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                                                                     Exhibit 4.2


                      CERTIFICATE OF DESIGNATION OF SERIES
                  AND DETERMINATION OF RIGHTS AND PREFERENCES

                                       OF

                      SERIES C CONVERTIBLE PREFERRED STOCK

                                       OF

                              CAIS INTERNET, INC.

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

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

     SECOND:  By unanimous consent of the Board of Directors of the Company (the
"Board"), dated as of September __, 1999, the following resolutions were duly
adopted:

     WHEREAS, the Amended and Restated Certificate of Incorporation of the
Company (the "Certificate of Incorporation") authorizes 25,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock"), issuable from
time to time in one or more series;

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

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

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

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

Section 1.  Designation; Rank.

     This series of cumulative convertible Preferred Stock shall be designated
and known as the "Series C Preferred Stock."  The number of shares constituting
the Series C Preferred Stock shall be 125,000 shares.  The Series C Preferred
Stock shall, with respect
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to dividends and rights upon liquidation, dissolution or winding up, whether
voluntary or involuntary, rank prior to the common stock of the Company, par
value $.01 per share (the "Common Stock"), and any other series of Preferred
Stock ("Other Preferred Stock").

Section 2.  Dividends.

     The holders of outstanding shares of Series C Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Company which are, by law, available for such payment,
cumulative dividends of $10.20 per annum per share, and no more, payable
quarterly on the fifteenth day of December, March, June and September in each
year commencing with a payment on December 15, 1999 of dividends accrued from
the date of issuance, and in preference and priority to any payment of any
dividend on Common Stock or Other Preferred Stock.  Accruals of dividends shall
not bear interest.

Section 3.  Liquidation Preference.

       (a)  Upon any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, before any distribution or payment shall be
made to the holders of any Common Stock or Other Preferred Stock, the holders of
Series C Preferred Stock shall be entitled to be paid out of the remaining
assets of the Company legally available for distribution with respect to each
share of Series C Preferred Stock an amount equal to the sum of (i) $120.00 per
share, as adjusted for any stock dividends, combinations or splits with respect
to such shares (the "Original Series C Issue Price") plus (ii) any accrued but
unpaid dividends thereon (whether or not declared) (such sum, the "Series C
Liquidation Value"). If upon any such liquidation, dissolution or winding up of
the Company the remaining assets of the Company available for distribution to
its stockholders shall be insufficient to pay the holders of shares of Series C
Preferred Stock the full Series C Liquidation Value, the holders of shares of
Series C Preferred Stock shall share ratably in any distribution of the
remaining assets of the Company in proportion to the respective amounts which
would otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.

       (b)  After payment in full of the Series C Liquidation Value, the
remaining assets of the Company legally available for distribution, if any,
shall be distributed to the holders of any Other Preferred Stock entitled to a
preference over the Common Stock and, thereafter, to the holders of Common
Stock.

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

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

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

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

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

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

Section 4.  Voting Rights.

     Each holder of outstanding shares of Series C Preferred Stock shall be
entitled to the number of votes equal to the number of whole shares of Common
Stock into which all of the shares of Series C Preferred Stock held by such
holder are convertible (as adjusted from time to time pursuant to Section 5
hereof), at each meeting of stockholders of the Company (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Company for their action or consideration.  Except as
provided by law or by the express provisions hereof, holders of Series C
Preferred Stock shall vote together with the holders of Common Stock as a single
class.

Section 5.  Conversion Rights.
     The holders of the Series C Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):

     (a)  Right to Convert.  Each share of Series C Preferred Stock shall be
          ----------------
convertible, at the option of the holder thereof, at any time and from time to
time (but subject to the

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limitation set forth in Section 6(i)), into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the Original
Series C Issue Price by the Conversion Price (as defined below) in effect at the
time of conversion. The Conversion Price at which shares of Common Stock shall
be deliverable upon conversion of Series C Preferred Stock without the payment
of additional consideration by the holder thereof (the "Conversion Price") shall
initially be $12.00. Such initial Conversion Price and the rate at which shares
of Series C Preferred Stock may be converted into shares of Common Stock, shall
be subject to adjustment as provided below.

