EXHIBIT 2.15
BARBADOS
THIS DEED OF GUARANTEE AND SUBORDINATION is made as of the 15th day of
July, 2005.
BY: MITEL NETWORKS INTERNATIONAL LIMITED, a company formed under the
laws of Barbados with registered office at The Corporate Secretary
Limited, Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xx. Xxxxxxx (hereinafter
referred to as the "Company")
AND: EACH OF THE INTERCOMPANY CREDITORS (jointly and severally, the
"Intercompany Creditors") identified in Schedule I hereto
IN FAVOUR OF: BNY TRUST COMPANY OF CANADA, a company formed under the laws of
Canada as the successor collateral agent to Highbridge
International LLC (in such capacity, the "Collateral Agent") for
itself as a holder and the other holders existing from time to
time (each a "Secured Party" and collectively, the "Secured
Parties"), of senior secured convertible notes initially issued as
of April 27, 2005, (as amended, restated or supplemented from time
to time the "Notes"), issued by Mitel Networks Corporation, a
corporation incorporated under the laws of Canada (the "Issuer")
pursuant to a Securities Purchase Agreement dated April 27, 2005
(the "Securities Purchase Agreement") by and among the Issuer and
the buyers party thereto.
RECITALS:
A. Pursuant to the Notes issued by the Issuer pursuant to the Securities
Purchase Agreement, the Issuer is indebted to the Secured Parties as
holders from time to time of the Notes.
B. The Company is a direct wholly-owned subsidiary of the Issuer; and the
Company will benefit from the arrangements under the issuance of the Notes
and the receipt of proceeds therefrom by the Issuer.
C. The Company has agreed to guarantee the obligations of the Issuer and as
additional security therefor.
D. Each of the Company and the Intercompany Creditors have agreed to execute
and deliver this Deed of Guarantee and Subordination to and in favour of
the Collateral Agent, for the purpose of effecting the subordination of
the rights in respect of certain Intercompany Debts (as defined herein),
and for the purposes of regulating the claims of the Collateral Agent and
the Intercompany Creditors against the Company.
E. This Deed of Guarantee and Subordination replaces in its entirety the Deed
of Guarantee and Subordination dated as of June 30, 2004 between the
Company, Highbridge
DEED OF GUARANTEE AND SUBORDINATION
International LLC (in its capacity as the former collateral agents), and
the Intercompany Creditors.
IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed of Guarantee and Subordination unless the context otherwise
requires the following expressions shall bear the following respective
meanings:
(a) "APPLICABLE LAW" means the law of any one or more jurisdictions
which is applicable to the interpretation of the
rights and interests created herein, or to the
exercise of any power or discretion by the
Company, the Collateral Agent or an Intercompany
Creditor hereunder, whether by reason of the
domicile of the Company, the domicile of the
Collateral Agent, the domicile of the Intercompany
Creditor, the situs of the whole or any part of
the Collateral, or other connecting factor (which
is admissible under general principles of law,
including relevant principles of conflicts of
laws) and includes the Governing Law. Each of the
parties hereto shall determine the Applicable Law
by reference to the Governing Law, except where
that party has actual notice of the applicability
hereto of another system or, and each of the
parties hereto shall obey the court orders of a
court validly claiming jurisdiction in respect
hereof;
(c) "COMPANY" means any entity with corporate capacity (of
whatsoever kind) incorporated or otherwise brought
into existence in any part of the world and
includes companies, limited liability companies
and societies with restricted liability which have
liability hereunder;
(d) "COUNTRY OF DOMICILE" means any one of the country of residence,
nationality or domicile (as appropriate);
(e) "DEED" means any instrument in writing whether in one or
more counterparts, in the form appropriate under
Applicable Law, and includes deeds, documents
under seal, contracts, declarations in writing,
memoranda, written resolutions of the Trustee and
other instruments in writing;
(f) "EVENT OF DEFAULT" means an event which constitutes an Event of
Default as described in the Notes, committed by
the Company;
