Document:

EXHIBIT 10.1
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                 PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

                                  BY AND AMONG

                           RHYTHMS NETCONNECTIONS INC.

                                       AND

                   THE PURCHASERS LISTED ON SCHEDULE I HERETO

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                                   Dated as of

                                February 6, 2000

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

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

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

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

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

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

                                   DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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     "Securities"  means  the  Shares  and  the  Warrants.

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

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

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

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

     "Subsidiary"  means  a  subsidiary  of  the  Company.

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

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

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

                    Term                                  Section

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

                                   ARTICLE II

                                SALE AND PURCHASE

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

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

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

     At  the  Closing  with  respect  to  each  Purchaser:

        (a)     Such  Purchaser  shall  deliver:

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

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

     At  the  Closing,  with  respect  to  each  Purchaser:

        (b)     The  Company  shall  deliver  to  such  Purchaser:

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

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

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

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

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

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

               (vii)  A  copy  of  the  Rights  Agreement  Amendment.

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

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

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE V

                            COVENANTS OF THE COMPANY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    SECTION  5.8.Reservation  of  Shares.  The  Company  shall:

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

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

                                    PAGE   11
<PAGE>

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

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

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

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

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

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

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

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

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

     (i)     make  any  required  payments  on  the  Securities;

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

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

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

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

                                    PAGE   12
<PAGE>
                                   ARTICLE VI

                           COVENANTS OF THE PURCHASERS

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

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

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

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

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

                                   ARTICLE VII

                         CONDITIONS PRECEDENT TO CLOSING

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

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

                                    PAGE   13
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    PAGE   14
<PAGE>
                                  ARTICLE VIII

                                  MISCELLANEOUS

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

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

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

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

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

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

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

     To  the  Company:

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

     with  a  copy  to:

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

     To  the  Purchasers:

     To  the  appropriate  member  of  the  HMTF  Group

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

     with  a  copy  to:

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

      with  a  copy  to:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

RHYTHMS  NETCONNECTIONS  INC.

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

                                    PAGE   18
<PAGE>

  HMTF  BRIDGE  RHY,  LLC

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

                                    PAGE   19
<PAGE>EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

     This  REGISTRATION  RIGHTS  AGREEMENT  (the "Agreement"), is made as of the
March 16, 2000, by and among Rhythms NetConnections Inc., a Delaware corporation
(the  "Company"),  and  the  entities  listed  on  Schedule I to this Agreement.

     WHEREAS,  the  Company  and  HMTF  Bridge RHY, LLC entered into a Preferred
Stock  and  Warrant  Purchase Agreement dated as of February 6, 2000 (the "Stock
Purchase  Agreement");

     WHEREAS,  pursuant to an Assignment and Assumption, the Holders (as defined
below)  have  become  parties  to  the  Stock  Purchase  Agreement;

     WHEREAS,  it  is  a  condition precedent to the closing of the transactions
contemplated in the Stock Purchase Agreement that the parties hereto execute and
deliver  this  Agreement;

     NOW  THEREFORE,  in  consideration  of  the  premises,  mutual promises and
covenants  contained  in  this  Agreement and intending to be legally bound, the
parties  hereto  hereby  agree  as  follows:

                                    ARTICLE I
                                   Definitions

     SECTION  1.01.  Definitions.  Terms defined in the Stock Purchase Agreement
are  used  herein as therein defined.  In addition, the following terms, as used
herein,  have  the  following  meanings:

     "Commission"  means  the  Securities  and  Exchange  Commission.

     "Demand  Registration"  means  a  registration  under  the  Securities  Act
requested  in  accordance  with  Section  2.01.

     "Holders"  means  the  entities  set  forth  on  Schedule  I (including any
affiliates  thereof)  and  any  direct or indirect transferee of any Registrable
Securities  held  by  such  entities.

     "Investor  Rights  Agreement"  means  the  Amended  and Restated Investors'
Rights  Agreement  dated  as  of  April  6,  1999  among the Company and certain
investors  parties  thereto.

     "Investor  Rights Agreement 30% Right" means the rights to participate in a
Company  registration  pursuant to Section 1.8 of the Investor Rights Agreement,
pursuant  to  which  the  amount of securities of the selling holders under such
agreement  to  be  included  in  a  piggyback  registration shall not, except in
certain circumstances, be reduced below thirty percent (30%) of the total amount
of  securities  included  in  such  offering.

     "Piggyback  Registration"  has  the  meaning  set  forth  in  Section 2.02.

     "Registrable  Common  Stock"  means  the shares of Common Stock issued upon
conversion  of  the Registrable Series E Preferred Stock or upon exercise of the
Warrants,  plus  any additional shares of Common Stock issued in respect thereof
in connection with any stock split, stock dividend or similar event with respect
to  the  Common  Stock.

     "Registrable  Series  E Preferred Stock" means the Series E Preferred Stock
purchased  pursuant  to the Stock Purchase Agreement, plus any additional shares
of  Series  E  Preferred  Stock issued in respect thereof in connection with any
stock  split,  stock  dividend  or  similar  event  with respect to the Series E
Preferred  Stock.

     "Registrable  Securities"  means  (a)  the  Registrable  Series E Preferred
Stock, (b) the Registrable Common Stock and (c) any securities of the Company or
any successor entity into which Registrable Common Stock or Registrable Series E
Preferred  Stock  may  hereafter  be converted or changed.  As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when  (i)  a  registration statement with respect to the sale of such securities
shall  have  become effective under the Securities Act and such securities shall
have  been  disposed  of under such registration statement, (ii) such securities
shall  have  been  transferred pursuant to Rule 144, (iii) such securities shall
have  been  otherwise  transferred or disposed of, and new certificates therefor
not  bearing  a legend restricting further transfer shall have been delivered by
the  Company,  and  subsequent transfer or disposition of them shall not require
their  registration  or  qualification  under  the Securities Act or any similar

                                    PAGE   1
<PAGE>
state  law  then  in  force  or  (iv)  such  securities  shall have ceased to be
outstanding.

     "Requesting  Holders"  means  the Holders requesting a Demand Registration,
and  shall  include  parties  deemed  "Requesting  Holders"  pursuant to Section
2.01(a)(iii).

     "Rule  144"  means  Rule  144  (or  any  successor  rule of similar effect)
promulgated  under  the  Securities  Act.

     "Selling  Holder"  means  any  Holder who is selling Registrable Securities
pursuant  to  a  public  offering  registered  hereunder.