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

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

     (c)  Mechanics of Conversion.
          -----------------------
          (i)      In order to convert shares of Series C Preferred Stock into
               shares of Common Stock, the holder shall surrender the
               certificate or certificates for such shares of Series C Preferred
               Stock at the office of the transfer agent (or at the principal
               office of the Company if the Company serves as its own transfer
               agent), together with written notice that such holder elects to
               convert all or any number of the shares represented by such
               certificate or certificates. Such notice shall state the number
               of shares of Series C Preferred Stock which the holder seeks to
               convert. If required by the Company, certificates surrendered for
               conversion shall be endorsed or accompanied by a written
               instrument or instruments of transfer, in form satisfactory to
               the Company, duly executed by the registered holder or his or its
               attorney duly authorized in writing. The date of receipt of such
               certificates and notice by the transfer agent or the Company
               shall be the conversion date ("Conversion Date"). As soon as
               practicable after the Conversion Date, the Company shall promptly
               issue and deliver at such office to such holder a certificate or
               certificates for the number of shares of Common Stock to which
               such holder is entitled. Such conversion shall be deemed to have
               been made at the close of business on the date of such surrender
               of the certificate representing the shares of Series C Preferred
               Stock to be converted, and the person entitled to receive the
               shares of Common Stock issuable upon such conversion shall be
               treated for all purposes as the record holder of such shares of
               Common Stock on such date.

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

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

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

          (v)      If the conversion is in connection with an underwritten
               offering of securities registered pursuant to the Securities Act
               of 1933, as amended (the "1933 Act"), the conversion may, at the
               option of any holder tendering Series C Preferred Stock for
               conversion, be conditioned upon the closing with the underwriter
               of the sale of securities pursuant to such offering, in which
               event the person(s) entitled to receive the Common Stock issuable
               upon such conversion of the Series C Preferred Stock shall not be
               deemed to have converted such Series C Preferred Stock until
               immediately prior to the closing of the sale of securities.

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<PAGE>

     (d)  Adjustments to Conversion Price for Diluting Issues.
          ---------------------------------------------------
          (i)    Special Definitions.  For purposes of this Subsection 5(d), the
                 -------------------
               following definitions shall apply:

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

               (B)  "Original Issue Date" shall mean the date on which the
                    first share of Series C Preferred Stock is first issued.

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

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

                         (1)  as a dividend or distribution on Series C
                              Preferred Stock;

                         (2)  by reason of a dividend, stock split, split-up or
                              other distribution on shares of Common Stock
                              excluded from the definition by the foregoing
                              clause (1);

                         (3)  upon the exercise of Options;

                         (4)  upon conversion of shares of Series C Preferred
                              Stock;

                         (5)  pursuant to warrants issued by the Company
                              pursuant to (a) the Warrant Agreement dated as of
                              September 4, 1998 among the Company, Cleartel
                              Communications, Inc., CAIS, Inc. and ING (U.S.)
                              Capital Corporation, Inc. (the "ING Warrant
                              Agreement"), (b) the Series A Preferred Stock and
                              Warrant Purchase Agreement dated as of February
                              19, 1999 among the Company and the several
                              purchasers set forth therein; and (c) the Warrant
                              to Purchase Common Stock granted to Hilton Hotels
                              Corporation;

                                       6
<PAGE>

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

                         (7)  in connection with any high-yield debt financing
                              undertaken by the Company, not to exceed 1,500,000
                              shares of Common Stock in t he aggregate;

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

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

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

                (E)      "Reserved Employee Shares" shall mean shares of Common
                         Stock issued to employees, officers, directors,
                         shareholders and executives of, and consultants or
                         vendors to, the Company of up to: (i) 5,000,000 shares
                         (as appropriately adjusted for any stock dividends,
                         combinations, splits or the like with respect to shares
                         of Common Stock), plus such additional number of shares
                         of Common Stock issued or deemed issued for like

                                       7
<PAGE>

                        purposes as shall be approved by holders of at least a
                        majority of the voting power of all then outstanding
                        shares of Series C Preferred Stock, voting together as
                        a single class; plus (ii) shares reserved, as of the
                        date hereof, for issuance upon the exercise of
                        outstanding Options to purchase up to 2,604,495 shares
                        of Common Stock presently held by five management
                        employees of the Company. Such Reserved Employee Shares
                        shall be issued, at any time, and from time to time,
                        under such arrangements, contracts or plans as are
                        recommended by the Company's management and approved by
                        the Board.

