Document:

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                                                                   Exhibit 10.35

Execution Copy

                          RHYTHMS NETCONNECTIONS INC.
                           (a Delaware corporation)

                                 $300,000,000

                           14% Senior Notes due 2010

                              PURCHASE AGREEMENT

Dated: February 16, 2000

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                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

SECTION 1.        Representations and Warranties...............................2

 (a) Representations and Warranties by the Company.............................2
     (i)          Similar Offerings............................................2
     (ii)         Offering Memorandum..........................................2
     (iii)        Independent Accountants......................................3
     (iv)         Financial Statements.........................................3
     (v)          No Material Adverse Change in Business.......................3
     (vi)         Good Standing of the Company.................................3
     (vii)        Good Standing of Designated Subsidiaries.....................4
     (viii)       Capitalization...............................................4
     (ix)         Authorization of Agreement...................................4
     (x)          Authorization of the Indenture...............................4
     (xi)         Authorization of the Registration Rights Agreement...........4
     (xii)        Intentionally Left Blank.....................................5
     (xiii)       Authorization of the Securities..............................5
     (xiv)        Description of the Securities and the Agreements.............5
     (xv)         Absence of Defaults and Conflicts............................5
     (xvi)        Absence of Labor Dispute.....................................6
     (xvii)       Absence of Proceedings.......................................6
     (xviii)      Possession of Intellectual Property..........................6
     (xix)        Absence of Further Requirements..............................7
     (xx)         Possession of Licenses and Permits...........................7
     (xxi)        Title to Property............................................9
     (xxii)       Tax Returns..................................................9
     (xxiii)      Environmental Laws...........................................9
     (xxiv)       Investment Company Act......................................10
     (xxv)        Rule 144A Eligibility.......................................10
     (xxvi)       No General Solicitation.....................................10
     (xxvii)      No Registration Required....................................10
     (xxviii)     Disqualified Stock..........................................11
     (xxix)       Insurance...................................................11
     (xxx)        Internal Accounting Controls................................11
     (xxxi)       Stabilization and Manipulation..............................11
     (xxxii)      Related Party Transactions..................................11
     (xxxiii)     Solvency....................................................11

 (b) Officer's Certificates...................................................12

SECTION 2.        Sale and Delivery to Initial Purchasers; Closing............12

 (a) Securities...............................................................12

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 (b)        Payment.......................................................  12

 (c)        Qualified Institutional Buyer.................................  13

 (d)        Denominations; Registration...................................  13

SECTION 3.  Covenants of the Company......................................  13

 (a)        Offering Memorandum...........................................  13

 (b)        Notice and Effect of Material Events..........................  13

 (c)        Amendment to Offering Memorandum and Supplements..............  13

 (d)        Qualification of Securities for Offer and Sale................  14

 (e)        DTC...........................................................  14

 (f)        Use of Proceeds...............................................  14

 (g)        Restriction on Sale of Securities.............................  14

 (h)        Press Releases................................................  14

SECTION 4.  Payment of Expenses...........................................  14

 (a)        Expenses......................................................  14

 (b)        Termination of Agreement......................................  15

SECTION 5.  Conditions of Initial Purchasers' Obligations.................  15

 (a)        Opinions of Counsel for Company...............................  15

 (b)        Opinion of Counsel for Initial Purchasers.....................  15

 (c)        Officers' Certificate.........................................  16

 (d)        Accountant's Comfort Letter...................................  16

 (e)        Bring-down Comfort Letter.....................................  16

 (f)        PORTAL........................................................  16

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 (g)        Registration Rights Agreements..................................  16

 (h)        Additional Documents............................................  16

 (i)        Termination of Agreement........................................  17

SECTION 6.  Subsequent Offers and Resales of the Securities.................  17

 (a)        Offer and Sale Procedures.......................................  17
     (i)    Offers and Sales only to Qualified Institutional Buyers.........  17
     (ii)   No General Solicitation.........................................  17
     (iii)  Purchases by Non-Bank Fiduciaries...............................  17
     (iv)   Subsequent Purchaser Notification...............................  17
     (v)    Restrictions on Transfer........................................  18
     (vi)   Delivery of Offering Memorandum.................................  18
     (vii)  Hedging Transactions............................................  18

 (b)        Covenants of the Company........................................  18
            (i)    Due Diligence............................................  18
            (ii)   Integration..............................................  18
            (iii)  Rule 144A Information....................................  19
            (iv)   Restriction on Repurchases...............................  19

 (c)        Resale Pursuant to Rule 144A....................................  19

SECTION 7.  Indemnification.................................................  19

 (a)        Indemnification of Initial Purchasers...........................  19

 (b)        Indemnification of Company, Directors and Officers..............  20

 (c)        Actions against Parties; Notification...........................  20

 (d)        Settlement without Consent if Failure to Reimburse..............  21

SECTION 8.  Contribution....................................................  21

SECTION 9.  Representations, Warranties and Agreements to Survive Delivery..  22

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SECTION 10.  Termination of Agreement....................................  23

 (a)  Termination; General...............................................  23

 (b)  Liabilities........................................................  23

SECTION 11.  Default by One or More of the Initial Purchasers............  23

SECTION 12.  Notices.....................................................  24

SECTION 13.  Parties.....................................................  24

SECTION 14.  Governing Law and Time......................................  24

SECTION 15.  Effect of Headings..........................................  24

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                                                                    Exhibit 10.5

                                 $300,000,000

                          RHYTHMS NETCONNECTIONS INC.
                           (a Delaware corporation)

                           14% Senior Notes due 2010

                              PURCHASE AGREEMENT
                              ------------------

                                                               February 16, 2000

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
Salomon Smith Barney Inc.
Chase Securities Inc.
Credit Suisse First Boston Corporation
  as Representatives of the several Initial Purchasers
  Merrill Lynch & Co.
  Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

     Rhythms NetConnections Inc., a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Initial Purchasers
named in Schedule A hereto (collectively, the "Initial Purchasers", which term
shall also include any initial purchaser substituted as hereinafter provided in
Section 11 hereof), for whom Merrill Lynch, Salomon Smith Barney Inc., Chase
Securities Inc. and Credit Suisse First Boston Corporation are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Initial Purchasers, acting
severally and not jointly, of the respective principal amount set forth in said
Schedule A of an aggregate of $300,000,000 of 14% Senior Notes due 2010 (the
"Securities").  The Securities are to be issued pursuant to an indenture to be
dated on or about February 23, 2000 (the "Indenture") between the Company and
State Street Bank and Trust Company of California, N.A., as trustee (the
"Trustee").  Securities issued in book-entry form will be issued to Cede & Co.
as nominee of The Depository Trust Company ("DTC") pursuant to one or more
letter agreements, to be dated as of the Closing Time (as defined in Section
2(b)) (collectively, the "DTC Agreement"), among the Company, the Trustee and
DTC.

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     The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement.  The Securities are
to be offered and sold through the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon
exemptions therefrom.  Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may only resell or otherwise
transfer such Securities if such Securities are hereafter registered under the
1933 Act or if an exemption from the registration requirements of the 1933 Act
is available (including the exemption afforded by Rule 144A ("Rule 144A") or
Regulation S ("Regulation S") of the rules and regulations promulgated under the
1933 Act by the Securities and Exchange Commission (the "Commission")).

     The Company has prepared and will deliver to each Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated February 16, 2000 (the "Final Offering Memorandum") for use by such
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities.  "Offering Memorandum" means, with respect to any
date or time referred to in this Agreement, the most recent offering memorandum
(whether the Final Offering Memorandum or any amendment or supplement thereto),
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities.

     SECTION 1.  Representations and Warranties.
                 ------------------------------

     (a)  Representations and Warranties by the Company  .  The Company
represents and warrants to each Initial Purchaser as of the date hereof, and
will represent as of the Closing Time referred to in Section 2(b) hereof by
means of the certificate described in Section 5(c) hereof, and agrees with each
Initial Purchaser as follows:

          (i)   Similar Offerings.  The Company has not, directly or
     indirectly, solicited any offer to buy or offered to sell, and will not,
     directly or indirectly, solicit any offer to buy or offer to sell, in the
     United States or to any United States citizen or resident, any security
     which is or would be integrated with the sale of the Securities in a manner
     that would require the Securities to be registered under the 1933 Act.

          (ii)  Offering Memorandum.  The Offering Memorandum does not, and at
     the Closing Time will not, include an untrue statement of a material fact
     or omit to state a material fact necessary in order to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading; provided that this representation, warranty and agreement shall
     not apply to such statements in or omissions from the Offering Memorandum
     made in reliance upon and in conformity with information furnished to the
     Company in writing by any Initial Purchaser through the Representatives
     expressly for use in the Offering Memorandum.  It is understood that the
     statements set forth in the Offering Memorandum under the heading "Plan of
     Distribution" and the identity of counsel to the Initial Purchasers under
     the heading

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     "Legal Matters" constitute the only information furnished in writing by or
     on behalf of the Initial Purchasers expressly for use in the Offering
     Memorandum.

          (iii)  Independent Accountants.  The accountants who certified the
     financial statements included in the Offering Memorandum are independent
     certified public accountants with respect to the Company and its
     subsidiaries within the meaning of Regulation S-X under the 1933 Act.

          (iv)   Financial Statements.  The financial statements, together with
     the related schedules and notes, included in the Offering Memorandum
     present fairly the consolidated financial position of the Company and its
     subsidiaries at the dates indicated and the statement of operations,
     stockholders' equity and cash flows of the Company and its consolidated
     subsidiaries for the periods specified; said financial statements have been
     prepared in conformity with generally accepted accounting principles
     ("GAAP") applied on a consistent basis throughout the periods involved.
     The selected financial data included in the Offering Memorandum present
     fairly the information shown therein and have been compiled on a basis
     consistent with that of the audited financial statements included in the
     Offering Memorandum.  The pro forma and pro forma as adjusted columns of
     the selected financial data included in the Offering Memorandum and the
     related notes thereto present fairly the information shown therein, have
     been prepared in accordance with the Commission's rules and guidelines with
     respect to pro forma financial information and have been properly compiled
     on the bases described therein, and the assumptions used in the preparation
     thereof are reasonable and the adjustments used therein are appropriate to
     give effect to the transactions and circumstances referred to therein.

          (v)    No Material Adverse Change in Business.  Since the respective
     dates as of which information is given in the Offering Memorandum, except
     as otherwise stated therein, (A) there has been no material adverse change
     in the condition, financial or otherwise, or in the earnings, business
     affairs or business prospects of the Company and its subsidiaries
     considered as one enterprise (a "Material Adverse Effect"), whether or not
     arising in the ordinary course of business, (B) there have been no
     transactions entered into by the Company or any of its subsidiaries, other
     than those in the ordinary course of business, which are material with
     respect to the Company and its subsidiaries considered as one enterprise,
     and (C) there has been no dividend or distribution of any kind declared,
     paid or made by the Company on any class of its capital stock.

          (vi)   Good Standing of the Company.  The Company has been duly
     organized and is validly existing as a corporation in good standing under
     the laws of the State of Delaware and has corporate power and authority to
     own, lease and operate its properties and to conduct its business as
     described in the Offering Memorandum and to enter into and perform its
     obligations under this Agreement; and the Company is duly qualified as a
     foreign corporation to transact business and is in good standing in each
     other jurisdiction in which such qualification is required, whether by
     reason of the ownership or leasing of

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     property or the conduct of business, except where the failure so to qualify
     or to be in good standing would not result in a Material Adverse Effect.

          (vii)   Good Standing of Designated Subsidiaries.  Each of the
     Designated Subsidiaries has been duly organized and is validly existing as
     a corporation or a public benefit corporation, as the case may be, in good
     standing under the laws of the jurisdiction of its incorporation, has
     corporate power and authority to own, lease and operate its properties and
     to conduct its business as described in the Offering Memorandum and is duly
     qualified as a foreign corporation to transact business and is in good
     standing, in each jurisdiction in which such qualification is required,
     whether by reason of the ownership or leasing of property or the conduct of
     business, except where the failure so to qualify or to be in good standing
     would not result in a Material Adverse Effect; except as otherwise
     disclosed in the Offering Memorandum, all of the issued and outstanding
     capital stock of each Designated Subsidiary has been duly authorized and
     validly issued, is fully paid and non-assessable and is directly or
     indirectly owned by the Company, free and clear of any security interest,
     mortgage, pledge, lien, encumbrance, claim or equity; none of the
     outstanding shares of capital stock of any Designated Subsidiary was issued
     in violation of any preemptive or similar rights arising by operation of
     law, or under the charter or by-laws of such Designated Subsidiary or under
     any agreement to which the Company or such Designated Subsidiary is a
     party.  The Company has no subsidiaries other than Rhythms Links Inc.,
     Rhythms Links Inc. -- Virginia, Rhythms Canada and Rhythms Europe
     (collectively, the "Designated Subsidiaries").

          (viii)  Capitalization.  The authorized, issued and outstanding
     capital stock of the Company is as set forth in the Offering Memorandum in
     the column entitled "Pro Forma" under the caption "Capitalization" (except
     for subsequent issuances, if any, pursuant to this Agreement, pursuant to
     employee benefit or stock option plans referred to in the Offering
     Memorandum or pursuant to the exercise of convertible securities or options
     referred to in the Offering Memorandum).

