VOTING AGREEMENT
This Voting Agreement (the "AGREEMENT"), dated as of August 1, 2001, is
made among (i) the undersigned holders or managers of discretionary accounts
that hold or beneficially own (each, a "CONSENTING NOTEHOLDER" and collectively
the "CONSENTING NOTEHOLDERS") certain of the 13-1/2% Senior Discount Notes due
2008, 12-3/4% Senior Notes due 2009, and 14% Senior Notes due 2010
(collectively, the "NOTES"), all issued by Rhythms NetConnections Inc.
("RHYTHMS," and together with its direct and indirect subsidiaries, the
"COMPANY") pursuant to certain indentures, dated as of May 5, 1998, April 23,
1999, and February 23, 2000, respectively, (together, the "INDENTURES"), entered
into between the Company and State Street Bank and Trust Company of California,
N.A., as trustee (the "INDENTURE TRUSTEE"), (ii) the Company, (iii) X.X.
Xxxxxxxx, the Company's Executive Vice President and Chief Financial Officer
(solely with respect to the treatment of his employment agreements as described
in the Term Sheet (as defined below)), and (iv) Xxxxx Xxxxxxxx, the Company's
Chief Operating Officer and Acting Chief Executive Officer (solely with respect
to the treatment of his employment agreements as described in the Term Sheet (as
defined below)) (each of the foregoing, a "PARTY", and collectively, the
"PARTIES").
RECITALS
WHEREAS, the Company is a provider of broadband local access
communication services and uses multiple digital subscriber lines to offer its
customers a range of high-speed, "always on" connections to the Internet or
private networks;
WHEREAS, the Company has been pursuing a dual-track strategy to either
(i) obtain an investment sufficient to fully fund its business plan and thereby
accomplish a stand-alone reorganization, or (ii) sell its assets, either as a
going concern to one purchaser or some or all of its assets to one or more
purchasers;
WHEREAS, the Company has determined that a prompt restructuring or, in
the event a prompt restructuring is not accomplished, an orderly wind-down of
operations (collectively, a "TRANSACTION") would be in the best interests of its
creditors and shareholders;
WHEREAS, certain of the holders of the Notes formed an AD HOC committee
(the "NOTEHOLDERS' COMMITTEE") for the purposes of negotiating a Transaction;
WHEREAS, each Consenting Noteholder is the holder or investment adviser
or manager for a holder of record of a claim, as defined in section 101(5) of
title 11 of the United States Code, 11 U.S.C. Sections 101-1330 (as amended, the
"BANKRUPTCY CODE") arising out of, or related to, the Notes (a "NOTEHOLDER
CLAIM"), or if not a holder of record, then the beneficial owner thereof;
WHEREAS, the Noteholders' Committee has retained Milbank, Tweed, Xxxxxx
& XXXxxx LLP ("MILBANK"), as counsel, and Jefferies & Co. ("JEFFERIES"), as
financial advisor, at the expense of the Company, all of which have been
involved in the negotiations of a Transaction;
WHEREAS, the Parties intend to implement the Transaction through a
confirmed joint plan of reorganization or joint plan of liquidation for the
Company (collectively, the "PLAN") in voluntary bankruptcy cases (the "CHAPTER
11 CASES") to be commenced by the Company by filing petitions (collectively, the
"PETITIONS") under chapter 11 of Title 11 of the United States Code, 11 U.S.C.
Sections 101-1330 (as amended, the "BANKRUPTCY CODE");
WHEREAS, subject to execution of definitive documentation and
appropriate approvals of the United States Bankruptcy Court for the Southern
District of New York (the "BANKRUPTCY COURT"), the following sets forth the
agreement between the Parties concerning their respective obligations.
NOW, THEREFORE, in consideration of the foregoing, the Parties agree as
follows:
AGREEMENT
SECTION 1. TERM SHEET. The term sheet, dated as of August 1, 2001,
annexed hereto as Exhibit A (the "TERM SHEET"), is incorporated herein and is
made part of this Agreement. Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Term Sheet. The general
terms and conditions of the Transaction are set forth in the Term Sheet,
HOWEVER, the Term Sheet is supplemented by the terms and conditions of this
Agreement. In the event of any inconsistencies between the terms of this
Agreement and the Term Sheet, the Term Sheet shall govern.
SECTION 2. MEANS FOR EFFECTUATING THE TRANSACTION. To implement the
Transaction, Rhythms has agreed, on the terms and conditions set forth herein,
to consummate, and to cause each of its wholly owned U.S. subsidiaries to
2
consummate, the Transaction through the Plan, the requisite acceptances of which
will be solicited after the Company commences the Chapter 11 Cases by filing the
Petitions under chapter 11 of the Bankruptcy Code, and to use its commercially
reasonable best efforts to have the Plan confirmed by the Bankruptcy Court in
accordance with the timetable set forth in the Term Sheet. .