(g) "INSOLVENCY EVENT" means:
(i) under any Applicable Law, a court making a
final winding up order or an order for the
dissolution or liquidation of (or similar
procedure in respect of) the Company, or
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DEED OF GUARANTEE AND SUBORDINATION
(ii) under any Applicable Law, a liquidator or
administrator or similar official is
appointed to the Company;
(i) "INTERCOMPANY DEBTS" means the book debts, accounts and other amounts
receivable, claims, demands, moneys and choses in
action which now are due or owing by the Company
to or owned, by the Intercompany Creditors and all
claims of whatsoever nature or kind which the
Intercompany Creditors have or may have against
the Company;
(j) "ISSUER INDEBTEDNESS" means all claims, indebtedness, liabilities and
obligations of the Issuer to the Secured Parties
under and in connection with the Securities
Purchase Agreement and the Notes;
(k) "ISSUER DISCHARGE DATE" means the date on which:
(i) all of the Issuer Indebtedness has been fully
discharged, or
(ii) a Qualified IPO (as defined in the Notes) is
consummated;
(l) "PERSON" means any individual or any body of persons
corporate or unincorporate, and includes
individuals, companies, bodies corporate, limited
liability companies, societies with restricted
liability, partnerships (whether limited or
general), firms, syndicates, joint ventures,
trusts, unincorporated associations, governmental
authorities and agencies, and any legal entity or
any other association of persons;
(m) "PROPER LAW" means the law, as determined in accordance with
this Deed of Guarantee and Subordination, to the
exclusive jurisdiction of which the rights of all
parties and the construction and effect of each
and every provision of this Deed of Guarantee and
Subordination shall be subject and by which such
rights, construction and effect shall be construed
and regulated.
1.2 Capitalised terms not defined in this Deed of Guarantee and Subordination,
unless otherwise indicated, shall have the meanings assigned to such terms
in the Notes.
1.3 Terms defined elsewhere in this Deed of Guarantee and Subordination,
unless otherwise indicated, shall have such meaning in every section
herein.
1.4 Where the context permits, any reference to "Collateral" in this Deed of
Guarantee and Subordination, shall be deemed to be a reference to
"Collateral or any part thereof."
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DEED OF GUARANTEE AND SUBORDINATION
1.5 Unless the context clearly requires otherwise, the words "hereof" "herein"
and "hereunder" and words of similar import, when used in this Deed of
Guarantee and Subordination, shall refer to this Deed of Guarantee and
Subordination as a whole and not to any particular section; wherever the
word "include" "includes" or "including" is used in any provision of this
Deed of Guarantee and Subordination, it shall be deemed to be followed by
the words "without limitation" unless clearly indicated otherwise.
1.6 The singular includes the plural and the plural includes the singular; and
the masculine gender includes the feminine and neuter genders.
1.7 The division of this Deed of Guarantee and Subordination into sections,
articles and paragraphs, the provision of a table of contents and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation hereof.
2. GUARANTEE OF OBLIGATIONS OF ISSUER
2.1 The Company hereby unconditionally GUARANTEES to the Collateral Agent and
each of the Secured Parties payment of all present and future
indebtedness, liabilities and obligations, whether direct or indirect,
absolute or contingent, now or hereafter owing by the Issuer to the
Secured Parties (collectively, the "Obligations"). The Company shall pay
to the Collateral Agent for itself and the Secured Parties, on demand by
the Collateral Agent, all amounts owing by the Company to the Collateral
Agent for itself and the Secured Parties hereunder and the Company shall
pay to the Collateral Agent for itself and the Secured Parties interest
thereon after demand at the highest rate of interest payable on the
Obligations or any part or parts thereof.
2.2 No change in the name, objects, capital or constitution of the Issuer or
any other matter relating to the Issuer, shall in any way affect the
liability of the Company, either with respect to transactions occurring
before or after any such change.
