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                                                                    EXHIBIT 2.12

DATED                                                             APRIL 27, 2005

                           (1) MITEL NETWORKS LIMITED

                                   AS CHARGOR

                                    - AND -

                        (2)HIGHBRIDGE INTERNATIONAL LLC.

                               AS SECURITY AGENT

                                   ----------

                               MORTGAGE DEBENTURE

                                   ----------

                                Speechly Bircham
                               6 St Andrew Street
                                     London
                                    EC4A 3LX
                                Doc no. 1130420-4

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                                    CONTENTS

<TABLE>
<S>                                                                    <C>
1.  INTERPRETATION..................................................    1
2.  PAYMENT OBLIGATIONS.............................................    8
3.  FIXED SECURITY..................................................    9
4.  FLOATING CHARGE.................................................   10
5.  CONVERSION OF FLOATING CHARGE...................................   11
6.  PRIORITY ARRANGEMENTS AND ACKNOWLEDGEMENT OF ASSIGNMENT.........   12
7.  RELEASE OF SECURITY.............................................   12
8.  REPRESENTATIONS AND WARRANTIES RELATING TO SECURITY ASSETS......   12
9.  COVENANTS RELATING TO SECURITY ASSETS...........................   14
10. POWERS OF THE SECURITY AGENT....................................   23
11. CONTINUING SECURITY.............................................   24
12. PROTECTION OF SECURITY..........................................   24
13. WHEN SECURITY BECOMES ENFORCEABLE...............................   26
14. ENFORCEMENT OF SECURITY.........................................   26
15. APPOINTMENT OF AN ADMINISTRATOR BY THE SECURITY AGENT...........   27
16. RECEIVER........................................................   27
17. APPLICATION OF PROCEEDS.........................................   30
18. NO LIABILITY AS MORTGAGEE IN POSSESSION.........................   31
19. PROTECTION OF THIRD PARTIES.....................................   31
20. NEW ACCOUNTS....................................................   32
21. REDEMPTION OF PRIOR SECURITY INTERESTS..........................   32
22. DELEGATION BY THE SECURITY AGENT................................   32
23. FURTHER ASSURANCE AND POWER OF ATTORNEY.........................   33
24. EXPENSES AND INDEMNITIES........................................   33
25. TAXES, CURRENCY AND STAMP DUTIES................................   34
</TABLE>

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<TABLE>
<S>                                                                    <C>
26. REMEDIES AND WAIVERS............................................   35
27. SET-OFF.........................................................   36
28. PARTIAL INVALIDITY..............................................   36
29. NOTICES.........................................................   36
30. COUNTERPARTS....................................................   37
31. GOVERNING LAW AND JURISDICTION..................................   37
SCHEDULE 1..........................................................   39
</TABLE>

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THIS MORTGAGE DEBENTURE is made as a deed on                          April 2005

BETWEEN:

(1)   MITEL NETWORKS LIMITED, a private company limited by shares incorporated
      in England and Wales under number 1309629 whose registered office is at
      Portskewett, Monmouthshire, NP26 5YR (the "CHARGOR"); and

(2)   HIGHBRIDGE INTERNATIONAL LLC ("SECURITY AGENT") as trustee for itself and
      the other Secured Parties

THIS DEED WITNESSES as follows:

1.    INTERPRETATION

1.1.  DEFINITIONS

      In this Deed, so far as the context admits, the following expressions have
      the respective meanings ascribed to them:

      "ACT" means the Law of Property Act 1925;

      "APPLICATIONS" means any and all applications for the registration of
      Intellectual Property Rights which have been made as at the date of this
      Deed or are made at any time during the subsistence of this security by or
      on behalf of or acquired by the Chargor in any registry or office in any
      part of the world;

      "BARCLAYS" means Barclays Bank PLC;

      "BARCLAYS SECURITY DOCUMENTS" means any or all of the following:

      (i)   a mortgage granted by the Chargor to Barclays and dated 31 October
            2001, in respect of the items listed in the schedule attached
            thereto; and

      (ii)  a mortgage granted by the Chargor to Barclays and dated 24 January
            2002, over all that freehold property of the Chargor situated at
            Mitel Business Park, Portskewett, Monmouthshire; and

      (iii) a mortgage granted by the Chargor to Barclays and dated 25 April
            2003 in respect of the items listed in the schedule attached thereto

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      "BOOK DEBTS SECURITY DOCUMENT" means a charge over book debts and cash at
      bank made or to be made on or about the date of this Deed between the
      Chargor and the Security Agent;

      "BUSINESS DAY" means a day (other than a Saturday and Sunday) on which
      banks are open in England & Wales for business of the nature required for
      the purposes of this Deed;

      "COLLATERAL AGENCY AGREEMENT" means the collateral agency agreement dated
      on or about the date hereof between, among others, the Security Agent, the
      Company and the Noteholders (as defined therein);

      "COMPANY" means Mitel Networks Corporation, a corporation incorporated
      under the laws of Canada, with headquarters located at 350 Legget Drive,
      Ottawa, Ontario K2K 2W7;

      "DANGEROUS SUBSTANCE" means any radioactive emission or natural or
      artificial substance (in whatever form), capable of harming any living
      organism or damaging the environment, public health or welfare, including
      any controlled, special, hazardous, toxic, radioactive or dangerous waste;

      "DEBTS" means all book debts, other debts, receivables and liabilities of
      any kind whatsoever now or at any time hereafter (and from time to time)
      due, owing or payable to the Chargor, including the benefit of any
      judgement or order to pay a sum of money, and the benefit of all rights,
      securities and guarantees of any nature enjoyed or held by it in relation
      to any of the same and all bills of exchange, promissory notes and other
      negotiable instruments for the time being owned or held by the Chargor;

      "DISCLOSURE LETTER" has the meaning given to it in the Securities Purchase
      Agreement;

      "ENFORCEMENT DATE" means the date on which the Security Agent demands the
      payment or discharge of all or any part of the Secured Liabilities or, if
      earlier, the date on which an Enforcement Event first occurs;

      "ENFORCEMENT EVENT" means the occurrence of any one or more of the
      following events:

      (i)   any of the Secured Liabilities are not be paid or discharged when
            the same ought to be paid or discharged (whether on demand or at
            scheduled maturity or by acceleration or otherwise as the case may
            be); or

      (ii)  an Event of Default occurs;

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      "ENVIRONMENTAL LAW" means all legislation, regulations, codes of practice,
      circulars and guidance notices (whether applicable in the UK or
      elsewhere), whether or not having the force of law, concerning the
      protection of human health, or the environment, or the conditions of the
      workplace, or the generation, transportation, storage, treatment or
      disposal of any Dangerous Substance;

      "ENVIRONMENTAL LICENCE" means any licence, permit, consent, authorisation
      or other approval required by any Environmental Law;

      "EVENT OF DEFAULT" has the meaning given to it in each of the Notes;

      "EXPLOITATION AGREEMENTS" means any arrangements or agreements between the
      Chargor and the Intellectual Property Users;

      "GUARANTEE" means the guarantee made or to be made by the Company in
      favour of the Security Agent (on behalf of itself and the other Secured
      Parties) on or about the date of this Deed, securing all monies,
      liabilities and obligations of the Company to the Security Agent and the
      other Secured Parties in connection with the Transaction Document.

      "INDEMNIFIED PARTY" is as defined in clause 9.7.3 (Environmental matters);

      "INSURANCES" means all policies of insurance in which the Chargor has an
      interest at any time;

      "INTELLECTUAL PROPERTY RIGHTS" means:

      (i)   know-how, patents, trademarks, service marks, designs, business
            names, topographical or similar rights, copyrights or other
            intellectual property monopoly rights, and any licence or other
            interest in any such rights; and

      (ii)  any other intellectual property rights of any description whatever
            which are now assigned to or licensed to the Chargor or which have
            been acquired or created by the Chargor prior to the date of this
            Deed and which are owned by (whether by themselves or jointly with
            another) or licensed to the Chargor as at the date of this Deed or
            which are acquired by or created by or assigned to or licensed to
            the Chargor at any time during the subsistence of this security;

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      "INTELLECTUAL PROPERTY USER" means any distributor or licensee in respect
      of Intellectual Property Rights;

      "KNOW-HOW" means all commercial and technical information of a
      confidential nature which might reasonably be of commercial interest or
      used by the Chargor in the operation of its business, including, without
      limitation:

      (i)   processes;

      (ii)  methods and techniques of manufacture;

      (iii) designs of machinery, jigs, tools and apparatus;

      (iv)  compounds; and

      (v)   recipes;

      "MNI SHARES" means the entire issued share capital of Mitel Networks Inc.,
      a Delaware corporation;

      "NOTES" has the meaning given to it in the Securities Purchase Agreement;

      "PERMITTED SECURITY INTEREST" means any of the Security Interests created
      and subsisting under any of the following:

      (i)   the Barclays Security Documents;

