EXHIBIT 2.12
DATED APRIL 27, 2005
(1) MITEL NETWORKS LIMITED
AS CHARGOR
- AND -
(2)HIGHBRIDGE INTERNATIONAL LLC.
AS SECURITY AGENT
----------
MORTGAGE DEBENTURE
----------
Xxxxxxxx Xxxxxxx
0 Xx Xxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Doc no. 1130420-4
CONTENTS
1. INTERPRETATION.................................................. 1
2. PAYMENT OBLIGATIONS............................................. 8
3. FIXED SECURITY.................................................. 9
4. FLOATING CHARGE................................................. 10
5. CONVERSION OF FLOATING CHARGE................................... 11
6. PRIORITY ARRANGEMENTS AND ACKNOWLEDGEMENT OF ASSIGNMENT......... 12
7. RELEASE OF SECURITY............................................. 12
8. REPRESENTATIONS AND WARRANTIES RELATING TO SECURITY ASSETS...... 12
9. COVENANTS RELATING TO SECURITY ASSETS........................... 14
10. POWERS OF THE SECURITY AGENT.................................... 23
11. CONTINUING SECURITY............................................. 24
12. PROTECTION OF SECURITY.......................................... 24
13. WHEN SECURITY BECOMES ENFORCEABLE............................... 26
14. ENFORCEMENT OF SECURITY......................................... 26
15. APPOINTMENT OF AN ADMINISTRATOR BY THE SECURITY AGENT........... 27
16. RECEIVER........................................................ 27
17. APPLICATION OF PROCEEDS......................................... 30
18. NO LIABILITY AS MORTGAGEE IN POSSESSION......................... 31
19. PROTECTION OF THIRD PARTIES..................................... 31
20. NEW ACCOUNTS.................................................... 32
21. REDEMPTION OF PRIOR SECURITY INTERESTS.......................... 32
22. DELEGATION BY THE SECURITY AGENT................................ 32
23. FURTHER ASSURANCE AND POWER OF ATTORNEY......................... 33
24. EXPENSES AND INDEMNITIES........................................ 33
25. TAXES, CURRENCY AND STAMP DUTIES................................ 34
26. REMEDIES AND WAIVERS............................................ 35
27. SET-OFF......................................................... 36
28. PARTIAL INVALIDITY.............................................. 36
29. NOTICES......................................................... 36
30. COUNTERPARTS.................................................... 37
31. GOVERNING LAW AND JURISDICTION.................................. 37
SCHEDULE 1.......................................................... 39
THIS MORTGAGE DEBENTURE is made as a deed on April 2005
BETWEEN:
(1) MITEL NETWORKS LIMITED, a private company limited by shares incorporated
in England and Wales under number 1309629 whose registered office is at
Xxxxxxxxxxx, Xxxxxxxxxxxxx, XX00 0XX (the "CHARGOR"); and
(2) HIGHBRIDGE INTERNATIONAL LLC ("SECURITY AGENT") as trustee for itself and
the other Secured Parties
THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1. DEFINITIONS
In this Deed, so far as the context admits, the following expressions have
the respective meanings ascribed to them:
"ACT" means the Law of Property Xxx 0000;
"APPLICATIONS" means any and all applications for the registration of
Intellectual Property Rights which have been made as at the date of this
Deed or are made at any time during the subsistence of this security by or
on behalf of or acquired by the Chargor in any registry or office in any
part of the world;
"BARCLAYS" means Barclays Bank PLC;
"BARCLAYS SECURITY DOCUMENTS" means any or all of the following:
(i) a mortgage granted by the Chargor to Barclays and dated 31 October
2001, in respect of the items listed in the schedule attached
thereto; and
(ii) a mortgage granted by the Chargor to Barclays and dated 24 January
2002, over all that freehold property of the Chargor situated at
Mitel Business Park, Portskewett, Monmouthshire; and
(iii) a mortgage granted by the Chargor to Barclays and dated 25 April
2003 in respect of the items listed in the schedule attached thereto
- 1 -
"BOOK DEBTS SECURITY DOCUMENT" means a charge over book debts and cash at
bank made or to be made on or about the date of this Deed between the
Chargor and the Security Agent;
"BUSINESS DAY" means a day (other than a Saturday and Sunday) on which
banks are open in England & Wales for business of the nature required for
the purposes of this Deed;
"COLLATERAL AGENCY AGREEMENT" means the collateral agency agreement dated
on or about the date hereof between, among others, the Security Agent, the
Company and the Noteholders (as defined therein);
"COMPANY" means Mitel Networks Corporation, a corporation incorporated
under the laws of Canada, with headquarters located at 000 Xxxxxx Xxxxx,
Xxxxxx, Xxxxxxx X0X 0X0;
"DANGEROUS SUBSTANCE" means any radioactive emission or natural or
artificial substance (in whatever form), capable of harming any living
organism or damaging the environment, public health or welfare, including
any controlled, special, hazardous, toxic, radioactive or dangerous waste;
"DEBTS" means all book debts, other debts, receivables and liabilities of
any kind whatsoever now or at any time hereafter (and from time to time)
due, owing or payable to the Chargor, including the benefit of any
judgement or order to pay a sum of money, and the benefit of all rights,
securities and guarantees of any nature enjoyed or held by it in relation
to any of the same and all bills of exchange, promissory notes and other
negotiable instruments for the time being owned or held by the Chargor;
"DISCLOSURE LETTER" has the meaning given to it in the Securities Purchase
Agreement;
"ENFORCEMENT DATE" means the date on which the Security Agent demands the
payment or discharge of all or any part of the Secured Liabilities or, if
earlier, the date on which an Enforcement Event first occurs;
"ENFORCEMENT EVENT" means the occurrence of any one or more of the
following events:
(i) any of the Secured Liabilities are not be paid or discharged when
the same ought to be paid or discharged (whether on demand or at
scheduled maturity or by acceleration or otherwise as the case may
be); or
(ii) an Event of Default occurs;
- 2 -
"ENVIRONMENTAL LAW" means all legislation, regulations, codes of practice,
circulars and guidance notices (whether applicable in the UK or
elsewhere), whether or not having the force of law, concerning the
protection of human health, or the environment, or the conditions of the
workplace, or the generation, transportation, storage, treatment or
disposal of any Dangerous Substance;
"ENVIRONMENTAL LICENCE" means any licence, permit, consent, authorisation
or other approval required by any Environmental Law;
"EVENT OF DEFAULT" has the meaning given to it in each of the Notes;
"EXPLOITATION AGREEMENTS" means any arrangements or agreements between the
Chargor and the Intellectual Property Users;
"GUARANTEE" means the guarantee made or to be made by the Company in
favour of the Security Agent (on behalf of itself and the other Secured
Parties) on or about the date of this Deed, securing all monies,
liabilities and obligations of the Company to the Security Agent and the
other Secured Parties in connection with the Transaction Document.