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DEED OF GUARANTEE AND SUBORDINATION
2.3 The Company and the Intercompany Creditors hereby expressly acknowledge
and confirm that the Collateral Agent, without consent of the Company or
the Intercompany Creditors and without exonerating in whole or in part the
Company, may grant time, renewals, extensions, indulgences, releases
and/or discharges to the Issuer and all other persons (including the
Company, and any other guarantor), may take securities from and give the
same and any or all existing securities up to the Issuer and all other
persons (including the Company, and any other guarantor), may abstain from
taking securities from the Issuer and all other persons (including the
Company, and any other guarantor), or from perfecting securities of the
Issuer and all other persons (including the Company, and any other
guarantor), may accept compositions from the Issuer and all other persons
(including the Company, and any other guarantor), and may otherwise change
the terms of any of the debts, obligations liabilities hereby guaranteed
and otherwise deal with the Issuer and all other persons (including the
Company, and any other guarantor), as the Collateral Agent may see fit,
and that all dividends, compositions, and moneys received by the
Collateral Agent from the Issuer or from any other persons or estates
capable of being applied by the Collateral Agent in reduction of the
Obligations hereby guaranteed, shall be regarded for all purposes as
payments in gross, and the Collateral Agent shall be entitled to prove
against the estate of the Issuer upon any insolvency or winding-up in
respect of the whole of said debtors liabilities, and the Company shall
have no right to be subrogated to the Collateral Agent in respect of any
such proof or otherwise until the Collateral Agent shall have received
from such estate or from the Company, payment in full of its claim with
interest.
2.4 This shall be a continuing guarantee, and shall cover and secure any
ultimate balance owing to the Secured Parties, including all costs,
charges and expenses which any Secured Party or the Collateral Agent may
incur in enforcing or obtaining payment of the sums of money due to the
Secured Parties from the Issuer either alone or in conjunction with any
other corporation, person or persons, or otherwise howsoever, or
attempting to do so. The Collateral Agent shall not be obliged to seek any
recourse against the Issuer or other persons or the securities it may hold
before being entitled to payment from the Company of all and every
Obligation hereby guaranteed. The Company hereby renounces the benefits of
discussion and division. The Company renounces to claim against, or set up
against, the Collateral Agent any right which the Company may have to be
subrogated in any of the rights, hypothecs, privileges and other security
held from time to time by the Collateral Agent. Every certificate issued
under the hand of a duly authorised officer of the Collateral Agent,
purporting to show the amount at any particular time due and payable to
the Collateral Agent, and covered by this guarantee, shall be received as
conclusive evidence (in the absence of manifest error) as against the
Company that such amount is at such time so due and payable to the
Collateral Agent and is covered hereby.
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DEED OF GUARANTEE AND SUBORDINATION
2.5 All payments made by the Company under this guarantee shall be made free
and clear and without deduction for any and all present and future taxes,
levies and withholdings, including without limitation stamp and
documentary taxes (collectively, the "Taxes"), but excluding taxes imposed
on the net income of the Collateral Agent. If the Company is required by
law to deduct any Taxes from or in respect of any amount paid or payable
hereunder, including without limitation any additional amount or amounts
payable pursuant to this paragraph, such amount shall be increased as
necessary so that the Collateral Agent receives an amount or amounts which
are, in the aggregate, equal to the sum it would have received had no such
deduction been made and the Company shall pay same to the relevant taxing
authority and, upon request by the Collateral Agent, shall give to the
Collateral Agent acceptable evidence of such payments. The Company
covenants and agrees to indemnify and save harmless the Collateral Agent
from and against any and all Taxes paid or payable by the Collateral Agent
in respect of any amounts paid or payable under this guarantee.
3. SUBORDINATION AND RANKING OF CLAIMS
3.1 Subject to the terms of this Deed of Guarantee and Subordination any and
all claims of the Collateral Agent (up to the Issuer Indebtedness), shall
for all purposes and at all times rank ahead of and in priority to the
Intercompany Debts.
3.2 Each of the Intercompany Creditors hereby expressly and fully subordinates
and defers its right to payment in accordance with section 3.1 above, to
any and all claims of the Collateral Agent (up to the Issuer
Indebtedness). Thereafter the claims of the Collateral Agent and the
claims of the Intercompany Creditors shall rank pari passu in all respects
and there shall be no other deferral or subordination of the claims of the
Intercompany Creditors.
