<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
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,
CII VENTURES II 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)
OCTOBER 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>
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP NO. 1247Q102 PAGE 2 OF 21 PAGES
----- -----
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR 1996 FUND L.P.
--------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
2 (b) /_/
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 (see Item 3)
--------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2 (D) OR 2(E) /_/
5
--------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 12,800,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /_/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated
May 19, 2000 and the Warrant Agreement described herein) who are party to
a voting agreement with CII Ventures LLC with respect to voting on
certain matters. See Item 4 - "Voting Agreement." If such shares were
included in the amount shown in Row 11, the percentage of Common Stock
shown in Row 13 would be 72.1%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.6%
--------------------------------------------------------------------------------
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. 1247Q102 PAGE 3 OF 21 PAGES
----- -----
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR PARTNERS II, L.P.
--------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
2 (b) /_/
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 (see Item 3)
--------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2 (D) OR 2(E) /_/
5
--------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 11,250,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /_/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 70.9%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.7%
--------------------------------------------------------------------------------
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. 1247Q102 PAGE 4 OF 21 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*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 12,800,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /_/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 72.1%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.6%
--------------------------------------------------------------------------------
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 21 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*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 12,800,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,800,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /_/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 72.1%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.6%
--------------------------------------------------------------------------------
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 21 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*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 11,250,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /X/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 70.9%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (12)
32.7%
--------------------------------------------------------------------------------
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 21 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*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 11,250,891 (see Row 12)
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /X/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 70.9%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (12)
32.7%
--------------------------------------------------------------------------------
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 21 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*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 11,250,891 (see Row 12)
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 11,250,891 (see Row 12)
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,250,891 (see Row 12)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /X/
Excludes an aggregate of 14,790,478 shares of Common Stock of the Issuer
beneficially owned by certain stockholders of the Issuer (based on
information contained in the Issuer's definitive Proxy Statement dated May
19, 2000 and the Warrant Agreement described herein) who are party to a
voting agreement with CII Ventures LLC with respect to voting on certain
matters. See Item 4 - "Voting Agreement." If such shares were included in
the amount shown in Row 11, the percentage of Common Stock shown in Row 13
would be 70.9%.
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (12)
32.7%
--------------------------------------------------------------------------------
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 9 OF 21 PAGES
----- -----
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CII VENTURES II LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /_/
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
(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
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,550,000
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,550,000
-----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,550,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /_/
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (12)
6.29%
--------------------------------------------------------------------------------
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 10 of 21
This Amendment No. 2 (this "Amendment") amends and supplements the
Statement on Schedule 13D filed on March 2, 2000, as amended by Amendment No. 1
to the Statement on Schedule 13D filed on April 13, 2000 (as amended, the
"Schedule 13D"), on behalf of 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"). This Amendment also constitutes the original statement on Schedule
13D of CII Ventures II LLC, a Delaware limited liability company ("CII Ventures
II" and, together with KKR 1996 Fund, KKR Associates 1996, KKR 1996 LLC, KKR
Partners, KKR Associates Strata, Strata LLC and CII Ventures, the "Reporting
Persons"), relating to the Common Stock, par value $.01 ("Issuer Common Stock"),
of CAIS Internet, Inc., a Delaware corporation (the "Issuer"). Capitalized terms
used and not defined in this Amendment have the meanings set forth in the
Schedule 13D.
This Amendment is being filed in connection with the issuance to CII
Ventures II by the Issuer of warrants to purchase up to 1,550,000 shares of
Issuer Common Stock (the "Warrants") and certain transactions related thereto.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 of the Schedule 13D is hereby amended and supplemented by
adding the following information:
CII Ventures II 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
<PAGE>
Page 11 of 21
Fund is the sole member of CII Ventures II. The address of the principal
business and office of CII Ventures II is 9 West 57th Street, New York, New York
10019.
During the last five years, CII Ventures: (i) has not been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors);
or (ii) was not a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was not or is
not 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.
This Amendment is being filed jointly by the Reporting Persons. The
agreement among the Reporting Persons relating to the joint filing of this
Amendment is attached as Exhibit 8 hereto.
Item 2 of the Schedule 13D is hereby amended and supplemented by
replacing the text of the fifth paragraph thereof with the following:
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, Edward A. Gilhuly and Johannes Huth.