SECTION 3. CONDUCT OF BUSINESS PENDING THE CONSUMMATION DATE OF
PLAN. The Company agrees that, prior to the consummation date of the Plan,
unless otherwise expressly permitted by this Agreement:
(a) Rhythms shall not disburse or transfer any cash, securities or
other assets or property outside the ordinary course of business to any of its
direct and indirect subsidiaries or otherwise unless authorized by an order of
the Bankruptcy Court, and if such disbursements and transfers exceed $250,000 in
the aggregate, such order is reasonably satisfactory to a Committee Majority.
(b) Prior to any liquidation of the Company, Rhythms shall and shall
cause each of its direct and indirect subsidiaries to (i) maintain its good
standing under the laws of the State or other jurisdiction in which it is
incorporated or organized, and (ii) notify the Consenting Noteholders of any
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated or threatened) which
relate directly to the Company and would reasonably be anticipated to materially
adversely affect the business, property, or financial condition of the Company
considered as one enterprise.
SECTION 4. RETENTION OF NOTICING AND BALLOTING AGENT. The Company shall promptly
file an application with the Bankruptcy Court seeking the entry of order
authorizing the Company to retain, employ, compensate, and reimburse Innisfree
M&A Incorporated on customary and reasonable terms and conditions, as the
Company's voting and claims agent in the Chapter 11 Cases, and the Consenting
Holders shall not object to and shall support such application.
SECTION 5. CONSENTING NOTEHOLDERS' COMMITMENTS REGARDING A TRANSACTION.
GENERAL AGREEMENT OF MUTUAL SUPPORT. The Company and the Consenting
Noteholders will conduct the restructuring process as provided for in the Term
Sheet.
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5.01. VOTE SUBJECT TO COURT APPROVED DISCLOSURE STATEMENT.
Each Consenting Noteholder agrees that so long as it (or a client or an
account for which it has voting authority) is the holder of record or the
beneficial owner of a Noteholder Claim, subject to the conditions that (i) the
material terms of any applicable agreements, including, without limitation, the
Plan implementing the Transaction, embody and are consistent with the terms set
forth in the Term Sheet, (ii) the Plan, the disclosure statement related
thereto, and order confirming the Plan are in form and substance reasonably
satisfactory to a Committee Majority and all agreements have been entered into
by all applicable parties and have become valid, binding and enforceable, (iii)
no Noteholders' Termination Event (as defined in the Term Sheet) shall have
occurred and shall have not been waived in accordance with the Term Sheet, and
(iv) the Company has not terminated this Agreement after the occurrence of a
Company Termination Event and none of its direct and indirect subsidiaries shall
have breached this Agreement, it shall, when solicited, subject to the
acknowledgements contained in Section 12 hereof, (a) vote to accept the Plan,
(b) not object to confirmation of the Plan, and (c) refrain from supporting
directly or indirectly any other proposed plan of reorganization or liquidation
for the Company; PROVIDED, HOWEVER, that no Consenting Noteholder shall be
barred from (x) objecting to compliance with Bankruptcy Code section 1125 or
other applicable law relating to the sufficiency of the disclosures contained in
the accompanying disclosure statement for the Plan (the "DISCLOSURE STATEMENT"),
if it believes the Disclosure Statement or other document received by such
Consenting Noteholder lacks adequate information (as defined in section
1125(a)(1) of the Bankruptcy Code) or contains a material misstatement or
omission or (y) taking any action that does not directly or indirectly conflict
with the provisions of the Term Sheet.
5.02. TRANSFER OF CLAIMS, INTERESTS AND SECURITIES.
Except as expressly provided herein, this Agreement shall not in any
way restrict the right or ability of any Party hereto to sell, use, assign,
transfer or otherwise dispose of any of the securities of, or claims against,
the Company, PROVIDED, HOWEVER, for a period commencing as of the date hereof
until the earliest to occur of (i) the occurrence of a Noteholders' Termination
Event (unless the occurrence of such Noteholders' Termination Event has been
waived), (ii) the Company's termination of this Agreement after the occurrence
of a Company Termination Event, and (iii) the order confirming the Plan
4
becomes a final order or the Plan shall have become effective (such period, the
"RESTRICTED PERIOD"), such transfer shall be void and without effect unless and
until the transferee delivers to the Consenting Noteholder transferor and the
Company within three (3) business days after the date of such transfer, a
written agreement containing the provisions set forth in Exhibit B attached
hereto pursuant to which such transferee shall assume all obligations of the
transferor hereunder in respect of the Noteholder Claims or securities
transferred (such transferees, if any, to also be a "Consenting Noteholder"
hereunder).