"INDEMNIFIED PARTY" is as defined in clause 9.7.3 (Environmental matters);
"INSURANCES" means all policies of insurance in which the Chargor has an
interest at any time;
"INTELLECTUAL PROPERTY RIGHTS" means:
(i) know-how, patents, trademarks, service marks, designs, business
names, topographical or similar rights, copyrights or other
intellectual property monopoly rights, and any licence or other
interest in any such rights; and
(ii) any other intellectual property rights of any description whatever
which are now assigned to or licensed to the Chargor or which have
been acquired or created by the Chargor prior to the date of this
Deed and which are owned by (whether by themselves or jointly with
another) or licensed to the Chargor as at the date of this Deed or
which are acquired by or created by or assigned to or licensed to
the Chargor at any time during the subsistence of this security;
- 3 -
"INTELLECTUAL PROPERTY USER" means any distributor or licensee in respect
of Intellectual Property Rights;
"KNOW-HOW" means all commercial and technical information of a
confidential nature which might reasonably be of commercial interest or
used by the Chargor in the operation of its business, including, without
limitation:
(i) processes;
(ii) methods and techniques of manufacture;
(iii) designs of machinery, jigs, tools and apparatus;
(iv) compounds; and
(v) recipes;
"MNI SHARES" means the entire issued share capital of Mitel Networks Inc.,
a Delaware corporation;
"NOTES" has the meaning given to it in the Securities Purchase Agreement;
"PERMITTED SECURITY INTEREST" means any of the Security Interests created
and subsisting under any of the following:
(i) the Barclays Security Documents;
(ii) a charge over book debts and cash at bank granted by the Chargor to
Export Development Canada and dated 3 March 2003; and
(iii) an amending deed to the charge described in paragraph (ii) above,
made between the Chargor and Export Development Canada and dated 11
June 2003;
"PLANNING ACTS" means the Town and Country Planning Xxx 0000, the Planning
(Listed Buildings and Conservation Areas) Xxx 0000, the Planning
(Hazardous Substances) Xxx 0000, the Planning (Consequential Provisions)
Xxx 0000, the Planning and Compensation Xxx 0000 and any orders,
regulations or permissions made or granted under any of those Acts;
- 4 -
"PLANT AND MACHINERY" means all plant, machinery, vehicles, furniture and
other equipment of the Chargor;
"PROPERTY" means the freehold, leasehold and/or commonhold property
mortgaged or charged by this Deed, including, without limitation, those
properties listed in Schedule 1 (Property);
"RECEIVER" means, as the context so admits, a receiver and/or a manager
not being an administrative receiver (within the meaning of section 29(2)
Insolvency Act 1986);
"RECEIVERSHIP ASSETS" has the meaning given to it in clause 16.1
(Appointment of Receiver);
"REPORT ON TITLE" means the report on or certificate of title, if any,
prepared in respect of the Property;
"SALE AND LEASEBACK" means the proposed sale and leaseback of the property
listed in Schedule 1 (Property) and other assets (including certain Plant
and Machinery) of the Chargor to Xxxxxx Xxxxxxxx Limited and the proposed
surrender and grant of new lease of part of the property listed in
Schedule 1 (Property) to Zarlink Semiconductor Limited and the proposed
grant of a new lease of part of the property listed in Schedule 1
(Property) to Newport Networks Group plc.
"SECURED LIABILITIES" has the meaning given to it in clause 2.1 (Covenant
to pay);
"SECURED PARTIES" means the Security Agent and the holders for the time
being of the Notes, and "SECURED PARTIES" means any of them;
"SECURITIES PURCHASE AGREEMENT" means the securities purchase agreement
among the Company and the other parties referred to therein as "Buyers"
made or to be made on or about the date of this Deed;
"SECURITY" means the Security Interests created by this Deed;
"SECURITY ASSET" means each asset, right and property subject to the
Security;
"SECURITY INTEREST" includes any mortgage, pledge, lien, charge (whether
fixed or floating), assignment by way of security, hypothecation, security
interest, standard security, assignment or assignation by way of security
or any other security agreement, retention of title, encumbrance of any
kind or arrangement relating to existing or future assets having
- 5 -
substantially the same economic affect as any of the foregoing (including,
without limitation, the deposit of monies or property with a person with
the primary intention of affording such person a right of set-off or
lien);
"SECURITY PERIOD" means the period from the date of this Deed until the
date on which all of the Secured Liabilities have been unconditionally and
irrevocably discharged in full;
"SHARES" means all stocks, shares, debentures, bonds or other securities
owned by the Chargor,
"SHARE RIGHTS" means all rights attaching to shares and any other
security, including rights to payment of a dividend or interest, and
rights of redemption, substitution, exchange and to the issue of further
shares;
"SUBSIDIARY" has the meaning given to that expression by section 736 of
the Companies Xxx 0000 and includes a subsidiary undertaking as defined in
section 53(1) of the Companies Xxx 0000;
"TAX" includes all present and future taxes, charges, imposts, duties,
levies, deductions, withholdings or amounts or charges of a similar
nature, (including any penalty, fine, surcharge or interest payable in
connection any failure to pay or any delay in paying any of the same), and
"TAXES" will be construed accordingly;
"THIRD PARTY RIGHTS" means any Intellectual Property Rights of any
description whatever which are licensed to the Chargor (but excluding any
rights which are assigned to the Chargor) now or at any time during the
subsistence of this security; and
"TRANSACTION DOCUMENTS" means the Securities Purchase Agreement among the
Principal Debtor, the Security Agent and others dated on or about the date
hereof, the senior secured convertible notes (the "NOTES") issued pursuant
thereto, the Security Documents (as defined in the Notes), the Collateral
Agency Agreement, the Registration Rights Agreement (as defined in the
Notes), this Deed, the Book Debts Security Document and the Guarantee.
1.2 CONSTRUCTION
Unless the contrary is indicated, the following rules of construction
apply to this Deed:
1.2.1 in the event of any conflict or inconsistency between this Deed and
the provisions of the Securities Purchase Agreement and the Notes in
relation to
- 6 -
any matter which is dealt with in both this Deed and the Securities
Purchase Agreement or the Notes, the terms of the Securities
Purchase Agreement or the Notes will prevail for so long as the
same continue in force and effect;
1.2.2 "INCLUDING" means including without limitation;
1.2.3 reference to the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of
a company or a corporation includes any equivalent or analogous
proceedings, or proceedings having a similar effect, under the law
of the place where such company or corporation is incorporated, or
in which it carries on business;
1.2.4 reference to a law or regulation will be construed as a reference
to such law or regulation as amended or re-enacted;
1.2.5 reference to any agreement or document, including this Deed, will
be construed as a reference to that agreement or document as from
time to time amended, novated or supplemented;
1.2.6 a person includes its successors and assigns;
1.2.7 headings are for convenience only and will be ignored in construing
this Deed; and
1.2.8 reference to the plural includes the singular and vice versa.
1.3 NATURE OF SECURITY OVER REAL PROPERTY
A reference in this Deed to a charge or mortgage of any freehold,
leasehold or commonhold property includes:
1.3.1 all buildings and fixtures (including trade and tenant's fixtures)
which are at any time situated on that property;
1.3.2 the proceeds of sale of any part of that property; and
1.3.3 the benefit of any covenants for title given or entered into by any
predecessor in title of the Chargor in respect of that property or
any monies paid or payable in respect of those covenants.
- 7 -
1.4 SECTION 2(1) LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) XXX 0000
The terms of the other Transaction Documents and of any side letters
between any parties in relation to any Transaction Document are
incorporated in this Deed to the extent required to ensure that any
purported disposition of the Security Assets contained in this Deed is a
valid disposition in accordance with section 2(1), Law of Property
(Miscellaneous Provisions) Xxx 0000.
1.5 RULE 139, LAND REGISTRATION RULES 1925
For the purposes only of Rule 139, Land Registration Rules 1925 (as
amended) the other Transaction Documents do not form part of the terms and
conditions of this Deed.
1.6 THIRD PARTY RIGHTS
A third party has no right under the Contracts (Rights of Third Parties)
Xxx 0000 to enforce or to enjoy the benefit of any term of this Deed.
1.7 TRUST PROVISION
The Security Agent holds the Security constituted by this Deed on trust
for the Secured Parties in accordance with the provisions of the
Collateral Agency Agreement.
1.8 PERPETUITY PERIOD
The perpetuity period applicable to all trusts constituted by this Deed
shall be 80 years.
1.9 ENTERPRISE XXX 0000
Paragraph 14 of Schedule Bl of the Insolvency Xxx 0000 (as inserted by
section 248 of, and Schedule 16 to, the Enterprise Act 2002) applies to
the floating charge created by this Deed.
2. PAYMENT OBLIGATIONS
2.1 COVENANT TO PAY
The Chargor irrevocably and unconditionally covenants on demand to pay or
discharge to the Security Agent (for the benefit of itself and the other
Secured Parties) all of its obligations and liabilities under the
Guarantee, whether
2.1.1 present or future;
- 8 -
2.1.2 actual or contingent; and/or
2.1.3 owed by the Company alone or jointly and/or severally with others,
(the "SECURED LIABILITIES").
2.2 DEFAULT INTEREST
2.2.1 Interest will accrue at the interest rate prescribed in the Notes,
both before and after judgment, on any amount payable under this
Deed, from the date due (whether demanded or not) until settlement
in full.
2.2.2 All such interest shall accrue on a day-to-day basis and be
calculated by the Security Agent on the basis of a 365 days' year
and shall be compounded in accordance with the usual practice of
the Security Agent.
