<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
CAIS INTERNET, INC.
-------------------
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $ 0.01 PER SHARE
----------------------------------------
(TITLE OF CLASS OF SECURITIES)
12476Q102
---------
(CUSIP NUMBER)
KKR 1996 FUND L.P., KKR PARTNERS II, L.P., KKR ASSOCIATES 1996 L.P.,
KKR 1996 GP LLC, KKR ASSOCIATES (STRATA) L.P., STRATA LLC, CII VENTURES LLC
C/O KOHLBERG KRAVIS ROBERTS & CO.
9 WEST 57TH STREET, NEW YORK, NEW YORK 10019 (212) 750-8300
-----------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
FEBRUARY 25, 2000
-----------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO REPORT
THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13d-1(b)(3) OR (4), CHECK THE FOLLOWING BOX . / /
NOTE: SIX COPIES OF THIS STATEMENT, INCLUDING ALL EXHIBITS, SHOULD BE FILED WITH
THE COMMISSION. SEE RULE 13d-1(a) FOR OTHER PARTIES TO WHOM COPIES ARE TO BE
SENT.
*THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED
TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 ("ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF THE ACT
BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE THE
NOTES).
PAGE 1 of 26 PAGES
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 2 OF 25 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR 1996 FUND L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 3 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR PARTNERS II, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 4 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR ASSOCIATES 1996 L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 5 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR 1996 GP LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 6 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR ASSOCIATES (STRATA) L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 7 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STRATA LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP NO. 12476Q102 PAGE 8 OF 26 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CII VENTURES LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO, AF (see item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
----------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES 16.4%
BENEFICIALLY ----------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING ----------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 16.4%
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16.4%
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
Page 9 of 26 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, $0.01 par
value per share ("Issuer Common Stock"), of CAIS Internet, Inc., a Delaware
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 1255 22nd Street, N.W., 4th Floor, Washington, D.C. 20037.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed jointly by KKR 1996 Fund L.P., a
Delaware limited partnership ("KKR 1996 Fund"), KKR Associates 1996 L.P., a
Delaware limited partnership ("KKR Associates 1996"), KKR 1996 GP LLC, a
Delaware limited liability company ("KKR 1996 LLC"), KKR Partners II, L.P., a
Delaware limited partnership ("KKR Partners"), KKR Associates (Strata) L.P., a
Delaware limited partnership ("KKR Associates Strata"), Strata LLC, a Delaware
limited liability company ("Strata LLC"), and CII Ventures LLC, a Delaware
limited liability company ("CII Ventures" and, together with KKR 1996 Fund, KKR
Associates 1996, KKR 1996 LLC, KKR Partners, KKR Associates Strata and Strata
LLC, the "Reporting Persons"). The agreement among the Reporting Persons
relating to the joint filing of this statement is attached as Exhibit 1 hereto.
CII Ventures was formed to effect the transaction described in
Item 4 below and has not engaged in any activities other than incident to its
formation and such transactions. KKR 1996 Fund and KKR Partners are the sole
members of CII Ventures.
KKR Associates 1996 is the sole general partner of KKR 1996
Fund, and KKR 1996 LLC is the sole general partner of KKR Associates 1996. KKR
Associates Strata is the sole general partner of KKR Partners, and Strata LLC is
the sole general partner of KKR Associates Strata. Each of KKR 1996 Fund and KKR
Partners is principally engaged in the business of investing in other companies.
Each of KKR Associates 1996, KKR 1996 LLC, KKR Associates Strata and Strata LLC
is
<PAGE>
Page 10 of 26 Pages
principally engaged in the business of investing in other companies through
partnerships and limited liability companies.
The address of the principal business and office of each of
the Reporting Persons is 9 West 57th Street, New York, New York 10019.
Messrs. Henry R. Kravis and George R. Roberts are the managing
members of KKR 1996 LLC and members of the executive committee of Strata LLC.
The other members of each of KKR 1996 LLC and Strata LLC are Robert I.