5.03. REPRESENTATION OF CONSENTING NOTEHOLDERS' HOLDINGS.
Each of the Consenting Noteholders represents that, as of the date
hereof, it is the beneficial owner of, and/or the investment adviser or manager
(with the power to vote and dispose of all of the aggregate principal amount of
the Notes, as set forth on its signature page (the "RELEVANT SECURITIES") on
behalf of their beneficial owners) of discretionary accounts for the holders or
beneficial owners of the Relevant Securities.
SECTION 6. THE COMPANY'S UNDERTAKINGS. Rhythms shall use its commercially
reasonable best efforts, and shall cause its direct and indirect subsidiaries to
use their commercially reasonable best efforts, to, as applicable, (i) take all
acts reasonably necessary to effectuate and consummate the transactions
contemplated by this Voting Agreement, the Term Sheet, and the Plan and (ii)
implement all steps necessary and desirable to obtain an order of the Bankruptcy
Court confirming the Plan, in each case, in accordance with the timetable set
forth in the Term Sheet.
SECTION 7. MUTUAL REPRESENTATIONS, WARRANTIES, AND COVENANTS. Each of the
Parties represents, warrants, and covenants to the others the following, each of
which is a continuing representation, warranty, and covenant:
7.01. ENFORCEABILITY.
This Agreement is a legal, valid and binding obligation of the Party,
enforceable against it in accordance with its terms, except as enforcement may
be limited by applicable laws relating to or limiting creditor's rights
generally or by equitable principles relating to enforceability.
5
7.02. NO CONSENT OR APPROVAL.
Except as expressly provided in this Agreement, no consent or approval
is required by any other person or entity in order for it to carry out the
provisions of this Agreement.
7.03 THIRD PARTY APPROVALS. Rhythms shall use its commercially
reasonable best efforts, and shall cause its direct and indirect subsidiaries to
use their commercially reasonable best efforts, to obtain all regulatory,
governmental, administrative, and third party approvals of the Transaction and
confirmation of the Plan, and to promptly consummate the Plan on the timetable
set forth in the Term Sheet.
7.04 POWER AND AUTHORITY. It has all requisite power and authority to
enter into this Agreement and to carry out the transactions contemplated by, and
perform its respective obligations under, this Agreement.
7.05 AUTHORIZATION. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by all
necessary action on its part.
7.06 GOVERNMENTAL CONSENTS. The execution and delivery by it of this
Agreement do not require any registration or filing with consent or approval of,
or other action to, with or by, any federal, state or other governmental
authority or regulatory body, except such filings as may be necessary and/or
required under the federal securities laws and, in connection with the
commencement of the Chapter 11 Cases, the approval of the Disclosure Statement
and confirmation of Plan.
SECTION 8. NO WAIVER OF PARTICIPATION AND RESERVATION OF RIGHTS. This Agreement
and the Plan are part of a proposed settlement of disputes among the Parties.
Except as expressly provided in this Agreement or the Term Sheet, nothing herein
is intended to, or does, in any manner waive, limit, impair, or restrict the
ability of each of the Consenting Noteholders to protect and preserve its
rights, remedies and interests, including without limitation, its claims against
the Company or its full participation in any bankruptcy case filed by the
Company. Except as otherwise provided in the Term Sheet or this Voting Agreement
(including, without limitation, with respect to a Survival Event), if the
transactions contemplated by this Agreement or in the Plan are not consummated,
or if this Agreement is terminated for any reason, the Parties fully reserve any
and all of their
6
rights.
SECTION 9. TERMINATION OF AGREEMENT. The termination events for this Voting
Agreement and the Term Sheet are as set forth in the Term Sheet.
SECTION 10. CONDITIONS TO CONSENTING NOTEHOLDERS' OBLIGATION TO VOTE
FOR THE PLAN. The obligations of the Consenting Noteholders to vote to accept
the Plan (as contemplated by the Term Sheet) shall be subject to each of the
following conditions relating to the Chapter 11 Cases and this Agreement:
(a) No Noteholders' Termination Event shall have occurred
(unless otherwise waived in accordance with the provisions of the Term
Sheet);
(b) This Agreement shall not otherwise have been terminated in
accordance with its terms;
(c) The Company projects that it will have sufficient cash on
the closing date to make all cash payments required to be made on the
closing date pursuant to the Plan;
(d) The form of the Plan and the confirmation order shall be
reasonably satisfactory in form and substance to the Consenting
Noteholders;
(e) All claims of creditors (whether secured or unsecured) and
all interests of equity security holders shall be treated in a fashion
consistent with the terms of the Term Sheet; and
(f) There shall not be in force any order, decree or ruling by
any court or governmental body having jurisdiction, or any threatened
or pending complaint of a governmental body praying for an order,
decree or ruling of a court restraining or enjoining the consummation
of or rendering illegal the transactions contemplated by this Agreement
or the Plan.