     "Senior  Piggyback  Registration Rights" means those piggyback registration
rights pursuant to (i) the Warrant Registration Rights Agreement dated as of May
5,  1998  among  the  Company  and parties thereto, (ii) the Warrant to Purchase
Shares  of Common Stock granted to Sun Financial Group dated as of May 19, 1998,
(iii) the Warrant to Purchase Shares of Common Stock granted to GATX dated as of
March  31, 1999 and (iv) the Stock Subscription Warrant granted to Cisco Systems
Capital  Corporation  dated  as  of  April  5,  1999.

     "Shelf  Registration"  has  the  meaning  set  forth  in  Section  2.03(b).

     "Underwriter"  means  a  securities  dealer  who  purchases any Registrable
Securities  as  principal  and  not  as  part  of  such  dealer's  market-making
activities.

     SECTION  1.01.Internal  References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles,  sections  and  paragraphs  in  this  Agreement, and references to the
parties  shall  mean  the  parties  to  the  Stock  Purchase  Agreement.

                                   ARTICLE II
                               Registration Rights

     SECTION  2.01.Demand  Registration.(a)     (i)     Holders of a majority of
the  Registrable  Securities held by the Holders may make up to four (4) written
requests for a Demand Registration under this Section 2.01 of all or any part of
the  Registrable  Securities  held by such Holders; provided, that (A) each such
Demand  Registration by the Holders must be in respect of Registrable Securities
with  a  fair market value of at least $50,000,000, (B) the Holders shall not be
entitled  to  a  Demand  Registration  if,  during  the  120 days preceding such
request,  the  Holders  had  requested  a Demand Registration and (C) unless and
until  the  consent described in Section 5.10 is obtained, the Holders shall not
be  entitled  to  a  Demand  Registration  which  results  in  such registration
statement  being  declared effective within 120 days after the effective date of
any  registration  effected  pursuant  to  Section  1.2  of the Investors Rights
Agreement.

          (ii)     Any  request  for  a  Demand  Registration  will  specify the
aggregate  number of shares of Registrable Securities proposed to be sold by the
Requesting  Holders  and  will  also  specify the intended method of disposition
thereof.  A  registration  will  not count as a Demand Registration until it has
become  effective.  Should a Demand Registration not become effective due to the
failure  of  a  Holder  to  perform  its obligations under this Agreement or the
inability of the Requesting Holders to reach agreement with the Underwriters for
the  proposed sale on price or other customary terms for such transaction, or in
the  event  the Requesting Holders withdraw or do not pursue the request for the
Demand  Registration (in each of the foregoing cases, provided that at such time
the Company is in compliance in all material respects with its obligations under
this  Agreement),  then,  subject  to  Section 2.01(b), such Demand Registration
shall  be  deemed  to  have  been  effected  (provided  that  (i) if, the Demand
Registration  does  not  become  effective because a material adverse change has
occurred,  or  is  reasonably  likely  to  occur, in the condition (financial or
otherwise),  business,  assets  or  results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the written request made
by the Requesting Holders, (ii) if the Company withdraws the Demand Registration
for  any reason or (iii) if, after the Demand Registration has become effective,
an  offering of Registrable Securities pursuant to a registration is  interfered
with  by  any  stop  order,  injunction,  or  other  order or requirement of the
Commission  or  other  governmental agency or court then the Demand Registration
shall  not  be  deemed  to  have  been  effected  and will not count as a Demand
Registration).

     (iii)     Upon  receipt of any request for a Demand Registration by holders
of  a majority of the Registrable Securities, the Company shall promptly (but in
any  event  within  ten  (10)  days) give written notice of such proposed Demand
Registration  to  all  other Holders, and all such Holders shall have the right,
exercisable  by  written  notice to the Company within twenty (20) days of their
receipt of the Company's notice, to elect to include in such Demand Registration
such  portion  of  their  Registrable  Securities as they may request.  All such
Holders  requesting  to  have  their Registrable Securities included in a Demand
Registration  in  accordance  with  the preceding sentence shall be deemed to be
"Requesting  Holders"  for  purposes  of  this  Section  2.01.

                                    PAGE   2
<PAGE>
     (b)     In  the event that the Requesting Holders withdraw or do not pursue
a  request  for  a  Demand Registration and, pursuant to Section 2.01(a) hereof,
such  Demand  Registration  is  deemed  to  have been effected, the  Holders may
reacquire  such  Demand  Registration  (such  that  the withdrawal or failure to
pursue  a  request  will  not  count  as a Demand Registration hereunder) if the
Selling  Holders  reimburse  the  Company  for any and all Registration Expenses
incurred  by  the  Company  in  connection  with  such  request  for  a  Demand
Registration.

     (c)  If  the  Requesting Holders so elect, the offering of such Registrable
Securities  pursuant to such Demand Registration shall be in the form of a "firm
commitment"  underwritten  offering.  A  majority  in interest of the Requesting
Holders  shall  have  the  right  to  select  the managing Underwriters and  any
additional  investment  bankers  and  managers to be used in connection with any
offering  under  this  Section  2.01,  subject  to the Company's approval, which
approval  shall  not  be  unreasonably  withheld.

     (d)     The  Requesting  Holders  will  inform  the Company of the time and
manner  of  any disposition of Registrable Common Stock, and agree to reasonably
cooperate  with  the  Company  in  effecting  the disposition of the Registrable
Common  Stock  in a manner that does not unreasonably disrupt the public trading
market  for the Common Stock; provided, however, that the Holders' only right to
a  shelf  registration  statement  shall  be  pursuant  to  Section  2.03.

     (e)     Subject  to  the Investor Rights Agreement 30% Right, no securities
to  be  sold  for the account of any Person (including the Company) other than a
Requesting Holder shall be included in a Demand Registration unless the managing
Underwriter  or Underwriters shall advise the Company and the Requesting Holders
in  writing  that  the  inclusion  of  such  securities  will not materially and
adversely  affect  the  price  of  the  offering  (a "Material Adverse Effect").
Furthermore,  in the event the managing Underwriter or Underwriters shall advise
the  Company  or  the  Requesting  Holders  that  even  after  exclusion  of all
securities  of other Persons (including the Company) pursuant to the immediately
preceding sentence, the amount of Registrable Securities proposed to be included
in such Demand Registration by Requesting Holders is sufficiently large to cause
a  Material Adverse Effect, the Registrable Securities of the Requesting Holders
to  be  included  in  such  Demand Registration shall equal the number of shares
which  the Company and the Requesting Holders are so advised can be sold in such
offering  without  a  Material Adverse Effect and such shares shall be allocated
pro  rata among the Requesting Holders on the basis of the number of Registrable
Securities requested to be included in such registration by each such Requesting
Holder;  provided,  however,  that if any Registrable Securities requested to be
registered  pursuant  to  a  Demand Registration under Section 2.01 are excluded
from  registration  hereunder,  then  the  Holder(s)  having  shares  excluded
("Excluded Holders") shall have the right to withdraw all, or any part, of their
shares  from  such  registration.