3. FIXED SECURITY
The Chargor charges in favour of the Security Agent (for the benefit of
itself and the other Secured Parties), in each case with full title
guarantee and as a continuing security for the Secured Liabilities:
3.1 LEGAL MORTGAGE
by way of legal mortgage, all its interest in the freehold property
specified in Schedule 1 (Property), together with:
3.1.1 the proceeds of sale of that property; and
3.1.2 the benefit of any covenants or rights attaching to that property
PROVIDED THAT it is acknowledged by the Security Agent that
notwithstanding the provisions of this clause 3.1, the Chargor shall be
entitled to use the proceeds of sale of the Property listed in Schedule 1
(Property) under the Sale and Leaseback in the ordinary course of its
business provided that the Security has not become enforceable;
3.2 FIXED CHARGE ON PROPERTY
to the extent not subject to the legal mortgage under clause 3.1 (Legal
mortgage), by way of fixed equitable charge, all its present and future
interest in any freehold, leasehold or commonhold property, together with:
- 9 -
3.2.1 the proceeds of sale of that property; and
3.2.2 the benefit of any covenants or rights attaching to that property;
3.3 FIXED CHARGE ON SPECIFIC ASSETS
by way of a fixed charge, all its present and future interest in:
3.3.1 all Plant and Machinery;
3.3.2 all Shares (including without limitation the MNI Shares) and all
Share Rights attaching to them;
3.3.3 all money standing to the credit of the Chargor's accounts and the
debts represented by the balances on such accounts;
3.3.4 all the Debts;
3.3.5 the Insurances, the benefit of any claim to Insurance proceeds and
the right to return of any insurance premium in relation to the
Insurance;
3.3.6 all its rights under any letters of credit issued in its favour and
any bills of exchange and other negotiable instruments held by it;
3.3.7 the benefit of all licences, consents and authorisations held in
connection with its business or the use of any Security Assets;
3.3.8 all Intellectual Property Rights;
3.3.9 its goodwill; and
3.3.10 its uncalled capital.
4. FLOATING CHARGE
The Chargor charges, in favour of the Security Agent (for the benefit of
itself and the other Secured Parties), with full title guarantee, by way
of floating charge, all its present and future undertaking and assets not
effectively charged by way of legal mortgage or fixed charge under clause
3 (Fixed Security) as a continuing security for the Secured Liabilities.
- 10 -
5. CONVERSION OF FLOATING CHARGE
5.1 CONVERSION
Without prejudice and in addition to any circumstances in which a floating
charge may crystallise by operation of law, the floating charge created
under clause 4 (Floating Charge) will convert into a fixed charge:
5.1.1 when the Security Agent gives notice to the Chargor at any time when
the Security Agent considers (in its sole discretion) that all or
any part of the Security Assets, or the Security Agent's security
interest in all or any part of the Security Assets, is or may be in
danger of being seized or subjected to any distress or execution or
is otherwise in jeopardy, or if at any time any of the Security
becomes enforceable; or
5.1.2 automatically and without notice to the Chargor:
(a) on the convening of a meeting of members of the Chargor to
consider a winding-up resolution;
(b) on the presentation of a petition to wind up the Chargor;
(c) on the making of an application for the appointment of an
Administrator in respect of the Chargor; or
(d) in respect of the particular Security Assets or class of
Security Assets concerned, if the Chargor is at any time in
breach of clause 9.1 (Negative Pledge).
5.2 PARTIAL CONVERSION
If the Security Agent specifies in the notice referred to in clause 5.1.1
(Conversion) that the conversion relates only to a class of Security
Assets, such restriction is not to constitute a waiver of the Security
Agent's rights to convert the floating charge into a fixed charge in
relation to other Security Assets at a later date.
5.3 ASSETS ACQUIRED AFTER ANY FLOATING CHARGE CRYSTALLISATION
Any asset acquired by the Chargor after any crystallisation of the
floating charge created under clause 4 (Floating Charge) that, but for
such crystallisation, would be subject to a
- 11 -
floating charge will (unless the Security Agent confirms in writing to the
contrary) be charged to the Security Agent by way of fixed charge.
6. PRIORITY ARRANGEMENTS AND ACKNOWLEDGEMENT OF ASSIGNMENT
6.1 PRIORITY ARRANGEMENTS
The Chargor covenants with the Security Agent that it shall:
6.1.1 use all reasonable endeavours to procure that an intercreditor
agreement is entered into as soon as practicable after the date
hereof between the Chargor, Barclays and the Security Agent upon
terms satisfactory to the Security Agent and Barclays; and
6.1.2 in the event that such intercreditor agreement is not entered into
by all parties thereto within 30 Business Days of the date of this
Deed, the Chargor shall refinance or repay the amount outstanding to
Barclays in such amount as is necessary to procure the release and
discharge of the Barclays Security Documents within 90 days of the
date of this Deed.
6.2 ACKNOWLEDGEMENT OF ASSIGNMENT
The Chargor covenants with the Security Agent that it shall procure the
acknowledgement of assignment substantially in the form contained in
Schedule 2 (Acknowledgement by Barclays Bank plc) to the Book Debts
Security Document as soon as practicable after the date of this Deed and
in any event within 30 Business Days of the date of this Deed.
7. RELEASE OF SECURITY
At the request and expense of the Chargor, the Security Agent will execute
a deed of release (and such other releases as may be necessary) in
relation to the Security Interests created by this Deed on the earlier to
occur of (i) the end of the Security Period and (ii) the date on which a
Qualified IPO (as defined in the Notes) is consummated.
8. REPRESENTATIONS AND WARRANTIES RELATING TO SECURITY ASSETS
8.1 GENERAL
The Chargor makes the representations and warranties set out in clauses
8.2 (Security) to and including 8.5 (Intellectual Property Rights,
Know-How and Third Party Rights) to the Security Agent (for the benefit of
itself and the other Secured Parties) on the date of this
- 12 -
Deed, Each representation and warranty will be deemed to be repeated by
the Chargor on each date during the Security Period with reference to the
facts and circumstances then existing.
8.2 SECURITY
This Deed creates the Security Interests that it purports to create, as
set out in clauses 3 (Fixed Security) and 4 (Floating Charge). This Deed
is not liable to be avoided or set aside on the liquidation or
administration of the Chargor or otherwise.
8.3 PROPERTY AND THE OTHER SECURITY ASSETS
Except as disclosed to the Security Agent in writing:
8.3.1 the Chargor has title to its Property specified in Schedule 1
(Property)
8.3.2 there is no breach of any Planning Acts, which may materially affect
the value of the Property;
8.3.3 there is no covenant, agreement, stipulation, reservation,
condition, interest, right or other matter which would have a
material adverse effect on the Property, the Plant and Machinery or
any other Security Asset;
8.3.4 there is no overriding interest over the Property;
8.3.5 no person has a right to terminate the use of a facility necessary
for the enjoyment and use of the Property or the Plant and
Machinery;
8.3.6 other than pursuant to Permitted Security Interests, the Chargor is
not aware of any adverse claim in respect of its ownership of, or
any interest in, the Property, the Plant and Machinery or any other
Security Asset; and
8.3.7 the Property is free from any tenancies or licences.
8.4 ENVIRONMENTAL MATTERS
8.4.1 The Chargor has obtained all Environmental Licences applicable to
its business and:
(a) has at all times complied in all material respects with the
terms and conditions of those Environmental Licences; and
- 13 -
(b) has to the best of its knowledge and belief at all times
complied in all material respects with all other applicable
Environmental Law.
8.4.2 No Dangerous Substance has been used, disposed of, generated,
stored, transported, dumped, released, deposited, buried or emitted
at, on, from or under any Property owned, leased, occupied and/or
controlled by the Chargor (and to the best of its knowledge at, on,
from or under any Property not owned, leased, occupied and/or
controlled by the Chargor) in circumstances where this might result
in a liability on the Chargor, which would have a material adverse
effect on its financial condition or on its ability to perform its
obligations under the Transaction Documents.
8.5 INTELLECTUAL PROPERTY RIGHTS, KNOW-HOW AND THIRD PARTY RIGHTS
8.5.1 The Intellectual Property Rights and Third Party Rights owned by, or
licensed to, the Chargor are all of the Intellectual Property
Rights, and Third Party Rights required by it in order for it to
carry on its business as currently conducted and the Chargor in
carrying on its business, confirms, subject to the Disclosure
Letter, that there are no claims against it for the infringement of
any Intellectual Property Rights of any third party.