      (ii)  a charge over book debts and cash at bank granted by the Chargor to
            Export Development Canada and dated 3 March 2003; and

      (iii) an amending deed to the charge described in paragraph (ii) above,
            made between the Chargor and Export Development Canada and dated 11
            June 2003;

      "PLANNING ACTS" means the Town and Country Planning Act 1990, the Planning
      (Listed Buildings and Conservation Areas) Act 1990, the Planning
      (Hazardous Substances) Act 1990, the Planning (Consequential Provisions)
      Act 1990, the Planning and Compensation Act 1991 and any orders,
      regulations or permissions made or granted under any of those Acts;

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      "PLANT AND MACHINERY" means all plant, machinery, vehicles, furniture and
      other equipment of the Chargor;

      "PROPERTY" means the freehold, leasehold and/or commonhold property
      mortgaged or charged by this Deed, including, without limitation, those
      properties listed in Schedule 1 (Property);

      "RECEIVER" means, as the context so admits, a receiver and/or a manager
      not being an administrative receiver (within the meaning of section 29(2)
      Insolvency Act 1986);

      "RECEIVERSHIP ASSETS" has the meaning given to it in clause 16.1
      (Appointment of Receiver);

      "REPORT ON TITLE" means the report on or certificate of title, if any,
      prepared in respect of the Property;

      "SALE AND LEASEBACK" means the proposed sale and leaseback of the property
      listed in Schedule 1 (Property) and other assets (including certain Plant
      and Machinery) of the Chargor to Robert Hitchins Limited and the proposed
      surrender and grant of new lease of part of the property listed in
      Schedule 1 (Property) to Zarlink Semiconductor Limited and the proposed
      grant of a new lease of part of the property listed in Schedule 1
      (Property) to Newport Networks Group plc.

      "SECURED LIABILITIES" has the meaning given to it in clause 2.1 (Covenant
      to pay);

      "SECURED PARTIES" means the Security Agent and the holders for the time
      being of the Notes, and "SECURED PARTIES" means any of them;

      "SECURITIES PURCHASE AGREEMENT" means the securities purchase agreement
      among the Company and the other parties referred to therein as "Buyers"
      made or to be made on or about the date of this Deed;

      "SECURITY" means the Security Interests created by this Deed;

      "SECURITY ASSET" means each asset, right and property subject to the
      Security;

      "SECURITY INTEREST" includes any mortgage, pledge, lien, charge (whether
      fixed or floating), assignment by way of security, hypothecation, security
      interest, standard security, assignment or assignation by way of security
      or any other security agreement, retention of title, encumbrance of any
      kind or arrangement relating to existing or future assets having

                                     - 5 -
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      substantially the same economic affect as any of the foregoing (including,
      without limitation, the deposit of monies or property with a person with
      the primary intention of affording such person a right of set-off or
      lien);

      "SECURITY PERIOD" means the period from the date of this Deed until the
      date on which all of the Secured Liabilities have been unconditionally and
      irrevocably discharged in full;

      "SHARES" means all stocks, shares, debentures, bonds or other securities
      owned by the Chargor,

      "SHARE RIGHTS" means all rights attaching to shares and any other
      security, including rights to payment of a dividend or interest, and
      rights of redemption, substitution, exchange and to the issue of further
      shares;

      "SUBSIDIARY" has the meaning given to that expression by section 736 of
      the Companies Act 1985 and includes a subsidiary undertaking as defined in
      section 53(1) of the Companies Act 1989;

      "TAX" includes all present and future taxes, charges, imposts, duties,
      levies, deductions, withholdings or amounts or charges of a similar
      nature, (including any penalty, fine, surcharge or interest payable in
      connection any failure to pay or any delay in paying any of the same), and
      "TAXES" will be construed accordingly;

      "THIRD PARTY RIGHTS" means any Intellectual Property Rights of any
      description whatever which are licensed to the Chargor (but excluding any
      rights which are assigned to the Chargor) now or at any time during the
      subsistence of this security; and

      "TRANSACTION DOCUMENTS" means the Securities Purchase Agreement among the
      Principal Debtor, the Security Agent and others dated on or about the date
      hereof, the senior secured convertible notes (the "NOTES") issued pursuant
      thereto, the Security Documents (as defined in the Notes), the Collateral
      Agency Agreement, the Registration Rights Agreement (as defined in the
      Notes), this Deed, the Book Debts Security Document and the Guarantee.

1.2   CONSTRUCTION

      Unless the contrary is indicated, the following rules of construction
      apply to this Deed:

      1.2.1 in the event of any conflict or inconsistency between this Deed and
            the provisions of the Securities Purchase Agreement and the Notes in
            relation to

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             any matter which is dealt with in both this Deed and the Securities
             Purchase Agreement or the Notes, the terms of the Securities
             Purchase Agreement or the Notes will prevail for so long as the
             same continue in force and effect;

      1.2.2  "INCLUDING" means including without limitation;

      1.2.3  reference to the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of
             a company or a corporation includes any equivalent or analogous
             proceedings, or proceedings having a similar effect, under the law
             of the place where such company or corporation is incorporated, or
             in which it carries on business;

      1.2.4  reference to a law or regulation will be construed as a reference
             to such law or regulation as amended or re-enacted;

      1.2.5  reference to any agreement or document, including this Deed, will
             be construed as a reference to that agreement or document as from
             time to time amended, novated or supplemented;

      1.2.6  a person includes its successors and assigns;

      1.2.7  headings are for convenience only and will be ignored in construing
             this Deed; and

      1.2.8  reference to the plural includes the singular and vice versa.

1.3   NATURE OF SECURITY OVER REAL PROPERTY

      A reference in this Deed to a charge or mortgage of any freehold,
      leasehold or commonhold property includes:

      1.3.1  all buildings and fixtures (including trade and tenant's fixtures)
             which are at any time situated on that property;

      1.3.2  the proceeds of sale of any part of that property; and

      1.3.3  the benefit of any covenants for title given or entered into by any
             predecessor in title of the Chargor in respect of that property or
             any monies paid or payable in respect of those covenants.

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1.4   SECTION 2(1) LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) ACT 1989

      The terms of the other Transaction Documents and of any side letters
      between any parties in relation to any Transaction Document are
      incorporated in this Deed to the extent required to ensure that any
      purported disposition of the Security Assets contained in this Deed is a
      valid disposition in accordance with section 2(1), Law of Property
      (Miscellaneous Provisions) Act 1989.

1.5   RULE 139, LAND REGISTRATION RULES 1925

      For the purposes only of Rule 139, Land Registration Rules 1925 (as
      amended) the other Transaction Documents do not form part of the terms and
      conditions of this Deed.

1.6   THIRD PARTY RIGHTS

      A third party has no right under the Contracts (Rights of Third Parties)
      Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

1.7   TRUST PROVISION

      The Security Agent holds the Security constituted by this Deed on trust
      for the Secured Parties in accordance with the provisions of the
      Collateral Agency Agreement.

1.8   PERPETUITY PERIOD

      The perpetuity period applicable to all trusts constituted by this Deed
      shall be 80 years.

1.9   ENTERPRISE ACT 2002

      Paragraph 14 of Schedule Bl of the Insolvency Act 1986 (as inserted by
      section 248 of, and Schedule 16 to, the Enterprise Act 2002) applies to
      the floating charge created by this Deed.

2.    PAYMENT OBLIGATIONS

2.1   COVENANT TO PAY

      The Chargor irrevocably and unconditionally covenants on demand to pay or
      discharge to the Security Agent (for the benefit of itself and the other
      Secured Parties) all of its obligations and liabilities under the
      Guarantee, whether

      2.1.1       present or future;

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      2.1.2  actual or contingent; and/or

      2.1.3  owed by the Company alone or jointly and/or severally with others,
      (the "SECURED LIABILITIES").

2.2   DEFAULT INTEREST

      2.2.1  Interest will accrue at the interest rate prescribed in the Notes,
             both before and after judgment, on any amount payable under this
             Deed, from the date due (whether demanded or not) until settlement
             in full.

      2.2.2  All such interest shall accrue on a day-to-day basis and be
             calculated by the Security Agent on the basis of a 365 days' year
             and shall be compounded in accordance with the usual practice of
             the Security Agent.