     SECTION  2.02.  Piggyback  Registration  (a)     If the Company proposes to
file  a  registration  statement  under  the  Securities  Act with respect to an
offering  of  Common  Stock  for  its  own account or for the account of another
Person  (other  than  a registration statement on Form S-4 or S-8, or, except as
provided  for  in  Section 2.03, pursuant to Rule 415 (or any substitute form or
rule,  respectively,  that may be adopted by the Commission)), the Company shall
give  written  notice  of such proposed filing to the Holders at the address set
forth  in  the  share  register of the Company as soon as reasonably practicable
(but  in  no  event  less  than  15  days  before  the anticipated filing date),
undertaking to provide each Holder the opportunity to register on the same terms
and  conditions such number of shares of Registrable Common Stock as such Holder
may  request (a "Piggyback Registration").  Each Holder will have seven business
days  after  receipt  of  any such notice to notify the Company as to whether it
wishes  to  participate  in  a Piggyback Registration (which notice shall not be
deemed to be a request for a Demand Registration); provided that should a Holder
fail  to  provide  timely  notice  to  the Company, such Holder will forfeit any
rights  to  participate  in  the  Piggyback  Registration  with  respect to such
proposed  offering.  In  the  event  that the registration statement is filed on
behalf of a Person other than the Company, the Company will use its best efforts
to  have  the  shares  of Registrable Common Stock that the Holders wish to sell
included  in the registration statement.  If the Company or the Person for whose
account  such  offering is being made shall determine in its sole discretion not
to register or to delay the proposed offering, the Company may, at its election,
provide  written notice of such determination to the Holders and (i) in the case
of  a  determination  not  to  effect  the proposed offering, shall thereupon be
relieved  of  the  obligation  to  register  such  Registrable  Common  Stock in
connection  therewith,  and  (ii)  in  the  case  of  a determination to delay a
proposed  offering,  shall  thereupon  be  permitted  to  delay registering such
Registrable  Common  Stock  for  the  same period as the delay in respect of the
proposed  offering.  As between the Company and the Selling Holders, the Company
shall  be  entitled  to select the Underwriters in connection with any Piggyback
Registration.

     (b)     If  the  Registrable  Securities  requested  to  be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that  due to such differences the inclusion of such Registrable Securities would

                                    PAGE   3
<PAGE>
cause  a  Material  Adverse  Effect,  then  (i)  the  number  of  such  Holders'
Registrable  Securities  to  be  included in the Piggyback Registration shall be
reduced  to  an  amount which, in the opinion of the managing Underwriter, would
eliminate  such  Material  Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from  such  Piggyback  Registration,  provided, that no other securities of such
type  are  included  and  offered  for  the  account of any other Person in such
Piggyback  Registration.  Any  partial  reduction  in  number  of  Registrable
Securities  of  any Holder to be included in the Piggyback Registration pursuant
to  clause  (i) of the immediately preceding sentence shall be effected pro rata
based  on  the  ratio  which  such  Holder's requested shares bears to the total
number  of shares requested to be included in such Piggyback Registration by all
Persons  other  than  the Company who have the contractual right to request that
their  shares  be included in such registration statement and who have requested
that  their  shares  be  included,  subject to the Senior Piggyback Registration
Rights  and  (if  applicable)  the  Investor Rights Agreement 30% Right.  If the
Registrable  Securities  requested  to be included in the registration statement
are  of  the same type as the securities being registered by the Company and the
managing  Underwriter advises the Company that the inclusion of such Registrable
Securities  would cause a Material Adverse Effect, the Company will be obligated
to  include  in such registration statement, as to each Holder only a portion of
the  shares  such  Holder  has requested be  registered equal to the ratio which
such  Holder's requested shares bears to the total number of shares requested to
be included in such registration statement by all Persons (other than the Person
or  Persons initiating such registration request) who have the contractual right
to  request that their shares be included in such registration statement and who
have  requested  their  shares  be  included,  subject  to  the Senior Piggyback
Registration Rights and the (if applicable) Investor Rights Agreement 30% Right.
If  the  Company initiated the registration, then the Company may include all of
its securities in such registration statement before any such Holder's requested
shares  are  included.  If  another  security holder initiated the registration,
then  the  Company  may  not  include any of its securities in such registration
statement  unless  all  Registrable  Securities  requested to be included in the
registration  statement  by  all  Holders  are  included  in  such  registration
statement.  If  as a result of the provisions of this Section 2.02(b) any Holder
shall  not  be  entitled to include all Registrable Securities in a registration
that  such Holder has requested to be so included, such Holder may withdraw such
Holder's  request  to  include  Registrable  Securities  in  such  registration
statement  prior  to  its  effectiveness.

     SECTION  2.03.  Shelf  Registration  (a)     Holders  of  a majority of the
Registrable  Securities  may,  at  any  time  after the first anniversary of the
Closing  Date (the "First Anniversary"), make a written request that the Company
effect  a  shelf registration of a portion of the Registrable Securities held by
such  Holders  (the "Shelf Registration") pursuant to Rule 415; provided, that a
Holder will be entitled to include in the Shelf Registration no more than 25% of
the  Registrable  Securities  held  by such Holder immediately after the Closing
Date  (giving  effect  to  accretion of dividends as of such anniversary on such
holder's  Registrable  Series  E Preferred Stock and exercise, as of or prior to
such anniversary, of such holder's Warrants).  Upon receipt of a request for the
Shelf Registration, the Company shall promptly (but in any event within 10 days)
give written notice of the proposed Shelf Registration to all other Holders, and
each such other Holder shall have the right to include in the Shelf Registration
up  to  25%  of the Registrable Securities held by such Holder immediately after
the Closing Date (giving effect to accretion of dividends as of such anniversary
on  such  holder's  Registrable  Series E Preferred Stock and exercise, as of or
prior  to  such  anniversary,  of  such  holder's  Warrants).

