EX-4.1




Exhibit 4.1










2002 MASTER AGREEMENT




dated as of August 27, 2007




	 	 	 	 	 	 	 	 	 
	 

	 	MORGAN STANLEY	 	 	 	 	 	 
	 

	 	CAPITAL SERVICES INC.
	 	 	 	MITEL US HOLDINGS, INC.
	 	 





                                                                                                        
 and            
                                                                                                        

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that
are or will be governed by this 2002 Master Agreement, which includes the schedule (the
“Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged
between the parties or otherwise effective for the purpose of confirming or evidencing those
Transactions. This 2002 Master Agreement and the Schedule are together referred to as this “Master
Agreement”.



Accordingly,
the parties agree as follows:—




1. Interpretation



(a) Definitions. The terms defined in Section 14 and elsewhere in this Master Agreement will have
the meanings therein specified for the purpose of this Master Agreement.



(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and
the other provisions of this Master Agreement, the Schedule will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this Master Agreement, such
Confirmation will prevail for the purpose of the relevant Transaction.



(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master
Agreement and all Confirmations form a single agreement between the parties (collectively referred
to as this “Agreement”), and the parties would not otherwise enter into any Transactions.




2. Obligations



(a) General Conditions.





(i) Each party will make each payment or delivery specified in each Confirmation to be made
by it, subject to the other provisions of this Agreement.




(ii) Payments under this Agreement will be made on the due date for value on that date in
the place of the account specified in the relevant Confirmation or otherwise pursuant to
this Agreement, in freely transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by payment), such
delivery will be made for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.



Copyright © 2002 by International Swaps and Derivatives Association, Inc.




 









 






(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition
precedent that no Event of Default or Potential Event of Default with respect to the other
party has occurred and is continuing, (2) the condition precedent that no Early Termination
Date in respect of the relevant Transaction has occurred or been effectively designated and
(3) each other condition specified in this Agreement to be a condition precedent for the
purpose of this Section 2(a)(iii).


(b) Change of Account. Either party may change its account for receiving a payment or delivery by
giving notice to the other party at least five Local Business Days prior to the Scheduled
Settlement Date for the payment or delivery to which such change applies unless such other party
gives timely notice of a reasonable objection to such change.



(c) Netting of Payments. If on any date amounts would otherwise be payable:—





(i) in the same currency; and




(ii) in respect of the same Transaction,


by each party to the other, then, on such date, each party’s obligation to make payment of any
such amount will be automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the party by which the larger
aggregate amount would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.



The parties may elect in respect of two or more Transactions that a net amount and payment
obligation will be determined in respect of all amounts payable on the same date in the same
currency in respect of those Transactions, regardless of whether such amounts are payable in
respect of the same Transaction. The election may be made in the Schedule or any Confirmation by
specifying that “Multiple Transaction Payment Netting” applies to the Transactions identified as
being subject to the election (in which case clause (ii) above will not apply to such
Transactions). If Multiple Transaction Payment Netting is applicable to Transactions, it will apply
to those Transactions with effect from the starting date specified in the Schedule or such
Confirmation, or, if a starting date is not specified in the Schedule or such Confirmation, the
starting date otherwise agreed by the parties in writing. This election may be made separately for
different groups of Transactions and will apply separately to each pairing of Offices through which
the parties make and receive payments or deliveries.




(d) Deduction or Withholding for Tax.





(i) Gross-Up. All payments under this Agreement will be made without any deduction or
withholding for or on account of any Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant governmental revenue authority,
then in effect. If a party is so required to deduct or withhold, then that party (“X”)
will—




(1) promptly notify the other party (“Y”) of such requirement;




(2) pay to the relevant authorities the full amount required to be deducted or
withheld (including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier
of determining that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;




(3) promptly forward to Y an official receipt (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to such
authorities; and



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(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to
which Y is otherwise entitled under this Agreement, such additional amount as is necessary to
ensure that the net amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that it would not be
required to be paid but for:—




(A) the failure by Y to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d); or




(B) the failure of a representation made by Y pursuant to Section 3(f) to be
accurate and true unless such failure would not have occurred but for (I)
any action taken by a taxing authority, or brought in a court of competent
jurisdiction, after a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this Agreement)
or (II) a Change in Tax Law.




(ii) Liability. If:—




(1) X is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect of
which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);




(2) X does not so deduct or withhold; and




(3) a liability resulting from such Tax is assessed directly against X,




then, except to the extent Y has satisfied or then satisfies the liability resulting from
such Tax, Y will promptly pay to X the amount of such liability (including any related
liability for interest, but including any related liability for penalties only if Y has
failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d)).



3. Representations



Each party
makes the representations contained in Sections 3(a), 3(b),
3(c), 3(d), 3(e) and 3(f)
and, if specified in the Schedule as applying, 3(g) to the other party (which representations will
be deemed to be repeated by each party on each date on which a Transaction is entered into and, in
the case of the representations in Section 3(f), at all times until the termination of this
Agreement). If any “Additional Representation” is specified in the Schedule or any Confirmation as
applying, the party or parties specified for such Additional Representation will make and, if
applicable, be deemed to repeat such Additional Representation at the time or times specified for
such Additional Representation.




(a) Basic Representations.





(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of
its organization or incorporation and, if relevant under such laws, in good standing;




(ii) Powers. It has the power to execute this Agreement and any other documentation
relating to this Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement to deliver
and to perform its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary action to
authorize such execution, delivery and performance;



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(iii) No Violation or Conflict. Such execution, delivery and performance do not
violate or conflict with any law applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency of government applicable to
it or any of its assets or any contractual restriction binding on or affecting it or any of
its assets;




(iv) Consents. All governmental and other consents that are required to have been obtained
by it with respect to this Agreement or any Credit Support Document to which it is a party
have been obtained and are in full force and effect and all conditions of any such consents
have been complied with; and




(v) Obligations Binding. Its obligations under this Agreement and any Credit Support
Document to which it is a party constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors’ rights generally and subject,
as to enforceability, to equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).


(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its
knowledge, Termination Event with respect to it has occurred and is continuing and no such event
or circumstance would occur as a result of its entering into or performing its obligations under
this Agreement or any Credit Support Document to which it is a party.



(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it, any
of its Credit Support Providers or any of its applicable Specified Entities any action, suit or
proceeding at law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support Document.



(d) Accuracy of Specified Information. All applicable information that is furnished in writing by
or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information, true, accurate and complete in every material
respect.



(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it
for the purpose of this Section 3(e) is accurate and true.



(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it
for the purpose of this Section 3(f) is accurate and true.



(g) No Agency. It is entering into this Agreement, including each Transaction, as principal and
not as agent of any person or entity.




4. Agreements



Each party agrees with the other that, so long as either party has or may have any obligation
under this Agreement or under any Credit Support Document to which it is a party:—



(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under
clause (iii) below, to such government or taxing authority as the other party reasonably directs:—


(i) any forms, documents or certificates relating to taxation specified in the
Schedule or any Confirmation;


(ii) any other documents specified in the Schedule or any Confirmation; and



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(iii) upon reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any applicable Credit
Support Document without any deduction or withholding for or on account of any Tax or with
such deduction or withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the legal or commercial
position of the party in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,


in each case by the date specified in the Schedule or such Confirmation or, if none is specified,
as soon as reasonably practicable.



(b) Maintain Authorizations. It will use all reasonable efforts to maintain in full force and
effect all consents of any governmental or other authority that are required to be obtained by it
with respect to this Agreement or any Credit Support Document to which it is a party and will use
all reasonable efforts to obtain any that may become necessary in the future.



(c) Comply With Laws. It will comply in all material respects with all applicable laws and orders
to which it may be subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement or any Credit Support Document to which it is a party.



(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section
3(f) to be accurate and true promptly upon learning of such failure.



(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon
it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have its seat, or where an Office
through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”),
and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or
in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.




5. Events of Default and Termination Events



(a) Events of Default The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any of the following events
constitutes (subject to Sections 5(c) and 6(e)(iv)) an event of default (an “Event of Default”)
with respect to such party:—





(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under
this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made by it
if such failure is not remedied on or before the first Local Business Day in the case of
any such payment or the first Local Delivery Day in the case of any such delivery after, in
each case, notice of such failure is given to the party;




(ii) Breach of Agreement; Repudiation of Agreement.




(1) Failure by the party to comply with or perform any agreement or obligation
(other than an obligation to make any payment under this Agreement or delivery under
Section 2(a)(i) or 9(h)(i)(2) or (4) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if such failure is
not remedied within 30 days after notice of such failure is given to the party; or




(2) the party disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, this Master Agreement, any Confirmation executed and
delivered by that party or any



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Transaction evidenced by such a Confirmation (or such action is taken by any person or
entity appointed or empowered to operate it or act on its behalf);



(iii) Credit Support Default.





(1) Failure by the party or any Credit Support Provider of such party to comply with or
perform any agreement or obligation to be complied with or performed by it in accordance
with any Credit Support Document if such failure is continuing after any applicable grace
period has elapsed;




(2) the expiration or termination of such Credit Support Document or the failing or ceasing
of such Credit Support Document, or any security interest granted by such party or such
Credit Support Provider to the other party pursuant to any such Credit Support Document, to
be in full force and effect for the purpose of this Agreement (in each case other than in
accordance with its terms) prior to the satisfaction of all obligations of such party under
each Transaction to which such Credit Support Document relates without the written consent
of the other party; or




(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or
rejects, in whole or in part, or challenges the validity of, such Credit Support Document;
(or such action is taken by any person or entity appointed or empowered to operate it or
act on its behalf);


(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or 3(f))
made or repeated or deemed to have been made or repeated by the party or any Credit Support
Provider of such party in this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or deemed to have been made
or repeated;



(v) Default Under Specified Transaction. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:—





(1) defaults (other than by failing to make a delivery) under a Specified Transaction or
any credit support arrangement relating to a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, such default results in a
liquidation of, an acceleration of obligations under, or an early termination of, that
Specified Transaction;



(2) defaults, after giving effect to any applicable notice requirement or grace period, in
making any payment due on the last payment or exchange date of, or any payment on early
termination of, a Specified Transaction (or, if there is no applicable notice requirement
or grace period, such default continues for at least one Local Business Day);




(3) defaults in making any delivery due under (including any delivery due on the last
delivery or exchange date of) a Specified Transaction or any credit support arrangement
relating to a Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, such default results in a liquidation of, an acceleration of
obligations under, or an early termination of, all transactions outstanding under the
documentation applicable to that Specified Transaction; or




(4) disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of, a Specified Transaction or any credit support arrangement relating to a
Specified Transaction that is, in either case, confirmed or evidenced by a document or
other confirming evidence executed and delivered by that party, Credit Support Provider or
Specified Entity (or such action is taken by any person or entity appointed or empowered to
operate it or act on its behalf);



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(vi) Cross-Default. If “Cross-Default” is specified in the Schedule as applying to the
party, the occurrence or existence of:—




(1) a default, event of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any applicable
Specified Entity of such party under one or more agreements or instruments relating to
Specified Indebtedness of any of them (individually or collectively) where the aggregate
principal amount of such agreements or instruments, either alone or together with the
amount, if any, referred to in clause (2) below, is not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness
becoming, or becoming capable at such time of being declared, due and payable under such
agreements or instruments; before it would otherwise have been due and payable; or




(2) a default by such party, such Credit Support Provider or such Specified Entity
(individually or collectively) in making one or more payments under such agreements or
instruments on the due date for payment (after giving effect to any applicable notice
requirement or grace period) in an aggregate amount, either alone or together with the
amount, if any, referred to in clause (1) above, of not less than the applicable Threshold
Amount;




(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party:—




(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2)
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a general assignment, arrangement
or composition with or for the benefit of its creditors; (4)(A) institutes or has instituted
against it, by a regulator, supervisor or any similar official with primary insolvency,
rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation
or organization or the jurisdiction of its head or home office, a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation by it or such regulator, supervisor or similar official, or (B)
has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding-up or liquidation, and such
proceeding or petition is instituted or presented by a person or entity not described in
clause (A) above and either (I) results in a judgment of insolvency or bankruptcy or the
entry of an order for relief or the making of an order for its winding-up or liquidation or
(II) is not dismissed, discharged, stayed or restrained in each case within 15 days of the
institution or presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment, sequestration or
other legal process levied, enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within 15 days thereafter; (8) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7)
above (inclusive); or (9) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or



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(viii) Merger Without Assumption. The party or any Credit Support Provider of such
party consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, or reorganizes, reincorporates or reconstitutes into or
as, another entity and, at the time of such consolidation, amalgamation, merger, transfer,
reorganisation, reincorporation or reconstitution:—




(1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Provider under this Agreement or
any Credit Support Document to which it or its predecessor was a party; or




(2) the benefits of any Credit Support Document fail to extend (without the consent
of the other party) to the performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.