The above conditions may be waived in writing by a Committee Majority.
SECTION 11. CONDITIONS TO THE COMPANY'S OBLIGATION TO CONSUMMATE FINANCIAL
RESTRUCTURING. The obligations of the Company to consummate the Transaction
shall be subject to the satisfaction,
7
as of the closing date of the transactions contemplated by the Term Sheet and
the Plan, of each of the following conditions relating to the Chapter 11 Cases
and this Agreement:
(a) This Agreement shall not have been terminated in
accordance with its terms;
(b) The Bankruptcy Court shall have entered an order
confirming the Plan under section 1129 of the Bankruptcy Code;
(c) There shall not be in force any order, decree or ruling by
any court or governmental body having jurisdiction restraining or
enjoining the consummation of or rendering illegal the transactions
contemplated by this Agreement or the Plan; and
(d) No Company Termination Event shall have occurred.
SECTION 12. ACKNOWLEDGMENT. This Agreement and the Term Sheet and
the transactions contemplated herein and therein are the product of negotiations
between the Parties and their respective representatives. It is recognized and
agreed by the Parties that this Agreement and the Term Sheet do not purport to
contain all of the material terms with respect to the Chapter 11 Cases. This
Agreement is not and shall not be deemed to be a solicitation of votes for the
acceptance of the Plan. Each of the Consenting Noteholders' acceptance of the
Plan will not be solicited until it has received a Disclosure Statement approved
by the Bankruptcy Court.
The Company acknowledges that (i) the Consenting Noteholders
are not responsible for soliciting acceptances of the Plan by the Accounts in
the Chapter 11 Cases, (ii) the solicitation of acceptances of the Plan involves
intermediate entities over whom the Consenting Noteholders lack control, and
(iii) the Consenting Noteholders' obligations to vote for the Plan are subject
to the timely performance of such intermediate entities' obligations such that
each Consenting Noteholder or Account, as the case may be, has sufficient time
in which to receive, review and return the applicable ballot(s) to the voting
agent on or before the voting deadline.
SECTION 13. EFFECTIVENESS; AMENDMENTS; NOTEHOLDERS. This Agreement
shall not become effective and binding on the Parties unless and until (i)
counterpart signature pages hereto shall
8
have been executed and delivered by regular mail or otherwise by the Company and
holders or managers of the Notes which constitute in the aggregate (x) the
amount set forth in the Term Sheet or (y) a lower percentage that is acceptable
to the Company, and (ii) the Parties each shall have executed and delivered to
the others the Mutual Release Agreement, substantially similar to the form
annexed hereto as Exhibit C. Once effective, neither this Agreement nor the Term
Sheet may be modified, amended, or supplemented (except as expressly provided
herein or in the Term Sheet) as to any Consenting Noteholder except in writing
signed by the Company and such Consenting Noteholder.
SECTION 14. IMPACT OF APPOINTMENT TO CREDITORS' COMMITTEE.
Notwithstanding anything herein to the contrary, if any Consenting Noteholder is
appointed to and serves on any official committee of unsecured creditors
appointed in the Chapter 11 Cases (an "OFFICIAL COMMITTEE"), the terms of this
Agreement shall not be construed so as to limit such Consenting Noteholder's
exercise (in its sole discretion) of its fiduciary duties to any person arising
from its service on such Official Committee, and any such exercise (in the sole
discretion of such Consenting Noteholder) of such fiduciary duties shall not be
deemed to constitute a breach of the terms of this Agreement (but the fact of
such service on an Official Committee shall not otherwise affect the continuing
validity or enforceability of this Agreement against such Consenting Noteholder
in its capacity as a holder of the Notes, including, without limitation, the
requirement of such Consenting Noteholder to support the Term Sheet, this
Agreement, and vote for the Plan).
SECTION 15. MISCELLANEOUS.
15.01. FURTHER ASSURANCES.
The Parties agree to execute and deliver such other instruments and
perform such acts, in addition to the matters herein specified, as may be
appropriate or necessary, from time to time, to effectuate the agreements and
understandings of the Parties, whether the same occurs before or after the date
of this Agreement.
15.02. COMPLETE AGREEMENT.
This Agreement, together with the Term Sheet and the exhibits and
schedules thereto, and the documents and pleadings referred to therein and
herein, is the entire agreement between
9
the Parties with respect to the subject matter hereof and supersedes all prior
agreements, oral or written, between the Parties with respect thereto.