8.5.2 The Intellectual Property Rights and Third Party Rights owned by the
Chargor are free of any Security Interests and any of right or
interest in favour of a third party, save for Permitted Security
Interests.
8.5.3 There is no actual or, to the best of the Chargor's knowledge and
belief, threatened, infringement of the Intellectual Property Rights
or Third Party Rights owned by the Chargor.
9. COVENANTS RELATING TO SECURITY ASSETS
9.1 NEGATIVE PLEDGE
Save as permitted by the Notes or the Securities Purchase Agreement, the
Chargor will not, nor purport or agree to do, any of the following:
9.1.1 create or permit to subsist any Security Interest over any of its
present or future assets, property or undertaking except for
Permitted Security Interests; or
- 14 -
9.1.2 sell, transfer, lend or otherwise dispose of (other than through
leasing) (whether by one or a series of transactions, whether
related or not) all or any part of its present or future assets,
property or undertaking including, without limitation, by any form
of factoring (except for the proposed sale of its subsidiary Edict
Training Limited and disposals of its assets, property and/or
undertaking which are made only in the ordinary course of trading),
9.1.3 other than in the ordinary course of trading, lease all or any part
of its present or future, assets, property or undertaking including,
without limitation, by any form of sale and leaseback (other than
the Sale and Leaseback) where any such lease would materially reduce
the value of such assets, property or undertaking;
except in favour of the Security Agent or with the prior written consent
of the Security Agent (which consent shall not be unreasonably withheld or
delayed) or as otherwise expressly permitted by the provisions of any
Transaction Document.
9.2 H.M. LAND REGISTRY
In respect of any Property the title to which is, or is to be, registered
at H.M. Land Registry:
9.2.1 the Chargor applies or (if the Property is acquired after the date
of this Deed) will apply to the Chief Land Registrar for a
restriction to be entered in the proprietorship register of the
Register of Title as follows:
"Except under an order of the Registrar, no disposition or
dealing by the proprietor of the land is to be registered without
the consent of the proprietor for the time being of the Debenture
dated [- ] 2005 between Mitel Networks Limited and Highbridge
International LLC."; and
9.2.2 the Chargor hereby certifies that the Security does not contravene
any of the provisions of its memorandum and articles of association.
9.3 INSURANCE
The Chargor will:
9.3.1 insure the Security Assets or (in the case of assets leased to the
Chargor, use reasonable endeavours to) procure that the Security
Assets are insured:
- 15 -
(a) against loss or damage by fire, risks normally insured against
in compliance with good industry practice and such other risks
as the Security Agent may reasonably require;
(b) for their full replacement or re-instatement value; and
(c) with an insurance company or underwriter acceptable to the
Security Agent (such acceptance not to be unreasonably
withheld or delayed);
9.3.2 subject to the rights of any lessor and any prior chargee apply all
money received under any Insurance in replacing, restoring or
reinstating the relevant Security Asset destroyed or damaged, or in
such manner as the Security Agent may agree, provided that the
Security Agent may require that such money is applied in or towards
satisfaction of the Secured Liabilities;
9.3.3 procure that the Security Agent's interest is endorsed on all
Insurance and subject to the rights of any prior chargee procure
that the Security Agent is named as first loss payee;
9.3.4 not do, or permit to be done, any action relating to any Security
Asset which may make any Insurance void or voidable; and
9.3.5 if the Insurance is or will become voidable or void, immediately and
at its own cost take all action necessary for restoring and renewing
the same and, failing any such restoration or renewal, the Chargor
will enter into a replacement policy on terms equivalent to those
given under the Insurance from a reputable insurer that is approved
by the Security Agent (such approval not to be unreasonably withheld
or delayed) and upon such renewal, restoration or replacement the
relevant policy will be subject in all respects to this Deed;
9.3.6 promptly pay all premiums relating to the Insurance, and provide the
Security Agent with evidence of premium payments upon the reasonable
request of the Security Agent, and if the Chargor defaults in paying
any such premiums, the Security Agent may pay them on behalf of the
Chargor and all sums so paid by the Security Agent will be added to
the Secured Liabilities; and
9.3.7 if the Security Agent requires, use the Chargor's reasonable
endeavours to ensure that the policies of insurance maintained by it
contain clauses reasonably
- 16 -
satisfactory to the Security Agent to ensure that the insurers will
not cancel any such policy without first giving 30 days' written
notice to the Security Agent and that a breach by the Chargor or a
failure by the Chargor to give notice of any event giving rise to
any claim will not vitiate the policy in respect of the Security
Agent's interest or affect the Security Agent's right to claim under
the policy and that the insurer will notify the Security Agent of
any cancellation or termination of, or default under, or failure to
renew the insurance or of any act or omission by the Chargor which
might affect such insurance.
9.4 DEPOSIT OF DEEDS AND DOCUMENTS OF TITLE
Subject always to compliance by the Chargor with its obligations to any
prior chargee or mortgagee under a Permitted Security Interest, the
Chargor will if requested by the Security Agent deposit with the Security
Agent during the Security Period all deeds and/or documents of title or
other evidence of ownership of the Security Assets, including but not
limited to:
9.4.1 all deeds and documents of title relating to Property, and any
related search certificates obtained in the three month period
ending on the date of this Deed; and
9.4.2 all certificates or analogous documents evidencing ownership of
any shares, securities or Share Rights and declarations of trust
in favour of the Company executed by all persons (other than the
Company) in whose name any shares, securities or Share Rights are
registered (and the Chargor will deliver to the Security Agent
such blank, executed stock transfer forms and any other documents
as are necessary for the Security Agent to register its interest,
or that of its nominee, in any shares, securities or Share
Rights).
9.5 PROPERTY
The Chargor will:
9.5.1 keep all freehold Property in good condition (allowing for fair
wear and tear) and maintain all Property that is leasehold or
commonhold in accordance with the relevant lease(s) or other
documents binding upon it;
- 17 -
9.5.2 comply in all material respects with all the terms and conditions
of any lease of a Property, and not do, or permit to be done,
anything which may allow the lessor to forfeit any lease;
9.5.3 pay when due all Taxes and duties imposed in respect of the
Property or any part of it, except to the extent that such Taxes
are being contested in good faith;
9.5.4 notify the Security Agent when it acquires any interest in any
freehold, leasehold or comonhold property, and if requested
execute and deliver to the Security Agent a legal mortgage, in a
form substantially similar to this Deed in favour of the Security
Agent, on such property and the proceeds of sale of that
property;
9.5.5 use the Property only as permitted by the Planning Acts;
9.5.6 not, without the prior consent of the Security Agent, carry out,
or permit to be carried out, on any part of the Property any
development, as defined in the Planning Acts;
9.5.7 other than the Sale and Leaseback, not grant any lease, tenancy,
contractual licence or right to occupy the Property which would
materially reduce the value of the Property or accept any
surrender of any lease or tenancy, (other than in the ordinary
course of its business) in each case without the prior written
consent of the Security Agent (such consent not to be
unreasonably withheld or delayed);
9.5.8 comply in all material respects with any positive or restrictive
covenants affecting the Property, and permit the Security Agent
or its nominee to enter the Property at any reasonable time with
reasonable prior notice;
9.5.9 allow the Security Agent or its nominee to carry out an
investigation of title on any Property, at the expense of the
Chargor, and provide the Security Agent or its nominee with all
documents and deeds as necessary;
9.5.10 provide the Security Agent, on demand, with a Report on Title
addressed to the Security Agent in relation to any Property
concerning matters which a prudent mortgagee would require to be
covered in such a report; and
- 18 -
9.5.11 within 14 days of receipt, notify and deliver a copy of any
material notice received from a public body in relation to any
Property to the Security Agent and comply with any requirements
contained in that notice;
9.6 PLANT AND MACHINERY
The Chargor will:
9.6.1 not use or permit the Plant and Machinery to be used for any
purpose for which it is not designed nor change the use of the
Plant and Machinery from its current use;
9.6.2 not use or permit the Plant and Machinery to be used for any
purpose or in any manner not covered by any Insurance or for any
illegal purpose;
9.6.3 at its own expense, maintain, service, repair and (where
appropriate) overhaul the Plant and Machinery so as to keep all
the Plant and Machinery in good repair and condition in all
respects (allowing for fair wear and tear);
9.6.4 permit the Security Agent and its authorised agents or
representatives, upon giving the Chargor reasonable prior notice,
to inspect any of the Plant and Machinery and the Chargor will
furnish to the Security Agent any information with respect to the
Plant and Machinery and their location and use as the Security
Agent may reasonably require from time to time;
9.6.5 do all acts and things which the Security Agent may reasonably
require in order to protect the Security Agent's interest in the
Plant and Machinery against the claims of any other person and
will, if so requested by the Security Agent, affix to any item
comprised in the Plant and Machinery in a prominent position a
durable nameplate containing the following legend:
"This [item] is the subject of a fixed charge in favour of
Highbridge International LLC. dated [- ]2005";
9.6.6 not remove or obscure such nameplates and will not permit such
nameplates to be removed or obscured; and
- 19 -
9.6.7 not remove or obscure any said numbers or manufacturer's
markings on Plant and Machinery and will not permit such
numbers or markings to be removed or obscured by any other
person.
