SECTION 1.1. Defined Terms Generally. Unless otherwise defined herein, capitalizedterms used herein have the meanings provided therefore in the Existing Credit Agreement.     SECTION 1.2. Certain Definitions. The following terms when used in this Amendmentshall have the following meanings (such meanings to be equally applicable to the singular andplural forms thereof);     “Amendment” and “Second Amendment” are defined in the preamble.     “Borrower” is defined in the preamble.     “Credit Agreement” is defined in the first recital.     “Existing Credit Agreement” is defined in the first recital.     “July 2007 Financials” is defined in the third recital.     “Second Amendment Effective Date” is defined in Article III.     “S-O-X” means the Sarbanes-Oxley Act of 2002, as amended.ARTICLE IIAMENDMENTS TO EXISTING CREDIT AGREEMENT     SECTION 2.1. The Existing Credit Agreement is hereby amended as follows:     SECTION 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby amended by inserting thefollowing definitions in the appropriate alphabetical order:     “Employee Stock Purchase Plan” means the plan offered by the Parent to its employees,officers and directors pursuant to which such employees, officers and directors have the option topurchase Capital Securities of the Parent, which, purchase may, to the extent permitted by law(including S-O-X), be financed by a loan from the Parent, all as described in Annex I tothe Second Amendment.     “Reno Facility Sale and Lease Back” means the sale and leaseback of the property ownedby Inter-Tel (Delaware) Incorporated (the “Seller”) located at 855 Trademark Drive, Reno,Nevada pursuant to which, among other things, the Seller will sell such property to a purchaser(the “Purchaser”) and who will then lease it back to the Seller or another Obligorprovided, that (i) the sale price of the facility shall not be less than $17,500,000, (ii)the lease terms shall be satisfactory to the Administrative Agent, acting reasonably and (iii) suchsale and leaseback will comply with Section 7.2.14 to the extent relevant.     “Second Amendment” means the Second Amendment to the Credit Agreement, dated as ofDecember 12, 2007, among the Borrowers and the Lenders party thereto.     “Second Amendment Effective Date” means the Second Amendment Effective Date as thatterm is defined in the Second Amendment.
2

 
     SECTION 2.1.2. Clause (d) of Section 3.1.1 of the Credit Agreement is hereby amended andrestated in its entirety to read as follows:“(d) concurrently with the receipt by the Parent or any of its Subsidiaries of anyNet Equity Proceeds or Net Debt Proceeds, the Borrowers shall make, or cause to bemade, a mandatory prepayment of the Loans in an amount equal to 40% of such NetEquity Proceeds (provided that such percentage shall be reduced to 0% ifthe Leverage Ratio set forth in the Compliance Certificate delivered pursuant toclause (c) of Section 7.1.1 by the Parent to the AdministrativeAgents immediately preceding the event giving rise to the Net Equity Proceeds wasless than 3.00.1) and 100% of such Net Debt Proceeds provided that withrespect to any Net Equity Proceeds received in respect of or related to theEmployee Stock Purchase Plan, such prepayment shall only be required to be made onthe last day of the Fiscal Quarter in which any loans made to fund purchases underthe Employee Stock Purchase Plan have been repaid to the Parent or any of itsSubsidiaries and no prepayments shall be required to he made hereunder at the timethat Capital Securities are issued in accordance with the Employee Stock PurchasePlan.”     SECTION 2.1.3. Clause (e) of Section 3.1.1 of the Credit Agreement is hereby amended andrestated in its entirety to read as follows:     “(e) The Parent shall, within three Business Days following the receipt of any NetDisposition Proceeds or Net Casualty Proceeds by the Parent orany of itsSubsidiaries, (x) deliver to the Administrative Agent a calculation of the amount ofsuch proceeds and, (y) except for any such proceeds received in respect of the RenoFacility Sale and Leaseback, to the extent the aggregate amount of such proceedsreceived by the Parent and its Subsidiaries in any Fiscal Year exceeds $2,000,000, make,or cause to be made, a mandatory