MacDonnell, Paul E. Raether, Michael W. Michelson, James H. Greene, Jr., Michael
T. Tokarz, Perry Golkin, Scott M. Stuart and Edward A. Gilhuly. Messrs. Kravis,
Roberts, MacDonnell, Raether, Michelson, Greene, Tokarz, Golkin, Stuart and
Gilhuly are each United States citizens, and the present principal occupation or
employment of each is as a managing member or member of KKR & Co. L.L.C., a
Delaware limited liability company which is the general partner of Kohlberg
Kravis Roberts & Co. L.P. ("KKR"), a private investment firm, the addresses of
which are 9 West 57th Street, New York, New York 10019, 2800 Sand Hill Road,
Suite 200, Menlo Park, California 94025 and 3 St. James Square, London, SW1Y
4JU, England. The business address of Messrs. Kravis, Raether, Tokarz, Golkin
and Stuart is 9 West 57th Street, New York, New York 10019; the business address
of Messrs. Roberts, MacDonnell, Michelson and Greene is 2800 Sand Hill Road,
Suite 200, Menlo Park, California 94025; and the business address of Mr. Gilhuly
is 3 St. James Square, London, SW1Y 4JU, England.
During the last five years, none of the Reporting Persons nor,
to the best knowledge of the Reporting Persons, any of the other persons named
in this Item 2: (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors); or (ii) was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is
<PAGE>
Page 11 of 26 Pages
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The funds used in connection with the purchase of Series D
Stock at the Initial Closing (as defined in Item 4) consisted of $73,872,708.
These funds were provided from general funds available to CII Ventures and its
affiliates.
ITEM 4. PURPOSE OF TRANSACTION.
PURCHASE AGREEMENT
Pursuant to a Preferred Stock Purchase Agreement, dated as of
December 20, 1999 (the "Purchase Agreement"), between the Issuer and CII
Ventures, CII Ventures agreed to purchase a total of 7,142,857 shares of the
Issuer's Series D Convertible Participating Preferred Stock ("Series D Stock")
at a purchase price of $14.00 per share. Each share of Series D Stock is
convertible at any time at the holder's option at an initial conversion price of
$16.50 per share into 0.8484 shares of Issuer Common Stock, or a total of
6,060,606 shares of Issuer Common Stock, subject to anti-dilution adjustments.
The Purchase Agreement also granted CII Ventures an option to purchase up to
7,142,857 shares of the Issuer's Series E Convertible Participating Preferred
Stock ("Series E Stock") at a purchase price of $14.00 per share (the "Option").
The Option is exercisable for a period of one year from the date of the receipt
of approval of the stockholders of the Issuer of the issuance of the shares of
Series D Stock not purchased by CII Ventures at the Initial Closing (as defined
below) and the Series E Stock. Upon issuance, each share of Series E Stock will
be convertible at any time at the holder's option at an initial conversion price
of $20.00 per share into 0.7 shares of Issuer Common Stock, or a total of
5,000,000 shares of Issuer Common Stock, subject to anti-dilution adjustments.
The Purchase Agreement is attached to this Schedule 13D as Exhibit 3 and is
incorporated herein by reference.
<PAGE>
Page 12 of 26 Pages
On February 25, 2000, CII Ventures purchased 5,276,622 shares
of Series D Stock (the "Initial Closing"). The shares purchased at the Initial
Closing currently are convertible into 4,477,134 shares of Issuer Common Stock,
or approximately 19.9% of the Issuer Common Stock outstanding immediately prior
to the Initial Closing. The issuance of the remaining 1,866,235 shares of Series
D Stock and, if CII Ventures exercises the Option, the issuance of the Series E
Stock, are subject to the approval of the holders of the Issuer Common Stock at
a meeting of the stockholders of the Company to be held to vote on such matter
(the "Stockholders' Meeting").