4. TURNOVER
4.1.1 If at any time on or before the Issuer Discharge Date, there has been an
Event of Default or an Insolvency Event, and an Intercompany Creditor:
(a) receives or recovers a payment of any kind in respect or on account
of the in respect of the Intercompany Debts;
(b) receives or recovers proceeds pursuant to any enforcement or similar
action against the Company; or
(c) discharges any of the Intercompany Debts by set-off, combination of
accounts or otherwise;
that Intercompany Creditor as the beneficiary of that payment,
distribution, set-off or combination, will promptly pay all amounts and
distributions to the Collateral Agent and, pending such payments, the
Intercompany Creditor shall hold such distribution on trust for the
Collateral Agent.
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DEED OF GUARANTEE AND SUBORDINATION
5. COVENANTS
5.1 Each of the Company and the Intercompany Creditors hereby covenants that
until the Issuer Discharge Date, it shall not:
(a) assign, sell, transfer or dispose of any of the Intercompany Debts
or permit any other person to purchase or acquire any of the
Intercompany Debts unless such assignee, transferee or purchaser has
first agreed to be bound by the terms of this Deed of Guarantee and
Subordination as a party hereto pursuant to a Deed in form and
content satisfactory to Collateral Agent; and
(b) create and the Company shall not permit to subsist any security
interest or any guarantee or other assurance against financial loss
in respect of the Intercompany Debts.
6. SUBORDINATION ON INSOLVENCY
6.1 Upon the occurrence of an Insolvency Event in relation to the Company, the
Intercompany Debts will fully and unconditionally be subordinate in right
of payment to any and all claims of the Collateral Agent.
6.2.1 Upon the occurrence of an Insolvency Event in relation to the Issuer or
the Company, as the case may be, the Collateral Agent is irrevocably and
severally authorised by each other relevant party to this Deed on their
behalf to (a) demand, claim, enforce and prove for, (b) file claims and
proofs, give receipt and take all proceedings and do all things which the
Collateral Agent considers reasonably necessary to recover, and (c)
receive distributions of any kind whatsoever, in respect or on account of,
the Intercompany Debts.
6.2.2 If, for any reason whatsoever, the Collateral Agent is not entitled to
take any such action for the recovery of any of Intercompany Debts, each
other party to this Deed (as the case may be) undertakes to take any
action and give any notices which the Collateral Agent reasonably requires
from time to time.
6.3.1 Upon the occurrence of an Insolvency Event in relation to the Issuer or
the Company, as the case may be, the Collateral Agent is irrevocably and
severally authorised by each other party to this Deed on their behalf to
exercise all powers of convening meetings, voting and representation in
respect of the Intercompany Debts, and each other party to this Deed will
provide all forms of proxy and of representation requested by the
Collateral Agent for that purpose.
6.3.2 If, for any reason whatsoever, the Collateral Agent is not entitled to
take any such action or exercise any such powers, each other party to this
Deed undertakes to take any action and exercise any powers which the
Collateral Agent reasonably requires from time to time.
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DEED OF GUARANTEE AND SUBORDINATION
6.4 Upon the occurrence of an Insolvency Event in relation to the Issuer, or
the Company as the case may be, the trustee in bankruptcy, liquidator,
assignee, receiver-manager, receiver, manager, or other person
distributing their assets or their proceeds (an "Insolvency Office
Holder") shall be directed by each other party as applicable to this Deed
of Guarantee and Subordination to pay distributions of any kind directly
to Collateral Agent until the Issuer Indebtedness has been fully
discharged.
6.5 If an Intercompany Creditor receives a payment or distribution from an
Insolvency Office Holder directly, such Intercompany Creditor shall hold
such payment or distribution in trust for the Collateral Agent pending an
application thereof in accordance with section 6.4.
6.6 The Company and the Intercompany Creditors acknowledge and agree that the
Collateral Agent may (subject to the provisions of this Deed of Guarantee
and Subordination):
(a) apply any moneys received under this Deed of Guarantee and
Subordination to any item of account or liability in respect of the
Issuer Indebtedness in any order or manner which it may determine in
its sole and absolute discretion; and
(b) hold any moneys received under this Deed of Guarantee and
Subordination in a trust account (bearing interest at a market rate
usual for accounts of that type) unless and until those moneys are
sufficient in aggregate in order to bring about the Issuer Discharge
Date.
