EXHIBIT 10.1
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                 PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

                                  BY AND AMONG

                           RHYTHMS NETCONNECTIONS INC.

                                       AND

                   THE PURCHASERS LISTED ON SCHEDULE I HERETO

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                                   Dated as of

                                February 6, 2000

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     This  STOCK  PURCHASE  AGREEMENT  is  dated  as  of  February 6, 2000 (this
"Agreement"),  by  and among Rhythms NetConnections Inc., a Delaware corporation
(the  "Company"),  and  each  of  the  purchasers  listed  on  Schedule I hereto
(individually,  a  "Purchaser"  and  collectively,  the  "Purchasers").

     WHEREAS,  the  Company  proposes,  subject  to the terms and conditions set
forth  herein,  to  issue and sell to the Purchasers 250,000 Shares of its 8.25%
Series  E  Convertible Preferred Stock, liquidation preference $1,000 per share,
par  value  $0.001  per  share  (the  "Series  E  Preferred  Stock");

     WHEREAS,  the  Company  proposes,  subject  to the terms and conditions set
forth herein, to issue and sell to the Purchasers warrants (each a "Warrant" and
together,  the  "Warrants") to purchase 5,625,000 shares of the Company's Common
Stock  (the  "Warrant  Shares"), par value $0.001 per share, such Warrants to be
allocated  and  priced as follows: Warrants to purchase 1,875,000 Warrant Shares
at  $45.00  per  share  with  a  term  of  three (3) years from the Closing Date
(defined  below),  Warrants  to  purchase 1,875,000 Warrant Shares at $50.00 per
share  with  a  term  of  five  (5)  years from the Closing Date and Warrants to
purchase  1,875,000  Warrant Shares at $55.00 per share with a term of seven (7)
years  from  the  Closing Date (each price an "Exercise Price" and together, the
"Exercise  Prices"),  in  substantially  the  form  as  attached  Exhibit  A;

     WHEREAS,  the  Company  proposes  to  form  a subsidiary for the purpose of
entering  into  business relationships in Latin America and desires to grant the
HMTF  Purchasers  (as  defined  below)  an  equity  ownership  interest equal to
twenty-five  percent  (25%)  of the Capital Stock of such Subsidiary (the "Latin
America  Subsidiary"),

     WHEREAS,  subject  to  the  terms  and  conditions  set  forth  herein, the
Purchasers  desire  to  purchase such Series E Preferred Stock and Warrants from
the  Company;

     NOW,  THEREFORE,  the parties hereto, intending to be legally bound, hereby
agree  as  follows.
                                    ARTICLE I

                                   DEFINITIONS

     (a)     As  used  in  this  Agreement,  the  following terms shall have the
following  meanings:

     "Affiliate" means, with respect to any Person, any other Person directly or
indirectly  controlling,  controlled  by,  or  under  direct  or indirect common
control  with,  such  Person.  For  the  purposes  of  this  definition  and the
definition  of  "HMTF Purchaser", "control" when used with respect to any Person
means  the  power to direct the management and policies of such Person, directly
or  indirectly,  whether through the ownership of voting securities, by contract
or  otherwise;  and  the  terms  "controlling"  and  "controlled"  have meanings
correlative  to  the  foregoing.

     "Applicable  Law"  means  (a)  any  United  States federal, state, local or
foreign  law,  statute,  rule,  regulation,  order,  writ, injunction, judgment,
decree  or  permit  of  any  Governmental  Authority and (b) any rule or listing
requirement  of any applicable national stock exchange or listing requirement of
any  national  stock  exchange  or Commission recognized trading market on which
securities  issued  by  the  Company  or  any  of the Subsidiaries are listed or
quoted.

     "Business Day" means any day other than a Saturday, a Sunday, the day after
Thanksgiving  or  a  day  when  banks  in The City of New York are authorized by
Applicable  Law  to  be  closed.

     "Capital Stock" means (i) with respect to any Person that is a corporation,
any  and  all  shares,  interests,  participations,  rights or other equivalents
(however  designated)  of  corporate  stock  and  (ii) with respect to any other
Person,  any  and  all  partnership  or  other  equity interests of such Person.

     "Certificate  of  Designation"  means the Certificate of Designation of the
Powers,  Preferences  and  Relative,  Participating,  Optional and Other Special
Rights  and Qualifications, Limitations and Restrictions thereof relating to the
Series  E  Preferred  Stock,  in  the  form  attached  hereto  as  Exhibit  B.

     "Commission"  means  the  United States Securities and Exchange Commission.

     "Commission  Filings"  means all reports, registration statements and other
filings  filed  by  the Company with the Commission (and all notes, exhibits and
schedules  thereto  and  documents  incorporated  by  reference  therein).

     "Common  Stock" means the  common stock, par value $0.001 per share, of the
Company.

     "Contract"  means  any  contract, lease, loan agreement, mortgage, security
agreement,  trust  indenture, note, bond, or other agreement (whether written or
oral)  or  instrument.

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     "Conversion  Shares"  means  the  shares  of Common Stock issuable upon the
conversion  of  the Series E Preferred Stock in accordance with the terms of the
Certificate  of  Designation.

     "Equity Documents" means this Agreement, the Registration Rights Agreement,
the Certificate of Designation, the Warrants, the Rights Agreement Amendment and
the  Management  Rights  Agreement.

     "Exchange Act" means the Securities Exchange Act of 1934, and the rules and
regulations  of  the  Commission  promulgated  thereunder.

     "GAAP"  means  United  States  generally  accepted  accounting  principles,
consistently  applied.

     "Governmental  Authority"  means  (i)  any foreign, Federal, state or local
court  or  governmental  or regulatory agency or authority, (ii) any arbitration
board,  tribunal or mediator and (iii) any national stock exchange or Commission
recognized  trading  market  on which securities issued by the Company or any of
the  Subsidiaries  are  listed  or  quoted.

     "HMTF"  means  Hicks, Muse, Tate & Furst Incorporated, a Texas corporation.

     "HMTF  Funds" means the funds affiliated with the HMTF Purchaser identified
by  the  HMTF  Purchaser  on  or  prior  to  the  Closing  Date.

     "HMTF  Group"  means HMTF and its Affiliates and their respective officers,
directors,  partners,  members, stockholders and employees (and members of their
respective  families and trusts for the primary benefit of such family members),
and  HMTF  Purchaser  and  its  Affiliates.

     "HMTF  Purchaser"  means any one or more of the following: HMTF Bridge RHY,
LLC and one or more members of the HMTF Group designated by HMTF Bridge RHY, LLC
on  or  prior  to  the  Closing  Date.

     "HMTF  Shares"  means  the  HMTF  Issued  Series E Preferred Shares held by
members  of the HMTF Group plus the shares of Common Stock issued to and held by
members  of the HMTF Group upon conversion of the HMTF Issued Series E Preferred
Shares.

     "HSR  Act"  means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as  amended,  and  applicable  rules  and  regulations.

     "Lien"  means  any  mortgage,  pledge,  lien,  security  interest,  claim,
restriction,  charge  or  encumbrance  of  any  kind.

     "Material  Adverse Effect" means a material adverse effect on the condition
(financial  or  otherwise),  business,  assets  or  results of operations of the
Company  and  the  Subsidiaries,  taken  as  a  whole.

     "Permitted  Transferee"  means,  with  respect  to  any  Purchaser,  or any
Permitted  Transferee  of  any  Purchaser,  (i)  any Purchaser Affiliate of such
Purchaser that is not a holder of common stock of the Company on the date hereof
or an affiliate of such holder; and (ii) any person that is a member of the HMTF
Group  and  any person investing, directly or indirectly, in or in parallel with
any  member of the HMTF Group; provided, however, that each Permitted Transferee
must  agree  in  writing  pursuant  to  a  Permitted  Transferee  Agreement,  in
accordance  with  the  provisions  of Section 6.5, to be bound by the terms, and
subject to the conditions, of this Agreement to the same extent, and in the same
manner, as the transferring Purchaser prior to the transfer of any Securities to
such  Permitted  Transferee;  and  provided,  further,  that  the  transfer  of
Securities  from  such  Purchaser  to such Permitted Transferee is in compliance
with  all  applicable  securities  laws.

     "Person"  means any individual, partnership, corporation, limited liability
company,  joint venture, association, joint-stock company, trust, unincorporated
organization,  government  or  agency or political subdivision thereof, or other
entity.

     "Purchaser Affiliate" means (a) any direct or indirect holder of any equity
interests  or  securities in any Purchaser (whether limited or general partners,
members,  stockholders  or otherwise), (b) any Affiliate of any Purchaser or (c)
any  director, officer, employee, representative or agent of (i) such Purchaser,
(ii)  any Affiliate of such Purchaser or (iii) any holder of equity interests or
securities  referred  to  in  clause  (a)  above.

     "Registration Rights Agreement" means the Registration Rights Agreement, to
be dated as of the Closing Date, to be entered into by and among the Company and
the  Purchasers,  in  the  form  attached  hereto  as  Exhibit  C.

     "Rights  Agreement  Amendment"  means  an amendment dated as of February 6,
2000  to  the  Company's  Rights Agreement dated as of April 2, 1999 between the
Company  and  American Securities Transfer and Trust, Inc., in substantially the
form  attached  as  Exhibit  D.

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     "Securities"  means  the  Shares  and  the  Warrants.

     "Securities  Act"  means  the  Securities  Act  of  1933, and the rules and
regulations  of  the  Commission  promulgated  thereunder.

     "Series  E  Preferred Stock" has the meaning set forth in the first recital
to  this  Agreement.  The  Series E Preferred Stock has the designation, powers,
preferences and rights, and qualifications, limitations and restrictions thereof
set  forth  in  the  Certificate  of  Designation.