(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any event specified below
constitutes (subject to Section 5(c)) an Illegality if the event is specified in clause (i) below,
a Force Majeure Event if the event is specified in clause (ii) below, a Tax Event if the event is
specified in clause (iii) below, a Tax Event Upon Merger if the event is specified in clause (iv)
below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified
pursuant to clause (v) below or an Additional Termination Event if the event is specified pursuant
to clause (vi) below:—





(i) Illegality. After giving effect to any applicable provision, disruption fallback or
remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, due to an event or
circumstance (other than any action taken by a party or, if applicable, any Credit Support
Provider of such party) occurring after a Transaction is entered into, it becomes unlawful
under any applicable law (including without limitation the laws of any country in which
payment, delivery or compliance is required by either party or any Credit Support Provider,
as the case may be), on any day, or it would be unlawful if the relevant payment, delivery
or compliance were required on that day (in each case, other than as a result of a breach by
the party of Section 4(b)):—




(1) for
the Office through which such party (which will be the Affected Party) makes
and receives payments or deliveries with respect to such Transaction to perform any
absolute or contingent obligation to make a payment or delivery in respect of such
Transaction, to receive a payment or delivery in respect of such Transaction or to
comply with any other material provision of this Agreement relating to such
Transaction; or




(2) for such party or any Credit Support Provider of such party (which will be the
Affected Party) to perform, any absolute or contingent obligation to make a payment
or delivery which such party or Credit Support Provider has under any Credit
Support Document relating to such Transaction, to receive a payment or delivery
under such Credit Support Document or to comply with any other material provision
of such Credit Support Document;


(ii) Force Majeure Event. After giving effect to any applicable provision, disruption
fallback or remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, by
reason of force majeure or act of state occurring after a Transaction is entered into, on
any day:—





	 	(1)	 	the Office through which such party (which will be the Affected Party) makes and
receives payments or deliveries with respect to such Transaction is prevented from
performing any absolute or contingent obligation to make a payment or delivery in
respect of such Transaction, from receiving a payment or delivery in respect of
such Transaction or from complying with any other material provision of this
Agreement relating to such Transaction (or would be so prevented if such payment,
delivery or compliance were required on that day), or it becomes impossible or
impracticable for such Office so to perform, receive





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	 		 	or comply (or it would be impossible or impracticable for such Office so to perform,
receive or comply if such payment, delivery or compliance were required on that day); or
	 
	 	(2)	 	such party or any Credit Support Provider of such party (which will be the Affected Party) is
prevented from performing any absolute or contingent obligation to make a payment or
delivery which such party or Credit Support Provider has under any Credit Support Document
relating to such Transaction, from receiving a payment or delivery under such Credit
Support Document or from complying with any other material provision of such Credit
Support Document (or would be so prevented if such payment, delivery or compliance were
required on that day), or it becomes impossible or impracticable for such party or Credit
Support Provider so to perform, receive or comply (or it would be impossible or
impracticable for such party or Credit Support Provider so to perform, receive or comply
if such payment, delivery or compliance were required on that day),




so long as the force majeure or act of state is beyond the control of such Office, such party or
such Credit Support Provider, as appropriate, and such Office, party or Credit Support Provider
could not, after using all reasonable efforts (which will not require such party or Credit Support
Provider to incur a loss, other than immaterial, incidental expenses), overcome such prevention,
impossibility or impracticability;



(iii) Tax Event. Due to (1) any action taken by a taxing authority, or brought in a court of
competent jurisdiction, after a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (2) a Change in Tax Law, the party
(which will be the Affected Party) will, or there is a substantial likelihood that it will, on the
next succeeding Scheduled Settlement Date (A) be required to pay to the other party an additional
amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest
under Section 9(h)) or (B) receive a payment from which an amount is required to be deducted or
withheld for or on account of a Tax (except in respect of interest under Section 9(h)) and no
additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));



(iv) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled
Settlement Date will either (1) be required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 9(h) or (2)
receive a payment from which an amount has been deducted or withheld for or on account of any Tax
in respect of which the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or substantially all its assets (or
any substantial part of the assets comprising the business conducted by it as of the date of this
Master Agreement) to, or reorganizing, reincorporating or reconstituting into or as, another entity
(which will be the Affected Party) where such action does not constitute a Merger Without
Assumption;



(v) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as
applying to the party, a Designated Event (as defined below) occurs with respect to such party, any Credit
Support Provider of such party or any applicable Specified Entity of such party (in each case, “X”)
and such Designated Event does not constitute a Merger Without Assumption, and the creditworthiness
of X or, if applicable, the successor, surviving or transferee entity of X, after taking into
account any applicable Credit Support Document, is materially weaker immediately after the
occurrence of such Designated Event than that of X immediately prior to the occurrence of such
Designated Event (and, in any such event, such party or its successor, surviving or transferee
entity, as appropriate, will be the Affected Party). A “Designated Event” with respect to X means
that:—





(1) X consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets (or any substantial part of the assets comprising the business conducted by
X as of the



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date of this Master Agreement) to, or reorganizes, reincorporates or reconstitutes
into or as, another entity;




(2) any person, related group of persons or entity acquires directly or indirectly
the beneficial ownership of (A) equity securities having the power to elect a
majority of the board of directors (or its equivalent) of X or (B) any other
ownership interest enabling it to exercise control of X; or




(3) X effects any substantial change in its capital structure by means of the
issuance, incurrence or guarantee of debt or the issuance of (A) preferred stock or
other securities convertible into or exchangeable for debt or preferred stock or (B)
in the case of entities other than corporations, any other form of ownership
interest; or




(vi) Additional Termination Event. If any “Additional Termination Event” is specified in
the Schedule or any Confirmation as applying, the occurrence of such event (and, in such
event, the Affected Party or Affected Parties will be as specified for such Additional
Termination Event in the Schedule or such Confirmation).



(c) Hierarchy of Events.





(i) An event or circumstance that constitutes or gives rise to an Illegality or a Force
Majeure Event will not, for so long as that is the case, also constitute or give rise to an Event of Default
under Section 5(a)(i), 5(a)(ii)(l) or 5(a)(iii)(l) insofar as such event or circumstance
relates to the failure to make any payment or delivery or a failure to comply with any
other material provision of this Agreement or a Credit Support Document, as the case may
be.




(ii) Except in circumstances contemplated by clause (i) above, if an event or circumstance
which would otherwise constitute or give rise to an Illegality or a Force Majeure Event also
constitutes an Event of Default or any other Termination Event, it will be treated as an
Event of Default or such other Termination Event, as the case may be, and will not
constitute or give rise to an Illegality or a Force Majeure Event.




(iii) If an event or circumstance which would otherwise constitute or give rise to a Force
Majeure Event also constitutes an Illegality, it will be treated as an Illegality, except
as described in clause (ii) above, and not a Force Majeure Event.


(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure
Event has occurred and is continuing with respect to a Transaction, each payment or delivery which
would otherwise be required to be made under that Transaction will be deferred to, and will not be
due until:—





(i) the first Local Business Day or, in the case of a delivery, the first Local Delivery Day
(or the first day that would have been a Local Business Day or Local Delivery Day, as appropriate, but for
the occurrence of the event or circumstance constituting or giving rise to that Illegality
or Force Majeure Event) following the end of any applicable Waiting Period in respect of
that Illegality or Force Majeure Event, as the case may be; or




(ii) if earlier, the date on which the event or circumstance constituting or giving rise to
that Illegality or Force Majeure Event ceases to exist or, if such date is not a Local Business Day or, in the
case of a delivery, a Local Delivery Day, the first following day that is a Local Business
Day or Local Delivery Day, as appropriate.


(e) Inability of Head or Home Office to Perform Obligations of Branch. If (i) an Illegality or a
Force Majeure Event occurs under Section 5(b)(i)(l) or 5(b)(ii)(l) and the relevant Office is not
the Affected Party’s head or home office, (ii) Section 10(a) applies, (iii) the other party seeks
performance of the relevant obligation or compliance




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with the relevant provision by the Affected Party’s head or home office and (iv) the Affected
Party’s head or home office fails so to perform or comply due to the occurrence of an event or
circumstance which would, if that head or home office were the Office through which the Affected
Party makes and receives payments and deliveries with respect to the relevant Transaction,
constitute or give rise to an Illegality or a Force Majeure Event, and such failure would
otherwise constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(l) with respect to
such party, then, for so long as the relevant event or circumstance continues to exist with
respect to both the Office referred to in Section 5(b)(i)(l) or 5(b)(ii)(l), as the case may be,
and the Affected Party’s head or home office, such failure will not constitute an Event of Default
under Section 5(a)(i) or 5(a)(iii)(l).




6. Early Termination; Close-Out Netting


(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect
to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the
“Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying
the relevant Event of Default, designate a day not earlier than the day such notice is effective
as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic
Early Termination” is specified in the Schedule as applying to a party, then an Early Termination
Date in respect of all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or,
to the extent analogous thereto, (8), and as of the time immediately preceding the institution of
the relevant proceeding or the presentation of the relevant petition upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(4) or, to the extent analogous thereto, (8).




(b) Right to Terminate Following Termination Event.





(i) Notice. If a Termination Event other than a Force Majeure Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that
Termination Event and each Affected Transaction, and will also give the other party such
other information about that Termination Event as the other party may reasonably require. If
a Force Majeure Event occurs, each party will, promptly upon becoming aware of it, use all
reasonable efforts to notify the other party, specifying the nature of that Force Majeure
Event, and will also give the other party such other information about that Force Majeure
Event as the other party may reasonably require.




(ii) Transfer to Avoid Termination Event. If a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the
Affected Party will, as a condition to its right to designate an Early Termination Date
under Section 6(b)(iv), use all reasonable efforts (which will not require such party to
incur a loss, other than immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement
in respect of the Affected Transactions to another of its Offices or Affiliates so that
such Termination Event ceases to exist.




If the Affected Party is not able to make such a transfer it will give notice to the other
party to that effect within such 20 day period, whereupon the other party may effect such a
transfer within 30 days after the notice is given under Section 6(b)(i).




Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional
upon the prior written consent of the other party, which consent will not be withheld if
such other party’s policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.


(iii) Two Affected Parties. If a Tax Event occurs and there are two Affected Parties, each
party will use all reasonable efforts to reach agreement within 30 days after notice of
such occurrence is given under Section 6(b)(i)-to avoid that Termination Event.



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(iv) Right to Terminate.





