Document:

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                                                                     EXHIBIT 4.4

                     CERTIFICATE OF DESIGNATION OF SERIES
                  AND DETERMINATION OF RIGHTS AND PREFERENCES

                                      OF

              SERIES F CONVERTIBLE PARTICIPATING PREFERRED STOCK

                                      OF

                              CAIS INTERNET, INC.

     CAIS Internet, Inc., a Delaware corporation (the "Company"), acting
pursuant to Section 151 of the General Corporation Law of Delaware, does hereby
submit the following Certificate of Designation of Series and Determination of
Rights and Preferences of its Series F Convertible Participating Preferred
Stock.

     FIRST:  The name of the Company is CAIS Internet, Inc.

     SECOND:  By unanimous consent of the Board of Directors of the Company (the
"Board"), dated as of April 28, 2000, the following resolutions were duly
adopted:

     WHEREAS, the Amended and Restated Certificate of Incorporation of the
Company (the "Certificate of Incorporation") authorizes 50,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock"), issuable from
time to time in one or more series;

     WHEREAS, the Board is authorized, subject to certain limitations prescribed
by law and certain provisions of the Certificate of Incorporation, to establish
and fix the number of shares to be included in any series of Preferred Stock and
the designation, rights, preferences, powers, restrictions and limitations of
the shares of such series; and

     WHEREAS, the Board deems it advisable to establish a series of Preferred
Stock, designated as Series F Convertible Participating Preferred Stock, par
value $.01 per share.

     NOW, THEREFORE, BE IT RESOLVED, that the series of Preferred Stock
designated as Series F Convertible Participating Preferred Stock is hereby
authorized and established; and

     FURTHER, RESOLVED, that the Board does hereby fix and determine the
designation, rights, preferences, powers, restrictions and limitations of the
Series F Convertible Participating Preferred Stock as follows:

Section 1.   Designation; Rank.

     (a)  This series of cumulative convertible participating Preferred Stock
shall be designated and known as the "Series F Preferred Stock."  The number of
shares constituting the Series F Preferred Stock shall be 56,617 shares
(including 16,617 shares
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of Series F Preferred Stock reserved exclusively for the payment of dividends
pursuant to Section 2).

     (b)  The Series F Preferred Stock shall, with respect to dividends and
rights upon liquidation dissolution or winding up, whether voluntary or
involuntary, rank (i) senior to the common stock of the Company, par value $.01
per share (the "Common Stock"), and to each other class of capital stock or
series of Preferred Stock or other equity-linked security established after the
date on which the first share of Series F Preferred Stock is issued by the
Company under this Certificate of Designation (the "Original Issuance Date"),
the terms of which do not expressly provide that it ranks senior to or on a
parity with the Series F Preferred Stock as to dividends and rights upon
liquidation, dissolution or winding up, whether voluntary or involuntary
(collectively referred to with the Common Stock as "Junior Securities"); (ii) on
parity with any additional shares of Series F Preferred Stock issued by the
Company in the future, Series G Convertible Preferred Stock ("Series G Shares")
and, subject to the written consent of Microsoft Corporation ("Microsoft") to
the extent required by Section 8.1 of the Series F Convertible Participating
Preferred Stock Purchase Agreement, dated as of April 28, 2000, by and between
Microsoft and the Company (the "Microsoft Consent"), any other class of capital
stock or series of Preferred Stock or other equity-linked security established
after the Original Issuance Date, the terms of which expressly provide that it
will rank on a parity with the Series F Preferred Stock as to dividends and
rights upon liquidation, dissolution or winding up, whether voluntary or
involuntary (collectively referred to as "Parity Securities"); and (iii) junior
to the Company's Series C Convertible Preferred Stock ("Series C Shares"),
Series D Convertible Participating Preferred Stock ("Series D Shares"), Series E
Convertible Participating Preferred Stock ("Series E Shares") and, subject to
the Microsoft Consent, to each other class of capital stock or series of
Preferred Stock or other equity-linked security issued by the Company after the
Original Issuance Date the terms of which expressly provide that it will rank
senior to the Series F Preferred Stock as to dividends and rights upon
liquidation, dissolution or winding up, whether voluntary or involuntary
(collectively referred to as "Senior Securities").

Section 2.   Dividends.

     (a)  The holders of outstanding shares of Series F Preferred Stock shall be
entitled to receive, and the Board of Directors shall declare if assets of the
Company are by law available for such payment, cumulative dividends of $70 per
annum per share, and no more, payable quarterly on the fifteenth day of
December, March, June and September in each year commencing with a payment on
September 15, 2000 of dividends accrued from the date of issuance (the "Payment
Date"), and in preference and priority to any payment of any dividend on Junior
Securities.

     (b)  At the option of the holder of Series F Preferred Stock, dividends
shall be paid in (a) cash, (b) additional shares of Series F Preferred Stock
("PIK Preferred Shares") or (c) shares of Common Stock, or any combination
thereof as determined by the holder.  If all or any portion of any dividend on
the Series F Preferred Stock shall be paid in shares of Common Stock, the number
of shares of Common Stock to be issued

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shall be determined based on the average of the closing price of the Common
Stock on the Nasdaq Stock Market for the twenty-five (25) trading days ending on
the last trading day prior to the related dividend payment date. In the event
the holder determines to receive all or any portion of a dividend on Series F
Preferred Stock in PIK Preferred Shares, the portion of such dividend for such
quarter shall equal 1.75% of the total value of Series F Preferred Stock held at
the time of the dividend by the holder thereof, including all previous PIK
Preferred Shares, as set forth in Schedule 1 hereto.

     (c)  Notwithstanding any other provision hereof, unless all shares of
Common Stock previously issued as quarterly dividends on Series F Preferred
Stock pursuant to Section 2(b) above are currently subject to an effective
registration statement covering the resale of such shares, no dividend payable
in shares of Common Stock shall be made to holders of Series F Preferred Stock
in any quarter.

     (d)  Any dividends that accrue shall, when declared, be in the form of PIK
Preferred Shares.

     (e)  The holders of Series F Preferred Stock shall give the Company ten
(10) days notice prior to a Payment Date as to the form of the quarterly
dividend. Any cash dividends shall be made by wire transfer to an account
specified by the holder of the Series F Preferred Stock by written notice to the
Company at least two (2) business days prior to the Payment Date.

Section 3.   Liquidation Preference.

     (a)  Upon any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, before any distribution or payment shall be
made to the holders of any Junior Securities, the holders of Series F Preferred
Stock shall be entitled to be paid out of the remaining assets of the Company
legally available for distribution with respect to each share of Series F
Preferred Stock an amount equal to the sum of (i) $1,000.00 per share, as
adjusted for any stock dividends, combinations or splits with respect to such
shares (the "Original Series F Issue Price") plus (ii) any accrued but unpaid
dividends thereon (whether or not declared) (such sum, the "Series F Liquidation
Value"). If upon any such liquidation, dissolution or winding up of the Company
the remaining assets of the Company available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series F
Preferred Stock the full Series F Liquidation Value and the holders of all
Parity Securities the full liquidation preference thereof, the holders of shares
of Series F Preferred Stock and any such other Parity Securities shall share
ratably in any distribution of the remaining assets of the Company in proportion
to the respective amounts which would otherwise be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to such shares were paid in full.

     (b)  After payment in full of the Series F Liquidation Value and the full
liquidation preference amounts with respect to all Parity Securities, the
remaining assets of the Company legally available for distribution, if any,
shall be distributed to the holders of any Junior Securities and to all of the
holders of shares of Series F Preferred Stock (and

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all other holders of Senior Securities and Parity Securities, the terms of which
so require) on an as-converted basis.

     (c)  The value of any property not consisting of cash which is distributed
by the Company to the holders of the Series F Preferred Stock pursuant to
Section 3(a) or otherwise will equal the Fair Market Value (as defined below)
thereof. For purposes hereof, the "Fair Market Value" of any property shall mean
the fair market value thereof as determined in good faith by the Board;
provided, however, that the value of any securities will be determined as
--------  -------
follows:

          (i)    Securities not subject to investment letter or other similar
                 restrictions on free marketability covered by (ii) below:

                 (A)     If traded on a securities exchange or through the
                         Nasdaq National Market, the value shall be deemed to be
                         the average of the closing prices of the securities on
                         such quotation system over the thirty (30) day period
                         ending three (3) days prior to the closing;

                 (B)     If actively traded over-the-counter, the value shall be
                         deemed to be the average of the closing bid or sale
                         prices (whichever is applicable) over the thirty (30)
                         day period ending three (3) days prior to the closing;
                         and

                 (C)     If there is no active public market, the value shall be
                         the fair market value thereof, as mutually determined
                         by the Board and the holders of at least a majority of
                         the voting power of all then outstanding shares of
                         Series F Preferred Stock.

          (ii)   The method of valuation of securities subject to investment
                 letter or other restrictions on free marketability (other than
                 restrictions arising solely by virtue of a stockholder's status
                 as an affiliate or former affiliate) shall be to make an
                 appropriate discount from the market value determined as above
                 in (i)(A), (B) or (C) to reflect the approximate fair market
                 value thereof, as mutually determined by the Board and the
                 holders of at least a majority of the voting power of all then
                 outstanding shares of Series F Preferred Stock.

Section 4.   Voting Rights.

     Except as set forth in Section 8.1 of the Series F Convertible
Participating Preferred Stock Purchase Agreement dated as of April 28, 2000,
between the Company and Microsoft, each holder of outstanding shares of Series F
Preferred Stock shall be entitled to the number of votes equal to the number of
whole shares of Common Stock into which all of the shares of Series F Preferred
Stock held by such holder are convertible (as adjusted from time to time
pursuant to Section 5 hereof), at each meeting of stockholders of the Company
(and written actions of stockholders in lieu of meetings)

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with respect to any and all matters presented to the stockholders of the Company
for their action or consideration. Except as provided by law or by the express
provisions hereof, holders of Series F Preferred Stock shall vote together with
the holders of Common Stock as a single class.

Section 5.   Conversion Rights.

     The holders of the Series F Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):

     (a)  Right to Convert.  Each share of Series F Preferred Stock shall be
          ----------------
convertible, at the option of the holder thereof, at any time and from time to
time, into such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the Original Series F Issue Price by the Conversion
Price (as defined below) in effect at the time of conversion.  The Conversion
Price at which shares of Common Stock shall be deliverable upon conversion of
Series F Preferred Stock without the payment of additional consideration by the
holder thereof (the "Conversion Price") shall initially be $24.00.  Such initial
Conversion Price and the rate at which shares of Series F Preferred Stock may be
converted into shares of Common Stock, shall be subject to adjustment as
provided below.

     In the event of a liquidation of the Company as set forth in Section 3
above, the Conversion Rights shall terminate at the close of business on the
first full day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of Series F Preferred Stock.