15.03. WAIVER.
No claim of waiver, modification, consent or acquiescence with respect
to any provision of this Agreement shall be made against any Party, except on
the basis of a written instrument executed by or on behalf of such Party. All
Parties shall receive advance written notice of any proposed material changes to
any of the Chapter 11 Documents.
15.04. PARTIES.
This Agreement shall be binding upon, and inure to the benefit of, the
Parties. No rights or obligations of any Party under this Agreement may be
assigned or transferred to any other person or entity except as provided in
Section 5.02 hereof. Nothing in this Agreement, express or implied, shall give
to any person or entity, other than the Parties, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
15.05 SURVIVAL. Notwithstanding the sale of Relevant Securities by any
of the Consenting Noteholders in accordance with Section 5.02 hereto or the
termination of the Consenting Noteholders' obligations hereunder in accordance
with Section 10 hereto, the Company's obligations and agreements set forth in
Section 15.11 (but only with respect to expenses incurred through the date of
such termination) hereto shall survive such termination and shall continue in
full force and effect for the benefit of the Consenting Noteholders in
accordance with the terms hereof.
15.06. HEADINGS.
The headings of all sections of this Agreement are inserted solely for
the convenience of reference and are not a part of and are not intended to
govern, limit or aid in the construction or interpretation of any term or
provision hereof.
15.07. GOVERNING LAW.
THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS PRINCIPLES
THEREOF.
10
15.08. EXECUTION OF AGREEMENT.
This Agreement may be executed and delivered (by facsimile or
otherwise) in any number of counterparts, each of which, when executed and
delivered, shall be deemed an original, and all of which together shall
constitute the same agreement. Except as expressly provided in this Agreement,
each individual executing this Agreement on behalf of a Party has been duly
authorized and empowered to execute and deliver this Agreement on behalf of said
Party.
15.09. INTERPRETATION.
This Agreement is the product of negotiations of the Parties, and in
the enforcement or interpretation hereof, is to be interpreted in a neutral
manner, and any presumption with regard to interpretation for or against any
party by reason of that Party having drafted or caused to be drafted this
Agreement, or any portion hereof, shall not be effective in regard to the
interpretation hereof.
15.10. CONFIDENTIALITY.
All information obtained in the course of the negotiations leading up
to this Agreement shall be treated as confidential information pursuant to the
confidentiality agreements previously executed between the Company and each of
the Consenting Noteholders, which confidentiality agreements are incorporated by
reference as if fully set forth herein.
15.11. FEES, EXPENSES AND INDEMNIFICATION. Unless the Consenting
Holders shall have materially breached any provision of this Agreement, the
Company shall pay in full on the day immediately prior to the filing of the
Petitions all reasonable fees and expenses that are due and owing to Milbank and
Jefferies under their respective engagement letters; PROVIDED, HOWEVER, that in
the event of such breach, the Company shall pay on such date any and all
outstanding expenses of such advisors through the date of the termination of
this Agreement.
Subject to Bankruptcy Court approval, the Company agrees that it shall
continue to pay (and support any application of the Noteholders' Committee to
require such payment), the reasonable fees and expenses of Milbank and
Jefferies, as legal and financial advisors to the Noteholders' Committee, from
and after the commencement (and through the conclusion) of the Chapter 11 Cases
and through the earlier to occur of (x) the consummation of the Plan and (y) the
termination of this
11
Agreement by the Company or the Consenting Noteholders, whether or not an
Official Committee is appointed and, if an Official Committee is appointed,
whether or not Milbank and Jefferies are selected as advisors to the Official
Committee; PROVIDED, HOWEVER, that if Milbank and Jefferies are selected as
advisors to the Official Committee, then the Company's obligations to pay their
respective fees and expenses under this Agreement shall terminate.
The Company agrees to indemnify and hold harmless each Consenting
Noteholder and its officers, directors, partners, employees, agents, and
advisors, including Milbank and Jefferies, and each of their respective
successors and assigns from and against any and all claims, suits, actions,
liabilities, and judgments and costs related thereto (including any defense
costs associated therewith on an "as incurred" basis) arising under or with
respect to the transactions contemplated by this Agreement or the Term Sheet or
any act or failure to act taken in contemplation, furtherance or connection
herewith, except if such claim or liability is determined by a competent court
to have arisen as a result of such Consenting Noteholder's material breach of
its obligations hereunder or fraudulent or willful misconduct or gross
negligence on the part of such Consenting Noteholder or the applicable
indemnified person.
15.12. TERMINATION.
In addition any other termination provisions contained in this
Agreement and the Term Sheet, this Agreement shall be terminable via written
notice to all of the Parties upon written agreement of the Company and a
Committee Majority to terminate the Agreement; PROVIDED, HOWEVER, that such
termination of the Agreement shall not restrict the Parties' remedies for a
prior breach hereof.
