Exhibit 10.5

 

AMENDMENT NO. 1

TO

RIGHTS AGREEMENT

 

THIS AMENDMENT NO. 1 (this “Amendment”) to the Rights Agreement (the “Rights
Agreement”) dated as of January 29, 2004 between VIA NET.WORKS, INC., a Delaware
corporation (the “Company”), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a
banking corporation organized under the laws of New York, as rights agent (the
“Rights Agent”), is entered into this 26th day of August, 2005.

 

WHEREAS, the Company and the Rights Agent are currently parties to the Rights
Agreement and desire to amend the Rights Agreement on the terms and conditions
hereinafter set forth;

 

WHEREAS, Mawlaw 653 Limited (“Mawlaw 653”), Interoute Communications Holdings SA
(“Interoute”), and Company have entered into a Sale and Purchase Agreement dated
as of the date hereof (the “Purchase Agreement”), pursuant to which Mawlaw 653
and Interoute will purchase certain subsidiaries and substantially all the
assets of Company on the terms and subject to the conditions set forth in the
Purchase Agreement;

 

WHEREAS, in connection with the Purchase Agreement, (i) Mawlaw 653 has committed
to lend to the Company and certain of its subsidiaries monies under a Facility
Agreement (the “Facility Agreement”) upon the terms and conditions contained
therein, in connection with which the Company has agreed to pay to the
commitment fee payable thereunder by issuing 14,189,189 shares (the “Commitment
Shares”) of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), to Mawlaw 660 Limited (“Mawlaw 660,” and together with Mawlaw 653 and
Interoute, the “Purchasers”), (ii) Mawlaw 653 and the Company have entered into
a Management Consultancy Services Agreement (the “Management Agreement”)
pursuant to which Mawlaw 653 will provide certain management consultancy
services in connection with the day-to-day operational activities of Company and
its subsidiaries upon the terms and conditions contained therein, in connection
with which the Company has agreed to pay to the management fee payable
thereunder by issuing 10,810,811 shares (the “Management Service Shares”) to
Mawlaw 660; and Mawlaw 660 has agreed to purchase 10,810,811 shares of Common
Stock (the “Common Investment Shares”, and together with the Commitment Shares
and the Management Services Shares, the “Aggregate Common Shares”) on the terms
and conditions set forth in a Subscription Agreement between the Company and
Mawlaw 660 (the “Subscription Agreement,” and together with the Purchase
Agreement, the Facility Agreement and the Management Agreement, the “Transaction
Documents”);

 

WHEREAS, pursuant to the Subscription Agreement, Mawlaw 660 has agreed to
purchase 5,405,405 shares (the “Preferred Shares”) of a new class of preferred
stock of the Company designated Series A Convertible Preferred Stock, par value
$0.001 per share (the “Preferred Shares” and together with the Aggregate Common
Shares, the “Shares”) on the terms and conditions set forth in the Subscription
Agreement; and

 

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WHEREAS, on August 23, 2005, the Board of Directors of the Company resolved to
amend the Rights Agreement to render it inapplicable to the (i) Transaction
Documents and (ii) the issuance of the Shares and the other transactions
contemplated by the Transaction Documents (collectively, the “Transactions”);
and

 

WHEREAS, for purposes of this Amendment, capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Rights Agreement, as
amended by this Amendment;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

 

1.             Amendment to Section 1.

 

(a)           Section 1(a) of the Rights Agreement is hereby amended by adding
the following new paragraph to the end of Section 1(a):

 

“Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, none of the Purchasers nor any of their respective Affiliates or
Associates shall be deemed to be an Acquiring Person by reason of the
consummation of any of the transactions contemplated by the Transaction
Documents, including the issuance of the Shares.”

 

 (b)          Section 1(i) of the Rights Agreement is hereby amended by adding
the following new paragraph to the end of Section 1(i):

 

“Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, no Distribution Date shall be deemed to have occurred by reason of
the consummation of the transactions contemplated by the Transaction Documents,
including the issuance of the Shares.”

 

(c)           Section 1 of the Rights Agreement is hereby amended by inserting
the following text after section 1(l) but before Section 1(m):

 

“(l-1)     “Facility Agreement” shall mean the Facility Agreement by and between
the Company and Mawlaw 653 Limited, dated as of August    , 2005.”

 

(d)           Section 1 of the Rights Agreement is hereby amended by inserting
the following text after section 1(m) but before Section 1(n):

 

“(m-1)     “Management Services Agreement” shall mean the Management Services
Agreement by and between the Company and Mawlaw 653 Limited, dated as of
August    , 2005.”

 

 (e)          Section 1 of the Rights Agreement is hereby amended by inserting
the following text after 1(r) but before 1(s):

 

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“(r-1)     “Purchasers” shall mean Interoute Communications Holdings SA, Mawlaw
653 Limited and Mawlaw 660 Limited.”