(1) If:-




(A) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions
within 30 days after an Affected Party gives notice under Section 6(b)(i); or




(B) a Credit Event Upon Merger or an Additional Termination Event occurs, or
a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,




the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the
case of a Tax Event or an Additional Termination Event if there are two Affected
Parties, or the Non-affected Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one Affected Party may, if the
relevant Termination Event is then continuing, by not more than 20 days notice to
the other party, designate a day not earlier than the day such notice is effective
as an Early Termination Date in respect of all Affected Transactions.




(2) If at any time an Illegality or a Force Majeure Event has occurred and is then
continuing and any applicable Waiting Period has expired:—




(A) Subject to clause (B) below, either party may, by not more than 20 days
notice to the other party, designate (I) a day not earlier than the day on which such
notice becomes effective as an Early Termination Date in respect of all Affected
Transactions or (II) by specifying in that notice the Affected Transactions in respect of which it is
designating the relevant day as an Early Termination Date, a day not earlier than two Local
Business Days following the day on which such notice becomes effective as an Early
Termination Date in respect of less than all Affected Transactions. Upon receipt of a notice
designating an Early Termination Date in respect of less than all Affected Transactions, the other
party may, by notice to the designating party, if such notice is effective on or before the
day so designated, designate that same day as an Early Termination Date in respect of any or all
other Affected Transactions.




(B) An Affected Party (if the Illegality or Force Majeure Event relates to
performance by such party or any Credit Support Provider of such party of an obligation
to make any payment or delivery under, or to compliance with any other material provision
of, the relevant Credit Support Document) will only have the right
to designate an Early Termination Date under Section 6(b)(iv)(2)(A) as a result of
an Illegality under Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2)
following the prior designation by the other party of an Early Termination
Date, pursuant to Section 6(b)(iv)(2)(A), in respect of less than all Affected Transactions.


(c) Effect of Designation.





(i) If notice designating an Early Termination Date is given under Section 6(a) or 6(b), the
Early Termination Date will occur on the date so designated, whether or not the relevant
Event of Default or Termination Event is then continuing.




(ii) Upon the occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 9(h)(i) in respect of the Terminated
Transactions will be required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early Termination Date will be
determined pursuant to Sections 6(e) and 9(h)(ii).



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(d) Calculations; Payment Date.





(i) Statement. On or as soon as reasonably practicable following the occurrence of
an Early Termination Date, each party will make the calculations on its part, if any, contemplated
by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including any quotations, market data or information from
internal sources used in making such calculations), (2) specifying (except where there are
two Affected Parties) any Early Termination Amount payable and (3) giving details of the
relevant account to which any amount payable to it is to be paid. In the absence of written
confirmation from the source of a quotation or market data obtained in determining a
Close-out Amount, the records of the party obtaining such quotation or market data will be
conclusive evidence of the existence and accuracy of such quotation or market data.




(ii) Payment Date. An Early Termination Amount due in respect of any Early Termination Date
will, together with any amount of interest payable pursuant to Section 9(h)(ii)(2), be
payable (1) on the day on which notice of the amount payable is effective in the case of an
Early Termination Date which is designated or occurs as a result of an Event of Default and
(2) on the day which is two Local Business Days after the day on which notice of the amount
payable is effective (or, if there are two Affected Parties, after the day on which the
statement provided pursuant to clause (i) above by the second party to provide such a
statement is effective) in the case of an Early Termination Date which is designated as a
result of a Termination Event.


(e) Payments on Early Termination. If an Early Termination Date occurs, the amount, if any, payable
in respect of that Early Termination Date (the “Early Termination Amount”) will be determined pursuant to this
Section 6(e) and will be subject to Section 6(f).





(i) Events of Default. If the Early Termination Date results from an Event of Default, the
Early Termination Amount will be an amount equal to (1) the sum of (A) the Termination
Currency Equivalent of the Close-out Amount or Close-out Amounts (whether positive or
negative) determined by the Non-defaulting Party for each Terminated Transaction or group of
Terminated Transactions, as the case may be, and (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Non-defaulting Party less (2) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early Termination
Amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party;
if it is a negative number, the Non-defaulting Party will pay the absolute value of Early
Termination Amount to the Defaulting Party.




(ii) Termination Events. If the Early Termination Date results from a Termination
Event:—




(1) One Affected Parry. Subject to clause (3) below, if there is one Affected Party,
the Early Termination Amount will be determined in accordance with Section 6(e)(i), except that
references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references
to the Affected Party and to the Non-affected Party, respectively.




(2) Two Affected Parties. Subject to clause (3) below, if there are two Affected
Parties, each party will determine an amount equal to the Termination Currency Equivalent of the
sum of the Close-out Amount or Close-out Amounts (whether positive or negative) for each
Terminated Transaction or group of Terminated Transactions, as the case may be, and the Early
Termination Amount will be an amount equal to (A) the sum of (I) one-half of the difference
between the higher amount so determined (by party “X”) and lower amount so determined (by party “Y”) and
(II) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y. If the Early Termination
Amount is a positive number, Y will pay it to X; if it is a negative number, X will pay the
absolute value of the Early Termination Amount to Y.



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(3) Mid-Market Events. If that Termination Event is an Illegality or a Force Majeure
Event, then the Early Termination Amount will be determined in accordance with
clause (1) or (2) above, as appropriate, except that, for the purpose of determining
a Close-out Amount or Close-out Amounts, the Determining Party will:—




(A) if obtaining quotations from one or more third parties (or from any of
the Determining Party’s Affiliates), ask each third party or Affiliate (I) not to
take account of the current creditworthiness of the Determining Party or any existing Credit
Support Document and (II) to provide mid-market quotations; and




(B) in any other case, use mid-market values without regard to the
creditworthiness of the Determining Party.




(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs
because Automatic Early Termination applies in respect of a party, Early Termination Amount
will be subject to such adjustments as are appropriate and permitted by applicable law to
reflect any payments or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).




(iv) Adjustment for Illegality or Force Majeure Event. The failure by a party or any Credit
Support Provider of such party to pay, when due, any Early Termination Amount will not
constitute an Event of Default under Section 5(a)(i) or
5(a)(iii)(1) if such failure is due
to the occurrence of an event or circumstance which would, if it occurred with respect to
payment, delivery or compliance related to a Transaction, constitute or give rise to an
Illegality or a Force Majeure Event. Such amount will (1) accrue interest and otherwise be
treated as an Unpaid Amount owing to the other party if subsequently an Early Termination
Date results from an Event of Default, a Credit Event Upon Merger or an Additional
Termination Event in respect of which all outstanding Transactions are Affected Transactions
and (2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).




(v) Pre-Estimate. The parties agree that an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks, and, except as otherwise provided
in this Agreement, neither party will be entitled to recover any additional damages as a
consequence of the termination of the Terminated Transactions.


(f) Set-Off. Any Early Termination Amount payable to one party (the “Payee”) by the other party
(the “Payer”), in circumstances where there is a Defaulting Party or where there is one Affected
Party in the case where either a Credit Event Upon Merger has occurred or any other Termination
Event in respect of which all outstanding Transactions are Affected Transactions has occurred,
will, at the option of the Non-defaulting Party or the Non-affected Party, as the case may be (“X”)
(and without prior notice to the Defaulting Party or the Affected Party, as the case may be), be
reduced by its set-off against any other amounts (“Other Amounts”) payable by the Payee to the
Payer (whether or not arising under this Agreement, matured or contingent and irrespective of the
currency, place of payment or place of booking of the obligation). To the extent that any Other
Amounts are so set off, those Other Amounts will be discharged promptly and in all respects. X will
give notice to the other party of any set-off effected under this Section 6(f).



For this purpose, either the Early Termination Amount or the Other Amounts (or the relevant
portion of such amounts) may be converted by X into the currency in which the other is denominated
at the rate of exchange at which such party would be able, in good faith and using commercially
reasonable procedures, to purchase the relevant amount of such currency.




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If an obligation is unascertained, X may in good faith estimate that obligation and set off in
respect of the estimate, subject to the relevant party accounting to the other when the obligation
is ascertained.



Nothing in this Section 6(f) will be effective to create a charge or other security interest. This
Section 6(f) will be without prejudice and in addition to any right of set-off, offset, combination
of accounts, lien, right of retention or withholding or similar right or requirement to which any
party is at any time otherwise entitled or subject (whether by operation of law, contract or
otherwise).




7. Transfer



Subject to Section 6(b)(ii) and to the extent permitted by applicable law, neither this Agreement
nor any interest or obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the other party,
except that:—



(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation
with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but
without prejudice to any other right or remedy under this Agreement); and



(b) a party may make such a transfer of all or any part of its interest in any Early Termination
Amount payable to it by a Defaulting Party, together with any amounts payable on or with respect to that interest and
any other rights associated with that interest pursuant to Sections 8, 9(h) and 11.



Any purported transfer that is not in compliance with this Section 7 will be void.




8. Contractual Currency



(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the
relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent
permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except
to the extent such tender results in the actual receipt by the party to which payment is owed, acting in good faith
and using commercially reasonable procedures in converting the currency so tendered into the Contractual Currency, of the
full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in
respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such
excess.



(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a
currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect
of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement
or (iii) in respect of a judgment or order of another court for the payment of any amount described in clause (i) or (ii)
above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled
pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any
shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency
and will refund promptly to the other party any excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation
between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order
for the purpose of such judgment or order and the rate of exchange at which such party is able, acting in good faith
and using




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commercially reasonable procedures in converting the currency received into the Contractual
Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or
order actually received by such party.



(c) Separate Indemnities. To the extent permitted by applicable law, the indemnities in this
Section 8 constitute separate and independent obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to
which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other
sums payable in respect of this Agreement.



(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to
demonstrate that it would have suffered a loss had an actual exchange or purchase been made.




9. Miscellaneous



(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter. Each of the parties acknowledges that in entering into this
Agreement it has not relied on any oral or written representation, warranty or other assurance (except as provided for or referred
to in this Agreement) and waives all rights and remedies which might otherwise be available to it in respect thereof,
except that nothing in this Agreement will limit or exclude any liability of a party for fraud.



(b) Amendments. An amendment, modification or waiver in respect of this Agreement will only be
effective if in writing (including a writing evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging
system.



(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations
of the parties under this Agreement will survive the termination of any Transaction.



(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and
privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law.



(e) Counterparts and Confirmations.


(i) This Agreement (and each amendment, modification and waiver in respect of it) may be
executed and delivered in counterparts (including by facsimile transmission and by
electronic messaging system), each of which will be deemed an
original.


(ii) The parties intend that they are legally bound by the terms of each Transaction from
the moment they agree to those terms (whether orally or otherwise). A Confirmation will be
entered into as soon as practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of telexes, by an
exchange of electronic messages on an electronic messaging system or by an exchange of
e-mails, which in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or through another effective
means that any such counterpart, telex, electronic message or 

e-mail constitutes a Confirmation.


(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect
of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any
right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or
privilege or the exercise of any other right, power or privilege.



(g) Headings. The headings used in this Agreement are for convenience of reference only and are not
to affect the construction of or to be taken into consideration in interpreting this Agreement.




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(h) Interest and Compensation.





(i)
Prior to Early Termination. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction:—




(1) Interest on Defaulted Payments. If a party defaults in the performance of any
payment obligation, it will, to the extent permitted by applicable law and subject to Section
6(c), pay interest (before as well as after judgment) on the overdue amount to the other party on demand
in the same currency as the overdue amount, for the period from (and including) the original due
date for payment to (but excluding) the date of actual payment (and excluding any period in
respect of which interest or compensation in respect of the overdue amount is due pursuant to clause
(3)(B) or (C) below), at the Default Rate.