     (b)  Fractional Shares. No fractional shares of Common Stock shall be
          -----------------
issued upon conversion of the Series F Preferred Stock. In lieu of fractional
shares, the Company shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.

     (c)  Mechanics of Conversion.
          -----------------------

          (i)    In order to convert shares of Series F Preferred Stock into
                 shares of Common Stock, the holder shall surrender the
                 certificate or certificates for such shares of Series F
                 Preferred Stock at the office of the transfer agent (or at the
                 principal office of the Company if the Company serves as its
                 own transfer agent), together with written notice that such
                 holder elects to convert all or any number of the shares
                 represented by such certificate or certificates. Such notice
                 shall state the number of shares of Series F Preferred Stock
                 which the holder seeks to convert. If required by the Company,
                 certificates surrendered for conversion shall be endorsed or
                 accompanied by a written instrument or instruments of transfer,
                 in form satisfactory to the Company, duly executed by the
                 registered holder or his or its attorney duly authorized in
                 writing. The date of receipt of such certificates and notice by
                 the transfer agent or the Company shall be the conversion date
                 ("Conversion Date"). As

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                 soon as practicable after the Conversion Date, the Company
                 shall promptly issue and deliver at such office to such holder
                 a certificate or certificates for the number of shares of
                 Common Stock to which such holder is entitled. Such conversion
                 shall be deemed to have been made at the close of business on
                 the date of such surrender of the certificate representing the
                 shares of Series F Preferred Stock to be converted, and the
                 person entitled to receive the shares of Common Stock issuable
                 upon such conversion shall be treated for all purposes as the
                 record holder of such shares of Common Stock on such date.

          (ii)   The Company shall at all times during which the Series F
                 Preferred Stock shall be outstanding, reserve and keep
                 available out of its authorized but unissued stock, for the
                 purpose of effecting the conversion of the Series F Preferred
                 Stock, such number of its duly authorized shares of Common
                 Stock as shall from time to time be sufficient to effect the
                 conversion of all outstanding Series F Preferred Stock. Before
                 taking any action which would cause an adjustment reducing the
                 Conversion Price below the then par value of the shares of
                 Common Stock issuable upon conversion of the Series F Preferred
                 Stock, the Company will take any corporate action which may, in
                 the opinion of its counsel, be necessary in order that the
                 Company may validly and legally issue fully paid and
                 nonassessable shares of Common Stock at such adjusted
                 Conversion Price.

          (iii)  Upon any conversion, the Company shall promptly pay in cash or,
                 to the extent sufficient funds are not then legally available
                 therefor, in Common Stock (at the Common Stock's Fair Market
                 Value as of the date of such conversion) or a combination of
                 cash and Common Stock, any accrued but unpaid dividends
                 (whether or not declared) on the shares of Series F Preferred
                 Stock being converted.

          (iv)   All shares of Series F Preferred Stock which shall have been
                 surrendered for conversion as herein provided shall no longer
                 be deemed to be outstanding and all rights with respect to such
                 shares, including the rights, if any, to receive dividends,
                 notices and to vote, shall immediately cease and terminate on
                 the Conversion Date, except only the right of the holders
                 thereof to receive shares of Common Stock in exchange therefor,
                 and if applicable, cash for any fractional shares of Common
                 Stock. Any shares of Series F Preferred Stock so converted
                 shall be retired and cancelled and shall not be reissued, and
                 the Company may from time to time take such appropriate action
                 as may be necessary to reduce the number of shares of
                 authorized Series F Preferred Stock accordingly.

          (v)    If the conversion is in connection with an underwritten
                 offering of securities registered pursuant to the Securities
                 Act of 1933, as amended (the "1933 Act"), the conversion may,
                 at the option of any

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                 holder tendering Series F Preferred Stock for conversion, be
                 conditioned upon the closing with the underwriter of the sale
                 of securities pursuant to such offering, in which event the
                 person(s) entitled to receive the Common Stock issuable upon
                 such conversion of the Series F Preferred Stock shall not be
                 deemed to have converted such Series F Preferred Stock until
                 immediately prior to the closing of the sale of securities.

     (d)  Adjustments to Conversion Price for Diluting Issues.
          ---------------------------------------------------

          (i)    Special Definitions.  For purposes of this Subsection 5(d), the
                 -------------------
                 following definitions shall apply:

                 (A)     "Option" shall mean rights, options or warrants to
                         subscribe for, purchase or otherwise acquire Common
                         Stock or Convertible Securities, excluding rights or
                         options granted to employees, vendors, officers,
                         directors and executives of, and consultants or
                         shareholders to, the Company in an amount not exceeding
                         the number of Reserved Employee Shares.

                 (B)     "Convertible Securities" shall mean any evidences of
                         indebtedness, shares or other securities directly or
                         indirectly convertible into or exchangeable for Common
                         Stock.

                 (C)     "Additional Shares of Common Stock" shall mean all
                         shares of Common Stock issued (or, pursuant to
                         Subsection 5(d)(iii) below, deemed to be issued) by the
                         Company after the Original Issuance Date, other than
                         Reserved Employee Shares and other than shares of
                         Common Stock issued or issuable:

                         (1)     as a dividend or distribution on Series F
                                 Preferred Stock, Series C Shares, Series D
                                 Shares, Series E Shares or Series G Shares;

                         (2)     by reason of the issuance of Series D Shares or
                                 Series E Shares pursuant to the Preferred Stock
                                 Purchase Agreement between the Company and CII
                                 Ventures LLC, dated as of December 20, 1999;

                         (3)     by reason of the issuance of Series G Shares
                                 pursuant to the Series G Preferred Stock
                                 Purchase Agreement between the Company and 3
                                 Com Corporation, dated as of March 20, 2000;

                         (4)     by reason of a dividend, stock split, split-up
                                 or other distribution on shares of Common
                                 Stock;

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                         (5)     upon the exercise of Options;

                         (6)     upon conversion of Series C Shares, Series D
                                 Shares, Series E Shares, Series F Preferred
                                 Stock or Series G Shares;

                         (7)     pursuant to warrants issued by the Company
                                 pursuant to (a) the Common Stock Warrant dated
                                 as of October 27, 1999 and the Series C
                                 Preferred Stock Purchase Agreement, dated as of
                                 September 29, 1999, between the Company and
                                 U.S. Telesource, Inc. (the "Qwest Warrant"),
                                 (b) the Warrant Agreement dated as of September
                                 4, 1998 among the Company, Cleartel
                                 Communications, Inc., CAIS, Inc. and ING (U.S.)
                                 Capital Corporation, Inc. (the "ING Warrant
                                 Agreement"), (c) the Series A Preferred Stock
                                 and Warrant Purchase Agreement dated as of
                                 February 19, 1999 among the Company and the
                                 several purchasers set forth therein, (d) the
                                 Warrant to Purchase Common Stock issued
                                 pursuant to the First Amendment to the Master
                                 License Agreement, dated as of April 23, 1999,
                                 among the Company, CAIS, Inc., and Hilton
                                 Hotels Corporation (the "Hilton Warrant"), (e)
                                 the Common Stock Warrants dated as of April 28,
                                 2000, issued to Microsoft (the "Microsoft
                                 Warrant") and (f) the Master Agreement for
                                 Hotel Internet Service dated as of January 1,
                                 2000, between CAIS, inc. and Bass Hotels and
                                 Resorts, Inc.;

                         (8)     to a corporation, partnership or other entity
                                 with which the Company is seeking to establish
                                 a partnership, joint venture or other business
                                 relationship when the total number of shares of
                                 Common Stock so issuable or issued does not
                                 exceed 1,000,000 shares (as appropriately
                                 adjusted for any stock dividends, combinations,
                                 splits or the like with respect to shares of
                                 Common Stock), provided the Company receives at
                                 least 95% of Fair Market Value for such shares;

                         (9)     in connection with any high-yield debt
                                 financing undertaken by the Company, not to
                                 exceed 2,000,000 shares of Common Stock in the
                                 aggregate, provided that the Company receives
                                 at least 95% of Fair Market Value for such
                                 shares (or, in the case of Convertible
                                 Securities, the conversion or exercise price
                                 therefor is at least 95% of the Fair Market
                                 Value of the Common

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                                 Stock on the date of issuance of the
                                 Convertible Securities);

                         (10)    pursuant to the Agreement and Plan of Merger
                                 among the Company, Business Anywhere USA, Inc.,
                                 CIBA Merger Corp., Kim Kao, and Amy Hsiao dated
                                 September 7, 1999, including without
                                 limitation, the conversion of Business Anywhere
                                 options into options to acquire Common Stock
                                 and the issuance of shares of Common Stock upon
                                 the exercise thereof, not to exceed 288,371
                                 shares of Common Stock in the aggregate;

                         (11)    in connection with the acquisition by the
                                 Company of the securities or assets of another
                                 corporation, partnership or other entity,
                                 provided the Company receives at least 95% of
                                 Fair Market Value for such shares; and

                         (12)    pursuant to the Agreement and Plan of Merger
                                 among the Company, CIAM Corp. and Atcom, Inc.
                                 dated August 4, 1999, as amended, including
                                 without limitation, the conversion of Atcom
                                 options into options to acquire Common Stock as
                                 described therein, the issuance of shares of
                                 Common Stock upon the exercise thereof and the
                                 issuance of Common Stock constituting
                                 "Contingent Consideration" as defined therein,
                                 not to exceed 2,654,826 shares of Common Stock
                                 in the aggregate.

                    (D)  "Reserved Employee Shares" shall mean shares of Common
                         Stock issued to employees, officers, directors,
                         shareholders and executives of, and consultants or
                         vendors to, the Company of up to: (i) 5,000,000 shares
                         (as appropriately adjusted for any stock dividends,
                         combinations, splits or the like with respect to shares
                         of Common Stock), plus such additional number of shares
                         of Common Stock issued or deemed issued for like
                         purposes as shall be approved by holders of at least a
                         majority of the voting power of all then outstanding
                         shares of Series F Preferred Stock, voting together as
                         a single class; plus (ii) shares reserved, as of the
                         date hereof, for issuance upon the exercise of
                         outstanding Options to purchase up to 3,031,495 shares
                         of Common Stock presently held by certain management
                         employees of the Company.  Such Reserved Employee
                         Shares shall be issued, at any time, and from time to
                         time, under such arrangements, contracts or plans as
                         are recommended by the Company's management and
                         approved by the Board.

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                      (E)  "Rights to Acquire Common Stock" (or "Rights") shall
                           mean all rights issued by the Company to acquire
                           Common Stock whether by exercise of a warrant, option
                           or similar call, or conversion of any existing
                           instruments, in either case for consideration fixed,
                           in amount or by formula, as of the date of issuance.