     (b)     From  and  after the third anniversary of the Closing Date, Holders
of  a majority of the Registrable Securities may make a written request that the
Company  amend  the  Shelf  Registration to include in the Shelf Registration no
more  than  50%  of  the Registrable Securities held by such Holders immediately
after  the  Closing  Date  (giving  effect  to accretion of dividends as of such
anniversary  on such holder's Registrable Series E Preferred Stock and exercise,
as of or prior to such anniversary, of such holder's Warrants).  Upon receipt of
such  request, the Company shall promptly (but in any event within 10 days) give
written  notice  of  the  proposed amendment to all other Holders, and each such
other  Holder  shall have the right to include in the amended Shelf Registration
up  to  50%  of the Registrable Securities held by such Holder immediately after
the Closing Date (giving effect to accretion of dividends as of such anniversary
on  such  holder's  Registrable  Series E Preferred Stock and exercise, as of or
prior  to  such  anniversary,  of  such  holder's Warrants).  From and after the
fourth anniversary of the Closing Date, Holders of a majority of the Registrable
Securities  may  make  a  written  request  that  the  Company  amend  the Shelf
Registration  to  include  in  the  Shelf  Registration  no more than 75% of the
Registrable  Securities  held  by such Holder immediately after the Closing Date
(giving effect to accretion of dividends as of such anniversary on such holder's
Registrable  Series  E  Preferred  Stock  and  exercise,  as of or prior to such
anniversary,  of  such  holder's  Warrants).  Upon  receipt of such request, the
Company  shall promptly (but in any event within 10 days) give written notice of
the  proposed  amendment  to all other Holders, and each such other Holder shall
have  the  right  to  include in the amended Shelf Registration up to 75% of the
Registrable  Securities  held by such Holders immediately after the Closing Date

                                    PAGE   4
<PAGE>
(giving effect to accretion of dividends as of such anniversary on such Holder's
Registrable  Series  E  Preferred  Stock  and  exercise,  as of or prior to such
anniversary,  of  such Holder's Warrants).  From and after the fifth anniversary
of  the  Closing  Date,  Holders of a majority of the Registrable Securities may
make  a written request that the Company amend the Shelf Registration to include
in  the Shelf Registration up to 100% of the Registrable Securities held by such
Holders  immediately  after  the  Closing  Date  (giving  effect to accretion of
dividends as of such anniversary on such holder's Registrable Series E Preferred
Stock  and  exercise,  as  of  or  prior  to  such anniversary, of such holder's
Warrants).  Upon receipt of such request, the Company shall promptly (but in any
event within 10 days) give written notice of the proposed amendment to all other
Holders,  and  each  such  other  Holder  shall have the right to include in the
amended Shelf Registration up to 100% of the Registrable Securities held by such
Holder  immediately  after  the  Closing  Date  (giving  effect  to accretion of
dividends as of such anniversary on such holder's Registrable Series E Preferred
Stock  and  exercise,  as  of  or  prior  to  such anniversary, of such holder's
Warrants).  If  a  Nonconsent  Event  (as  defined  in  Section 5.10) shall have
occurred,  references in this paragraph to the "third anniversary of the Closing
Date"  shall  mean the second anniversary of the Closing Date, references to the
"fourth anniversary of the Closing Date" shall mean the third anniversary of the
Closing Date and references to the "fifth anniversary of the Closing Date" shall
mean  the  fourth  anniversary  of  the  Closing  Date.

     (c)  If  the  Company's ability to amend the registration statement for the
Shelf  Registration  to  increase  the number of Registrable Securities included
therein  (or  to  file a new shelf registration statement in respect thereof) in
accordance  with Section 2.03 (b) is subject to any contractual limitations that
could  delay  the  Company's  ability  to file or cause to become effective such
registration  statement,  then,  if  requested  by  Holders of a majority of the
Registrable  Securities,  the  Company shall, in lieu of following the procedure
set forth in Section 2.03(b), file a single registration statement for the Shelf
Registration  (and  cause  such  registration  statement  to  become  and remain
effective  for  the  period  set  forth  in  Section 3.01) that would permit the
offering  of  such  portion of the Registrable Securities (up to 100%) as may be
requested  by  the Holders of a majority of the Registrable Securities (it being
understood  and  agreed that the Holders of the Registrable Securities would not
have  the  right  to  offer  and  sell  from such Shelf Registration Registrable
Securities  other  than in accordance with the schedule and amounts set forth in
Section  2.03(b)  and  that  the  Company  would have the right to take whatever
measures necessary to ensure that such schedule was followed, including, without
limitation  the  issuance  of  stop  orders).

                                   ARTICLE III
                             Registration Procedures

     SECTION  3.01.Filings; Information.  In connection with the registration of
Registrable  Securities  pursuant to Section 2.01, Section 2.02 and Section 2.03
hereof,  the  Company  will  use  its  reasonable  best  efforts  to  effect the
registration  of  such  Registrable  Securities  as  promptly  as  is reasonably
practicable,  and  in  connection  with  any  such  request:

     (a)  The  Company will expeditiously prepare and file with the Commission a
registration  statement  on  any  form  for which the Company then qualifies and
which  counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with the
intended  method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective (i)  with
respect  to  any Demand Registration or Piggyback Registration, for such period,
not to exceed 60 days, as may be reasonably necessary to effect the sale of such
securities,  (ii)  with  respect to the Shelf Registration, until the earlier of
the  sale of all Registrable Securities thereunder and the eighth anniversary of
the  Closing  Date  (it being understood that if at any time all the Registrable
Securities  then  permitted to be sold under such Shelf Registration pursuant to
Section  2.03  have  been  sold  but  the  Holders have the right to request the
addition  of  additional Registrable Securities to the Shelf Registration in the
future  pursuant  to  Section 2.03, the Company may (at its option) either cause
the  registration  statement  to remain effective (notwithstanding the fact that
all  securities then registrable on such shelf registration statement shall have
been  sold)  and  to  file post-effective amendments when required to permit the
sale  of the additional Registrable Securities or prepare and file, and cause to
become  and  remain  effective, a new shelf registration statement to effect the
registration  of the additional Registrable Securities when required pursuant to
Section  2.03); provided that if the Company shall furnish to the Selling Holder
a  certificate signed by the Company's Chairman, President or any Vice-President
stating  that the Company's Board of Directors has determined in good faith that
it  would  be  detrimental  or  otherwise  disadvantageous to the Company or its
shareholders  for  such a registration statement to be filed as expeditiously as
possible because the sale of Registrable Securities covered by such Registration
Statement  or  the  disclosure  of  information  in  any  related  prospectus or
prospectus supplement would materially interfere with any acquisition, financing
or  other  material  event  or  transaction which is then intended or the public
disclosure  of which at the time would be materially prejudicial to the Company,
the Company may postpone the filing or effectiveness of a registration statement
for  a period of not more than 120 days; provided that during any 360-day period