(2) Compensation for Defaulted Deliveries. If a party defaults in the performance of
any obligation required to be settled by delivery, it will on demand (A) compensate the
other party to the extent provided for in the relevant Confirmation or elsewhere in this Agreement and
(B) unless otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to
the extent permitted by applicable law and subject to Section 6(c), pay to the other party
interest (before as well as after judgment) on an amount equal to the fair market value of that which was
required to be delivered in the same currency as that amount, for the period from (and including)
the originally scheduled date for delivery to (but excluding) the date of actual delivery (and
excluding any period in respect of which interest or compensation in respect of that amount is due
pursuant to clause (4) below), at the Default Rate. The fair market value of any obligation referred to
above will be determined as of the originally scheduled date for delivery, in good faith and using
commercially reasonable procedures, by the party that was entitled to take delivery.




(3) Interest on Deferred Payments. If:—




(A) a party does not pay any amount that, but for Section 2(a)(iii), would
have been payable, it will, to the extent permitted by applicable law and subject to
Section 6(c) and clauses (B) and (C) below, pay interest (before as well as after judgment) on
that amount to the other party on demand (after such amount becomes payable) in the same
currency as that amount, for the period from (and including) the date the amount would,
but for Section 2(a)(iii), have been payable to (but excluding) the date the amount
actually becomes payable, at the Applicable Deferral Rate;




(B) a payment is deferred pursuant to Section 5(d), the party which would
otherwise have been required to make that payment will, to the extent permitted by
applicable law, subject to Section 6(c) and for so long as no Event of Default or Potential
Event of Default with respect to that party has occurred and is continuing, pay interest
(before as well as after judgment) on the amount of the deferred payment to the other party on demand
(after such amount becomes payable) in the same currency as the deferred payment, for the
period from (and including) the date the amount would, but for Section 5(d), have been
payable to (but excluding) the earlier of the date the payment is no longer deferred pursuant
to Section 5(d) and the date during the deferral period upon which an Event of Default or
Potential Event of Default with respect to that party occurs, at the Applicable Deferral Rate;
or




(C) a party fails to make any payment due to the occurrence of an Illegality
or a Force Majeure Event (after giving effect to any deferral period contemplated by
clause (B) above), it will, to the extent permitted by applicable law, subject to Section 6(c)
and for so long as the event or circumstance giving rise to that Illegality or Force Majeure
Event continues and



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no Event of Default or Potential Event of Default with respect to that party has
occurred and is continuing, pay interest (before as well as after judgment) on the
overdue amount to the other party on demand in the same currency as the overdue
amount, for the period from (and including) the date the party fails to make the
payment due to the occurrence of the relevant Illegality or Force Majeure Event
(or, if later, the date the payment is no longer deferred pursuant to Section 5(d))
to (but excluding) the earlier of the date the event or circumstance giving rise to
that Illegality or Force Majeure Event ceases to exist and the date during the
period upon which an Event of Default or Potential Event of Default with respect to
that party occurs (and excluding any period in respect of which interest or
compensation in respect of the overdue amount is due pursuant to clause (B) above),
at the Applicable Deferral Rate.




(4) Compensation for Deferred Deliveries. If:—




(A) a party does not perform any obligation that, but for Section 2(a)(iii), would
have been required to be settled by delivery;




(B) a delivery is deferred pursuant to Section 5(d); or




(C) a party fails to make a delivery due to the occurrence of an Illegality or a
Force Majeure Event at a time when any applicable Waiting Period has expired,




the party required (or that would otherwise have been required) to make the delivery will,
to the extent permitted by applicable law and subject to Section 6(c), compensate and pay
interest to the other party on demand (after, in the case of clauses (A) and (B) above,
such delivery is required) if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.




(ii) Early Termination. Upon the occurrence or effective designation of an Early
Termination Date in respect of a Transaction:—




(1) Unpaid Amounts. For the purpose of determining an Unpaid Amount in respect of the
relevant Transaction, and to the extent permitted by applicable law, interest will accrue
on the amount of any payment obligation or the amount equal to the fair market value of any
obligation required to be settled by delivery included in such determination in the same currency as
that amount, for the period from (and including) the date the relevant obligation was (or would
have been but for Section 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the
relevant Early Termination Date, at the Applicable Close-out Rate.




(2) Interest on Early Termination Amounts. If an Early Termination Amount is due in respect
of such Early Termination Date, that amount will, to the extent permitted by applicable
law, be paid together with interest (before as well as after judgment) on that amount in the Termination
Currency, for the period from (and including) such Early Termination Date to (but excluding) the date
the amount is paid, at the Applicable Close-out Rate.




(iii) Interest Calculation. Any interest pursuant to this Section 9(h) will be calculated on
the basis of daily compounding and the actual number of days elapsed.



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10. Offices; Multibranch Parties



(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to and agrees with the other party that,
notwithstanding the place of booking or its jurisdiction of incorporation or organization, its obligations are the same in
terms of recourse against it as if it had entered into the Transaction through its head or home office, except that a party
will not have recourse to the head or home office of the other party in respect of any payment or delivery deferred pursuant
to Section 5(d) for so long as the payment or delivery is so deferred. This representation and agreement will be deemed
to be repeated by each party on each date on which the parties enter into a Transaction.



(b) If a party is specified as a Multibranch Party in the Schedule, such party may, subject to
clause (c) below, enter into a Transaction through, book a Transaction in and make and receive payments and
deliveries with respect to a Transaction through any Office listed in respect of that party in the Schedule (but not any other
Office unless otherwise agreed by the parties in writing).



(c) The Office through which a party enters into a Transaction will be the Office specified for
that party in the relevant Confirmation or as otherwise agreed by the parties in writing, and, if an Office for that
party is not specified in the Confirmation or otherwise agreed by the parties in writing, its head or home office. Unless
the parties otherwise agree in writing, the Office through which a party enters into a Transaction will also be the
Office in which it books the Transaction and the Office through which it makes and receives payments and deliveries with
respect to the Transaction. Subject to Section 6(b)(ii), neither party may change the Office in which it books
the Transaction or the Office through which it makes and receives payments or deliveries with respect to a Transaction
without the prior written consent of the other party.




11. Expenses



A Defaulting Party will,- on demand,- indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees, execution fees and Stamp Tax,
incurred by such other party by reason of the enforcement and protection of its rights under this
Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of
the early termination of any Transaction, including, but not limited to, costs of collection.




12. Notices



(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in
any manner described below (except that a notice or other communication under Section 5 or 6 may
not be given by -electronic messaging system or e-mail) to the address or number or in accordance
with the electronic messaging system or e-mail details provided (see the Schedule) and will be
deemed effective as indicated:—





(i) if in writing and delivered in person or by courier, on the date it is delivered;




(ii) if sent by telex, on the date the recipient’s answerback is received;




(iii) if sent by facsimile transmission, on the date it is received by a responsible
employee of the recipient in legible form (it being agreed that the burden of proving
receipt will be on the sender and will not be met by a transmission report generated by the
sender’s facsimile machine);




(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date it is delivered or its delivery is attempted;




(v) if sent by electronic messaging system, on the date it is received; or



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(vi) if sent by e-mail, on the date it is delivered,


unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that communication will be
deemed given and effective on the first following day that is a Local Business Day.



(b) Change of Details. Either party may by notice to the other change the address, telex or
facsimile number or electronic messaging system or e-mail details at which notices or other
communications are to be given to it.




13. Governing Law and Jurisdiction



(a) Governing Law. This Agreement will be governed by and construed in accordance with the law
specified in the Schedule.



(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising
out of or in connection with this Agreement (“Proceedings”), each party irrevocably:—





(i) submits:—




(1) if this Agreement is expressed to be governed by English law, to (A) the
non-exclusive jurisdiction of the English courts if the Proceedings do not involve a Convention
Court and (B) the exclusive jurisdiction of the English courts if the Proceedings do involve a
Convention Court; or




(2) if this Agreement is expressed to be governed by the laws of the State of New
York, to the non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City;




(ii) waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have any jurisdiction over such party-; and




(iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings
in any one or more jurisdictions will not preclude the bringing of Proceedings in any other
jurisdiction.


(c) Service of Process. Each party irrevocably appoints the Process Agent, if any, specified
opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for
any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within
30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this
Agreement will affect the right of either party to serve process in any other manner permitted by applicable law.



(c)
Waiver of Immunities. Each party irrevocably waives, to the extent permitted by applicable law,
with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on
the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court,
(iii) relief by way of injunction or order for specific performance or recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in
the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law,
that it will not claim any such immunity in any Proceedings.




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14. Definitions



As used in this Agreement:—



“Additional Representation ” has the meaning specified in Section 3.



“Additional Termination Event” has the meaning specified in Section 5(b).



“Affected Party” has the meaning specified in Section 5(b).



“Affected Transactions” means (a) with respect to any Termination Event consisting of an
Illegality, Force Majeure Event, Tax Event or Tax Event Upon Merger, all Transactions affected by
the occurrence of such Termination Event (which, in the case of an Illegality under Section
5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means all Transactions unless the
relevant Credit Support Document references only certain Transactions, in which case those
Transactions and, if the relevant Credit Support Document constitutes a Confirmation for a
Transaction, that Transaction) and (b) with respect to any other Termination Event, all
Transactions.



“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or indirectly, the person
or any entity directly or indirectly under common control with the person. For this purpose,
“control” of any entity or person means ownership of a majority of the voting power of the entity
or person.



“Agreement” has the meaning specified in Section 1(c).



“Applicable Close-out Rate” means:—




(a) in respect of the determination of an Unpaid Amount: —





(i) in respect of obligations payable or deliverable (or which would have been but
for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;




(ii) in respect of obligations payable or deliverable (or which would have been but
for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate;




(iii) in respect of obligations deferred pursuant to Section 5(d), if there is no
Defaulting Party and for so long as the deferral period continues, the Applicable Deferral
Rate; and




(iv) in all other cases following the occurrence of a Termination Event (except where
interest accrues pursuant to clause (iii) above), the Applicable Deferral Rate; and



(b) in respect of an Early Termination Amount:—





(i) for the period from (and including) the relevant Early Termination Date to (but
excluding) the date
(determined in accordance with Section 6(d)(ii)) on which that amount is payable:—




(1) if the Early Termination Amount is payable by a Defaulting Party, the Default
Rate;




(2) if the Early Termination Amount is payable by a Non-defaulting Party, the
Non-default Rate; and




(3) in all other cases, the Applicable Deferral Rate; and



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(ii) for the period from (and including) the date (determined in accordance with
Section 6(d)(ii)) on which that amount is payable to (but excluding) the date of actual
payment:—




(1) if a party fails to pay the Early Termination Amount due to the occurrence of an
event or circumstance which would, if it occurred with respect to a payment or delivery under
a Transaction, constitute or give rise to an Illegality or a Force Majeure Event, and for so long as
the Early Termination Amount remains unpaid due to the continuing existence of such event or
circumstance, the Applicable Deferral Rate;




(2) if the Early Termination Amount is payable by a Defaulting Party (but excluding
any period in respect of which clause (1) above applies), the Default Rate;




(3) if the Early Termination Amount is payable by a Non-defaulting Party (but
excluding any period in respect of which clause (1) above applies), the Non-default Rate; and




(4) in all other cases, the Termination Rate.