 

(f)            Section 1 of the Rights Agreement is hereby amended by inserting
the following text after Section 1(w) but before Section 1(x):

 

“(w-1)  “Sale Agreement” shall mean the Sale and Purchase Agreement by and among
VIA NET.WORKS, Inc., Mawlaw 653 Limited and Interoute Communications Holdings
SA, dated as of August    , 2005.”

 

(g)           Section 1 of the Rights Agreement is hereby amended by inserting
the following text after Section 1(z) but before Section 1(aa):

 

“(z-1)    “Shares” shall mean the shares of the Company’s Series A Convertible
Preferred Stock, par value $0.001 per share, and Common Stock issued to Mawlaw
660 Limited pursuant to Facility Agreement, the Management Services Agreement
and the Subscription Agreement.”

 

(h)           Section 1(aa) of the Rights Agreement is hereby amended by adding
the following new paragraph to the end of Section 1(aa):

 

“Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, no Stock Acquisition Date shall be deemed to have occurred by
reason of the consummation of the transactions contemplated by the Transaction
Documents, including the issuance of the Shares.”

 

(i)            Section 1 of the Rights Agreement is hereby amended by inserting
the following text after Section 1(aa) but before Section 1(bb):

 

“(aa-1)  “Subscription Agreement” shall mean the Subscription Agreement by and
between the Company and Mawlaw 660 Limited, dated as of August    , 2005.”

 

(j)            Section 1 of the Rights Agreement is hereby amended by inserting
the following text after Section 1(bb) but before Section 1(cc):

 

“(bb-1)   “Transaction Documents” shall mean the Sale Agreement, the Facility
Agreement, the Management Services Agreement, and the Subscription Agreement.”

 

(k)           Section 1(cc) of the Rights Agreement is hereby amended by adding
the following new paragraph to the end of Section 1(cc):

 

 “Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, no Triggering Event shall be deemed to have occurred by reason of
the consummation of the transactions contemplated by the Transaction Documents,
including the issuance of the Shares.”

 

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2.             Amendment to Section 11(a)(ii). Section 11(a)(ii) of the Rights
Agreement is amended by adding the following sentence at the end thereof:

 

 “Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, the consummation of the transactions contemplated by the
Transaction Documents, including the issuance of the Shares, shall not cause the
Rights to be adjusted or become exercisable in accordance with this
Section 11(a)(ii).”

 

3.             Amendment to Section 13(e). Section 13(e) of the Rights Agreement
is amended by adding the following sentence at the end thereof:

 

 “Notwithstanding anything in this Agreement that might otherwise be deemed to
the contrary, the provisions of this Section 13 shall not be applicable to the
transactions contemplated by the Transaction Documents, including the issuance
of the Shares.”

 

4.             Effective Date.  This Amendment shall become effective as of the
date first above written.

 

5.             Other Terms Unchanged.  The Rights Agreement, as amended by this
Amendment, shall remain and continue in full force and effect and is in all
respects agreed to, ratified and confirmed hereby.  Any reference to the Rights
Agreement after the date first set forth above shall be deemed to be a reference
to the Rights Agreement, as amended by this Amendment.

 

6.             Benefits.  Nothing in the Rights Agreement, as amended by this
Amendment, shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock) any legal
or equitable right, remedy or claim under the Rights Agreement, as amended by
this Amendment; but the Rights Agreement, as amended by this Amendment, shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).

 

7.             Descriptive Headings.  Descriptive headings of the several
Sections of this Amendment are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

 

8.             Governing Law.  This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State.

 

9.             Counterparts.  This Amendment may be executed in any number of
counterparts.  It shall not be necessary that the signature of or on behalf of
each party appears on each counterpart, but it shall be sufficient that the
signature of or on behalf of each party appears on one or more of the
counterparts.  All counterparts shall collectively constitute a single
agreement.

 

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It shall not be necessary in any proof of this Amendment to produce or account
for more than a number of counterparts containing the respective signatures of
or on behalf of all of the parties.

 

10.           Fax Transmission.  A facsimile, telecopy or other reproduction of
this Amendment may be executed by one or more parties hereto, and an executed
copy of this Amendment may be delivered by one or more parties hereto by
facsimile or similar instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes.  At the request of any party hereto, all parties agree to execute an
original of the Amendment as well as any facsimile, telecopy or other
reproduction thereof.

 

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and attested, all as of the day and year first above written.

 

 

 

 

 

VIA NET.WORKS, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Matt S. Nydell

 

 

 

 

Name: Matt S. Nydell

 

 

 

Title:  SVP, General Counsel and Secretary

 

 

 

 

 

 

 

 

 

 

 

CONTINENTAL STOCK TRANSFER &

 

 

 

TRUST COMPANY, as Rights Agent

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Roger Bernhammes

 

 

 

 

Name: Roger Bernhammes

 

 

 

Title:  Rights Agent

 

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