               (ii)   No Adjustment of Conversion Price. No adjustment in the
                      ---------------------------------
                      number of shares of Common Stock into which the Series F
                      Preferred Stock is convertible shall be made, by
                      adjustment in the applicable Conversion Price thereof,
                      unless the Fair Market Value of the consideration per
                      share (determined pursuant to Subsection 5(d)(v) below)
                      received by the Company for an Additional Share of Common
                      Stock issued or deemed to be issued by the Company is less
                      than the greater of 95% of the Fair Market Value per share
                      of the Common Stock or the applicable Conversion Price in
                      effect on the date of, and immediately prior to, the issue
                      of such additional shares, or if prior to such issuance,
                      the Company receives written notice from the holders of at
                      least a majority of the voting power of all then
                      outstanding shares of Series F Preferred Stock, voting
                      together as a single class, agreeing that no such
                      adjustment shall be made as the result of the issuance of
                      Additional Shares of Common Stock.

               (iii)  Issue of Securities Deemed Issue of Additional Shares of
                      --------------------------------------------------------
                      Common Stock. If the Company at any time or from time to
                      ------------
                      time after the Original Issuance Date shall issue any
                      Options or Convertible Securities or Rights to Acquire
                      Common Stock, then the maximum number of shares of Common
                      Stock (as set forth in the instrument relating thereto
                      without regard to any provision contained therein for a
                      subsequent adjustment of such number) issuable upon the
                      exercise of such Options, Rights to Acquire Common Stock
                      or, in the case of Convertible Securities, the conversion
                      or exchange of such Convertible Securities, shall be
                      deemed to be Additional Shares of Common Stock issued as
                      of the time of such issue; provided, however, that
                      Additional Shares of Common Stock shall not be deemed to
                      have been issued unless the Fair Market Value of the
                      consideration per share (determined pursuant to Subsection
                      5(d)(v) hereof) received by the Company for such
                      Additional Shares of Common Stock would be less than the
                      greater of 95% of the Fair Market Value per share of
                      Common Stock or the applicable Conversion Price in effect
                      on the date of and immediately prior to such issue, or
                      such record date, as the case may be, and provided,
                      further, that in any such case:

                      (A)  No further adjustment in the Conversion Price shall
                           be made upon the subsequent issue of shares of Common
                           Stock upon the exercise of such Options, Rights or
                           conversion or exchange of such Convertible
                           Securities;

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                      (B)     Upon the expiration or termination of any
                              unexercised Option, Right or Convertible Security,
                              the Conversion Price shall be adjusted immediately
                              to reflect the applicable Conversion Price which
                              would have been in effect had such Option, Right
                              or Convertible Security (to the extent outstanding
                              immediately prior to such expiration or
                              termination) never been issued; and

                      (C)     In the event of any change in the number of shares
                              of Common Stock issuable upon the exercise,
                              conversion or exchange of any Option, Right or
                              Convertible Security, including, but not limited
                              to, a change resulting from the anti-dilution
                              provisions thereof, the Conversion Price then in
                              effect shall forthwith be readjusted to such
                              Conversion Price as would have obtained had the
                              Conversion Price adjustment that was originally
                              made upon the issuance of such Option, Right or
                              Convertible Security which were not exercised or
                              converted prior to such change been made upon the
                              basis of such change, but no further adjustment
                              shall be made for the actual issuance of Common
                              Stock upon the exercise or conversion of any such
                              Option, Right or Convertible Security.

               (iv)   Adjustment of Conversion Price upon Issuance of Additional
                      ----------------------------------------------------------
                      Shares of Common Stock. If the Company shall at any time
                      ----------------------
                      after the Original Issuance Date issue Additional Shares
                      of Common Stock (including Additional Shares of Common
                      Stock deemed to be issued pursuant to Subsection
                      5(d)(iii), but excluding shares issued as a dividend or
                      distribution as provided in Subsection 5(f) or upon a
                      stock split or combination as provided in Subsection
                      5(e)), without consideration, or for a consideration per
                      share less than the greater of 95% of the Fair Market
                      Value per share of Common Stock or the applicable
                      Conversion Price in effect on the date of and immediately
                      prior to such issue, or without the requisite number of
                      notices contemplated by Subsection 5(d)(ii) hereof, then
                      and in such event, such Conversion Price shall be reduced,
                      concurrently with such issue, to a price (calculated to
                      the nearest cent) determined by multiplying such
                      Conversion Price by a fraction, the numerator of which
                      shall be the number of shares of Common Stock outstanding
                      immediately prior to such issue plus the number of shares
                      of Common Stock which the aggregate consideration received
                      by the Company for the total number of Additional Shares
                      of Common Stock so issued would purchase at the greater of
                      95% of the Fair Market Value per share of Common Stock or
                      such Conversion Price; and the denominator of which shall
                      be the number of shares of Common Stock outstanding
                      immediately prior to such issue plus the number of such
                      Additional Shares of Common Stock so issued.

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                      Notwithstanding the foregoing, the applicable Conversion
                      Price shall not be reduced if the amount of such reduction
                      would be an amount less than $.03, but any such amount
                      shall be carried forward and reduction with respect
                      thereto made at the time of and together with any
                      subsequent reduction which, together with such amount and
                      any other amount or amounts so carried forward, shall
                      aggregate $.03 or more.

               (v)    Determination of Consideration. For purposes of this
                      ------------------------------
                      Subsection 5(d), the Fair Market Value of the
                      consideration received by the Company for the issue of any
                      Additional Shares of Common Stock shall be computed as
                      follows:

                      (A)     Cash and Property.  Such consideration shall:
                              -----------------

                              (1)    insofar as it consists of cash, be computed
                                     at the aggregate of cash received by the
                                     Company, excluding amounts paid or payable
                                     for accrued interest or accrued dividends;

                              (2)    insofar as it consists of property other
                                     than cash, be computed at the Fair Market
                                     Value thereof at the time of such issue, as
                                     determined in good faith by the Board; and

                              (3)    in the event Additional Shares of Common
                                     Stock are issued together with other shares
                                     or securities or other assets of the
                                     Company for consideration which covers
                                     both, be the proportion of such
                                     consideration so received, computed as
                                     provided in clauses (1) and (2) above, as
                                     determined in good faith by the Board.

                      (B)     Options, Rights and Convertible Securities.  The
                              ------------------------------------------
                              consideration per share received by the Company
                              for Additional Shares of Common Stock deemed to
                              have been issued pursuant to Subsection 5(d)(iii),
                              relating to Options, Rights and Convertible
                              Securities, shall be determined by dividing

                              (1)    the total amount, if any, received or
                                     receivable by the Company as consideration
                                     for the issue of such Options, Rights or
                                     Convertible Securities, plus the minimum
                                     aggregate amount of additional
                                     consideration (as set forth in the
                                     instruments relating thereto, without
                                     regard to any provision contained therein
                                     for a subsequent adjustment of such
                                     consideration) payable to the Company upon
                                     the exercise of such Options, Rights or the
                                     conversion or exchange of such Convertible
                                     Securities, by

                                       12
<PAGE>

                    (2)  the maximum number of shares of Common Stock (as set
                         forth in the instruments relating thereto, without
                         regard to any provision contained therein for a
                         subsequent adjustment of such number) issuable upon the
                         exercise of such Options, Rights or the conversion or
                         exchange of such Convertible Securities.

     (e)  Adjustment for Stock Splits and Combinations. If the Company shall at
          --------------------------------------------
any time or from time to time after the Original Issuance Date effect a
subdivision of the outstanding Common Stock, the Conversion Price then in effect
immediately before that subdivision shall be proportionately decreased. If the
Company shall at any time or from time to time after the Original Issuance Date
combine the outstanding shares of Common Stock, the Conversion Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.

     (f)  Adjustment for Certain Dividends and Distributions.  In the event the
          --------------------------------------------------
Company at any time or from time to time after the Original Issuance Date shall
make or issue a dividend or other distribution payable in Additional Shares of
Common Stock, then and in each such event the Conversion Price shall be
decreased as of the time of such issuance, by multiplying the Conversion Price
by a fraction, the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance, and the denominator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance plus the number of shares of Common Stock issuable in payment of such
dividend or distribution.

     (g)  Adjustments for Other Dividends and Distributions. In the event the
          -------------------------------------------------
Company at any time, or from time to time after the Original Issuance Date shall
make or issue, a dividend or other distribution payable in securities of the
Company other than shares of Common Stock, then and in each such event provision
shall be made so that the holders of shares of the Series F Preferred Stock
shall receive upon conversion thereof in addition to the number of shares of
Common Stock receivable thereupon, the amount of securities of the Company that
they would have received had their Series F Preferred Stock been converted into
Common Stock on the date of such event and had thereafter, during the period
from the date of such event to and including the Conversion Date, retained such
securities receivable by them as aforesaid during such period given application
to all adjustments called for during such period, under this paragraph with
respect to the rights of the holders of the Series F Preferred Stock.

     (h)  Adjustment for Reclassification, Exchange or Substitution. If the
          ---------------------------------------------------------
Common Stock issuable upon the conversion of the Series F Preferred Stock shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for above), then and in each such event the holder of each share of Series F
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and

                                       13
<PAGE>

property receivable upon such reorganization, reclassification, or other change,
by holders of the number of shares of Common Stock into which such shares of
Series F Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.

     (i)  No Impairment. The Company will not, by amendment of its Certificate
          -------------
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series F Preferred Stock against impairment to the extent required hereunder.

     (j)  Certificate as to Adjustments. Upon the occurrence of each adjustment
          -----------------------------
or readjustment of the Conversion Price pursuant to this Section 5, the Company
at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each holder, if any, of Series F
Preferred Stock outstanding a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based and shall file a copy of such certificate with its
corporate records. The Company shall, upon the reasonable written request of any
holder of Series F Preferred Stock, furnish or cause to be furnished to such
holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of Series F Preferred Stock. Despite such
adjustment or readjustment, the form of each or all Series F Preferred Stock
certificates, if the same shall reflect the initial or any subsequent Conversion
Price, need not be changed in order for the adjustments or readjustments to be
valid in accordance with the provisions of this Certificate, which shall
control.