TERMS OF THE SERIES D STOCK
The Series D Stock ranks senior to Issuer Common Stock, on a
parity with the Series E Stock and junior to the Issuer's Series C Convertible
Preferred Stock. Holders of the Series D Stock will be entitled to receive
quarterly dividends, payable in additional shares of Series D Stock, at a rate
per annum equal to six percent of the sum of $14.00 plus all compounded accrued
and unpaid dividends, as adjusted for stock dividends, stock combinations or
similar events. In addition, when and if the board of directors of the Issuer
(the "Board") declares dividends on the Issuer Common Stock, holders of the
Series D Stock are entitled to receive the amount of dividends as would have
been payable to such holders if such shares had been converted into Issuer
Common Stock.
Each holder of Series D Stock is entitled to the number of
votes equal to the number of whole shares of Issuer Common Stock into which all
of such holder's shares of Series D Stock are convertible, with respect to all
matters submitted for stockholder approval. Except as provided by law or by the
express terms of the Series D Stock, such holders vote together with holders of
the Issuer Common Stock as a single class.
For so long as CII Ventures and its affiliates own a majority
of the outstanding shares of Series D Stock and Series E Stock and CII Ventures
is entitled to comparable rights under the
<PAGE>
Page 13 of 26 Pages
Stockholders Agreement, the approval of the holders of at least a majority of
the Series D Stock and Series E Stock, voting together as a single class, shall
be required to take certain actions, including: (i) the authorization or
issuance of additional equity securities, other than certain exempt issuances;
(ii) any merger or consolidation with, or acquisition of, another entity,
subject to certain exceptions, and any "change of control" of the Issuer (as
such term is defined in the Certificate of Designation of Series and
Determination of Rights and Preferences of Series D Convertible Participating
Preferred Stock (the "Series D Certificate")); (iii) certain redemptions of
capital stock for an aggregate purchase price in excess of $10 million; (iv) any
sale of a subsidiary's securities to a third party (other than the Issuer or
another wholly owned subsidiary of the Issuer); (v) any sale or other transfer
of the Issuer's technology or other intellectual property other than in the
ordinary course of business; and (vi) entering into any arrangement or contract
to take any of the foregoing actions.
In addition, for so long as any shares of Series D Stock are
outstanding, the approval of the holders of at least a majority of the Series D
Stock shall be required to take any of the following actions: (i) any amendment,
alteration or change to the terms of the Series D Stock which adversely affects
such shares; (ii) any increase or decrease in the total number of authorized or
issued shares of Series D Stock; (iii) any amendment or repeal of the Issuer's
constituent documents in a manner that adversely affects the Series D Stock; and
(iv) entering into any arrangement or contract to take any of the foregoing
actions.
In addition, if any of the following events occurs (each, an
"Event of Default"), then the holders of the Series D Stock and Series E Stock,
voting as a single class, will have the right to elect a majority of the Board
until such time as the Issuer cures the default. The Events of Default are: (i)
if the Issuer fails to pay any dividend on the Series D Stock or Series E Stock
or make any required redemption or liquidation payment thereon for a period of
five days; (ii) if the Issuer fails to perform in any material
<PAGE>
Page 14 of 26 Pages
respect certain specified material covenants contained in the Purchase Agreement
and the Stockholder Agreement between the Issuer, certain significant
stockholders of the Issuer and CII Ventures, dated as of February 9, 2000 (the
"Stockholders Agreement"), the terms of which are described below; (iii) if the
Issuer breaches certain material representations and warranties in the Purchase
Agreement; (iv) the Issuer's bankruptcy, receivership, assignment for the
benefit of creditors or liquidation, which in the case of any involuntary
proceeding, has not been discharged or stayed within 60 days; or (v) the
acceleration of any third party obligations or unsatisfied judgments in excess
of $500,000 of, by or on behalf of the Issuer, which obligations are not
satisfied, discharged or stayed within 30 days.
Upon the occurrence of a "mandatory redemption event," holders
of a majority of the outstanding shares of Series D Stock may, at their option,
require the Issuer to redeem all of the outstanding shares of Series D Stock.
Mandatory redemption events include: February 25, 2005 (provided that the
holders must elect, within 60 days of such date, to have their shares redeemed),
a change of control of the Issuer, the sale or other transfer of all or
substantially all of the Issuer's assets, and an Event of Default. The
redemption price will equal the greater of (i) the sum of $14.00 plus
compounded, accrued and unpaid dividends thereon, as adjusted for stock splits,
stock combinations and similar events, and (ii) the fair market value of the
shares of Issuer Common Stock into which the Series D Stock may then be
converted.