15.13. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of the parties and their respective successors, assigns,
heirs, executors, administrators and representatives, other than a trustee or
similar representative appointed in the Chapter 11 cases. The agreements,
representations and obligations of the Consenting Noteholders under this
Agreement are, in all respects, several and not joint.
15.14. NOTICES.
All notices hereunder shall be deemed given if in writing
12
and delivered, if sent by telecopy, courier or by registered or certified mail
(return receipt requested) to the following addresses and telecopier numbers (or
at such other addresses or telecopier numbers as shall be specified by like
notice)
(1) if to the Company, to:
Rhythms NetConnections Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxxxxx
Telecopier: (000) 000-0000
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
(2) if to a Consenting Noteholder or a transferee
thereof, to the addresses or telecopier numbers set
forth below following the Consenting Noteholder's
signature (or as directed by any transferee thereof),
as the case may be with copies to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000 AND
(000) 000-0000
Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by telecopier shall be effective upon oral or machine
confirmation of transmission.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day
and year first above written.
Dated: August 1, 0000 XXXXXXX XXXXXXXXXXXXXX INC.,
a Delaware corporation
By: ______________________
Name: X.X. Xxxxxxxx
Its: Executive VP & CFO
Dated: August 1, 2001 ___________________________
Xxxxx Xxxxxxxx (solely with
respect to the treatment of his
employment agreements as
described in the Term Sheet), in
his individual capacity
Dated: August 1, 2001 ___________________________
X.X. Xxxxxxxx (solely with
respect to the treatment of his
employment agreements as
described in the Term Sheet), in
his individual capacity
[CONSENTING NOTEHOLDER SIGNATURE PAGES FOLLOW]
14
Dated: August 1, 2001 XXXXXX XXXXXXX INVESTMENT MANAGEMENT, INC.
--------------------------
Xxxxxx X. Xxxxxxxxx
Title: Executive Director
0 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
15
Dated: August 1, 2001 XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
--------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
4 World Financial Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
16
Dated: August 1, 2001 FIR TREE PARTNERS
--------------------------
Xxxxx Xxxxxx
Title: Vice President
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
17
Dated: August 1, 2001 AQUITANIA PARTNERS
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Principal, on behalf of Aquitania
Partners, Q.P., L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
18
Dated: August 1, 2001 VIKING GLOBAL INVESTORS LP
--------------------------
Xxxxx X. Xxxxx
Title: Managing Director
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
19
Dated: August 1, 2001 LUTHERAN BROTHERHOOD HIGH YIELD
FUND, BY LUTHERAN BROTHERHOOD
RESEARCH CORP., ITS INVESTMENT
ADVISOR
LB SERIES FUND, INC. - HIGH
PORTFOLIO, BY LUTHERAN
BROTHERHOOD, ITS INVESTMENT
ADVISOR
--------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
20
Dated: August 1, 2001 CONTINENTAL CASUALTY COMPANY
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
000 Xxxxx Xxxxxx Xxxxxx
XXX Xxxxx - 00X
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
21
Dated: August 1, 2001 CITADEL EQUITY FUND LTD.
BY: CITADEL LIMITED
PARTNERSHIP, PORTFOLIO MANAGER
BY: GLB PARTNERS, L.P.,
ITS GENERAL PARTNER
BY: CITADEL INVESTMENT
GROUP, L.L.C., ITS GENERAL PARTNER
--------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
22
Dated: August 1, 2001 CITADEL CREDIT TRADING LTD.
BY: CITADEL LIMITED
PARTNERSHIP, PORTFOLIO MANAGER
BY: GLB PARTNERS, L.P.,
ITS GENERAL PARTNER
BY: CITADEL INVESTMENT
GROUP, L.L.C., ITS GENERAL PARTNER
--------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
AGGREGATE PRINCIPAL AMOUNT
OF NOTES BENEFICIALLY OWNED
$-------------------------
2008 13 1/2% Senior Discount Notes
$-------------------------
2009 12 3/4% Senior Notes
$-------------------------
2010 14% Senior Notes
AGGREGATE PRINCIPAL AMOUNT OF
NOTES MANAGED ON BEHALF OF
ACCOUNTS FOR WHICH SIGNATORY HAS
VOTING AUTHORITY:
$-------------------------
2008 13 1/2% Senior Discount Notes
Voting Agreement by $-------------------------
and among Rhythms 2009 12 3/4% Senior Notes
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx, and $-------------------------
certain Consenting Noteholders 2010 14% Senior Notes
23
Exhibit A
Term Sheet
EXHIBIT B
PROVISION FOR TRANSFER AGREEMENT
The undersigned ("TRANSFEREE") hereby acknowledges that it has read and
understands the Voting Agreement between Rhythms NetConnections Inc. and
[Transferor Consenting Noteholder], INTER ALIA, and agrees to be bound by the
terms and conditions thereof to the extent Transferor was thereby bound.