     (k)  Notice of Record Date.  In the event
          ---------------------

          (i)     that the Company declares a dividend (or any other
                  distribution) on its Common Stock payable in Common Stock or
                  other securities of the Company;

          (ii)    that the Company subdivides or combines its outstanding shares
                  of Common Stock;

          (iii)   of any reclassification of the Common Stock of the Company
                  (other than a subdivision or combination of its outstanding
                  shares of Common Stock or a stock dividend or stock
                  distribution thereon); or

          (iv)    of the involuntary or voluntary dissolution, liquidation or
                  winding up of the Company;

     then the Company shall cause to be filed at its principal office or at the
office of the transfer agent of the Series F Preferred Stock, and shall cause to
be mailed to the

                                       14
<PAGE>

holders of the Series F Preferred Stock at their last addresses as shown on the
records of the Company, or such transfer agent, at least 10 days prior to the
record date specified in (A) below or 20 days before the date specified in (B)
below, a notice stating

                  (A)  the record date of such dividend, distribution,
                       subdivision or combination, or, if a record is not to be
                       taken, the date as of which the holders of Common Stock
                       of record to be entitled to such dividend, distribution,
                       subdivision or combination are to be determined, or

                  (B)  the date on which such reclassification, dissolution,
                       liquidation or winding up is expected to become
                       effective, and the date as of which it is expected that
                       holders of Common Stock of record shall be entitled to
                       exchange their shares of Common Stock for securities or
                       other property deliverable upon such reclassification,
                       dissolution or winding up.

Section 6. Mandatory Redemption.

     (a)  Upon the fifth anniversary of the Original Issuance Date, the Company
shall redeem, out of assets of the Company which are, by law, available for such
payment, all shares of Series F Preferred Stock (then outstanding and not
previously converted pursuant to Section 5), at a price per share equal to the
Original Series F Issue Price, plus any accrued but unpaid dividends thereon
(whether or not declared).

     (b)  The following events shall constitute "Mandatory Redemption Events"
for purposes hereof unless the holders of at least a majority of the voting
power of all then outstanding shares of Series F Preferred Stock, voting
together as a single class, vote otherwise:

          (i)    any merger, consolidation, reorganization or other business
                 combination of the Company in which the stockholders of the
                 Company immediately prior to such transaction will, immediately
                 after such transaction (by virtue of securities issued in the
                 transaction or otherwise), beneficially own (as determined
                 pursuant to Rule 13d-3 under the Securities Exchange Act of
                 1934, as amended (the "Exchange Act") capital stock
                 representing less than 50% of the voting power of the surviving
                 entity's voting stock immediately after such transaction;

          (ii)   a sale of all or substantially all of the assets of the Company
                 to any other entity, where the Company's stockholders
                 immediately prior to such sale will, immediately after such
                 sale (by virtue of securities issued as consideration for the
                 Company's sale or otherwise), beneficially own (as determined
                 pursuant to Rule 13d-3 under the Exchange Act) capital stock
                 representing less than 50% of the voting power of the acquiring
                 entity's voting stock;

                                       15
<PAGE>

          (iii)  any acquisition of voting stock of the Company by a person or
                 "group" (as such term is defined in Section 13(d)(3) of the
                 Exchange Act) (other than Ulysses G. Auger, Sr., Ulysses G.
                 Auger, II, William M. Caldwell, IV and/or Evans K. Anderson) in
                 a purchase or transaction or series of purchases or
                 transactions if immediately thereafter such person or group
                 has, or would have, ultimate "beneficial ownership" (as defined
                 in Rule 13d-3 under the Exchange Act) of more than 50% of the
                 combined voting power of the Company's then outstanding voting
                 stock;

          (iv)   individuals who at the beginning of any period of three
                 consecutive calendar years constituted the Board of Directors
                 (together with any directors who are members of the Board on
                 the Original Issuance Date and any new directors whose election
                 by the Board of Directors or whose nomination for election by
                 the Company's stockholders was approved by a vote of at least a
                 majority of the members of the Board of Directors then still in
                 office who either were members of the Board of Directors at the
                 beginning of such period or whose election or nomination for
                 election was previously so approved) cease to constitute at
                 least a majority of the members of the Board of Directors then
                 in office;

          (v)    (A) an assignment by the Company for the benefit of creditors,
                 (B) the filing by the Company of a petition to have the Company
                 adjudged insolvent, bankrupt or seeking a reorganization or
                 liquidation under any law relating to bankruptcy, insolvency or
                 receivership, (C) an appointment of a receiver or trustee for
                 all or substantially all of the assets of the Company, unless
                 appointed without the Company's consent, in which case if after
                 sixty (60) days such appointment has not been vacated or
                 stayed, (D) a public admission in writing of the Company's
                 inability generally to pay its debts as they come due, or (E)
                 the adoption of a plan of liquidation or dissolution by the
                 Board of Directors of the Company; or

          (vi)   the execution of, or entering into by the Company, an agreement
                 to do any of the above.

     (c)  Upon the occurrence of any Mandatory Redemption Event, the Company
shall redeem, out of the assets of the Company which are, by law, available for
such payment, and subject to any obligation in respect of Senior Securities and
any Parity Securities, all of the Series F Preferred Stock then issued and
outstanding, at a price per share equal to the Original Series F Issue Price,
plus any accrued but unpaid dividends thereon (whether or not declared).

     (d)  In the event of any redemption of Series F Preferred Stock, the
Company may, at its option, pay the Redemption Price in shares of Common Stock
having an aggregate Fair Market Value equal to the Redemption Price.

                                       16
<PAGE>

     (e)  At least twenty (20) but not more than sixty (60) days prior to any
date on which the Company must redeem shares of the Series F Preferred Stock
pursuant to Section 6(a) (each a "Redemption Date," together the "Redemption
Dates"), the Company shall send a notice (the "Redemption Notice") to all
holders of the outstanding Series F Preferred Stock of such redemption to be
effected, specifying the number of shares to be redeemed from such holder, the
Redemption Date, the price per share to be paid (the "Redemption Price") and the
place at which payment may be obtained.

     (f)  On or prior to the Redemption Date, to the extent the Company effects
any such redemption for cash, the Company shall deposit the Redemption Price of
all shares to be redeemed as of such date with a bank or trust company having
aggregate capital and surplus in excess of $50,000,000, as a trust fund, with
irrevocable instructions and authority to the bank or trust company to pay, upon
receipt of notice from the Company that such holder has surrendered the Series F
Preferred Stock share certificates in accordance with Section 6(g), the
Redemption Price of the shares to their respective holders. Any moneys deposited
by the Company pursuant to this Section 6(f) for the redemption of shares
thereafter converted into shares of Common Stock pursuant to Section 5 hereof no
later than the fifth (5th) day preceding the Redemption Date shall be returned
to the Company forthwith upon such conversion. The balance of any funds
deposited by the Company pursuant to this Section 6(f) remaining unclaimed at
the expiration of one (1) year following such Redemption Date shall be returned
to the Company promptly upon its written request.

     (g)  On such Redemption Date, each holder of shares of Series F Preferred
Stock to be redeemed shall surrender such holder's certificates representing
such shares to the Company in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
canceled. In the event less than all the shares represented by such certificates
are redeemed, a new certificate shall be issued representing the unredeemed
shares. From and after such Redemption Date, unless there shall have been a
default in payment of the Redemption Price or the Company is unable to pay the
Redemption Price due to not having sufficient legally available funds, all
rights of the holder of such shares as a holder of Series F Preferred Stock
(except the right to receive the Redemption Price without interest upon
surrender of their certificates), shall cease and terminate with respect to such
shares; provided that in the event that shares of Series F Preferred Stock are
not redeemed due to a default in payment by the Company or because the Company
does not have sufficient legally available funds, such shares of Series F
Preferred Stock shall remain outstanding and shall be entitled to all of the
rights and preferences provided herein.

     (h)  Shares subject to redemption pursuant to this Section 6 shall be
redeemed from each holder of Series F Preferred Stock on a pro rata basis.

                                       17
<PAGE>

     (i)  If upon any Redemption Date the assets of the Company available for
redemption are insufficient to pay the redeeming holders of outstanding shares
of Series F Preferred Stock the full amounts to which they are entitled, all
shares of the Series F Preferred Stock will be redeemable for cash upon demand.
The shares of Series F Preferred Stock not redeemed shall remain outstanding and
entitled to all the powers, preferences and rights provided herein.   At any
time thereafter when additional funds of the Company are legally available for
the redemption of shares of Series F Preferred Stock, such funds will
immediately be used to redeem the balance of the shares which the Company has
become obligated to redeem on any Redemption Date but which it has not redeemed.

     (j)  In the event of a call for redemption of any shares of Series F
Preferred Stock, the Conversion Rights (as defined in Section 5) for such Series
F Preferred Stock shall terminate as to the shares designated for redemption at
the close of business on the fifth (5th) day preceding the Redemption Date,
unless default is made in payment of the Redemption Price.

     (k)  The Company will not enter into any contract or agreement (whether
verbal or written) restricting or impairing its ability to redeem shares of the
Series F Preferred Stock in accordance with this Section 6.

                   [Signatures appear on the following page]

                                       18
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
to be executed this __ day of March 2000.

                                    CAIS INTERNET, INC

                                    By _________________________________
                                       Name:  Ulysses G. Auger, II
                                       Title: Chairman of the Board and
                                              Chief Executive Officer

ATTEST:

___________________________
Michael G. Plantamura
Secretary

                                       19
<PAGE>

                                  Schedule 1

                        1.750% Quarterly Dividend Rate
                $24.00 Series F Preferred Conversion to Common

<TABLE>
<CAPTION>
                                         Incremental Series F     Total Series F           Conversion        Equivalent
                           Date           Preferred Shares       Preferred Shares             Ratio            Common
                           ----           ----------------       ----------------             -----            ------
<S>                      <C>             <C>                     <C>                       <C>              <C>
Assumed Closing Date     8/2/2000             40,000.00              40,000.00             41.66667         1,666,666.67
                         9/15/2000               342.22              40,342.22             41.66667         1,680,925.93
                         12/15/2000              705.99              41,048.21             41.66667         1,710,342.13
                         3/15/2001               718.34              41,766.55             41.66667         1,740,273.12
                         6/15/2001               730.91              42,497.47             41.66667         1,770,727.90
                         9/15/2001               743.71              43,241.18             41.66667         1,801,715.63
                         12/15/2001              756.72              43,997.90             41.66667         1,833,245.66
                         3/15/2002               769.96              44,767.86             41.66667         1,865,327.46
                         6/15/2002               783.44              45,551.30             41.66667         1,897,970.69
                         9/15/2002               797.15              46,348.44             41.66667         1,931,185.17
                         12/15/2002              811.10              47,159.54             41.66667         1,964,980.92
                         3/15/2003               825.29              47,984.83             41.66667         1,999,368.08
                         6/15/2003               839.73              48,824.57             41.66667         2,034,357.02
                         9/15/2003               854.43              49,679.00             41.66667         2,069,958.27
                         12/15/2003              869.38              50,548.38             41.66667         2,106,182.54
                         3/15/2004               884.60              51,432.98             41.66667         2,143,040.73
                         6/15/2004               900.08              52,333.05             41.66667         2,180,543.95
                         9/15/2004               915.83              53,248.88             41.66667         2,218,703.47
                         12/15/2004              931.86              54,180.74             41.66667         2,257,530.78
                         3/15/2005               948.16              55,128.90             41.66667         2,297,037.57
                         6/15/2005               964.76              56,093.66             41.66667         2,337,235.72
                         8/2/2005                523.54              56,617.20             41.66667         2,359,049.92
</TABLE>

Note:  Schedule assumes dividends are paid in Series F Preferred shares in each
dividend period.  If holder elects to receive dividends in either cash or Common
Stock for any dividend period, this Schedule will not apply because the number
of shares to be issued in dividends will be based on the total Series F
Preferred shares outstanding on the dividend date.

