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EXHIBIT 10.7

     AGREEMENT AND DECLARATION OF TRUST (this "TRUST AGREEMENT"), dated as of
July 6, 2001, by and between Rhythms NetConnections, Inc. (the "COMPANY"),
having a principal place of business at 9100 East Mineral Circle, Englewood, CO
80112, as settlor, and The Bank of Cherry Creek, N.A., having an office at 3033
East First Avenue, Denver, CO 80206, as Trustee.

     WHEREAS, the Company has created the Rhythms NetConnections Inc. Severance
Policy (the "SEVERANCE PROGRAM"), a copy of which is attached hereto as EXHIBIT
A; and

     WHEREAS, Company has created the Rhythms NetConnections Inc. Paid Time Off
and Family and Medical Leave Act Policy (the "PTO/FMLA PROGRAM" and, together
with the Severance Program, the "PROGRAMS"), a copy of which is attached hereto
as EXHIBIT B; and

     WHEREAS, capitalized terms used herein and not otherwise defined have the
meanings given to them in the Programs; and

     WHEREAS, pursuant to the Severance Program, each Employee of the Company
will become entitled to receive the payments provided for him or her under the
Severance Program if such Employee's Employment with the Company is terminated
by the Company, on an Involuntary No Fault basis, following the date of this
Trust Agreement; and

     WHEREAS, pursuant to the PTO/FMLA Program, each Employee of the Company
will become entitled to receive the payments provided for him or her under the
PTO/FMLA Program if such Employee's Employment with the Company is terminated,
for any reason, or if such Employee is otherwise entitled to PTO payments under
the PTO/FMLA Program, following the date of this Trust; and

     WHEREAS, the Company desires to set aside properties having a value
sufficient to fund payments required to be made to the Employees eligible to
receive benefits under the Programs.

     NOW, THEREFORE, in consideration of the premises and other valuable
consideration, and subject to the terms and provisions of Programs and this
Trust Agreement, it is hereby agreed as follows:

                                       1.

                      DEFINITIONS AND RULES OF CONSTRUCTION

     NAME. This trust shall be known as the Rhythms Severance and PTO/FMLA
Trust, and is hereinafter referred to in this Trust Agreement as the "TRUST."

     TERMS DEFINED IN THE RECITALS. When used in this Trust Agreement, terms
defined in the recitals hereto have the meanings ascribed therein.
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     CERTAIN OTHER TERMS DEFINED. Unless the context otherwise requires, the
following terms shall have the following meanings for all purposes of this Trust
Agreement:

     2.   "BENEFICIAL INTEREST": as to each Beneficiary at any given time, the
          share of the Trust Fund, if any, to which such Beneficiary is, or
          presumptively will be, entitled pursuant to Section 5.03 below.

     3.   "BENEFICIARIES": the Employees of the Company specified on SCHEDULE A
          attached hereto.

     (c)  "GROSS BENEFITS": all Severance Benefits and all accrued and unpaid
PTO which a Beneficiary is legally entitled to receive under the Programs,
INCLUDING all Withholdings.

     (d)  "INITIAL CONTRIBUTION": the initial contribution to the Trust Fund
specified in 0 below.

     (e)  "NET BENEFITS": all Severance Benefits and all accrued and unpaid PTO
which a Beneficiary is legally entitled to receive under the Programs, NET OF
all Withholdings.

     (f)  "NOTICE": the tangible expression of a communication sent, an
instruction or direction given, or an action taken, pursuant to this Trust
Agreement; provided that a Notice shall be effective only if it conforms to the
requirements of Section 13.05 below.

     (g)  "ORIGINAL TRUSTEE": the original Trustee of the Trust first above
named.

     (h)  "OTHER WITHHOLDING AMOUNTS": all amounts authorized by the Beneficiary
to be withheld from any payments due to the Beneficiary from the Company and all
other amounts required to be withheld by the Company by court or administrative
order or otherwise by reason of legal process or agreement with the Beneficiary.

     (i)  "OTHER WITHHOLDING TAXES": any tax or taxes or other charge or charges
(other than Withholding Taxes) which have been or may be imposed on a
Beneficiary or upon the Trust with respect to the amount distributable or to be
distributed under the income tax laws of the United States or of any state or
political subdivision or entity by reason of any distribution provided for in
this Trust Agreement, whenever such withholding is determined by the Trustee, in
the Trustee's sole discretion, to be required by any law, regulation, rule,
ruling, directive or other governmental authority.

     (j)  "PERMITTED TRANSFEREES": the heirs, administrators, executors,
successors and assigns of a Beneficiary who are permitted, under the provisions
of 11 below, to succeed to the Beneficial Interest of a Beneficiary.