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

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

        (iii)         Issue of Securities Deemed Issue of Additional Shares of
                      --------------------------------------------------------
                  Common Stock. If the Company at any time or from time to time
                  ------------
                  after the Original Issue Date issue any Options or Convertible
                  Securities or Rights to Acquire Common Stock, then the maximum
                  number of shares of Common Stock (as set forth in the
                  instrument relating thereto without regard to any provision
                  contained therein for a subsequent adjustment of such number)
                  issuable upon the exercise of such Options, Rights to Acquire
                  Common Stock or, in the case of Convertible Securities, the
                  conversion or exchange of such Convertible Securities, shall
                  be deemed to be Additional Shares of Common Stock issued as of
                  the time of such issue; provided, however, that Additional
                  Shares of Common Stock shall not be deemed to have been issued
                  unless the Fair Market Value of the consideration per


                                       8
<PAGE>

                  share (determined pursuant to Subsection 5(d)(v) hereof)
                  received by the Company for such Additional Shares of Common
                  Stock would be less than the greater of 95% of the Fair Market
                  Value per share of Common Stock or the applicable Conversion
                  Price in effect on the date of and immediately prior to such
                  issue, or such record date, as the case may be, and provided,
                  further, that in any such case:

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

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

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

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


                                       9
<PAGE>

                such Conversion Price by a fraction, the numerator of which
                shall be the number of shares of Common Stock outstanding
                immediately prior to such issue plus the number of shares of
                Common Stock which the aggregate consideration received by the
                Company for the total number of Additional Shares of Common
                Stock so issued would purchase at the greater of 95% of the Fair
                Market Value per share of Common Stock or such Conversion Price;
                and the denominator of which shall be the number of shares of
                Common Stock outstanding immediately prior to such issue plus
                the number of such Additional Shares of Common Stock so issued.

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

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

                (A)  Cash and Property.  Such consideration shall:
                     -----------------
                     (1)  insofar as it consists of cash, be computed at the
                          aggregate of cash received by the Company, excluding
                          amounts paid or payable for accrued interest or
                          accrued dividends;

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

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

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


                                       10
<PAGE>

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

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

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

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

        (g)  Adjustments for Other Dividends and Distributions. In the event
             -------------------------------------------------
the Company at any time, or from time to time after the Original Issue Date
shall make or issue, a dividend or other distribution payable in securities of
the Company other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of shares of the Series C Preferred
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon, the amount of securities of the Company
that they would have received had their Series C Preferred Stock been converted
into Common Stock on the date of such event and had thereafter, during the
period from the date of such event to and including the Conversion Date,



                                       11
<PAGE>

retained such securities receivable by them as aforesaid during such period
given application to all adjustments called for during such period, under this
paragraph with respect to the rights of the holders of the Series C Preferred
Stock.

        (h)  Adjustment for Reclassification, Exchange or Substitution.  If the
             ---------------------------------------------------------
Common Stock issuable upon the conversion of the Series C Preferred Stock shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for above), then and in each such event the holder of each share of Series C
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the
number of shares of Common Stock into which such shares of Series C Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.