Messrs. Kravis, Roberts, MacDonnell, Raether, Michelson, Greene, Tokarz, Golkin,
Stuart and Gilhuly are each United States citizens, Mr. Huth is a citizen of
Germany, 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, N.Y. 10019, 2800 Sand Hill Road, Suite 200, Menlo Park,
California 94025 and Stirling
<PAGE>
Page 12 of 21
Square, 7 Carlton Gardens, London, SW1Y 5AD, 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 Messrs. Gilhuly and Huth is Stirling Square,
7 Carlton Gardens, London, SW1Y 5AD, England.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby amended by adding the following
paragraph:
No funds were used in connection with the acquisition of the
Warrants.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby amended by adding the following
information:
CREDIT AGREEMENT
On October 25, 2000, CII Ventures II entered into a Credit Agreement
(the "Credit Agreement"), with the Issuer, Ulysses G. Auger II ("Mr. Auger") and
R. Theodore Ammon ("Mr. Ammon" and, together with Mr. Auger and CII Ventures II,
the "Lenders") pursuant to which the Lenders agreed, upon the terms and subject
to the conditions contained therein, to make loans to the Issuer of up to
$20,000,000. Of the total aggregate commitment by all of the Lenders, CII
Ventures II committed to lend $15,500,000. The Credit Agreement is guaranteed by
certain of the Issuer's subsidiaries. The commitment of CII Ventures II and the
other Lenders under the Credit Agreement will terminate, and the outstanding
loans will be required to be repaid on the earlier of (i) March 31, 2001 and
(ii) the date on which the Issuer closes the sale of certain of its assets.
In addition, the Issuer is required to prepay outstanding loans with proceeds
from asset sales and sales of capital stock. Loans made under the Credit
Agreement will bear interest either at the Alternative Base Rate (as defined
in the Credit Agreement) plus 5.00% or at the Adjusted LIBO Rate (as defined
in the Credit Agreement) plus 6.00%.
<PAGE>
Page 13 of 21
The Credit Agreement contains certain restrictions on the Issuer,
including, among other things, limitations on the ability of the Issuer or any
of its subsidiaries to (i) incur indebtedness, (ii) create liens, (iii) make
certain restricted payments or investments and (iv) make certain capital
expenditures. Events of Default under the Credit Agreement, include, without
limitation, failure to pay principal of or interest on any Loans when due,
failure to perform certain covenants, failure to make any payment in respect of
certain material indebtedness as it becomes due or the acceleration of the
maturity of such material indebtedness and certain bankruptcy events. Upon the
occurrence of an Event of Default, the commitments will terminate and the loans
will become due and payable.
CONTINGENT WARRANTS
Pursuant to the terms of the Credit Agreement, in the event that
Cais, Inc., a wholly-owned subsidiary of the Issuer, has not replaced the
Issuer as the borrower under the Credit Agreement (the "Cais Assumption") by
November 15, 2000, the Issuer has agreed to enter into a warrant agreement
and issue to the Lenders warrants to purchase up to 500,000 shares of Issuer
Common Stock (the "Initial Contingent Warrants"). If the Cais Assumption has
not occurred by November 22, 2000, the Issuer has agreed to issue to the
Lenders additional warrants to purchase up to 500,000 shares of Issuer Common
Stock (the "Second Contingent Warrants"). Based on its commitment percentage
as of the date hereof, if the Initial Contingent Warrants or the Second
Contingent Warrants are issued, CII Ventures II would receive Initial
Contingent Warrants to purchase up to 387,500 shares of Issuer Common Stock
and Second Contingent Warrants to purchase up to 387,500 shares of Issuer
Common Stock. The Initial Contingent Warrants and the Second Contingent
Warrants will have an exercise price equal to the exercise price of the
Warrants described below, subject to anti-dilution adjustments,
<PAGE>
Page 14 of 21
and will be exercisable in whole or in part at any time during the ten-year
period commencing on the date of issue.