     "Shares" means the shares of Series E Preferred Stock to be issued and sold
by  the  Company  to  the  Purchasers  pursuant  to  Section  2.1  hereof.

     "Subsidiary" means, with respect to any Person (i) a corporation a majority
of whose capital stock with voting power, under ordinary circumstances, to elect
directors  is  at  the  time, directly or indirectly, owned by such Person, by a
subsidiary  of  such  Person,  or by such Person and one or more subsidiaries of
such  Person,  (ii)  a  partnership in which such Person or a subsidiary of such
Person  is,  at the date of determination, a general partner of such partnership
and  has  the power to direct the policies and management of such partnership or
(iii)  any  other  Person  (other  than  a  corporation) in which such Person, a
subsidiary  of  such  Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (A) at
least  a  majority  ownership  interest  or (B) the power to elect or direct the
election  of  the  directors  or  other  governing  body  of  such  Person.

     "Subsidiary"  means  a  subsidiary  of  the  Company.

     "Term" shall mean the 15-year period ending on the fifteenth anniversary of
the  Issuance,  after  which  the  Shares, if not earlier redeemed or converted,
shall  be  mandatorily  redeemed  by  the  Company.

     "Transactions"  means  the  transactions contemplated by this Agreement and
the  other  Equity  Documents.

     (b)     As  used  in  this  Agreement,  the  following terms shall have the
meanings  given  thereto  in  the  Sections  set  forth  opposite  such  terms:

                    Term                                  Section

                   Agreement                                      Preamble
                   Closing                                        2.2
                   Closing  Date                                  2.2
                   Company                                        Preamble
                   DGCL                                           3.2(b)
                   HMTF  Director                                 5.2
                   HMTF  Issued  Series  E  Preferred  Shares     5.2
                   Indemnified  Party                             8.1(c)
                   Indemnified  Person                            8.1(b)
                   Indemnifying  Party                            8.1(c)
                   Information                                    3.7
                   Issuance                                       2.1
                   Losses                                         8.1(b)
                   Management  Rights  Agreement                  2.2(c)
                   Notices                                        8.2
                   Permitted  Transferee  Agreement               6.5
                   Projections                                    3.7
                   Purchaser;  Purchasers                         Preamble
                   Purchase  Price                                2.1
                   Securities  Transfer                           6.5
                   Supplying  Purchasers                          8.18

                                   ARTICLE II

                                SALE AND PURCHASE

     SECTION  2.1.Agreement  to  Sell  and  to  Purchase;  Purchase  Price
     On  the  Closing Date, and upon the terms and subject to the conditions set
forth in this Agreement, the Company shall issue and sell to each Purchaser, and
each  Purchaser,  severally  and not jointly, shall purchase and accept from the
Company  such  number  of  Shares  and  Warrants  as  is set forth opposite such
Purchaser's  name on Schedule 1 hereto (the "Issuance"), for a purchase price of
one  thousand  dollars  ($1,000)  per  Share  (the  "Purchase  Price").

     SECTION  2.2.Closing     The closing of the Issuance to each Purchaser (the
"Closing")  shall  take  place on a date to be specified by the Company and such
Purchaser,  which  shall  be no later than the later of (A) the 2nd Business Day
after the date as of which all of the conditions set forth in Article VII hereof
shall  have  been satisfied as to the purchase by the HMTF Purchaser (or, to the
extent  permitted,  waived  by  the  party  or  parties  entitled to the benefit
thereof)  and  (B)  15 Business Days after the date hereof or at such other time
and  date  as the parties hereto shall agree in writing (such date and time, the
"Closing  Date"),  at the offices of Brobeck, Phleger & Harrison LLP, located at
550  West  C  Street,  San Diego, California 92101 or at such other place as the

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parties  hereto  shall  agree  in  writing.  At such time as a Purchaser and the
Company shall have satisfied all the conditions set forth in Article VII, if the
Company  elects,  such  Purchaser and the Company shall close separately on such
date.

     At  the  Closing  with  respect  to  each  Purchaser:

        (a)     Such  Purchaser  shall  deliver:

               (i)  against  delivery of a certificate or certificates
representing the Shares  and  the  Warrants being purchased by such Purchaser
pursuant to Section 2.1, an amount equal to the aggregate Purchase Price of such
Securities via wire transfer  of  immediately  available  funds  to such bank
account as the Company shall  designate  not  later  than  two Business Days
prior to the Closing Date;

               (ii)  a  copy of the Registration Rights Agreement executed by
such  Purchaser.

     At  the  Closing,  with  respect  to  each  Purchaser:

        (b)     The  Company  shall  deliver  to  such  Purchaser:

               (i)  against  payment  of  the Purchase Price therefor, a
certificate or certificates  representing  the  Shares  and  Warrants  being
purchased by such Purchaser  pursuant  to  Section  2.1,  which  shall  be  in
definitive form and registered  in  the  name  of such Purchaser or its nominee
or designee and in a single  certificate  or  in  such  other  denominations  as
such Purchaser shall request  not  later  than  two  Business  Days  prior  to
the  Closing  Date;

               (ii)  an  opinion  of  counsel  to the Company, dated the Closing
Date, covering  such  matters as are customarily covered by such opinions, in
form and substance  reasonably  acceptable  to  the  Purchasers;

               (iii)  an  officer's  certificate  of  the  Company  as
contemplated by Section  7.2(f);

               (iv)  a  certificate  of  the  secretary  of  the  Company
covering such matters as are customarily covered by such certificates and as to
the book value per share  of  the Common Stock, in form and substance reasonably
acceptable to the  Purchasers;

               (v)  a  long-form  good  standing  certificate of the Company
issued by the Secretary  of  State  of  the  State  of  Delaware;  and

               (vi)  a  copy  of  the  Registration  Rights  Agreement
executed by the Company.

               (vii)  A  copy  of  the  Rights  Agreement  Amendment.

          (c)     The  Company  shall  deliver to the HMTF Funds a letter in the
form  of  Exhibit E executed by the Company (the "Management Rights Agreement").

          (d)     The Company shall deliver to Purchasers (or their designees) a
transaction  fee equal to 3.25% of the Purchase Price of the Shares purchased by
Purchasers,  in  immediately  available  funds  by  wire  transfer to an account
designated  by  Purchasers at least two Business Days prior to the Closing Date.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The  Company  hereby  represents and warrants to each Purchaser on the date
hereof  and  on  and  as  of  the  Closing  Date  as  follows:

     SECTION  3.1.Organization  and  Standing.  Each  of  the  Company  and  the
material  domestic  Subsidiaries is duly incorporated,  validly existing and in
good standing under the laws of its state of incorporation and has all requisite
corporate power and authority to own its properties  and assets and to carry on
its business as it is now being conducted and as proposed to be conducted. Each
of the Company and the material domestic Subsidiaries is duly qualified to
transact business as a foreign corporation and is  in  good  standing  in  each
jurisdiction  in  which the  character of the properties  owned  or  leased  by
it  or  the nature of its business makes such qualification  necessary,  except
for  any such failures to so qualify or be in good  standing  that  would not,
individually or in the aggregate, reasonably be expected  to  have  a  Material
Adverse  Effect.

     All  of  the  outstanding  shares  of  Capital  Stock of each such material
Subsidiary  have  been validly issued and are fully paid and non-assessable and,
except  as  provided on Schedule 3.1 hereof, are owned directly or indirectly by
the  Company,  free  and  clear  of  all  pledges,  claims,  Liens,  charges,
encumbrances,  and  security  interest  of  any  kind or nature whatsoever.  The

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Company  does  not  own  any  equity  interest  in any corporation, partnership,
limited  liability company, joint venture, or other entity except as provided on
Schedule  3.1(b)  hereof.


     The  Company  has  delivered  to  Purchaser true and complete copies of the

Company's  Certificate  of Incorporation, as amended to date, and By-laws, as in
effect  on  the  date  hereof.

     SECTION  3.2.Capital  Stock.  (a)     As of the date of this Agreement, the
authorized  Capital  Stock  of  the  Company  consists solely of (i) 250,000,000
shares  of  Common Stock, par value $0.001 per share, of which 78,296,488 shares
are  issued  and  outstanding  as  of December 31, 1999 (and no shares of Common
Stock have been issued since December 31, 1999 except those issued in respect to
the  exercise  of  stock options), and (ii) 5,000,000 shares of preferred stock,
par  value  $0.001 per share, of which no shares are issued or outstanding. Each
share  of  Capital  Stock  of  the  Company  that will be issued and outstanding
immediately following the Closing, including without limitation the Shares, will
be  duly authorized and validly issued and fully paid and nonassessable, and the
issuance  thereof will not have been subject to any preemptive rights or made in
violation  of  any  Applicable  Law.