3.    FIXED SECURITY

      The Chargor charges in favour of the Security Agent (for the benefit of
      itself and the other Secured Parties), in each case with full title
      guarantee and as a continuing security for the Secured Liabilities:

3.1   LEGAL MORTGAGE

      by way of legal mortgage, all its interest in the freehold property
      specified in Schedule 1 (Property), together with:

      3.1.1  the proceeds of sale of that property; and

      3.1.2  the benefit of any covenants or rights attaching to that property

      PROVIDED THAT it is acknowledged by the Security Agent that
      notwithstanding the provisions of this clause 3.1, the Chargor shall be
      entitled to use the proceeds of sale of the Property listed in Schedule 1
      (Property) under the Sale and Leaseback in the ordinary course of its
      business provided that the Security has not become enforceable;

3.2   FIXED CHARGE ON PROPERTY

      to the extent not subject to the legal mortgage under clause 3.1 (Legal
      mortgage), by way of fixed equitable charge, all its present and future
      interest in any freehold, leasehold or commonhold property, together with:

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      3.2.1  the proceeds of sale of that property; and

      3.2.2  the benefit of any covenants or rights attaching to that property;

3.3   FIXED CHARGE ON SPECIFIC ASSETS

      by way of a fixed charge, all its present and future interest in:

      3.3.1  all Plant and Machinery;

      3.3.2  all Shares (including without limitation the MNI Shares) and all
             Share Rights attaching to them;

      3.3.3  all money standing to the credit of the Chargor's accounts and the
             debts represented by the balances on such accounts;

      3.3.4  all the Debts;

      3.3.5  the Insurances, the benefit of any claim to Insurance proceeds and
             the right to return of any insurance premium in relation to the
             Insurance;

      3.3.6  all its rights under any letters of credit issued in its favour and
             any bills of exchange and other negotiable instruments held by it;

      3.3.7  the benefit of all licences, consents and authorisations held in
             connection with its business or the use of any Security Assets;

      3.3.8  all Intellectual Property Rights;

      3.3.9  its goodwill; and

      3.3.10 its uncalled capital.

4.    FLOATING CHARGE

      The Chargor charges, in favour of the Security Agent (for the benefit of
      itself and the other Secured Parties), with full title guarantee, by way
      of floating charge, all its present and future undertaking and assets not
      effectively charged by way of legal mortgage or fixed charge under clause
      3 (Fixed Security) as a continuing security for the Secured Liabilities.

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5.    CONVERSION OF FLOATING CHARGE

5.1   CONVERSION

      Without prejudice and in addition to any circumstances in which a floating
      charge may crystallise by operation of law, the floating charge created
      under clause 4 (Floating Charge) will convert into a fixed charge:

      5.1.1 when the Security Agent gives notice to the Chargor at any time when
            the Security Agent considers (in its sole discretion) that all or
            any part of the Security Assets, or the Security Agent's security
            interest in all or any part of the Security Assets, is or may be in
            danger of being seized or subjected to any distress or execution or
            is otherwise in jeopardy, or if at any time any of the Security
            becomes enforceable; or

      5.1.2 automatically and without notice to the Chargor:

            (a)   on the convening of a meeting of members of the Chargor to
                  consider a winding-up resolution;

            (b)   on the presentation of a petition to wind up the Chargor;

            (c)   on the making of an application for the appointment of an
                  Administrator in respect of the Chargor; or

            (d)   in respect of the particular Security Assets or class of
                  Security Assets concerned, if the Chargor is at any time in
                  breach of clause 9.1 (Negative Pledge).

5.2   PARTIAL CONVERSION

      If the Security Agent specifies in the notice referred to in clause 5.1.1
      (Conversion) that the conversion relates only to a class of Security
      Assets, such restriction is not to constitute a waiver of the Security
      Agent's rights to convert the floating charge into a fixed charge in
      relation to other Security Assets at a later date.

5.3   ASSETS ACQUIRED AFTER ANY FLOATING CHARGE CRYSTALLISATION

      Any asset acquired by the Chargor after any crystallisation of the
      floating charge created under clause 4 (Floating Charge) that, but for
      such crystallisation, would be subject to a

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      floating charge will (unless the Security Agent confirms in writing to the
      contrary) be charged to the Security Agent by way of fixed charge.

6.    PRIORITY ARRANGEMENTS AND ACKNOWLEDGEMENT OF ASSIGNMENT

6.1   PRIORITY ARRANGEMENTS

      The Chargor covenants with the Security Agent that it shall:

      6.1.1 use all reasonable endeavours to procure that an intercreditor
            agreement is entered into as soon as practicable after the date
            hereof between the Chargor, Barclays and the Security Agent upon
            terms satisfactory to the Security Agent and Barclays; and

      6.1.2 in the event that such intercreditor agreement is not entered into
            by all parties thereto within 30 Business Days of the date of this
            Deed, the Chargor shall refinance or repay the amount outstanding to
            Barclays in such amount as is necessary to procure the release and
            discharge of the Barclays Security Documents within 90 days of the
            date of this Deed.

6.2   ACKNOWLEDGEMENT OF ASSIGNMENT

      The Chargor covenants with the Security Agent that it shall procure the
      acknowledgement of assignment substantially in the form contained in
      Schedule 2 (Acknowledgement by Barclays Bank plc) to the Book Debts
      Security Document as soon as practicable after the date of this Deed and
      in any event within 30 Business Days of the date of this Deed.

7.    RELEASE OF SECURITY

      At the request and expense of the Chargor, the Security Agent will execute
      a deed of release (and such other releases as may be necessary) in
      relation to the Security Interests created by this Deed on the earlier to
      occur of (i) the end of the Security Period and (ii) the date on which a
      Qualified IPO (as defined in the Notes) is consummated.

8.    REPRESENTATIONS AND WARRANTIES RELATING TO SECURITY ASSETS

8.1   GENERAL

      The Chargor makes the representations and warranties set out in clauses
      8.2 (Security) to and including 8.5 (Intellectual Property Rights,
      Know-How and Third Party Rights) to the Security Agent (for the benefit of
      itself and the other Secured Parties) on the date of this

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      Deed, Each representation and warranty will be deemed to be repeated by
      the Chargor on each date during the Security Period with reference to the
      facts and circumstances then existing.

8.2   SECURITY

      This Deed creates the Security Interests that it purports to create, as
      set out in clauses 3 (Fixed Security) and 4 (Floating Charge). This Deed
      is not liable to be avoided or set aside on the liquidation or
      administration of the Chargor or otherwise.

8.3   PROPERTY AND THE OTHER SECURITY ASSETS

      Except as disclosed to the Security Agent in writing:

      8.3.1 the Chargor has title to its Property specified in Schedule 1
            (Property)

      8.3.2 there is no breach of any Planning Acts, which may materially affect
            the value of the Property;

      8.3.3 there is no covenant, agreement, stipulation, reservation,
            condition, interest, right or other matter which would have a
            material adverse effect on the Property, the Plant and Machinery or
            any other Security Asset;

      8.3.4 there is no overriding interest over the Property;

      8.3.5 no person has a right to terminate the use of a facility necessary
            for the enjoyment and use of the Property or the Plant and
            Machinery;

      8.3.6 other than pursuant to Permitted Security Interests, the Chargor is
            not aware of any adverse claim in respect of its ownership of, or
            any interest in, the Property, the Plant and Machinery or any other
            Security Asset; and

      8.3.7 the Property is free from any tenancies or licences.

8.4   ENVIRONMENTAL MATTERS

      8.4.1 The Chargor has obtained all Environmental Licences applicable to
            its business and:

            (a)   has at all times complied in all material respects with the
                  terms and conditions of those Environmental Licences; and

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            (b)   has to the best of its knowledge and belief at all times
                  complied in all material respects with all other applicable
                  Environmental Law.

      8.4.2 No Dangerous Substance has been used, disposed of, generated,
            stored, transported, dumped, released, deposited, buried or emitted
            at, on, from or under any Property owned, leased, occupied and/or
            controlled by the Chargor (and to the best of its knowledge at, on,
            from or under any Property not owned, leased, occupied and/or
            controlled by the Chargor) in circumstances where this might result
            in a liability on the Chargor, which would have a material adverse
            effect on its financial condition or on its ability to perform its
            obligations under the Transaction Documents.

8.5   INTELLECTUAL PROPERTY RIGHTS, KNOW-HOW AND THIRD PARTY RIGHTS

      8.5.1 The Intellectual Property Rights and Third Party Rights owned by, or
            licensed to, the Chargor are all of the Intellectual Property
            Rights, and Third Party Rights required by it in order for it to
            carry on its business as currently conducted and the Chargor in
            carrying on its business, confirms, subject to the Disclosure
            Letter, that there are no claims against it for the infringement of
            any Intellectual Property Rights of any third party.

      8.5.2 The Intellectual Property Rights and Third Party Rights owned by the
            Chargor are free of any Security Interests and any of right or
            interest in favour of a third party, save for Permitted Security
            Interests.

      8.5.3 There is no actual or, to the best of the Chargor's knowledge and
            belief, threatened, infringement of the Intellectual Property Rights
            or Third Party Rights owned by the Chargor.