          (ix)    Authorization of Agreement.  This Agreement has been duly
     authorized, executed and delivered by the Company.

          (x)     Authorization of the Indenture.  The Indenture has been duly
     authorized by the Company and, at the Closing Time, will have been duly
     executed and delivered by the Company and will constitute the valid and
     binding agreement of the Company, enforceable against the Company in
     accordance with its terms, except as the enforcement thereof may be limited
     by bankruptcy, insolvency (including, without limitation, all laws relating
     to fraudulent transfers), reorganization, moratorium or other similar laws
     relating to or affecting enforcement of creditors' rights generally, or by
     general principles of equity (regardless of whether enforcement is
     considered in a proceeding in equity or at law).

          (xi)    Authorization of the Registration Rights Agreement.  The
     Registration Rights Agreement has been duly authorized by the Company and,
     at the Closing Time,

                                      -4-
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     will have been duly executed and delivered by the Company and will
     constitute the valid and binding agreement of the Company, enforceable
     against the Company in accordance with its terms, except as the enforcement
     thereof may be limited by bankruptcy, insolvency (including, without
     limitation, all laws relating to fraudulent transfers), reorganization,
     moratorium or other similar laws relating to or affecting enforcement of
     creditors' rights generally, or by general principles of equity (regardless
     of whether enforcement is considered in a proceeding in equity or at law).

          (xii)   Intentionally Left Blank.

          (xiii)  Authorization of the Securities.  The Securities have been
     duly authorized and, at the Closing Time, will have been duly executed by
     the Company and, when authenticated in the manner provided for in the
     Indenture and delivered against payment of the purchase price therefor will
     constitute valid and binding obligations of the Company, enforceable
     against the Company in accordance with their terms, except as the
     enforcement thereof may be limited by bankruptcy, insolvency (including,
     without limitation, all laws relating to fraudulent transfers),
     reorganization, moratorium or other similar laws relating, to or affecting
     enforcement of creditors' rights generally, or by general principles of
     equity (regardless of whether enforcement is considered in a proceeding, in
     equity or at law), and will be in the form contemplated by, and entitled to
     the benefits of, the Indenture.  All of the outstanding shares of capital
     stock of the Company have been duly authorized and validly issued, are
     fully paid and nonassessable, are not subject to any preemptive or similar
     rights and have been issued in compliance with or in reliance upon an
     exemption from all applicable state and federal securities laws.

          (xiv)   Description of the Securities and the Agreements.  The
     Securities, the Indenture and the Registration Rights Agreement will
     conform in all material respects to the respective statements relating
     thereto contained in the Offering Memorandum and will be in substantially
     the respective forms previously delivered to the Initial Purchasers.

          (xv)    Absence of Defaults and Conflicts.  Neither the Company nor
     any of its subsidiaries is in violation of its charter or by-laws or in
     default in the performance or observance of any obligation, agreement,
     covenant or condition contained in any contract, indenture, mortgage, deed
     of trust, loan or credit agreement, note, lease or other agreement or
     instrument to which the Company or any of its subsidiaries is a party or by
     which any of them may be bound, or to which any of the property or assets
     of the Company or any of its subsidiaries is subject (collectively,
     "Agreements and Instruments") except for such defaults that would not
     result in a Material Adverse Effect, and the execution, delivery and
     performance of this Agreement, the Indenture, the Registration Rights
     Agreement and the Securities and any other agreement or instrument entered
     into or issued or to be entered into or issued by the Company in connection
     with the transactions contemplated hereby or thereby or in the Offering
     Memorandum and the consummation of the transactions contemplated herein and
     in the Offering Memorandum (including the issuance and sale of the
     Securities and the use of the proceeds from the

                                      -5-
<PAGE>

     sale of the Securities as described in the Offering Memorandum under the
     caption "Use of Proceeds") and compliance by the Company with its
     obligations hereunder have been duly authorized by all necessary corporate
     action and do not and will not, whether with or without the giving of
     notice or passage of time or both, conflict with or constitute a breach of,
     default or a Repayment Event (as defined below) under, or result in the
     creation or imposition of any lien, charge or encumbrance upon any property
     or assets of the Company or any of its subsidiaries pursuant to, the
     Agreements and Instruments except for such conflicts, breaches or defaults
     or liens, charges or encumbrances that, singly or in the aggregate, would
     not result in a Material Adverse Effect, nor will such action result in any
     violation of the provisions of the charter or by-laws of the Company or any
     of its subsidiaries or any applicable law, statute, rule, regulation,
     judgment, order, writ or decree of any government, government
     instrumentality or court, domestic or foreign, having jurisdiction over the
     Company or any of its subsidiaries or any of their assets or properties. As
     used herein, a "Repayment Event" means any event or condition which gives
     the holder of any note, debenture, other evidence of indebtedness or
     preferred stock (or any person acting on such holder's behalf) the right to
     require the repurchase, redemption or repayment of all or a portion of such
     indebtedness or preferred stock by the Company or any of its subsidiaries.

          (xvi)    Absence of Labor Dispute.  No labor dispute with the
     employees of the Company or any of its subsidiaries exists or, to the
     knowledge of the Company, is imminent, and the Company is not aware of any
     existing or imminent labor disturbance by the employees of any of its or
     any of its subsidiaries' principal suppliers, manufacturers, customers or
     contractors, which, in either case, may reasonably be expected to result in
     a Material Adverse Effect.

          (xvii)   Absence of Proceedings.  Except as disclosed in the Offering
     Memorandum, there is no action, suit, proceeding, inquiry or investigation
     before or by any court or governmental agency or body, domestic or foreign,
     now pending, or, to the knowledge of the Company, threatened, against or
     affecting the Company or any subsidiary thereof which might reasonably be
     expected to result in a Material Adverse Effect, or which might reasonably
     be expected to materially and adversely affect the properties or assets of
     the Company or any of its subsidiaries or the consummation of this
     Agreement or the performance by the Company of its obligations hereunder.
     The aggregate of all pending legal or governmental proceedings to which the
     Company or any subsidiary thereof is a party or of which any of their
     respective property or assets is the subject which are not described in the
     Offering Memorandum, including ordinary routine litigation incidental to
     the business, could not reasonably be expected to result in a Material
     Adverse Effect.

          (xviii)  Possession of Intellectual Property.  Except as disclosed
     in the Offering Memorandum, (A) the Company and its subsidiaries own or
     possess, or can acquire on reasonable terms, adequate patents, patent
     rights, licenses, inventions, copyrights, know-how (including trade secrets
     and other unpatented and/or unpatentable proprietary or confidential
     information, systems or procedures), trademarks, service marks,
     trade

                                      -6-
<PAGE>

     names or other intellectual property (collectively, "Intellectual
     Property") necessary to carry on the business now operated by them, except
     that the Company and its subsidiaries may fail to so own, possess or have
     the ability to acquire on reasonable terms any Intellectual Property if
     such failure would not result, singly or in the aggregate, in a Material
     Adverse Effect, and (B) neither the Company nor any of its subsidiaries has
     received any notice or is otherwise aware of any infringement of or
     conflict with asserted rights of others with respect to any Intellectual
     Property or of any facts or circumstances which would render any
     Intellectual Property invalid or inadequate to protect the interest of the
     Company or any of its subsidiaries therein, and which infringement or
     conflict (if the subject of any unfavorable decision, ruling or finding) or
     invalidity or inadequacy, singly or in the aggregate, would result in a
     Material Adverse Effect.

          (xix)  Absence of Further Requirements.  No filing with, or
     authorization, approval, consent, license, order, registration,
     qualification or decree of, any court or governmental authority or agency
     is necessary or required for the performance by the Company of its
     obligations hereunder, in connection with the offering, issuance or sale of
     the Securities hereunder or the consummation of the transactions
     contemplated by this Agreement, except as may be required under the 1933
     Act or state securities or "blue sky" laws in connection with the Exchange
     Offer (as defined in the Offering Memorandum).

          (xx)   Possession of Licenses and Permits.  Except as disclosed in
     the Offering Memorandum, the Company and its subsidiaries possess such
     permits, licenses, approvals, consents and other authorizations issued by
     the appropriate federal, state, local or foreign regulatory agencies or
     bodies necessary to conduct the business now operated by them
     (collectively, "Governmental Licenses"); the Company and its subsidiaries
     are in compliance with the terms and conditions of all such Governmental
     Licenses, except where the failure so to comply would not, singly or in the
     aggregate, have a Material Adverse Effect; all of the Governmental Licenses
     are valid and in full force and effect, except where the invalidity of such
     Governmental Licenses or the failure of such Governmental Licenses to be in
     full force and effect would not have a Material Adverse Effect; and neither
     the Company nor any of its subsidiaries has received any notice of
     proceedings relating to the revocation or modification of any such
     Governmental Licenses which, singly or in the aggregate, if the subject of
     an unfavorable decision, ruling or finding, would result in a Material
     Adverse Effect.  The Company has not been informed of any fact, event or
     circumstance that is reasonably likely to impair the Company's (or its
     subsidiaries') ability to obtain any Governmental Licenses necessary or
     advisable in order to effectuate the Company's future plans and strategies
     described in the Offering Memorandum and no event exists that permits, or
     after notice or lapse of time or both, would permit, revocation or
     termination of any Governmental License or result in any impairment of
     rights of the Company or any of its subsidiaries under any such
     Governmental Licenses.  Without limiting the generality of this paragraph
     (xx):

                 (A)  the Company and each of its subsidiaries hold all
          telecommunications regulatory licenses, permits, authorizations,
          consents and

                                      -7-
<PAGE>

          approvals (the "Telecommunications Licenses") required from the
          Federal Communications Commission (the "FCC") for the Company and its
          subsidiaries to conduct their business on and as of the date hereof in
          the manner described in the Offering Memorandum, except as would not
          have, individually or in the aggregate, a Material Adverse Effect; the
          Telecommunications Licenses have been duly and validly issued and are
          in full force and effect, except where the failure to be in full force
          and effect would not have, individually or in the aggregate, a
          Material Adverse Effect; no proceedings to revoke or restrict the
          Telecommunications Licenses are pending or, to the best of the
          Company's knowledge, threatened; neither the Company nor its
          subsidiaries are in violation of any of the terms and conditions of
          any of the Telecommunications Licenses, are in violation of the
          Communications Act of 1934, as amended (the "Communications Act"), or
          are in violation of any FCC rules and regulations, or state regulatory
          laws, rules or regulations, except as would not have, individually or
          in the aggregate, a Material Adverse Effect; and the Company and its
          subsidiaries have in effect with the FCC all international and
          domestic service tariffs necessary to conduct their business on and as
          of the date hereof in the manner described in the Offering Memorandum
          except as would not have, individually or in the aggregate, a Material
          Adverse Effect;

                 (B)  the Company and its subsidiaries have obtained all state
          and municipal Telecommunications Licenses and filed all tariffs
          required for the provision of telecommunications services in any state
          to conduct their business on and as of the date hereof in the manner
          described in the Offering Memorandum, except where the failure to do
          so would not have, individually or in the aggregate, a Material
          Adverse Effect;

                 (C)  there is no outstanding adverse judgment, injunction,
          decree or order that has been issued by the FCC or any state utility
          commission or similar state agency ("PUC") or municipality against the
          Company or its subsidiaries or any action, proceeding or investigation
          pending before the FCC or any state PUC or municipality, or, to the
          Company's knowledge, threatened by the FCC or any state PUC or
          municipality against the Company or its subsidiaries which, if the
          subject of any unfavorable decision, ruling or finding, would have a
          Material Adverse Effect on the Company or its subsidiaries;

                 (D)  no license, permit, consent, approval, order or
          authorization of, or filing with, the FCC or with any state PUC or
          municipal authority on the part of the Company or its subsidiaries is
          required in connection with the issuance or sale of the Securities;

                 (E)  neither the issuance and sale of the Securities nor the
          performance by the Company or its subsidiaries of their obligations
          under this Agreement, the Registration Rights Agreements or the
          Indenture will result in a violation in any material respect of: (1)
          the Communications Act or the applicable rules or

                                      -8-
<PAGE>

          regulations, or any order, writ, judgment, injunction, decree or award
          of the FCC binding on the Company or its subsidiaries; (2) any state
          telecommunications laws or any applicable state PUC rules or
          regulations, or any order, writ, judgment, injunction, decree or award
          of any state PUC binding on the Company or its subsidiaries; (3) any
          municipal rules or regulations applicable to the Company or its
          subsidiaries; or (4) the Governmental Licenses; and

                   (F)  the Governmental Licenses do not have an expiration
          date or are renewable by their terms or in the ordinary course of
          business without the need to comply with any qualification procedures
          not generally applicable to the renewal of Governmental Licenses or to
          pay any amounts other than routine filing fees.

          (xxi)    Title to Property.  The Company and its subsidiaries have
     good and marketable title to all real property owned by the Company and its
     subsidiaries and good title to all other properties owned by them, in each
     case, free and clear of all mortgages, pledges, liens, security interests,
     claims, restrictions or encumbrances of any kind except such as (a) are
     described in the Offering Memorandum or (b) do not, singly or in the
     aggregate, materially affect the value of such property and do not
     interfere with the use made and proposed to be made of such property by the
     Company or any of its subsidiaries; and all of the leases and subleases
     material to the business of the Company and its subsidiaries, considered as
     one enterprise, and under which the Company or any of its subsidiaries
     holds properties described in the Offering Memorandum, are in full force
     and effect, and neither the Company nor any of its subsidiaries has any
     notice of any material claim of any sort that has been asserted by anyone
     adverse to the rights of the Company or any of its subsidiaries under any
     of the leases or subleases mentioned above, or affecting or questioning the
     rights of the Company or any subsidiary thereof to the continued possession
     of the leased or subleased premises under any such lease or sublease.

