CAIS Internet Announces Release of $40.5 Million Escrow Fund; Escrow Fund Resulted From $147 Million Sale Of CAISSoft To Cisco In October 2000.

Business Editors/Hi-Tech Writers

WASHINGTON--(BUSINESS WIRE)--May 24, 2001

CAIS Internet, Inc. (Nasdaq:CAIS) today announced the release of $40.5 million in funds held in escrow from the sale of its CAISSoft Software Solutions subsidiary to Cisco Systems in late 2000. The disbursement of the funds will reduce the Company's debt and thereby strengthen its balance sheet.

"A key component of the redirection and streamlining of CAIS Internet has been to focus on improving the Company's financial health and steering the company to positive cash flow and profitability," said Michael Lee, president and CEO of CAIS. "The Company will use the released $40.5 million to reduce our debt, which will certainly help in the achievement of these goals as we continue to improve our balance sheet and pay down debt, both crucial elements in improving shareholder value and enabling the Company to become a leader in providing broadband solutions nationwide."

In October 2000, Cisco systems purchased the broadband subscriber management software business of CAIS Software Solutions (CAISSoft), a wholly-owned software development subsidiary from CAIS Internet. Under the terms of the agreement, cash and Cisco common stock worth an aggregate value of approximately $170 million (US) was exchanged for the stock options and assets of the broadband subscriber management software business of CAISSoft. Gross cash proceeds to CAIS were approximately $147 million, of which approximately 27% or $40.5 million was placed in escrow.

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CAIS Internet, Inc. (Nasdaq:CAIS) is a nationwide supplier of broadband Internet access solutions and provides price competitive high speed Internet services to businesses in 29 Points of Presence (serving 38 metro areas) across the nation utilizing a tier-one, nationwide Internet network and several proprietary technologies. The Company offers always-on, broadband Internet access to its customers through its digital subscriber line service, "HyperDSL," and through T-1, DS-3 and other bandwidth connections in major metropolitan areas throughout the U.S. Additionally, the Company provides bundled data services including Web hosting, co-location services and other value added managed data services. Finally, the Company also provides service to certain hotel properties utilizing installed high speed Internet service and business centers. The Company uses its unmanned business centers and Internet kiosks to deliver broadband Internet access and content to public venues, such as airports, retail centers, and cruise ships.

CAIS Internet is headquartered in Washington, DC and operates a Cisco-Powered, coast-to-coast OC-12 clear-channel Internet and ATM Network, and peers with public and private partners, and at national exchange points.

This release contains statements relating to CAIS's future expectations and business strategies or other "forward-looking" information. Those statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the statements. Important factors that may cause actual results to differ from projections include, among others: changes in business and market conditions; changes in the Internet services industry and the general economy; our limited operating history; our ability to manage rapid growth; our ability to enter into joint ventures and other strategic relationships with companies on terms acceptable to us; access to additional capital; and the impact of computer and related problems that may arise from our operations.