9.    COVENANTS RELATING TO SECURITY ASSETS

9.1   NEGATIVE PLEDGE

      Save as permitted by the Notes or the Securities Purchase Agreement, the
      Chargor will not, nor purport or agree to do, any of the following:

      9.1.1 create or permit to subsist any Security Interest over any of its
            present or future assets, property or undertaking except for
            Permitted Security Interests; or

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      9.1.2 sell, transfer, lend or otherwise dispose of (other than through
            leasing) (whether by one or a series of transactions, whether
            related or not) all or any part of its present or future assets,
            property or undertaking including, without limitation, by any form
            of factoring (except for the proposed sale of its subsidiary Edict
            Training Limited and disposals of its assets, property and/or
            undertaking which are made only in the ordinary course of trading),

      9.1.3 other than in the ordinary course of trading, lease all or any part
            of its present or future, assets, property or undertaking including,
            without limitation, by any form of sale and leaseback (other than
            the Sale and Leaseback) where any such lease would materially reduce
            the value of such assets, property or undertaking;

      except in favour of the Security Agent or with the prior written consent
      of the Security Agent (which consent shall not be unreasonably withheld or
      delayed) or as otherwise expressly permitted by the provisions of any
      Transaction Document.

9.2   H.M. LAND REGISTRY

      In respect of any Property the title to which is, or is to be, registered
      at H.M. Land Registry:

      9.2.1 the Chargor applies or (if the Property is acquired after the date
            of this Deed) will apply to the Chief Land Registrar for a
            restriction to be entered in the proprietorship register of the
            Register of Title as follows:

               "Except under an order of the Registrar, no disposition or
               dealing by the proprietor of the land is to be registered without
               the consent of the proprietor for the time being of the Debenture
               dated [- ] 2005 between Mitel Networks Limited and Highbridge
               International LLC."; and

      9.2.2 the Chargor hereby certifies that the Security does not contravene
            any of the provisions of its memorandum and articles of association.

9.3   INSURANCE

      The Chargor will:

      9.3.1 insure the Security Assets or (in the case of assets leased to the
            Chargor, use reasonable endeavours to) procure that the Security
            Assets are insured:

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<PAGE>

            (a)   against loss or damage by fire, risks normally insured against
                  in compliance with good industry practice and such other risks
                  as the Security Agent may reasonably require;

            (b)   for their full replacement or re-instatement value; and

            (c)   with an insurance company or underwriter acceptable to the
                  Security Agent (such acceptance not to be unreasonably
                  withheld or delayed);

      9.3.2 subject to the rights of any lessor and any prior chargee apply all
            money received under any Insurance in replacing, restoring or
            reinstating the relevant Security Asset destroyed or damaged, or in
            such manner as the Security Agent may agree, provided that the
            Security Agent may require that such money is applied in or towards
            satisfaction of the Secured Liabilities;

      9.3.3 procure that the Security Agent's interest is endorsed on all
            Insurance and subject to the rights of any prior chargee procure
            that the Security Agent is named as first loss payee;

      9.3.4 not do, or permit to be done, any action relating to any Security
            Asset which may make any Insurance void or voidable; and

      9.3.5 if the Insurance is or will become voidable or void, immediately and
            at its own cost take all action necessary for restoring and renewing
            the same and, failing any such restoration or renewal, the Chargor
            will enter into a replacement policy on terms equivalent to those
            given under the Insurance from a reputable insurer that is approved
            by the Security Agent (such approval not to be unreasonably withheld
            or delayed) and upon such renewal, restoration or replacement the
            relevant policy will be subject in all respects to this Deed;

      9.3.6 promptly pay all premiums relating to the Insurance, and provide the
            Security Agent with evidence of premium payments upon the reasonable
            request of the Security Agent, and if the Chargor defaults in paying
            any such premiums, the Security Agent may pay them on behalf of the
            Chargor and all sums so paid by the Security Agent will be added to
            the Secured Liabilities; and

      9.3.7 if the Security Agent requires, use the Chargor's reasonable
            endeavours to ensure that the policies of insurance maintained by it
            contain clauses reasonably

                                     - 16 -
<PAGE>

            satisfactory to the Security Agent to ensure that the insurers will
            not cancel any such policy without first giving 30 days' written
            notice to the Security Agent and that a breach by the Chargor or a
            failure by the Chargor to give notice of any event giving rise to
            any claim will not vitiate the policy in respect of the Security
            Agent's interest or affect the Security Agent's right to claim under
            the policy and that the insurer will notify the Security Agent of
            any cancellation or termination of, or default under, or failure to
            renew the insurance or of any act or omission by the Chargor which
            might affect such insurance.

9.4   DEPOSIT OF DEEDS AND DOCUMENTS OF TITLE

      Subject always to compliance by the Chargor with its obligations to any
      prior chargee or mortgagee under a Permitted Security Interest, the
      Chargor will if requested by the Security Agent deposit with the Security
      Agent during the Security Period all deeds and/or documents of title or
      other evidence of ownership of the Security Assets, including but not
      limited to:

      9.4.1    all deeds and documents of title relating to Property, and any
               related search certificates obtained in the three month period
               ending on the date of this Deed; and

      9.4.2    all certificates or analogous documents evidencing ownership of
               any shares, securities or Share Rights and declarations of trust
               in favour of the Company executed by all persons (other than the
               Company) in whose name any shares, securities or Share Rights are
               registered (and the Chargor will deliver to the Security Agent
               such blank, executed stock transfer forms and any other documents
               as are necessary for the Security Agent to register its interest,
               or that of its nominee, in any shares, securities or Share
               Rights).

9.5   PROPERTY

      The Chargor will:

      9.5.1    keep all freehold Property in good condition (allowing for fair
               wear and tear) and maintain all Property that is leasehold or
               commonhold in accordance with the relevant lease(s) or other
               documents binding upon it;

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<PAGE>

      9.5.2    comply in all material respects with all the terms and conditions
               of any lease of a Property, and not do, or permit to be done,
               anything which may allow the lessor to forfeit any lease;

      9.5.3    pay when due all Taxes and duties imposed in respect of the
               Property or any part of it, except to the extent that such Taxes
               are being contested in good faith;

      9.5.4    notify the Security Agent when it acquires any interest in any
               freehold, leasehold or comonhold property, and if requested
               execute and deliver to the Security Agent a legal mortgage, in a
               form substantially similar to this Deed in favour of the Security
               Agent, on such property and the proceeds of sale of that
               property;

      9.5.5    use the Property only as permitted by the Planning Acts;

      9.5.6    not, without the prior consent of the Security Agent, carry out,
               or permit to be carried out, on any part of the Property any
               development, as defined in the Planning Acts;

      9.5.7    other than the Sale and Leaseback, not grant any lease, tenancy,
               contractual licence or right to occupy the Property which would
               materially reduce the value of the Property or accept any
               surrender of any lease or tenancy, (other than in the ordinary
               course of its business) in each case without the prior written
               consent of the Security Agent (such consent not to be
               unreasonably withheld or delayed);

      9.5.8    comply in all material respects with any positive or restrictive
               covenants affecting the Property, and permit the Security Agent
               or its nominee to enter the Property at any reasonable time with
               reasonable prior notice;

      9.5.9    allow the Security Agent or its nominee to carry out an
               investigation of title on any Property, at the expense of the
               Chargor, and provide the Security Agent or its nominee with all
               documents and deeds as necessary;

      9.5.10   provide the Security Agent, on demand, with a Report on Title
               addressed to the Security Agent in relation to any Property
               concerning matters which a prudent mortgagee would require to be
               covered in such a report; and

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<PAGE>

      9.5.11   within 14 days of receipt, notify and deliver a copy of any
               material notice received from a public body in relation to any
               Property to the Security Agent and comply with any requirements
               contained in that notice;

9.6   PLANT AND MACHINERY

      The Chargor will:

      9.6.1    not use or permit the Plant and Machinery to be used for any
               purpose for which it is not designed nor change the use of the
               Plant and Machinery from its current use;

      9.6.2    not use or permit the Plant and Machinery to be used for any
               purpose or in any manner not covered by any Insurance or for any
               illegal purpose;

      9.6.3    at its own expense, maintain, service, repair and (where
               appropriate) overhaul the Plant and Machinery so as to keep all
               the Plant and Machinery in good repair and condition in all
               respects (allowing for fair wear and tear);

      9.6.4    permit the Security Agent and its authorised agents or
               representatives, upon giving the Chargor reasonable prior notice,
               to inspect any of the Plant and Machinery and the Chargor will
               furnish to the Security Agent any information with respect to the
               Plant and Machinery and their location and use as the Security
               Agent may reasonably require from time to time;

      9.6.5    do all acts and things which the Security Agent may reasonably
               require in order to protect the Security Agent's interest in the
               Plant and Machinery against the claims of any other person and
               will, if so requested by the Security Agent, affix to any item
               comprised in the Plant and Machinery in a prominent position a
               durable nameplate containing the following legend:

               "This [item] is the subject of a fixed charge in favour of
                Highbridge International LLC. dated [-      ]2005";

      9.6.6    not remove or obscure such nameplates and will not permit such
               nameplates to be removed or obscured; and

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<PAGE>

      9.6.7       not remove or obscure any said numbers or manufacturer's
                  markings on Plant and Machinery and will not permit such
                  numbers or markings to be removed or obscured by any other
                  person.