                                    PAGE   5
<PAGE>
the Company shall use its reasonable best efforts to permit a period of at least
120 consecutive days during which the Company will make a registration statement
available  under  this Agreement; and provided further that if (i) the effective
date of any registration statement filed pursuant to a Demand Registration would
otherwise  be  at least 45 calendar days, but fewer than 90 calendar days, after
the  end  of the Company's fiscal year, and (ii) the Securities Act requires the
Company  to  include  audited  financials as of the end of such fiscal year, the
Company  may  delay  the  effectiveness  of such registration statement for such
period  as  is  reasonably  necessary  to  include therein its audited financial
statements for such fiscal year.  If the Company exercises its right to postpone
the  filing  or  effectiveness  of  a  registration  statement,  the  applicable
Requesting  Holders  shall be entitled to withdraw their request for such Demand
Registration  and  it  shall  not  count  as  a  Demand  Registration.

     (b)     Anything  in  this Agreement to the contrary notwithstanding, it is
understood  and  agreed that the Company shall not be required to keep any shelf
registration  effective  or  useable  for  offers  and  sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus  supplement  or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any  material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making  of  such  a filing, supplement or amendment at such time would interfere
with  such  transaction or purpose.  The Company shall promptly give the Holders
of  Registrable  Securities  written  notice  of  such postponement containing a
general  statement  of the reasons for such postponement and an approximation of
the  anticipated  delay.  Upon  receipt by a Holder of Registrable Securities of
notice  of  an  event of the kind described in this Section 3.01(b), such Holder
shall  forthwith discontinue such Holder's disposition of Registrable Securities
until such Holder's receipt of notice from the Company that such disposition may
continue and of any supplemented or amended prospectus indicated in such notice.
The Company shall use its reasonable best efforts to permit sales of Registrable
Securities on such shelf registration statement for at least 120 days during any
360-day  period.  In  the event the Company shall give notice of an event of the
kind  described  in  this  Section 3.01 (b), the Company shall extend the period
during which the applicable registration statement shall be maintained effective
as  provided  in Section 3.01 (a) hereof by the number of days during the period
from  and  including  the date of the giving of such notice to the date when the
Company  shall give notice to the Selling Holders that such dispositions of such
Registrable Securities may continue and shall have made available to the Selling
Holders  any  such  supplemented  or  amended  prospectus.

     (c)  The  Company  will,  if  requested,  prior to filing such registration
statement  or  any  amendment  or  supplement  thereto,  furnish  to the Selling
Holders,  and  each applicable managing Underwriter, if any, copies thereof, and
thereafter  furnish  to  the  Selling Holders and each such Underwriter, if any,
such  number  of copies of such registration statement, amendment and supplement
thereto  (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration statement
(including  each  preliminary  prospectus)  as  the Selling Holders or each such
Underwriter  may  reasonably  request  in  order  to  facilitate the sale of the
Registrable  Securities  by  the  Selling  Holders.

     (d)  After  the  filing  of  the  registration  statement, the Company will
promptly  notify  the  Selling  Holders  of  any  stop  order  issued or, to the
Company's  knowledge,  threatened  to  be  issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it  if  entered.

     (e) The Company will use its commercially reasonable efforts to qualify the
Registrable  Securities  for  offer and sale under such other securities or blue
sky  laws  of  such  jurisdictions  in  the United States as the Selling Holders
reasonably  request;  keep each such registration or qualification (or exemption
therefrom)  effective  during the period in which such registration statement is
required  to  be  kept effective; and do any and all other acts and things which
may  be  reasonably  necessary  or  advisable  to  enable each Selling Holder to
consummate  the  disposition of the Registrable Securities owned by such Selling
Holder  in such jurisdictions; provided that the Company will not be required to
(i)  qualify  generally  to  do  business in any jurisdiction where it would not
otherwise  be  required  to qualify but for this paragraph 3.01(e), (ii) subject
itself  to taxation in any such jurisdiction or (iii) consent to general service
of  process  in  any  such  jurisdiction.

     (f)  The  Company  will  as  promptly  as is practicable notify the Selling
Holders,  at  any time when a prospectus relating to the sale of the Registrable
Securities  is  required  by  law to be delivered in connection with sales by an
Underwriter  or dealer, of the occurrence of any event requiring the preparation
of a supplement or amendment to such prospectus so that, as thereafter delivered
to  the  purchasers  of  such  Registrable  Securities, such prospectus will not
contain  an  untrue  statement  of a material fact or omit to state any material
fact  required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
promptly  make available to the Selling Holders and to the Underwriters any such
supplement  or  amendment.  Upon  receipt of any notice of the occurrence of any

                                    PAGE   6
<PAGE>
event  of  the  kind  described  in the preceding sentence, Selling Holders will
forthwith  discontinue  the offer and sale of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until receipt by
the  Selling  Holders and the Underwriters of the copies of such supplemented or
amended  prospectus and, if so directed by the Company, the Selling Holders will
deliver  to the Company all copies, other than permanent file copies then in the
possession  of  Selling  Holders,  of  the  most recent prospectus covering such
Registrable  Securities at the time of receipt of such notice.  In the event the
Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective as provided in Section
3.01(a)  hereof  by  the number of days during the period from and including the
date  of  the  giving  of  such  notice  to the date when the Company shall make
available  to  the  Selling  Holders  such  supplemented  or amended prospectus.

     (g)  The  Company  will  enter  into  customary  agreements  (including  an
underwriting  agreement  in  customary  form) and take such other actions as are
required  in  order  to  expedite  or  facilitate  the  sale of such Registrable
Securities.

     (h)  At  the  request of any Underwriter in connection with an underwritten
offering  the  Company  will furnish (i) an opinion of counsel, addressed to the
Underwriters,  covering  such  customary matters as the managing Underwriter may
reasonably  request  and  (ii)  a  comfort  letter  or  comfort letters from the
Company's  independent public accountants covering such customary matters as the
managing  Underwriter  may  reasonably  request.

     (i)  If  requested  by  the managing Underwriter or any Selling Holder, the
Company  shall promptly incorporate in a prospectus supplement or post effective
amendment  such  information  as  the managing Underwriter or any Selling Holder
reasonably  requests  to be included therein, including without limitation, with
respect  to  the  Registrable  Securities being sold by such Selling Holder, the
purchase  price  being paid therefor by the Underwriters and with respect to any
other  terms  of  the  underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement  or  post  effective  amendment.