The holders of the Series D Stock may convert their shares of
Series D Stock into Common Stock at any time and from time to time on the terms
described above. In addition, commencing on February 25, 2005, the Issuer may,
upon 60 days notice, cause all of the outstanding shares of Series D Stock to be
converted into shares of Issuer Common Stock at the conversion price then in
effect.
<PAGE>
Page 15 of 26 Pages
Upon liquidation, dissolution or winding up of the Issuer,
holders of Series D Stock will be entitled to a liquidation preference per share
in an amount equal to the greater of (i) the sum of $14.00 plus compounded,
accrued and unpaid dividends thereon, and (ii) the amount that would have been
payable if such holders had converted their shares, including accrued but unpaid
dividends thereon, into shares of Issuer Common Stock. At the election of the
holders of a majority of the outstanding shares of Series D Stock and Series E
Stock, voting together as a single class, (i) a merger or consolidation of the
Issuer where (A) the stockholders of the Issuer immediately prior to such
transaction cease to own in the aggregate at least 50% of the voting securities
of the surviving entity (or ultimate parent thereof) or (B) any entity or
"group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) becomes the beneficial owner of more than 50%
of the voting securities of the surviving entity (or ultimate parent thereof) or
(ii) a sale of substantially all of the Issuer's assets or all of the stock of
its subsidiaries will be deemed a liquidation, dissolution or winding up of the
Issuer.
The terms of the Series D Stock and the Series E Stock are set
forth in the Series D Certificate and the Certificate of Designation of Series
and Determination of Rights and Preferences of Series E Convertible
Participating Preferred Stock, respectively, attached to this Schedule 13D as
Exhibits 4 and 5, respectively, which are incorporated herein by reference.
VOTING AGREEMENT
Concurrently with and as a condition to the execution and
delivery of the Purchase Agreement, CII Ventures and certain significant
stockholders of the Issuer (the "Stockholders") entered into a Voting Agreement,
dated as of December 20, 1999 (the "Voting Agreement"), whereby each Stockholder
agreed not to sell, transfer, assign, pledge or otherwise, directly or
indirectly, dispose of or enter into any contract or other arrangement with
respect to, or consent to the sale, transfer, assignment, pledge or other
disposition of any interest in, any Issuer Common Stock owned by such
Stockholder as of
<PAGE>
Page 16 of 26 Pages
the date of the Voting Agreement or acquired by such Stockholder after the date
of the Voting Agreement (the "Subject Securities") or any options, rights or
warrants to acquire Subject Securities, subject to certain exceptions. Each
Stockholder further agreed not to grant any proxies or powers of attorney,
deposit any Subject Securities or options, rights or warrants to acquire Subject
Securities into a voting trust or enter into any voting agreements with respect
to the Subject Securities. The Stockholders include: Ulysses G. Auger, II, the
Issuer's Chairman of the Board and Chief Executive Officer; Ulysses G. Auger,
Sr., a director of the Issuer; William M. Caldwell, IV, the Issuer's President;
Chancery Lane, L.P.; Evans K. Anderson, an Executive Vice President of the
Issuer; Gary H. Rabin, an Executive Vice President of the Issuer; and Kevin
Brand, an officer of the Issuer.
In addition, pursuant to the Voting Agreement, each
Stockholder agreed to vote the Subject Securities in favor of (i) the issuance
and sale of Series D Stock and Series E Stock to CII Ventures and (ii) an
amendment to the Issuer's Restated Certificate of Incorporation to increase the
authorized number of shares of preferred stock from 25 million to 50 million.
The foregoing provisions of the Voting Agreement will terminate on the approval
of the issuance of the Issuer Common Stock to CII Ventures.