7. PROTECTION OF SUBORDINATION
7.1 The subordination provisions in this Deed of Guarantee and Subordination
constitute a continuing subordination and benefit to the ultimate
aggregate balance of the Issuer Indebtedness, and the claims of the
Collateral Agent for and on behalf of the Secured Parties, regardless of
any intermediate payment or discharge of the Issuer Indebtedness in whole
or in part.
7.2 The subordination and priority provisions in this Deed of Guarantee and
Subordination will not be affected by any act, omission , occurrence or
circumstance whatsoever which (but for this provision) may operate to
release, extricate or otherwise exonerate any party to this Deed of
Guarantee and Subordination from their obligations under this Deed of
Guarantee and Subordination or otherwise affect those subordination and
priority provisions, including (without limitation):
(a) any time or indulgence granted to or composition with any person;
(b) the taking, amendment, replacement, substitution, compromise,
renewal or release of or refusal to enforce or exercise any rights,
remedies or securities against or granted by the Issuer or the
Company as the case may be;
(c) any legal or equitable limitation, disability, incapacity,
impairment or other circumstance relating to any Intercompany
Creditor or the Company as the case may be or any other person or
any amendment, supplement, substitution or replacement of the terms
of this Deed of Guarantee and Subordination or any other document;
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DEED OF GUARANTEE AND SUBORDINATION
(d) any fluctuation in or partial repayment or prepayment of the Issuer
Indebtedness;
(e) the giving or failing to give any notice, or the sequence or order
of giving any notice to any person; or
(f) the time, sequence or order of creating, granting, executing,
delivering or registering, or any failure in respect thereof, of any
notice, caveat, financing statement or other document.
7.3 The Company is a party to this Deed of Guarantee and Subordination inter
alia in order to acknowledge the priorities, rights and obligations set
out in this Deed of Guarantee and Subordination and undertakes not to take
or agree to take any action whereby the ranking and or subordination
provided for in this Deed of Guarantee and Subordination may be impaired.
8. WARRANTY OF CAPACITY AND FURTHER ASSURANCES
8.1 Each party to this Deed of Guarantee and Subordination represents and
warrants to the other that it has full authority, power and capacity to
enter into and carry out its obligations under this Deed of Guarantee and
Subordination and that all necessary acts and things have been taken or
done to enable it lawfully to enter into and carry out its obligations
under this Deed of Guarantee and Subordination and that when executed,
this Deed of Guarantee and Subordination will create obligations which are
valid and binding on it and enforceable in accordance with their terms.
8.2 Each of the parties agrees to perform (or procure the performance of) all
further acts and things, and execute and deliver (or procure the execution
and delivery of such further documents, as may be required by law or as
may be necessary or desirable to implement and/or give effect to this Deed
of Guarantee and Subordination.
9. ASSIGNMENT OF RIGHTS BY COLLATERAL AGENT
9.1.1 The Company and the Intercompany Creditors acknowledge and agree that the
Collateral Agent (in this capacity the "Transferor"), may at any time
assign any of its rights under this Deed of Guarantee and Subordination or
transfer any of its rights and obligations under this Deed of Guarantee
and Subordination to any person (a "Transferee").
9.1.2 An assignment or transfer in accordance with section 9.1.1, will be
effective if the Transferor and the Transferee execute an Accession Deed
under which the Transferee agrees to be bound by all of the terms of this
Deed of Guarantee and Subordination as if an original party thereto. Each
of the parties to this Deed of Guarantee and Subordination (other than the
Transferee) irrevocably authorises the Collateral Agent to execute on its
behalf any Accession Deed that has been duly completed and executed by the
Transferor and the Transferee. The Collateral Agent will promptly notify
the other parties to this Deed of Guarantee and Subordination of the
receipt and execution by it on their behalf of any Accession Deed.