     (j) The Company shall promptly make available for inspection by any Selling
Holder  or  Underwriter  participating  in  any  disposition  pursuant  to  any
registration  statement,  and  any  attorney,  accountant  or  other  agent  or
representative retained by any such Selling Holder or Underwriter (collectively,
the  "Inspectors"),  all  financial  and  other  records,  pertinent  corporate
documents  and properties of the Company (collectively, the "Records"), as shall
be  reasonably  necessary  to  enable  them  to  exercise  their  due  diligence
responsibility,  and  cause  the  Company's officers, directors and employees to
supply  all  information requested by any such Inspector in connection with such
registration  statement;  provided,  however, that unless the disclosure of such
Records  is  necessary  to  avoid  or  correct a misstatement or omission in the
registration  statement  or the release of such Records is ordered pursuant to a
subpoena  or  other  order  from  a court of competent jurisdiction, the Company
shall  not be required to provide any information under this subparagraph (j) if
(A)  the Company believes, after consultation with counsel for the Company, that
to  do  so  would cause the Company to forfeit an attorney-client privilege that
was  applicable  to  such  information  or  (B)  if  either  (1) the Company has
requested  and  been  granted from the Commission confidential treatment of such
information  contained  in  any filing with the Commission or documents provided
supplementally  or  otherwise  or  (2) the Company reasonably determines in good
faith  that  such  Records  are  confidential  and so notifies the Inspectors in
writing  unless  prior to furnishing any such information with respect to (A) or
(B)  such Holder of Registrable Securities requesting such information agrees to
enter  into  a  confidentiality  agreement  in  customary  form  and  subject to
customary exceptions; provided further, however, that each Holder of Registrable
Securities agrees that it will, upon learning that disclosure of such Records is
sought  in  a  court  of  competent jurisdiction, give notice to the Company and
allow  the  Company,  at  its  expense,  to  undertake appropriate action and to
prevent  disclosure  of  the  Records  deemed  confidential.

     (k)  The  Company  shall  cause  the Registrable Securities included in any
registration  statement to be (A) listed on each securities exchange, if any, on
which  similar  securities  issued  by  the  Company  are  then  listed,  or (B)
authorized  to  be quoted and/or listed (to the extent applicable) on the Nasdaq
National  Market  if  the  Registrable  Securities  so  qualify.

     (l) The Company shall provide a CUSIP number for the Registrable Securities
included in any registration statement not later than the effective date of such
registration  statement.

     (m)     The  Company  shall  cooperate  with  each  Selling Holder and each
Underwriter  participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the  National  Association  of  Securities  Dealers,  Inc.

     (n)  The Company shall during the period when the prospectus is required to
be  delivered  under the Securities Act, promptly file all documents required to
be  filed  with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of

                                    PAGE   7
<PAGE>
the  Exchange  Act.

     (o)  The  Company will make generally available to its security holders, as
soon  as  reasonably  practicable, an earnings statement covering a period of 12
months,  beginning  within  three  months  after  the  effective  date  of  the
registration statement, which earnings statement shall satisfy the provisions of
Section  11(a)  of  the  Securities  Act  and  the  rules and regulations of the
Commission  thereunder.

     The  Company  may require Selling Holders promptly to furnish in writing to
the  Company  such  information  regarding  such  Selling  Holders,  the plan of
distribution  of the Registrable Securities and other information as the Company
may  from  time  to  time  reasonably  request  or as may be legally required in
connection  with  such  registration.

     SECTION  3.02.Registration  Expenses.  In  connection with any Registration
effected  hereunder,  the  Company  shall pay the following expenses incurred in
connection  with  such  registration  (the  "Registration  Expenses"):  (i)
registration and filing fees with the Commission and the National Association of
Securities  Dealers,  Inc., (ii) fees and expenses of compliance with securities
or  blue  sky  laws  (including  reasonable fees and disbursements of counsel in
connection  with  blue  sky qualifications of the Registrable Securities), (iii)
printing  expenses,  (iv)  fees  and  expenses  incurred  in connection with the
listing  or  quotation  of  the Registrable Securities, (v) fees and expenses of
counsel  to  the  Company  and  the  reasonable fees and expenses of independent
certified  public  accountants  for  the  Company  (including  fees and expenses
associated with the special audits or the delivery of comfort letters), (vi) the
reasonable  fees  and expenses of any additional experts retained by the Company
in  connection with such registration, (vii) all roadshow costs and expenses not
paid  by  the  Underwriters  and  (viii) the reasonable fees and expenses of one
counsel  for  the  Selling  Holders.

                                   ARTICLE IV
                        Indemnification and Contribution

     SECTION  4.01.Indemnification  by  the  Company.  The  Company  agrees  to
indemnify  and  hold  harmless  each Selling Holder and its Affiliates and their
respective  officers,  directors,  partners,  stockholders,  members, employees,
agents  and  representatives  and  each Person (if any) which controls a Selling
Holder  within the meaning of either Section 15 of the Securities Act or Section
20  of  the  Exchange Act, from and against any and all losses, claims, damages,
liabilities,  costs  and  expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or alleged
untrue  statement  of  a material fact contained or incorporated by reference in
any  registration statement or prospectus relating to the Registrable Securities
(as  amended  or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or  alleged  omission  to  state  therein  a material fact required to be stated
therein  or  necessary  to  make  the  statements therein not misleading, except
insofar  as  such  losses, claims, damages or liabilities are caused by or based
upon any information furnished in writing to the Company by or on behalf of such
Selling  Holder  expressly for use therein or by the Selling Holder's failure to
deliver  a copy of the registration statement or prospectus or any amendments or
supplements  thereto  after  the  Company  has furnished the Selling Holder with
copies of the same; provided, however, that the Company shall have no obligation
to  indemnify under this sentence to the extent any such losses, claims, damages
or  liabilities  have  been  finally and non-appealably determined by a court to
have resulted from such Selling Holder's willful misconduct or gross negligence.
The  Company  also  agrees  to  indemnify  any  Underwriters  of the Registrable
Securities,  their  officers  and  directors  and  each person who controls such
Underwriters  on  substantially the same basis as that of the indemnification of
the  Selling  Holders  provided  in  this  Section  4.01, except insofar as such
losses,  claims,  damages  or  liabilities  are  caused  by  or  based  upon any
information  furnished  in  writing  to  the  Company  by  or  on behalf of such
Underwriter expressly for use therein or by the Underwriter's failure to deliver
a  copy  of  the  registration  statement  or  prospectus  or  any amendments or
supplements  thereto after the Company has furnished the Underwriter with copies
of  the  same;  provided,  however, that the Company shall have no obligation to
indemnify  under this sentence to the extent any such losses, claims, damages or
liabilities  have  been finally and non-appealably determined by a court to have
resulted  from  any  such  Underwriter's willful misconduct or gross negligence.