          (b)     Except  as  set  forth on Schedule 3.2, as of the date of this
Agreement,  there  are  (i)  no  outstanding  options,  warrants,  agreements,
conversion  rights,  exchange rights, preemptive rights or other rights (whether
contingent  or not) to subscribe for, purchase or acquire any issued or unissued
shares  of Capital Stock of the Company or any Subsidiary, (ii) no authorized or
outstanding  stock appreciation, phantom stock, profit participation, or similar
rights  with  respect  to  the  Company  or  any  Subsidiary,  (iii)  no rights,
contracts,  commitments or arrangements (contingent or otherwise) obligating the
Company  or  any Subsidiary to either (A) redeem, purchase or otherwise acquire,
or  offer  to purchase, redeem, or otherwise acquire, any outstanding shares of,
or  any  outstanding warrants or rights of any kind to acquire any shares of, or
any  outstanding  securities  that  are convertible into or exchangeable for any
shares  of,  Capital  Stock  of the Company, or (B) pay any dividend or make any
distribution in respect of any shares of, or any outstanding securities that are
convertible  or  exchangeable  for  any shares of, Capital Stock of the Company,
(iv)  no agreements or arrangements under which the Company or any Subsidiary is
obligated to register the sale of any of its securities under the Securities Act
(except  as  provided  hereunder) and except as set forth in Schedule 3.2(a) and
(v)  no  restrictions upon, or Contracts or understandings of the Company or any
Subsidiary,  or, to the knowledge of the Company, Contracts or understandings of
any  other  Person,  with  respect  to,  the voting or transfer of any shares of
Capital Stock of the Company or any Subsidiary.  Except as set forth on Schedule
3.2(a),  there  are  no  securities  or  instruments  containing antidilution or
similar  provisions  that  will  be  triggered  by  the  consummation  of  the
transactions contemplated hereby in accordance with the terms of this Agreement,
the Certificate of Designation or the Warrants.  Except as set forth on Schedule
3.2(a),  no party has any right of first refusal, right of first offer, right of
co-sale  or  other  similar right regarding the Company's securities.  Except as
set  forth  on  Schedule  3.2(a),  there are no provisions of the Certificate of
Incorporation, as amended, or the By-laws of the Company, no agreements to which
the  Company is a party and no agreements by which the Company or any Subsidiary
are  bound,  that  would  (a)  require  the  vote  of the holders of more than a
majority  of  the  shares  of the Company's issued and outstanding Common Stock,
voting  together  as  a  single  class, to take or prevent any corporate action,
other than those matters requiring a class vote under General Corporation Law of
the  State  of  Delaware  (the  "DGCL"), or (b) entitle any party to nominate or
elect  any  director of the Company or require any of the Company's stockholders
to  vote  for  any  such  nominee  or other person as a director of the Company.

          (c)     The  Conversion  Shares  and  Warrant  Shares  have  been duly
authorized  and  adequately  reserved  in contemplation of the conversion of the
Series  E  Preferred  Stock and the exercise of the Warrants, respectively, and,
when  issued  and  delivered  in accordance with the terms of the Certificate of
Designation  or  the Warrants, as the case may be, will have been validly issued
and will be fully paid and nonassessable, and the issuance thereof will not have
been  subject  to  any  preemptive rights or made in violation of any Applicable
Law.

          (d)     The  holders  of  the  Series  E  Preferred  Stock  will, upon
issuance  thereof,  have  the rights set forth in the Certificate of Designation
(subject  to  the limitations and qualifications set forth therein and under the
DGCL.

     SECTION  3.3.Authorization;  Enforceability.  The Company has the power and
authority  to  execute,  deliver  and  perform its obligations under each of the
Equity Documents, and has taken all action necessary to authorize the execution,
delivery  and  performance  by  it  of  each  of  such  Equity  Documents and to
consummate the Transaction.  No other corporate or stockholder proceeding on the
part of the Company is necessary for such authorization, execution, delivery and
consummation. The Company has duly executed and delivered this Agreement and, at
the Closing, the Company will have duly executed and delivered each of the other

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Equity  Documents  to  be  executed  and  delivered at or prior to Closing. This
Agreement constitutes, and each of the other Equity Documents, when executed and
delivered by the Company, will constitute, a legal, valid and binding obligation
of  the  Company.

     SECTION  3.4.No  Violation;  Consents.  (a)     The execution, delivery and
performance by the Company of each of  the Equity Documents and the consummation
by the Company of the Transactions do  not  and  will  not  contravene  any

Applicable  Law,  except  for any such contravention  that  would  not,
individually or in the aggregate, reasonably be expected  to  have  a  Material
Adverse  Effect.  The  execution, delivery and performance  by the Company of
each of the Equity Documents and the consummation of  the Issuance (i) will not
(A) violate, result in a breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any  right of  termination,
cancellation or acceleration) under any Contract to which the Company is a party
or by which the Company is bound or to which any of its  assets  is subject, or
(B) result in the creation or imposition of any Lien upon any of the assets of
the Company, except for any such violations, breaches, defaults  or  Liens that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and (ii) will not conflict with or violate  any
provision  of  the certificate of incorporation or bylaws or other governing
documents  of  the  Company.

          (b)     Except  as set forth on Schedule 3.4(b) and except for (i) the
filings  by  the  Company,  if  any,  required  by  the HSR Act, (ii) applicable
filings,  if  any,  required by applicable federal and state securities laws and
(iii)  filing  of  the Certificate of Designation with the Secretary of State of
the State of Delaware, in each case, which shall be made (or are not required to
be made) on or prior to the Closing Date, no consent, authorization or order of,
or  filing  or  registration with, any Governmental Authority or other Person is
required to be obtained or made by the Company for the execution and delivery of
the  Equity  Documents  or  the  consummation by the Company of the Transactions
except  where  the failure to obtain such consents, authorizations or orders, or
make such filings or registrations, would not, individually or in the aggregate,
reasonably  be  expected to have a Material Adverse Effect or a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby.

     SECTION  3.5.Commission  Filings;  Financial  Statements.(a)  The Company
has filed all reports, registration statements and other filings, together with
any amendments or supplements required to be made with  respect  thereto,  that
it  has been required to file with the Commission under  the Securities Act and
the Exchange Act.  As of the respective dates of their  filing  with  the
Commission,  the  Commission  Filings  complied in all material  respects  with
the applicable provisions of the Securities Act and the Exchange Act and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were
made,  not  misleading.

          (b)     Each  of  the  historical consolidated financial statements of
the  Company  (including  any  related  notes  or  schedules)  included  in  the
Commission  Filings  was  prepared  in  accordance  with  GAAP (except as may be
disclosed  therein),  and  complied  in all material respects with the rules and
regulations  of  the  Commission.  Such  financial statements fairly present the
consolidated  financial  position  of the Company and the Subsidiaries as of the
dates thereof and the consolidated results of operations, cash flows and changes
in  stockholders' equity for the periods then ended (subject, in the case of the
unaudited  interim  financial  statements,  to  normal, recurring year-end audit
adjustments).  Except  as  set  forth  on Schedule 3.5(b) or as reflected in the
Commission Filings filed prior to the date hereof, the Company does not have any
liabilities or obligations of any nature (whether accrued, absolute, contingent,
unasserted or otherwise) that individually or in the aggregate would be expected
to  have  a  Material  Adverse  Effect.

          SECTION  3.6.Private  Offering.  Based,  in  part,  on the Purchasers'
representations  in  Section 4.2, the offer and sale of the Securities is exempt
from  the  registration  and  prospectus delivery requirements of the Securities
Act. Neither the Company, nor anyone acting on behalf of it, has offered or sold
or will offer or sell any securities, or has taken or will take any other action
(including,  without  limitation,  any offering of any securities of the Company
under  circumstances  that  would  require,  under  the  Securities  Act,  the
integration of such offering with the offering and sale of the Securities, which
would  subject  the  Issuance  to  the registration provisions of the Securities
Act).

          SECTION  3.7.Provided  Information.  To  the knowledge of the Company,
all  written information (excluding information of a general economic nature and
financial  projections)  concerning  the  Company  and  the  Transactions  (the
"Information")  that  has been prepared by or on behalf of the Company or any of
the  Company's  authorized  representatives  and  that  has been provided to the
Purchasers  or  any  of  their authorized representatives in connection with the
Issuance, when taken as a whole, was, at the time made available, correct in all

                                    PAGE   7
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material  respects  and  did not, at the time made available, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to  make  the  statements  contained  therein  not  misleading  in  light of the
circumstances  under  which  such statements are made. All financial projections
concerning  the  Company and the Transactions (the "Projections") that have been
prepared  by  or  on  behalf  of  the Company or any of the Company's authorized
representatives  and  that have been delivered to the Purchasers or any of their
authorized  representatives  in  connection  with  the  Transactions  have  been
reasonably prepared on a basis reflecting the best currently available estimates
and judgments of the Company's management as to the future financial performance
of  the  Company  and  the  individual  business  segments  thereof.

          SECTION  3.8.Material  Adverse  Change  Except  as  disclosed  in  the
Commission  Filings filed as of the date hereof or as set forth on Schedule 3.8,
since  September  30,  1999,  there  has  not  been  any  event,  occurrence  or
development  of  a  state  of circumstances or facts that has had, or could have
reasonably  been  expected  to  have,  (i)  a  Material Adverse Effect or (ii) a
material adverse effect on the ability of the Company to perform its obligations
under  this  Agreement.

          SECTION  3.9.Litigation.  Except  as  disclosed  in Commission Filings
filed  as  of the date hereof or as set forth on Schedule 3.9, there are not any
(a)  outstanding  judgments  against  or  affecting  the  Company  or any of the
Subsidiaries,  (b)  proceedings  pending  or,  to  the knowledge of the Company,
threatened  against  or  affecting the Company or any of the Subsidiaries or (c)
investigations  by  any Governmental Authority that are, to the knowledge of the
Company,  pending  or  threatened against or affecting the Company or any of the
Subsidiaries  that (i) in any manner challenge or seek to prevent, enjoin, alter
or  materially  delay  the  Transactions  or  (ii)  if resolved adversely to the
Company  or  any  Subsidiary,  would  have,  individually or in the aggregate, a
Material  Adverse  Effect.

          SECTION  3.10.Permits  and  Licenses. The Company and the Subsidiaries
have  obtained all governmental permits, licenses, franchises and authorizations
required  for  the  Company  and  the  Subsidiaries  to conduct their respective
businesses  as  currently  conducted,  except  for those of which the failure to
obtain  would  not  have  a  Material  Adverse  Effect.