Under the Voting Agreement, each Stockholder has also agreed
to vote the Subject Securities in favor of the election to the Board of two
designees of CII Ventures. If CII Ventures exercises the Option, each
Stockholder will vote the Subject Securities in favor of the election to the
Board of a third designee. Each Stockholder has further agreed not to take any
action that would change the size of the Board, except as contemplated by the
Stockholders Agreement, and to vote such Stockholder's Subject Securities
against certain matters set forth in the Stockholders Agreement (and described
below in the discussion of the "consent rights" granted pursuant to the
Stockholders Agreement) unless such matters were consented to by at least one of
the directors of the Issuer who was designated by CII
<PAGE>
Page 17 of 26 Pages
Ventures. These provisions of the Voting Agreement will terminate upon the
termination of the Stockholders Agreement pursuant to its terms.
The Voting Agreement is attached to this Schedule 13D as
Exhibit 6 and is incorporated herein by reference.
STOCKHOLDERS AGREEMENT
Pursuant to the terms of the Purchase Agreement, on February
25, 2000 the Issuer, CII Ventures and the Stockholders entered into the
Stockholders Agreement. Under the terms of the Stockholders Agreement, CII
Ventures has the right to designate two of eight members of the Board. If CII
Ventures exercises the Option, it will have the right to designate three of nine
members of the Board. These rights will continue as long as CII Ventures and its
affiliates own a certain percentage of the outstanding Issuer Common Stock. When
CII Ventures, together with its affiliates, ceases to own at least ten percent
of the outstanding Issuer Common Stock, its right to designate more than two
directors will terminate. When CII Ventures ceases to own at least five percent
of the outstanding Issuer Common Stock, its right to designate more than one
director will terminate, and when it ceases to own at least the lesser of (i)
five percent of the outstanding Issuer Common Stock and (ii) 1,428,571 shares of
voting securities of the Issuer. Effective February 25, 2000, James H. Greene,
Jr., a member of KKR 1996 LLC and Strata LLC, and Alex Navab, an executive of
KKR, were appointed to the Board by the directors of the Issuer.
The Stockholders Agreement also prohibits the Issuer from
taking certain corporate actions unless such actions are approved by at least
one director that was designated by CII Ventures. These "consent rights"
include: (i) changes in the number of authorized or issued shares of Series D
Stock or Series E Stock; (ii) changes to the rights, preferences or powers of
the Series D Stock or Series E Stock or alterations of the Issuer's constituent
documents in a manner that adversely affects such shares;
<PAGE>
Page 18 of 26 Pages
(iii) related party transactions; (iv) removal of certain executive officers;
(v) approval or modification of material employment agreements or compensation
plans or arrangements; (vi) changes in the number or composition of the Board;
(vii) the rights described in clauses (i), (iii), (iv) and (v) of the third
paragraph under the caption "Terms of the Series D Stock" of this Item 4 and (x)
entering into any arrangement or contract to take any of the foregoing actions.
These consent rights are dependent upon CII Ventures' continuing to own certain
specified percentages of Issuer Common Stock as set forth the Stockholders
Agreement, except for the restrictions against the Issuer's making any change in
the amount of authorized Series D Stock or Series E Stock or any adverse change
in the terms thereof, or making any alterations of its constituent documents in
a manner that adversely affects the Series D Stock or Series E Stock, which
survive until no shares of the Series D Stock and Series E Stock are
outstanding.
In addition, the Stockholders Agreement provides that CII
Ventures and its transferees will have the right to require the Issuer to file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the registration of any or all of the equity
securities held by such holder, including shares of Issuer Common Stock received
upon conversion of such holder's Series D Stock or Series E Stock (the
"Registrable Securities"). CII Ventures and its transferees are entitled to
three such "demand" registration rights under the Stockholders Agreement (or
four "demand" rights if CII Ventures exercises at least 50% of the Option).
Holders of Registrable Securities also have unlimited "piggyback" registration
rights with respect to the Registrable Securities. These demand and piggyback
registration rights are subject to customary restrictions and limitations. The
Issuer has agreed to pay all registration expenses in connection with the
registration of the Registrable Securities, except that underwriting discounts
and commissions and transfer taxes, if any, will be at the holders' expense.