“Applicable Deferral Rate” means:—



(a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer to be a rate
offered to the payer by a major bank in a relevant interbank market for overnight deposits in the applicable
currency, such bank to be selected in good faith by the payer for the purpose of obtaining a representative rate that will
reasonably reflect conditions prevailing at the time in that relevant market;



(b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of Applicable
Close-out Rate, the rate certified by the relevant payer to be a rate offered to prime banks by a major bank in a relevant
interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by the payer
after consultation with the other party, if practicable, for the purpose of obtaining a representative rate that will
reasonably reflect conditions prevailing at the time in that relevant market; and



(c) for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(l) of the
definition of Applicable Close-out Rate, a rate equal to the arithmetic mean of the rate determined pursuant to clause (a)
above and a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as
certified by it) if it were to fund or of funding the relevant amount.



“Automatic Early Termination” has  the meaning specified in Section 6(a).



“Burdened Party” has the meaning specified in Section 5(b)(iv).



“Change in Tax Law”  means the enactment, promulgation, execution or ratification of, or any change
in or amendment to, any law (or in the application or official interpretation of any law) that
occurs after the parties enter into the relevant Transaction.



“Close-out Amount” means, with respect to each Terminated Transaction or each group of Terminated
Transactions and a Determining Party, the amount of the losses or costs of the Determining Party
that are or would be incurred under then prevailing circumstances (expressed as a positive number)
or gains of the Determining Party that are or would be realized under then prevailing circumstances
(expressed as a negative number) in replacing, or in providing for the Determining Party the
economic equivalent of, (a) the material terms of that Terminated Transaction or group of
Terminated Transactions, including the payments and deliveries by the parties under Section 2(a)(i)
in respect of that Terminated Transaction or group of Terminated Transactions that would, but for
the occurrence of the relevant Early Termination Date, have been required after that date (assuming
satisfaction of the conditions precedent in




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Section 2(a)(iii)) and (b) the option rights of the parties in respect of that Terminated
Transaction or group of Terminated Transactions.



Any Close-out Amount will be determined by the Determining Party (or its agent), which will act in
good faith and use commercially reasonable procedures in order to produce a commercially
reasonable result. The Determining Party may determine a Close-out Amount for any group of
Terminated Transactions or any individual Terminated Transaction but, in the aggregate, for not
less than all Terminated Transactions. Each Close-out Amount will be determined as of the Early
Termination Date or, if that would not be commercially reasonable, as of the date or dates
following the Early Termination Date as would be commercially reasonable.



Unpaid Amounts in respect of a Terminated Transaction or group of Terminated Transactions and
legal fees and out-of-pocket expenses referred to in Section 11 are to be excluded in all
determinations of Close-out Amounts.



In determining a Close-out Amount, the Determining Party may consider any relevant information,
including, without limitation, one or more of the following types of information:—



(i) quotations (either firm or indicative) for replacement transactions supplied by one or more
third parties that may take into account the creditworthiness of the Determining Party at the time
the quotation is provided and the terms of any relevant documentation, including credit support
documentation, between the Determining Party and the third party providing the quotation;



(ii) information consisting of relevant market data in the relevant market supplied by one or more
third parties including, without limitation, relevant rates, prices, yields, yield curves,
volatilities, spreads, correlations or other relevant market data in the relevant market; or



(iii) information of the types described in clause (i) or (ii) above from internal sources
(including any of the Determining Party’s Affiliates) if that information is of the same type used
by the Determining Party in the regular course of its business for the valuation of similar
transactions.



The Determining Party will consider, taking into account the standards and procedures described in
this definition, quotations pursuant to clause (i) above or relevant market data pursuant to
clause (ii) above unless the Determining Party reasonably believes in good faith that such
quotations or relevant market data are not readily available or would produce a result that would
not satisfy those standards. When considering information described in clause (i), (ii) or (iii)
above, the Determining Party may include costs of funding, to the extent costs of funding are not
and would not be a component of the other information being utilized. Third parties supplying
quotations pursuant to clause (i) above or market data pursuant to clause (ii) above may include,
without limitation, dealers in the relevant markets, end-users of the relevant product,
information vendors, brokers and other sources of market information.



Without duplication of amounts calculated based on information described in clause (i), (ii) or
(iii) above, or other relevant information, and when it is commercially reasonable to do so, the
Determining Party may in addition consider in calculating a Close-out Amount any loss or cost
incurred in connection with its terminating, liquidating or reestablishing any hedge related to a
Terminated Transaction or group of Terminated Transactions (or any gain resulting from any of
them).



Commercially reasonable procedures used in determining a Close-out Amount may include the
following:—



(1) application to relevant market data from third parties pursuant to clause (ii) above or
information from internal sources pursuant to clause (iii) above of pricing or other valuation
models that are, at the time of the determination of the Close-out Amount, used by the Determining
Party in the regular course of its business in pricing or valuing transactions between the
Determining Party and unrelated third parties that are similar to the Terminated Transaction or
group of Terminated Transactions; and




ISDA® 2002





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(2) application of different valuation methods to Terminated Transactions or groups of Terminated
Transactions depending on the type, complexity, size or number of the Terminated Transactions or
group of Terminated Transactions.



“Confirmation” has the meaning specified in the preamble.



“consent” includes a consent, approval, action, authorization, exemption, notice, filing,
registration or exchange control consent.



“Contractual Currency” has the meaning specified in Section 8(a).



“Convention Court” means any court which is bound to apply to the Proceedings either Article 17 of
the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters or Article 17 of the 1988 Lugano Convention on Jurisdiction and the Enforcement
of Judgments in Civil and Commercial Matters.



“Credit Event Upon Merger” has the meaning specified in Section 5(b).



“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.



“Credit Support Provider” has the meaning specified in the Schedule.



“Cross-Default” means the event specified in Section 5(a)(vi).



“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual
cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.



“Defaulting Party”  has the meaning specified in Section 6(a).



“Designated Event” has the meaning specified in Section 5(b)(v).



“Determining Party” means the party determining a Close-out Amount.



“Early Termination Amount” has the meaning specified in Section 6(e).



“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).



“electronic messages” does not include e-mails but does include documents expressed in markup
languages, and “electronic messaging system ” will be construed accordingly.



“English law” means the law of England and Wales, and “English” will be construed
accordingly.



“Event of Default” has the meaning specified in Section 5(a) and, if
applicable, in the Schedule. 



“Force Majeure Event”  has the meaning specified in
Section 5(b).



“General Business Day” means a day on which commercial banks are open for general business
(including dealings in foreign exchange and foreign currency deposits).



“Illegality” has the meaning specified in Section 5(b).




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“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a
payment under this Agreement but for a present or former connection between the jurisdiction of
the government or taxation authority imposing such Tax and the recipient of such payment or a
person related to such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such jurisdiction, or
being or having been organised, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in such jurisdiction,
but excluding a connection arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or enforced, this Agreement or a
Credit Support Document).



“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by
the practice of any relevant governmental revenue authority), and “unlawful” will be construed
accordingly.



“Local Business Day” means (a) in relation to any obligation under Section 2(a)(i), a General
Business Day in the place or places specified in the relevant Confirmation and a day on which a
relevant settlement system is open or operating as specified in the relevant Confirmation or, if a
place or a settlement system is not so specified, as otherwise agreed by the parties in writing or
determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b)
for the purpose of determining when a Waiting Period expires, a General Business Day in the place
where the event or circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a General Business Day in
the place where the relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment and, if that currency does not have a single
recognized principal financial centre, a day on which the settlement system necessary to
accomplish such payment is open, (d) in relation to any notice or other communication, including
notice contemplated under Section 5(a)(i), a General Business Day (or a day that would have been a
General Business Day but for the occurrence of an event or circumstance which would, if it
occurred with respect to payment, delivery or compliance related to a Transaction, constitute or
give rise to an Illegality or a Force Majeure Event) in the place specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the
place where the relevant new account is to be located and (de) in relation to Section 5(a)(v)(2),
a General Business Day in the relevant locations for performance with respect to such Specified
Transaction.



“Local Delivery Day” means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement
systems necessary to accomplish the relevant delivery are generally open for business so that the
delivery is capable of being accomplished in accordance with customary market practice, in the
place specified in the relevant Confirmation or, if not so specified, in a location as determined
in accordance with customary market practice for the relevant delivery.



“Master
Agreement” has the meaning specified in the preamble.



“Merger Without Assumption” means the event specified in Section 5(a)(viii).



“Multiple Transaction Payment Netting” has the meaning specified in Section
2(c).


“Non-affected Party” means, so long as there is only one Affected
Party, the other party.



“Non-default Rate” means the rate certified by the Non-defaulting Party to be a rate offered to
the Non-defaulting Party by a major bank in a relevant interbank market for overnight deposits in
the applicable currency, such bank to be selected in good faith by the Non-defaulting Party for
the purpose of obtaining a representative rate that will reasonably reflect conditions prevailing
at the time in that relevant market.



“Non-defaulting Party” has the meaning specified in Section 6(a).



“Office” means a branch or office of a party, which may be such party’s head or home office.



“Other Amounts” has the meaning specified in Section 6(f).




ISDA® 2002




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“Payee” has the meaning specified in Section 6(f).



“Payer” has  the meaning specified in Section 6(f).



“Potential Event of Default” means any event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.



“Proceedings” has the meaning specified in Section
13(b).



“Process Agent” has the meaning specified in
the Schedule.



“rate of exchange” includes, without limitation, any premiums and costs of exchange payable in
connection with the purchase of or conversion into the Contractual Currency.



“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party
is incorporated, organised, managed and controlled or considered to have its seat, (b) where an
Office through which the party is acting for purposes of this Agreement is located, (c) in which
the party executes this Agreement and (d) in relation to any payment, from or through which such
payment is made.



“Schedule” has the meaning specified in the preamble.



“Scheduled Settlement Date” means a date on which a payment or delivery is to be made under
Section 2(a)(i) with respect to a Transaction.



“Specified Entity” has the meaning specified in the Schedule.



“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed
money.



“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement
with respect to any such transaction) now existing or hereafter entered into between one party to
this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of
such party) and the other party to this Agreement (or any Credit Support Provider of such other
party or any applicable Specified Entity of such other party) which is not a Transaction under this
Agreement but (i) which is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction,
currency option, credit protection transaction, credit swap, credit default swap, credit default
option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase
transaction, buy/sell-back transaction, securities lending transaction, weather index transaction
or forward purchase or sale of a security, commodity or other financial instrument or interest
(including any option with respect to any of these transactions) or (ii) which is a type of
transaction that is similar to any transaction referred to in clause (i) above that is currently,
or in the future becomes, recurrently entered into in the financial markets (including terms and
conditions incorporated by reference in such agreement) and which is a forward, swap, future,
option or other derivative on one or more rates, currencies, commodities, equity securities or
other equity instruments, debt securities or other debt instruments, economic indices or measures
of economic risk or value, or other benchmarks against which payments or deliveries are to be made,
(b) any combination of these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.



“Stamp Tax” means any stamp, registration, documentation or
similar tax.



“Stamp Tax Jurisdiction” has the meaning specified
in Section 4(e).




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“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by any government or
other taxing authority in respect of any payment under this Agreement other than a stamp,
registration, documentation or similar tax.



“Tax Event” has the meaning specified in Section 5(b).



“Tax Event Upon Merger” has the meaning specified in Section 5(b).



“Terminated Transactions” means, with respect to any Early Termination Date, (a) if resulting from
an Illegality or a Force Majeure Event, all Affected Transactions specified in the notice given
pursuant to Section 6(b)(iv), (b) if resulting from any other Termination Event, all Affected
Transactions and (c) if resulting from an Event of Default, all Transactions in effect either
immediately before the effectiveness of the notice designating that Early Termination Date or, if
Automatic Early Termination applies, immediately before that Early Termination Date.



“Termination Currency” means (a) if a Termination Currency is specified in the Schedule and that
currency is freely available, that currency, and (b) otherwise, Euro if this Agreement is
expressed to be governed by English law or United States Dollars if this Agreement is expressed to
be governed by the laws of the State of New York.