The Credit Agreement also provides that if the commitments under the
Credit Agreement have not been terminated and the loans have not been repaid in
full by December 31, 2000, the Issuer will enter into a warrant agreement and
issue to the Lenders warrants to purchase up to a number of shares of Issuer
Common Stock equal to the difference between (i) the number of shares of Issuer
Common Stock equal to 19.9% of the number of outstanding shares of Issuer Common
Stock on October 25, 2000 and (ii) the sum of (A) the number of Initial
Contingent Warrants and Second Contingent Warrants issued by the Issuer and (B)
2,000,000 (the "Additional Contingent Warrants" and, together with the Initial
Contingent Warrants and the Second Contingent Warrants, the "Contingent
Warrants"). Based on its commitment percentage as of the date hereof and
assuming that (i) the number of outstanding shares of Issuer Common Stock on
October 25, 2000 was 23,110,174 (the number of shares of Issuer Common Stock
outstanding on August 1, 2000 as set forth in the Issuer's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2000 (the "Form 10-Q")) and (ii) no
Initial Contingent Warrants or Second Contingent Warrants were issued, if the
Additional Contingent Warrants are issued, CII Ventures II would receive
Additional Contingent Warrants to purchase 2,014,166 shares of Issuer Common
Stock. The Additional Contingent Warrants will have an exercise price of $.01
per share, subject to anti-dilution adjustments, and will be exercisable in
whole or in part at any time during the ten-year period commencing on the date
of issue.
The Issuer has agreed to indemnify CII Ventures II and its
affiliates with respect to certain losses arising from CII Venture II's entering
into the Credit Agreement and performing its obligations thereunder.
<PAGE>
Page 15 of 21
The Credit Agreement is attached to this Amendment to Schedule 13D
as Exhibit 9 and is incorporated herein by reference.
WARRANTS
In connection with the Credit Agreement, on October 25, 2000, the
Issuer issued to CII Ventures II the Warrants to purchase 1,550,000 shares of
Issuer Common Stock pursuant to a Warrant Agreement, dated as of October 25,
2000 (the "Warrant Agreement"), among the Issuer, CII Ventures II, Mr. Auger and
Mr. Ammon. The Warrants have an exercise price of $4.56 per share (the "Initial
Exercise Price"); provided that on January 23, 2001 (the "Anniversary Date"),
the Initial Exercise Price will be reset to the average of the ten lowest
Closing Prices (as defined in the Warrant Agreement) for Issuer Common Stock
during the period beginning on October 26, 2000 and ending on the Anniversary
Date (the "Reset Price"); provided, further, that if all or part of the Warrants
are exercised prior to the Anniversary Date, the Initial Exercise Price will be
reset with respect to those Warrants that are exercised to the average of the
ten lowest Closing Prices for the Issuer Common Stock during the period
beginning on October 26, 2000 and ending on the trading day immediately
preceding the exercise date (or, if such period consists of less than ten
trading days, the average of each such trading day during such period);
provided, further, that in no event and under no circumstances will the Reset
Price be greater than $4.56 per share (the "Exercise Price"). The Exercise Price
is subject to anti-dilution adjustments. The Warrants are exercisable in whole
or in part at any time during the ten-year period commencing on October 25,
2000.
The terms of the Warrants are set forth in the Warrant Agreement,
which is attached to this Amendment to Schedule 13D as Exhibit 10 and is
incorporated herein by reference.
OTHER AGREEMENTS
<PAGE>
Page 16 of 21
In connection with the Warrant Agreement, the Issuer executed an
Agreement (the "Board Agreement") in which it has agreed to take all action
necessary to the extent permitted by law to: (i) increase the size of the
Board of Directors ("Board") of the Issuer to nine (9) directors and to elect
one designee of CII Ventures II to the Board and (ii) cooperate with CII
Ventures and CII Ventures II to enter into any amendments to the Stockholders
Agreement and the Voting Agreement necessary to provide the benefit of the
provisions of such agreements to CII Ventures II with respect to the designee
of CII Ventures II, including using its best efforts to cause each of the
stockholders party thereto to execute any such amendments.
The Board Agreement is attached to this Amendment to Schedule 13D as
Exhibit 11 and is incorporated herein by reference.
In connection with the issuance of the Warrants to CII Ventures II,
the Stockholders Agreement was amended to join CII Ventures II as a party
for purposes of the registration rights, increase the number of demand
registration rights from three to four and provide an additional demand
registration right in the event that any of the Contingent Warrants are
issued.