9.7 ENVIRONMENTAL MATTERS
The Chargor will:
9.7.1 comply in all material respects with:
(a) the terms and conditions of all Environmental Licences
applicable to it; and
(b) all other applicable Environmental Law;
9.7.2 notify the Security Agent of any claim in relation to an
alleged breach of any Environmental Law which might, if
substantiated, have a material adverse affect on its financial
condition or its ability to perform its obligations under the
Transaction Documents; and
9.7.3 indemnify the Security Agent, each Receiver appointed under
this Deed and their respective officers, employees, agents and
delegates (each an "INDEMNIFIED PARTY") against any costs or
expenses properly suffered or incurred by them which:
(a) arise by virtue of any actual or alleged breach by the
Chargor of any Environmental Law;
(b) would not have arisen, if this Deed had not been
executed; and
(c) were not caused by the negligence or wilful default of
any Indemnified Party.
9.8 DEBTS
The Chargor will comply in all respects with the provisions of
the Book Debts Security Document
9.9 INTELLECTUAL PROPERTY RIGHTS, APPLICATIONS, KNOW-HOW AND THIRD
PARTY RIGHTS
Save as permitted by the Securities Purchase Agreement or the
Notes, the Chargor will:
- 20 -
9.9.1 make all registrations, and pay all fees and Taxes or
analogous sums necessary to maintain those of its Intellectual
Property Rights and Third Party Rights reasonably required for
the carrying on of its business;
9.9.2 if such fees, Taxes or analogous sums as described in clause
9.9.1 are not paid, then the Security Agent may pay them, and
the Chargor will indemnify the Security Agent for such
payment;
9.9.3 take all action reasonably practicable to prevent third
parties infringing its Intellectual Property Rights and Third
Party Rights, and take such other steps as are reasonably
practicable to maintain its interest in such Intellectual
Property Rights and Third Party Rights as are reasonably
required for the carrying on of its business;
9.9.4 not, otherwise than in accordance with the Notes:
(a) sell, transfer, licence or otherwise dispose of all or
any part of such Intellectual Property Rights and Third
Party Rights; or
(b) permit any Intellectual Property Right or Third Party
Right to be abandoned, be cancelled or lapse due to
non-use;
9.9.5 not, (otherwise than in the ordinary course of its business)
without the prior written consent of the Security Agent, (such
consent not to be unreasonably withheld or delayed) make any
modification or permit there to be made any modification to
its Intellectual Property Rights and Third Party Rights if
such modification may have an adverse effect on the security
of the Security Agent whether under this security or
otherwise;
9.9.6 not permit any of the Intellectual Property Rights
registrations to be the subject of a successful claim of
abandonment as a result of non-use, other than where such
Intellectual Property Rights no longer have any use in the
ordinary course of the Chargor's business;
9.9.7 maintain and comply (in all material respects) with proper
procedures for the maintenance of the confidentiality of the
Know-How;
9.9.8 undertake to pursue each of the Applications and undertakes
upon the grant or registration of the relevant Intellectual
Property Right in relation to an
- 21 -
Application to enter into such further form of document as may
be necessary to charge in favour of the Security Agent by way
of first fixed charge all legal and beneficial ownership of
the relevant Intellectual Property Right and the entire
interest of the Chargor in such Intellectual Property Right;
9.9.9 if any Application made by or in respect of it is challenged
or if any Intellectual Property Right of the Chargor which is
the subject of the Application is challenged or is not
permitted to be registered, use its reasonable endeavours to
defeat or reduce the effect of any objection or challenge; and
9.9.10 hold upon trust for the Security Agent absolutely the entire
interest of the Chargor in and to all those Intellectual
Property Rights and Third Party Rights which cannot for any
reason be charged by the Chargor together with the entire
benefit of such rights including, without limitation, the
benefit of any Applications relating to Third Party Rights to
the extent that such benefit accrues to the Chargor and all
proceeds, money and other rights and benefits to which the
Chargor is beneficially entitled in respect of the exercise of
such Third Party Rights.
9.10 SHARES AND SHARE RIGHTS
9.10.1 VOTING RIGHTS
(a) Unless and until me occurrence of an Enforcement Event,
the Chargor shall have the right to vote on the Shares
for any purpose in a manner not inconsistent with the
terms of this Deed and any other agreement, instrument
or document executed pursuant thereto or in connection
therewith.
(b) At any time on or after the occurrence of an Enforcement
Event:
(i) the Security Agent or its nominee may (in the name
of the Chargor or otherwise and without any
further consent or authority on the part of the
Chargor) exercise all voting powers and other
rights pertaining to the Shares (including the
right to nominate or remove a director) as if the
Security Agent was the sole beneficial owner of
the Shares; and
- 22 -
(ii) the Chargor shall (and shall procure that its
nominees shall) accept short notice for and attend
any meeting of the holders of any Shares, appoint
proxies and exercise voting and other rights and
powers exercisable by the holder of the Shares as
the Security Agent may direct from time to time
9.10.2 DIVIDENDS
(a) Unless and until the occurrence of an Enforcement Event,
the Chargor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the
Shares.
(b) At any time on or after the occurrence of an Enforcement
Event:
(i) all rights of the Chargor to receive the dividends
and interest payments which it would otherwise be
authorised to receive and retain pursuant to
paragraph (a) above shall cease, and all such
rights shall thereupon become vested in the
Security Agent; and
(ii) all dividends and interest payments which are
received by the Chargor contrary to the provisions
of this paragraph (b) shall be received in trust
for the Security Agent, shall be segregated from
other funds of the Chargor and shall be paid over
immediately to the Security Agent.
10. POWERS OF THE SECURITY AGENT
10.1 POWER OF REMEDY
If the Chargor fails to comply with any obligation, covenant or
stipulation affecting a Security Asset (whether set out in this Deed or
otherwise), the Chargor will permit the Security Agent or its officers,
employees, agents or delegates to enter or take possession of such
Security Asset and do all such things as the Security Agent may reasonably
consider necessary or desirable to prevent or remedy any breach of such
obligation, covenant or stipulation.
- 23 -
10.2 INDEMNITY
The Chargor will indemnify the Security Agent against all losses,
liabilities, costs and expenses properly incurred in connection with the
exercise of the powers contained in clause 10.1 (Power of remedy).
11. CONTINUING SECURITY
The Security is a continuing security and will extend to the ultimate
balance of all the Secured Liabilities, regardless of any intermediate
payment or discharge in whole or in part or liquidation or other
incapacity of the Chargor.
12. PROTECTION OF SECURITY
12.1 EFFECT OF INSOLVENCY
12.1.1 Where any discharge of the Secured Liabilities is made in
whole or in part or any arrangement is made on the basis of
any payment, security or other disposition which is
subsequently avoided or must be restored on the insolvency,
liquidation or otherwise of the Chargor, the Security and the
liability of the Chargor under this Deed will continue as if
the discharge or arrangement had not occurred.
12.1.2 The Security Agent may concede or compromise any claim that
any payment, security or other disposition is liable to
avoidance or restoration.