     (k)  "PROGRAM": means each of the Severance Program and the PTO/FMLA
Program.

     (l)  "SUBSEQUENT CONTRIBUTION(S)": each and all of the subsequent
contributions to the Trust Fund specified in Section 2.02 below.
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     (m)  "TRUST FUND": all property (principal plus accrued, accumulated and
undistributed income) that, at any particular time, belongs to the Trust under
this Trust Agreement.

     (n)  "TRUSTEE": the trustee of the Trust in office from time to time;
namely the Original Trustee or its successor appointed pursuant to 6 below in
office at any time.

     (o)  "WITHHOLDING TAXES": all taxes or similar expenses amounts required to
be withheld, on behalf of each Beneficiary, by any law, regulation, rule,
ruling, directive or other governmental requirement and remitted to the
applicable governmental authority with respect to the Gross Benefits.

     (p)  "WITHHOLDINGS": the sum of all Withholding Taxes, Other Withholding
Taxes and Other Withholding Amounts.

     GENDER, NUMBER AND SUBDIVISION REFERENCES. Except where the context
otherwise requires, words importing the masculine gender include the feminine
and the neuter, if appropriate, words importing the singular number shall
include the plural number and vice versa and words importing persons shall
include firms, associations, corporations and other entities. All references
herein to ARTICLES, Sections and other subdivisions, unless referring
specifically to the Programs, refer to the corresponding ARTICLES, Sections and
other subdivisions of this Trust Agreement.

     TITLES. The ARTICLE titles and Section headings in this Trust Agreement are
included solely for purposes of identification, and are not to be used to
construe any provision contained in this Trust Agreement or for any other
purpose.

                                       4.

                INITIAL CONTRIBUTION; SUBSEQUENT CONTRIBUTION(S);
                        AND UNDERTAKINGS OF THE TRUSTEE

     INITIAL CONTRIBUTION. Upon the execution of this Trust Agreement, the
Company shall transfer, assign and deliver to the Trustee, and the Trustee shall
receive and accept, U.S. Treasury Bills having a value on the date of execution
of this Trust Agreement of at least SEVEN MILLION FOUR HUNDRED THOUSAND DOLLARS
($7,400,000), or alternatively, at least SEVEN MILLION FOUR HUNDRED THOUSAND
DOLLARS ($7,400,000) in cash, representing the Initial Contribution to the
Trust. If the Company transfers cash to the Trust in payment of all or part of
its Initial Contribution to the Trust, the Trustee agrees to invest all of such
cash (to the extent of the nearest whole dollar )in Permitted Investments within
forty-eight (48) hours of receipt thereof.

     Section 2.02. SUBSEQUENT CONTRIBUTION(S). From time to time after the date
of this Trust Agreement, the Company may transfer, assign and deliver to the
Trustee, and the Trustee shall receive and accept, additional U.S. Treasury
Bills having a value of the date of transfer to the Trustee sufficient to fund
any obligations of the Company under the Colorado Wage Act for Gross Benefits
owed under the Programs in excess of the Initial Contribution, each such
additional transfer representing a Subsequent Contribution to the Trust.
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     Section 2.03. UNDERTAKINGS OF THE TRUSTEE. The Original Trustee hereby
declares that it will hold the Trust Fund upon the terms set forth in this Trust
Agreement. Each successor Trustee shall succeed to the right, title and interest
of the Original Trustee in the Trust Fund automatically upon its due succession
or due acceptance of appointment as the Trustee without the need for any
conveyancing documents as to all or any part of the Trust Fund. All documents
effecting any transfer or encumbrance of all or any part of the Trust Fund shall
be executed and delivered exclusively by the Trustee.

                                       5.

                                  BENEFICIARIES

     RIGHTS OF BENEFICIARIES. Except under the circumstances and to the extent
provided in 5.03, the Beneficiaries shall be the beneficial owners of the Trust
created by this Trust Agreement and the Trustee shall retain only such incidents
of ownership as are necessary to undertake the actions and transactions
authorized herein. Each Beneficiary shall be entitled to participation in the
rights and benefits due to a Beneficiary according to his or her Beneficial
Interest, and each Beneficiary shall take and hold his or her Beneficial
Interest subject to all of the terms and provisions of this Trust Agreement. The
interest of a Beneficiary is hereby declared and shall be in all respects
personal property.

     OWNERSHIP AND CONTROL OF TRUST FUND. Except as is hereinafter expressly
provided, no Beneficiary shall have any title or right to, or possession,
management or control of the Trust Fund. No widower, widow, heir or devisee of
any individual who may be a Beneficiary and no bankruptcy trustee, receiver or
similar person of any Beneficiary shall have any right, statutory or otherwise
(including any right of dower, homestead or inheritance, or of partition, as
applicable), in any property forming a part of the Trust Fund, but the whole
title to all of the Trust Fund shall be vested in the Trustee and the sole
interest of the Beneficiaries shall be the rights and benefits given to such
persons under this Trust Agreement.