          SECTION  3.11.Intellectual  Property,  etc. Schedule 3.11 sets forth a
true  and  complete  list of all patents, patent applications, trademarks, trade
names,  service  marks  and  registered  copyrights  and  make  work  rights and
applications  therefor,  if  any,  owned  by or licensed to the Company that are
material  to  the  Company.  All  patents, patent applications, trademarks, mask
works, service marks and copyrights of the Company have been duly applied for or
registered  and  filed with or issued by each appropriate governmental entity in
the  jurisdictions  indicated  on  Schedule  3.11,  all  necessary affidavits of
continuing use have been filed and all necessary maintenance fees have been paid
to  continue  all  such  rights  in  effect.  The Company owns or is licensed or
otherwise  has the right to use, without  payment to any other person except for
fees  set forth in Schedule 3.11, all intellectual property used in or necessary
for  the  Company's  business,  as  presently  conducted  and  as proposed to be
conducted,  except  with  respect  to  "shrink-wrap"  software.  The  Company's
ownership  and/or  use  of  intellectual  property in its business, as presently
conducted  and  as proposed to be conducted does not conflict with, or result in
any  violation of, or default (with or without notice or lapse of time, or both)
under,  or  give rise to a right of termination, cancellation or acceleration of
any obligation or result in any loss of a material benefit under or the creation
of any Lien in or upon any of the properties or assets of the Company under, any
contract  between  the Company and any person or any other intellectual property
rights  of  any  other person, except for any such conflict, violation, default,
right  of  termination,  cancellation, acceleration, loss of material benefit or
creation  of  any  Lien  which  would  not  have  a  Material  Adverse  Effect.

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     Each  Purchaser  severally  as  to  itself  only,  and  not jointly, hereby
represents  and  warrants  to  the  Company  as of the date hereof and as of the
Closing  Date  as  follows:

     SECTION  4.1.  Organization;  Authorization; Enforceability. Such Purchaser
is  duly  organized, validly existing and in good standing under the laws of the
jurisdiction  of  its  organization and has all requisite power and authority to
own  its  properties  and assets and to carry on its business as it is now being
conducted  and  as  currently  proposed  to be conducted. Such Purchaser has the
power  to  execute, deliver and perform its obligations under each of the Equity
Documents to which it is a party and has taken all action necessary to authorize
the  execution,  delivery  and performance by it of such Equity Documents and to
consummate  the  transactions  contemplated  hereby  and  thereby.  No  other
proceedings  on the part of such Purchaser are necessary for such authorization,
execution,  delivery  and  consummation.  Such  Purchaser  has duly executed and
delivered  this  Agreement  and,  at  the Closing, such Purchaser will have duly
executed  and  delivered  each  of the other Equity Documents to be executed and

                                    PAGE   8
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delivered  at  or  prior to Closing. This Agreement constitutes, and each of the
other  Equity  Documents  to  which such Purchaser is a party, when executed and
delivered  by  such  Purchaser,  will  constitute,  a  legal,  valid and binding
obligation  of  such  Purchaser.

     SECTION  4.2.  Private Placement.  (a)  Such Purchaser understands that (i)
the  offering  and sale of the Securities, the Conversion Shares and the Warrant
Shares in the Issuance by the Company is intended to be exempt from registration
under  the  Securities Act pursuant to Section 4(2) thereof and (ii) there is no
existing  public  or  other  market  for  the  Securities.

          (b)     Such  Purchaser  (either  alone or together with its advisors)
has  sufficient knowledge and experience in financial and business matters so as
to  be  capable  of  evaluating  the  merits  and risks of its investment in the
Securities,  the  Conversion  Shares  and  the Warrant Shares, and is capable of
bearing  the  economic  risks  of  such  investment.

          (c)     Such  Purchaser  is  acquiring  the Securities, the Conversion
Shares  and  the Warrant Shares to be acquired hereunder for its own account (or
for  accounts  over  which  it  exercises  investment  authority or as otherwise
provided  herein),  for  investment  and not with a view to the public resale or
distribution  thereof,  in  violation  of  any  securities  law.

          (d)     Such Purchaser understands that the Securities, the Conversion
Shares  and  the  Warrant Shares will be issued in a transaction exempt from the
registration  or qualification requirements of the Securities Act and applicable
state securities laws, and that such securities must be held indefinitely unless
a subsequent disposition thereof is registered or qualified under the Securities
Act  and  such  laws  or  is  exempt  from  such  registration or qualification.

          (e)     Such  Purchaser  (A)  has  been furnished with or has had full
access  to  all of the information that it considers necessary or appropriate to
make  an  informed  investment  decision  with  respect  to  the Securities, the
Conversion  Shares  and  the  Warrant  Shares and that it has requested from the
Company,  (B)  has  had an opportunity to discuss with management of the Company
the  intended  business  and  financial  affairs  of  the  Company and to obtain
information  (to  the  extent  the  Company  possessed such information or could
acquire  it  without  unreasonable  effort  or  expense) necessary to verify any
information  furnished  to  it  or  to  which it had access and (C) can bear the
economic  risk of (x) an investment in the Securities, the Conversion Shares and
the  Warrant  Shares  indefinitely  and  (y)  a  total  loss  in respect of such
investment,  has such knowledge and experience in business and financial matters
so  as  to  enable  it  to  understand  and  evaluate  the  risks of and form an
investment  decision  with  respect  to  its  investment  in the Securities, the
Conversion  Shares  and  the  Warrant  Shares and to protect its own interest in
connection.

          (f)     The  foregoing  representations with respect to the Conversion
Shares and the Warrant Shares are made only if and to the extent the offering of
the Shares and the Warrants constitutes an offering of the Conversion Shares and
the  Warrant  Shares.

     SECTION  4.3.No  Violation;  Consents.  (a)     The execution, delivery and
performance  by  such Purchaser of each of the Equity Documents to which it is a
party  and  the  consummation of the Transactions do not and will not contravene
any Applicable Law, except for such contraventions as would not, individually or
in  the  aggregate,  reasonably be expected to have a material adverse effect on
the  ability  of  such  Purchaser  to  timely perform its obligations under this
Agreement.  The execution, delivery and performance by such Purchaser of each of
the  Equity  Documents  to  which  it  is  a  party  and the consummation of the
Transactions  contemplated  therein (i) will not (A) violate, result in a breach
of or constitute (with or without due notice or lapse of time or both) a default
(or  give  rise to any right of termination, cancellation or acceleration) under
any  Contract  to  which  such  Purchaser is party or by which such Purchaser is
bound or to which any of its assets is subject, or (B) result in the creation or
imposition  of any Lien upon any of the assets of such Purchaser, except for any
such  violations, breaches, defaults or Liens that would not, individually or in
the  aggregate,  reasonably be expected to have a material adverse effect on the
ability  of  such  Purchaser  to  timely  perform  its  obligations  under  this
Agreement,  and  (ii)  will  not  conflict  with or violate any provision of the
certificate  of  incorporation  or  bylaws  or other governing documents of such
Purchaser.

               (b)     Except  for  (i)  the  filings  by the Purchaser, if any,
required  by  the  HSR  Act,  and  (ii)  applicable  filings,  if  any, with the
Commission  pursuant  to the Exchange Act, in each case, which shall be made (or
are  not  required  to  be  made)  on  or prior to the Closing Date, no consent,
authorization  or  order  of,  or  filing or registration with, any Governmental
Authority  or  other Person is required to be obtained or made by such Purchaser
for  the  execution,  delivery and performance of any of the Equity Documents to
which  it is a party or the consummation of any of the transactions contemplated
therein,  except  where  the  failure to obtain such consents, authorizations or



                                    PAGE   9
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orders, or make such filings or registrations, would not, individually or in the
aggregate,  reasonably  be  expected  to  have  a material adverse effect on the
ability  of  such  Purchaser  to  timely  perform  its  obligations  under  this
Agreement.

     SECTION  4.4.No  Litigation.  There  are  not any (a) outstanding judgments
against  or  affecting the Purchaser or any of its subsidiaries, (b) proceedings
pending  or,  to the knowledge of the Purchaser, threatened against or affecting
the  Purchaser  or  any  of  its  subsidiaries  or  (c)  investigations  by  any
Governmental  Authority  that are, to the knowledge of the Purchaser, pending or
threatened  against  or affecting the Purchaser or any of its subsidiaries that,
in  any  case, individually or in the aggregate, would reasonably be expected to
have  a  material  adverse  effect  on  the  ability of such Purchaser to timely
perform  its  obligations  under  this  Agreement.

                                    ARTICLE V

                            COVENANTS OF THE COMPANY

     SECTION  5.1.Operation  of Business. From the date hereof until the Closing
Date,  the  Company  shall,  and  shall  cause  each  of  the  Subsidiaries  to:

     (i)     operate  its  business  in  all  material  respects in the ordinary
course  and  in  compliance  with  Applicable  Laws;

     (ii)     not  adopt  any  amendment  to its charter or bylaws or comparable
organizational  documents;

     (iii)     not  split,  combine  or  reclassify  any shares of the Company's
Capital  Stock;

     (iv)     not  declare or pay any dividend or distribution (whether in cash,
stock  or  property)  in  respect of its Capital Stock or increase the number of
shares  subject  to  the  Company's  stock  incentive  and  option  plan;

     (v)     not  take  any  action,  or knowingly omit to take any action, that
would,  or  that  would  reasonably  be  expected  to,  result in (A) any of the
representations  and warranties of the Company set forth in Article III becoming
untrue or (B) any of the conditions to the obligations of Purchaser set forth in
Section  7.2  not  being  satisfied  or  (C)  the  triggering  of  any  of  the
anti-dilution  adjustments  contained  in the Certificate of Designation for the
Series  E  Preferred  Stock  (had  such  Certificate  been  in  effect);  or

     (vi)     enter into any agreement or commitment to do any of the foregoing.