9.7   ENVIRONMENTAL MATTERS

      The Chargor will:

      9.7.1       comply in all material respects with:

                  (a)   the terms and conditions of all Environmental Licences
                        applicable to it; and

                  (b)   all other applicable Environmental Law;

      9.7.2       notify the Security Agent of any claim in relation to an
                  alleged breach of any Environmental Law which might, if
                  substantiated, have a material adverse affect on its financial
                  condition or its ability to perform its obligations under the
                  Transaction Documents; and

      9.7.3       indemnify the Security Agent, each Receiver appointed under
                  this Deed and their respective officers, employees, agents and
                  delegates (each an "INDEMNIFIED PARTY") against any costs or
                  expenses properly suffered or incurred by them which:

                  (a)   arise by virtue of any actual or alleged breach by the
                        Chargor of any Environmental Law;

                  (b)   would not have arisen, if this Deed had not been
                        executed; and

                  (c)   were not caused by the negligence or wilful default of
                        any Indemnified Party.

9.8               DEBTS

                  The Chargor will comply in all respects with the provisions of
                  the Book Debts Security Document

9.9               INTELLECTUAL PROPERTY RIGHTS, APPLICATIONS, KNOW-HOW AND THIRD
                  PARTY RIGHTS

                  Save as permitted by the Securities Purchase Agreement or the
                  Notes, the Chargor will:

                                     - 20 -
<PAGE>

      9.9.1       make all registrations, and pay all fees and Taxes or
                  analogous sums necessary to maintain those of its Intellectual
                  Property Rights and Third Party Rights reasonably required for
                  the carrying on of its business;

      9.9.2       if such fees, Taxes or analogous sums as described in clause
                  9.9.1 are not paid, then the Security Agent may pay them, and
                  the Chargor will indemnify the Security Agent for such
                  payment;

      9.9.3       take all action reasonably practicable to prevent third
                  parties infringing its Intellectual Property Rights and Third
                  Party Rights, and take such other steps as are reasonably
                  practicable to maintain its interest in such Intellectual
                  Property Rights and Third Party Rights as are reasonably
                  required for the carrying on of its business;

      9.9.4       not, otherwise than in accordance with the Notes:

                  (a)   sell, transfer, licence or otherwise dispose of all or
                        any part of such Intellectual Property Rights and Third
                        Party Rights; or

                  (b)   permit any Intellectual Property Right or Third Party
                        Right to be abandoned, be cancelled or lapse due to
                        non-use;

      9.9.5       not, (otherwise than in the ordinary course of its business)
                  without the prior written consent of the Security Agent, (such
                  consent not to be unreasonably withheld or delayed) make any
                  modification or permit there to be made any modification to
                  its Intellectual Property Rights and Third Party Rights if
                  such modification may have an adverse effect on the security
                  of the Security Agent whether under this security or
                  otherwise;

      9.9.6       not permit any of the Intellectual Property Rights
                  registrations to be the subject of a successful claim of
                  abandonment as a result of non-use, other than where such
                  Intellectual Property Rights no longer have any use in the
                  ordinary course of the Chargor's business;

      9.9.7       maintain and comply (in all material respects) with proper
                  procedures for the maintenance of the confidentiality of the
                  Know-How;

      9.9.8       undertake to pursue each of the Applications and undertakes
                  upon the grant or registration of the relevant Intellectual
                  Property Right in relation to an

                                     - 21 -
<PAGE>

                  Application to enter into such further form of document as may
                  be necessary to charge in favour of the Security Agent by way
                  of first fixed charge all legal and beneficial ownership of
                  the relevant Intellectual Property Right and the entire
                  interest of the Chargor in such Intellectual Property Right;

      9.9.9       if any Application made by or in respect of it is challenged
                  or if any Intellectual Property Right of the Chargor which is
                  the subject of the Application is challenged or is not
                  permitted to be registered, use its reasonable endeavours to
                  defeat or reduce the effect of any objection or challenge; and

      9.9.10      hold upon trust for the Security Agent absolutely the entire
                  interest of the Chargor in and to all those Intellectual
                  Property Rights and Third Party Rights which cannot for any
                  reason be charged by the Chargor together with the entire
                  benefit of such rights including, without limitation, the
                  benefit of any Applications relating to Third Party Rights to
                  the extent that such benefit accrues to the Chargor and all
                  proceeds, money and other rights and benefits to which the
                  Chargor is beneficially entitled in respect of the exercise of
                  such Third Party Rights.

9.10  SHARES AND SHARE RIGHTS

      9.10.1      VOTING RIGHTS

                  (a)   Unless and until me occurrence of an Enforcement Event,
                        the Chargor shall have the right to vote on the Shares
                        for any purpose in a manner not inconsistent with the
                        terms of this Deed and any other agreement, instrument
                        or document executed pursuant thereto or in connection
                        therewith.

                  (b)   At any time on or after the occurrence of an Enforcement
                        Event:

                        (i)   the Security Agent or its nominee may (in the name
                              of the Chargor or otherwise and without any
                              further consent or authority on the part of the
                              Chargor) exercise all voting powers and other
                              rights pertaining to the Shares (including the
                              right to nominate or remove a director) as if the
                              Security Agent was the sole beneficial owner of
                              the Shares; and

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<PAGE>

                        (ii)  the Chargor shall (and shall procure that its
                              nominees shall) accept short notice for and attend
                              any meeting of the holders of any Shares, appoint
                              proxies and exercise voting and other rights and
                              powers exercisable by the holder of the Shares as
                              the Security Agent may direct from time to time

      9.10.2      DIVIDENDS

                  (a)   Unless and until the occurrence of an Enforcement Event,
                        the Chargor shall be entitled to receive and retain any
                        and all dividends and interest paid in respect of the
                        Shares.

                  (b)   At any time on or after the occurrence of an Enforcement
                        Event:

                        (i)   all rights of the Chargor to receive the dividends
                              and interest payments which it would otherwise be
                              authorised to receive and retain pursuant to
                              paragraph (a) above shall cease, and all such
                              rights shall thereupon become vested in the
                              Security Agent; and

                        (ii)  all dividends and interest payments which are
                              received by the Chargor contrary to the provisions
                              of this paragraph (b) shall be received in trust
                              for the Security Agent, shall be segregated from
                              other funds of the Chargor and shall be paid over
                              immediately to the Security Agent.

10.   POWERS OF THE SECURITY AGENT

10.1  POWER OF REMEDY

      If the Chargor fails to comply with any obligation, covenant or
      stipulation affecting a Security Asset (whether set out in this Deed or
      otherwise), the Chargor will permit the Security Agent or its officers,
      employees, agents or delegates to enter or take possession of such
      Security Asset and do all such things as the Security Agent may reasonably
      consider necessary or desirable to prevent or remedy any breach of such
      obligation, covenant or stipulation.

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<PAGE>

10.2  INDEMNITY

      The Chargor will indemnify the Security Agent against all losses,
      liabilities, costs and expenses properly incurred in connection with the
      exercise of the powers contained in clause 10.1 (Power of remedy).

11.   CONTINUING SECURITY

      The Security is a continuing security and will extend to the ultimate
      balance of all the Secured Liabilities, regardless of any intermediate
      payment or discharge in whole or in part or liquidation or other
      incapacity of the Chargor.

12.   PROTECTION OF SECURITY

12.1  EFFECT OF INSOLVENCY

      12.1.1      Where any discharge of the Secured Liabilities is made in
                  whole or in part or any arrangement is made on the basis of
                  any payment, security or other disposition which is
                  subsequently avoided or must be restored on the insolvency,
                  liquidation or otherwise of the Chargor, the Security and the
                  liability of the Chargor under this Deed will continue as if
                  the discharge or arrangement had not occurred.

      12.1.2      The Security Agent may concede or compromise any claim that
                  any payment, security or other disposition is liable to
                  avoidance or restoration.

12.2  CIRCUMSTANCES NOT AFFECTING SECURITY OR GUARANTEES

      The Security Interests created, and the obligations assumed by the Chargor
      under this Deed will not be affected by any act, omission, matter or thing
      which, but for this provision, would reduce, release or prejudice the
      Security or any of the Chargor's obligations under this Deed in whole or
      in part, including (whether or not known to the Chargor or the Security
      Agent):

      12.2.1      any time or waiver granted to, or composition with the Chargor
                  or any other person; or

      12.2.2      the taking, variation, compromise, exchange, renewal or
                  release of, or refusal or neglect to perfect, take up or
                  enforce, any rights against, or security over assets of, the
                  Chargor or any other person, or any non-presentation or
                  non-observance

                                     - 24 -
<PAGE>

                  of any formality or other requirement in respect of any
                  instrument or any failure to realise the full value of any
                  security; or

      12.2.3      any incapacity or lack of power, authority or legal
                  personality of, or dissolution, or change in members or status
                  of, the Chargor or any other person; or

      12.2.4      any variation (however fundamental) or replacement of a
                  Transaction Document or any other document or security; or

      12.2.5      any unenforceability, illegality or invalidity of any
                  obligation of any person under any Transaction Document or any
                  other document or security, to the intent that the Chargor's
                  obligations and the Security under this Deed will remain in
                  full force and be construed accordingly, as if there were no
                  unenforceability, illegality or invalidity; or

      12.2.6      any postponement, discharge, reduction, non-provability or
                  other similar circumstances affecting any obligation of the
                  Chargor or any other person under a Transaction Document,
                  resulting from any insolvency, liquidation or dissolution
                  proceedings or from any law, regulation or order, so that each
                  such obligation will, for the purposes of the Chargor's
                  obligations under this Deed, be construed as if there were no
                  such circumstance; or

      12.2.7      any resort to any other means of payment of the Secured
                  Liabilities, or any of them, at any time and in any order
                  which the Security Agent thinks fit.