          (xxii)   Tax Returns.  The Company and its subsidiaries have filed
     all federal, state, local and foreign tax returns that are required to be
     filed or have duly requested extensions thereof and have paid all taxes
     required to be paid by any of them and any related assessments, fines or
     penalties, except for any such tax, assessment, fine or penalty that is
     being contested in good faith and by appropriate proceedings, and adequate
     charges, accruals and reserves have been provided for in the financial
     statements referred to in Section l(a)(v) above in respect of all federal,
     state, local and foreign taxes for all periods as to which the tax
     liability of the Company or any of its subsidiaries has not been finally
     determined or remains open to examination by applicable taxing authorities,
     except for such failures to file, request extensions, make payments and
     provide for adequate charges, accruals and reserves as would not, singly or
     in the aggregate, result in a Material Adverse Effect.

          (xxiii)  Environmental Laws.  Except as described in the Offering
     Memorandum and except such matters as would not, singly or in the
     aggregate, result in a Material Adverse Effect, (A) neither the Company nor
     any of its subsidiaries is in violation of any

                                      -9-
<PAGE>

     federal, state, local or foreign statute, law, rule, regulation, ordinance,
     code, policy or rule of common law or any judicial or administrative
     interpretation thereof, including any judicial or administrative order,
     consent, decree or judgment, relating to pollution or protection of human
     health, the environment (including, without limitation, ambient air,
     surface water, groundwater, land surface or subsurface strata) or wildlife,
     including, without limitation, laws and regulations relating to the release
     or threatened release of chemicals, pollutants, contaminants, wastes, toxic
     substances, hazardous substances, petroleum or petroleum products
     (collectively, "Hazardous Materials") or to the manufacture, processing,
     distribution, use, treatment, storage, disposal, transport or handling of
     Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
     and its subsidiaries have all permits, authorizations and approvals
     required under any applicable Environmental Laws and are each in compliance
     with their requirements, (C) there are no pending or threatened
     administrative, regulatory or judicial actions, suits, demands, demand
     letters, claims, liens, notices of noncompliance or violation,
     investigation or proceedings relating to any Environmental Law against the
     Company or any of its subsidiaries and (D) there are no events or
     circumstances that might reasonably be expected to form the basis of an
     order for clean-up or remediation, or an action, suit or proceeding by any
     private party or governmental body or agency, against or affecting the
     Company or any of its subsidiaries relating to Hazardous Materials or
     Environmental Laws.

          (xxiv)   Investment Company Act.  The Company is not, and upon the
     issuance and sale of the Securities as herein contemplated and the
     application of the net proceeds therefrom as described in the Offering
     Memorandum will not be, an "investment company" or an entity "controlled"
     by an "investment company" as such terms are defined in the Investment
     Company Act of 1940, as amended (the "1940 Act").

          (xxv)    Rule 144A Eligibility. The Securities are eligible for resale
     pursuant to Rule 144A and will not be, at the Closing Time, of the same
     class as securities listed on a national securities exchange registered
     under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer
     quotation system.

          (xxvi)   No General Solicitation.  None of the Company, its
     affiliates, as such term is defined in Rule 501(b) under the 1933 Act
     ("Affiliates"), or any person acting on its or any of their behalf (other
     than the Initial Purchasers, as to whom the Company makes no
     representation) has engaged or will engage, in connection with the offering
     of the Securities, in any form of general solicitation or general
     advertising within the meaning of Rule 502(c) under the 1933 Act.

          (xxvii)  No Registration Required.  Subject to compliance by the
     Initial Purchasers with the representations and warranties set forth in
     Section 2 and the procedures set forth in Section 6 hereof, it is not
     necessary in connection with the offer, sale and delivery of the Securities
     to the Initial Purchasers and to each Subsequent Purchaser in the manner
     contemplated by this Agreement and the Offering Memorandum to register the
     Securities

                                      -10-
<PAGE>

     under the 1933 Act or to qualify the Indenture under the Trust Indenture
     Act of 1939, as amended (the "1939 Act").

          (xxviii)  Disqualified Stock.  The Company's 8.25% Series E
     Convertible Preferred Stock due 2015 ("Series E Preferred Stock") is not
     "Disqualified Stock" within the meaning of the Indentures dated as of May
     5, 1998 and April 23, 1999 between the Company and State Street Bank and
     Trust Company of California, N.A.

          (xxix)    Insurance.  The Company and each of its subsidiaries
     maintains insurance covering its properties, operations, personnel and
     business.  Such insurance insures against such losses and risks as are
     adequate in accordance with customary industry practice to protect the
     Company, each of its subsidiaries and their businesses.  Neither the
     Company or any of its subsidiaries has received notice from any insurer or
     agent of such insurer that substantial capital improvement or other
     expenditures will have to be made in order to continue such insurance.  All
     such insurance is outstanding and duly in force on the date hereof.

          (xxx)     Internal Accounting Controls.  The Company maintains a
     system of internal accounting controls sufficient to provide reasonable
     assurances that (a) transactions are executed in accordance with
     management's general or specific authorization; (b) transactions are
     recorded as necessary to permit preparation of financial statements in
     conformity with generally accepted accounting principles and to maintain
     accountability for assets; (c) access to assets is permitted only in
     accordance with management's general or specific authorization; and (d) the
     recorded accountability for assets is compared with existing assets at
     reasonable intervals and appropriate action is taken with respect to any
     differences.

          (xxxi)    Stabilization and Manipulation.  None of the Company or any
     of its subsidiaries has (a) taken, directly or indirectly, any action
     designed to, or that might reasonably be expected to, cause or result in
     stabilization or manipulation of the price of any security of the Company
     to facilitate the sale or resale of the Securities or (b) since the date of
     the Offering Memorandum (I) sold, bid for, purchased or paid any person any
     compensation for soliciting purchases of, the Securities or (II) paid or
     agreed to pay to any person any compensation for soliciting another to
     purchase any securities of the Company.

          (xxxii)   Related Party Transactions.  Except as disclosed in the
     Offering Memorandum, there are no business relationships or related party
     transactions required to be disclosed therein pursuant to Item 404 of
     Regulation S-K of the Commission (assuming for purposes of this paragraph
     (xxxii) that Regulation S-K is applicable to the Offering Memorandum).

          (xxxiii)  Solvency.  The Company is, and immediately after the
     Closing Time will be, Solvent.  As used herein, the term "Solvent" means,
     with respect to the Company on a particular date, that on such date (A) the
     fair market value of the assets of the Company is

                                      -11-
<PAGE>

     greater than the total amount of liabilities (including contingent
     liabilities) of the Company, (B) the present fair salable value of the
     assets of the Company is greater than the amount that will be required to
     pay the probable liabilities of the Company on its debts as they become
     absolute and mature, (C) the Company is able to realize upon its assets and
     pay its debts and other liabilities, including contingent obligations, as
     they mature, and (D) the Company does not have unreasonably small capital.

     (b)  Officer's Certificates.  Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.

     SECTION 2.  Sale and Delivery to Initial Purchasers; Closing  .

     (a)  Securities.  On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the principal amount of
Securities set forth in Schedule A opposite the name of such Initial Purchaser,
plus any additional principal amount of Securities which such Initial Purchaser
may become obligated to purchase pursuant to the provisions of Section 11
hereof.

     (b)  Payment.  Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Baker &
McKenzie, 805 Third Avenue, New York, New York 10022, or at such other place as
shall be agreed upon by the Representatives and the Company, at 10:00 A.M. on
the fourth business day after the date hereof (unless postponed in accordance
with the provisions of Section 11), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called the
"Closing Time").

     Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them.  It is understood that
each Initial Purchaser has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase.  Merrill Lynch, individually and not
as representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder.  The certificates representing the Securities shall be registered in
the name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchasers in The City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.

                                      -12-
<PAGE>

     (c)  Qualified Institutional Buyer.  Each Initial Purchaser severally and
not jointly represents and warrants to, and agrees with, the Company that, as of
the date hereof and as of the Closing Date, it is a "qualified institutional
buyer" within the meaning of Rule 144A under the 1933 Act (a "Qualified
Institutional Buyer") and an "accredited investor" within the meaning of Rule
501(a) under the 1933 Act (an "Accredited Investor").

     (d)  Denominations; Registration.  Certificates for the Securities shall
be in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Time.

     SECTION 3.  Covenants of the Company.  The Company covenants with each
Initial Purchaser as follows:

     (a)  Offering Memorandum.  The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Final Offering Memorandum and any amendments and supplements thereto and
documents incorporated by reference therein as such Initial Purchaser may
reasonably request.

     (b)  Notice and Effect of Material Events.  The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as evidenced by a notice
in writing from the Initial Purchasers to the Company, any material changes in
or affecting the earnings, business affairs or business prospects of the Company
and its subsidiaries which (i) make any statement in the Offering Memorandum
false or misleading or (ii) are not disclosed in the Offering Memorandum.  In
such event or if during such time any event shall occur as a result of which it
is necessary, in the reasonable opinion of the Company, its counsel, the Initial
Purchasers or counsel for the Initial Purchasers, to amend or supplement the
Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.

     (c)  Amendment to Offering Memorandum and Supplements.  The Company will
advise each initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers.  Neither the consent of the Initial
Purchasers, nor the Initial Purchasers'

                                      -13-
<PAGE>

delivery of any such amendment or supplement, shall constitute a waiver of any
of the conditions set forth in Section 5 hereof.

     (d)  Qualification of Securities for Offer and Sale.  The Company will
use its best efforts, in cooperation with the Initial Purchasers, to qualify the
Securities for offering and sale by the Initial Purchasers to any Subsequent
Purchasers under the applicable securities laws of such jurisdictions as the
Representatives may reasonably designate and will maintain such qualifications
in effect as long as required for the sale of the Securities; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.

     (e)  DTC.  The Company will cooperate with the Representatives and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.

     (f)  Use of Proceeds.  The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".

     (g)  Restriction on Sale of Securities.  During a period of 180 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of Merrill Lynch, directly or indirectly, issue, sell, offer or
agree to sell, grant any option for the sale of, or otherwise dispose of, any
other debt securities of the Company or securities of the Company that are
convertible into, or exchangeable for, the Securities or such other debt
securities.

     (h)  Press Releases.  From the date hereof to the Closing Time, without
the prior consent of the Initial Purchasers, the Company will not issue directly
or indirectly any press release or other public communication or hold any press
conference with respect to the Company or the business, financial condition,
assets, results of operations or prospects of the Company, unless in the
judgment of the Company and its counsel, and after notification to the Initial
Purchasers, such press release, communication or conference is required by law.

     SECTION 4.  Payment of Expenses.
                 -------------------

     (a)  Expenses.  The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers of this Agreement
and any Agreement among Initial Purchasers, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale and
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Initial Purchasers, including any charges
of DTC in connection therewith, (iv) the fees and disbursements of the Company's

                                      -14-
<PAGE>

counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(e) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Initial Purchasers in connection therewith and in connection with the
preparation of the Blue Sky Survey, any supplement thereto and any Legal
Investment Survey, which amounts shall not exceed $2,500, (vi) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities, (vii) any fees
payable in connection with the rating of the Securities and (viii) any fees
payable to the review by the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322.

     (b)  Termination of Agreement.  If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers.

     SECTION 5.  Conditions of Initial Purchasers' Obligations.  The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:

     (a)  Opinions of Counsel for Company.  At the Closing Time, the
Representatives shall have received the opinions, dated as of the Closing Time,
together with signed or reproduced copies of such letters for each of the other
Initial Purchasers, (i) of Brobeck, Phleger & Harrison LLP, counsel for the
Company, to the effect set forth in Exhibit A-1 hereto, (ii) of Hale and Dorr
LLP, counsel for the Company, to the effect set forth in Exhibit A-2 hereto,
(iii) of Blumenfeld & Cohen, counsel for the Company, to the effect set forth in
Exhibit A-3 hereto, (iv) of Leboeuf, Lamb, Greene & MacRae L.L.P., counsel for
the Company, to the effect set forth on Exhibit A-4 hereto and (v) of Jeffrey
Blumenfeld, General Counsel of the Company, to the effect set forth on Exhibit
A-5 hereto.  In giving the opinion described in clause (i) above such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives.

     (b)  Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Baker & McKenzie, counsel for the Initial Purchasers, together
with signed or reproduced copies of such letter for each of the other Initial
Purchasers, substantially to the effect set forth in Exhibit A-6 hereto. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives.

                                      -15-
<PAGE>

     (c)  Officers' Certificate.  At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, and (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time.

     (d)  Accountant's Comfort Letter.  At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers containing statements and information of
the type ordinarily included in accountants' "comfort letters" to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.

     (e)  Bring-down Comfort Letter.   At the Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d) of this Section, except
that the specified date referred to shall be a date not more than three business
days prior to the Closing Time.