By:
----------------------
Transferee
EXHIBIT C TO VOTING AGREEMENT
MUTUAL RELEASE AGREEMENT
This Mutual Release Agreement (this "AGREEMENT") dated as of
August 1, 2001, is made by and among (i) the undersigned holders (each, a
"CONSENTING NOTEHOLDER" and collectively the "CONSENTING NOTEHOLDERS") of
certain of the 13-1/2% Senior Discount Notes due 2008, 12-3/4% Senior Notes due
2009, and 14% Senior Notes due 2010 (collectively, the "NOTES"), all issued by
Rhythms NetConnections Inc. ("RHYTHMS," and together with its direct and
indirect subsidiaries, the "COMPANY") pursuant to certain indentures, dated as
of May 5, 1998, April 23, 1999, and February 23, 2000, respectively, (together,
the "INDENTURES"), entered into between the Company and State Street Bank and
Trust Company of California, N.A., as trustee, (ii) the Company, (iii) X.X.
Xxxxxxxx, the Company's Executive Vice President and Chief Financial Officer,
and (iv) Xxxxx Xxxxxxxx, the Company's Chief Operating Officer and Acting Chief
Executive Officer (each of the foregoing, a "PARTY", and collectively, the
"PARTIES").
WHEREAS, the Parties entered into that certain Voting
Agreement, dated as of August 1, 2001 (the "VOTING AGREEMENT"), pursuant to
which, among other things, the Parties set forth their agreements concerning
their respective obligations with respect to a Transaction1 and the conduct of
the Chapter 11 Cases.
NOW, THEREFORE, in consideration of the foregoing and the
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which the Parties hereby acknowledge, the Parties
agree as follows:
1. RELEASE BY CONSENTING NOTEHOLDERS.
Except as provided for herein, each Consenting Noteholder,
solely in its capacity as a holder of the Notes, hereby unequivocally releases
and forever discharges the Company, its directors serving on the board of
directors on the date that the Company approved the Voting Agreement, officers,
--------
(1) Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Voting Agreement.
attorneys, advisors, accountants, employees, executives, and representatives
(collectively, the "COMPANY RELEASED PARTIES"), from any and all claims (as
defined in 11 U.S.C. Section 101(5)) arising under or in connection with the
Notes whether or not asserted or raised and existing, or alleged to exist or to
have existed, at any time from the beginning of the world to and including the
date hereof (collectively, the "NOTEHOLDER CLAIMS"), which the Consenting
Noteholder has or may have against any of the Company Released Parties;
PROVIDED, HOWEVER, that the foregoing release shall not apply to any Noteholder
Claim (i) relating to the payment (or non-payment) of any principal of, or
premium, if any, and interest under the Indenture or with respect to the Notes,
including, without limitation, payment (or non-payment) of the Escrowed Funds,
and any fees or other charges that become due and payable in accordance with the
Indentures or under applicable law, (ii) involving the gross negligence, willful
misconduct or fraud of any Company Released Party or (iii) relating to the
Voting Agreement, the Term Sheet and this Agreement, including, without
limitation, any claim relating to the Company's breach of the Voting Agreement,
the Term Sheet or this Agreement or the enforcement of the provisions of such
agreements; PROVIDED, FURTHER, that, in the event of a Noteholders' Termination
Event or a Company Termination Event, this Agreement and the releases provided
hereunder shall automatically terminate, be of no further force or effect, and
be deemed null and void and to have never existed in any form.
2. RELEASE BY THE COMPANY.
Upon the execution of this Agreement by the Parties, the
Company and Messrs. Xxxxxxxx and Xxxxxxxx (collectively, the "COMPANY RELEASING
PARTIES") hereby unequivocally release and forever discharge each Consenting
Noteholder, in its capacity as a holder of the Notes, and any of its affiliates,
and their respective successors, assigns, trustees, agents, and their directors,
officers, employees, executives, attorneys, advisors, accountants, and
representatives (collectively, the "NOTEHOLDER RELEASED PARTIES") from any and
all claims (as defined in 11 U.S.C. Section 101(5)) whether or not asserted or
raised and existing, or alleged to exist or to have existed, at any time from
the beginning of the world to and including the date of execution of this
Agreement by the Parties (collectively, the "COMPANY CLAIMS"), which any Company
Releasing Party ever had or may have against any of the Noteholder Released
Parties; PROVIDED, HOWEVER, that the foregoing release shall not apply to any
Company Claims (i) involving the gross negligence, willful
27
misconduct or fraud of any Noteholder Released Party or (ii) arising under the
terms and conditions of, or from a Noteholder Released Party's breach of the
Voting Agreement, the Term Sheet or this Agreement; PROVIDED, FURTHER, that, in
the event of a Noteholders' Termination Event or a Company Termination Event,
this Agreement and the releases provided hereunder shall automatically
terminate, be of no further force or effect, and be deemed null and void and to
have never existed in any form.