12.3  IMMEDIATE RECOURSE

      The Chargor waives any right it may have of first requiring the Security
      Agent (or any trustee or agent on its behalf) to proceed against, or
      enforce any other rights or security against or claim payment from, any
      person before enforcing the Security contained in this Deed.

12.4  SUSPENSE ACCOUNT

      At any time during the Security Period, the Security Agent may:

      12.4.1      refrain from applying or enforcing any other money, security
                  or rights held or received by the Security Agent in respect of
                  those amounts, or apply and

                                     - 25 -
<PAGE>

                  enforce the same in such manner and order as it sees fit
                  (whether against those amounts or otherwise); and

      12.4.2      hold in a suspense account any monies received under this Deed
                  or on account of the Chargor's liability in respect of the
                  Secured Liabilities and may hold such monies for such period
                  as the Security Agent sees fit in the Security Agent's
                  absolute discretion without any obligation to apply the same
                  or any part thereof in discharge of the Secured Liabilities.

12.5  ADDITIONAL RIGHT

      This Deed and the Security constituted by this Deed is in addition to, and
      is not in any way prejudiced by, any other right, remedy, security or
      guarantee held by the Security Agent for the Secured Liabilities.

13.   WHEN SECURITY BECOMES ENFORCEABLE

13.1  ENFORCEMENT EVENT

      The Security will become immediately enforceable upon the occurrence of an
      Enforcement Event, and the power of sale and other powers conferred by
      Section 101 (Powers incident to estate or interest of mortgagee) of the
      Act, as varied or amended by this Deed, win be immediately exercisable,
      upon and at any time after the occurrence of an Enforcement Event.

14.   ENFORCEMENT OF SECURITY

14.1  ENFORCEMENT RIGHT

      After the Security has become enforceable, the Security Agent may, in its
      absolute discretion, enforce all or any part of the Security in such
      manner as it sees fit.

14.2  GENERAL

      14.2.1      For the purposes of all powers implied by statute, the Secured
                  Liabilities will be deemed to have become due and payable on
                  the date of this Deed.

      14.2.2      Section 103 of the Act (Regulation of exercise of power of
                  sale), and section 93 of the Act (Restriction on right of
                  consolidation of mortgages) will not apply to this Deed.

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      14.2.3      The statutory powers of leasing conferred on the Security
                  Agent will be extended to allow the Security Agent to lease,
                  make agreements for leases, accept surrenders of leases and
                  grant options, as the Security Agent will think fit, and
                  without the need to comply with any of the provisions of
                  Section 99 (Leasing powers of mortgagor and mortgagee in
                  possession) and 100 (Power of mortgagor and mortgagee in
                  possession to accept surrenders of leases) of the Act.

15.   APPOINTMENT OF AN ADMINISTRATOR BY THE SECURITY AGENT

      At any time on or after the Enforcement Date the Security Agent may
      appoint an administrator of the Chargor for the purposes and upon the
      terms contained in Schedule B1 Insolvency Act 1986.

16.   RECEIVER

16.1  APPOINTMENT OF RECEIVER

      At any time on or after the Enforcement Date, or at any time if the
      Chargor so requests in writing, the Security Agent may, without further
      notice, appoint under seal or in writing any person to be a Receiver of
      all or any part of the Security Assets (but not the whole or substantially
      the whole of the Security Assets) that the Security Agent may specify (the
      "RECEIVERSHIP ASSETS"), in the same manner, as if the Security Agent
      itself had become entitled under the act to exercise the power of sale
      conferred by the Act.

16.2  POWERS OF RECEIVER

      Every Receiver appointed in accordance with clause 16.1 (Appointment of
      Receiver) will have, and will be entitled to exercise, all of the
      following powers, in relation to the Chargor and in addition to those
      conferred by the Act on any receiver appointed under the Act:

      16.2.1      TAKE POSSESSION: to take immediate possession of, get in and
                  collect the whole or any part of the Receivership Assets and,
                  for that purpose, to take such proceedings as may seem to him
                  expedient;

      16.2.2      CARRY ON BUSINESS: to carry on the business of the Chargor, as
                  it considers appropriate;

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<PAGE>

      16.2.3      PROTECTION OF ASSETS: to make and effect all repairs and
                  insurances, do all other acts which the Chargor might do in
                  the ordinary conduct of its business for the protection and
                  the improvement of the Receivership Assets, commence and/or
                  complete any building operations on the Property, and apply
                  for and maintain any planning permissions, building
                  regulations approvals and any other permissions, consents or
                  licences, as it considers appropriate;

      16.2.4      EMPLOYEES: to appoint and discharge managers, officers,
                  agents, accountants and employees of the Chargor for the
                  purposes of this Deed, upon such terms as it considers
                  appropriate;

      16.2.5      BORROW MONEY: for the purpose of exercising any of the powers,
                  authorities and discretions conferred on it by or pursuant to
                  this Deed or the Act and/or of defraying any costs, charges,
                  losses or expenses (including remuneration) which will be
                  incurred in their exercise or for any other purpose, to raise
                  and borrow money, either unsecured or on the security of all
                  or any part of the Receivership Assets, either in priority to
                  the Security or otherwise, and generally on such terms and
                  conditions as he may consider appropriate, and so that no
                  person lending such money will be concerned to enquire as to
                  the propriety or purpose of the exercise of such power, or to
                  see to the application of any money so raised or borrowed;

      16.2.6      SET ASSETS: to sell, exchange, convert into money and realise
                  all or any part of the Receivership Assets, by public auction
                  or private contract, and generally in such manner and on such
                  terms as he may consider appropriate, for a consideration
                  consisting of cash, debentures, shares, stock or other
                  valuable consideration, and payable in a lump sum or by
                  installments spread over such period as he may consider
                  appropriate (and fixtures may be severed and sold separately
                  from the property containing them, without the consent of the
                  Chargor);

      16.2.7      LEASES: to let all or any part of the Receivership Assets, for
                  such term and at such rent (with or without a premium) as he
                  may consider appropriate, and to accept a surrender of any
                  lease or tenancy of such Receivership Assets, on such terms as
                  he may consider appropriate (including the payment of money to
                  a lessee or tenant on a surrender);

                                     - 28 -
<PAGE>

      16.2.8      COMPROMISE: to settle, adjust, refer to arbitration,
                  compromise and arrange any claims, accounts, disputes, and
                  demands with or by any person who is or claims to be a
                  creditor of the Chargor, or relating in any way to all or any
                  part of the Receivership Assets;

      16.2.9      LEGAL ACTIONS: to bring, prosecute, enforce, defend and
                  abandon any such actions, suits and proceedings in relation to
                  all or any part of the Receivership Assets, as he may consider
                  appropriate;

      16.2.10     RECEIPTS: to give valid receipts for all money;

      16.2.11     SUBSIDIARIES: to form one or more Subsidiaries of the Chargor,
                  and transfer to any such Subsidiary all or any part of the
                  Receivership Assets; and

      16.2.12     GENERAL POWERS: to do all such other acts and things, as he
                  may consider desirable or necessary, for realising all or any
                  part of the Receivership Assets, or incidental or conducive to
                  any of the matters, powers or authorities conferred on a
                  Receiver under this Deed, to exercise in relation to all or
                  any part of the Receivership Assets all such powers and
                  authorities as he would be capable of exercising, if he were
                  the absolute beneficial owner of them, and to use the name of
                  the Chargor for all or any such purpose.

16.3  REMOVAL AND REMUNERATION

      The Security Agent may in writing:

      16.3.1      remove any Receiver appointed by it;

      16.3.2      appoint a new Receiver, in the place of any Receiver whose
                  appointment may have terminated; and

      16.3.3      fix the remuneration of any Receiver appointed by it.

16.4  JOINT RECEIVERS

      If, at any time, there is more than one Receiver of all or any part of the
      Receivership Assets, each such Receiver may (unless otherwise stated in
      any appointment document) exercise all of the powers conferred on a
      Receiver under this Deed individually and to the exclusion of each other
      Receiver.