prepayment of the Loans in an amount equal to 100% ofthe aggregate amount of such Net Disposition Proceeds or Net Casualty Proceeds in excessof $2,000,000; provided that, (A) 50% of the aggregate amount of Net DispositionProceeds received in respect of the Reno Facility Sale and Leaseback shall, within threeBusiness Days following receipt thereof, be applied as a mandatory prepayment of theLoans, and (B) pursuant to written notice referred to above delivered by the Parent tothe Administrative Agent in connection with the calculation not more than three BusinessDays following receipt of any such Net Disposition Proceeds (including Net DispositionProceeds in respect of the Reno Facility Sate and Leaseback not otherwise subject toclause (A) above) or Net Casualty Proceeds, so long as no Default has occurredand is continuing, all such other Net Disposition Proceeds or Net Casualty Proceeds, asthe case may be, may be retained by the Parent or any such Subsidiary, as the case maybe (and be excluded from the prepayment requirements of this clause (e) (other thanclause (A) hereof)), if (i) the Parent informs the Administrative Agent in such noticeof its good faith intention to apply (or cause one or more of the Subsidiaries to apply)such Net Disposition Proceeds or Net Casualty Proceeds to the acquisition of
3

 
other assets or properties in the U.S. consistent with the businesses permitted to beconducted pursuant to Section 7.2.1 (including by way of merger or Investment);providedfurther that, so long as such assets or properties will beowned by a Borrower or a Subsidiary Guarantor, such assets or properties may be locatedoutside of the United States, and (ii) within 270 days following the receipt of such NetDisposition Proceeds or Net Casualty Proceeds, such proceeds are applied or committed tosuch acquisition. The amount of such Net Disposition Proceeds or Net Casualty Proceeds(including the portion of any Net Disposition Proceeds received in respect of the RenoFacility Sale and Leaseback and not applied pursuant to clause (A) above) not appliedafter such 270 day period (or committed within such 270 day period but not appliedwithin 90 days after such 270 day period) shall be applied as a mandatory prepayment ofthe Loans as required pursuant to the first sentence of this clause (e) without givingeffect to the provisos therein.”     SECTION 2.1.4. Section 7.2.9 of the Credit Agreement is hereby amended by deleting the word“and” immediately prior to clause (iii) and inserting the following language immediately followingclause (iii)*,*“or (iv) issuance (for cash consideration) of Capital Securities to one or more ofthe Permitted Holders in an aggregate amount not to exceed $50,000,000 over the term of thisAgreement; provided that no cash amounts (whether in respect of interest, dividends, distributions,redemptions or otherwise) may be paid on or in respect of any such Capital Securities except inaccordance with Section 7.2.6 of the Credit Agreement.”     SECTION 2.1.5. Section 7.2.11 of the Credit Agreement is hereby amended by (x) deleting theword “or” at the end of clause (c), (y) deleting the period (“.”) at the endof clause (d)and replacing it with a “; or”, and (z) inserting a new clause (e) which shall read as follows:“(e) the Reno Facility Sale and Leaseback.”     SECTION 2.1.6. Clause (b) of Section 7.2.17 of the Credit Agreement is hereby amended byinserting the following language at the end of such Clause; “; provided that proceeds fromthe Reno Facility Sale and Leaseback shall only be required to be applied in accordance withclause (e) of Section 3.1.1”.ARTICLE IIICONDITIONS TO EFFECTIVENESS     SECTION 3.1. Conditions to Effectiveness. This Amendment shall become effective uponthe prior or simultaneous satisfaction of each of the following conditions in a manner reasonablysatisfactory to the Administrative Agent (the date when all such conditions are so satisfied beingthe “Second Amendment Effective Date”):     SECTION 3.1.1. Counterparts. The Administrative Agent shall have received (a)counterparts to this Amendment, executed by the Borrower and the Required Lenders and (b) a fullyexecuted copy of an amendment to the Second Lien Credit Agreement, substantially in the form ofthis Amendment.