                                       20
<PAGE>

                                      21<PAGE>

                                                                     EXHIBIT 4.5

                              CAIS INTERNET, INC.

              SERIES F CONVERTIBLE PARTICIPATING PREFERRED STOCK
                              PURCHASE AGREEMENT

     This SERIES F CONVERTIBLE PARTICIPATING PREFERRED STOCK PURCHASE AGREEMENT
(this "Agreement"), dated as of April 28, 2000, by and between CAIS Internet,
       ---------
Inc., a Delaware corporation (the "Company"), and Microsoft Corporation, a
                                   -------
Washington corporation (the "Purchaser").
                             ---------

                                   Section 1

                   Authorization and Sale of Preferred Stock
                   -----------------------------------------

     1.1  Authorization.  The Company has authorized the sale and issuance of
          --------------
40,000 shares of the Company's Series F Convertible Participating Preferred
Stock, par value $.01 per share ("Shares").
                                  ------

     1.2  Sale and Issuance of Shares.  Subject to the terms and conditions of
          ---------------------------
this Agreement, Purchaser agrees to purchase from the Company, and the Company
agrees to sell and issue to Purchaser, the Shares at a purchase price of One
Thousand Dollars ($1,000.00) per Share (the "Per Share Purchase Price").

                                   Section 2

                            Closing Dates; Delivery
                            -----------------------

     2.1  Closing.  The purchase and sale of the Shares hereunder shall take
          -------
place at a closing (the "Closing") on the third business day after the
                         -------
satisfaction or waiver of the conditions set forth in Sections 5 and 6 hereof
(the "Closing Date").  The Closing shall be held at the offices of the Company
      ------------
at 1255 22/nd/ Street, N.W., Washington, D.C., at 10:00 a.m. local time, on the
Closing Date, or at such other time and place upon which the Company and
Purchaser shall agree.

     2.2  Delivery.  At the Closing, the Company will deliver to Purchaser a
          --------
certificate registered in Purchaser's name representing the Shares to be
purchased against payment of the purchase price therefor.  At the Closing,
Purchaser will pay to the Company by wire transfer of immediately available
federal funds per the Company's instructions cash in the amount of Forty Million
Dollars ($40,000,000.00).

                                   Section 3

                 Representations and Warranties of the Company
                 ---------------------------------------------

     The Company (including for purposes of this Section 3 all subsidiaries of
the Company) represents and warrants to Purchaser as of the date of this
Agreement as follows:

     3.1  Organization; Good Standing.  The Company is a corporation duly
          ---------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, is qualified to conduct business and is in good standing under the
laws of each jurisdiction in which the nature of its business or the ownership
or leasing of its properties requires such qualification.  The Company has the
requisite corporate power and authority to own and operate its properties and
<PAGE>

assets and to carry on its business as currently conducted. A true and correct
copy of the Company's Amended and Restated Certificate of Incorporation (the
"Restated Certificate") is attached hereto as Exhibit A, and a true and correct
---------------------                         ---------
copy of the Company's By-Laws (the "By-Laws") is attached hereto as Exhibit B,
                                    -------                         ---------
which in each case shall be in full force and effect as of the Closing Date (as
the Restated Certificate shall be amended pursuant to the Certificate of
Designation (as defined below)).

     3.2  Company Shares.  The Shares to be issued to Purchaser hereunder will
          --------------
be duly authorized, validly issued, fully paid and nonassessable, and will have
the rights, preferences and privileges described in the Restated Certificate and
the Certificate of Series and Determination of Rights and Preferences of Series
F Convertible Participating Preferred Stock (the "Certificate of Designation"),
                                                  --------------------------
a true and correct copy of which is attached hereto as Exhibit C, which shall be
                                                       ---------
in full force and effect as the Closing Date. Such copy contains all amendments
through the Closing Date. The Company will not amend the Certificate of
Designation or otherwise take any action or fail to take any action that would
cause or permit the Certificate of Designation to be amended or adversely affect
the rights, preferences and privileges of the Shares without Purchaser's prior
written consent.

     3.3  Authority; Binding Nature of Agreements.
          ---------------------------------------

     (a)  The execution, delivery and performance of this Agreement and all
other agreements and instruments contemplated to be executed and delivered by
the Company in connection herewith have been duly authorized by all necessary
corporate action on the part of the Company and its board of directors (the
"Board").  The Company has all requisite legal and corporate power and authority
 -----
to sell and issue the Shares hereunder and to issue the shares of common stock
of the Company, par value $0.01 per share, issuable upon conversion of the
Shares (the "Conversion Stock") and to carry out and perform its obligations
             ----------------
under the terms of this Agreement.

     (b)  The Conversion Stock has been duly and validly reserved and, when
issued in compliance with the terms of this Agreement and the Restated
Certificate, will be validly issued, fully paid and nonassessable, and will have
the rights, preferences and privileges described in the Restated Certificate and
the Certificate of Designation. The Shares will be delivered to Purchaser free
of any liens or encumbrances, other than any liens or encumbrances created by or
imposed upon or by virtue of Purchaser; provided, however, that the Shares and
                                        --------  -------
the Conversion Stock are subject to restrictions on transfer under state and/or
federal securities laws as set forth herein and in the Registration Rights
Agreement between the Company and Purchaser dated the date hereof (the
"Registration Rights Agreement").  Except as set forth in the Restated
 -----------------------------
Certificate and the Certificate of Designation, the Shares and the Conversion
Stock are not subject to any preemptive rights or rights of first refusal.

     (c)  This Agreement and all other agreements and instruments contemplated
to be executed and delivered by the Company in connection herewith constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that enforceability
may be limited by applicable bankruptcy, merger, insolvency, moratorium,
fraudulent conveyance or other laws affecting the enforcement of the rights of
creditors and other obligees generally and by general principles of equity
regardless of whether such enforceability is considered in a proceeding in law
or equity, and by limitations on indemnification due to public policy
considerations.

                                       2
<PAGE>

     3.4  No Violation or Default.
          -----------------------

     (a)  The execution, delivery and performance of this Agreement and the
other agreements and instruments contemplated to be executed and delivered by
the Company in connection herewith will not, directly or indirectly (with or
without notice or lapse of time):

          (i)   contravene, conflict with or result in a material violation of
(i) the Company's Restated Certificate or Bylaws, or (ii) any resolution adopted
by the Company's Board or any committee thereof or the stockholders of the
Company;

          (ii)  contravene, conflict with or result in a violation of, or give
any governmental body the right to challenge the issuance of the Shares or to
exercise any remedy or obtain any relief under, any legal requirement or any
order to which the Company or any material assets owned or used by it are
subject;

          (iii) to the knowledge of the Company, cause any material assets
owned or used by the Company to be reassessed or revalued by any taxing
authority or other governmental body;

          (iv)  contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any governmental body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any governmental authorization
that is held by the Company;

          (v)   contravene, conflict with or result in a violation or breach of,
or  default under, any material contract to which the Company is a party; or

          (vi)  result in the imposition or creation of any mortgage, pledge,
lien, charge or encumbrance upon or with respect to any material properties or
assets owned or used by the Company.

     (b)  The Company is not in violation of or in default under its Restated
Certificate or By-Laws or, to the best of the Company's knowledge, (i) any
judgment, order, writ, decree, statute, rule or regulation applicable to it, or
(ii) any mortgage or indenture, or any other material agreement, instrument or
contract to which it is a party or by which it is bound.

     3.5  Finders and Brokers.
          -------------------

     The Company has not engaged any broker, finder or agent, and the Purchaser
has not, and will not, incur, directly or indirectly, as a result of any action
taken by the Company, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Transaction Documents.
In the event that the preceding sentence is in any way inaccurate, the Company
agrees to indemnify and hold harmless Purchaser from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability) for which Purchaser, or any of its
officers, directors, employees or representatives, is responsible.

     3.6  Reports and Financial Statements; Absence of Certain Changes.
          ------------------------------------------------------------

     (a)  The Company has filed all reports required to be filed with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the Securities Act of
                                     ---
1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934
                       --------------
as amended (the "Exchange Act"), since its initial public offering on May 20,
                 ------------
1999 (all such reports, including those to be filed prior

                                       3
<PAGE>

to the Closing Date and all registration statements and prospectuses filed by
the Company with the SEC in connection with the Company's initial public
offering, are collectively referred to as the "Company SEC Reports"), and has
                                               -------------------
previously furnished or made available to Purchaser true and complete copies of
all the Company SEC Reports filed, if any, with respect to periods ending after
May 20, 1999 (including any exhibits thereto) and will promptly deliver to
Purchaser any Company SEC Reports filed between the date hereof and the Closing
Date. All of such Company SEC Reports complied at the time they were filed and
declared effective, if applicable, in all material respects with applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations thereunder. None of such Company SEC Reports, as of their respective
dates (as amended through the date hereof), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited financial statements of the
Company included in the Company SEC Reports comply in all material respects with
the published rules and regulations of the SEC with respect thereto, and such
audited financial statements (i) were prepared from the books and records of the
Company, (ii) were prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis (except as may be
                        ----
indicated therein or in the notes or schedules thereto) and (iii) present fairly
the financial position of the Company as of the dates thereof and the results of
operations and cash flows for the periods then ended.  The unaudited financial
statements included in the Company SEC Reports comply in all material respects
with the published rules and regulations of the SEC with respect thereto; and
such unaudited financial statements (i) were prepared from the books and records
of the Company, (ii) were prepared in accordance with GAAP, except as otherwise
permitted under the Exchange Act and the rules and regulations thereunder, on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and (iii) present fairly the financial position of the
Company as of the dates thereof and the results of operations and cash flows (or
changes in financial condition) for the periods then ended, subject to normal
year-end adjustments and any other adjustments described therein or in the notes
or schedules thereto.  The foregoing representations and warranties shall also
be deemed to be made with respect to all filings made with the SEC on or before
the Closing Date.

     (b)  Except as specifically contemplated by this Agreement or reflected in
the Company SEC Reports, since May 20, 1999, there has not been (i) any material
adverse change in the Company's business, assets, liabilities, or operations,
and, to the knowledge of the Company, no event has occurred that is likely to
have a material adverse effect on the Company's business, assets, liabilities or
operations; or (ii) any material change in the Company's accounting principles,
procedures or methods.