12.2 CIRCUMSTANCES NOT AFFECTING SECURITY OR GUARANTEES
The Security Interests created, and the obligations assumed by the Chargor
under this Deed will not be affected by any act, omission, matter or thing
which, but for this provision, would reduce, release or prejudice the
Security or any of the Chargor's obligations under this Deed in whole or
in part, including (whether or not known to the Chargor or the Security
Agent):
12.2.1 any time or waiver granted to, or composition with the Chargor
or any other person; or
12.2.2 the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, the
Chargor or any other person, or any non-presentation or
non-observance
- 24 -
of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any
security; or
12.2.3 any incapacity or lack of power, authority or legal
personality of, or dissolution, or change in members or status
of, the Chargor or any other person; or
12.2.4 any variation (however fundamental) or replacement of a
Transaction Document or any other document or security; or
12.2.5 any unenforceability, illegality or invalidity of any
obligation of any person under any Transaction Document or any
other document or security, to the intent that the Chargor's
obligations and the Security under this Deed will remain in
full force and be construed accordingly, as if there were no
unenforceability, illegality or invalidity; or
12.2.6 any postponement, discharge, reduction, non-provability or
other similar circumstances affecting any obligation of the
Chargor or any other person under a Transaction Document,
resulting from any insolvency, liquidation or dissolution
proceedings or from any law, regulation or order, so that each
such obligation will, for the purposes of the Chargor's
obligations under this Deed, be construed as if there were no
such circumstance; or
12.2.7 any resort to any other means of payment of the Secured
Liabilities, or any of them, at any time and in any order
which the Security Agent thinks fit.
12.3 IMMEDIATE RECOURSE
The Chargor waives any right it may have of first requiring the Security
Agent (or any trustee or agent on its behalf) to proceed against, or
enforce any other rights or security against or claim payment from, any
person before enforcing the Security contained in this Deed.
12.4 SUSPENSE ACCOUNT
At any time during the Security Period, the Security Agent may:
12.4.1 refrain from applying or enforcing any other money, security
or rights held or received by the Security Agent in respect of
those amounts, or apply and
- 25 -
enforce the same in such manner and order as it sees fit
(whether against those amounts or otherwise); and
12.4.2 hold in a suspense account any monies received under this Deed
or on account of the Chargor's liability in respect of the
Secured Liabilities and may hold such monies for such period
as the Security Agent sees fit in the Security Agent's
absolute discretion without any obligation to apply the same
or any part thereof in discharge of the Secured Liabilities.
12.5 ADDITIONAL RIGHT
This Deed and the Security constituted by this Deed is in addition to, and
is not in any way prejudiced by, any other right, remedy, security or
guarantee held by the Security Agent for the Secured Liabilities.
13. WHEN SECURITY BECOMES ENFORCEABLE
13.1 ENFORCEMENT EVENT
The Security will become immediately enforceable upon the occurrence of an
Enforcement Event, and the power of sale and other powers conferred by
Section 101 (Powers incident to estate or interest of mortgagee) of the
Act, as varied or amended by this Deed, win be immediately exercisable,
upon and at any time after the occurrence of an Enforcement Event.
14. ENFORCEMENT OF SECURITY
14.1 ENFORCEMENT RIGHT
After the Security has become enforceable, the Security Agent may, in its
absolute discretion, enforce all or any part of the Security in such
manner as it sees fit.
14.2 GENERAL
14.2.1 For the purposes of all powers implied by statute, the Secured
Liabilities will be deemed to have become due and payable on
the date of this Deed.
14.2.2 Section 103 of the Act (Regulation of exercise of power of
sale), and section 93 of the Act (Restriction on right of
consolidation of mortgages) will not apply to this Deed.
- 26 -
14.2.3 The statutory powers of leasing conferred on the Security
Agent will be extended to allow the Security Agent to lease,
make agreements for leases, accept surrenders of leases and
grant options, as the Security Agent will think fit, and
without the need to comply with any of the provisions of
Section 99 (Leasing powers of mortgagor and mortgagee in
possession) and 100 (Power of mortgagor and mortgagee in
possession to accept surrenders of leases) of the Act.
15. APPOINTMENT OF AN ADMINISTRATOR BY THE SECURITY AGENT
At any time on or after the Enforcement Date the Security Agent may
appoint an administrator of the Chargor for the purposes and upon the
terms contained in Schedule B1 Insolvency Xxx 0000.
16. RECEIVER
16.1 APPOINTMENT OF RECEIVER
At any time on or after the Enforcement Date, or at any time if the
Chargor so requests in writing, the Security Agent may, without further
notice, appoint under seal or in writing any person to be a Receiver of
all or any part of the Security Assets (but not the whole or substantially
the whole of the Security Assets) that the Security Agent may specify (the
"RECEIVERSHIP ASSETS"), in the same manner, as if the Security Agent
itself had become entitled under the act to exercise the power of sale
conferred by the Act.
16.2 POWERS OF RECEIVER
Every Receiver appointed in accordance with clause 16.1 (Appointment of
Receiver) will have, and will be entitled to exercise, all of the
following powers, in relation to the Chargor and in addition to those
conferred by the Act on any receiver appointed under the Act:
16.2.1 TAKE POSSESSION: to take immediate possession of, get in and
collect the whole or any part of the Receivership Assets and,
for that purpose, to take such proceedings as may seem to him
expedient;
16.2.2 CARRY ON BUSINESS: to carry on the business of the Chargor, as
it considers appropriate;
- 27 -
16.2.3 PROTECTION OF ASSETS: to make and effect all repairs and
insurances, do all other acts which the Chargor might do in
the ordinary conduct of its business for the protection and
the improvement of the Receivership Assets, commence and/or
complete any building operations on the Property, and apply
for and maintain any planning permissions, building
regulations approvals and any other permissions, consents or
licences, as it considers appropriate;
16.2.4 EMPLOYEES: to appoint and discharge managers, officers,
agents, accountants and employees of the Chargor for the
purposes of this Deed, upon such terms as it considers
appropriate;
16.2.5 BORROW MONEY: for the purpose of exercising any of the powers,
authorities and discretions conferred on it by or pursuant to
this Deed or the Act and/or of defraying any costs, charges,
losses or expenses (including remuneration) which will be
incurred in their exercise or for any other purpose, to raise
and borrow money, either unsecured or on the security of all
or any part of the Receivership Assets, either in priority to
the Security or otherwise, and generally on such terms and
conditions as he may consider appropriate, and so that no
person lending such money will be concerned to enquire as to
the propriety or purpose of the exercise of such power, or to
see to the application of any money so raised or borrowed;
16.2.6 SET ASSETS: to sell, exchange, convert into money and realise
all or any part of the Receivership Assets, by public auction
or private contract, and generally in such manner and on such
terms as he may consider appropriate, for a consideration
consisting of cash, debentures, shares, stock or other
valuable consideration, and payable in a lump sum or by
installments spread over such period as he may consider
appropriate (and fixtures may be severed and sold separately
from the property containing them, without the consent of the
Chargor);
16.2.7 LEASES: to let all or any part of the Receivership Assets, for
such term and at such rent (with or without a premium) as he
may consider appropriate, and to accept a surrender of any
lease or tenancy of such Receivership Assets, on such terms as
he may consider appropriate (including the payment of money to
a lessee or tenant on a surrender);
- 28 -
16.2.8 COMPROMISE: to settle, adjust, refer to arbitration,
compromise and arrange any claims, accounts, disputes, and
demands with or by any person who is or claims to be a
creditor of the Chargor, or relating in any way to all or any
part of the Receivership Assets;
16.2.9 LEGAL ACTIONS: to bring, prosecute, enforce, defend and
abandon any such actions, suits and proceedings in relation to
all or any part of the Receivership Assets, as he may consider
appropriate;
16.2.10 RECEIPTS: to give valid receipts for all money;
16.2.11 SUBSIDIARIES: to form one or more Subsidiaries of the Chargor,
and transfer to any such Subsidiary all or any part of the
Receivership Assets; and
16.2.12 GENERAL POWERS: to do all such other acts and things, as he
may consider desirable or necessary, for realising all or any
part of the Receivership Assets, or incidental or conducive to
any of the matters, powers or authorities conferred on a
Receiver under this Deed, to exercise in relation to all or
any part of the Receivership Assets all such powers and
authorities as he would be capable of exercising, if he were
the absolute beneficial owner of them, and to use the name of
the Chargor for all or any such purpose.
16.3 REMOVAL AND REMUNERATION
The Security Agent may in writing:
16.3.1 remove any Receiver appointed by it;
16.3.2 appoint a new Receiver, in the place of any Receiver whose
appointment may have terminated; and
16.3.3 fix the remuneration of any Receiver appointed by it.
