a party
or the transactions contemplated hereby and thereby.

          (iv) Ownership of Shares. Hockemeier is the lawful record owner of the
Shares, and of all rights thereto, free and clear of all liens, claims, charges,
encumbrances, restrictions, rights, options to purchase, proxies, voting trust
and other voting agreements, calls or commitments of every kind.

          (v) Acknowledgements.

     Hockemeier is fully aware of the Company's business, operations and
financial condition and has received or has had full access to all of the
information, including the Company's financial statements, he considers
necessary or appropriate to make an informed decision with respect to the
delivery of the Shares in satisfaction of the Loan Amount.

     Hockemeier has had the opportunity to ask questions of and receive answers
from the Company and its executive officers and financial and legal advisors
concerning the Company and he has been furnished with all documents and other
information about the Company which he has requested. Hockemeier believes that
he has been fully apprised of all facts and circumstances necessary to permit
him to make an informed decision relating to the delivery of the Shares in
satisfaction of the Loan Amount, that he has sufficient knowledge and experience
in business and financial matters, is capable of evaluating the merits and risks
of the transactions



contemplated hereby and has the capacity to protect his own interest in
connection with the transactions contemplated hereby.

     Hockemeier acknowledges and agrees that the Company may experience
significant future growth as a result of, among other things, an initial public
offering of its capital stock, a merger, consolidation or acquisition of the
Company into, with or by another entity, a sale of the Company's assets or a
strategic alliance or other business arrangement. Hockemeier further
acknowledges that, as a result of such transactions or otherwise, there may be
an increase in the value of the Company's capital stock after the date of this
Agreement for which, other than as set forth in Section 3 hereof, Hockemeier
agrees he shall not be entitled to any such benefit.

     (e) Representations and Warranties of the Company. The Company hereby
represents and warrants to Hockemeier as follows:

          (i) Organization. The Company is duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company has all
requisite power and authority to execute and deliver this Agreement and all
other agreements which are ancillary hereto and to consummate the transactions
contemplated hereby and thereby.

          (ii) Authorization; Approvals. All corporate action on the part of the
Company necessary for the authorization, execution, delivery and performance of
all of the Company's obligations under this Agreement has been taken prior to
the Closing. This Agreement, when executed and delivered by or on behalf of the
Company, shall constitute the valid and legally binding obligation of the
Company, legally enforceable against the Company in accordance with its
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
or by equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity). No consent, approval, order,
license, permit, action by, or authorization of or designation, declaration, or
filing with any governmental authority on behalf of the Company is required that
has not been, or will not have been, obtained by the Company prior to the
Closing in connection with the valid execution, delivery and performance of this

     2. Escrow. At the Closing, the Company shall place the Shares in escrow,
which Shares shall be held in escrow in accordance with the terms and provisions
hereof and in accordance with the following instructions:

     (a) Appointment. Hockemeier irrevocably authorizes the Company to deposit
with the Secretary of the Company any certificates evidencing the Shares to be
held by the Secretary of the Company and any additions and substitutions to the
Shares. Hockemeier does hereby irrevocably constitute and appoint the Secretary
of the Company as his attorney-in-fact and agent for the term of this escrow to
execute with respect to such Shares all documents necessary or appropriate to
make such Shares negotiable and to complete any transaction herein contemplated.

     (b) No Rights as a Stockholder. Hockemeier will not be deemed to be a
stockholder of the Company with respect to the Shares for any purpose, nor will
anything contained herein be



construed to confer upon Hockemeier, as such, any of the rights of a stockholder
of the Company with respect to the Shares while the Shares are held in escrow.

     (c) Escrow Period. The Shares shall be held in escrow from the date hereof
until such time as (i) some or all of the Shares are distributed to Hockemeier,
or (ii) the Shares are retained by the Company, each in accordance with Section
3 below.

     3. Adjustment.

     (a) If the Company consummates a firm commitment underwritten public
offering of its Common Stock (an "IPO") by April 15, 2005 at a per share price
greater than $1.16 (as such price may be adjusted in the event of any stock
dividend, stock distribution, subdivision, combination, consolidation or similar
event), the Company shall return to Hockemeier that number of Shares (the
"Adjusted Shares") calculated by subtracting from the Shares held in escrow an
amount equal to a fraction, the numerator of which shall equal the Loan Amount
and the denominator of which shall equal the per share price of the Company's
Common Stock sold in the IPO. The Secretary of the Company shall deliver the
Adjusted Shares to Hockemeier within ten (10) business days of the closing of
the IPO and the Company shall retain those Shares remaining in escrow. In the
event that the Company consummates an IPO at a per share price less than or
equal to $1.16 (as such price may be adjusted in the event of any stock
dividend, stock distribution, subdivision, combination, consolidation or similar
event), there shall be no adjustment to the Shares pursuant to this Section 3(a)
and the Secretary of the Company shall retain and cancel the Shares.