4

 
     SECTION 3.1.2. Certificate of Authorized Officer. The Borrowers shall have delivered acertificates of Authorized Officers, solely in their capacity as Authorized Officers of theBorrowers, certifying that, both immediately before and after giving effect to the this Amendmenton the Second Amendment Effective Date, the statements set forth in Article IV hereof are true andcorrect.     SECTION 3.1.3. Obligor Acknowledgment and Consent. The Parent and eachObligor (other than the Borrowers) shall execute and deliver an Acknowledgment and Consent insubstantially the form of Annex II hereto.     SECTION 3.1.4. Legal Matters. All legal matters incident to this Amendment shall besatisfactory to the U.S. Administrative Agent and its counsel.     SECTION 3.1.5. Payment of Expenses. The Borrowers shall have paid all reasonable fees,costs and expenses of the Agents in connection with the preparation, execution and delivery of thisAmendment and the administration of the Credit Agreement, including without limitation, thereasonable fees and disbursements of counsel to the Administrative Agent.ARTICLE IVREPRESENTATIONS AND WARRANTIES     To induce the Lenders to enter into this Amendment, the Borrowers represent and warrant to theLenders as set forth below:     SECTION 4.1. Representations and Warranties, No Event of Default. The representationsand warranties contained herein, in Article VI of the Credit Agreement and in each other LoanDocument, certificate or other writing delivered by or on behalf of any Obligor to any SecuredParty on or prior to the Second Amendment Effective Date are true and correct in all materialrespects on and as of such date as though made on and as of such date (except that anyrepresentation and warranty expressly made as of a specific date shall be true and correct only asof such specific date), and no Default or Event of Default shall have occurred, assumingeffectiveness of this Amendment, and be continuing on the Second Amendment Effective Date or wouldresult from this Amendment becoming effective in accordance with its terms.     SECTION 4.2. Due Authorization, Non-Contravention, etc. The execution, delivery andperformance by each Obligor of this Amendment, the Credit Agreement as amended hereby and each LoanDocument executed or to be executed by it are in each case within such Person’s powers, have beenduly authorized by all necessary action and do not (a) contravene any (i) Obligor’s OrganicDocuments, (ii) court decree or order binding on or affecting any Obligor or (iii) law orgovernmental regulation binding on or affecting any Obligor; or (b) result in (i) or require thecreation or imposition of any Lien on any Obligor’s properties (except as permitted by the CreditAgreement) or (ii) a default under any material contractual restriction binding on or affecting anyObligor.     SECTION 4.3. Government Approval, Regulation, etc. No authorization or approval orother action by, and no notice to or filing with, any Governmental Authority or other Person (otherthan those that have been, or on the Second Amendment Effective Date will be, duly obtained ormade and which are, or on the Second Amendment Effective Date will be, in full force andeffect) is required for the consummation of this Amendment or the Credit Agreement as amendedhereby or the due
5

 
execution, delivery or performance by any Obligor of this Amendment, the Credit Agreement asamended hereby or any Loan Document to which it is a party.     SECTION 4.4. Validity, etc. This Amendment, the Credit Agreement (as amended hereby)and each Loan Document to which any Obligor is a party constitutes the legal, valid and bindingobligations of such Obligor, enforceable against such Obligor in accordance with their respectiveterms (except, in any case, as such enforceability may be limited by applicable bankruptcy,insolvency, reorganization or similar laws affecting creditors’ rights generally and by principlesof equity).ARTICLE VCONTINUED EFFECTIVENESS OF CREDIT AGREEMENT     SECTION 5.1. Continued Effectiveness of Credit Agreement. Each Borrower hereby (a)confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, infull force and is herby ratified and confirmed in all respects except that on and after the SecondAmendment Effective Date all references in any such Loan Document to the “Credit Agreement,”“thereto,” “thereof,” “thereunder” or words of like imports