     RISK OF FORFEITURE. A Beneficiary's Beneficial Interest, and any title or
right of a Beneficiary in or to the Trust Fund, shall be forfeited upon his
failure to comply with the terms and conditions of the Program that would
entitle him or her to payment thereunder and, notwithstanding anything contained
in the Programs or in this Trust Agreement to the contrary, all benefits under
the Programs shall be forfeited under the circumstances, and in accordance with
the terms and conditions, specified in the Programs.

     RESTRICTION ON TRANSFER OF BENEFICIAL INTERESTS. Except as otherwise
provided in Section 3.05, the Beneficial Interest of a Beneficiary shall not be
assignable or transferable, either by such Beneficiary in person, by a duly
authorized agent or attorney of such Beneficiary or by the properly appointed
legal representative of such Beneficiary, nor shall a Beneficiary have authority
or power to sell, assign, transfer, encumber or in any other manner anticipate
or dispose of his or her Beneficial Interest, and any such transfer shall be
null and void AB INITIO.

     PERMITTED TRANSFERS. Notwithstanding the provisions of Section 3.04, a
Beneficial Interest may be assigned or transferred in the following
circumstances (and no other), provided that the Beneficial Interest shall remain
subject to the benefits forfeiture provisions in the Programs (as applied to the
original employee Beneficiary) and the assignee or transferee
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agrees in writing to be bound to the terms and provisions of this Trust
Agreement and the Programs:

     Upon the death of a Beneficiary, his or her Beneficial Interest shall pass
as personal property to his or her legal representative and may thereafter be
transferred by will, intestate succession or operation of law as part of that
individual's testamentary or intestate estate, and such death shall in no way
terminate or affect the validity of this Trust Agreement.

     The Beneficial Interest of any Beneficiary may be assignable or
transferable if the Trustee, in its sole discretion, has consented in writing to
such assignment or transfer.

     CONFLICTING CLAIMS TO BENEFICIAL INTERESTS. If any conflicting claims or
demands are made or asserted with respect to the ownership or control of the
Beneficial Interest of any Beneficiary, or if there is any disagreement among
persons claiming to be Permitted Transferees of a Beneficial Interest resulting
in adverse claims or demands being made in connection with such Beneficial
Interest (an "OWNERSHIP DISPUTE"), then, in any of such events, the Trustee
shall be entitled, at its sole election, to refuse to comply with any demand or
direction made by any party to such Ownership Dispute. In so refusing, the
Trustee may elect to make no payment or distribution with respect to the
Beneficial Interest relating to the Ownership Dispute, or any part thereof, and
to refer such Ownership Dispute to the Court having jurisdiction over the Trust,
which shall have exclusive jurisdiction over resolution of such Ownership
Dispute. In so doing, the Trustee shall not be or become liable to any of such
parties for its refusal to comply with any demand or direction made by them nor
shall the Trustee be liable for interest on any funds which it may so withhold.
The Trustee shall be entitled to refuse to act until either (i) the rights of
the adverse claimants have been adjudicated by a final judgment of such Court or
(ii) all differences have been resolved by a valid written agreement among all
of such parties and the Trustee, which agreement shall include a complete
release of the Trustee.

     NO SUITS BY BENEFICIARIES. No Beneficiary shall have any right by virtue of
any provision of this Trust Agreement to institute any action or proceeding at
law or in equity against any party other than the Trustee upon or under or with
respect to the Trust Fund.

                                       6.

                        DURATION AND TERMINATION OF TRUST

     DURATION. Subject to the overriding provisions of 2, the Trust shall
terminate upon the earliest date on which there are no distributions to
Beneficiaries or the Company remaining to be paid pursuant to Section 5.03.

     RULE AGAINST PERPETUITIES. Notwithstanding any other provision of this
Trust Agreement, and particularly notwithstanding the provisions of 17, the
Trust shall terminate, if it shall not have previously terminated, one (1) day
before the twentieth (20th) anniversary of the date of execution of this Trust
Agreement.

     TERMINATION BY BENEFICIARY. The Trust may not be revoked or terminated at
any time prior to the date specified in 17 by the Beneficiaries and/or the
Trustee.
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     CONTINUANCE OF TRUST FOR WINDING UP. After the date specified in 17, and
solely for the purpose of liquidating and winding up the affairs of the Trust,
the Trustee shall continue to act as such until its duties have been fully
performed.

                                       7.