     (b) In the event that the Company fails to consummate an IPO by April 15,
2005, (i) Hockemeier shall request return of the Shares in writing (the "Share
Request") and repay the Loan Amount in cash on or before April 20, 2005 (the
"Settlement Date"), or (ii) if Hockemeier fails to deliver the Share Request
prior to the Settlement Date, the Company shall retain the Shares.

     4. Release. In consideration for and subject to performance of the
obligations contained in this Agreement, Hockemeier hereby agrees and covenants
not to sue or to bring, or assign to any third person, any claims or causes of
action, known or unknown, accrued or unaccrued, asserted or unasserted, from the
beginning of time to the date hereof, and releases and waives any claims or
causes of action that Hockemeier may have against the Company, its agents,
officers, employees, stockholders, directors, successors and assigns (the
"Company Releasees"), including, but not limited to, any and all claims or
causes of action relating to the repayment of the Loan Amount. Hockemeier
represents and warrants that he has not filed, nor has he assigned to any third
person, any complaints, charges or claims for relief against the Company
Releasees with any local, state or federal court or administrative agency.



     5. Miscellaneous.

     (a) Survival of Representations and Warranties. All of the representations
and warranties made herein shall survive the execution and delivery of this

     (b) Further Assurances. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.

     (c) Governing Law; Jurisdiction. This Agreement shall be governed by and
construed according to the laws of the State of New Jersey, without regard to
the conflict of laws provisions thereof. Any dispute arising under or in
relation to this Agreement shall be resolved in a competent court in the State
of New Jersey, and each of the parties hereby submits irrevocably to the
exclusive jurisdiction of such court.

     (d) Successors and Assigns; Assignment. Except as otherwise expressly
limited herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto. None of the rights, privileges, or obligations set forth in,
arising under, or created by this Agreement may be assigned without the prior
consent in writing of each party to this Agreement.

     (e) Entire Agreement. This Agreement, which contains the entire
understanding of the parties hereto, shall be binding on the parties hereto,
their parents, subsidiaries, affiliates, heirs, executors, administrators and
assigns. It is the only agreement between the parties with respect to the
subject matter hereof and shall not be modified or varied by oral
understandings. Any term of this Agreement may be amended and the observance of
any term hereof may be waived only with the written consent of the Company.

     (f) Notices, etc. All notices and other communications required or
permitted hereunder to be given to a party to this Agreement shall be in writing
and shall be telecopied or mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand or by messenger, addressed to such
party's address as set forth below or at such other address as the party shall
have furnished to each other party in writing in accordance with this provision:

     if to Hockemeier:    8 Coldstream Court, Skillman, NJ 08558

     if to the Company:   Arbinet-thexchange, Inc.
                          120 Albany Street, Tower II, Suite 450
                          New Brunswick, New Jersey 08901
                          Facsimile: (732) 509-9101
                          Attn: General Counsel

                          with a copy to:

                          David J. Sorin, Esq.
                          Morgan, Lewis & Bockius LLP
                          502 Carnegie Center



                          Princeton, NJ 08540
                          Facsimile: (609) 919-6639

or such other address with respect to a party as such party shall notify each
other party in writing as above provided. Any notice sent in accordance with
this section shall be effective (a) if mailed, five (5) business days after
mailing, (b) if sent by messenger, one (1) business day after delivery, and (c)
if sent via telecopier, one (1) business day after transmission and electronic
confirmation of receipt or (if transmitted and received on a non-business day)
on the second business day following transmission and electronic confirmation of
receipt (provided, however, that any notice of change of address shall only be
valid upon receipt).

     (g) Delays or Omissions. No delay or omission to exercise any right, power,
or remedy accruing to any party upon any breach or default under this Agreement,
shall be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.

     (h) Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided, however, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent

     (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument.

     (j) Legal Review. All parties to this Agreement have had an opportunity to
review this Agreement and to obtain independent legal counsel to review this

                                    * * * * *



     IN WITNESS WHEREOF, the parties have executed this Settlement and Release
Agreement as of the date first above written.

                                        ARBINET-THEXCHANGE, INC.

                                        By:    /s/ Peter P. Sach
                                            Name:  Peter P. Sach
                                            Title: CIO & SVP Operations

                                           /s/ J. Curt Hockemeier
                                        J. Curt Hockemeier