3. AGREEMENTS.
The Parties understand and agree (a) that neither this
Agreement, nor any part hereof, shall be used or construed as an admission of
liability on the part of any Party, (b) that neither this Agreement, nor any
part hereof, shall be used as evidence by or against any Party for any purpose,
and (c) that each Party has had the opportunity to engage counsel to review this
Agreement and advise such Party with respect thereto.
4. SUCCESSORS AND ASSIGNS.
The terms of this Agreement shall be binding on the Parties
and their respective successors and assigns.
5. TERMINATION.
In the event of Noteholders' Termination Event or a Company
Termination Event, this Agreement, including any releases provided hereunder,
shall automatically terminate and be of no further force or effect, and be
deemed null and void and to have never existed in any form.
6. COUNTERPARTS; FACSIMILE EXECUTION.
This Agreement may be executed in any number of counterparts
and by different Parties on separate counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement. This Agreement may be executed and delivered by telecopier, PROVIDED,
HOWEVER, that the Parties shall endeavor to deliver original counterpart
signatures to the other Parties as soon thereafter as practicable.
7. GOVERNING LAW.
THIS MUTUAL RELEASE AGREEMENT AND THE RELEASES
28
CONTAINED HEREIN SHALL BE GOVERNED BY, ENFORCED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CHOICE OF LAW
PRINCIPLES.
IN WITNESS WHEREOF, the Parties have caused this Mutual
Release Agreement to be executed as of the date first written above.
Dated: August 1, 0000 XXXXXXX XXXXXXXXXXXXXX INC.,
a Delaware corporation
By:
---------------------------
Name: X.X. Xxxxxxxx
Its: Executive VP & CFO
------------------------------
Dated: August 1, 2001 Xxxxx Xxxxxxxx, in his
individual capacity
------------------------------
Dated: August 1, 2001 X.X. Xxxxxxxx, in his
individual capacity
[CONSENTING NOTEHOLDER SIGNATURE PAGES FOLLOW]
29
Dated: August 1, 2001 XXXXXX XXXXXXX INVESTMENT MANAGEMENT, INC.
--------------------------
Xxxxxx X. Xxxxxxxxx
Title: Executive Director
0 Xxxxx Xxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement
by and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
30
Dated: August 1, 2001 XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
--------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
4 World Financial Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
31
Dated: August 1, 2001 FIR TREE PARTNERS
--------------------------
Xxxxx Xxxxxx
Title: Vice President
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
32
Dated: August 1, 2001 AQUITANIA PARTNERS
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Principal, on behalf of Aquitania
Partners, Q.P., L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
33
Dated: August 1, 2001 VIKING GLOBAL INVESTORS LP
--------------------------
Xxxxx X. Xxxxx
Title: Managing Director
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
34
Dated: August 1, 2001 LUTHERAN BROTHERHOOD HIGH YIELD
FUND, BY LUTHERAN BROTHERHOOD
RESEARCH CORP., ITS INVESTMENT ADVISOR
LB SERIES FUND, INC. - HIGH
PORTFOLIO, BY LUTHERAN
BROTHERHOOD, ITS INVESTMENT ADVISOR
--------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
35
Dated: August 1, 2001 CONTINENTAL CASUALTY COMPANY
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
000 Xxxxx Xxxxxx Xxxxxx
XXX Xxxxx - 00X
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
36
Dated: August 1, 2001 CITADEL CREDIT TRADING LTD.
BY: CITADEL LIMITED
PARTNERSHIP, PORTFOLIO MANAGER
BY: GLB PARTNERS, L.P.,
ITS GENERAL PARTNER
BY: CITADEL INVESTMENT
GROUP, L.L.C., ITS GENERAL PARTNER
--------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
37
Dated: August 1, 2001 CITADEL EQUITY FUND LTD.
BY: CITADEL LIMITED
PARTNERSHIP, PORTFOLIO MANAGER
BY: GLB PARTNERS, L.P.,
ITS GENERAL PARTNER
BY: CITADEL INVESTMENT
GROUP, L.L.C., ITS GENERAL PARTNER
--------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Director
000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Mutual Release Agreement by
and among Rhythms
NetConnections, Inc.
and its affiliates, X.X.
Xxxxxxxx, Xxxxx Xxxxxxxx,
and certain Consenting
Noteholders
38
39