The Amendment and Joinder to Stockholders Agreement is attached to
this Amendment to Schedule 13D as Exhibit 12 and is incorporated herein by
reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Schedule 13D is hereby amended and supplemented by
replacing the first three paragraphs of paragraphs (a) and (b) thereof with the
following:
(a) and (b) As of October 25, 2000, neither CII Ventures nor CII
Ventures II owned any shares of Issuer Common Stock. However, pursuant to Rule
13d-3 under the Exchange Act, (i) CII Ventures may be deemed to beneficially own
6,250,891 shares of Issuer Common Stock, which are subject to issuance upon
conversion of the Series D Stock acquired at the Initial Closing and the
<PAGE>
Page 17 of 21
Second Closing and as dividend payments and 5,000,000 shares of Issuer Common
Stock, which are subject to issuance upon conversion of the Series E Stock
issuable upon the exercise by CII Ventures of the Option and (ii) CII Ventures
II may be deemed to beneficially own 1,550,000 shares of Issuer Common Stock,
which are subject to issuance upon exercise of the Warrants. In addition, if the
maximum number of the Contingent Warrants are issued, CII Ventures II may be
deemed to beneficially own 3,564,166 shares of Issuer Common Stock. The
11,250,891 shares issuable upon conversion of the Series D Stock and Series E
Stock would constitute approximately 32.7% of the Issuer Common Stock
outstanding upon conversion (based on the number of outstanding shares of Issuer
Common Stock as of August 1, 2000, as set forth in the Form 10-Q). The 1,550,000
shares issuable upon exercise of the Warrants would constitute approximately
6.29% of the Issuer Common Stock outstanding upon exercise (approximately 13.4%
if the maximum number of Contingent Warrants are issued) (based on the number of
outstanding shares of Issuer Common Stock as of August 1, 2000, as set forth in
the Form 10-Q).
Accordingly, the percentage of the outstanding Issuer Common Stock
beneficially owned by CII Ventures and CII Ventures II is approximately 32.7%
and 6.29%, respectively.
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 own any shares of Issuer Common
Stock deemed to be beneficially owned by CII Ventures. As the sole member of CII
Ventures II, 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 CII
Ventures II. As a result, KKR 1996 Fund may be deemed to own any shares of
Issuer Common Stock deemed to be beneficially owned by CII Ventures II.
<PAGE>
Page 18 of 21
Item 5 of the Schedule 13D is hereby amended and supplemented by
replacing the last paragraph of paragraphs (a) and (b) thereof with the
following:
As a member of each of KKR 1996 LLC and Strata LLC, each of Messrs.
Kravis, Roberts, MacDonnell, Raether, Michelson, Greene, Tokarz, Golkin, Stuart,
Gilhuly and Huth 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.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Schedule 13D is hereby amended by adding the
following:
8. Joint Filing Agreement, dated October 27, 2000, among CII Ventures
II LLC, 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.
9. Credit Agreement, dated as of October 25, 2000, among CAIS Internet,
Inc., the lenders party thereto and CII Ventures II LLC, as
Administrative Agent.
10. Warrant Agreement, dated as of October 25, 2000, among CAIS
Internet, Inc., CII Ventures II LLC, Ulysses G. Auger II and R.
Theodore Ammon.
11. Agreement, dated as of October 25, 2000, of CAIS Internet, Inc.
12. Amendment and Joinder to Stockholders Agreement, dated as of October
25, 2000, among CAIS Internet, Inc., CII Ventures LLC and CII
Ventures II LLC.
<PAGE>
Page 19 of 21
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
CII VENTURES II 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 20 of 21
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: October 27, 2000
<PAGE>
Page 21 of 21
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
8. Joint Filing Agreement, dated October 27, 2000, among CII Ventures
II LLC, 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.
9. Credit Agreement, dated as of October 25, 2000, among CAIS Internet,
Inc., the lenders party thereto and CII Ventures II LLC, as
Administrative Agent.
10. Warrant Agreement, dated as of October 25, 2000, among CAIS
Internet, Inc., CII Ventures II LLC, Ulysses G. Auger II and R.
Theodore Ammon.
11. Agreement, dated as of October 25, 2000, of CAIS Internet, Inc.
12. Amendment and Joinder to Stockholders Agreement, dated as of October
25, 2000, among CAIS Internet, Inc., CII Ventures LLC and CII
Ventures II LLC.