     3.7  Compliance with Applicable Law.  Except as disclosed in the Company
          ------------------------------
SEC Reports filed prior to the date of this Agreement or in the Company's
Registration Statement on Form S-1, as amended, SEC file number 333-72769
("Registration Statement"), the Company holds all governmental authorizations
  ----------------------
necessary for the lawful conduct of its business under and pursuant to, and the
business of the Company is not being conducted in violation of, any governmental
authorization applicable to the Company, except to the extent that the failure
or violation would not in the aggregate have a material adverse effect on the
business, results of operations or financial condition of the Company.

                                       4
<PAGE>

     3.8  Consents.  No consent, approval or authorization of or designation,
          --------
declaration or filing with any governmental authority or other third party on
the part of the Company is required in connection with the valid execution and
delivery of this Agreement nor any other agreement or instrument contemplated to
be executed and delivered by the Company in connection with this Agreement, or
the offer, sale or issuance of the Shares and the Conversion Stock, or the
consummation of any other transaction contemplated hereby or thereby, except for
qualification (or taking such action as may be necessary to secure an exemption
from qualification, if available) of the offer and sale of the Shares and the
Conversion Stock under applicable blue sky laws, which qualifications, if
required, will be accomplished in a timely manner, filings or notices required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR
Act") and such other consents, approvals, authorizations and filings as have
been obtained and are in full force and effect.

     3.9  Capitalization.  As of the date of this Agreement, the authorized
          --------------
capital stock of the Company consists of 100,000,000 shares of Common Stock, of
which 23,119,061 shares are issued and outstanding, and 25,000,000 shares of
preferred stock, par value $.01 per share, of which 2,827,168 shares are
designated as Series A Preferred Stock (the "Series A Shares"), none of which
                                             ---------------
are issued and outstanding, 1,119,679 shares are designated as Series B
Preferred Stock ("Series B Shares"), none of which are issued and outstanding,
                  ---------------
125,000 shares are designated as Series C Preferred Stock ("Series C Shares"),
                                                            ---------------
of which 125,000 shares are issued and outstanding, 9,620,393 shares are
designated as Series D Convertible Participating Preferred Stock ("Series D
                                                                   --------
Shares"), 5,276,622 of which are issued and outstanding, 9,620,393 shares are
------
designated as Series E Convertible Participating Preferred Stock ("Series E
                                                                   --------
Shares"), none of which are issued and outstanding, 56,617 shares are designated
------
as Series F Convertible Participating Preferred Stock ("Series F Shares"), none
                                                        ---------------
of which are issued and outstanding, and 28,051 shares are designated as Series
G Preferred Stock ("Series G Shares"), none of which are issued and outstanding.
                    ---------------
All of the outstanding shares of capital stock of the Company have been duly
authorized and validly issued in compliance with applicable laws, and are fully
paid and non assessable. As of the date of this Agreement, the Company has
reserved (a) 1,572,677 shares of Common Stock for issuance upon conversion of
the Shares to be issued hereunder or upon additional shares issued as dividends
on the shares issued hereunder, (b) 1,250,000 shares of Common Stock for
issuance upon conversion of the Series C Shares, (c) 5,000,000 shares of Common
Stock for issuance pursuant to the Company's Amended and Restated 1998 Equity
Incentive Plan and Atcom, Inc. 1996 Stock Option/Stock Issuance Plan, (d)
4,809,061 shares of Common Stock for issuance pursuant to other outstanding
options and warrants, (e) 14,896,216 shares of Common Stock for issuance upon
the conversion of Series D Shares and Series E Shares and 779,195 shares of
Common Stock for issuance upon conversion of Series G Shares.

     3.10 Environmental Matters.  The properties, assets and operations of the
          ---------------------
Company are in material compliance with all applicable federal, state, local or
foreign laws, rules, regulations, permits, licenses and decrees relating to
environmental matters or the discharge, release, storage, treatment or clean-up
of any materials or substances.  No environmental or similar claim has been
asserted (or to the best knowledge of the Company threatened) against the
Company.

                                       5
<PAGE>

     3.11 Litigation.  There are no actions, suits, proceedings or
          ----------
investigations pending against the Company or its properties before any court or
governmental agency which could reasonably be expected to have a material
adverse effect on the business, results of operations or financial condition of
the Company (nor, to the best of the Company's knowledge, is there any threat
thereof).  The Company is not a party or subject to any order, writ, injunction
or decree of any court or governmental agency or instrumentality.  There is no
action, suit, proceeding or investigation by the Company currently pending or
that the Company intends to initiate.

     3.12 Title to Properties and Assets; Liens.  The Company has good and
          -------------------------------------
marketable title to its properties and assets, and has good title to all its
leasehold interests, in each case subject to no  mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) the lien of current taxes not yet due and
payable, (ii) possible minor liens and encumbrances which do not in any case
materially detract from the value of the property subject thereto or materially
impair the operations of the Company, and which have not arisen otherwise than
in the ordinary course of business and (iii) liens to secure vendor financing or
installation purchases.

     3.13 Intellectual Property; Trademarks.
          ---------------------------------

          (a) The Company has the right to use, free and clear of all liens,
charges, claims and restrictions, all patents, trademarks, service marks, trade
names, copyrights, licenses and other intellectual property rights necessary to
the business of the Company as presently conducted.  To the best of the
Company's knowledge, the Company is not infringing upon or otherwise acting
adversely to the right or claimed right of any other person under or with
respect to the foregoing.

     (b)  The Company is at least a 50 percent owner of the entire right, title
and interest in and to the subject U.S. and foreign (excluding Israel) patents
and patent applications included in Schedule 3.13 (collectively, the
                                    -------------
"Properties"), and, in particular, is a 100 percent owner of the entire right,
 ----------
title and interest in and to U.S. Application No. 08/893,403 and corresponding
PCT Application No. PCT/US971/12045.

     (c)  To the best knowledge of the Company, the Properties encompass all
patents and patent applications relating to communication systems that are
wholly or partially owned by Inline Connection Corporation.

     (d)  The Company has undertaken a reasonable investigation and has
determined that there are no claims, actions or proceedings, pending or to the
best knowledge of the Company threatened, or other information that challenges
the validity and/or the enforceability of any of the claims in the patents or of
any of the claims of the patent applications that may issue with respect to the
Properties.

     (e)  The Company will use commercially reasonable efforts to prosecute (to
the extent that the Company has a legal right to do so) all of the pending
patent applications listed in Schedule 3.13, with a view to obtaining broad
patent protection covering technology (known as "Overvoice") relating to the
                                                 ---------
simultaneous transmission of voice and data over a single traditional copper
telephone line at speeds of up to 300 times those of conventional 28.8k dial-up
modems

                                       6
<PAGE>

and to enable a user to have both designated high-speed Internet access and
complete use of his telephone simultaneously over one traditional telephone
line.

          (f)  There are no encumbrances, third party or otherwise, against any
of the Properties.

     3.14 Tax Matters.  The Company, any predecessor of the Company and all
          -----------
current and former members for income tax purposes of any affiliated group of
corporations of which the Company or any such predecessor is or has been a
member, Cleartel, Inc. and Cleartel, L.P. (collectively, the "Taxpayers") have
                                                              ---------
duly filed all tax reports and returns required to be filed by them or have
requested and obtained appropriate extensions, including all federal, state,
local and foreign tax returns and reports.  The Taxpayers have paid in full all
taxes required to be paid by such Taxpayers before such payment became
delinquent or have otherwise paid any required interest and penalties relating
thereto or have made adequate provision, in conformity with U.S. GAAP
consistently applied, for the payment of such taxes as well as taxes which may
subsequently become due.  There are no audits known by the Company to be pending
of the tax returns of the Company or any other Taxpayer, and there are no claims
known by the Company or any Taxpayer which have been or maybe asserted relating
to any tax returns filed for any year which if determined adversely would result
in the assertion by any governmental agency of any material deficiency.

     3.15 Investment Company.  Immediately following the Closing, after giving
          ------------------
effect to the transactions contemplated hereby, neither the Company nor any
person, firm or entity controlling, controlled by or under common control with
the Company will be an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

     3.16 Employer Matters.  Except as disclosed in the Company SEC Reports, or
          ----------------
as set forth in Schedule 3.16, the Company does not have any employment
                -------------
contracts with any of its employees that are not terminable at will and does not
have any collective bargaining agreement covering any of its employees.  The
Company is not aware of any labor organization activity involving its employees.
The Company is in compliance in all material respects with the requirements of
(i) the Employee Retirement Income Security Act of 1974, as amended, and (ii)
the Internal Revenue Code of 1986, as amended, in each case relating to employee
benefit plans, programs and agreements.

     3.17 Condition of System.  All material properties, equipment and systems
          -------------------
of the Company are in good repair, working order and condition and are in
material compliance with all standards and rules imposed (i) by any governmental
agency or authority in which such properties, equipment and/or systems are
located or operated and (ii) under any agreements with customers.

     3.18 Fees; License Compliance.  The Company has paid all material
          ------------------------
franchise, license or other fees and charges which have become due in respect of
its business and has made appropriate provisions as is required by GAAP for any
such fees and charges which have accrued.  The Company has duly secured all
necessary and material permits, licenses, consents and authorizations from and
have filed all required and material registrations, applications,

                                       7
<PAGE>

reports and other documents with, the appropriate governmental agencies,
authorities and commissions and other entities exercising jurisdiction over the
business of the Company. All of the Company's licenses, including licenses held
through or by affiliated entities, are valid and in full force and effect
without conditions except such conditions as are generally applicable to holders
of licenses. To the best of the Company's knowledge, no event has occurred and
is continuing which could result in the termination, revocation or adverse
modification of any license. The Company does not have any reason to believe
that its licenses, including licenses held through or by its affiliated
entities, will not be renewed in the ordinary course.

     3.19 No Conflict of Interest.  Except as disclosed in the Company SEC
          -----------------------
Reports or as set forth in Schedule 3.19, the Company is not indebted, directly
                           -------------
or indirectly, to any of its officers, directors or stockholders or to their
respective spouses or children, in any amount whatsoever, other than for normal
travel advances or reimbursement for normal business expenses; and none of such
officers, directors or stockholders, or any members of their immediate families
is indebted to the Company.  Schedule 3.19 sets forth a description of all
                             -------------
transactions since January 1, 1997, between the Company and any of its officers,
directors and stockholders, and their respective spouses and children in which
such persons had a direct or indirect material interest which are not disclosed
in the Company SEC Reports.

     3.20 Agreements; Action.
          ------------------

     (a)  Except as disclosed in the Company SEC Reports or as set forth in
Schedule 3.20, there are no agreements, understandings, instruments, contracts,
judgments, orders, writs or decrees to which the Company is a party or by which
it is bound that involve (i) obligations (contingent or otherwise) of, or
payments to, the Company in excess of $50,000, other than transactions in the
ordinary cause of business, (ii) the license of any patent, copyright, trade
secret or other proprietary rights to or from the Company, (iii) provisions
restricting or affecting the development, manufacture or distribution of the
Company's products or services or (iv) indemnification by the Company with
respect to infringements of proprietary rights.