16.4 JOINT RECEIVERS
If, at any time, there is more than one Receiver of all or any part of the
Receivership Assets, each such Receiver may (unless otherwise stated in
any appointment document) exercise all of the powers conferred on a
Receiver under this Deed individually and to the exclusion of each other
Receiver.
- 29 -
16.5 LENDER MAY EXERCISE RECEIVER'S POWERS
All or any of the powers, authorities and discretions which are conferred
by this Deed (either expressly or impliedly) upon a Receiver may be
exercised, after the Security becomes enforceable, by the Security Agent,
both before and after the appointment of any Receiver.
16.6 POWER TO DISPOSE OF CHATTELS OR PRODUCE
At any time after the security constituted by this Deed shall have become
enforceable, the Security Agent or any Receiver appointed under this Deed
may dispose of any chattels or produce found on the Property as agent for
the Chargor and (without prejudice to any obligation to account for the
proceeds of any sale of such chattels or produce) the Security Agent or
such or Receiver are to be indemnified by the Chargor against any
liability arising from such disposal.
17. APPLICATION OF PROCEEDS
All money received by the Security Agent or by any Receiver appointed
under this Deed will, after the Security has become enforceable, but
subject to the payment of any claims having priority to the Security, be
applied by the Security Agent for the following purposes and, unless
otherwise determined by the Security Agent or the Receiver, in the
following order of priority (without prejudice to the right of the
Security Agent to recover any shortfall from the Chargor):
17.1 COSTS OF ENFORCEMENT
to meet all costs, charges and expenses incurred and payments made by the
Security Agent or the Receiver, and all remuneration due under this Deed,
together with interest on all such amounts (both before and after judgment
and payable on demand) at the interest rate prescribed in the Notes from
the date the same become due and payable, until the date the same are
unconditionally and irrevocably paid and discharged in full;
17.2 SECURED LIABILITIES
to pay the Secured Liabilities or such part as is then due and payable as
determined by the Security Agent in its sole discretion; and
17.3 SURPLUS TO THE CHARGOR
to pay any surplus to the Chargor or other person entitled to it.
- 30 -
18. NO LIABILITY AS MORTGAGEE IN POSSESSION
18.1 NO LIABILITY
Neither the Security Agent nor any Receiver will be liable to account as
mortgagee in possession, or be liable for any loss on realisation or for
any default or omission for which a mortgagee in possession might be
liable, by virtue of it entering into possession of all or any part of the
Security Assets.
18.2 RECEIVER AS AGENT OF THE CHARGOR
Every Receiver appointed by the Security Agent under this Deed will be
deemed to be the agent of the Chargor for all purposes and will, as such,
be deemed to be in the same position as a Receiver duly appointed by a
mortgagee under the Act.
18.3 RESPONSIBILITY OF THE CHARGOR
The Chargor alone will be responsible for a Receiver's contracts,
engagements, acts, omissions, defaults and for losses and liabilities
incurred by him and the Security Agent will not incur any liability for
these (either to me Chargor or otherwise) by reason of the Security Agent
appointing such a Receiver.
18.4 RIGHTS UNDER THE ACT
Subject to the other provisions of mis Deed, the Security Agent and every
Receiver will be entitled to all the rights, powers, privileges and
immunities under the Act conferred on mortgagees and receivers duly
appointed under the Act.
19. PROTECTION OF THIRD PARTIES
No purchaser, mortgagee or other person or company dealing with the
Security Agent or a Receiver, or any agent of them, need enquire whether
the Secured Liabilities have become payable, whether any power which the
Security Agent or Receiver is purporting to exercise has become
exercisable, whether any Secured Liabilities remain due or how any money
paid to the Security Agent or Receiver is applied.
- 31 -
20. NEW ACCOUNTS
20.1 DEEMED NEW ACCOUNT
If the Security Agent receives, or is deemed to have received, notice,
whether actual or constructive, of any subsequent Security Interest or
other interest affecting any part of the Security Assets and/or their
proceeds of sale, the Security Agent may open a new account or accounts
with the Chargor. If the Security Agent does not open a new account, it
will nevertheless be treated as if it had done so, at the time when it
received or was deemed to have received notice and, from that time, all
payments made to the Security Agent will be credited or be treated as
having been credited to the new account and will not operate to reduce the
amount of the Secured Liabilities.
20.2 BREAKING OF ACCOUNTS
If, for any reason, this Deed ceases to be a continuing security in
respect of the Chargor, me Security Agent may open a new account, or
continue any existing account, with the Chargor, and the liability of the
Chargor in respect of the Secured Liabilities, at the date of such
cessation, will remain, regardless of any payments in or out of any such
account.
21. REDEMPTION OF PRIOR SECURITY INTERESTS
The Security Agent may, at any time after me Security has become
enforceable, redeem any prior Security Interest against all or any part of
the Security Assets or procure the transfer of the same to itself and may
settle and pass the accounts of the holder of any prior Security Interest.
Any accounts so settled and passed will be conclusive and binding on the
Chargor. All principal, interest, costs, charges and expenses of and
incidental to such redemption and transfer will be paid by the Chargor to
the Security Agent on demand.
22. DELEGATION BY THE SECURITY AGENT
The Security Agent may delegate, by power of attorney or in any other
manner, to any person or persons all or any of the powers, authorities and
discretions which are exercisable by the Security Agent under mis Deed in
relation to all or any part of the Security Assets. Any such delegation
may be made upon such terms (including the power to sub-delegate), and
subject to such regulations, as the Security Agent may think fit. The
Security Agent will not be liable or responsible to the Chargor for any
loss or damage, arising from any act, default, omission or misconduct on
the part of any delegate or sub-delegate.
- 32 -
23. FURTHER ASSURANCE AND POWER OF ATTORNEY
23.1 GENERAL
The Chargor will, at its own expense, give all such assurances, take all
action and execute all documents required by the Security Agent for
perfecting or protecting the Security, for facilitating the realisation of
all or any part of the Security Assets or in the exercise of all powers,
authorities and discretions vested in the Security Agent, or any Receiver,
of all or any part of the Security Assets, or in any delegate or
sub-delegate appointed in accordance with clause 22 (Delegation by the
Security Agent).
23.2 POWER OF ATTORNEY
The Chargor, by way of security and in order to secure the performance of
its obligations under this Deed, irrevocably appoints each of the Security
Agent and any Receiver, delegate or sub-delegate appointed under this
Deed, to be its attorney, acting severally, on its behalf and in its name,
to give all assurances, take all action and execute all documents (under
hand or seal) which the Chargor is obliged to under this Deed (including
making any demand upon, or giving any notice or receipt to, any person
owing money to the Chargor and executing and delivering any legal charges,
mortgages, assignments or other security and any transfers of securities)
and generally, in its name and on its behalf, to exercise all or any of
the powers, authorities and discretions conferred by this Deed or by
statute on the Security Agent or any Receiver, delegate or sub-delegate.
The power of attorney hereby granted is to secure the performance of
obligations owed to the donees within the meaning of the Powers of
Xxxxxxxx Xxx 0000.
23.3 RATIFICATION
The Chargor agrees to ratify and confirm whatever any such attorney,
acting pursuant to clause 23.3 (Power of attorney), does or purports to do
in the exercise or purported exercise of all or any of the powers,
authorities and discretions referred to in clause 23.2 (Power of
attorney).
24. EXPENSES AND INDEMNITIES
24.1 COSTS AND Expenses
All costs, charges and expenses properly incurred, and all payments
properly made, by the Security Agent or any Receiver appointed under this
Deed in the lawful exercise of the
- 33 -
powers conferred by this Deed (whether or not occasioned by any act,
neglect or default of the Chargor) will carry interest (both before and
after judgment) at the interest rate prescribed in the Notes from the date
of the same being incurred or becoming payable, until the date the same
are unconditionally and irrevocably discharged in full. The amount of all
such costs, charges, expenses, payments and interest and all remuneration
payable under this Deed is payable by the Chargor on demand. All such
costs, charges, expenses and payments will be paid and charged as between
the Security Agent and the Chargor on a full indemnity basis.
24.2 INDEMNITY
The Security Agent and every Receiver, attorney, manager, agent or other
person appointed by the Security Agent under this Deed is entitled to be
indemnified out of the Security Assets in respect of all liabilities and
expenses properly incurred by them in the execution or purported execution
of any of the powers, authorities or discretions vested in them pursuant
to this Deed, and against all actions, proceedings, costs, claims and
demands in respect of any matter or thing done, or omitted to be done, in
any way relating to the Security Assets.