     SECTION  4.02.Indemnification  by  Selling  Holders.  Each  Selling  Holder
agrees  to  indemnify and hold harmless the Company, its officers and directors,
and each Person, if any, which controls the Company within the meaning of either
Section  15  of the Securities Act or Section 20 of the Exchange Act to the same
extent  as  the foregoing indemnity from the Company to each Selling Holder, but
only  with reference to information furnished in writing by or on behalf of such
Selling  Holder  expressly  for  use in any registration statement or prospectus
relating  to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus.  Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers and
directors  and  each  person who controls such Underwriters on substantially the
same  basis  as  that  of  the  indemnification  of the Company provided in this

                                    PAGE   8
<PAGE>
Section  4.02, but only with reference to information furnished in writing by or
on behalf of such Selling Holder expressly for use in any registration statement
or  prospectus  relating  to  the  Registrable  Securities,  or any amendment or
supplement  thereto,  or any preliminary prospectus.  Each such Selling Holder's
liability under this Section 4.02 shall be limited to an amount equal to the net
proceeds  (after  deducting  the underwriting discount and expenses) received by
such Selling Holder from the sale of such Registrable Securities by such Selling
Holder.  The  obligation  of each Selling Holder shall be several and not joint.

     SECTION  4.03.Conduct  of  Indemnification  Proceedings.  In  case  any
proceeding  (including  any  governmental  investigation)  shall  be  instituted
involving  any  Person  in  respect of which indemnity may be sought pursuant to
Section  4.01  or  Section  4.02,  such  Person  (the "Indemnified Party") shall
promptly  notify  the  Person  against  whom  such  indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request of
the  Indemnified  Party,  shall  retain  counsel reasonably satisfactory to such
Indemnified  Party  to  represent  such  Indemnified  Party  and  any others the
Indemnifying  Party  may designate in such proceeding and shall pay the fees and
disbursements  of  such  counsel  related  to  such  proceeding.  In  any  such
proceeding,  any  Indemnified  Party  shall  have  the  right  to retain its own
counsel,  but  the  fees and expenses of such counsel shall be at the expense of
such  Indemnified  Party  unless  (i) the Indemnifying Party and the Indemnified
Party  shall  have  mutually agreed to the retention of such counsel or (ii) the
named  parties  to any such proceeding (including any impleaded parties) include
both  the  Indemnified  Party  and  the  Indemnifying  Party and, in the written
opinion  of counsel for the Indemnified Party, representation of both parties by
the  same  counsel  would  be inappropriate due to actual or potential differing
interests between them.  It is understood that the Indemnifying Party shall not,
in  connection  with  any  proceeding  or  related  proceedings  in  the  same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of  attorneys  (in  addition  to  any  local  counsel)  at any time for all such
Indemnified  Parties, and that all such fees and expenses shall be reimbursed as
they  are  incurred.  In  the case of any such separate firm for the Indemnified
Parties,  such  firm  shall be designated in writing by the Indemnified Parties.
The  Indemnifying Party shall not be liable for any settlement of any proceeding
effected  without  its written consent, but if settled with such consent (not to
be  unreasonably  withheld),  or if there be a final judgment for the plaintiff,
the  Indemnifying  Party  shall  indemnify  and  hold  harmless such Indemnified
Parties  from  and against any loss or liability (to the extent stated above) by
reason  of  such  settlement  or  judgment.

     SECTION  4.04.Contribution.  If  the  indemnification  provided for in this
Article  IV  is  unavailable  to  an Indemnified Party in respect of any losses,
claims,  damages  or liabilities in respect of which indemnity is to be provided
hereunder,  then  each  such  Indemnifying  Party,  in lieu of indemnifying such
Indemnified  Party,  shall  to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims,  damages  or liabilities in such proportion as is appropriate to reflect
the  relative fault of such party in connection with the statements or omissions
that  resulted  in  such  losses, claims, damages or liabilities, as well as any
other  relevant  equitable considerations.  The relative fault of the Company, a
Selling  Holder  and the Underwriters shall be determined by reference to, among
other  things, whether the untrue or alleged untrue statement of a material fact
or  the  omission  or  alleged  omission  to  state  a  material fact relates to
information  supplied by such party and the parties' relative intent, knowledge,
access  to  information  and opportunity to correct or prevent such statement or
omission.

     The  Company  and  each Selling Holder agrees that it would not be just and
equitable  if  contribution pursuant to this Section 4.04 were determined by pro
rata  allocation  (even  if the Underwriters were treated as one entity for such
purpose)  or by any other method of allocation that does not take account of the
equitable  considerations  referred  to  in the immediately preceding paragraph.
The  amount  paid  or payable by an Indemnified Party as a result of the losses,
claims,  damages  or  liabilities  referred  to  in  the  immediately  preceding
paragraph  shall  be  deemed  to  include,  subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in  connection  with  investigating  or  defending  any  such  action  or claim.
Notwithstanding  the  provisions  of  this  Article  IV, no Underwriter 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 to the public
were  offered  to  the  public  exceeds  the  amount  of  any damages which such
Underwriter  has  otherwise  been  required  to  pay by reason of such untrue or
alleged  untrue  statement  or  omission  or  alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which  the  net proceeds of the offering (before deducting expenses) received by
such  Selling Holder exceeds the amount of any damages which such Selling Holder
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 Securities Act)
shall  be  entitled  to  contribution from any Person who was not guilty of such
fraudulent  misrepresentation.