     (b)  The Company is  not a party to and is not bound by any contract,
agreement or instrument, and is not subject to any restriction under its
Restated Certificate or its By-Laws, that materially adversely affects its
business as now conducted or as proposed to be conducted, or its properties or
financial condition.

     (c)  Except as disclosed in the Company SEC Reports or as provided in
Schedule 3.20, the Company has not granted or agreed to grant any registration
-------------
rights, including piggy back rights, to any person or entity.

     3.21 Complete Copies of Requested Documents.  The Company has delivered or
          --------------------------------------
made available true and complete copies of each document that has been
reasonably requested by Purchaser.

     3.22 Full Disclosure.  Neither this Agreement (including all Exhibits
          ---------------
hereto) nor any of the other agreements or instruments contemplated to be
executed and delivered by the Company in connection with this Agreement contain
any untrue statement of material fact; and

                                       8
<PAGE>

none of such documents omits to state any material fact necessary to make any of
the representations, warranties or other statements or information contained
therein not misleading.

                                   Section 4

                  Representations and Warranties of Purchaser
                  -------------------------------------------

     Purchaser hereby represents and warrants to the Company with respect to the
purchase of the Shares by Purchaser, as follows:

     4.1  Experience; Speculative Nature of Investment.  Purchaser has
          --------------------------------------------
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests.  Purchaser acknowledges that its
investment in the Company is highly speculative and entails a substantial degree
of risk and Purchaser is in a position to lose the entire amount of such
investment.

     4.2  Investment.  Purchaser is acquiring the Shares and the underlying
          ----------
Conversion Stock for investment for its own account, not as a nominee or agent,
and not with the view to, or for resale in connection with, any distribution
thereof.  Purchaser is an "accredited investor" within the meaning of Regulation
D, Rule 501(a), promulgated by the SEC.

     4.3  Restricted Securities.  Purchaser acknowledges that the Shares and the
          ---------------------
underlying Conversion Stock must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from the registration
requirements of the Securities Act is available.

     4.4  Access to Data.  Purchaser has had an opportunity to discuss the
          --------------
Company's business, management and financial affairs with the Company's
management.  Purchaser has had an opportunity to ask questions of officers of
the Company, which questions were answered to its satisfaction.  Purchaser
understands that such discussions, as well as any other written information
issued by the Company, were intended to describe certain aspects of the
Company's business and operations, but were not an exhaustive description.

     4.5  Authority; Binding Nature of Agreements.
          ---------------------------------------

     (a)  The execution, delivery and performance of this Agreement and all
other agreements and instruments contemplated to be executed and delivered by
Purchaser in connection herewith have been duly authorized by all necessary
corporate action on the part of Purchaser and its board of directors. Purchaser
has all requisite legal and corporate power and authority to purchase the Shares
hereunder.

     (b)  This Agreement and all other agreements and instruments contemplated
to be executed and delivered by Purchaser in connection herewith constitute the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their terms, except to the extent that enforceability may be
limited by applicable bankruptcy, merger, insolvency, moratorium, fraudulent
conveyance or other laws affecting the enforcement of the rights of creditors
and other obligees generally and by general principles of equity regardless of
whether such enforceability is considered in a proceeding in law or equity, and
by limitations on indemnification due to public policy considerations.

     (c)  There is no pending proceeding, and, to Purchaser's knowledge, no
person has threatened to commence any proceeding that challenges, or that may
have the effect of

                                       9
<PAGE>

preventing, delaying, making illegal or otherwise interfering with Purchaser's
ability to comply with or perform its obligations and covenants under this
Agreement and under all other agreements and instruments contemplated to be
executed and delivered by Purchaser in connection herewith, and, to the
knowledge of Purchaser, no event has occurred, and no claim, dispute or other
condition or circumstance exists, that might directly or indirectly give rise to
or serve as a basis for the commencement of any such proceeding.

     4.6  Brokers or Finders.  Purchaser has not engaged any broker, finder or
          ------------------
agent, and the Company has not, and will not, incur, directly or indirectly, as
a result of any action taken by Purchaser, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
the purchase of the Shares.  In the event that the preceding sentence is in any
way inaccurate, the Purchaser agrees to indemnify and hold harmless the Company
from any liability for any commission or compensation in the nature of any such
fee (and the costs and expenses of defending against such liability) for which
the Company or any of its officers, directors, employees or representatives, is
held responsible.

     4.7  Tax Liability.  Purchaser has reviewed with its own tax advisors the
          -------------
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement.  With respect to such matters,
Purchaser has relied solely on such advisors and not on any statements or
representations of the Company or any of its representatives other than the
representations and warranties set forth herein.  Purchaser understands that it
(and not the Company) shall be responsible for its own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.

                                   Section 5

                Conditions to Purchaser's Obligations to Close
                ----------------------------------------------

     Purchaser's obligations to purchase the Shares at the Closing are, unless
waived by Purchaser, subject to the fulfillment of the following conditions:

     5.1  Representations and Warranties Correct.  The representations and
          --------------------------------------
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects as of the Closing Date.

     5.2  Covenants.  All covenants and agreements contained in this Agreement
          ---------
and the other agreements and instruments contemplated herewith to be performed
by the Company on or prior to the Closing shall have been performed or complied
with in all materials respects.

     5.3  Blue Sky.  The Company shall have obtained all necessary Blue Sky law
          --------
permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Shares.

     5.4  Registration Rights Agreement.  The Company shall have executed and
          -----------------------------
delivered the Registration Rights Agreement as of the Closing Date.

     5.5  Opinion of Company's Counsel.  The Purchaser shall have received from
          ----------------------------
Morrison & Foerster, LLP, counsel to the Company, an opinion addressed to it,
dated the Closing Date, is substantially the form of Exhibit D.
                                                     ---------

                                       10
<PAGE>

     5.6    Commercial Agreement.  The Company shall have executed and delivered
            --------------------
to Purchaser an Internet Access and Portal Development and Co-Marketing
Agreement,  substantially in the form of Exhibit E (the "Commercial Agreement"),
                                         ---------
as of the Closing Date.

     5.7    HSR Compliance.  All waiting periods applicable to the purchase of
            --------------
the Shares under the HSR Act shall have been terminated or expired.

                                   Section 6

                 Conditions to Company's Obligations to Close
                 --------------------------------------------

     The Company's obligation to sell and issue the Shares at the Closing is,
unless waived by the Company, subject to the fulfillment of the following
conditions:

     6.1    Representations and Warranties Correct.  The representations and
            --------------------------------------
warranties made by Purchaser in Section 4 hereof shall be true and correct in
all material respects as of the Closing Date.

     6.2    Covenants.  All covenants and agreements contained in this Agreement
            ---------
and all other agreements and instruments contemplated herewith to be performed
by Purchaser on or prior to the Closing shall have been performed or complied
with in all material respects.

     6.3    Blue Sky. The Company shall have obtained all necessary blue sky law
            --------
permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Shares.

     6.4    Registration Rights Agreement.  Purchaser shall have executed and
            -----------------------------
delivered the Registration Rights Agreement as of the Closing Date.

     6.5    Commercial Agreement.  Purchaser shall have executed and delivered
            --------------------
to the Company the Commercial Agreement as of the Closing Date.

     6.6    HSR Compliance.  All waiting periods applicable to the purchase of
            --------------
the Shares under the HSR Act shall have been terminated or expired.

                                   Section 7

                           Confidential Information
                           ------------------------

     7.1    Confidential Company Information. Purchaser covenants and agrees
            --------------------------------
that it shall maintain the confidentiality of all nonpublic information related
to the Company made available to it and/or any of its representatives by or on
behalf of the Company ("Confidential Company Information"). Purchaser further
                        --------------------------------
covenants and agrees that it shall not disclose any Confidential Company
Information to any person or entity, other than its officers, directors,
employees, attorneys, accountants and other agents with a legitimate need for
such information (which individuals and entities Purchaser shall cause to comply
with this Section 7.1), except as required by law, without the prior written
consent of the Company.  Purchaser agrees that violation of this Section 7.1
would cause immediate and irreparable damage to the business of

                                       11
<PAGE>

the Company, and consents to the entry of immediate and permanent injunctive
relief for any violation hereof.

     7.2    Confidential Purchaser Information. The Company covenants and agrees
            ----------------------------------
that it shall maintain the confidentiality of all nonpublic information related
to Purchaser made available to it and/or any of its representatives by or on
behalf of Purchaser ("Confidential Purchaser Information"). The Company further
                      ----------------------------------
covenants and agrees that it shall not disclose any Confidential Purchaser
Information to any person or entity, other than its officers, directors,
employees, attorneys, accountants and other agents with a legitimate need for
such information (which individuals and entities the Company shall cause to
comply with this Section 7.2), except as required by law, without the prior
written consent of Purchaser. The Company agrees that violation of this Section
7.2 would cause immediate and irreparable damage to the business of Purchaser,
and consents to the entry of immediate and permanent injunctive relief for any
violation hereof.

                                   Section 8

                                Other Covenants
                                ---------------

     8.1    Future Issuances.  Notwithstanding any other provision to the
            -----------------
contrary herein or in the Certificate of Designation, in addition to the voting
rights set forth in the Certificate of Designation, the written consent of the
Purchaser shall be required to approve any issuance and sale by the Company of
(i) Senior Securities or Parity Securities (as such terms are defined in the
Certificate of Designation) or (ii) equity securities in the Company to any
person or entity which the Purchaser and the Company  mutually determine to be a
competitor of the Purchaser; provided, however, that no separate vote as
contemplated by this Section 8.1 shall be required if any such issuance or sale
is subject to Section 6(b)(iii) of the Certificate of Designation; and provided
further that this Section 8.1 shall immediately become null and void at the
earlier of such time that: (i) the Commercial Agreement is terminated or (ii)
Purchaser owns of record no Shares.

     8.2    Put Right.  If the Company terminates the Commercial Agreement
            ---------
pursuant to Section 17.5  thereof, Purchaser shall have a "put" option to sell
all or any portion of the Shares to the Company and, in such event, the Company
shall be required to purchase such Shares from Purchaser.  The "put" option
exercise price payable to Purchaser in such event shall equal the sum of (1) the
product of (a) the number of Shares which Purchaser elects to sell to the
Company pursuant to the exercise of such "put" option (the "Put Shares") times
(b) 118.75% of the Per Share Purchase Price, plus (2) any accrued but unpaid
dividends on the Put Shares (collectively, the "Put Consideration").  The "put"
option shall be exercisable upon the delivery by Purchaser to the Company of a
written notice of election to exercise the "put" option (the "Exercise Notice")
on or before 5:00 p.m., Eastern time, on the date which is thirty (30) days
after the date on which the Company notifies Purchaser of the Company's
termination of the Commercial Agreement under Section 17.5 thereof.  The Put
Consideration shall be paid to Purchaser in cash within ten (10) business days
after the Company's receipt of the Exercise Notice.