                                     - 29 -
<PAGE>

16.5  LENDER MAY EXERCISE RECEIVER'S POWERS

      All or any of the powers, authorities and discretions which are conferred
      by this Deed (either expressly or impliedly) upon a Receiver may be
      exercised, after the Security becomes enforceable, by the Security Agent,
      both before and after the appointment of any Receiver.

16.6  POWER TO DISPOSE OF CHATTELS OR PRODUCE

      At any time after the security constituted by this Deed shall have become
      enforceable, the Security Agent or any Receiver appointed under this Deed
      may dispose of any chattels or produce found on the Property as agent for
      the Chargor and (without prejudice to any obligation to account for the
      proceeds of any sale of such chattels or produce) the Security Agent or
      such or Receiver are to be indemnified by the Chargor against any
      liability arising from such disposal.

17.   APPLICATION OF PROCEEDS

      All money received by the Security Agent or by any Receiver appointed
      under this Deed will, after the Security has become enforceable, but
      subject to the payment of any claims having priority to the Security, be
      applied by the Security Agent for the following purposes and, unless
      otherwise determined by the Security Agent or the Receiver, in the
      following order of priority (without prejudice to the right of the
      Security Agent to recover any shortfall from the Chargor):

17.1  COSTS OF ENFORCEMENT

      to meet all costs, charges and expenses incurred and payments made by the
      Security Agent or the Receiver, and all remuneration due under this Deed,
      together with interest on all such amounts (both before and after judgment
      and payable on demand) at the interest rate prescribed in the Notes from
      the date the same become due and payable, until the date the same are
      unconditionally and irrevocably paid and discharged in full;

17.2  SECURED LIABILITIES

      to pay the Secured Liabilities or such part as is then due and payable as
      determined by the Security Agent in its sole discretion; and

17.3  SURPLUS TO THE CHARGOR

      to pay any surplus to the Chargor or other person entitled to it.

                                     - 30 -
<PAGE>

18.   NO LIABILITY AS MORTGAGEE IN POSSESSION

18.1  NO LIABILITY

      Neither the Security Agent nor any Receiver will be liable to account as
      mortgagee in possession, or be liable for any loss on realisation or for
      any default or omission for which a mortgagee in possession might be
      liable, by virtue of it entering into possession of all or any part of the
      Security Assets.

18.2  RECEIVER AS AGENT OF THE CHARGOR

      Every Receiver appointed by the Security Agent under this Deed will be
      deemed to be the agent of the Chargor for all purposes and will, as such,
      be deemed to be in the same position as a Receiver duly appointed by a
      mortgagee under the Act.

18.3  RESPONSIBILITY OF THE CHARGOR

      The Chargor alone will be responsible for a Receiver's contracts,
      engagements, acts, omissions, defaults and for losses and liabilities
      incurred by him and the Security Agent will not incur any liability for
      these (either to me Chargor or otherwise) by reason of the Security Agent
      appointing such a Receiver.

18.4  RIGHTS UNDER THE ACT

      Subject to the other provisions of mis Deed, the Security Agent and every
      Receiver will be entitled to all the rights, powers, privileges and
      immunities under the Act conferred on mortgagees and receivers duly
      appointed under the Act.

19.   PROTECTION OF THIRD PARTIES

      No purchaser, mortgagee or other person or company dealing with the
      Security Agent or a Receiver, or any agent of them, need enquire whether
      the Secured Liabilities have become payable, whether any power which the
      Security Agent or Receiver is purporting to exercise has become
      exercisable, whether any Secured Liabilities remain due or how any money
      paid to the Security Agent or Receiver is applied.

                                     - 31 -
<PAGE>

20.   NEW ACCOUNTS

20.1  DEEMED NEW ACCOUNT

      If the Security Agent receives, or is deemed to have received, notice,
      whether actual or constructive, of any subsequent Security Interest or
      other interest affecting any part of the Security Assets and/or their
      proceeds of sale, the Security Agent may open a new account or accounts
      with the Chargor. If the Security Agent does not open a new account, it
      will nevertheless be treated as if it had done so, at the time when it
      received or was deemed to have received notice and, from that time, all
      payments made to the Security Agent will be credited or be treated as
      having been credited to the new account and will not operate to reduce the
      amount of the Secured Liabilities.

20.2  BREAKING OF ACCOUNTS

      If, for any reason, this Deed ceases to be a continuing security in
      respect of the Chargor, me Security Agent may open a new account, or
      continue any existing account, with the Chargor, and the liability of the
      Chargor in respect of the Secured Liabilities, at the date of such
      cessation, will remain, regardless of any payments in or out of any such
      account.

21.   REDEMPTION OF PRIOR SECURITY INTERESTS

      The Security Agent may, at any time after me Security has become
      enforceable, redeem any prior Security Interest against all or any part of
      the Security Assets or procure the transfer of the same to itself and may
      settle and pass the accounts of the holder of any prior Security Interest.
      Any accounts so settled and passed will be conclusive and binding on the
      Chargor. All principal, interest, costs, charges and expenses of and
      incidental to such redemption and transfer will be paid by the Chargor to
      the Security Agent on demand.

22.   DELEGATION BY THE SECURITY AGENT

      The Security Agent may delegate, by power of attorney or in any other
      manner, to any person or persons all or any of the powers, authorities and
      discretions which are exercisable by the Security Agent under mis Deed in
      relation to all or any part of the Security Assets. Any such delegation
      may be made upon such terms (including the power to sub-delegate), and
      subject to such regulations, as the Security Agent may think fit. The
      Security Agent will not be liable or responsible to the Chargor for any
      loss or damage, arising from any act, default, omission or misconduct on
      the part of any delegate or sub-delegate.

                                     - 32 -
<PAGE>

23.   FURTHER ASSURANCE AND POWER OF ATTORNEY

23.1  GENERAL

      The Chargor will, at its own expense, give all such assurances, take all
      action and execute all documents required by the Security Agent for
      perfecting or protecting the Security, for facilitating the realisation of
      all or any part of the Security Assets or in the exercise of all powers,
      authorities and discretions vested in the Security Agent, or any Receiver,
      of all or any part of the Security Assets, or in any delegate or
      sub-delegate appointed in accordance with clause 22 (Delegation by the
      Security Agent).

23.2  POWER OF ATTORNEY

      The Chargor, by way of security and in order to secure the performance of
      its obligations under this Deed, irrevocably appoints each of the Security
      Agent and any Receiver, delegate or sub-delegate appointed under this
      Deed, to be its attorney, acting severally, on its behalf and in its name,
      to give all assurances, take all action and execute all documents (under
      hand or seal) which the Chargor is obliged to under this Deed (including
      making any demand upon, or giving any notice or receipt to, any person
      owing money to the Chargor and executing and delivering any legal charges,
      mortgages, assignments or other security and any transfers of securities)
      and generally, in its name and on its behalf, to exercise all or any of
      the powers, authorities and discretions conferred by this Deed or by
      statute on the Security Agent or any Receiver, delegate or sub-delegate.
      The power of attorney hereby granted is to secure the performance of
      obligations owed to the donees within the meaning of the Powers of
      Attorney Act 1971.

23.3  RATIFICATION

      The Chargor agrees to ratify and confirm whatever any such attorney,
      acting pursuant to clause 23.3 (Power of attorney), does or purports to do
      in the exercise or purported exercise of all or any of the powers,
      authorities and discretions referred to in clause 23.2 (Power of
      attorney).

24.   EXPENSES AND INDEMNITIES

24.1  COSTS AND Expenses

      All costs, charges and expenses properly incurred, and all payments
      properly made, by the Security Agent or any Receiver appointed under this
      Deed in the lawful exercise of the

                                     - 33 -
<PAGE>

      powers conferred by this Deed (whether or not occasioned by any act,
      neglect or default of the Chargor) will carry interest (both before and
      after judgment) at the interest rate prescribed in the Notes from the date
      of the same being incurred or becoming payable, until the date the same
      are unconditionally and irrevocably discharged in full. The amount of all
      such costs, charges, expenses, payments and interest and all remuneration
      payable under this Deed is payable by the Chargor on demand. All such
      costs, charges, expenses and payments will be paid and charged as between
      the Security Agent and the Chargor on a full indemnity basis.

24.2  INDEMNITY

      The Security Agent and every Receiver, attorney, manager, agent or other
      person appointed by the Security Agent under this Deed is entitled to be
      indemnified out of the Security Assets in respect of all liabilities and
      expenses properly incurred by them in the execution or purported execution
      of any of the powers, authorities or discretions vested in them pursuant
      to this Deed, and against all actions, proceedings, costs, claims and
      demands in respect of any matter or thing done, or omitted to be done, in
      any way relating to the Security Assets.

24.3  PAYMENT

      The Security Agent and any Receiver may retain and pay all sums in respect
      of monies payable under clauses 24.1 (Costs and Expenses) or 24.2
      (Indemnity) out of any money received under the powers conferred by this
      Deed.