“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination
Currency, such Termination Currency amount and, in respect of any amount denominated in a currency
other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency
determined by the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant
Close-out Amount is determined as of a later date, that later date, with the Termination Currency
at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at or about 11:00
a.m. (in the city in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other Currency for value
on the relevant Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be selected in good faith by
that party and otherwise will be agreed by the parties.



“Termination Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination
Event.



“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof
or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of
funding such amounts.



“Threshold Amount” means the amount, if any, specified as such in the
Schedule.



“Transaction” has the meaning specified in the preamble.



“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the
aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or
that would have become payable but for Section 2(a)(iii) or due but for Section 5(d)) to such
party under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early Termination Date and which
remain unpaid as at such Early Termination Date, (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)
or 5(d)) required to be settled by delivery to such party on or prior to such Early Termination
Date and which has not been so settled as at such Early Termination Date, an amount equal to the
fair market value of that which was (or would have been) required to be delivered and (c) if the
Early Termination Date results from an Event of Default, a Credit Event Upon Merger or an
Additional Termination Event in respect of which all outstanding Transactions are Affected
Transactions, any Early Termination Amount due prior to such Early Termination Date and which
remains unpaid as




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of such Early Termination Date, in each case together with any amount of interest accrued or other
compensation in respect of that obligation or deferred obligation, as the case may be, pursuant to
Section 9(h)(ii)(l) or (2), as appropriate. The fair market value of any obligation referred to in
clause (b) above will be determined as of the originally scheduled date for delivery, in good
faith and using commercially reasonable procedures, by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it will be the average of the Termination
Currency Equivalents of the fair market values so determined by both parties.




“Waiting Period” means:—



(a) in respect of an event or circumstance under Section 5(b)(i), other than in the case of Section
5(b)(i)(2) where the relevant payment, delivery or compliance is actually required on the relevant day (in which
case no Waiting Period will apply), a period of three Local Business Days (or days that would have been Local Business
Days but for the occurrence of that event or circumstance) following the occurrence of that event or circumstance;
and



(b) in respect of an event or circumstance under Section 5(b)(ii), other than in the case of
Section 5(b)(ii)(2) where the relevant payment, delivery or compliance is actually required on the relevant day (in
which case no Waiting Period will apply), a period of eight Local Business Days (or days that would have been Local
Business Days but for the occurrence of that event or circumstance) following the occurrence of that event or
circumstance.



IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.




	 	 	 	 	 	 	 	 	 	 	 
	MORGAN STANLEY CAPITAL SERVICES INC.	 	MITEL US HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven T. Naftzger
 

Name: Steven T. Naftzger
	 	 	 	By:
	 	/s/ Greg Hiscock
 

Name: Greg Hiscock
	 	 
	 

	 	Title: Authorized Signator
	 	 	 	 	 	Title: Secretary/Treasurer	 	 
	 

	 	Date: Nov 27 2007
	 	 	 	 	 	Date: Dec 12/07	 	 






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SCHEDULE

to the

2002 MASTER AGREEMENT




dated as of August 27,2007




between




MORGAN STANLEY CAPITAL SERVICES INC.

a Delaware corporation

(“Party A”)




and




MITEL US HOLDINGS, INC.

a Delaware corporation

(“Party B”)





Part 1. Termination Provisions.




	 	 	 	 	 
	(a)

	 	“Specified Entity” means in relation to Party A for the purpose of:	 	 
	 
	 	 	 	 
	 

	 	Section 5(a)(v) (Default Under Specified Transaction)
	 	Affiliates
	 
	 	 	 	 
	 

	 	Section 5(a)(vi) (Cross Default)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(a)(vii) (Bankruptcy)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(b)(v) (Credit Event Upon Merger)
	 	None Specified
	 
	 	 	 	 
	 

	 	and in relation to Party B for the purpose of:	 	 
	 
	 	 	 	 
	 

	 	Section 5(a)(v) (Default Under Specified Transaction)
	 	Affiliates
	 
	 	 	 	 
	 

	 	Section 5(a)(vi) (Cross Default)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(a)(vii) (Bankruptcy)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(b)(v) (Credit Event upon Merger)
	 	None Specified






(b) “Specified Transaction” shall have the meaning specified in Section 14 of this
Agreement




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	(c)	 	“Cross Default” applies to Party A and Party B.
	 
	 	 	“Specified Indebtedness” has the meaning specified in Section 14 of this Agreement. In
addition, with respect to Party B, “Specified Indebtedness” shall include, without
limitation, the obligations of Party B under that certain Credit Agreement dated as of
August 16, 2007, made by and between Party B, Mitel Networks Corporation., Mitel Networks,
Inc., Arsenal Acquisition Corporation, Morgan Stanley Senior Funding, Inc., as U.S.
Administrative Agent, Morgan Stanley & Co. Incorporated, as Collateral Agent, Morgan
Stanley Senior Funding (Nova Scotia) Co. as Canadian Administrative Agent, Morgan Stanley
Senior Funding, Inc., Morgan Stanley Senior Funding (Nova Scotia) Co, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Syndication Agents and Arrangers, and the other
Lenders party thereto, as the same may be amended, modified, supplemented or replaced from
time to time (the “Credit Agreement”) (and to which other lenders, borrowers or other
persons may be or become party).
	 
	 	 	“Threshold Amount” means, with respect to a party, an amount equal to USD 20,000,000 (or
the equivalent in another currency, currency unit or combination thereof as reasonably
determined by the other party as of that date).






	(d)	 	Bankruptcy. Section 5(a)(vii) is hereby amended by replacing the number “15” with the
number “30” in lines 15 and 23 thereof.
	 
	(e)	 	“Credit Event Upon Merger” applies to Party A and Party B.
	 
	(f)	 	The “Automatic Early Termination” provision of Section 6(a) of this Agreement will not apply
to Party A and will not apply to Party B.
	 
	(g)	 	“Termination Currency” means United States Dollars (“USD”).
	 
	(h)	 	Additional Termination Events will apply. The following will constitute an
Additional Termination Event, where Party B shall be the Affected Party and all Transactions
shall be Affected Transactions:
	 
	 	 	If (A) Party A is no longer (x) a Secured Party (as defined below) with rights to
share on a pro rata and pari passu basis with the Lenders, in connection with the
Lenders’ right to receive payments of principal under the Credit Agreement, in the
proceeds of the collection or sale of any Collateral (as defined below) or (y) a
beneficiary under any guaranty issued for the benefit of the Secured Parties, in
each case as a result of actions taken without Party A’s consent; provided, however,
that the foregoing shall not constitute an Additional Termination Event if,
contemporaneously with any such events, Party B shall have executed an ISDA Credit
Support Annex or arranged for other credit support, in either case for the benefit
of Party A and on terms and conditions reasonably satisfactory to Party A.
	 
	 	 	The following terms shall have the meanings set forth below for purposes of this clause
(G):






     “Collateral” means any collateral pledged to the Secured Parties under the
Collateral Documents.




     “Collateral Documents” means the Credit Agreement and any of the related security,
pledge, guaranty or other collateral agreements.




     “Lender” means any lender under the Credit Agreement holding the most senior
security interest in the Collateral relative to the other Secured Parties.




     “Loan” means any loan made by a Lender to a borrower under the Credit
Agreement.




     “Secured Party” means a secured party under the Collateral Documents.



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Part 2. Representations.





	(a)	 	Party A and Party B Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, each of Party A and Party B makes the following representation:
	 
	 	 	It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under
Section 9(h) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on: (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Sections 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided by the other
party pursuant to Sections 4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d) of this
Agreement, except that it will not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or
commercial position.






	(b)	 	Party A and Party B Payee Tax Representations.
	 
	(i)	 	For the purpose of Section 3(f) of this Agreement, Party A makes the
following representation: it is a U.S. corporation duly organized and incorporated under the
laws of the State of Delaware (and is therefore a “US Person as such term is used in
Section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) and is an exempt
recipient under Section 1.6049-4(c)(l)(ii) of the United States Treasury Regulations.
	 
	(ii)	 	For the purpose of Section 3(f) of this Agreement, Party B makes the following
representation: it is a U.S. corporation duly organized and incorporated under the
laws of the State of Delaware (and is therefore a “US Person as such term is used in
Section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) and is an exempt
recipient under Section 1.6049-4(c)(l)(ii) of the United States Treasury Regulations.






Part 3. Agreement to Deliver Documents.



For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents, as applicable:





	(a)	 	Tax forms, documents or certificates to be delivered are:





	 	 	 	 	 
	Party required	 	 	 	 
	to deliver	 	 	 	 
	document	 	Form/Document/Certificate	 	Date by which to be delivered
	Party A and
Party B

	 	An original
executed United
States Internal Revenue
Service Form W-9 (or any
successor thereto) with
respect to any payments
received or to be
received by Party A or
Party B, as the case may
be, that are not
effectively connected
or otherwise
attributable to such
Party’s conduct of a
trade or business in the
United States.
	 	(i) Upon the execution of
this Agreement; (ii)promptly upon reasonable
demand by Party A or Party
B, as applicable; and (iii)
promptly upon any Form W-9
(or any successor thereto)
previously provided by Party
B becoming obsolete,
incorrect, or expired.






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(b) Other documents to be delivered are:




	 	 	 	 	 	 	 
	 	 	 	 	 	 	Covered by
	Party required to	 	 	 	 	 	Section 3(d)
	Deliver document	 	Form/Document/Certificate	 	Date by which to be delivered	 	Representation
	Party A and Party B
	 	Either (i) a signature booklet
	 	Upon  execution  of  this
	 	Yes
	 

	 	containing a secretary’s
	 	Agreement and as deemed	 	 
	 

	 	certificate and resolutions
	 	necessary  for  any  further	 	 
	 

	 	(“authorizing resolutions”) or (ii)
	 	documentation.	 	 
	 

	 	other authority documentation,	 	 	 	 
	 

	 	in either case, which (x)	 	 	 	 
	 

	 	authorizes the party to enter into	 	 	 	 
	 

	 	derivatives transactions of the	 	 	 	 
	 

	 	type contemplated by the parties	 	 	 	 
	 

	 	and (y) is reasonably satisfactory	 	 	 	 
	 

	 	in form and substance to the	 	 	 	 
	 

	 	other party.	 	 	 	 
	 
	 	 	 	 	 	 
	Party A and Party B

	 	Certified copies of documents
	 	As soon as practicable after the
	 	Yes
	 

	 	evidencing each party’s capacity
	 	execution of this Agreement,	 	 
	 

	 	to execute this Agreement, each
	 	and, with respect to a	 	 
	 

	 	Confirmation and any Credit
	 	Confirmation, upon the other	 	 
	 

	 	Support Document (if applicable)
	 	party’s request.	 	 
	 

	 	and to perform its obligations	 	 	 	 
	 

	 	hereunder and thereunder.	 	 	 	 
	 
	 	 	 	 	 	 
	Party A and Party B

	 	A copy of the annual report of
	 	As soon as practicable after the
	 	Yes
	 

	 	such party (in the case of Party
	 	execution of this Agreement and	 	 
	 

	 	A, in respect of Morgan Stanley)
	 	also within 120 calendar days	 	 
	 

	 	containing audited consolidated
	 	after the end of each fiscal year	 	 
	 

	 	financial statements for each such
	 	while there are any obligations	 	 
	 

	 	fiscal year, certified by
	 	outstanding under this	 	 
	 

	 	independent certified public
	 	Agreement.	 	 
	 

	 	accountants and prepared in	 	 	 	 
	 

	 	accordance with generally	 	 	 	 
	 

	 	accepted accounting principles in	 	 	 	 
	 

	 	the country in which such party	 	 	 	 
	 

	 	is organized.	 	 	 	 
	 