referring to the Credit Agreement shallmean the Credit Agreement as amended by this Amendment, and (b) confirms and agrees that to theextent that any such Loan Document purports to assign or pledge to the Collateral Agent, or grantto the Collateral Agent, a Lien on any collateral as security for the Obligations of the Borrowersfrom time to time existing in respect of the Credit Agreement and the Loan Documents, such pledge,assignment and/or grant of a Lien is ratified and confirmed in all respects.ARTICLE VIWAIVER     SECTION 6.1. Waiver. The Required Lenders herby waive the requirement of the Parent todeliver the July 2007 Financials to the Administrative Agent within 90 days of the end of theFiscal Quarter ended July 31, 2007 as set forth in Section 7.1.1 (a) of the Credit Agreement;provided that the Parents shall deliver such July 2007 Financials to the AdministrativeAgent on or before December 15, 2007 and the failure of the Parent to make such delivery shallconstitute an immediate Event of Default. The Required Lenders herby waive the Default arisingunder Section 7.1.1(d) of the Credit Agreement arising as a result of the failure of the Parent tonotify the Administrative Agent within the requisite time period of the Default arising as a resultof the failure of the Parent to deliver the July 2007 Financials.ARTICLE VIIMISCELLANEOUS     SECTION 7.1. Counterparts. This Amendment may be executed by the parties hereto inseveral counterparts, each of which when executed and delivered shall be an original and all ofwhich shall constitute together one and the same agreement. Delivery of an executed counterpart ofa signature page to this Amendment by facsimile (or other electronic transmission) shall beeffective as delivery of a manually executed counterpart of this Amendment.
6

 
     SECTION 7.2. Cross-References. References in this Amendment to any Article or Sectionare, unless otherwise specified, to such Article or Section of this Amendment.     SECTION 7.3. Governing Law. This Amendment shall be governed by, and construed inaccordance with, the internal laws of the State of New York.     SECTION 7.4. Loan Document Pursuant to Credit Agreement. This Amendment constitutes a“Loan Document” under the Credit Agreement. Accordingly, it shall be an Event of Default under theCredit Agreement if (a) any representation or warranty made by an Obligor under or in connectionwith this Amendment shall have been untrue, false or misleading in any material respect when made,or (b) an Obligor shall fail to perform or observe any term, covenant or agreement contained inthis Amendment.     SECTION 7.5. No Waiver. Except as expressly set forth herein, this Amendment is not,and shall not be deemed to be a waiver of or consent to any Event of Default, event with which thegiving of notice or lapse of time or both may result in an Event of Default, or othernon-compliance now existing or hereafter arising under the Credit Agreement and the other LoanDocuments.     SECTION 7.6. Successors and Assigns. This Amendment shall be binding upon and inure tothe benefit of the parties hereto and their respective successors and assigns.     SECTION 7.7. Fees and Expenses. The Borrowers shall pay on demand all out-of-pocketcosts and expenses of the Agents in connection with the preparation, execution and delivery of thisAmendment, including without limitation, the reasonable fees and expenses and other reasonablecharges of legal counsel to the Agents.     SECTION 7.8. WAIVER OF JURY TRIAL. EACH ADMINISTRATIVE AGENT, EACH LENDER, EACH ISSUERAND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENTPERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASEDHEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OFCONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH ADMINISTRATIVEAGENT, SUCH LENDER, SUCH ISSUER OR SUCH BORROWER IN CONNECTION THEREWITH. EACH BORROWERACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THISPROVISION IS A MATERIAL INDUCEMENT FOR EACH ADMINISTRATIVE AGENT, EACH LENDER AND EACH ISSUERENTERING INTO THE LOAN DOCUMENTS. EACH PARTY HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT ORATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULDNOT IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
7

 
     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Second Amendment as ofthe date first above written.      MITEL NETWORKS CORPORATION