          SECTION  5.2.  HMTF Director  For so long as members of the HMTF Group
own any combination of the shares of Series E Preferred Shares issued to members
of  the  HMTF  Group  on  the  Closing Date (the "HMTF Issued Series E Preferred
Shares")  and  Common  Stock  issued  upon  conversion  of  HMTF Issued Series E
Preferred  Shares  that,  taken  together,  would  represent, if all HMTF Issued
Series  E  Preferred  Shares  were converted, an amount of Common Stock issuable
upon conversion of 40% or more of the HMTF Issued Series E Preferred Shares, the
holders  of a majority of the then outstanding HMTF Shares shall have a right to
designate  one member of the Company's Board of Directors (the "HMTF Director");
provided,  however,  that  the  right  to designate the HMTF Director under this
Section 5.2 shall be suspended at any time that members of the HMTF Group own at
least  100  shares  of  Series  E  Preferred Stock and have the right to elect a
person to the Board of Directors under the terms of the Series E Preferred Stock
set  forth  in  the  Certificate  of Designation.  In the event the holders of a
majority of the then outstanding HMTF Shares are entitled under this Section 5.2
to  designate the HMTF Director for election to the Company's Board of Directors
and  elect  to have the Board of Directors appoint the HMTF Director, they shall
so  notify the Company in writing and the Company shall (a) increase the size of
the  Board  of Directors by one and fill the vacancy created thereby by electing
the  HMTF Director and (b) in connection with the meeting of stockholders of the
Company  next  following such election, nominate such HMTF Director for election
as  director  by the stockholders and use its commercially reasonable efforts to
cause  the  HMTF  Director to be so elected. If the holders of a majority of the
then  outstanding  HMTF  Shares are entitled under this Section 5.2 to designate
the HMTF Director for election to the Company's Board of Directors and a vacancy
shall  exist  in the office of a HMTF Director, the holders of a majority of the
then  outstanding HMTF Shares shall be entitled to designate a successor and the
Board  of  Directors  shall  elect  such  successor  and, in connection with the
meeting  of  stockholders  of the Company next following such election, nominate
such  successor  for  election  as  director  by  the  stockholders  and use its
commercially  reasonable  efforts  to  cause  the  successor  to  be  elected.

     SECTION 5.3.  Access to Books and Records. (a)     The Company shall afford
to  each  of  the  Purchasers  and  the  Purchasers'  accountants,  counsel  and
representatives  full  access during normal business hours throughout the period
prior to the Closing Date (or the earlier termination of this Agreement pursuant
to Section 8.4) to all its properties, books, Contracts, commitments and records
(including,  but  not  limited  to, tax returns) and, during such period, shall,
upon  request,  furnish  promptly  to  each of the Purchasers (i) a copy of each

                                    PAGE   10
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report, schedule and other document filed or received by any of them pursuant to
the  requirements  of  Federal  or  state  securities  laws  and  (ii) all other
information  concerning its business, properties and personnel as the Purchasers
may reasonably request, provided that no investigation or receipt of information
pursuant  to this Section 5.3 shall affect any representation or warranty of the
Company  or  the  conditions  to  the  obligations  of  the  Purchasers.

     (b)     The  Company  shall  supplement the Information and the Projections
from  time  to  time until the Closing Date if there is a material change in the
Information  and  the  Projections  previously  provided, but no such supplement
shall  be  given  effect  for  purposes  of  determining whether the Company has
breached  any  representations  or  warranties  for  purposes of Section 7.2 and
Section  8.1.

     SECTION  5.4.  Agreement  to  Take  Necessary  and  Desirable  Actions. The
Company  shall  (a)  subject  to the satisfaction of the conditions set forth in
Section  7.1, execute and deliver the Equity Documents and such other documents,
certificates, agreements and other writings, and (b) take such other actions, in
each  case, as may be necessary or reasonably requested by any of the Purchasers
in order to consummate or implement the Issuance in accordance with the terms of
this  Agreement.

     SECTION  5.5.  Compliance with Conditions; Commercially Reasonable Efforts.
The  Company  shall  use  all  commercially  reasonable  efforts  to  cause  all
conditions  precedent to the obligations of the Company and the Purchasers to be
satisfied.  Upon  the terms and subject to the conditions of this Agreement, the
Company  will  use  all  commercially reasonable efforts to take, or cause to be
taken,  all action, and to do, or cause to be done, all things necessary, proper
or  advisable consistent with Applicable Law to consummate and make effective in
the  most  expeditious  manner  practicable  the Issuance in accordance with the
terms  of  this  Agreement.

     SECTION  5.6.HSR  Act Notification.  To the extent required by the HSR Act,
the  Company  shall,  to  the  extent  it  has  not already done so, (a) use all
commercially  reasonable  efforts  to  file or cause to be filed, as promptly as
practicable  after the execution and delivery of this Agreement, with the United
States  Federal Trade Commission and the Antitrust Division of the United States
Department  of  Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all  commercially  reasonable  efforts  to  promptly  comply with or cause to be
complied  with any requests by the United States Federal Trade Commission or the
Antitrust  Division  of  the  United States Department of Justice for additional
information  concerning  such  transactions,  in  each  case so that the waiting
period  applicable  to  this  Agreement and the transactions contemplated hereby
under  the  HSR  Act shall expire as soon as practicable after the execution and
delivery of this Agreement. The Company agrees to request, and to cooperate with
the Purchasers in requesting, early termination of any applicable waiting period
under  the  HSR  Act.

     SECTION  5.7.Consents  and  Approvals.  The  Company  (a)  shall  use  all
commercially  reasonable  efforts  to  obtain  all  necessary consents, waivers,
authorizations  and  approvals  of all Governmental Authorities and of all other
Persons  required  in connection with the execution, delivery and performance of
the  Equity  Documents  or  the  consummation  of  the  Issuance  and  (b) shall
diligently  assist and cooperate with the Purchasers in preparing and filing all
documents  required  to  be  submitted  by  the  Purchasers  to any Governmental
Authority  in  connection  with  the  Issuance (which assistance and cooperation
shall  include, without limitation, timely furnishing, upon written requests, to
the  Purchasers all information concerning the Company and the Subsidiaries that
counsel  to  the  Purchasers reasonably determines is required to be included in
such  documents  or  would  be  helpful  in obtaining any such required consent,
waiver,  authorization  or  approval).

    SECTION  5.8.Reservation  of  Shares.  The  Company  shall:

     (i)     cause  to be authorized and reserve and keep available at all times
during  which  any  of  the  Shares  and  Warrants remain outstanding, free from
preemptive  rights,  out of its treasury stock or authorized but unissued shares
of Capital Stock, or both, solely for the purpose of effecting the conversion or
exercise  of  the Shares or Warrants pursuant to the terms of the Certificate of
Designation,  sufficient  shares  of Common Stock to provide for the issuance of
the maximum number of shares issuable upon conversion or exercise of outstanding
Shares  and  Warrants;

     (ii)     issue  and  cause  the  transfer  agent  to deliver such shares of
Common Stock as required upon conversion or exercise of the Shares and Warrants;
and
     (iii)     if  any  shares  of  Common  Stock  reserved  for  the purpose of
issuance upon conversion of the Shares and Warrants require registration with or
approval  of  any  Governmental  Authority  under any Applicable Law before such
shares may be validly issued or delivered, secure such registration or approval,
as the case may be, and maintain such registration or approval in effect so long
as  so  required.

                                    PAGE   11
<PAGE>

     SECTION  5.9.Use  of Proceeds.  The Company shall use the proceeds from the
Issuance  for  payment  of expenses incurred in connection with the Transactions
and  for  general  corporate  purposes.

     SECTION  5.10.Filing of Certificate of Designation.  Prior to the Issuance,
the  Company  shall  file  the  Certificate of Designation with the Secretary of
State  of  the  State  of  Delaware  pursuant  to  Section  151(g)  of the DGCL.

     SECTION  5.11.Listing  of  Shares.  The  Company shall use all commercially
reasonable  efforts to cause the shares of Common Stock issuable upon conversion
of  the  Shares  to  be  listed  or otherwise eligible for trading on the NASDAQ
National  Market  System  or  other  national  securities  exchange.

     SECTION  5.12.Periodic  Information.  For  so  long  as  the Securities are
outstanding  the  Company  shall  file  all  reports required to be filed by the

Company  under  Section  13  or  15(d) of the Exchange Act and shall provide the
holders  of  the  Securities  and prospective purchasers of such shares with the
information  specified  in  Rule  144A(d)  under  the  Securities  Act.

     SECTION 5.13.Legends.  So long as applicable, each certificate representing
any  portion of the Securities, shall contain, be stamped or otherwise imprinted
with  a  legend  in the following form (in addition to any legend required under
applicable  state  securities  laws):

"THE  SHARES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS
OF  ANY  STATE  OF  THE  UNITED  STATES.  SUCH  SHARES MAY NOT BE OFFERED, SOLD,
TRANSFERRED,  PLEDGED,  HYPOTHECATED  OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH  REGISTRATION  OTHER  THAN  PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.

After  the  above  requirement  for a legend is no longer applicable because the
Securities  are  freely transferable under the Securities Act, the Company shall
remove  such  legend  upon  request from a holder of such Securities, if outside
counsel  for  such  holder  reasonably  determines  that  the  transfer  of such
Securities is no longer restricted by the Securities Act and outside counsel for
the  Company  reasonably  concurs  in  such  determination.

     SECTION  5.14.  Payment;  Paying  Agent;  Certain Information.  The Company
shall

     (i)     make  any  required  payments  on  the  Securities;

     (ii)     maintain  (a)  an  office  or  agency  where the Securities may be
presented  for  payment  (the "Paying Agent"), (b) an office or agency where the
Securities  may  be presented for conversion (the "Conversion Agent"), and (c) a
Registrar,  which  shall  be an  office or an agency where the Securities may be
presented  for  transfer;  and

     (iii)     provide  certain  information  to  the Purchasers, including such
information and notices as may be necessary for the Purchasers to exercise their
rights under this Agreement and in connection with conversion or exercise of the
Securities.