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

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

        (k)  Notice of Record Date.  In the event
             ---------------------
             (i)      that the Company declares a dividend (or any other
                 distribution) on its Common Stock payable in Common Stock or
                 other securities of th e Company;


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<PAGE>

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

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

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

     then the Company shall cause to be filed at its principal office or at the
office of the transfer agent of the Series C Preferred Stock, and shall cause to
be mailed to the holders of the Series C Preferred Stock at their last addresses
as shown on the records of the Company, or such transfer agent, at least 10 days
prior to the record date specified in (A) below or 20 days before the date
specified in (B) below, a notice stating

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

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

        (l)     Limitation on Conversion Rights.  Notwithstanding any other
                -------------------------------
provision herein to the contrary, at no time will (i) the number of shares of
Common Stock issuable to such holder upon any conversion of Series C Preferred
Stock, plus (ii) the number of shares of Common stock beneficially owned by such
holder (as determined pursuant to Rule 13d-3 of the Exchange Act) that were
previously issued upon conversion of Series C Preferred Stock in accordance with
the provisions hereof, exceed 4.99% of the total issued and outstanding shares
of Common Stock.

Section 6.  Mandatory Redemption.

        (a)  Upon the second anniversary of the closing of the Original Issue
Date, the Company shall redeem, out of assets of the Company which are, by law,
available for such payment, the lesser of 41,667 shares (then outstanding and
not previously converted pursuant to Section 5) of the Series C Preferred Stock,
at a price per share equal to the Original Series C Issue Price, plus any
accrued but unpaid dividends thereon (whether or not declared). Upon the third
anniversary of the Original Issue Date, the Company shall redeem, out of the
assets of the Company which are, by law, available for such payment, the
remaining shares (then outstanding and not previously converted pursuant to
Section


                                       13
<PAGE>

5) of the Series C Preferred Stock at a price per share equal to the
Original Series C Issue Price, plus any accrued but unpaid dividends thereon
(whether or not declared).

        (b)  The following events shall constitute "Mandatory Redemption Events"
for purposes hereof unless the holders of at least a majority of the voting
together as a single class, vote otherwise:

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

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

         (iii)  any acquisition of voting stock of the Company by a person
                or "group" (as such term is defined in Section 13(d)(3) of the
                Exchange Act) in a purchase or transaction or series of
                purchases or transactions if immediately thereafter such person
                or group has, or would have, beneficial ownership of more than
                50% of the combined voting power of the Company's then
                outstanding voting stock;

         (iv)   a change or changes in the membership of the Company's
                Board of Directors which represent a change of a majority or
                more of such membership during any three-year period;

         (v)    A change or changes in the membership of the Company's
                Board of Directors

         (vi)   (A) an assignment by the Company for the benefit of
                creditors, (B) the filing by the Company of a petition to have
                the Company adjudged insolvent, bankrupt or seeking a
                reorganization or liquidation under any law relating to
                bankruptcy, insolvency or receivership, (C) an appointment of a
                receiver or trustee for all or substantially all of the assets
                of the Company, unless appointed without the Company's consent,
                in which case if after sixty (60) days such appointment has


                                       14
<PAGE>

                not been vacated or stayed, (D) a public admission in writing of
                the Company's inability to pay its debts as they come due, or
                (E) the adoption of a plan of liquidation or dissolution by the
                Board of Directors of the Company; or

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

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

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

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

     (f)  On such Redemption Date, each holder of shares of Series C Preferred
Stock to be redeemed shall surrender such holder's certificates representing
such shares to the Company in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
canceled. In the event less than all the shares represented by such certificates
are redeemed, a new certificate shall be issued representing the unredeemed
shares. From and after such Redemption Date, unless there shall have been a
default in payment of the Redemption Price or the Company is unable to pay the
Redemption Price due to not having sufficient legally available funds, all
rights of the


                                       15
<PAGE>

holder of such shares as a holder of Series C Preferred Stock (except the right
to receive the Redemption Price without interest upon surrender of their
certificates), shall cease and terminate with respect to such shares; provided
that in the event that shares of Series C Preferred Stock are not redeemed due
to a default in payment by the Company or because the Company does not have
sufficient legally available funds, such shares of Series C Preferred Stock
shall remain outstanding and shall be entitled to all of the rights and
preferences provided herein.

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

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

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

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


                   [Signatures appear on the following page]



<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be executed this ___ day of September 1999.


                                        CAIS INTERNET, INC.


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

ATTEST:

/s/ Michael G. Plantamura
------------------------------
Michael G. Plantamura
Secretary



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