     (f)  PORTAL.  At the Closing Time, the Securities shall have been
designated for trading on PORTAL.

     (g)  Registration Rights Agreements.  The Issuer and the Initial
Purchasers shall have entered into a registration rights agreement (the
"Registration Rights Agreement"), dated as of the Closing Time, substantially in
form and substance as described in the Offering Memorandum under the heading
"Description of the Notes--Exchange Offer; Registration Rights."

     (h)  Additional Documents.  At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such other documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers.

                                      -16-
<PAGE>

     (i)  Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7 and 8 shall survive any such termination and remain in
full force and effect.

     SECTION 6.  Subsequent Offers and Resales of the Securities.

     (a)  Offer and Sale Procedures.  Each of the Initial Purchasers and the
Company hereby acknowledge and agree to observe the following procedures in
connection with the offer and sale of the Securities:

          (i)    Offers and Sales only to Qualified Institutional Buyers
     Offers and sales of the Securities will be made only by the Initial
     Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
     which such offers or sales are made.  Each such offer or sale shall only be
     made to persons whom the offeror or seller reasonably believes to be
     qualified institutional buyers (as defined in Rule 144A under the
     Securities Act).

          (ii)   No General Solicitation.  The Securities will be offered by
     approaching prospective Subsequent Purchasers on an individual basis.  No
     general solicitation or general advertising (within the meaning of Rule
     502(c) under the 1933 Act) will be used in the United States in connection
     with the offering of the Securities.

          (iii)  Purchases by Non-Bank Fiduciaries.  In the case of a non-bank
     Subsequent Purchaser of a Security acting as a fiduciary for one or more
     third parties, in connection with an offer and sale to such purchaser
     pursuant to clause (a) above, each third party shall, in the judgment of
     the applicable Initial Purchaser, be an Institutional Accredited Investor
     or a Qualified Institutional Buyer or a non-U.S. person outside the United
     States.

          (iv)   Subsequent Purchaser Notification.  Each Initial Purchaser
     will take reasonable steps to inform, and cause each of its U.S. Affiliates
     to take reasonable steps to inform, persons acquiring Securities from such
     Initial Purchaser or Affiliate, as the case may be, in the United States
     that the Securities (A) have not been and will not be registered under the
     1933 Act and have not been registered under any state securities laws, (B)
     are being sold to them without registration under the 1933 Act in reliance
     on Rule 144A or in accordance with another exemption from registration
     under the 1933 Act, as the case may be, and (C) may not be offered, sold or
     otherwise transferred except (1) to the Company, (2) outside the United
     States in accordance with Rule 904 of Regulation S, or (3) inside the
     United States in accordance with (x) Rule 144A to a person whom the seller
     reasonably believes is a Qualified Institutional Buyer that is purchasing
     such Securities for its own account or for the account of a Qualified
     Institutional Buyer to whom notice is given that the offer, sale or
     transfer is being made

                                      -17-
<PAGE>

     in reliance on Rule 144A or (y) the exemption from registration under the
     1933 Act provided by Rule 144, if available.

          (v)    Restrictions on Transfer.  The transfer restrictions and the
     other provisions set forth in Section 3.17 of the Indenture, including the
     legends required thereby, shall apply to the Securities except as otherwise
     agreed by the Company and the Initial Purchasers.  The Company shall refuse
     to register any transfer of securities not made in accordance with
     Regulation S under the Securities Act, pursuant to registration under the
     Securities Act, or pursuant to an available exemption from such
     registration.  Following the sale of the Securities by the Initial
     Purchasers to Subsequent Purchasers pursuant to the terms hereof, the
     Initial Purchasers shall not be liable or responsible to the Company for
     any losses, damages or liabilities suffered or incurred by the Company,
     including any losses, damages or liabilities under the 1933 Act, arising
     from or relating to any resale or transfer by any Subsequent Purchaser of
     any Security; provided, that nothing contained in this sentence shall limit
     the Initial Purchasers' rights and obligations under Section 7 hereof.

          (vi)   Delivery of Offering Memorandum.  Each Initial Purchaser will
     deliver to each purchaser of the Securities from such Initial Purchaser, in
     connection with its original distribution of the Securities, a copy of the
     Offering Memorandum, as amended and supplemented at the date of such
     delivery.

          (vii)  Hedging Transactions.  The Initial Purchasers will not engage
     in hedging transactions with respect to the Securities prior to the
     expiration of the applicable distribution compliance period specified in
     Rule 903 of Regulation S under the Securities Act, unless in compliance
     with the Securities Act.

     (b)  Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:

          (i)   Due Diligence.  In connection with the original distribution of
     the Securities, the Company agrees that, prior to any offer or resale of
     the Securities by the Initial Purchasers, the Initial Purchasers and
     counsel for the Initial Purchasers shall have the right to make reasonable
     inquiries into the business of the Company and its subsidiaries.  The
     Company also agrees to provide answers to each prospective Subsequent
     Purchaser of Securities who so requests concerning the Company and its
     subsidiaries (to the extent that such information is available or can be
     acquired and made available to prospective Subsequent Purchasers without
     unreasonable effort or expense and to the extent the provision thereof is
     not prohibited by applicable law) and the terms and conditions of the
     offering of the Securities, as provided in the Offering Memorandum.

          (ii)  Integration.  The Company agrees that it will not and will
     cause its Affiliates not to make any offer or sale of securities of the
     Company of any class if, as a result of the doctrine of "integration"
     referred to in Rule 502 under the 1933 Act, such

                                      -18-
<PAGE>

     offer or sale would render invalid (for the purpose of (i) the sale of the
     Securities by the Company to the Initial Purchasers, (ii) the resale of the
     Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
     resale of the Securities by such Subsequent Purchasers to others, in each
     case in accordance with the terms and conditions herein set forth) the
     exemption from the registration requirements of the 1933 Act provided by
     Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
     otherwise.

          (iii)  Rule 144A Information.  The Company agrees that, in order to
     render the Securities eligible for resale pursuant to Rule 144A under the
     1933 Act, while any of the Securities remain outstanding, it will make
     available, upon request, to any holder of Securities or prospective
     purchasers of Securities the information specified in Rule 144A(d)(4),
     unless the Company furnishes information to the Commission pursuant to
     Section 13 or 15(d) of the 1934 Act (such information, whether made
     available to holders or prospective purchasers or furnished to the
     Commission, is herein referred to as "Additional Information").

          (iv)   Restriction on Repurchases.  Until the expiration of three
     years after the original issuance of the Securities, the Company will not,
     and will cause its Affiliates not to, purchase or agree to purchase or
     otherwise acquire any Securities which are "restricted securities" (as such
     term is defined under Rule 144(a)(3) under the 1933 Act), whether as
     beneficial owner or otherwise (except as agent acting as a securities
     broker on behalf of and for the account of customers in the ordinary course
     of business in unsolicited broker's transactions) unless, immediately upon
     any such purchase, the Company or  any Affiliate shall submit such
     Securities to the Trustee for cancellation.

     (c)  Resale Pursuant to Rule 144A.  Each Initial Purchaser represents and
agrees, that, except as permitted by Section 6(a) above, it has offered and sold
Securities and will offer and sell Securities as part of their distribution at
any time, only in accordance with Rule 144A under the 1933 Act.  Each Initial
Purchaser severally represents and agrees that it has not entered and will not
enter into any contractual arrangements with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company.

     SECTION 7.  Indemnification.

     (a)  Indemnification of Initial Purchasers.  The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:

          (i)  against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, arising out of any untrue statement or alleged
     untrue statement of a material fact contained in the Final Offering
     Memorandum (or any amendment or supplement thereto), or the omission or
     alleged omission therefrom of a material fact necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading;

                                      -19-
<PAGE>

          (ii)   against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, to the extent of the aggregate amount paid in
     settlement of any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission; provided that (subject to Section
     7(d) below) any such settlement is effected with the written consent of the
     Company; and

          (iii)  against any and all expense whatsoever, as incurred (including
     the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
     incurred in investigating, preparing or defending against any litigation,
     or any investigation or proceeding by any governmental agency or body,
     commenced or threatened, or any claim whatsoever based upon any such untrue
     statement or omission, or any such alleged untrue statement or omission, to
     the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through the Representative expressly for use in the Offering
Memorandum (or any amendment thereto), which information is described in Section
1(a)(ii) hereof.

     (b)  Indemnification of Company, Directors and Officers.  Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who would be required to sign the Offering
Memorandum if it were a registration statement on Form S-1, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Offering Memorandum in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through the Representatives expressly for use
in the Offering Memorandum.

     (c)  Actions against Parties; Notification.  Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement.  In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company.  An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of

                                      -20-
<PAGE>

the indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 or Section 8 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

     (d)  Settlement without Consent if Failure to Reimburse.  If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

     SECTION 8.  Contribution.  If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

     The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.

                                      -21-
<PAGE>

     The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

     The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8.  The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed pursuant
to this Agreement were offered to the Subsequent Purchasers exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.

     No person guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

     For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, each officer of the Company who
would be required to sign the Offering Memorandum if it were a registration
statement on Form S-1, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Initial Purchasers'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.

     SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchasers.

                                      -22-
<PAGE>

     SECTION 10.  Termination of Agreement.

     (a)  Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.

     (b)  Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7
and 8 shall survive such termination and remain in full force and effect.

     SECTION 11. Default by One or More of the Initial Purchasers. If one or
more of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements, for one or more of
the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser.

     No action pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.

     In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Offering Memorandum or in any other documents
or arrangement.

                                      -23-
<PAGE>

     SECTION 12.  Notices.  All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication.  Notices to the Initial
Purchasers shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-11201, attention of  Marcey Becker,
with a courtesy copy to Malcolm I. Ross, Baker & McKenzie, 805 Third Avenue, New
York, New York 10022; notices to the Company shall be directed to it at 6933
South Revere Parkway, Englewood, Colorado 80112, attention of Scott Chandler,
with a courtesy copy to Richard R. Plumridge, Brobeck Phleger & Harrison LLP,
370 Interlocken Boulevard, Suite 500, Denver, Colorado 80021.

     SECTION 13.  Parties.  This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers and the Company and their respective
successors.  Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained.  This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation.  No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor by reason merely of
such purchase.

     SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.

     SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.

                           [signature page follows]

                                      -24-
<PAGE>

     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchasers and the Company in accordance with its terms.

                                    Very truly yours,

                                    RHYTHMS NETCONNECTIONS, INC.

                                    By:
                                       ---------------------------------
                                        Scott Chandler
                                        Chief Financial Officer

CONFIRMED AND ACCEPTED,
 as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
          INCORPORATED

By
  --------------------------------
        Authorized Signatory

For themselves and as Representatives of the other Initial Purchasers named in
Schedule A hereto.

                                      -25-
<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
                   Name of Initial Purchaser                       Principal Amount
                   -------------------------                     --------------------
<S>                                                              <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............          $105,000,000
Salomon Smith Barney Inc.......................................           105,000,000
Chase Securities Inc...........................................            52,500,000
Credit Suisse First Boston Corporation.........................            37,500,000
Total..........................................................          $300,000,000
                                                                 ====================
</TABLE>

                                      -26-
<PAGE>

                                  SCHEDULE B

                         RHYTHMS NETCONNECTIONS, INC.
                           14% Senior Notes due 2010

     1.  The initial public offering price of the Securities shall be 100.0% of
the principal amount of the Notes.

     2.  The purchase price to be paid by the Initial Purchasers for the
Securities shall be 97.25% of the principal amount of the Notes.

     3.  The interest rate on the Notes shall be 14% per annum commencing
February 23, 2000.

     4.  The further terms and conditions of the Securities are as set forth in
the Offering Memorandum.

                                      -27-
<PAGE>

                                                                     Exhibit A-1

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                SECTION 5(a)(i)
                   [Form of Brobeck Phleger opinion follows]

                                      A-1
<PAGE>

                                                                     Exhibit A-2

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(ii)
                    [Form of Hale and Dorr opinion follows]

                                      A-2
<PAGE>

                                                                     Exhibit A-3

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(iii)
                 [Form of Blumenfeld & Cohen opinion follows]

                                      A-3
<PAGE>

                                                                     Exhibit A-4

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(iv)
                    [Form of LeBoeuf Lamb opinion follows]

                                      A-4
<PAGE>

                                                                     Exhibit A-5

                FORM OF OPINION OF THE COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                SECTION 5(a)(v)
                   [Form of General Counsel opinion follows]

                                      A-5
<PAGE>

                                                                     Exhibit A-6

             FORM OF OPINION OF INITIAL PURCHASERS' LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                 SECTION 5(b)
                  [Form of Baker & McKenzie opinion follows]

                                      A-6<PAGE>

                                                                   Exhibit 10.36

                          RHYTHMS NETCONNECTIONS INC.
                           (a Delaware corporation)

                               2,500,000 Shares

                 6 3/4% Cumulative Convertible Preferred Stock

                              PURCHASE AGREEMENT

Dated: February 28, 2000

<PAGE>

                               2,500,000 Shares

                          RHYTHMS NETCONNECTIONS INC.
                           (a Delaware corporation)

                 6 3/4% Cumulative Convertible Preferred Stock

                              PURCHASE AGREEMENT
                              ------------------

                                                               February 28, 2000

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
Salomon Smith Barney Inc.

Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
    Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

    Rhythms NetConnections Inc., a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and Salomon Smith Barney Inc.
(collectively, the "Initial Purchasers", which term shall also include any
initial purchaser substituted as hereinafter provided in Section 11 hereof),
with respect to the issue and sale by the Company and the purchase by the
Initial Purchasers, acting severally and not jointly, of the respective number
of shares of 6 3/4% Cumulative Convertible Preferred Stock (liquidation
preference equal to $100.00 per share) of the Company (the "Preferred Stock")
set forth in said Schedule A, and with respect to the grant by the Company to
the Initial Purchasers, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 500,000
additional shares of Preferred Stock to cover over-allotments, if any.  The
aforesaid 2,500,000 shares of Preferred Stock (the "Firm Shares") to be
purchased by the Initial Purchasers and all or any part of the 500,000 shares of
Preferred Stock subject to the option describe in Section 2(b) hereof (the
"Option Shares") are hereinafter called, collectively, the "Shares."  The Shares
will be issued in book-entry form and will be issued to Cede & Co. as nominee of
The Depository Trust Company ("DTC") pursuant to the Letter of Representations,
to be dated as of the Closing Time (as defined herein) (the "DTC Agreement"),
among the Company and DTC.

    The holders of the Shares (including the Initial Purchasers and Subsequent
Purchasers (as defined)) will be entitled to the benefits of a registration
rights agreement, to be dated as of

<PAGE>

March 3, 2000 (the "Registration Rights Agreement"), between the Company and the
Initial Purchasers. Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission under the
circumstances set forth therein a shelf registration statement pursuant to Rule
415 under the Securities Act of 1933, as amended (the "1933 Act") relating to
the resale of the Shares and, upon conversion of the Shares, the Common Stock,
and to use its commercially reasonable best efforts to cause such shelf
registration statement to be declared effective.

    This Agreement, the Registration Rights Agreement and the Company's
Certificate of Designations, Preferences and Relative, Participating, Optional
and Other Special Rights of Preferred Stock are hereinafter referred to
collectively as the "Operative Documents."

    The Company understands that the Initial Purchasers propose to make an
offering of the Shares on the terms and in the manner set forth herein and in
the Offering Memorandum (as defined) and agrees that the Initial Purchasers may
resell, subject to the conditions set forth herein, all or a portion of the
Shares to purchasers ("Subsequent Purchasers") at any time after the date of
this Agreement.  The Shares are to be offered and sold through the Initial
Purchasers without being registered under the 1933 Act in reliance upon the
exemption afforded by Rule 144A ("Rule 144A") of the rules and regulations of
the Securities and Exchange Commission (the "Commission") under the 1933 Act
(the "1933 Act Regulations").  Pursuant to the terms of the Shares, investors
that acquire Shares may only resell or otherwise transfer such Shares if such
Shares are hereafter registered under the 1933 Act or if an exemption from the
registration requirements of the 1933 Act is available (including the exemption
afforded by Rule 144A).

    The Company has prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated February 25, 2000 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to each Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated February 28, 2000 (the "Final Offering Memorandum"),
each for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Shares.  "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Shares.

    SECTION 1.  Representations and Warranties.

    (a)  Representations and Warranties by the Company . The Company represents
and warrants to each Initial Purchaser as of the date hereof, and will represent
as of the Closing Time referred to in Section 2(c) hereof and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, by means of the
certificate described in Section 5(c) or 5(i)(i) hereof, and agrees with each
Initial Purchaser as follows:

         (i)  Similar Offerings. The Company has not, directly or indirectly,
    solicited any offer to buy or offered to sell, and will not, directly or
    indirectly, solicit any offer to buy or offer to sell, in the United States
    or to any United States citizen or resident, any

                                       2
<PAGE>

    security which is or would be integrated with the sale of the Shares in a
    manner that would require the Shares to be registered under the 1933 Act.

         (ii)  Offering Memorandum. The Offering Memorandum does not, and at the
    Closing Time will not, include an untrue statement of a material fact or
    omit to state a material fact necessary in order to make the statements
    therein, in the light of the circumstances under which they were made, not
    misleading; provided that this representation, warranty and agreement shall
    not apply to such statements in or omissions from the Offering Memorandum
    made in reliance upon and in conformity with information furnished to the
    Company in writing by any Initial Purchaser expressly for use in the
    Offering Memorandum. It is understood that the statements set forth in the
    Offering Memorandum under the heading "Plan of Distribution" and the
    identity of counsel to the Initial Purchasers under the heading "Legal
    Matters" constitute the only information furnished in writing by or on
    behalf of the Initial Purchasers expressly for use in the Offering
    Memorandum.

         (iii) Independent Accountants. The accountants who certified the
    financial statements included in the Offering Memorandum are independent
    certified public accountants with respect to the Company and its
    subsidiaries within the meaning of Regulation S-X under the 1933 Act.

         (iv)  Financial Statements. The financial statements, together with the
    related schedules and notes, included in the Offering Memorandum present
    fairly the consolidated financial position of the Company and its
    subsidiaries at the dates indicated and the statement of operations,
    stockholders' equity and cash flows of the Company and its consolidated
    subsidiaries for the periods specified; said financial statements have been
    prepared in conformity with generally accepted accounting principles
    ("GAAP") applied on a consistent basis throughout the periods involved. The
    selected financial data included in the Offering Memorandum present fairly
    the information shown therein and have been compiled on a basis consistent
    with that of the audited financial statements included in the Offering
    Memorandum. The pro forma and pro forma as adjusted columns of the selected
    financial data included in the Offering Memorandum and the related notes
    thereto present fairly the information shown therein, have been prepared in
    accordance with the Commission's rules and guidelines with respect to pro
    forma financial information and have been properly compiled on the bases
    described therein, and the assumptions used in the preparation thereof are
    reasonable and the adjustments used therein are appropriate to give effect
    to the transactions and circumstances referred to therein.

         (v)   No Material Adverse Change in Business. Since the respective
    dates as of which information is given in the Offering Memorandum, except as
    otherwise stated therein, (A) there has been no material adverse change in
    the condition, financial or otherwise, or in the earnings, business affairs
    or business prospects of the Company and its subsidiaries considered as one
    enterprise (a "Material Adverse Effect"), whether or not arising in the
    ordinary course of business, (B) there have been no transactions entered
    into by the Company or any of its subsidiaries, other than those in the
    ordinary course of business, which are material with respect to the Company
    and its subsidiaries considered

                                       3
<PAGE>

    as one enterprise, and (C) there has been no dividend or distribution of any
    kind declared, paid or made by the Company on any class of its capital
    stock.

         (vi)   Good Standing of the Company. The Company has been duly
    organized and is validly existing as a corporation in good standing under
    the laws of the State of Delaware and has corporate power and authority to
    own, lease and operate its properties and to conduct its business as
    described in the Offering Memorandum and to enter into and perform its
    obligations under this Agreement; and the Company is duly qualified as a
    foreign corporation to transact business and is in good standing in each
    other jurisdiction in which such qualification is required, whether by
    reason of the ownership or leasing of property or the conduct of business,
    except where the failure so to qualify or to be in good standing would not
    result in a Material Adverse Effect.

         (vii)  Good Standing of Subsidiaries. Each of the Designated
    Subsidiaries has been duly organized and is validly existing as a
    corporation or a public benefit corporation, as the case may be, in good
    standing under the laws of the jurisdiction of its incorporation, has
    corporate power and authority to own, lease and operate its properties and
    to conduct its business as described in the Offering Memorandum and is duly
    qualified as a foreign corporation to transact business and is in good
    standing, in each jurisdiction in which such qualification is required,
    whether by reason of the ownership or leasing of property or the conduct of
    business, except where the failure so to qualify or to be in good standing
    would not result in a Material Adverse Effect; except as otherwise disclosed
    in the Offering Memorandum, all of the issued and outstanding capital stock
    of each Designated Subsidiary has been duly authorized and validly issued,
    is fully paid and non-assessable and is directly or indirectly owned by the
    Company, free and clear of any security interest, mortgage, pledge, lien,
    encumbrance, claim or equity; none of the outstanding shares of capital
    stock of any Designated Subsidiary was issued in violation of any preemptive
    or similar rights arising by operation of law, or under the charter or by-
    laws of such Designated Subsidiary or under any agreement to which the
    Company or such Designated Subsidiary is a party. The Company has no
    subsidiaries other than Rhythms Links Inc., Rhythms Links Inc.--Virginia,
    Rhythms Canada and Rhythms Europe (collectively, the "Designated
    Subsidiaries").

         (viii)  Capitalization. The authorized, issued and outstanding capital
    stock of the Company is as set forth in the Offering Memorandum in the
    column entitled "Pro Forma" under the caption "Capitalization" (except for
    subsequent issuances, if any, pursuant to this Agreement, pursuant to
    employee benefit or stock option plans referred to in the Offering
    Memorandum or pursuant to the exercise of convertible securities or options
    referred to in the Offering Memorandum).

         (ix)   Authorization of Agreement. This Agreement has been duly
    authorized, executed and delivered by the Company.

         (x)    Authorization and Description of Shares. The Shares to be
    purchased by the Initial Purchasers from the Company have been duly and
    validly authorized for issuance and sale to the Initial Purchasers pursuant
    to this Agreement, and, when issued and delivered by the Company pursuant to
    this Agreement, against payment of the consideration set forth herein, will
    be validly issued, fully paid and non-assessable; the

                                       4
<PAGE>

    shares of Common Stock issuable upon conversion of the Shares have been duly
    and validly authorized and reserved for issuance and, when issued and
    delivered in accordance with the provisions of the Shares, will be duly and
    validly issued, fully paid and non-assessable; the Shares and Common Stock
    conform in all material respects to all statements relating thereto
    contained in the Offering Memorandum and such descriptions conform to the
    rights set forth in the instruments defining the same; no holder of the
    Shares will be subject to personal liability by reason of being such a
    holder; and the issuances of the Shares and the Common Stock issuable upon
    conversion of the Shares are not subject to the preemptive or other similar
    rights of any securityholder of the Company.

         (xi)   Authorization of the Registration Rights Agreement. The
    Registration Rights Agreement has been duly authorized by the Company and,
    at the Closing Time, will have been duly executed and delivered by the
    Company and will constitute the valid and binding agreement of the Company,
    enforceable against the Company in accordance with its terms, except as the
    enforcement thereof may be limited by bankruptcy, insolvency (including,
    without limitation, all laws relating to fraudulent transfers),
    reorganization, moratorium or other similar laws relating to or affecting
    enforcement of creditors' rights generally, or by general principles of
    equity (regardless of whether enforcement is considered in a proceeding in
    equity or at law). The Registration Rights Agreement will conform in all
    material respects to the statements relating thereto contained in the
    Offering Memorandum and will be in substantially the respective form
    previously delivered to the Initial Purchasers.

         (xii)  Absence of Defaults and Conflicts. Neither the Company nor any
    of its subsidiaries is in violation of its charter or by-laws or in default
    in the performance or observance of any obligation, agreement, covenant or
    condition contained in any contract, indenture, mortgage, deed of trust,
    loan or credit agreement, note, lease or other agreement or instrument to
    which the Company or any of its subsidiaries is a party or by which any of
    them may be bound, or to which any of the property or assets of the Company
    or any of its subsidiaries is subject (collectively, "Agreements and
    Instruments"), except for such defaults that would not result in a Material
    Adverse Effect, and the execution, delivery and performance of this
    Agreement, the Registration Rights Agreement and any other agreement or
    instrument entered into or issued or to be entered into or issued by the
    Company in connection with the transactions contemplated hereby or thereby
    or in the Offering Memorandum and the consummation of the transactions
    contemplated herein and in the Offering Memorandum (including the issuance
    and sale of the Shares and the use of the proceeds from the sale of the
    Shares as described in the Offering Memorandum under the caption "Use of
    Proceeds") and compliance by the Company with its obligations hereunder have
    been duly authorized by all necessary corporate action and do not and will
    not, whether with or without the giving of notice or passage of time or
    both, conflict with or constitute a breach of, default or a Repayment Event
    (as defined below) under, or result in the creation or imposition of any
    lien, charge or encumbrance upon any property or assets of the Company or
    any of its subsidiaries pursuant to, the Agreements and Instruments, except
    for such conflicts, breaches or defaults or liens, charges or encumbrances
    that, singly or in the aggregate, would not result in a Material Adverse
    Effect, nor will such action result in any violation of the

                                       5
<PAGE>

    provisions of the charter or by-laws of the Company or any of its
    subsidiaries or any applicable law, statute, rule, regulation, judgment,
    order, writ or decree of any government, government instrumentality or
    court, domestic or foreign, having jurisdiction over the Company or any of
    its subsidiaries or any of their assets or properties. As used herein, a
    "Repayment Event" means any event or condition which gives the holder of any
    note, debenture, other evidence of indebtedness or preferred stock (or any
    person acting on such holder's behalf) the right to require the repurchase,
    redemption or repayment of all or a portion of such indebtedness or
    preferred stock by the Company or any of its subsidiaries.

         (xiii) Absence of Labor Dispute. No labor dispute with the employees of
    the Company or any of its subsidiaries exists or, to the knowledge of the
    Company, is imminent, and the Company is not aware of any existing or
    imminent labor disturbance by the employees of any of its or any of its
    subsidiaries' principal suppliers, manufacturers, customers or contractors,
    which, in either case, may reasonably be expected to result in a Material
    Adverse Effect.

