CHATTANOOGA, Tenn. Covista Communications, Inc. (NASDAQ:CVST), a provider of bundled telecommunication services for residential and small business customers, today announced that it has completed the previously announced transaction to sell selected long distance commercial long distance customers, switches and related facilities to PAETEC Communications, Inc., a Fairport, New York based competitive local exchange carrier.

The price for the selected customers and assets was approximately $13.5 million, of which approximately $8.4 million was received at closing. The remaining balance of the purchase price is to be paid in two installments, with the last payment due in nine months, subject to final adjustment. A portion of the initial proceeds was used to repay Covista’s revolving credit facility with Capital Source Finance. After closing, Kevin Alward resigned from Covista as Chief Operating Officer and a member of the Board of Directors, to pursue other opportunities.

In a second transaction, Covista expects to sell selected local commercial customers to PAETEC for an additional cash price of approximately $1.5 million. Management anticipates executing definitive agreements related to this transaction within the next 30 days.

Mr. John Leach, Chief Executive Officer of Covista, stated, «Closing this transaction represents a significant achievement for Covista. We have vastly improved our balance sheet with a strong cash position and zero bank debt. Additionally, we have solidified the focus of our operations both geographically and strategically. For the balance of 2004, we plan to build on the momentum we have created by extending our local service footprint to additional markets in the Northeast and Mid-Atlantic regions as well as certain states in the Southeast.» Mr. Leach continued, «The Board of Directors expressed appreciation for Mr. Alward’s efforts on behalf of the Company and best wishes in his future endeavors.»