                        ADMINISTRATION OF THE TRUST FUND

     PAYMENT OF CLAIMS, EXPENSES AND LIABILITIES. The Trustee shall pay from the
Trust Fund all claims, expenses, charges, liabilities and obligations of the
Trust Fund and such liabilities as the Trustee may be obligated to pay as
transferee of the Trust Fund, including, without limiting the generality of the
foregoing, such debts, liabilities or obligations as may be payable from the
Trust Fund, interest, taxes, assessments, and public charges of every kind and
nature, and all other costs, charges and expenses connected with or arising out
of the execution or administration of the Trust and the Trust Fund, and such
other payments and disbursements as are provided for in this Trust Agreement or
which may be determined by the Trustee to be proper charges against the Trust
and Trust Fund.

     ACCUMULATION OF NET INCOME. The Trustee shall accumulate all of the net
income of the Trust Fund not utilized for the payment of Trust liabilities and
expenses pursuant to Section 5.01 and invest such accumulated income in
accordance with Section 7.02.

     Section 5.03. DISTRIBUTIONS. Distributions shall be paid from the Trust
Fund as follows:

     (a)  At such time as a Beneficiary becomes legally entitled to receive a
payment of benefits under the Programs ("PAYMENT EVENT"), the Trustee shall
promptly pay to such Beneficiary, in the manner provided in this Section, the
amount of such Beneficiary's Net Benefits, subject to applicable Withholdings,
in satisfaction of the Company's payment obligations under the Programs.

     (b)  The Company will use reasonable best efforts to provide the Trustee,
at least forty-eight (48) hours prior to the occurrence of a Payment Event with
respect to a Beneficiary, with a Notice of payment for such Beneficiary (a
"PAYMENT NOTICE"), specifying the Gross Benefits payable to such Beneficiary.
The Company may include more than one Beneficiary and the relevant Benefits
Information for more than one Beneficiary in the same Payment Notice.

     (c)  The Company has retained Ceridian Employer Services ("PAYROLL AGENT,"
or any successor payroll service utilized by the Company) to provide payroll
services to the Company, including, but not limited to, the payment of all
payroll amounts to employees, payment of all Net Benefits to Beneficiaries and
the remittance of all Withholdings to the appropriate payees with respect to the
Gross Benefits payable to Beneficiaries. The Trustee agrees that it shall
utilize the Payroll Agent to pay all Net Benefits to Beneficiaries who are
legally entitled to receive such Net Benefits hereunder and under the Programs
and to withhold and remit all Withholdings to the appropriate payees. The
Company agrees to provide the Trustee with direct access to the Company's
payroll policies, practices and systems as maintained by the Company and by the
Payroll Agent, as in effect from time to time.
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     (d)  Following receipt of a Payment Notice, on or before the close of
business on the date on which a Payment Event occurs, the Trustee shall deliver
out of the Trust Fund to the Payroll Agent the funds necessary to pay the Net
Benefits to the Beneficiary(ies) specified in such Payment Notice and all
Withholdings payable to the applicable payees relating thereto.

     (e)  If, as to any Beneficiary specified in a Payment Notice, the Trustee
is unable to provide the Payroll Agent with the funds necessary to pay the Gross
Benefits specified in such Payment Notice on or before the close of business on
the date of occurrence of a Payment Event (as specified in Section 5.03(d)
above), the Company retains the right (but not the obligation) to deliver the
funds directly to the Payroll Agent to fund all or a portion of the specified
Gross Benefits on behalf of the Trust prior to the close of business on the date
on which such Payment Event occurs, in which case, upon receipt of written
verification of such payment(s) by the Company, the Trustee shall reimburse the
Company for all amounts so paid in the manner set forth in this Section 5.03(e).
By no later than Wednesday of each week, the Company shall provide the Trustee
with a notice of all direct payments made by the Company to the Payroll Agent
during the immediately preceding calendar week (the "WEEKLY NOTICE"), and the
Trustee shall reimburse the Company in full for all amounts so paid as shown in
the Weekly Notice within five (5) business days after receipt of such Weekly
Notice.

     (f)  At such time as the Trustee determines that all of the Gross Benefits
have been paid hereunder and the Programs and all other claims, expenses,
charges, liabilities and obligations of the Trust have been discharged or paid
from the Trust Fund, or if the existence of the Trust shall terminate pursuant
to 2 of this Trust Agreement, the Trustee shall, as expeditiously as is
consistent with the conservation and protection of the Trust Fund, distribute
the remaining Trust Fund to the Company.