         (xiv)  Absence of Proceedings. Except as disclosed in the Offering
    Memorandum, there is no action, suit, proceeding, inquiry or investigation
    before or by any court or governmental agency or body, domestic or foreign,
    now pending, or, to the knowledge of the Company, threatened, against or
    affecting the Company or any subsidiary thereof which might reasonably be
    expected to result in a Material Adverse Effect, or which might reasonably
    be expected to materially and adversely affect the properties or assets of
    the Company or any of its subsidiaries or the consummation of this Agreement
    or the performance by the Company of its obligations hereunder. The
    aggregate of all pending legal or governmental proceedings to which the
    Company or any subsidiary thereof is a party or of which any of their
    respective property or assets is the subject which are not described in the
    Offering Memorandum, including ordinary routine litigation incidental to the
    business, could not reasonably be expected to result in a Material Adverse
    Effect.

         (xv)   Possession of Intellectual Property. Except as disclosed in the
    Offering Memorandum, (A) the Company and its subsidiaries own or possess, or
    can acquire on reasonable terms, adequate patents, patent rights, licenses,
    inventions, copyrights, know-how (including trade secrets and other
    unpatented and/or unpatentable proprietary or confidential information,
    systems or procedures), trademarks, service marks, trade names or other
    intellectual property (collectively, "Intellectual Property") necessary to
    carry on the business now operated by them, except that the Company and its
    subsidiaries may fail to so own, possess or have the ability to acquire on
    reasonable terms any Intellectual Property if such failure would not result,
    singly or in the aggregate, in a Material Adverse Effect, and (B) neither
    the Company nor any of its subsidiaries has received any notice or is
    otherwise aware of any infringement of or conflict with asserted rights of
    others with respect to any Intellectual Property or of any facts or
    circumstances which would render any Intellectual Property invalid or
    inadequate to protect the interest of the Company or any of its subsidiaries
    therein, and which infringement or conflict (if the subject of any
    unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
    or in the aggregate, would result in a Material Adverse Effect.

                                       6
<PAGE>

         (xvi)  Absence of Further Requirements. No filing with, or
    authorization, approval, consent, license, order, registration,
    qualification or decree of, any court or governmental authority or agency is
    necessary or required for the performance by the Company of its obligations
    hereunder, in connection with the offering, issuance or sale of the Shares
    hereunder or the consummation of the transactions contemplated by this
    Agreement, except as may be required under the 1933 Act or state securities
    or "blue sky" laws in connection with the registration statement to be filed
    in accordance with the terms of the Registration Rights Agreement.

         (xvii) Possession of Licenses and Permits. Except as disclosed in the
    Offering Memorandum, the Company and its subsidiaries possess such permits,
    licenses, approvals, consents and other authorizations issued by the
    appropriate federal, state, local or foreign regulatory agencies or bodies
    necessary to conduct the business now operated by them (collectively,
    "Governmental Licenses"); the Company and its subsidiaries are in compliance
    with the terms and conditions of all such Governmental Licenses, except
    where the failure so to comply would not, singly or in the aggregate, have a
    Material Adverse Effect; all of the Governmental Licenses are valid and in
    full force and effect, except where the invalidity of such Governmental
    Licenses or the failure of such Governmental Licenses to be in full force
    and effect would not have a Material Adverse Effect; and neither the Company
    nor any of its subsidiaries has received any notice of proceedings relating
    to the revocation or modification of any such Governmental Licenses which,
    singly or in the aggregate, if the subject of an unfavorable decision,
    ruling or finding, would result in a Material Adverse Effect. The Company
    has not been informed of any fact, event or circumstance that is reasonably
    likely to impair the Company's (or its subsidiaries') ability to obtain any
    Governmental Licenses necessary or advisable in order to effectuate the
    Company's future plans and strategies described in the Offering Memorandum
    and no event exists that permits, or after notice or lapse of time or both,
    would permit, revocation or termination of any Governmental License or
    result in any impairment of rights of the Company or any of its subsidiaries
    under any such Governmental Licenses. Without limiting the generality of
    this paragraph (xvii):

                (A)  the Company and each of its subsidiaries hold all
         telecommunications regulatory licenses, permits, authorizations,
         consents and approvals (the "Telecommunications Licenses") required
         from the Federal Communications Commission (the "FCC") for the Company
         and its subsidiaries to conduct their business on and as of the date
         hereof in the manner described in the Offering Memorandum, except as
         would not have, individually or in the aggregate, a Material Adverse
         Effect; the Telecommunications Licenses have been duly and validly
         issued and are in full force and effect, except where the failure to be
         in full force and effect would not have, individually or in the
         aggregate, a Material Adverse Effect; no proceedings to revoke or
         restrict the Telecommunications Licenses are pending or, to the best of
         the Company's knowledge, threatened; neither the Company nor its
         subsidiaries are in violation of any of the terms and conditions of any
         of the Telecommunications Licenses, are in violation of the
         Communications Act of 1934, as amended (the "Communications Act"), or
         are in violation of any FCC rules and regulations, or state regulatory
         laws, rules or regulations, except as would not have, individually

                                       7
<PAGE>

         or in the aggregate, a Material Adverse Effect; and the Company and its
         subsidiaries have in effect with the FCC all international and domestic
         service tariffs necessary to conduct their business on and as of the
         date hereof in the manner described in the Offering Memorandum except
         as would not have, individually or in the aggregate, a Material Adverse
         Effect;

                (B)  the Company and its subsidiaries have obtained all state
         and municipal Telecommunications Licenses and filed all tariffs
         required for the provision of telecommunications services in any state
         to conduct their business on and as of the date hereof in the manner
         described in the Offering Memorandum, except where the failure to do so
         would not have, individually or in the aggregate, a Material Adverse
         Effect;

                (C)  there is no outstanding adverse judgment, injunction,
         decree or order that has been issued by the FCC or any state utility
         commission or similar state agency ("PUC") or municipality against the
         Company or its subsidiaries or any action, proceeding or investigation
         pending before the FCC or any state PUC or municipality, or, to the
         Company's knowledge, threatened by the FCC or any state PUC or
         municipality against the Company or its subsidiaries which, if the
         subject of any unfavorable decision, ruling or finding, would have a
         Material Adverse Effect on the Company or its subsidiaries;

                (D)  no license, permit, consent, approval, order or
         authorization of, or filing with, the FCC or with any state PUC or
         municipal authority on the part of the Company or its subsidiaries is
         required in connection with the issuance or sale of the Shares;

                (E)  neither the issuance and sale of the Shares nor the
         performance by the Company or its subsidiaries of their obligations
         under this Agreement or the Registration Rights Agreements will result
         in a violation in any material respect of: (1) the Communications Act
         or the applicable rules or regulations, or any order, writ, judgment,
         injunction, decree or award of the FCC binding on the Company or its
         subsidiaries; (2) any state telecommunications laws or any applicable
         state PUC rules or regulations, or any order, writ, judgment,
         injunction, decree or award of any state PUC binding on the Company or
         its subsidiaries; (3) any municipal rules or regulations applicable to
         the Company or its subsidiaries; or (4) the Governmental Licenses; and

                (F)  the Governmental Licenses do not have an expiration date or
         are renewable by their terms or in the ordinary course of business
         without the need to comply with any qualification procedures not
         generally applicable to the renewal of Governmental Licenses or to pay
         any amounts other than routine filing fees.

         (xviii) Title to Property. The Company and its subsidiaries have good
    and marketable title to all real property owned by the Company and its
    subsidiaries and good title to all other properties owned by them, in each
    case, free and clear of all mortgages, pledges, liens, security interests,
    claims, restrictions or encumbrances of any kind except

                                       8
<PAGE>

    such as (a) are described in the Offering Memorandum or (b) do not, singly
    or in the aggregate, materially affect the value of such property and do not
    interfere with the use made and proposed to be made of such property by the
    Company or any of its subsidiaries; and all of the leases and subleases
    material to the business of the Company and its subsidiaries, considered as
    one enterprise, and under which the Company or any of its subsidiaries holds
    properties described in the Offering Memorandum, are in full force and
    effect, and neither the Company nor any of its subsidiaries has any notice
    of any material claim of any sort that has been asserted by anyone adverse
    to the rights of the Company or any of its subsidiaries under any of the
    leases or subleases mentioned above, or affecting or questioning the rights
    of the Company or any subsidiary thereof to the continued possession of the
    leased or subleased premises under any such lease or sublease.

         (xix)  Tax Returns. The Company and its subsidiaries have filed all
    federal, state, local and foreign tax returns that are required to be filed
    or have duly requested extensions thereof and have paid all taxes required
    to be paid by any of them and any related assessments, fines or penalties,
    except for any such tax, assessment, fine or penalty that is being contested
    in good faith and by appropriate proceedings, and adequate charges, accruals
    and reserves have been provided for in the financial statements referred to
    in Section l(a)(iv) above in respect of all federal, state, local and
    foreign taxes for all periods as to which the tax liability of the Company
    or any of its subsidiaries has not been finally determined or remains open
    to examination by applicable taxing authorities, except for such failures to
    file, request extensions, make payments and provide for adequate charges,
    accruals and reserves as would not, singly or in the aggregate, result in a
    Material Adverse Effect.

         (xx)   Environmental Laws. Except as described in the Offering
    Memorandum and except such matters as would not, singly or in the aggregate,
    result in a Material Adverse Effect, (A) neither the Company nor any of its
    subsidiaries is in violation of any federal, state, local or foreign
    statute, law, rule, regulation, ordinance, code, policy or rule of common
    law or any judicial or administrative interpretation thereof, including any
    judicial or administrative order, consent, decree or judgment, relating to
    pollution or protection of human health, the environment (including, without
    limitation, ambient air, surface water, groundwater, land surface or
    subsurface strata) or wildlife, including, without limitation, laws and
    regulations relating to the release or threatened release of chemicals,
    pollutants, contaminants, wastes, toxic substances, hazardous substances,
    petroleum or petroleum products (collectively, "Hazardous Materials") or to
    the manufacture, processing, distribution, use, treatment, storage,
    disposal, transport or handling of Hazardous Materials (collectively,
    "Environmental Laws"), (B) the Company and its subsidiaries have all
    permits, authorizations and approvals required under any applicable
    Environmental Laws and are each in compliance with their requirements, (C)
    there are no pending or threatened administrative, regulatory or judicial
    actions, suits, demands, demand letters, claims, liens, notices of
    noncompliance or violation, investigation or proceedings relating to any
    Environmental Law against the Company or any of its subsidiaries and (D)
    there are no events or circumstances that might reasonably be expected to
    form the basis of an order for clean-up or remediation, or an action, suit
    or proceeding by any private party or governmental body or agency, against
    or affecting the

                                       9
<PAGE>

    Company or any of its subsidiaries relating to Hazardous Materials or
    Environmental Laws.

         (xxi)   Investment Company Act. The Company is not, and upon the
    issuance and sale of the Shares as herein contemplated and the application
    of the net proceeds therefrom as described in the Offering Memorandum will
    not be, an "investment company" or an entity "controlled" by an "investment
    company" as such terms are defined in the Investment Company Act of 1940, as
    amended (the "1940 Act").

         (xxii)  Rule 144A Eligibility. The Shares are eligible for resale
    pursuant to Rule 144A and will not be, at the Closing Time, of the same
    class as securities listed on a national securities exchange registered
    under Section 6 of the Securities Exchange Act of 1934, as amended (the
    "1934 Act"), or quoted in a U.S. automated interdealer quotation system.

         (xxiii) No General Solicitation. None of the Company, its affiliates,
    as such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"), or
    any person acting on its or any of their behalf (other than the Initial
    Purchasers, as to whom the Company makes no representation) has engaged or
    will engage, in connection with the offering of the Shares, in any form of
    general solicitation or general advertising within the meaning of Rule
    502(c) under the 1933 Act.

         (xxiv)  No Registration Required. Subject to compliance by the Initial
    Purchasers with the representations and warranties set forth in Section 2
    and the procedures set forth in Section 6 hereof, it is not necessary in
    connection with the offer, sale and delivery of the Shares to the Initial
    Purchasers and to each Subsequent Purchaser in the manner contemplated by
    this Agreement and the Offering Memorandum to register the Shares under the
    1933 Act.

         (xxv)   Disqualified Stock. The Company's 8.25% Series E Convertible
    Preferred Stock due 2015 ("Series E Preferred Stock") is not "Disqualified
    Stock" within the meaning of the Indentures dated as of May 5, 1998 and
    April 23, 1999 between the Company and State Street Bank and Trust Company
    of California, N.A.

         (xxvi)  Insurance. The Company and each of its subsidiaries maintains
    insurance covering its properties, operations, personnel and business. Such
    insurance insures against such losses and risks as are adequate in
    accordance with customary industry practice to protect the Company, each of
    its subsidiaries and their businesses. Neither the Company or any of its
    subsidiaries has received notice from any insurer or agent of such insurer
    that substantial capital improvement or other expenditures will have to be
    made in order to continue such insurance. All such insurance is outstanding
    and duly in force on the date hereof.