                                       12
<PAGE>

                                   Section 9

                                 Miscellaneous
                                 -------------

     9.1    Governing Law.  This Agreement shall be governed in all respects by
            -------------
the internal laws of the State of Delaware, without regard to the conflicts of
laws provisions thereof.

     9.2    Jurisdiction; Jury Trial Waiver.  The parties hereto hereby
            -------------------------------
irrevocably submit to the exclusive jurisdiction of the state and federal courts
located in the State of Delaware with respect to any action or proceeding
arising out of this Agreement or in any way arising here from or relating
hereto.  THE PARTIES HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INSTITUTED BY ANY PARTY AGAINST ANY OTHER PARTY ARISING ON, OUT OF OR
BY REASON OF THIS AGREEMENT, ANY ALLEGED TORTIOUS CONDUCT BY ANY PARTY OR IN ANY
WAY, DIRECTLY OR INDIRECTLY, ARISING OUT OF OR RELATED TO THE RELATIONSHIP
BETWEEN THE PARTIES.

     9.3    Survival.  The representations, warranties, covenants and agreements
            --------
made herein shall survive any investigation made by Purchaser and the closing of
the transactions contemplated hereby.

     9.4    Successors and Assigns.  Except as otherwise provided herein, the
            ----------------------
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of the
parties hereto; provided, however, that the rights of Purchaser to purchase the
                --------  -------
Shares shall not be assignable without the prior written consent of the Company.

     9.5    Entire Agreement; Amendment.  This Agreement and the other documents
            ---------------------------
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein.  Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that Purchaser may, with the Company's prior written consent,
--------  -------
waive, modify or amend any provision hereof governing the rights and obligations
of Purchaser.

     9.6    Notice, etc.  All notices and other communications required or
            ------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to Purchaser, at Purchaser's address, One Microsoft Way,
Redmond, Washington, 98052 Attention: Chief Financial Officer with a copy to
Robert A. Eshelman, or at such other address as Purchaser shall have furnished
to the Company in writing, or (b) if to the Company, at the Company's address:
1255 22nd Street, N.W., Washington, D.C. 20037, or at such other address as the
Company shall have furnished to Purchaser, and addressed to the attention of the
Chief Executive Officer.  Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or seventy-two (72) hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.

                                       13
<PAGE>

     9.7    Delays or Omissions. Except as expressly provided herein, no delay
            -------------------
or omission to exercise any right, power or remedy accruing to either party to
this Agreement upon any breach or default of the other party under this
Agreement, shall impair any such right, power or remedy of such nondefaulting
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of
either party of any breach or default under this Agreement, or any waiver on the
part of either party of any provisions or conditions of this Agreement, must be
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement or by law or otherwise
afforded to either party to this Agreement, shall be cumulative and not
alternative.

     9.8    Counterparts.  This Agreement may be executed in any number of
            ------------
counterparts, each of which shall be enforceable against the party actually
executing such counterparts, and all of which together shall constitute one
instrument.

     9.9    Severability.  In the event that any provision of this Agreement
            ------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided, however, that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to
either party.

     9.10   Titles and Subtitles. The titles and subtitles used in this
            --------------------
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.

     9.11   Expenses.  The Company and Purchaser shall bear their own expenses
            --------
with respect to this Agreement and the transactions contemplated hereby.

                   [Signatures appear on the following page]

                                       14
<PAGE>

     The foregoing Series F Preferred Stock Purchase Agreement is hereby
executed as of the date first above written.

                                   "COMPANY"

                                   CAIS INTERNET, INC.

                                   By:   /s/ Gary H. Rabin
                                         _____________________________________

                                   Name: Gary H. Rabin
                                         _____________________________________

                                   Its:  Executive
                                         _____________________________________

                                   "PURCHASER"
                                   MICROSOFT CORPORATION

                                   By:   /s/ John G. Connors
                                         _____________________________________

                                   Name: John G. Connors
                                         _____________________________________

                                   Its:  Chief Financial Officer
                                         _____________________________________

                                       15
<PAGE>

                                   EXHIBIT A
                                   ---------

               Amended and Restated Certificate of Incorporation

                                       16
<PAGE>

                                   EXHIBIT B
                                   ---------

                                    By-Laws

                                       17
<PAGE>

                                   EXHIBIT C
                                   ---------

                          Certificate of Designation

                                       18
<PAGE>

                                   EXHIBIT D
                                   ---------

                         Opinion of Company's Counsel

                                       19
<PAGE>

                                   SCHEDULES
                                      TO
                  SERIES F PREFERRED STOCK PURCHASE AGREEMENT

     The following schedules refer to the Series F Preferred Stock Purchase
Agreement (the "Agreement"), dated as of April __, 2000, between CAIS Internet,
Inc. (the "Company") and Microsoft Corporation (the "Purchaser").

     Nothing in the following schedules is intended to broaden the scope of any
representation or warranty contained in the Agreement or to create any covenant
on the part of the Company.

     To the extent more than one representation and warranty contained in the
Agreement requires the same disclosure, the appearance of such disclosure on any
single item herein shall serve as disclosure for all other representations and
warranties to which such disclosure applies.  The failure by the Company to
cross-reference any disclosure on any particular schedule shall not constitute a
breach by the Company of the applicable representation or warranty as long as
the matter is disclosed elsewhere in these schedules.

     Inclusion of any item in the schedules (1) does not represent a
determination by the Company that such item is material nor shall it be deemed
to establish a standard of materiality (it being the intent that the Company
shall not be penalized for having disclosed more than it may be required by the
terms of the Agreement), (2) does not represent a determination by the Company
that such item did not arise in the ordinary course of business, and (3) shall
not constitute, or be deemed to be, an admission concerning such item by the
Company. The items in the schedules are descriptions or brief summaries of
certain aspects of the Company and the Company's business and are necessarily
not complete. Accordingly, the schedules are qualified in their entirety by
reference to the more detailed information in documents attached hereto or
previously delivered or made available to the Purchaser and its representatives.

     Capitalized terms used but not defined herein shall have the same meanings
ascribed to them in the Agreement.  The headings in the following schedules are
for reference only and shall not affect the disclosures contained therein.

                                       20
<PAGE>

                                 SCHEDULE 3.13
                                      TO
                  SERIES F PREFERRED STOCK PURCHASE AGREEMENT

     As of the date hereof, the Company owns at least a fifty percent (50%) of
the entire right, title and interest in and to the following subject U.S. and
foreign (excluding Israel) patents and patent applications:

     The Company is a licensee and joint-owner of patents and patent
applications of Inline Connection Corporation ("Inline") relating to the Over
Voice technology. The Company, together with Inline, has five U.S. patents and
eleven U.S. patent applications. Two of these eleven patent applications has
recently been allowed and, therefore, is expected to become patents in the next
several months.

     Together with Inline, which also owns 50%, the Company owns 50% of all U.S.
and foreign (with the exception of Israel) patents and patent applications
relating to the OverVoice technology, except for certain patent applications
relating to the OverVoice technology filed in the European Patent Office,
Australia, Brazil, Canada, China, Czech Republic, Eurasia, Hungary, Indonesia,
Japan, North Korea, South Korea, Mexico, Norway, New Zealand, Poland and
Singapore, as to which the Company owns 100%.

     The first U.S. patent granted relates to transmission of video over active
voice telephone wires.  Related patents have also been obtained in Canada and
from the European Patent Office, covering Germany, France and the United
Kingdom.  In addition, a patent was issued in South Korea and a division
application was filed in Europe.

     The second U.S. patent granted relates to some or all aspects of the
following systems, among others:

 .    provision of high-speed Internet service through the communication of
     Ethernet signals over the active telephone wiring in residences, hotels,
     apartment buildings and similar structures;

 .    provision of video services over the telephone writing in the same
     structures;

 .    provision of webTV-type services over the telephone wiring in these
     structures;

 .    creation of a standard Ethernet network, using existing telephone wiring,
     among all personal computers in a structure; and

 .    communication of Ethernet signals over 1,000 feet over a single active
     telephone line.

     Novel ideas are embodied in many of the different parts that make up these
systems.  Among these parts are:

                                       21
<PAGE>

 .    different electronic processes for converting the video and data signals;

 .    special connectors that are easy to install, convenient to use and promote
     smooth signal flow across the wiring;

 .    different arrangements of the components to facilitate the operation of the
     systems; and

 .    special "command and control" procedures that help implement the different
     applications.

     Pursuant to the Company's license agreement with Inline, the Company has
the exclusive right to make, use and sell the OverVoice technology for all
structures in the United States, except for single family residential units and
certain food establishments, for which the Company has non-exclusive rights. The
Company further has the exclusive right to make, use and sell under all foreign
patents and patent applications relating to the OverVoice technology for all
structures except for single family residential units and certain food
establishments, for which the Company has non-exclusive rights, with the
exception of Israel, which Inline reserved for itself.

     Business Anywhere USA, Inc. ("BAC"), a subsidiary of the Company, is the
assignee of US Patent 5,901,067 and US Patent Application 09/088,213.  This
intellectual property was assigned to BAC by Kim Kao.

     Please see the attached documents for a list of patents and patent
applications held by CAIS Software Solutions, Inc., a subsidiary of the Company.

                                       22
<PAGE>

                                 SCHEDULE 3.16
                                      TO
                  SERIES F PREFERRED STOCK PURCHASE AGREEMENT

     Except as set forth in the Company SEC Reports or as set forth below, as of
the date hereof, the Company does not have any (i) employment contracts with any
of its employees that are not terminable at will, or (ii) collective bargaining
agreement covering any of its employees.

I.   Employment Contracts
     --------------------

None.
II.  Collective Bargaining Agreements
     --------------------------------

     None.

                                       23
<PAGE>

                                 SCHEDULE 3.19
                                      TO
                  SERIES F PREFERRED STOCK PURCHASE AGREEMENT

     Except as set forth in the Company SEC Reports or as set forth below, as of
the date hereof, the Company is not indebted, directly or indirectly, to any of
its officers, directors or stockholders or to their respective spouses or
children, in any amount whatsoever, other than for normal travel advances or
reimbursement for normal business expenses; and none of such officers, directors
or stockholders, or any member of their immediate families is indebted to the
Company.

     None.

     Additionally, set forth below, is a description of all transactions since
January 1, 1996, between the Company and any of its officers, directors and
stockholders and their respective spouses and children in which such persons had
a direct or indirect material interest which are not disclosed in the Company
SEC Reports.

     None.

                                       24

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