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DEED OF GUARANTEE AND SUBORDINATION
10. FUNDS HELD BY COLLATERAL AGENT
10.1.1 After the final and conclusive settlement of all claims of the
Collateral Agent (up to the Issuer Indebtedness), any funds or amounts
received by the Collateral Agent, shall be held on trust for and
promptly applied as follows:
(a) prior to the occurrence of an Insolvency Event, to the
Intercompany Creditor; and
(b) following the occurrence of an Insolvency Event to the Company or
the Insolvency Office Holder (as may be appropriate).
11. GENERAL
11.1.1. After the final and conclusive settlement of all claims of the
Collateral Agent (up to the Issuer Indebtedness), any funds or amounts
received by the Collateral Agents, shall be held on trust for and
promptly applied as follows:
(a) prior to the occurrence of an Insolvency Event, to the
Intercompany Creditor; and
(b) following the occurrence of an Insolvency Event to the Company or
the Insolvency Office Holder (as may be appropriate).
11.1.1 Notices: All notices, requests, demands or other communication by the
terms hereof required or permitted to be given by either party to the
other shall, unless otherwise specifically provided for herein, be given
in writing and be delivered by personal delivery or courier delivery and
by transmittal by electronic means of communication addressed to such
other party as follows:
If to the Collateral Agent: If to the Company:
BNY Trust Company of Canada Mitel Networks International Limited
0 Xxxx Xxxxxx Xxxx c/o Corporate Secretary Limited
Suite 0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0 Whitepark Road
Canada Bridgetown
Barbados
If to an Intercompany Creditor:
- at the address set forth for such Intercompany Creditor in Schedule I.
11.1.2 Any party may from time to time by notice to the other party change the
address to which notices are to be given. Any communication shall be
conclusively deemed to have been given on the day of actual delivery
thereof or on the day of actual transmission thereof if such day is a
business day and the communication is delivered or transmitted during
the normal business hours of the recipient and on the business day
during which normal business hours next occur if given after such hours
on any day.
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DEED OF GUARANTEE AND SUBORDINATION
11.2 Counterparts: This Deed of Guarantee and Subordination may be executed
in any number of counterparts, each of which shall be deemed an
original, but all of which collectively shall constitute one and the
same instrument representing this Deed of Guarantee and Subordination
between the parties hereto and it shall not be necessary for the proof
of this Deed of Guarantee and Subordination that any party produce or
account for more than one such counterpart.
11.3 Invalid Provisions: If any provision of this Deed of Guarantee and
Subordination is held to be illegal or invalid or unenforceable, such
provision shall be fully severable, and this Deed of Guarantee and
Subordination shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Deed of Guarantee and Subordination, and the remaining provisions of
this Deed of Guarantee and Subordination shall remain in full force and
effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Deed of Guarantee
and Subordination.
11.4 Governing Law: This Deed of Guarantee and Subordination shall be
governed by, and construed in accordance with, the laws of Barbados and
the Courts of Barbados shall have non-exclusive jurisdiction herein.
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DEED OF GUARANTEE AND SUBORDINATION
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first hereinbefore written.
THE COMMON SEAL of )
MITEL NETWORKS )
INTERNATIONAL LIMITED ) /s/ Xxxx Xxxxxxx
was hereto set and affixed by ) Xxxx Xxxxxxx, Director
)
)
)
)
)
)
Witness: S. Felskie
Name: Xxxxxx Felskie
Address: Xxxxxx, Xxxxxxx, Xxxxxx
Occupation: Assistant Corporate Secretary
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DEED OF GUARANTEE AND SUBORDINATION
SCHEDULE I
NAME AND ADDRESS OF INTERCOMPANY CREDITOR
MITEL NETWORKS OVERSEAS LIMITED
The Corporate Secretary Limited
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xx. Xxxxxxx
THE COMMON SEAL of )
MITEL NETWORKS )
OVERSEAS LIMITED ) /s/ Xxxx Xxxxxxx
was hereto set and affixed by ) Xxxx Xxxxxxx, Director
)
)
)
)
)
)
Witness: S. Felskie
Name: Xxxxxx Felskie
Address: Xxxxxx, Xxxxxxx, Xxxxxx
Occupation: Assistant Corporate Secretary
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