         (xxvii) Internal Accounting Controls. The Company maintains a system of
    internal accounting controls sufficient to provide reasonable assurances
    that (a) transactions are executed in accordance with management's general
    or specific authorization; (b) transactions are recorded as necessary to
    permit preparation of financial

                                       10
<PAGE>

    statements in conformity with generally accepted accounting principles and
    to maintain accountability for assets; (c) access to assets is permitted
    only in accordance with management's general or specific authorization; and
    (d) the recorded accountability for assets is compared with existing assets
    at reasonable intervals and appropriate action is taken with respect to any
    differences.

         (xxviii) Stabilization and Manipulation. None of the Company or any of
    its subsidiaries has (a) taken, directly or indirectly, any action designed
    to, or that might reasonably be expected to, cause or result in
    stabilization or manipulation of the price of any security of the Company to
    facilitate the sale or resale of the Shares or (b) since the date of the
    Offering Memorandum (I) sold, bid for, purchased or paid any person any
    compensation for soliciting purchases of, the Shares or (II) paid or agreed
    to pay to any person any compensation for soliciting another to purchase any
    securities of the Company.

         (xxix)   Related Party Transactions. Except as disclosed in the
    Offering Memorandum, there are no business relationships or related party
    transactions required to be disclosed therein pursuant to Item 404 of
    Regulation S-K of the Commission (assuming for purposes of this paragraph
    (xxix) that Regulation S-K is applicable to the Offering Memorandum).

    (b)  Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.

    SECTION 2.  Sale and Delivery to Initial Purchasers; Closing.

    (a)  Firm Shares. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchasers, and the Initial Purchasers agree to
severally and not jointly purchase from the Company, an aggregate of 2,500,000
Shares at a price of $97.00 per Share. The parties agree that the initial
offering price of the Shares will be $100.00 per Share.

    (b)  Option Shares. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Initial Purchasers, severally
and not jointly, to purchase up to an additional 500,000 Shares, at the price
per Share set forth in Section 2(a) hereof, plus an amount per Share equal to
any accrued and unpaid dividends or distributions from the Closing Time. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the Firm
Shares upon notice by Merrill Lynch to the Company setting forth the number of
Option Shares as to which the Initial Purchasers are then exercising the option
and the time and date of payment and delivery for such Option Shares. Any such
time and date of delivery for the Option Shares (a "Date of Delivery") shall be
determined by the Merrill Lynch, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to the Closing
Time, as hereinafter defined. If the option is

                                       11
<PAGE>

exercised as to all or any portion of the Option Shares, each of the Initial
Purchasers, acting severally and not jointly, on the basis of the
representations and warranties of the Company contained herein and subject to
the terms and conditions herein set forth, will purchase that proportion of the
total number of Option Shares then being purchased which the number of Firm
Shares set forth in Schedule A opposite the name of such Initial Purchasers
bears to the total number of Firm Shares, subject in each case to such
adjustments as Merrill Lynch in its discretion shall make to eliminate any sales
or purchases of fractional shares.

    (c)  Delivery. Deliveries of certificates for the Firm Shares shall be made
at the offices of Baker & McKenzie in The City of New York or such other place
as shall be agreed upon by the Initial Purchasers and the Company and payment of
the purchase price for the Firm Shares shall be made by the Initial Purchasers
to the Company by wire transfer of immediately available funds contemporaneous
with closing, at 9:00 a.m., New York City time, on March 3, 2000 or such other
time not later than ten (10) business days after such date as shall be agreed
upon by the Initial Purchasers and the Company (such time and date of payment
and delivery being referred to herein as the "Closing Time"). In addition, in
the event that any or all of the Option Shares are purchased by the Initial
Purchasers, payment of the purchase price for such Option Shares shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon
by Merrill Lynch and the Company, on each Date of Delivery as specified in the
notice from Merrill Lynch to the Company.

    (d)  Payment. Payment for the Shares purchased by the Initial Purchasers
shall be made to the Company by wire transfer of immediately available funds to
a bank designated by the Company, against delivery to the Initial Purchasers of
certificates for the Shares to be purchased by them. Unless otherwise specified
in writing by the Initial Purchasers prior to the Closing Time or the relevant
Date of Delivery, as the case may be, the Firm Shares and Option Shares, if any,
shall be issued in global form as one or more certificates registered in the
name of Cede & Co. as nominee of DTC pursuant to the DTC Agreement and shall be
made available for examination by the Initial Purchasers in The City of New York
at least one (1) business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.

     (e) Qualified Institutional Buyer.  Each Initial Purchaser severally and
not jointly represents and warrants to, and agrees with, the Company that, as of
the date hereof and as of the Closing Date, it is a "qualified institutional
buyer" within the meaning of Rule 144A under the 1933 Act (a "Qualified
Institutional Buyer") and an "accredited investor" within the meaning of Rule
501(a) under the 1933 Act (an "Accredited Investor").

    SECTION 3.  Covenants of the Company.  The Company covenants with each
Initial Purchaser as follows:

    (a)  Offering Memorandum.  The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.

                                       12
<PAGE>

    (b)  Notice and Effect of Material Events. The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the Shares
with any securities exchange or any other regulatory body in the United States
or any other jurisdiction, and (y) prior to the completion of the placement of
the Shares by the Initial Purchasers as evidenced by a notice in writing from
the Initial Purchasers to the Company, any material changes in or affecting the
earnings, business affairs or business prospects of the Company and its
subsidiaries which (i) make any statement in the Offering Memorandum false or
misleading or (ii) are not disclosed in the Offering Memorandum. In such event
or if during such time any event shall occur as a result of which it is
necessary, in the reasonable opinion of the Company, its counsel, the Initial
Purchasers or counsel for the Initial Purchasers, to amend or supplement the
Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.

    (c)  Amendment to Offering Memorandum and Supplements. The Company will
advise each initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers. Neither the consent of the Initial
Purchasers, nor the Initial Purchasers' delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.

    (d)  Qualification of Shares for Offer and Sale. The Company will use its
best efforts, in cooperation with the Initial Purchasers, to qualify the Shares
for offering and sale by the Initial Purchasers to any Subsequent Purchasers
under the applicable securities laws of such jurisdictions as the Initial
Purchasers may reasonably designate and will maintain such qualifications in
effect as long as required for the sale of the Shares; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.

    (e)  DTC and PORTAL. The Company will cooperate with the Initial Purchasers
and use its reasonable best efforts to (i) permit the Shares to be eligible for
clearance and settlement through the facilities of DTC and (ii) permit the
Shares to be designated as PORTAL Securities in accordance with the ruled and
regulations of the National Association of Securities Dealers, Inc.

                                       13
<PAGE>

    (f)  Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Shares in the manner specified in the Offering Memorandum
under "Use of Proceeds".

    (g)  Restrictions on Sale of Securities. During a period of 90 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any equity securities or equity-linked
securities of the Company or any securities convertible into or exercisable or
exchangeable for any of the foregoing or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of any of the
foregoing, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Shares to
be sold hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Offering Memorandum, (C) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to in the Offering
Memorandum, (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan or (E) any shares of Common
Stock delivered by the Company to a transfer agent to pay cash dividends on the
Shares.

    (h)  Reservation of Common Stock. The Company will reserve and keep
available at all times, free of any preemptive rights, shares of Common Stock
for the purpose of enabling the Company to satisfy any obligations to issue
shares of Common Stock upon conversion of the Shares.

    (i)  Press Releases. From the date hereof to the Closing Time, without the
prior consent of the Initial Purchasers, the Company will not issue directly or
indirectly any press release or other public communication or hold any press
conference with respect to the Company or the business, financial condition,
assets, results of operations or prospects of the Company, unless in the
judgment of the Company and its counsel, and after notification to the Initial
Purchasers, such press release, communication or conference is required by law.

    SECTION 4.  Payment of Expenses.

    (a)  Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and any filing of the Offering Memorandum (including financial statements and
any schedules or exhibits) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers of the Operative
Documents and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Shares, (iii) the preparation,
issuance and delivery of the certificates for the Shares to the Initial
Purchasers, including any charges of DTC in connection therewith, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Shares under securities laws

                                       14
<PAGE>

in accordance with the provisions of Section 3(d) hereof, (vi) any fees payable
in connection with the rating of the Shares and (vii) any fees payable to the
review by the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the initial and continued designation of the Shares as PORTAL
securities under the PORTAL Market Rules pursuant to NASD Rule 5322.

    (b)  Termination of Agreement. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5(k) or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers.

    SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations of
the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:

    (a)  Opinions of Counsel for Company. At the Closing Time, the Initial
Purchasers shall have received the opinions, dated as of the Closing Time, (i)
of Brobeck, Phleger & Harrison LLP, counsel for the Company, to the effect set
forth in Exhibit A-1 hereto, (ii) of Hale and Dorr LLP, counsel for the Company,
to the effect set forth in Exhibit A-2 hereto, (iii) of Blumenfeld & Cohen,
counsel for the Company, to the effect set forth in Exhibit A-3 hereto, (iv) of
Leboeuf, Lamb, Greene & MacRae L.L.P., counsel for the Company, to the effect
set forth on Exhibit A-4 hereto and (v) of Jeffrey Blumenfeld, General Counsel
of the Company, to the effect set forth on Exhibit A-5 hereto. In giving the
opinion described in clause (i) above such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the Initial
Purchasers.

    (b)  Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Baker & McKenzie, counsel for the Initial Purchasers,
substantially to the effect set forth in Exhibit A-6 hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Initial Purchasers.

    (c)  Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Initial
Purchasers shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and

                                       15
<PAGE>

effect as though expressly made at and as of the Closing Time and (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time.

    (d)  Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.

    (e)  Bring-down Comfort Letter. At the Closing Time, the Initial Purchasers
shall have received from PricewaterhouseCoopers LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.

    (f)  PORTAL. At the Closing Time, the Shares shall have been designated for
trading on PORTAL.

    (g)  Registration Rights Agreements. The Issuer and the Initial Purchasers
shall have entered into the Registration Rights Agreement, dated as of the
Closing Time, substantially in form and substance as described in the Offering
Memorandum under the heading "Description of the Preferred Stock--Registration
Rights."

    (h)  Lock-up Agreements. At the Closing Time, the Initial Purchasers shall
have received an agreement substantially in the form of Exhibit B hereto signed
by the persons listed on Schedule B hereto.

    (i)  Conditions to Purchase of Option Shares. In the event that the Initial
Purchasers exercise their option provided in Section 2(b) hereof to purchase all
or any portion of the Option Shares, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company and any subsidiary of the Company hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery, the Initial
Purchasers shall have received:

         (i)   Officers' Certificate. A certificate, dated such Date of
    Delivery, of the President or a Vice President of the Company and of the
    chief financial or chief accounting officer of the Company confirming that
    the certificate delivered at the Closing Time pursuant to Section 5(c)
    hereof remains true and correct as of such Date of Delivery.

         (ii)  Opinions of Counsel for the Company. At the relevant Date of
    Delivery, the Initial Purchasers shall have received the opinions, dated as
    of such Date of Delivery, of each of Brobeck, Phleger & Harrison LLP, Hale
    and Dorr LLP, Blumenfeld & Cohen, Leboeuf, Lamb, Greene & MacRae L.L.P. and
    of Jeffrey Blumenfeld, each in form and substance to the effect set froth in
    Exhibits A-1 through A-5 hereof. In giving the opinion pursuant to this
    subsection, Brobeck Phleger & Harrison LLP may rely, as to all matters
    governed by the laws of

                                       16
<PAGE>

jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Initial
Purchasers.

         (iii)  Opinion of Counsel for Initial Purchasers. At the relevant Date
of Delivery, the Initial Purchasers shall have received the favorable
opinion, dated as of such Date of Delivery of Baker & McKenzie, counsel for
the Initial Purchasers, substantially to the effect set forth in Exhibit A-6
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law
of the State of Delaware, upon the opinions of counsel satisfactory to the
Initial Purchasers.

         (iv)   Bring-down Comfort Letter. At the relevant Date of Delivery, the
Initial Purchasers shall have received from PricewaterhouseCoopers LLP a
letter, dated as of such Date of Delivery, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a date not
more than three business days prior to such Date of Delivery.

    (j)  Additional Documents. At the Closing Time and at each Date of Delivery,
counsel for the Initial Purchasers shall have been furnished such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Shares as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties of the
Company, or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the
Shares as herein contemplated shall be satisfactory in form and substance to the
Initial Purchasers and counsel for the Initial Purchasers.

    (k)  Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Shares on
a Date of Delivery which is after the Closing Time, the obligations of the
Initial Purchasers to purchase the relevant Option Shares, may be terminated by
the Initial Purchasers by notice to the Company at any time at or prior to the
Closing Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 hereof and except that Sections 1, 7, 8 and 9 hereof shall survive any
such termination and remain in full force and effect.

    SECTION 6.  Subsequent Offers and Resales of the Shares.

    (a)  Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby acknowledge and agree to observe the following procedures in
connection with the offer and sale of the Shares:

         (i)    Offers and Sales only to Qualified Institutional Buyers. Offers
    and sales of the Shares will be made only by the Initial Purchasers or
    Affiliates thereof qualified to do so in the jurisdictions in which such
    offers or sales are made. Each such offer or sale

                                       17
<PAGE>

    shall only be made to persons whom the offeror or seller reasonably believes
    to be qualified institutional buyers (as defined in Rule 144A under the 1933
    Act).