     (g)  The Company shall provide periodic updates to the Trustee in the form
of amendments to SCHEDULE A attached hereto (or in such other form agreed to
with the Trustee) regarding changes, if any. to SCHEDULE A, including, but not
limited to any changes in the eligible Beneficiaries, the 2002 Payment amounts
to any one or more Beneficiaries or the date of payment of any 2002 Payments. In
addition, upon reasonable advance notice form the Trustee, representatives of
the Company agree to meet with the Trustee to review Trust administration and
other Trust-related matters.

                                       8.

                            TAX MATTERS; WITHHOLDINGS

     INCOME TAX STATUS. The Trust is intended to be treated as a grantor trust
subject to the provisions of Subchapter J, Subpart E of the Internal Revenue
Code owned by the Company as grantor. Any items of income, deduction, credit or
loss of the Trust shall be allocated to the Company for federal income tax
purposes. The Trustee is authorized to take any action that may be necessary or
appropriate to minimize any potential tax liability of the Company arising out
of the operation of the Trust.

     TAX RETURNS AND REPORTS. The Trustee will file with the IRS annual
information tax returns (Form 1041), as provided in this Section. Items of
income, deduction and credit attributable to the Trust will not be reported on
the Form 1041. Instead, the Trustee will attach to
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the Form 1041 a separate statement showing the items of income, deduction and
credit attributable to the Trust and detailing the allocation of such items to
the Company. Within thirty (30) days after the end of each calendar year, the
Trustee shall cause to be prepared and mailed to the Company such information
with respect to the Trust as shall be necessary for the Company to complete and
file its federal, state and local income and other tax returns.

     Section 6.03. WITHHOLDINGS. The Trustee shall utilize the Payroll Agent,
which shall (i) be responsible for calculating and determining the amount of all
Withholdings, including, but not limited to, all Withholding Taxes and Other
Withholding Taxes (defined below) due and owing to the appropriate governmental
authority, with respect to the Gross Benefits payable hereunder and under the
Programs and (ii) agree to timely withhold and deposit or pay over all
Withholdings to the appropriate payees, in all cases consistent with the
Company's normal payroll practices.

                                       9.

                    POWERS OF AND LIMITATIONS ON THE TRUSTEE

     OVERRIDING LIMITATIONS ON TRUSTEE. The Trustee shall not at any time, on
behalf of the Trust, the Company or any Beneficiary, enter into or engage in any
trade or business, and no part of the Trust Fund shall be used or disposed of by
the Trustee in furtherance of any trade or business. The Trustee shall be
restricted to receiving the Initial Contribution, investing the Trust Fund
subject to the limitations provided in 12, collecting income from the Trust
Fund, effecting the distributions specified in ARTICLE V above, utilizing the
Payroll Agent to perform the duties of the Payroll Agent specified in ARTICLES V
and VI above, and exercising such other powers and duties as are specified
elsewhere in this Trust Agreement, including, without limitation the duties
specified in 13, for the purposes of carrying out the terms of this Trust
Agreement.

     LIMITED INVESTMENT POWERS. The Trustee (a) shall invest all funds received
by it as Trustee or otherwise held in the Trust Fund only in (i) marketable
direct obligations of, or guaranteed as to principal and interest by, the United
States government or any agency thereof; having a remaining maturity
contemporaneous with the anticipated need of the Trust for funds or (ii) money
market funds that invest exclusively in marketable direct obligations of, or
guaranteed as to principal and interest by the United States government or any
agency thereof; which funds permit redemption of invested funds on an overnight
basis in order to meet the anticipated need of the Trust for funds or (b) to the
extent the Trustee anticipates that funds will be needed within 30 days or less,
may also invest in insured demand deposit accounts or interest-bearing
certificates of deposit or other similar obligations of domestic banks or other
financial institutions having a shareholders' equity or equivalent capital of
not less than One Billion Dollars ($1,000,000,000), at the then best generally
available rates of interest for like amounts and like periods ("PERMITTED
INVESTMENTS").

     SPECIFIC POWERS OF TRUSTEE. Subject to the limitations contained in this
Trust Agreement, the Trustee shall have, in addition to any powers conferred by
any other provision of this Trust Agreement, the power to take any and all
actions as, in the sole discretion of the Trustee, are necessary or advisable to
effectuate the purposes of the Trust, including the following specific powers:
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               To retain all or any assets constituting part of the Trust Fund,
to hold legal title to property of the Trust in the name of the Trust, to invest
or reinvest funds of the Trust only as provided in 12 and to cause such
investments of any part of the Trust Fund to be registered and held in its name,
as Trustee, or in the names of nominees.

               To maintain appropriate books and records relating to the Trust
and the Trust Fund detailing the acts and transactions of the Trustee.