Furthermore, in connection with any registration statement filed pursuant to the
Stockholders Agreement,
<PAGE>
Page 19 of 26 Pages
the Issuer and the holders have agreed to indemnify each other against certain
liabilities, including certain liabilities under the Securities Act.
Under the Stockholders Agreement, CII Ventures and its
affiliates are restricted from transferring securities of the Issuer to any
individual or entity that is principally engaged in the business of providing
high-speed Internet connections specifically targeting hotels and multi-dwelling
unit buildings, subject to certain exceptions. In addition, certain Stockholders
are restricted from transferring more than a certain percentage of their
securities of the Issuer without CII Ventures' consent until February 25, 2005,
and other Stockholders are restricted from transferring more than a certain
percentage of their securities of the Issuer without CII Ventures' consent until
February 25, 2003.
Under the Stockholders Agreement, CII Ventures has the right
to purchase its pro rata portion of new equity securities issued by the Issuer,
other than certain exempt issuances. In addition, CII Ventures and its
affiliates have agreed not to acquire additional voting securities of the Issuer
until February 25, 2005 if such acquisitions would increase CII Ventures'
ownership percentage above a specified threshold equal to the sum of (i) the
ratio, expressed as a percentage, of (A) 7,142,857 to (B) the total number of
outstanding shares of voting securities on a fully diluted basis as of the
Initial Closing plus (ii) five percent, subject to certain exceptions.
The Stockholders Agreement is attached to this Schedule 13D as Exhibit
7 and is incorporated herein by reference.
The Reporting Persons intend to review on a continuing basis
their investment in the Issuer. Subject to the limitations described above, the
Reporting Persons may decide to increase or decrease their investment in the
Issuer depending upon the price and availability of the Issuer's securities,
subsequent developments affecting the Issuer, the Issuer's business and
prospects, other investment and
<PAGE>
Page 20 of 26 Pages
business opportunities available to the Reporting Persons, general stock market
and economic conditions, tax considerations and other factors.
Other than as described above, none of the Reporting Persons
has any present plans or proposals that relate to or would result in any of the
actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) As of February 25, 2000, CII Ventures did not own
any shares of Issuer Common Stock. However, pursuant to Rule 13d-3 under the
Exchange Act, CII Ventures may be deemed to beneficially own 4,477,134 shares of
Issuer Common Stock, which is subject to issuance upon conversion of the Series
D Stock acquired at the Initial Closing. The 4,477,134 shares issuable upon
conversion of the Series D Stock would constitute approximately 16.4% of the
Issuer Common Stock outstanding upon such conversion (based on the number of
outstanding shares of Issuer Common Stock listed in the Issuer's Preliminary
Proxy Statement filed on February 25, 2000).
Accordingly, the percentage of the outstanding Issuer Common
Stock beneficially owned by CII Ventures is approximately 16.4%.
As the sole members of CII Ventures, KKR 1996 Fund and KKR
Partners have the power to direct the voting of and disposition of any shares of
Issuer Common Stock deemed to be beneficially owned by CII Ventures. As a
result, KKR 1996 Fund and KKR Partners may be deemed to beneficially own any
shares of Issuer Common Stock deemed to be beneficially owned by CII Ventures.
KKR Associates 1996, as the sole general partner of KKR 1996
Fund, has the power to direct the voting of and disposition of any shares of
Issuer Common Stock deemed to be beneficially owned by KKR 1996 Fund. KKR
Associates Strata, as the sole general partner of KKR Partners, has the power to
direct the voting of and disposition of any shares of Issuer Common Stock deemed
to be
<PAGE>
Page 21 of 26 Pages
beneficially owned by KKR Partners. As a result, KKR Associates 1996 and KKR
Associates Strata may be deemed to beneficially own any shares of Issuer Common
Stock deemed to be beneficially owned by KKR 1996 Fund and KKR Partners,
respectively.
KKR 1996 LLC, as the sole general partner of KKR Associates
1996, has the power to direct the voting of and disposition of any shares of
Issuer Common Stock deemed to be beneficially owned by KKR Associates 1996. As a
result, KKR 1996 LLC may be deemed to beneficially own any shares of Issuer
Common Stock deemed to be beneficially owned by KKR Associates 1996.