24.3 PAYMENT
The Security Agent and any Receiver may retain and pay all sums in respect
of monies payable under clauses 24.1 (Costs and Expenses) or 24.2
(Indemnity) out of any money received under the powers conferred by this
Deed.
25. TAXES, CURRENCY AND STAMP DUTIES
25.1 GROSSING UP
All amounts payable by the Chargor under this Deed are to be paid in full
without any deduction or withholding, whether on account of any Taxes or
otherwise, unless the Chargor is required by law to make such deduction or
withholding, in which case the amount so payable will be increased to the
extent necessary to ensure that the amount receivable by the Security
Agent after such deduction or withholding is equal to the amount which
would have been receivable by the Security Agent if no such deduction or
withholding had been required.
- 34 -
25.2 CURRENCY INDEMNITY
The Chargor will indemnify the Security Agent for any loss or liability
suffered by it, as a result of any amount paid or received in respect of
the Secured Liabilities (whether as a result of any order, judgment or
otherwise) not being received or recovered by or on behalf of the Security
Agent in the currency in which it is expressed to be payable.
25.3 STAMP DUTY
25.3.1 The Chargor will pay all stamp, documentary, registration and other
similar duties or Taxes, including any related penalties, additions,
surcharges or interest, which are imposed or chargeable on or in
connection with tie Security or any judgment given in connection
with this Deed
25.3.2 The Security Agent may, but is not obliged to, pay any amounts
which are referred to in clause 25.3.1. If the Security Agent does
so, the Chargor will indemnify the Security Agent on demand against
any such payment, together with any costs and expenses (including
related legal fees and any VAT payable) incurred by or on behalf of
the Security Agent in connection with such payment.
26. REMEDIES AND WAIVERS
26.1 DELAY NOT WAIVER
If the Security Agent does not exercise, or delays in exercising, any of
its respective rights or remedies under or in connection with this Deed,
that will not operate as a waiver of any such right or remedy.
26.2 FUTURE RIGHTS
The single or partial exercise of any right or remedy will not prevent any
further or other exercise of that right or remedy.
26.3 ADDITIONAL RIGHTS
The rights and remedies provided to the Security Agent in this Deed are
additional to any rights or remedies provided by law.
- 35 -
27. SET-OFF
27.1 All payments required to be made by the Chargor under this Deed will be
made without reference to any set-off or counterclaim and will be made,
free and clear of, and without any deduction for or on account of, any
set-off or counterclaim.
27.2 The Chargor authorises the Security Agent to apply any credit balance to
which it is entitled on any account of the Chargor with the Security Agent
or any other liability of the Security Agent to the Chargor in
satisfaction of any unpaid sum due and payable by the Chargor to the
Security Agent under this Deed. The Security Agent is authorised to
purchase wife any credit balance on any such account such other currencies
as may be necessary to effect such application. The Security Agent will
not be obliged to exercise any right given to it by this clause 27.2.
28. PARTIAL INVALIDITY
If a provision of this Deed is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, this will
not affect or impair the legality, validity or enforceability of any other
provision of this Deed or that provision under the law of any other
jurisdiction.
29. NOTICES
29.1 A demand notice or other communication to the Chargor in connection with
this Deed:
29.1.1 shall be in writing; and
29.1.2 shall be left at or sent by facsimile or prepaid ordinary post
(airmail if posted to a place outside the United Kingdom) to the
Chargor addressed to the person at the address identified with its
signature below.
29.2 A demand notice or other communication shall take effect from the time it
is received (or if earlier the time it is deemed to be received in
accordance with clause 29.3) unless a later time is specified in it.
29.3 A letter or facsimile is deemed to be received:
29.3.1 in the case of a posted letter unless actually received earlier on
the second (fifth if posted to a place outside the United Kingdom)
day after posting; and
- 36 -
29.3.2 in the case of facsimile on production of a transmission
report from the machine from which the facsimile was sent
which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient.
30. COUNTERPARTS
This Deed may be executed in any number of counterparts, and by the
different parties hereto on separate counterparts, each of which will
constitute an origional, and all the counterparts together will constitute
the same instrument.
31. GOVERNING LAW AND JURISDICTION
31.1 GOVERNING LAW
This Deed is governed by, and will be construed in accordance with,
English law.
31.2 JURISDICTION
31.2.1 SUBMISSION TO JURISDICTION
The Charger irrevocably agrees for the benefit of the Security Agent
that the courts of England and/or any of the federal or State courts
sitting in The City of New York, Borough of Manhattan will have
jurisdiction to hear and determine any suit, action or proceeding,
and to settle any disputes which may arise out of, or in connection
with, this Deed and, for that purpose, irrevocably submits to the
jurisdiction of such courts.
31.2.2 FORUM
The Chargor irrevocably waives any objection which it might now or
hereafter have to any of the courts referred to in clause 31.2.1
being nominated as the forum to hear and determine any suit, action
or proceeding, and to settle any disputes which may arise out of, or
in connection with, this Deed and agree not to claim that any such
court is not a convenient or inappropriate forum.
31.2.3 OTHER COMPETENT JURISDICTIONS
The submission to the jurisdiction of the courts referred to in
clause 31.2.1 will not (and is not to be construed so as to) limit
the right of the Security Agent to take proceedings against the
Chargor in any other court of competent
- 37 -
jurisdiction, nor will the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
31.2.4 CONSENT TO ENFORCEMENT
The Chargor hereby consents in respect of any legal action or
proceeding arising out of, or in connection with, this Deed, to the
giving of any relief, or the issue of any process in connection with
such action or proceeding including, without limitation, the making,
enforcement or execution against any property whatsoever
(irrespective of its use or intended use) of any order or judgment
which may be made or given in such action or proceeding.
31.2.5 WAIVER OF INDEMNITY
To the extent that the Chargor may in any jurisdiction claim for
itself or its assets, immunity from suit, execution, attachment
(whether in aid of execution, before judgment or otherwise) or other
legal process and, to the extent that in any such jurisdiction there
may be attributed to itself or its assets such immunity (whether or
not claimed), the Chargor hereby irrevocably agrees that it will not
claim, and hereby irrevocably waives, such immunity to the full
extent permitted by the law of such jurisdiction
IN WITNESS OF WHICH this Deed has been entered into as a deed on the date first
stated above
- 38 -
SCHEDULE 1
PROPERTY
Title No. description
-------- -----------
CYM.62633 FREEHOLD LAND AT MITEL BUSINESS PARK,
PORTSKEWETT, MONMOUTHSHIRE
- 39 -
IN WITNESS whereof this Debenture has been executed the day and year first
before written.
EXECUTED (but not delivered until the
date hereof by MITEL NETWORKS
LIMITED and signed by two directors or a
director and the secretary
Director ILLEGIBLE
Director/ /s/ Xxxx Xxxxxxx
NOTICE DETAILS
Address: Mitel Business Xxxx
Xxxxxxxxxxx
Xxxxxxxx
Xxxxx XX00 0XX
Fax No.: 0000 000 0000
Tel. No.: 0000 000 0000
Attention: Xxxxx Xxxxx
EXECUTED (but not delivered until the HIGHBRIDGE INTERNATIONAL LLC
date hereof by the SECURITY AGENT
acting by its duly authorized signatories By: HIGHBRIDGE CAPITAL
MANAGEMENT, LLC
By: ____________________________
Name: Xxx X. Xxxxxx
Title: Managing Director
IN WITNESS whereof this Debenture has been executed the day and year first
before written.
EXECUTED (but not delivered until the
date hereof by MITEL NETWORKS
LIMITED and signed by two directors or a
director and the secretary
Director _________________________
Director/Secretary _______________
NOTICE DETAILS
Address: Mitel Business Xxxx
Xxxxxxxxxxx
Xxxxxxxx
Xxxxx XX00 0XX
Fax No.: 0000 000 0000
Tel. No.: 0000 000 0000
Attention: Xxxxx Xxxxx
EXECUTED (but not delivered until the HIGHBRIDGE INTERNATIONAL LLC
date hereof by the SECURITY AGENT
acting by its duly authorized
signatories By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC
By: /s/ Xxxx X. Chill
----------------------------
Name: Xxxx X. Chill
Title: Managing Director