25.   TAXES, CURRENCY AND STAMP DUTIES

25.1  GROSSING UP

      All amounts payable by the Chargor under this Deed are to be paid in full
      without any deduction or withholding, whether on account of any Taxes or
      otherwise, unless the Chargor is required by law to make such deduction or
      withholding, in which case the amount so payable will be increased to the
      extent necessary to ensure that the amount receivable by the Security
      Agent after such deduction or withholding is equal to the amount which
      would have been receivable by the Security Agent if no such deduction or
      withholding had been required.

                                     - 34 -
<PAGE>

25.2  CURRENCY INDEMNITY

      The Chargor will indemnify the Security Agent for any loss or liability
      suffered by it, as a result of any amount paid or received in respect of
      the Secured Liabilities (whether as a result of any order, judgment or
      otherwise) not being received or recovered by or on behalf of the Security
      Agent in the currency in which it is expressed to be payable.

25.3  STAMP DUTY

      25.3.1 The Chargor will pay all stamp, documentary, registration and other
            similar duties or Taxes, including any related penalties, additions,
            surcharges or interest, which are imposed or chargeable on or in
            connection with tie Security or any judgment given in connection
            with this Deed

      25.3.2 The Security Agent may, but is not obliged to, pay any amounts
            which are referred to in clause 25.3.1. If the Security Agent does
            so, the Chargor will indemnify the Security Agent on demand against
            any such payment, together with any costs and expenses (including
            related legal fees and any VAT payable) incurred by or on behalf of
            the Security Agent in connection with such payment.

26.   REMEDIES AND WAIVERS

26.1  DELAY NOT WAIVER

      If the Security Agent does not exercise, or delays in exercising, any of
      its respective rights or remedies under or in connection with this Deed,
      that will not operate as a waiver of any such right or remedy.

26.2  FUTURE RIGHTS

      The single or partial exercise of any right or remedy will not prevent any
      further or other exercise of that right or remedy.

26.3  ADDITIONAL RIGHTS

      The rights and remedies provided to the Security Agent in this Deed are
      additional to any rights or remedies provided by law.

                                     - 35 -

<PAGE>
27.   SET-OFF

27.1  All payments required to be made by the Chargor under this Deed will be
      made without reference to any set-off or counterclaim and will be made,
      free and clear of, and without any deduction for or on account of, any
      set-off or counterclaim.

27.2  The Chargor authorises the Security Agent to apply any credit balance to
      which it is entitled on any account of the Chargor with the Security Agent
      or any other liability of the Security Agent to the Chargor in
      satisfaction of any unpaid sum due and payable by the Chargor to the
      Security Agent under this Deed. The Security Agent is authorised to
      purchase wife any credit balance on any such account such other currencies
      as may be necessary to effect such application. The Security Agent will
      not be obliged to exercise any right given to it by this clause 27.2.

28.   PARTIAL INVALIDITY

      If a provision of this Deed is or becomes illegal, invalid or
      unenforceable in any respect under the law of any jurisdiction, this will
      not affect or impair the legality, validity or enforceability of any other
      provision of this Deed or that provision under the law of any other
      jurisdiction.

29.   NOTICES

29.1  A demand notice or other communication to the Chargor in connection with
      this Deed:

      29.1.1 shall be in writing; and

      29.1.2 shall be left at or sent by facsimile or prepaid ordinary post
            (airmail if posted to a place outside the United Kingdom) to the
             Chargor addressed to the person at the address identified with its
             signature below.

29.2  A demand notice or other communication shall take effect from the time it
      is received (or if earlier the time it is deemed to be received in
      accordance with clause 29.3) unless a later time is specified in it.

29.3  A letter or facsimile is deemed to be received:

      29.3.1 in the case of a posted letter unless actually received earlier on
             the second (fifth if posted to a place outside the United Kingdom)
             day after posting; and

                                     - 36 -

<PAGE>
          29.3.2      in the case of facsimile on production of a transmission
                      report from the machine from which the facsimile was sent
                      which indicates that the facsimile was sent in its
                      entirety to the facsimile number of the recipient.

30.   COUNTERPARTS

      This Deed may be executed in any number of counterparts, and by the
      different parties hereto on separate counterparts, each of which will
      constitute an origional, and all the counterparts together will constitute
      the same instrument.

31.   GOVERNING LAW AND JURISDICTION

31.1  GOVERNING LAW

      This Deed is governed by, and will be construed in accordance with,
      English law.

31.2  JURISDICTION

      31.2.1 SUBMISSION TO JURISDICTION

            The Charger irrevocably agrees for the benefit of the Security Agent
            that the courts of England and/or any of the federal or State courts
            sitting in The City of New York, Borough of Manhattan will have
            jurisdiction to hear and determine any suit, action or proceeding,
            and to settle any disputes which may arise out of, or in connection
            with, this Deed and, for that purpose, irrevocably submits to the
            jurisdiction of such courts.

      31.2.2 FORUM

            The Chargor irrevocably waives any objection which it might now or
            hereafter have to any of the courts referred to in clause 31.2.1
            being nominated as the forum to hear and determine any suit, action
            or proceeding, and to settle any disputes which may arise out of, or
            in connection with, this Deed and agree not to claim that any such
            court is not a convenient or inappropriate forum.

      31.2.3 OTHER COMPETENT JURISDICTIONS

            The submission to the jurisdiction of the courts referred to in
            clause 31.2.1 will not (and is not to be construed so as to) limit
            the right of the Security Agent to take proceedings against the
            Chargor in any other court of competent

                                     - 37 -

<PAGE>

            jurisdiction, nor will the taking of proceedings in any one or more
            jurisdictions preclude the taking of proceedings in any other
            jurisdiction, whether concurrently or not.

      31.2.4 CONSENT TO ENFORCEMENT

            The Chargor hereby consents in respect of any legal action or
            proceeding arising out of, or in connection with, this Deed, to the
            giving of any relief, or the issue of any process in connection with
            such action or proceeding including, without limitation, the making,
            enforcement or execution against any property whatsoever
            (irrespective of its use or intended use) of any order or judgment
            which may be made or given in such action or proceeding.

      31.2.5 WAIVER OF INDEMNITY

            To the extent that the Chargor may in any jurisdiction claim for
            itself or its assets, immunity from suit, execution, attachment
            (whether in aid of execution, before judgment or otherwise) or other
            legal process and, to the extent that in any such jurisdiction there
            may be attributed to itself or its assets such immunity (whether or
            not claimed), the Chargor hereby irrevocably agrees that it will not
            claim, and hereby irrevocably waives, such immunity to the full
            extent permitted by the law of such jurisdiction

IN WITNESS OF WHICH this Deed has been entered into as a deed on the date first
stated above

                                     - 38 -
<PAGE>

                                   SCHEDULE 1

                                    PROPERTY

<TABLE>
<CAPTION>
Title No.        description
--------         -----------
<S>              <C>
CYM.62633        FREEHOLD    LAND    AT    MITEL    BUSINESS    PARK,
                 PORTSKEWETT, MONMOUTHSHIRE
</TABLE>

                                     - 39 -
<PAGE>

IN WITNESS whereof this Debenture has been executed the day and year first
before written.

EXECUTED (but not delivered until the
date hereof by MITEL NETWORKS
LIMITED and signed by two directors or a
director and the secretary

                                          Director ILLEGIBLE

                                          Director/ /s/ Paul Butcher

NOTICE DETAILS

        Address:   Mitel Business Park
                   Portskewett
                   Caldicot
                   Gwent NP26 5YR
        Fax No.:   0870 909 4040
        Tel. No.:  0870 909 2020
        Attention: Chris Crane

EXECUTED (but not delivered until the            HIGHBRIDGE INTERNATIONAL LLC
date hereof by the SECURITY AGENT
acting by its duly authorized signatories        By: HIGHBRIDGE CAPITAL
                                                 MANAGEMENT, LLC

                                                By: ____________________________
                                                    Name: Ari J. Storch
                                                    Title: Managing Director

<PAGE>
IN WITNESS whereof this Debenture has been executed the day and year first
before written.

EXECUTED (but not delivered until the
date hereof by MITEL NETWORKS
LIMITED and signed by two directors or a
director and the secretary

                                          Director _________________________

                                          Director/Secretary _______________

NOTICE  DETAILS

        Address:   Mitel Business Park
                   Portskewett
                   Caldicot
                   Gwent NP26 5YR

        Fax No.:  0870 909 4040

        Tel. No.:  0870 909 2020

        Attention: Chris Crane

EXECUTED (but not delivered until the    HIGHBRIDGE INTERNATIONAL LLC
date hereof by the SECURITY AGENT
acting by its duly authorized
signatories                              By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC

                                         By: /s/ Adam J. Chill
                                             ----------------------------
                                             Name: Adam J. Chill
                                             Title: Managing Director