Strata LLC, as the sole general partner of KKR Associates
Strata, has the power to direct the voting of and disposition of any shares of
Issuer Common Stock deemed to be beneficially owned by KKR Associates Strata. As
a result, Strata LLC may be deemed to beneficially own any shares of Issuer
Common Stock deemed to be beneficially owned by KKR Associates Strata.
As a member of each of KKR 1996 LLC and Strata LLC, each of
Messrs. Kravis, Roberts, MacDonnell, Raether, Michelson, Greene, Tokarz, Golkin,
Stuart and Gilhuly may be deemed to beneficially own any shares of Issuer Common
Stock that KKR 1996 LLC and Strata LLC may beneficially own or be deemed to
beneficially own. Each such individual disclaims beneficial ownership of such
shares. Neither the filing of this Schedule 13D nor any of its contents shall be
deemed to constitute an admission that any Reporting Person is the beneficial
owner of the Issuer Common Stock referred to herein for purposes of Section
13(d) of the Exchange Act or for any other purpose, and such beneficial
ownership is expressly disclaimed.
(c) Except as set forth in this Item 5, to the best knowledge
of each of the Reporting Persons, none of the Reporting Persons and no other
person described in Item 2 hereof has beneficial ownership of, or has engaged in
any transaction during the past 60 days in, any shares of Issuer Common Stock.
<PAGE>
Page 22 of 26 Pages
(d) No person other than the CII Ventures has the right to
receive dividends from, or the proceeds from the sale of, the shares of Issuer
Common Stock referred to in this Item 5.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Except as set forth in Item 4 of this Statement, to the best
knowledge of the Reporting Persons, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 and between such persons and any person with respect to any securities of
the Issuer, including but not limited to, transfer or voting of any of the
securities of the Issuer, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies, or a pledge or contingency the occurrence of which would
give another person voting power over the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement, dated February 29, 2000, among CII
Ventures LLC, KKR 1996 Fund L.P., KKR Partners II, L.P., KKR
Associates 1996 L.P., KKR 1996 GP LLC, KKR Associates (Strata)
L.P. and Strata LLC relating to the filing of a joint
statement on Schedule 13D.
2. Power of Attorney, dated September 20, 1999.
3. Purchase Agreement, dated as of December 20, 1999, between
CAIS Internet, Inc. and CII Ventures LLC (incorporated by
reference to Exhibit A to CAIS Internet, Inc.'s Preliminary
Proxy Statement, filed with the Securities and Exchange
Commission on February 25, 2000 (the "Preliminary Proxy
Statement").
4. Certificate of Designation of Series and Determination of
Rights and Preferences of Series D Convertible Participating
Preferred Stock (incorporated by reference to Exhibit B to the
Preliminary Proxy Statement).
5. Form of Certificate of Designation of Series and Determination
of Rights and Preferences of Series E Convertible
Participating Preferred Stock (incorporated by reference to
Exhibit C to the Preliminary Proxy Statement).
<PAGE>
Page 23 of 26 Pages
6. Voting Agreement, dated as of December 20, 1999, among CAIS
Internet, Inc., CII Ventures LLC and the parties signatory
thereto (incorporated by reference to Exhibit E to the
Preliminary Proxy Statement).
7. Stockholders Agreement, dated as of February 9, 2000, among
CAIS Internet, Inc., CII Ventures LLC and the parties
signatory thereto (incorporated by reference to Exhibit D to
the Preliminary Proxy Statement).
<PAGE>
Page 24 of 26 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
CII VENTURES LLC
By: KKR 1996 Fund L.P.
By: KKR Associates 1996 L.P., its General Partner
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its General Partner
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR PARTNERS II, L.P.
By: KKR Associates (Strata) L.P., its General Partner
By: Strata LLC, General Partner
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
<PAGE>
Page 25 of 26 Pages
KKR ASSOCIATES 1996 L.P.
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR ASSOCIATES (STRATA) L.P.