     SECTION  5.15.  Latin  American Subsidiary.  The Company agrees to form the
Latin  American  Subsidiary  and  to  issue  to the HMTF Purchasers an aggregate
equity  interest  in (and proportional representation on the board of) the Latin
American  Subsidiary  equal  to  twenty-five  percent  (25%)  of  the issued and
outstanding  Capital  Stock  of  the  Latin  American  Subsidiary  as  soon  as
practicable  after  its  formation.  The  HMTF  Purchasers' interest will not be
reduced  or  diluted  by  the  first  twenty-five  million dollars ($25,000,000)
invested  by the Company.  The organizational and constitutive documents for the
Latin  American  Subsidiary  and  the  joint venture will be subject to the HMTF
Purchasers'  prior  approval,  such  consent  not to be unreasonably withheld or
delayed, and shall contain with respect to the HMTF Purchasers such terms as are
customary  for  private  equity  investments  in  private  companies (including,
without  limitation,  appropriate liquidity and minority protection provisions).

     SECTION  5.16.Latin  American  Venture.  Attached  hereto as Exhibit F is a
term  sheet  describing  the  indicative  terms  of  a  proposed  joint  venture
arrangement to exploit DSL opportunities in Latin America.  The Company will use
commercially reasonable efforts to cause the Latin American Subsidiary to effect
the  joint venture, but nothing in this Section 5.16 shall compel the Company to
go  forward  with  the  joint  venture if in its commercial judgment it would be
imprudent  or  inadvisable  to  do  so.  The  Company  will not create any other
entity,  or  enter  into  any  other  venture  or  partnership  to  exploit  DSL
opportunities  in Latin America without granting the HMTF Purchasers an interest
identical  to  that  held in the Latin American Subsidiary.  The HMTF Purchasers
shall  be  entitled  to  representation  on  any  board  subcommittee  or  other
board-level  task  force  assigned  to  supervise  the  Company's Latin American
venture, if formed, in proportion to their equity interest in the Latin American
Subsidiary.

                                    PAGE   12
<PAGE>
                                   ARTICLE VI

                           COVENANTS OF THE PURCHASERS

     SECTION  6.1.Agreement  to  Take  Necessary  and  Desirable  Actions.  Each
Purchaser  shall  (a) subject to the satisfaction of the conditions set forth in
Section  7.2,  execute and deliver each of the Equity Documents to which it is a
party  and such other documents, certificates, agreements and other writings and
(b)  take  such  other  actions  as  may  be  reasonably necessary, desirable or
requested  by  the  Company in order to consummate or implement the Transactions
in  accordance  with  the  terms  of  this  Agreement.

     SECTION  6.2.Compliance  with  Conditions; Commercially Reasonable Efforts.
Each  Purchaser will use all commercially reasonable efforts to cause all of the
obligations  imposed  upon it in this Agreement to be duly complied with, and to
cause  all  conditions  precedent  to  the  obligations  of  the Company and the
Purchasers to be satisfied. Upon the terms and subject to the conditions of this
Agreement,  each Purchaser will use all commercially reasonable efforts to take,
or  cause  to  be  taken, all action, and to do, or cause to be done, all things
necessary,  proper or advisable consistent with applicable law to consummate and
make  effective  in  the most expeditious manner practicable the Transactions in
accordance  with  the  terms  of  this  Agreement.

     SECTION  6.3.HSR  Act Notification.  To the extent required by the HSR Act,
each  Purchaser  shall,  if it has not already done so, (a) use all commercially
reasonable  efforts  to  file  or  cause to be filed, as promptly as practicable
after  the  execution  and  delivery  of  this Agreement, with the United States
Federal  Trade  Commission  and  the  Antitrust  Division  of  the United States
Department  of  Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all  commercially  reasonable  efforts  to  promptly  comply with or cause to be
complied  with any requests by the United States Federal Trade Commission or the
Antitrust  Division  of  the  United States Department of Justice for additional
information concerning such transactions in each case so that the waiting period
applicable  to this Agreement and the transactions contemplated hereby under the
HSR  Act shall expire as soon as practicable after the execution and delivery of
this  Agreement.  Purchaser agrees to request, and to cooperate with the Company
in  requesting, early termination of any applicable waiting period under the HSR
Act.

     SECTION  6.4.Consents  and  Approvals.  Each  Purchaser  (a)  shall use all
commercially  reasonable  efforts  to  obtain  all  necessary consents, waivers,
authorizations  and  approvals  of  all  Governmental  Authorities other than as
expressly  set  forth  in  Section  6.3  regarding the HSR Act, and of all other
Persons  required  in connection with the execution, delivery and performance of
this  Agreement or the consummation of the Transactions and (b) shall diligently
assist  and  cooperate  with  the  Company in preparing and filing all documents
required  to  be  submitted  by  the  Company  to  any Governmental Authority in
connection  with  such  Transactions  (which  assistance  and  cooperation shall
include,  without  limitation,  timely furnishing to the Company all information
concerning  such  Purchaser that counsel to the Company reasonably determines is
required  to  be included in such documents or would be helpful in obtaining any
such  required  consent,  waiver,  authorization  or  approval).

     SECTION  6.5.Restrictions  on  Transfer.  No  Purchaser shall sell, assign,
transfer, pledge, hypothecate, deposit in a voting trust or otherwise dispose of
any  portion  of the Securities (any such disposition, a "Securities Transfer"),
other  than  (a)  to a Permitted Transferee of such Purchaser that has agreed in
writing  (each, a "Permitted Transferee Agreement") to be bound by the terms and
provisions  of  this  Section  6.5  to  the  same  extent  that the transferring
Purchaser  would be bound if it beneficially owned the Securities transferred to
such  Permitted  Transferee or (b)(i) in any transaction in compliance with Rule
144  under  the  Securities  Act  or any successor rule or regulation, (ii) in a
transaction  exempt  from the registration requirements of the Securities Act or
(iii) pursuant to a registration statement. Each Purchaser shall promptly notify
the  Company  of  any  Securities  Transfer  to  a  Permitted Transferee of such
Purchaser,  which  notification  shall  include a Permitted Transferee Agreement
executed  by  each Permitted Transferee of such Purchaser to whom any Securities
have  been  transferred.

                                   ARTICLE VII

                         CONDITIONS PRECEDENT TO CLOSING

     SECTION  7.1.Conditions  to  the Company's Obligations.  The obligations of
the  Company  with  respect to a Purchaser hereunder required to be performed on
the  Closing Date shall be subject to the satisfaction or waiver, at or prior to
the  Closing,  of  the  following  conditions:

          (a)     The representations and warranties of such Purchaser contained
in  this  Agreement shall have been true and correct when made and, in addition,
shall be repeated and true and correct in all material respects on and as of the
Closing  Date  with  the  same  force and effect as though made on and as of the
Closing  Date.

                                    PAGE   13
<PAGE>

          (b)     Such  Purchaser  shall have performed in all material respects
all  obligations  and agreements, and complied in all material respects with all
covenants  contained in this Agreement to be performed and complied with by such
Purchaser  at  or  prior  to  the  Closing  Date.

          (c)     Any  applicable  waiting period under the HSR Act with respect
to  the  purchase  by  such  Purchaser  shall  have  expired or been terminated.

          (d)     The  Company  shall  have  obtained  all  necessary  consents,
waivers, authorizations and approvals of all Governmental Authorities and of all
other  Persons  required  in  connection  with  the  execution,  delivery  and
performance  of  the  Equity  Documents  or  the  consummation  of the Issuance.

          (e)     Such Purchaser shall have entered into the Registration Rights
Agreement.

     SECTION 7.2.Conditions to Each Purchaser's Obligations.  The obligations of
a  Purchaser  hereunder  required  to  be performed on the Closing Date shall be
subject  to  the  satisfaction  or  waiver,  at  or prior to the Closing, of the
following  conditions:

          (a)     The representations and warranties of the Company contained in
this  Agreement (i) shall have been true and correct when made and (ii) shall be
(A)  in  the  case  of  representations  and warranties that are qualified as to
materiality  or  Material  Adverse Effect, true and correct and (B) in all other
cases, true and correct in all material respects, in the case of clauses (A) and
(B), as of the Closing Date with the same force and effect as though made on and
as  of  the  Closing  Date.

          (b)     The  Company shall have performed in all material respects all
of  its  obligations, agreements and covenants contained in this Agreement to be
performed  and  complied  with  at  or  prior  to  the  Closing  Date.

          (c)     The  Company  shall  have entered into the Registration Rights
Agreement.

          (d)     The  Company  shall  have filed the Certificate of Designation
with  the  Secretary  of  State  of  the  State  of  Delaware.

          (e)     Any  applicable  waiting period under the HSR Act with respect
to  the  purchase  by  such  Purchaser  shall  have  expired or been terminated.

          (f)     The  Company  shall  have  delivered  to  such  Purchaser  a
certificate executed by it or on its behalf by a duly authorized representative,
dated  the  Closing Date, to the effect that each of the conditions specified in
paragraph  (a)  through  (e)  of  this  Section  7.2  has  been  satisfied.

          (g)     No  provision  of  any  Applicable  Law,  injunction, order or
decree  of  any  Governmental  Entity shall be in effect which has the effect of
making  the  Transactions  illegal  or  shall otherwise restrain or prohibit the
consummation  of  the  Transactions.

          (h)     Such  Purchaser  shall  have received an opinion of counsel to
the  Company,  dated  the Closing Date, and addressed to such Purchaser, in form
and  substance  reasonably  acceptable  to  the  Purchaser.

          (i)     Such  Purchaser  shall have received certificates representing
the  Securities  purchased  by  such  Purchaser  concurrently with the Company's
receipt  of  the  Purchase  Price  for  such  Securities.