         (ii)   No General Solicitation. The Shares will be offered by
    approaching prospective Subsequent Purchasers on an individual basis. No
    general solicitation or general advertising (within the meaning of Rule
    502(c) under the 1933 Act) will be used in the United States in connection
    with the offering of the Shares.

         (iii)  Purchases by Non-Bank Fiduciaries. In the case of a non-bank
    Subsequent Purchaser of Shares acting as a fiduciary for one or more third
    parties, in connection with an offer and sale to such purchaser pursuant to
    clause (a) above, each third party shall, in the judgment of the applicable
    Initial Purchaser, be a Qualified Institutional Buyer.

         (iv)   Subsequent Purchaser Notification. Each Initial Purchaser will
    take reasonable steps to inform, and cause each of its Affiliates to take
    reasonable steps to inform, persons acquiring Shares from such Initial
    Purchaser or Affiliate, as the case may be, in the United States that the
    Shares (A) have not been registered under the 1933 Act and have not been
    registered under any state securities laws, (B) are being sold to them
    without registration under the 1933 Act in reliance on Rule 144A or in
    accordance with another exemption from registration under the 1933 Act, as
    the case may be, and (C) may not be offered, sold or otherwise transferred
    except (1) to the Company, (2) pursuant to an effective registration
    statement under the 1933 Act, (3) outside the United States in accordance
    with Rule 904 of Regulation S, or (4) inside the United States in accordance
    with (x) Rule 144A to a person whom the seller reasonably believes is a
    Qualified Institutional Buyer that is purchasing such Shares for its own
    account or for the account of a Qualified Institutional Buyer to whom notice
    is given that the offer, sale or transfer is being made in reliance on Rule
    144A or (y) the exemption from registration under the 1933 Act provided by
    Rule 144, if available.

         (v)    Restrictions on Transfer. The transfer restrictions and the
    other provisions of this Agreement and the Offering Memorandum, including
    the legend required thereby, shall apply to the Shares except as otherwise
    agreed by the Company and the Initial Purchasers. Following the sale of the
    Shares by the Initial Purchasers to Subsequent Purchasers in accordance with
    the terms and procedures contained herein, the Initial Purchasers shall not
    be liable or responsible to the Company for any losses, damages or
    liabilities suffered or incurred by the Company, including any losses,
    damages or liabilities under the 1933 Act, arising from or relating to any
    resale or transfer of any Share.

         (vi)   Delivery of Offering Memorandum. Each Initial Purchaser will
    deliver to each purchaser of the Shares from such Initial Purchaser, in
    connection with its original distribution of the Shares, a copy of the
    Offering Memorandum, as amended and supplemented at the date of such
    delivery.

                                       18
<PAGE>

    (b)  Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:

         (i)    Due Diligence. In connection with the original distribution of
    the Shares, the Company agrees that, prior to any offer or resale of the
    Shares by the Initial Purchasers, the Initial Purchasers and counsel for the
    Initial Purchasers shall have the right to make reasonable inquiries into
    the business of the Company and its subsidiaries. The Company also agrees to
    provide answers to each prospective Subsequent Purchaser of Shares who so
    requests concerning the Company and its subsidiaries (to the extent that
    such information is available or can be acquired and made available to
    prospective Subsequent Purchasers without unreasonable effort or expense and
    to the extent the provision thereof is not prohibited by applicable law) and
    the terms and conditions of the offering of the Shares, as provided in the
    Offering Memorandum.

         (ii)   Integration. The Company agrees that it will not and will cause
    its Affiliates not to make any offer or sale of securities of the Company of
    any class if, as a result of the doctrine of "integration" referred to in
    Rule 502 under the 1933 Act, such offer or sale would render invalid (for
    the purpose of (i) the sale of the Shares by the Company to the Initial
    Purchasers, (ii) the resale of the Shares by the Initial Purchasers to
    Subsequent Purchasers or (iii) the resale of the Shares by such Subsequent
    Purchasers to others, in each case in accordance with the terms and
    conditions herein set forth) the exemption from the registration
    requirements of the 1933 Act provided by Section 4(2) thereof or by Rule
    144A thereunder or otherwise.

         (iii)  Rule 144A Information.  The Company agrees that, in order to
    render the Shares eligible for resale pursuant to Rule 144A under the 1933
    Act, while any of the Shares remain outstanding, it will make available,
    upon request, to any holder of Shares or prospective purchasers of Shares
    the information specified in Rule 144A(d)(4), unless the Company furnishes
    information to the Commission pursuant to Section 13 or 15(d) of the 1934
    Act (such information, whether made available to holders or prospective
    purchasers or furnished to the Commission, is herein referred to as
    "Additional Information").

         (iv)   Restriction on Repurchases. Until the expiration of two years
    after the original issuance of the Shares, the Company will not, and will
    cause its Affiliates not to, purchase or agree to purchase or otherwise
    acquire any Shares which are "restricted securities" (as such term is
    defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
    owner or otherwise (except as agent acting as a securities broker on behalf
    of and for the account of customers in the ordinary course of business in
    unsolicited broker's transactions).

    (c)  Resale Pursuant to Rule 144A. Each Initial Purchaser represents and
agrees, that, except as permitted by Section 6(a) above, it has offered and sold
Shares and will offer and sell Shares as part of their distribution at any time,
only in accordance with Rule 144A under the 1933 Act. Each Initial Purchaser
severally represents and agrees that it has not entered and will not enter into
any contractual arrangements with respect to the distribution of the Shares,
except with its affiliates or with the prior written consent of the Company.

                                       19
<PAGE>

    SECTION 7.  Indemnification.

    (a)  Indemnification of Initial Purchasers. The Company agrees to indemnify
and hold harmless each Initial Purchaser and each person, if any, who controls
any Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:

         (i)    against any and all loss, liability, claim, damage and expense
    whatsoever, as incurred, arising out of any untrue statement or alleged
    untrue statement of a material fact contained in the Final Offering
    Memorandum (or any amendment or supplement thereto), or the omission or
    alleged omission therefrom of a material fact necessary in order to make the
    statements therein, in the light of the circumstances under which they were
    made, not misleading;

         (ii)   against any and all loss, liability, claim, damage and expense
    whatsoever, as incurred, to the extent of the aggregate amount paid in
    settlement of any litigation, or any investigation or proceeding by any
    governmental agency or body, commenced or threatened, or of any claim
    whatsoever based upon any such untrue statement or omission, or any such
    alleged untrue statement or omission; provided that (subject to Section 7(d)
    below) any such settlement is effected with the written consent of the
    Company; and

         (iii)  against any and all expense whatsoever, as incurred (including
    the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
    incurred in investigating, preparing or defending against any litigation, or
    any investigation or proceeding by any governmental agency or body,
    commenced or threatened, or any claim whatsoever based upon any such untrue
    statement or omission, or any such alleged untrue statement or omission, to
    the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
thereto), which information is described in Section 1(a)(ii) hereof; and
provided further that the Company will not be liable to an Initial Purchaser
with respect to any Preliminary Offering Memorandum to the extent that the
Company shall sustain the burden of proof of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such Initial
Purchaser, in contravention of a requirement of this Agreement or applicable
law, sold Shares to a person to whom such Initial Purchaser failed to send or
give, at or prior to the Closing Date, a copy of the Final Offering Memorandum
as then amended or supplemented if (i) the Company has previously furnished
copies thereof (sufficiently in advance of the Closing Date to allow for the
distribution by the Closing Date) to the Initial Purchasers and the loss,
liability, claim, damage or expense of such Initial Purchaser resulted from an
untrue statement or omission or alleged untrue statement or omission of a
material fact contained in or omitted from the Preliminary Offering Memorandum
which was corrected in the Final Offering Memorandum as, if applicable, amended
or supplemented prior to the Closing Date and (ii) giving or sending such Final
Offering Memorandum by the Closing Date to the party or parties

                                       20
<PAGE>

asserting such loss, liability, claim, damage or expense would have constituted
a complete defense to the claim asserted by such person.

    (b)  Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who would be required to sign the Offering
Memorandum if it were a registration statement on Form S-1, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Offering Memorandum in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser expressly for use in the Offering Memorandum.

    (c)  Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.  In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.  No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

    (d)  Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying

                                       21
<PAGE>

party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.

    SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Shares pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the Initial Purchasers
on the other hand in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

    The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Initial Purchasers, bear to the
aggregate initial offering price of the Shares.

    The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

    The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8.  The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

    Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed pursuant to
this Agreement were offered to the Subsequent Purchasers exceeds the amount of
any damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.

                                       22
<PAGE>

    No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

    For purposes of this Section 8, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Initial Purchaser,
and each director of the Company, each officer of the Company who would be
required to sign the Offering Memorandum if it were a registration statement on
Form S-1, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.  The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the number of Firm Shares set forth opposite their respective names in
Schedule A hereto and not joint.

    SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Shares to the Initial
Purchasers.

    SECTION 10.  Termination of Agreement.

    (a)  Termination; General. The Initial Purchasers may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Initial Purchasers, impracticable to market the Shares or to
enforce contracts for the sale of the Shares, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.

    (b)  Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7
and 8 shall survive such termination and remain in full force and effect.

                                       23
<PAGE>

    SECTION 11. Default by One or More of the Initial Purchasers. If one of the
Initial Purchasers shall fail at the Closing Time or a Date of Delivery to
purchase the Shares which it is obligated to purchase under this Agreement (the
"Defaulted Shares"), the other Initial Purchaser shall have the right, but not
the obligation, within 24 hours thereafter, to make arrangements, for the non-
defaulting Initial Purchaser, or any other Initial Purchasers, to purchase all,
but not less than all, of the Defaulted Shares in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the other Initial
Purchaser shall not have completed such arrangements within such 24-hour period,
then this Agreement shall terminate without liability on the part of the non-
defaulting Initial Purchaser.

    No action pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.

    In the event of any such default which does not result in a termination of
this Agreement, either the non-defaulting Initial Purchaser or the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Offering Memorandum or in any other documents or
arrangement.

     SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to the Initial Purchasers at North Tower, World
Financial Center, New York, New York 10281-11201, attention of Paul Pepe, with a
courtesy copy to Malcolm I. Ross, Baker & McKenzie, 805 Third Avenue, New York,
New York 10022; notices to the Company shall be directed to it at 6933 South
Revere Parkway, Englewood, Colorado 80112, attention of Scott Chandler, with a
courtesy copy to Richard R. Plumridge, Brobeck Phleger & Harrison LLP, 370
Interlocken Boulevard, Suite 500, Broomfield, Colorado 80021.

    SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Shares from any
Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.

    SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.

                                       24
<PAGE>

    SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.

    If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchasers and the Company in accordance with its terms.

                                    Very truly yours,

                                    RHYTHMS NETCONNECTIONS, INC.

                                    By:
                                       -------------------------------------
                                       Scott Chandler
                                       Chief Financial Officer

CONFIRMED AND ACCEPTED,
 as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED
SALOMON SMITH BARNEY INC.

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
          INCORPORATED

By:
   ------------------------------------
          Authorized Signatory

                                       25
<PAGE>

                                  SCHEDULE A

         Name of Initial Purchaser                        Number of Firm Shares
        --------------------------                        ---------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......            1,375,000
Salomon Smith Barney Inc.................................            1,125,000
   Total.................................................            2,500,000
                                                                     =========

                                       26
<PAGE>

                                  SCHEDULE B

Brentwood Affiliates Fund, L.P.
Brentwood Associates VII, L.P.
Kleiner Perkins Caulfield & Byers VIII, L.P.
KPCB VIII Founders Fund, L.P.
KPCB VIII Information Sciences Zaibatsu Fund II, L.P.
MCI WorldCom Venture Fund, Inc.
G-Past, L.L.C.
Microsoft Corporation
Catherine M. Hapka
Steve Stringer
Michael S. Lanier
David J. Shimp
Scott C. Chandler
Kevin R. Compton
Keith B. Geeslin
Susan Mayer
William R. Stensrud
John L. Walecka
Edward J. Zander

                                       27

<PAGE>

                                                                     Exhibit A-1

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                SECTION 5(a)(i)
                   [Form of Brobeck Phleger opinion follows]

                                      A-1
<PAGE>

                                                                     Exhibit A-2

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(ii)
                    [Form of Hale and Dorr opinion follows]

                                      A-2

<PAGE>

                                                                     Exhibit A-3

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(iii)
                 [Form of Blumenfeld & Cohen opinion follows]

                                      A-3
<PAGE>

                                                                     Exhibit A-4

                  FORM OF OPINION OF COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                               SECTION 5(a)(iv)
                    [Form of LeBoeuf Lamb opinion follows]

                                      A-4
<PAGE>

                                                                     Exhibit A-5

                FORM OF OPINION OF THE COMPANY'S LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                SECTION 5(a)(v)
                   [Form of General Counsel opinion follows]

                                      A-5
<PAGE>

                                                                     Exhibit A-6

             FORM OF OPINION OF INITIAL PURCHASERS' LEGAL COUNSEL
                          TO BE DELIVERED PURSUANT TO
                                 SECTION 5(b)
                  [Form of Baker & McKenzie opinion follows]

                                      A-6
<PAGE>

                                                                       Exhibit B

                           Form of Lock-Up Agreement

                                      A-7

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