               To initiate, prosecute, defend, supervise, direct, compromise or
settle any claim, demand, action or proceeding relating to the Trust or this
Trust Agreement, and in connection therewith, at the Trustee's discretion, to
retain/utilize and employ such agents, adjusters and professionals (including
professionals affiliated with the Trustee, the Company or any Beneficiary) and
to confer upon them such authority as the Trustee may deem expedient to carry
out its duties hereunder, and to pay reasonable compensation therefor from the
Trust Fund.

     (d)  To retain/utilize agents and third-party professionals, advisors and
consultants to assist and/or advise the Trustee in the performance of its duties
including, specifically, the retention of the Payroll Agent to provide the
services provided in ARTICLES V and VI above.

     (e)  To perform any and all acts, exercise any and all rights, enter into
any and all proceedings, contracts and other instruments (including, but not
limited to the preparation and filing of any and all statements and papers,
documents and instruments of any kind and nature with any governmental body
having jurisdiction over the Trust or the Program) that are not inconsistent
with the provisions of this Trust Agreement and that the Trustee deems necessary
and advisable in its opinion for the exercise by the Trustee of all the rights
and privileges accorded to it hereunder, for the protection and safekeeping of
the Trust Fund and for the administration of the Trust in accordance with the
terms of this Trust Agreement and applicable law.

                                      10.

                             ACCOUNTS OF THE TRUSTEE

     ACCOUNTS AND INSPECTION. The Trustee shall keep accurate and detailed
accounts of all investments, receipts and disbursements and other transactions
hereunder and all accounts, books and records relating thereto shall be open at
all reasonable times to inspection and audit by any person designated by the
Company. The Trustee shall promptly deliver to such designee any reports on the
Trust Fund that are reasonably requested.

     ACCOUNTING REPORTS. Within a reasonable time period following the
termination of the Trust pursuant to 16, and within thirty (30) days, or such
other agreed-upon period, after removal or resignation of the Trustee, the
Trustee shall deliver to the Company a certified written report, in a format
acceptable to the Company, setting forth (i) all investments, receipts and
disbursements, and other transactions effected during the period from the date
of this Trust Agreement, or from the close of any preceding period covered by
such a report to the date of such removal, resignation or termination, (ii) all
cash, securities and other property held at the
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close of such period and the current value thereof, and (iii) such other
information as may be required of the Trustee under any applicable law.

     RIGHT TO JUDICIAL ACCOUNTING. Nothing contained in this ARTICLE shall be
construed as a limitation upon or prohibition against the Trustee's right to
have its accounting judicially settled.

     PRESERVATION OF BOOKS AND RECORDS. All records and accounts maintained by
the Trustee with respect to the Trust shall be preserved for such period as may
be required under any applicable law. Upon the expiration of any such required
retention period, the Trustee shall have the right to destroy such records and
accounts after first notifying the Company of its intention and transferring to
the Company all records and accounts requested. The Trustee shall have the right
to preserve all records and accounts in original form, or on microfilm, magnetic
tape, or any other similar process.

                                      11.

                 LIABILITIES AND INDEMNIFICATION OF THE TRUSTEE

     GENERALLY. The Trustee accepts and undertakes to discharge the trust
created by this Trust Agreement upon the terms and conditions hereof. The
Trustee shall exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
its own affairs. No provisions of this Trust Agreement shall be construed to
relieve the Trustee from liability for its own recklessness or its own
intentional or willful and wanton misconduct resulting in private gain, except
that:

               The Trustee shall not be liable for any action taken in good
faith in reliance upon the advice of professionals.

               The Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Trust
Agreement, and no implied covenants or obligations shall be read into this Trust
Agreement against the Trustee.

               The Trustee shall not be liable for any error of judgment made in
good faith.

     (d)  The Trustee shall not be liable for any errors made by, or omissions
of, the Paying Agent.

     REQUIREMENT OF ADEQUATE RESOURCES. Notwithstanding any other provision of
this Trust Agreement, and particularly notwithstanding the provisions of 4, the
Trustee shall not be required to enter into or maintain any claim, demand,
action or proceeding relating to the Trust unless the Trustee shall have
sufficient funds on hand for that purpose or unless the Trustee shall have been
indemnified to its satisfaction against all expenses and liabilities to which it
may, in its judgment, be subjected by any such action on its part.

     RELIANCE BY TRUSTEE. Except as is otherwise specifically provided herein:
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               The Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order or other paper or document reasonably believed by the
Trustee to be genuine and to have been signed or presented by the proper party
or parties.

               The Trustee may consult with legal counsel to be selected by it,
and pay the cost of such consultation from the Trust Fund, and the advice or
opinion of such counsel shall be full and complete personal protection to the
Trustee and agents of the Trust in respect of any action taken or suffered by it
in good faith and in reliance on, or in accordance with, such advice or opinion.