          (j)     The  Purchaser shall have executed and caused its rights agent
to  execute  the  Rights  Agreement  Amendment.

          (k)     The  Company  shall  have  delivered  to the HMTF Purchasers a
Management  Rights  Agreement  executed by the Company and addressed to the HMTF
Funds.

          (l)     There  shall  not  have  occurred (i) any event, circumstance,
condition,  fact,  effect  or  other matter which has had or could reasonably be
expected  to  have  a  material  adverse  effect  (x)  on  the business, assets,
financial  condition, prospects, or results of operations of the Company and the
Subsidiaries  taken  as  a  whole  or  (y) on the ability of the Company and the
Subsidiaries  to  perform  on  a timely basis any material obligation under this
Agreement  or  to  consummate  the  Issuance  contemplated  hereby;  or (ii) any
material  disruption  of  or  material  adverse  change in financial, banking or
capital market conditions that would reasonably be expected to materially impair
the  Company's  ability  to  obtain  financing  on  reasonable  terms.







                                    PAGE   14
<PAGE>
                                  ARTICLE VIII

                                  MISCELLANEOUS

          SECTION  8.1.Indemnification.  (a)       All  representations,
warranties,  covenants  and agreements contained in this Agreement shall survive
the Closing for 18 months (except (i) covenants and agreements that are required
to  be  performed  after  the Closing Date and (ii) the last sentence of Section
3.2(a),  which  shall survive indefinitely). Notwithstanding the foregoing, with
respect to claims asserted pursuant to this Section 8.1 before the expiration of
the  applicable  representation,  warranty,  covenant  or agreement, such claims
shall survive until the date they are finally adjudicated or otherwise resolved.

     (b)     The  Company  agrees  to indemnify and hold harmless each Purchaser
and  each  Purchaser  Affiliate (each an "Indemnified Person"), from and against
(and  to reimburse each indemnified person as the same are incurred) any and all
losses (including, but not limited to, impairment of the value of the Shares and
Warrants  as  of  the  date  such  loss  first  becomes  known,  but  excluding
consequential  damages),  claims,  damages,  liabilities,  costs  and  expenses
(collectively,  "Losses")  to which any indemnified person may become subject or
which  any  indemnified  person  may  incur  based  upon,  arising out of, or in
connection with (i) a breach of any representation, warranty or covenant of this
Agreement  by  the  Company  or  (ii)  any  claim,  litigation, investigation or
proceeding brought by or on behalf of any Person other than the Company relating
to  the  Issuance,  and to reimburse each indemnified person upon demand for any
reasonable  legal  or  other  reasonable  out  of  pocket  expenses  incurred in
connection  with  investigating  or defending any of the foregoing, provided the
maximum  amount  indemnifiable to each Purchaser (and its successors or assigns)
under  clause (i) shall not exceed the purchase price of the Shares and Warrants
purchased  by  such  Purchaser.

     (c)     If  a  Person  entitled  to  indemnity  hereunder  (an "Indemnified
Party") asserts that the Company (the "Indemnifying Party") has become obligated
to  the  Indemnified  Party  pursuant to Section 8.1(b), or if any suit, action,
investigation,  claim  or proceeding is begun, made or instituted as a result of
which  the  Indemnifying  Party  may  become  obligated to the Indemnified Party
hereunder,  the  Indemnified  Party shall notify the Indemnifying Party promptly
and  shall  cooperate  with  the Indemnifying Party, at the Indemnifying Party's
expense,  to the extent reasonably necessary for the resolution of such claim or
in  the  defense of such suit, action or proceedings, including making available
any  information,  documents  and  things  in  the possession of the Indemnified
Party.  Notwithstanding  the  foregoing  notice  requirement,  the  right  to
indemnification hereunder shall not be affected by any failure to give, or delay
in  giving,  notice unless, and only to the extent that, the rights and remedies
of  the  Indemnifying Party shall have been materially prejudiced as a result of
such  failure  or  delay.

     (d)     In  fulfilling  its  obligations  under this Section 8.1, after the
Indemnifying  Party has provided each Indemnified Party with a written notice of
its  acceptance of liability under this Section 8.1, as between such Indemnified
Party and the Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid cooperation,
any claim, suit, action or proceeding brought by a third party in such manner as
the  Indemnifying  Party may in its sole discretion reasonably deem appropriate;
provided,  that  (i)  counsel  retained  by the Indemnifying Party is reasonably
satisfactory  to  the Indemnified Party and (ii) the Indemnifying Party will not
consent  to  any settlement or entry of judgment imposing any obligations on any
other party hereto other than financial obligations for which such party will be
indemnified  hereunder,  unless  such  party  has  consented  in writing to such
settlement  or  judgment  (which  consent  may  be given or withheld in its sole
discretion)  and (iii) the Indemnifying Party will not consent to any settlement
or  entry  of  judgment  unless, in connection therewith, the Indemnifying Party
obtains  a  full  and  unconditional  release  of the Indemnified Party from all
liability  with respect to such suit, action, investigation claim or proceeding.
Notwithstanding  the  Indemnifying  Party's  election  to  assume the defense or
investigation  of  such claim, action or proceeding, the Indemnified Party shall
have  the  right to employ separate counsel and to participate in the defense or
investigation  of such claim, action or proceeding, which participation shall be
at the expense of the Indemnifying Party, if (i) on the advice of counsel to the
Indemnified  Party  use  of  counsel  of  the  Indemnifying Party's choice could
reasonably be expected to give rise to a material conflict of interest, (ii) the
Indemnifying  Party  shall  not have employed counsel reasonably satisfactory to
the  Indemnified  Party  to  represent the Indemnified Party within a reasonable
time  after notice of the assertion of any such claim or institution of any such
action  or  proceeding,  (iii)  if  the  Indemnifying  Party shall authorize the
Indemnified Party to employ separate counsel at the Indemnifying Party's expense
or  (iv)  such  action shall seek relief other than monetary damages against the
Indemnified  Party.

     (e)     The  Company  and  the  Purchasers agree that any payment of Losses
made  hereunder  will  be  treated  by  the  parties  on their tax returns as an
adjustment  to  the  Purchase  Price.  If, notwithstanding such treatment by the
parties, a final determination (which shall include the form 870-AD or successor
form)  with respect to the Indemnified Party or any of its affiliates causes any

                                    PAGE   15
<PAGE>
such  payment  not  to  be  treated as an adjustment to Purchase Price, then the
Indemnifying  Party  shall indemnify the Indemnified Party for any taxes payable
by  the  Indemnified  Party  or  any subsidiary by reason of the receipt of such
payment  (including  any  payments  under this Section 8.1(e)), determined at an
assumed  marginal tax rate equal to the highest marginal tax rate then in effect
for  corporate  taxpayers  in  the  relevant  jurisdiction.

     SECTION  8.2.Notices.  All  notices, demands, requests, consents, approvals
or  other  communications  (collectively, "Notices") required or permitted to be
given  hereunder  or  which are given with respect to this Agreement shall be in
writing  and  shall  be  personally  served,  delivered by reputable air courier
service  with  charges prepaid, or transmitted by hand delivery, telegram, telex
or  facsimile,  addressed  as  set forth below, or to such other address as such
party  shall  have  specified  most  recently by written notice. Notice shall be
deemed  given  on  the  date  of service or transmission if personally served or
transmitted  by  telegram, telex or facsimile. Notice otherwise sent as provided
herein shall be deemed given on the next business day following delivery of such
notice  to  a  reputable  air  courier  service.

     To  the  Company:

              Rhythms  NetConnections  Inc.
              6933  South  Revere  Parkway
              Englewood,  CO  80112-3931
              Attn:  Catherine  Hapka
              Telephone:  (303)  476-4200
              Fax:  (303)  476-5700

     with  a  copy  to:

              Brobeck,  Phleger  &  Harrison  LLP
              550  West  C  Street,  Suite  1300
              San  Diego,  CA  9210
              Attn:  Martin  C.  Nichols
              Telephone:  (619)  699-0254
              Fax:  (619)  234-3848

     To  the  Purchasers:

     To  the  appropriate  member  of  the  HMTF  Group

               c/o  Hicks,  Muse,  Tate  &  Furst  Incorporated
               1325  Avenue  of  the  Americas
               25th  Floor
               New  York,  NY  10019
               Attn:  Michael  J.  Levitt
               Telephone:  (212)  424-1400
               Fax:  (212)  424-1450

     with  a  copy  to:

               Hicks,  Muse,  Tate  &  Furst  Incorporated
               200  Crescent  Court,  Suite  1600
               Dallas,  Texas  75201
               Attn:  Lawrence  D.  Stuart
               Telephone:  (214)  740-7300
               Fax:  (214)  720-7888

      with  a  copy  to:

               Vinson  &  Elkins  L.L.P.
               1325  Avenue  of  the  Americas  (17th  Floor)
               New  York,  NY  10019
               Attention:  Eric  S.  Shube
               Telephone:  (917)  206-8005
               Fax:  (917)  206-8100

     SECTION  8.3.Governing  Law.  This  Agreement  shall  be  governed  by,
interpreted under, and construed in accordance with the laws of the State of New
York,  regardless  of  the  laws  that  might  otherwise govern under applicable
principles  of  conflicts  of  law  thereof.