By: Strata LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR 1996 GP LLC
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
STRATA LLC
By: /s/ William J. Janetschek
----------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
Dated: February 29, 2000
<PAGE>
Page 26 of 26 Pages
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibits
- -------------- -----------------------
<S> <C>
1. Joint Filing Agreement, dated February 29, 2000, among CII
Ventures LLC, KKR 1996 Fund L.P., KKR Partners II, L.P., KKR
Associates 1996 L.P., KKR 1996 GP LLC, KKR Associates (Strata)
L.P. and Strata LLC relating to the filing of a joint
statement on Schedule 13D.
2. Power of Attorney, dated September 20, 1999.
3. Purchase Agreement, dated as of December 20, 1999, between
CAIS Internet, Inc. and CII Ventures LLC (incorporated by
reference to Exhibit A to CAIS Internet, Inc.'s Preliminary
Proxy Statement, filed with the Securities and Exchange
Commission on February 25, 2000 (the "Preliminary Proxy
Statement").
4. Certificate of Designation of Series and Determination of
Rights and Preferences of Series D Convertible Participating
Preferred Stock (incorporated by reference to Exhibit B to the
Preliminary Proxy Statement).
5. Form of Certificate of Designation of Series and Determination
of Rights and Preferences of Series E Convertible
Participating Preferred Stock (incorporated by reference to
Exhibit C to the Preliminary Proxy Statement).
6. Voting Agreement, dated as of December 20, 1999, among CAIS
Internet, Inc., CII Ventures LLC and the parties signatory
thereto (incorporated by reference to Exhibit E to the
Preliminary Proxy Statement).
7. Stockholders Agreement, dated as of February 9, 2000, among
CAIS Internet, Inc., CII Ventures LLC and the parties
signatory thereto (incorporated by reference to Exhibit D to
the Preliminary Proxy Statement).
</TABLE>
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
We, the signatories of the Statement on Schedule 13D to which
this Agreement is attached, hereby agree that such statement is, and any
amendments thereto filed by any of us will be, filed on behalf of each of us.
CII VENTURES LLC
By: KKR 1996 Fund L.P.
By: KKR Associates 1996 L.P., its General Partner
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its General Partner
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR PARTNERS II, L.P.
By: KKR Associates (Strata) L.P., its General Partner
By: Strata LLC, General Partner
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
<PAGE>
KKR ASSOCIATES 1996 L.P.
By: KKR 1996 GP LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR ASSOCIATES (STRATA) L.P.
By: Strata LLC, its General Partner
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
KKR 1996 GP LLC
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
STRATA LLC
By: /s/ William J. Janetschek
----------------------------------------
Name: William J. Janetschek
Title: Attorney-in-fact for Henry R. Kravis
Dated: February 29, 2000
<PAGE>
EXHIBIT 2
POWER OF ATTORNEY
Know all men by these presents that Henry R. Kravis does hereby make, constitute
and appoint William J. Janetschek and Richard J. Kreider, or either one of them,
as a true and lawful attorney-in-fact of the undersigned with full powers of
substitution and revocation, for and in the name, place and stead of the
undersigned (both in the undersigned's individual capacity and as a member of
any limited liability company or limited partnership for which the undersigned
is otherwise authorized to sign), to execute and deliver such forms as may be
required to be filed from time to time with the Securities and Exchange
Commission with respect to any investments of KKR Associates, L.P., KKR
Associates 1996 L.P., KKR Associates II (1996) Limited Partnership, KKR
Associates (Strata) L.P., KKR Associates (KLC) L.P., and KKR Associates (NXS)
L.P. (including any amendments or supplements to any reports, forms or schedules
previously filed by such persons or entities): (i) pursuant to Sections 13(d)
and 16(a) of the Securities Exchange Act of 1934, as amended (the "Act"),
including without limitation, Schedule 13D, Schedule 14G, statements on Form 3,
Form 4 and Form 5 and (ii) in connection with any applications for EDGAR access
codes, including without limitation the Form ID.
/s/ Henry R. Kravis
------------------------------------
Name: Henry R. Kravis
September 20, 1999
- -----------------------------
Date