	 	 	 	 	 	 
	Party A
	 	A duly executed copy of the
	 	As soon as practicable after the
	 	No
	 

	 	Credit  Support  Document
	 	execution of this Agreement.	 	 
	 

	 	specified in Part 4 of this	 	 	 	 
	 

	 	Schedule.	 	 	 	 
	 
	 	 	 	 	 	 
	Party B

	 	Written notice prior to the
	 	At least 15 days prior to such
	 	Yes
	 

	 	prepayment in full of the Loans
	 	prepayment or release	 	 
	 

	 	or release of any Collateral	 	 	 	 
	 

	 	(other than with respect to any	 	 	 	 
	 

	 	Collateral released pursuant to	 	 	 	 
	 

	 	Section 7.2.11 of the Credit	 	 	 	 
	 

	 	Agreement).	 	 	 	 






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	 	 	 	 	 	 	Covered by
	Party required to	 	 	 	 	 	Section 3(d)
	Deliver document	 	Form/Document/Certificate	 	Date by which to be delivered	 	Representation
	Party A and Party B
	 	Such other documents as
	 	Upon request
	 	No
	 

	 	the other party may	 	 	 	 
	 

	 	reasonably request.	 	 	 	 







Part 4. Miscellaneous.





	(a)	 	Addresses for Notices. For the purpose of Section 12(a) of
this Agreement:





	 	 	 	 	 
	 

	 	(i)
	 	Address for notices or communications to Party A:
	 
	 	 	 	 
	 

	 	 	 	MORGAN STANLEY CAPITAL SERVICES INC.
	 

	 	 	 	1585 Broadway
	 

	 	 	 	New York, New York 10036-8293
	 

	 	 	 	Attention: CHIEF LEGAL OFFICER
	 

	 	 	 	Telephone No.: +1 212 761 4000
	 

	 	 	 	Facsimile No: +1 212 507 4622
	 
	 	 	 	 
	 

	 	 	 	United States taxpayer identification number: 13-3292567.
	 
	 	 	 	 
	 

	 	(ii)
	 	Address for notices or communications to Party B:
	 
	 	 	 	 
	 

	 	 	 	MITEL US HOLDINGS, INC.350 Legget Drive
	 

	 	 	 	Kanata, Ontario, K2K 2W7
	 

	 	 	 	Canada
	 

	 	 	 	Attention: TREASURER
	 

	 	 	 	Telephone No.: 613 592-2122
	 

	 	 	 	Facsimile No.: 613 592-7838
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	MITEL US HOLDINGS , INC
	 

	 	 	 	350 Legget Drive
	 

	 	 	 	Kanata, Ontario, K2K 2W7
	 

	 	 	 	Canada
	 

	 	 	 	Attention: LEGAL DEPARTMENT
	 

	 	 	 	Facsimile No.: 613 592-7802
	 
	 	 	 	 
	 

	 	 	 	Government / taxpayer identification number: 753249676






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	(b)	 	Process Agent. For the purpose of Section 13(c) of this Agreement:






	 	 	 	 	 
	 

	 	(i)
	 	Party A irrevocably appoints as its Process Agent:
	 
	 	 	 	 
	 

	 	 	 	MORGAN STANLEY CAPITAL SERVICES INC.
	 

	 	 	 	1585 Broadway
	 

	 	 	 	New York, New York 10036-8293
	 

	 	 	 	Attention: CHIEF LEGAL OFFICER
	 
	 	 	 	 
	 

	 	(ii)
	 	Party B irrevocably appoints as its Process Agent:
	 
	 	 	 	 
	 

	 	 	 	CT CORPORATION SYSTEM
	 

	 	 	 	111 Eighth Avenue
	 

	 	 	 	New York, New York 10016:







	(c)	 	Offices. The provisions of Section 10(a) of this Agreement will apply to Party A and to Party
B.
	 
	(d)	 	Multibranch Party. For the purpose of Section 10(c) of this Agreement:
	 
	 	 	Party A is not a Multibranch Party.
	 
	 	 	Party B is not a Multibranch Party.
	 
	(e)	 	“Calculation Agent” means Party A, unless
Party)’ A is in an Event of Default, in which case a
mutually acceptable third party dealer will be appointed by the parties hereto.
	 
	(f)	 	“Credit Support Document” means any credit support annex, and any other document, any of
which by its terms secures, guarantees or otherwise supports either party’s’ obligations under
this Agreement, including, but not limited to, in the case of Party A, the guarantee of Morgan
Stanley ; and, in the case of Party B, the Collateral Documents and any agreement or
instrument as set forth in the Credit Agreement, now or hereafter existing, of any kind or
nature which secures, guarantees or otherwise provides direct or indirect assurance of payment
or performance of any existing or future obligation of Party B under this Agreement, made by
or on behalf of any person or entity (including, without limiting the generality of the
foregoing, any agreement or instrument granting any lien, security interest, assignment,
charge or encumbrance to secure any such obligation, any guaranty, suretyship, letter of
credit, put option or subordination agreement relating to any such obligation and any “keep
well” or other financial support agreement relating to Party B, including but not limited to
those certain Loan Documents (as such term is defined in the Credit Agreement) (collectively,
the “Party B CSD”).
	 
	(g)	 	“Credit Support Provider” means in relation to Party A: Morgan Stanley, a Delaware company.
	 
	 	 	“Credit Support Provider” means in relation to Party B: Any party executing or delivering
any Parry BCSD.
	 
	(h)	 	Governing Law; Jurisdiction. Sections 13(a) and (b) of the Agreement shall be
deleted and replaced with the following:
	 
	 	 	“(a) Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York.






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(b) Jurisdiction. With respect to any suit, action or proceedings relating to any dispute
arising out of or in connection with this Agreement (“Proceedings”), each party:




(i) irrevocably submits to the exclusive jurisdiction of the courts of the State of
New
York and the United States District Court located in the Borough of Manhattan in
New York City of the State of New York; and




(ii) waives any objection which it may have at any time to the laying of venue of
any Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not have any jurisdiction
over such party.”




	(i)	 	Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any Proceedings relating to this
Agreement or any Credit Support Document.
	 
	(j)	 	Netting of Payments. “Multiple Transaction Payment Netting” will apply for the purpose of
Section 2(c) of this Agreement to all Transactions under this Agreement.
	 
	(k)	 	“Affiliate” has the meaning specified in Section 14 of this Agreement, but excludes
Morgan Stanley Derivative Products Inc.
	 
	(1)	 	Absence of Litigation. For the purpose of Section 3(c) of this Agreement “Specified
Entity” shall mean Affiliates in relation to both parties.
	 
	(m)	 	No Agency. The provisions of Section 3(g) will apply to this Agreement.
	 
	(n)	 	Additional Representation will apply. For the purpose of Section 3 of this
Agreement the following Section 3(h) will constitute an Additional Representation:
	 
	 	 	“(h)Relationship Between Parties. Each party will be deemed to represent to the other
party on the date on which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the contrary for
that Transaction):






(1) Non-Reliance. It is acting for its own account, and it has made its own
independent
decisions to enter into that Transaction and as to whether that Transaction is
appropriate or
proper for it based upon its own judgment and upon advice from such advisers as it
has
deemed necessary. It is not relying on any communication (written or oral) of the
other party
as investment advice or as a recommendation to enter into that Transaction; it
being
understood that information and explanations related to the terms and conditions of
a
Transaction shall not be considered investment advice or a recommendation to enter
into that
Transaction. No communication (written or oral) received from the other party
shall be
deemed to be an assurance or guarantee as to the expected results of that
Transaction;




(2) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional
advice), and
understands and accepts, the terms, conditions and risks of that Transaction. It is
also capable
of assuming, and assumes, the risks of that Transaction; and




(3) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it
in respect of that Transaction.”






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	(o)	 	Recording of Conversations. Each party (i) consents to the recording of telephone
conversations between the trading, marketing and other relevant personnel of the parties in
connection with this Agreement or any potential Transaction, (ii) agrees to obtain any
necessary consent of, and give any necessary notice of such recording to, its relevant
personnel and (iii) agrees, to the extent permitted by applicable law, that recordings may be
submitted in evidence in any Proceedings.





Part 5. Other Provisions.




	(a)	 	Limitation on Condition Precedent: Section 2(a)(iii) of this Agreement is hereby amended by
adding the following phrase at the end of clause (1) immediately before the last comma of
such phrase:
	 
	 	 	“provided, however, that if an Event of Default or Potential Event of Default has occurred
and is continuing for longer than thirty (30) Local Business Days without an Early
Termination Event being designated, then the condition specified in this clause (1) will
cease to be a condition precedent to the obligations under Section 2(a)(i).
	 
	(b)	 	Additional Representations. In addition to the provisions addressed above in Part 4 of the
Schedule,
Section 3 of this Agreement is hereby amended by adding at the end thereof the following
sub-
paragraphs:






“(i) Eligible Contract
Participant. It is an  ”Eligible Contract Participant” as
defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.




(j)
Non-ERISA Representation. It continuously represents that it is not (i) an
employee benefit plan (hereinafter an “ERISA Plan”), as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), subject
to Title I of ERISA or a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, or subject to any other statute, regulation, procedure or
restriction that is materially similar to Section 406 of ERISA or Section 4975 of
the Code (together with ERISA Plans, “Plans”), (ii) a person any of the assets of
whom constitute assets of a Plan, or (iii) in connection with any Transaction
under this Agreement, a person acting on behalf of a Plan, or using the assets of
a Plan. It will provide notice to the other party in the event that it is aware
that it is in breach of any aspect of this representation or is aware that with
the passing of time, giving of notice or expiry of any applicable grace period it
will breach this representation.”




	(c)	 	Export of Defaults. The occurrence or designation of an Early Termination Date on account
of an
Event of Default or Termination Event with respect to a party hereto (“X”) (where X is the
Defaulting
Party or sole Affected Party) shall constitute a material breach and event of default
(howsoever
described) under all transactions, excluding the Collateral Documents, between X and the
other party
(“Y”) or any Affiliate of Y (whether or not arising under this Agreement, whether or not
matured,
whether or not contingent and regardless of the currency, place of payment or booking
office of the
obligation) (together, the “Other Transactions”), whereupon Y or any Affiliate of Y shall
have the
right to terminate, liquidate and otherwise close out any such Other Transactions (and X
shall be liable
for any damages suffered by Y and any Affiliate of Y as a result thereof).
	 
	(d)	 	Single Relationship. The parties and their Affiliates intend that all Transactions and all
other
obligations (whether or not arising under this Agreement, whether or not matured, whether
or not
contingent and regardless of the currency, place of payment or booking office of the
obligation) shall
be treated as mutual and part of a single, indivisible contractual and business
relationship.
	 
	(e)	 	Procedures for Entering Into Transactions. Party A will deliver to Party B a Confirmation
relating to
each Transaction.







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	(f)	 	Form of Agreement. The parties hereby agree that the text of the body of the Agreement is
intended
to be the printed form of 2002 ISDA Master Agreement as published and
copyrighted by the International Swaps and Derivatives Association, 
	 
	(g)	 	Transfers. The following provision (c) is hereby added to Section 7 of this Agreement:






“(c)
Party A may, if it has reasonable grounds for insecurity regarding a
potential default under this Agreement or any Specified Transaction by Party B, or
for any legal, tax, accounting, regulatory or other reason, transfer its rights
and obligations under this Agreement or any agreement for a Specified Transaction
to any Affiliate of Party A that is in the same jurisdiction and that is
guarantied by the Credit Support Provider, and Party B hereto agrees to such
transfer; provided, however, that both Party A and the Affiliate transferee are
‘dealers in notional principal contracts” within the meaning of U.S. Treasury
Regulation Section 1.1001-4.”