     (c)  The Trustee may rely and shall be protected with respect to any and
all actions taken or performed, or failed to be taken or performed, by the
Payroll Agent.

     INDEMNIFICATION OF TRUSTEE. The Trustee shall be indemnified by and receive
reimbursement from the Company against and from any and all loss, liability,
damage or expense that the Trustee may incur or sustain, in good faith and
without recklessness or its own intentional or willful and wanton misconduct
resulting in personal gain, in the exercise and performance of any of the powers
and duties of the Trustee under this Trust Agreement. The Trustee may receive
advance payments in connection with indemnification under this Section, provided
that prior to receiving any such advance, the Trustee shall first have given a
written undertaking to repay any amount advanced to it and to reimburse the
Trust in the event it is subsequently determined that it is not entitled to such
indemnification. The rights accruing to the Trustee by reason of the foregoing
shall not be deemed to exclude any other right to which it may legally be
entitled, nor shall anything else contained herein restrict the right of the
Trustee to contribution under applicable law.

     BOND OF TRUSTEE. Neither the Original Trustee nor any successor Trustee
shall be obliged to file or furnish any bond or surety for the performance of
its duties, unless otherwise ordered by a court, and if so ordered, all costs
and expenses of providing such bond or surety shall be paid or reimbursed from
the Trust Fund as an expense of administration.

     LIABILITY TO THIRD PERSONS. The Company shall not be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any person in
connection with the Trust Fund or the affairs of the Trust, and no Trustee or
agent of the Trust shall be subject to any personal liability whatsoever, in
tort, contract or otherwise, to any person in connection with the Trust Fund or
the affairs of this Trust, except for its own recklessness or its own
intentional or willful and wanton misconduct; and all such persons shall look
solely to the Trust Fund for satisfaction of claims of any nature arising in
connection with affairs of the Trust.

     NONLIABILITY OF TRUSTEE FOR ACTS OF PREDECESSORS. Any successor Trustee may
accept and rely upon any accounting made by or on behalf of any predecessor
Trustee hereunder, and any statement or representation made as to the assets
comprising the Trust Fund or as to any other fact bearing upon the prior
administration of the Trust. A Trustee shall not be liable for having accepted
and relied upon such accounting, statement or representation if it is later
proved to be incomplete, inaccurate or untrue. A Trustee or successor Trustee
shall not be liable for any
<Page>

act or omission of any predecessor Trustee, nor have a duty to enforce any
claims against any predecessor Trustee on account of any such act or omission.

     NONLIABILITY OF TRUSTEE FOR ACTS OF OTHERS. Nothing contained in this Trust
Agreement shall be deemed to be an assumption by the Trustee of any of the
liabilities, obligations or duties of the Company, and shall not be deemed to be
or contain a covenant or agreement by the Trustee to assume or accept any such
liability, obligation or duty.

                                      12.

                            COMPENSATION OF TRUSTEES

     TRUSTEE COMPENSATION. Each Trustee shall be entitled to such compensation
for services rendered as shall be mutually agreed upon by the Trustee and the
Company prior to such Trustee's accession to office, to be paid as specified in
such agreement, a copy of which is appended hereto as SCHEDULE B. In addition,
the Company shall prepay to the Payroll Agent the Payroll Agent's fees and
expenses for providing the services specified in ARTICLES V and VI above.

     PRIOR LIEN OF TRUSTEE. The Trustee shall have a lien upon the Trust Assets
prior to any Beneficial Interest in the Trust to secure payment of any amounts
payable to the Trustee or to Beneficiaries or agents of the Trust as
compensation for services to the Trust or for indemnification pursuant to 6
above.

                                      13.

                         TRUSTEE AND SUCCESSOR TRUSTEES

     GENERALLY. The Trustee shall be a bank or trust company authorized to act
as a corporate fiduciary under the laws of the State of Colorado. A Trustee that
changes its name or reorganizes, reincorporates or merges with or into or
consolidates with any other entity shall be deemed to be a continuing entity and
shall continue to act as a Trustee hereunder.

     RESIGNATION. The Trustee may resign as Trustee by delivering a Notice of
resignation to the Company. Such resignation shall become effective on the date
specified in such Notice (which shall not be less than thirty (30) days after
delivery of such Notice) or upon the appointment of such Trustee's successor and
such successor's acceptance of such appointment, whichever is later.

     APPOINTMENT OF SUCCESSOR. In the event of the removal, resignation,
bankruptcy or insolvency of the Trustee, a vacancy shall be deemed to exist and
a successor shall be appointed by the Company.

     ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. The removal, resignation,
bankruptcy or insolvency of the Trustee shall not operate to terminate the Trust
created by this Trust Agreement or to revoke any existing agency created
pursuant to the terms of this Trust Agreement or invalidate any action
theretofore taken by the Trustee. Any successor Trustee appointed hereunder
shall execute an instrument accepting its appointment and shall deliver one
counterpart thereof to each of the Company, and, in case of the Trustee's
resignation, to the retiring Trustee. Thereupon such successor shall, without
any further act, become vested with all
<Page>

the liabilities, duties, powers, rights, title, discretion and privileges of its
predecessor in the Trust with like effect as if originally named Trustee. The
retiring Trustee shall duly assign, transfer and deliver to such successor all
property and money held by such retiring Trustee hereunder and shall, as
reasonably requested by such successor, execute and deliver an instrument or
instruments conveying and transferring to such successor upon the trust herein
expressed, all the liabilities, duties, powers, rights, title, discretion and
privileges of such retiring Trustee.

                                      14.

                                   AMENDMENTS

     AMENDMENT AUTHORITY. Whenever necessary to carry out the purposes of the
Trust, this Trust Agreement may be amended by the Trustee with the consent and
approval of the Company; provided, however, that:

               no such amendment may be made that would have the effect of
reducing the beneficial interest of any Beneficiary at any time; and

               no such amendment may be made under any circumstances that would
have the effect of (i) extending the termination of the Trust beyond the date
specified in 2, (ii) authorizing the Trustee to engage in a trade or business,
or (iii) expanding the amendment powers of the Trustee under this ARTICLE.

                                      15.

                            MISCELLANEOUS PROVISIONS

     INTENTION OF PARTIES TO ESTABLISH TRUST. This Trust Agreement is intended
to create a trust without transferable certificated beneficial interests (except
as permitted by operation of law) and the Trust created hereunder shall be
governed and construed in all respects as a trust.

     GOVERNING LAW. This Trust Agreement shall be construed and enforced, to the
extent possible, according to the laws of the State of Colorado, and all
provisions hereof shall be administered according to the laws of said State.

     SEVERABILITY. In the event any provision of this Trust Agreement or the
application thereof to any person or circumstances shall be finally determined
by a court of proper jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Trust Agreement, or the application of such provision to
persons or circumstances or in jurisdictions other than those as to or in which
it is held invalid or unenforceable, shall not be affected thereby, and each
provision of this Trust Agreement shall be valid and enforced to the fullest
extent permitted by law.

     INSTRUMENTS OF FURTHER ASSURANCE. The Company shall, upon the reasonable
request of the Trustee, execute, acknowledge and deliver such further
instruments and do such further acts as may be necessary or proper to carry out
effectively the purpose of this Trust Agreement.
<Page>

     NOTICES. 16. Any Notice or other communication required or permitted to be
made in accordance with this Trust Agreement shall be in writing and shall be
deemed to have been sufficiently given, for all purposes, if delivered
personally, or if delivered during regular business hours by facsimile
transmission, telex or other electronic or telegraphic means, or if delivered by
a recognized overnight or two-day delivery service or if mailed by first class
mail:

          (i)  if to the TRUSTEE, at:

               The Bank of Cherry Creek, N.A.
               3033 East First Avenue
               Denver, CO 80206
               Attn: Daniel A. Rich, Senior Vice President
               Telephone No.:
               Fax No.:
               E-Mail:

          (ii) if to the COMPANY, at:

               Rhythms NetConnections Inc.
               9100 East Mineral Circle
               Englewood, CO  80112
               Attn: Jay Braukman, Chief Financial Officer
               Telephone No.:
               Fax No.:
               E-Mail:

     Any entity may change the address at which it is to receive Notices under
this Trust Agreement by furnishing written Notice thereof to the Trustee as
provided above.

     COUNTERPARTS. This Trust Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
<Page>

     IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement
or caused this Trust Agreement to be duly executed by their respective officers
and the Trustee herein has executed this Trust Agreement, as Trustee, effective
as of the day and year first above written.


                                        COMPANY:

                                        RHYTHMS NETCONNECTIONS INC.

                                        BY:
                                           ---------------------------------
                                        NAME (PRINT):
                                                     -----------------------
                                        TITLE:
                                              ------------------------------



                                        TRUSTEE:

                                        THE BANK OF CHERRY CREEK, N.A.

                                        BY:
                                           ---------------------------------
                                        NAME (PRINT):
                                                     -----------------------
                                        TITLE:
                                              ------------------------------

<Page>

                                    EXHIBIT A

                                SEVERANCE POLICY


<Page>

                                    EXHIBIT B

                                PAID TIME OFF AND
                       FAMILY AND MEDICAL LEAVE ACT POLICY