     SECTION  8.4.Termination.  (a)  This Agreement may be terminated as
between  the Company and any Purchaser (i) at any time prior to the Closing Date
by  mutual  written  agreement  of  the  Company and such Purchaser, (ii) if the
Closing  shall not have occurred on or prior toMarch 31, 2000 either the Company
or  such Purchaser, at any time after March 31, 2000, provided that the right to
terminate this Agreement under this Section 8.4(a)(ii) shall not be available to
any  party  whose failure to fulfill any obligation under this Agreement was the
cause  of  or  resulted in the failure of the Closing to occur on or before such
date,  (iii)  if  any  Governmental  Authority shall have issued a nonappealable
final  order,  decree  or  ruling or taken any other action having the effect of
permanently  restraining,  enjoining  or  otherwise prohibiting the transactions
contemplated by this Agreement, by either the Company or such Purchaser, (iv) if

                                    PAGE   16
<PAGE>
either  the  Company  or  such Purchaser shall have breached any of its material
obligations under this Agreement, by the non-breaching party, or (v) if an event
described  in  Section  7.2(l) shall have occurred, by such Purchaser. Any party
desiring to terminate this Agreement pursuant to clauses 8.4(a)(ii), (iii), (iv)
or  (v)  shall  promptly  give  notice  of  such termination to the other party.

     (b)     If  this  Agreement  is  terminated  as  between  the Company and a
Purchaser,  as  permitted  by  Section 8.4(a), such termination shall be without
liability  of  any  party  (or  any  stockholder,  director,  officer,  partner,
employee,  agent, consultant or representative of such party) to any other party
to  this  Agreement;  provided  that  if  such termination shall result from the
willful  (a)  failure  of any party to fulfill a condition to the performance of
the  obligations  of  the other party, (b) failure to perform a covenant of this
Agreement  or  (c)  breach by any party hereto of any representation or warranty
contained  herein, such failing or breaching party shall be fully liable for any
and  all  losses  (excluding  consequential damages) incurred or suffered by the
other  party  as  a result of such failure or breach. The provisions of Sections
8.2,  8.3,  this  Section  8.4, Sections 8.5, 8.8, 8.10, 8.11, 8.12, 8.13, 8.14,
8.16,  8.17,  8.18  and  8.20  shall  survive any termination hereof pursuant to
Section  8.4(a).

     SECTION  8.5.Entire  Agreement.  As  between the Company and each Purchaser
this  Agreement and the other Equity Documents (including all agreements entered
into  pursuant hereto and thereto and all certificates and instruments delivered
pursuant hereto and thereto) constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements,  representations,  understandings,  negotiations  and  discussions
between the parties, whether oral or written, with respect to the subject matter
hereof.

     SECTION  8.6.Modifications  and  Amendments.  No amendment, modification or
termination  of  this  Agreement as between the Company and a Purchaser shall be
binding  unless  executed in writing by the Company and such Purchaser intending
to  be  bound  thereby.

     SECTION  8.7.Waivers and Extensions.  Any party to this Agreement may waive
any  condition, right, breach or default that such party has the right to waive,
provided that such waiver will not be effective against the waiving party unless
it  is  in  writing,  is  signed  by such party, and specifically refers to this
Agreement.  Waivers  may be made in advance or after the right waived has arisen
or  the breach or default waived has occurred. Any waiver may be conditional. No
waiver  of  any  breach  of any agreement or provision herein contained shall be
deemed  a  waiver of any preceding or succeeding breach thereof nor of any other
agreement  or  provision  herein  contained.  No waiver or extension of time for
performance  of any obligations or acts shall be deemed a waiver or extension of
the  time  for  performance  of  any  other  obligations  or  acts.

     SECTION  8.8.Titles  and Headings.  Titles and headings of sections of this
Agreement  are for convenience only and shall not affect the construction of any
provision  of  this  Agreement.

     SECTION  8.9.Exhibits  and  Schedules.  Each  of the exhibits and schedules
referred to herein and attached hereto is an integral part of this Agreement and
is  incorporated  herein  by  reference.

     SECTION  8.10.Expenses.  All costs and expenses incurred in connection with
this  Agreement  shall  be  paid  by  the  party incurring such cost or expense;
provided,  however,  that  (a)  the  Company shall pay the filing fee payable in
respect  to  any  HSR  Act  filing, and (b) if this Agreement is terminated with
respect  to  any  Purchaser for any reason other than a breach by such Purchaser
and  other  than the failure of the condition set forth in Section 7.2(l)(ii) to
be  satisfied,  then  (without  limiting  any  party's  right to recover damages
pursuant  to Section 8.4(b)) the Company shall reimburse such Purchaser for such
Purchaser's  reasonable  out-of-pocket costs and expenses incurred in connection
with  this  Agreement.

     SECTION  8.11.Press  Releases  and  Public  Announcements.  All  public
announcements or disclosures relating to the Issuance or this Agreement shall be
made  only  if mutually agreed upon by the Company and the Purchasers, except to
the  extent such disclosure is, in the opinion of counsel, required by law or by
regulation  of  any  applicable national stock exchange or Commission recognized
trading  market;  provided  that  (a) any such required disclosure shall only be
made,  to  the  extent  consistent  with  law  and  regulation of any applicable
national  stock  exchange  or  Commission  recognized  trading  market,  after
consultation  with  each  Purchaser  and  (b) no such announcement or disclosure
(except  as  required  by  law or by regulation of any applicable national stock
exchange  or  Commission recognized trading market) shall identify any Purchaser
without  such  Purchaser's  prior  consent.

     SECTION  8.12.Assignment; No Third Party Beneficiaries.  This Agreement and
the rights, duties and obligations hereunder may not be assigned or delegated by
the  Company  without  the  prior written consent of the Purchasers, and may not
assigned  or  delegated  by  any  Purchaser  without the Company's prior written
consent  except  that  each  Purchaser  may  assign any or all of its rights and

                                    PAGE   17
<PAGE>
obligations  under  this  Agreement  to  any  one or more of its Affiliates. Any
assignment  or delegation of rights, duties or obligations hereunder made by the
Company  without  the prior written consent of the Purchasers, shall be void and
of no effect. This Agreement and the provisions hereof shall be binding upon and
shall  inure  to  the  benefit  of  each  of  the  parties  and their respective
successors  and  permitted assigns. This Agreement is not intended to confer any
rights  or  benefits  on  any  Persons  other than the parties hereto, except as
expressly  set  forth  in Section 5.2, Section 8.1, this Section 8.12 or Section
8.20.

     SECTION  8.13.Severability.  This  Agreement shall be deemed severable, and
the  invalidity  or  unenforceability  of any term or provision hereof shall not
affect  the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or  provision,  the parties hereto intend that there shall be added as a part of
this  Agreement a provision as similar in terms to such invalid or unenforceable
provision  as  may  be  possible  and  be  valid  and  enforceable.

     SECTION 8.14.Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute  one  and  the  same  instrument.

     SECTION  8.15.Further  Assurances.  As between the Company and a Purchaser,
each party hereto, upon the request of any other party hereto, shall do all such
further  acts  and execute, acknowledge and deliver all such further instruments
and  documents  as  may  be necessary or desirable to carry out the transactions
contemplated  by  this  Agreement,  including,  in the case of the Company, such
acts,  instruments  and documents as may be necessary or desirable to convey and
transfer  to  each  Purchaser  the  Shares  and  Warrants  to be purchased by it
hereunder.

     SECTION  8.16.Remedies  Cumulative.  The  remedies provided herein shall be
cumulative and shall not preclude the assertion by any party hereto of any other
rights  or  the  seeking  of  any  remedies  against  the  other  party  hereto.

     SECTION  8.17.Several  Liability  of  the  Purchasers.  Nothing  in  this
Agreement  (including,  without  limitation,  Article  VI) shall be construed to
impose  on  any  Purchaser any liability for any action or failure to act of any
other  Purchaser,  including  any  breach  of  this  Agreement by any such other
Purchaser.

     SECTION  8.18.No  Duty  to  Other Purchasers.  Each Purchaser confirms with
each  other Purchaser that such Purchaser has conducted its own due diligence in
connection  with  its  investment in the Securities and the other Purchasers may
therefore  have  information  different  from, or additional to, the information
possessed  by  such  Purchaser.  In  addition,  although  certain  of such other
Purchasers  (the "Supplying Purchasers") may have shared information received by
them  (including  information contained in third party reports prepared for such
other  Purchasers)  with  such Purchaser, no representation or warranty is being
made  with  respect  to  such information by any Supplying Purchaser or any such
third party. Nothing in this Section 8.18 is meant to limit any duty, obligation
or  liability  the  Company  may  have  to any Purchaser under this Agreement or
otherwise.

     SECTION  8.19.Specific  Performance.  The  parties  hereto  agree  that the
remedy  at  law  for any breach of this Agreement may be inadequate, and that as
between  the  Company  and  a  Purchaser  any  party  by  whom this Agreement is
enforceable  shall  be entitled to specific performance in addition to any other
appropriate relief or remedy. Such party may, in its sole discretion, apply to a
court  of  competent jurisdiction for specific performance or injunctive or such
other  relief  as  such  court may deem just and proper in order to enforce this
Agreement  as  between  the  Company  and  a Purchaser, or prevent any violation
hereof,  and, to the extent permitted by applicable as between the Company and a
Purchaser law, each party waives any objection to the imposition of such relief.

     SECTION  8.20.No  Purchaser  Affiliate  Liability.  No  Purchaser Affiliate
shall  have  any  liability or obligation of any nature whatsoever in connection
with  or  under  this Agreement or the transactions contemplated hereby, and the
Company  hereby  waives  and  releases  all  claims  of  any  such liability and
obligation,  it  being  understood  that  no  such  Person or entity (other than
Purchaser)  shall  be  liable  for  or  in  respect  of  this Agreement with the
transactions  contemplated  hereby.


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

RHYTHMS  NETCONNECTIONS  INC.

By:  /s/ Catherine Hapka
     Name:  Catherine  Hapka
     Title:  Chief  Executive  Officer



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  HMTF  BRIDGE  RHY,  LLC

By:  /s/ David Knickel
     Name: David W. Knickel
     Title: Vice President















































































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