                                    PAGE   9

<PAGE>
                                    ARTICLE V
                                  Miscellaneous

     SECTION  5.01.Participation  in  Underwritten Registrations.  No Person may
participate  in  any  underwritten  registered  offering  contemplated hereunder
unless  such  Person  (a) agrees to sell its securities on the basis provided in
any  underwriting  arrangements  approved  by  the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of  attorney,  custody  arrangements,  indemnities,  underwriting agreements and
other  documents  reasonably  required  under  the  terms  of  such underwriting
arrangements and this Agreement and (c) furnishes in writing to the Company such
information  regarding  such Person, the plan of distribution of the Registrable
Securities and other information as the Company may from time to time request or
as  may  be  legally  required  in  connection with such registration; provided,
however,  that  no  such Person shall be required to make any representations or
warranties  in  connection with any such registration other than representations
and  warranties  as  to  (i)  such  Person's ownership of his or its Registrable
Securities  to  be  sold  or transferred free and clear of all liens, claims and
encumbrances, (ii) such Person's power and authority to effect such transfer and
(iii)  such  matters  pertaining  to  compliance  with securities laws as may be
reasonably  requested;  provided  further,  however, that the obligation of such
Person  to  indemnify  pursuant  to  any  such  underwriting agreements shall be
several,  not  joint  and  several,  among  such  Persons  selling  Registrable
Securities,  and the liability of each such Person will be in proportion to, and
provided further that such liability will be limited to, the net amount received
by such Person from the sale of such Person's Registrable Securities pursuant to
such  registration.

     SECTION 5.02.Rule 144.  The Company covenants that it will file any reports
required  to  be  filed  by it under the Securities Act and the Exchange Act and
that  it  will take such further action as the Holders may reasonably request to
the  extent required from time to time to enable the Holders to sell Registrable
Securities  without  registration under the Securities Act within the limitation
of  the  exemptions  provided by Rule 144 under the Securities Act, as such Rule
may  be  amended  from time to time, or any similar rule or regulation hereafter
adopted  by  the  Commission.  Upon  the request of any Holder, the Company will
deliver  to  such  Holder a written statement as to whether it has complied with
such  reporting  requirements.

     SECTION  5.03. Holdback  Agreements. Each Holder agrees, in the event of an
underwritten  offering by the Company (whether for the account of the Company or
otherwise)  not  to  offer,  sell,  contract to sell or otherwise dispose of any
Registrable  Securities,  or  any securities convertible into or exchangeable or
exercisable  for  such securities, including any sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten offering), during the 14
days  prior to, and during the 120-day period (or such lesser period as the lead
or  managing  underwriters  may require) beginning on, the effective date of the
registration  statement  for  such  underwritten offering (or, in the case of an
offering  pursuant to an effective shelf registration statement pursuant to Rule
415,  the  pricing  date  for  such  underwritten  offering).

     SECTION  5.04.Termination.  The  registration  rights  granted  under  this
Agreement  will terminate on March 31, 2015, or such earlier time as there shall
no  longer  be any Registrable Securities; provided, however, that if all shares
of  Series  E  Preferred  Stock  outstanding  on  such  date shall not have been
redeemed  in  full  in  accordance  with  Section  10  of  the  Certificate  of
Designations,  this Agreement shall remain in full force and effect with respect
to  the  Registrable  Securities  until  such  time  as  the  shares of Series E
Preferred  Stock  have  been  so  redeemed  in  full.

     SECTION  5.05.Amendments, Waivers, Etc.  This Agreement may not be amended,
waived  or  otherwise  modified or terminated except by an instrument in writing
signed  by  the  Company  and  the  Holders  of  at least 50% of the Registrable
Securities  then  held  by  all the Holders, if the amendment is to be effective
against  the  Holders.

     SECTION  5.06.Counterparts.  This  Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.  Each
party  need  not  sign  the  same  counterpart.

     SECTION  5.07.Entire  Agreement.  This  Agreement  constitutes  the  entire
agreement  and  supersedes all prior agreements and understandings, both written
and  oral,  among  the  parties  with  respect  to  the  subject  matter hereof.

     SECTION  5.08.Governing  Law.  This  Agreement  shall  be  governed by, and
construed  in  accordance  with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law  thereof.

     SECTION  5.09.Assignment  of  Registration  Rights.  Each  Holder  of  the
Registrable  Securities  may  assign  all  or  any part of its rights under this
Agreement  to  any  person  to whom such Holder sells, transfers or assigns such
Registrable  Securities.  In  the  event that the Holder shall assign its rights
pursuant  to this Agreement in connection with the transfer of less than all its

                                    PAGE   10
<PAGE>
Registrable  Securities, the Holder shall also retain his rights with respect to
its  remaining  Registrable  Securities.

     SECTION  5.10.  Consent.  The  Company  will use its best efforts to obtain
the  consent  of  "Holders  of  60%  or  more  of  the  outstanding  Registrable
Securities"  (as  such terms are defined in the Investors Rights Agreement ) (i)
acknowledging  that  the Holders of the Registrable Securities are new preferred
stock  investors  in  the  Company  within  the  meaning  of  Section 3.3 of the
Investors Rights Agreement and (ii) consenting (if necessary in light of (i)) to
the  waiver of Section 1.14(b) of the Investors Rights Agreement with respect to
registrations  effected  pursuant  to  this  Agreement.  If the Company does not
obtain  the requisite consent referred to in the preceding sentence prior to the
first  anniversary  of  the  Closing  Date  (a  "Nonconsent  Event"),  the shelf
registration  rights  set  forth  in  Section 2.03 shall be adjusted as provided
therein.

                                    PAGE   11
<PAGE>

     IN  WITNESS  WHEREOF, the Company and each Holder has caused this Agreement
to  be  signed  on its behalf by its officer thereunto duly authorized as of the
date  first  written  above.

RHYTHMS  NETCONNECTIONS  INC.

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

HMTF  BRIDGE  RHY,  LLC
HM4  RHYTHMS  QUALIFIED  FUND,  LLC
HM4  RHYTHMS  PRIVATE  FUND,  LLC
HM  PG-IV  RHYTHMS,  LLC
HM  4-SBS  RHYTHMS  COINVESTORS,  LLC
HM  4-EQ  RHYTHMS  COINVESTORS,  LLC

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

               [SIGNATURE PAGE FOR RHYTHMS NETCONNECTIONS INC.
                         REGISTRATION RIGHTS AGREEMENT]

                                    PAGE   12
<PAGE>

                   SCHEDULE I

                                       Number           Purchase Price
Purchasers                            of Shares          of the Shares

HMTF  Bridge  RHY,  LLC                125,000            $125,000,000
HM4  Rhythms  Qualified  Fund,  LLC    113,743             113,743,000
HM4  Rhythms  Private  Fund,  LLC          806                 806,000
HM  PG-IV  Rhythms,  LLC                 6,056               6,056,000
HM  4-SBS  Rhythms  Coinvestors,  LLC     2,724              2,724,000
HM  4-EQ  Rhythms  Coinvestors,  LLC      1,671              1,671,000

                                    PAGE   13
<PAGE>

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