	(h)	 	2002 Master Agreement Protocol. Party A is an adherent to the ISDA 2002 Master Agreement
Protocol published by the International Swaps and Derivatives
Association, Inc. on July 15,
2003 (the “2002 Protocol”). In the event that Party B is not an adherent to the 2002
Protocol, Party A and Party B hereby agree that in accordance with the terms of the 2002
Protocol, certain amendments shall be deemed to be made to:
	 
	 	 	(i) sets of definitions and provisions published before 2002 by ISDA (each an “ISDA
Definitions Booklet”); and
	 
	 	 	(ii) documents containing credit support provisions published before 2002 by ISDA (each
called “Credit Support Provisions”);
	 
	 	 	in each case in accordance with the terms of the 2002 Protocol as specified in Annexes 1-18
thereof. As used in this Agreement (including in all Confirmations related to it), any
reference to any ISDA Definitions Booklet and/or Credit Support Provisions shall mean that
ISDA Definitions Booklet and/or those Credit Support Provisions as deemed amended in
accordance with the terms of the 2002 Protocol.
	 
	(i)	 	Accuracy of Specified Information. Section 3(d) is
hereby amended by adding in the third line thereof after the word “respect” and before the period the words “or, in the case of
audited or unaudited financial statements, present fairly in all material respects the
consolidated financial condition of the persons covered thereby as at the dates thereof and
the results of their operations for the periods then ended.”
	 
	(j)	 	This agreement is entered into in connection with the First Lien Credit Agreement dated as of
August 16, 2007, made by and between Mitel Networks, Inc. Mitel Networks Corporation., Party B, ,
Arsenal Acquisition Corporation, Morgan Stanley Senior Funding, Inc., as U.S.
Administrative Agent, Morgan Stanley & Co. Incorporated, as Collateral Agent, Morgan
Stanley Senior Funding (Nova Scotia) Co. as Canadian Administrative Agent, Morgan Stanley
Senior Funding, Inc., Morgan Stanley Senior Funding (Nova Scotia) Co, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Syndication Agents and Joint Lead Arrangers, and
the other Lenders party thereto, as the same may be amended, modified, supplemented or
replaced from time to time (the “First Lien Credit Agreement”) (and to which other lenders,
borrowers or other persons may be or become party) and any Transaction entered into in this
Agreement constitutes a Rate Protection Agreement for purposes this Agreement. Capitalized
terms used but not defined in this Agreement shall have the meanings given to them in the
First Lien Credit Agreement.





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SCHEDULE




to the




2002 MASTER AGREEMENT




dated as of August 27, 2007




between




MORGAN
STANLEY CAPITAL SERVICES INC.




a Delaware corporation

(“Party A”)




and




MITEL US
HOLDINGS, INC.

a Delaware corporation

(“Party B”)




Part 1. Termination Provisions.




	 	 	 	 	 
	(a)

	 	“Specified Entity” means
in relation to Party A for the purpose of:	 	 
	 
	 	 	 	 
	 

	 	Section 5(a)(v) (Default Under Specified Transaction)
	 	Affiliates
	 
	 	 	 	 
	 

	 	Section 5(a)(vi) (Cross Default)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(a)(vii) (Bankruptcy)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(b)(v) (Credit Event Upon Merger)
	 	None Specified
	 
	 	 	 	 
	 

	 	and in relation to Party B for the purpose of:	 	 
	 
	 	 	 	 
	 

	 	Section 5(a)(v) (Default Under Specified Transaction)
	 	Affiliates
	 
	 	 	 	 
	 

	 	Section 5(a)(vi) (Cross Default)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(a)(vii) (Bankruptcy)
	 	None Specified
	 
	 	 	 	 
	 

	 	Section 5(b)(v) (Credit Event Upon Merger)
	 	None Specified
	 
	 	 	 	 
	(b)	 	“Specified
Transaction” shall have the meaning specified in Section 14 of this Agreement






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     IN WITNESS WHEREOF, the parties have executed this Schedule by
their duly authorized officers as of the date hereof.



	 	 	 	 	 	 	 	 	 
	MORGAN STANLEY CAPITAL SERVICES INC.	 	MITEL US HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:
	 	/s/ Steve Spooner	 	 
	 

	 	 

Name:
	 	Name:
	 	 

Steve Spooner
	 	 
	 

	 	Title:
	 	Title:
	 	President	 	 
	 

	 	Date:
	 	Date:	 	 	 	 






38









 





Execution Copy




     IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized
officers as
of the date hereof.



	 	 	 	 	 	 	 	 	 
	MORGAN STANLEY CAPITAL SERVICES INC.	 	MITEL US HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven T. Naftzger
	 	By:	 	 	 	 
	 

	 	 

Name: Steven T. Naftzger
	 	 	 	 

Name:
	 	 
	 

	 	Title: Authorized Signator
	 	 	 	Title:	 	 
	 

	 	Date:
     Nov 14 2007
	 	 	 	Date:	 	 







38









 








Morgan Stanley




	 	 	 	 	 	 	 
	Date:

	 	August 27, 2007	 	 	 	 
	 
	 	 	 	 	 	 
	To:

	 	Mitel US Holdings, Inc.
	 	From:
	 	Morgan Stanley Capital Services Inc.
	 
	 	 	 	 	 	 
	Attn:

	 	Douglas McCarthy
	 	Contact:
	 	New York Derivative Client Services Group
	 
	 	 	 	 	 	 
	Fax:

	 	613 591 2320
	 	Fax:	 	212 404 4726
	 
	 	Douglas McCarthy@mitel.com	 	 	 	 
	Tel:

	 	613 592 2122 ext. 4431	 	Tel:
	 	212 761 2996






			
	Re: Rate Swap Transaction MSCS Ref. No. HRSK9
	 	RL






     The
purpose of this letter agreement is to confirm the terms and conditions of the Swap
Transaction entered into between us on the Trade Date specified below (the “Transaction”). This
letter agreement constitutes a “Confirmation” as referred
to in the ISDA Master Agreement
below.



     The definitions and provisions contained in the 2006 ISDA Definitions (as published by the
International Swaps and Derivatives Association, Inc.) are incorporated into this Confirmation.
In the event of any inconsistency between those definitions and this Confirmation, this
Confirmation will govern.



     1. This Confirmation evidences a complete, binding agreement between you and us as to the
terms of the
Transaction to which this Confirmation relates. In addition, you and we agree to use all
reasonable efforts promptly
to negotiate, execute and deliver an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross
Border) (The “ISDA Form”), with such modifications as you and we will in good faith agree.
Upon the execution by
you and us of such an Agreement, this Confirmation will supplement, form part of, and be
subject to that Agreement.
All provisions contained or incorporated by reference in that Agreement upon its execution
will govern this
Confirmation except as expressly modified below. Until we execute and deliver that
Agreement, this Confirmation,
together with all other documents referring to the ISDA Form (each also a “Confirmation”)
confirming transactions
(each also a “Transaction”) entered into between us (notwithstanding anything to the
contrary in a Confirmation),
shall supplement, form part of, and be subject to an Agreement in the form of the ISDA Form
as if we had executed
an Agreement in such form (but without any Schedule) on the Trade Date of the first such
Transaction between us.
In the event of any inconsistency between the provisions of that Agreement and this
Confirmation, this Confirmation
will prevail for the purpose of this Transaction.



     This Confirmation will be governed by and construed in accordance with the Laws of the
State of New York without reference to choice of law doctrine provided that this provision will
be superseded by any choice of law provision contained in the Agreement.



     2. The terms of the particular Transaction to which this Confirmation relates are as
follows:



	 	 	 
	Party A:
	 	Morgan Stanley Capital Services Inc.
	 
	 	 
	Party A Credit Support:
	 	Payments guaranteed by Morgan Stanley
	 
	 	 
	Party B:

	 	Mitel US Holdings, Inc.
	 
	 	 
	Trade Date:

	 	August 27, 2007
	 
	 	 
	Notional Amount:

	 	USD 215,000,000
	 
	 	 
	Effective Date:
	 	October 31, 2007






1








 





Morgan Stanley




	 	 	 
	Termination Date:
	 	October 31, 2009, subject to adjustment in
	 
	 	accordance with the Modified Following Business
	 
	 	Day Convention.
	 
	 	 
	Fixed Amounts:
	 	 
	 
	 	 
	     Fixed Rate Payer:
	 	Party B
	 
	 	 
	     Fixed Rate Payer Payment Dates:
	 	The last day of each January, April, July and
	 
	 	October, commencing on January 31, 2008, up to
	 
	 	and including the Termination Date, subject to
	 
	 	adjustment in accordance with the Modified
	 
	 	Following Business Day Convention.
	 
	 	 
	     Fixed Rate:
	 	4.85%
	 
	 	 
	      Fixed Rate Day Count Fraction:
	 	Actual/360
	 
	 	 
	Floating Amounts:
	 	 
	 
	     Floating Rate Payer:
	 	Party A
	 
	 	 
	     Floating Rate Payer Payment Dates:
	 	The last day of each January, April, July and
	 
	 	October, commencing on January 31, 2008, up to
	 
	 	and including the Termination Date, subject to
	 
	 	adjustment in accordance with the Modified
	 
	 	Following Business Day Convention.
	 
	 	 
	     Floating Rate Option:
	 	USD-LIBOR-BBA
	 
	 	 
	     Designated Maturity:
	 	Three (3) months
	 
	 	 
	     Floating Rate Day Count Fraction:
	 	Actual/360
	 
	 	 
	     Spread:
	 	Inapplicable
	 
	 	 
	     Reset Dates:
	 	The first day of each Calculation Period
	 
	 	 
	     Compounding:
	 	Inapplicable
	 
	 	 
	Business Days for Payments:
	 	New York and London
	 
	 	 
	Calculation Agent:
	 	Party A, or as specified in the Agreement






     3. “Additional Termination Event.”


It shall constitute an Additional Termination Event in accordance with Section 5(b)(vi) of the ISDA
Master Agreement with Party B as the sole Affected Party if within 60 calendar days of the Trade
Date of this Transaction Party B has failed to deliver to Party A the following documents, each in
form and substance mutually satisfactory to Party A and Party B: this Confirmation and an ISDA
Master Agreement, including the Schedule, duly executed on behalf of Party B.




2









 








Morgan Stanley




     4. Account Details:



	 	 	 
	Payments to Party A:

	 	As per Standard Settlement Instructions
	 
	 	 
	Payments to Party B:

	 	Please Provide
	 
	 	 
	Documentation Contacts:

	 	Institutional Clients
	 

	 	Hotline: +1 212-761-2996
	 

	 	Facsimile: +1 212-404-4726
	 

	 	Email: Derivative.Confirms.Americas@morganstanley.com
	 
	 	 
	Operations Contact:
	 	Tel +1 212 761 4662
	 
	 	Fax +1 410 534 1431





Please
confirm that the foregoing correctly sets forth the terms of our agreement MSCS Ref. HRSK9
executing this Confirmation and returning it to us.


Best Regards,




MORGAN STANLEY CAPITAL SERVICES INC.




	 	 	 	 	 
	 	 	 
	 	BY:  	 /s/ David N. Moore 	 
	 	 	Name:  	David N. Moore 	 
	 	 	Title:  	Vice President 	 
	 



Acknowledged and agreed as of the date first written above:




MITEL US HOLDINGS, INC.




	 	 	 	 	 
	 	 	 
	 	BY:  	 /s/ Steve Spooner 	 
	 	 	Name:  	Steve Spooner 	 
	 	 	Title:  	President 	 



3