Document:

exv4w3

 

EXHIBIT 4.3

HSBC FINANCE CORPORATION

Form of Warrant Agreement

(for warrants sold alone)

     This Warrant Agreement dated as of          between HSBC Finance Corporation,
a corporation organized under the laws of the State of Delaware (the “Company”, which term includes
any successor corporation under the Indenture hereinafter referred to) and as Warrant Agent (the
“Warrant Agent”).

     Whereas, the Company has entered into an Indenture dated as of          (the
“Indenture”), with          , as Trustee (the “Trustee”), providing for the issuance from
time to time of its unsecured debt securities (the “Debt Securities”), to be issued in one or more
series as provided in the Indenture; and

     Whereas, the Company proposes to sell warrant certificates evidencing one or more
warrants (the “Warrants” or, individually a “Warrant”) representing the right to purchase [title of
debt securities purchasable through exercise of Warrants] (the “Warrant Debt Securities”), such
warrant certificates and other warrant certificates issued pursuant to this Agreement hereinafter
referred to as the “Warrant Certificates”; and

     Whereas, the Company desires the Warrant Agent to act on behalf of the Company in
connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and
in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions on which they may be issued, exchanged, exercised and
replaced;

     Now, Therefore, in consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:

ARTICLE I

Issuance of Warrants and Execution

and Delivery of Warrant Certificates

     Section 1.01. Issuance of Warrants. Each Warrant Certificate shall evidence one or
more Warrants. Each Warrant evidenced thereby shall represent the right, subject to the provisions
contained herein and therein, to purchase a Warrant Debt Security in the principal amount of $     .

     Section 1.02. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form substantially in the form set
forth in Exhibit A hereto, shall be dated and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which the Warrant
Certificates may be listed, or to

 

 

conform to usage. The Warrant Certificates shall be signed on behalf of the Company by either
its President, one of its Vice Presidents or one of its Assistant Treasurers under its corporate
seal and attested by its Secretary or any of its Assistant Secretaries. Such signatures may be
manual or facsimile signatures of such authorized officers and may be imprinted or otherwise
reproduced on the Warrant Certificates. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.

     No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall
be exercisable, until such Warrant Certificate has been countersigned by the manual signature of
the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by
the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

     In case any officer of the Company who shall have signed any of the Warrant Certificates
either manually or by facsimile signature shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such
Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed
such Warrant Certificates has ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by such persons as, at the actual date of the execution of
such Warrant Certificate, shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.          [If bearer
Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein shall mean the
bearer of such Warrant Certificate.]

     [If registered Warrants — The term “holder” or “holder of a Warrant Certificate” as used
herein shall mean any person in whose name at the time any Warrant Certificate shall be registered
upon the books to be maintained by the Warrant Agent for that purpose.]

     Section 1.03. Issuance of Warrant Certificates. Warrant Certificates evidencing the
right to purchase an aggregate principal amount not exceeding $     aggregate principal
amount of Warrant Debt Securities (except as provided in Sections 2.03(c), 3.02 and 4.01) may be
executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant
Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant
Certificates duly executed on behalf of the Company, countersign Warrant Certificates evidencing
Warrants representing the right to purchase up to $     aggregate principal amount of Warrant
Debt Securities and shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall
countersign a Warrant Certificate only if the Warrant Certificate is issued in exchange or
substitution for one or more previously countersigned Warrant Certificates, [If registered Warrants
or in connection with their transfer], as hereinafter provided or as provided in Section 2.03(c).

ARTICLE II

Warrant Price, Duration and Exercise of Warrants

     Section 2.01. Warrant Price*. [On     , 20      the exercise price of each Warrant
is $     . During the period from     , 20 through and including     , 20     the
exercise price of each Warrant will be $     plus [accrued amortization of the original issue
discount] [accrued interest] from     , 20     . On     , 20     the
exercise price of each Warrant will be $     . During the period from     ,

 

 

20     , through and including     , 20     , the exercise price of each Warrant will be $     
plus [accrued amortization of the original issue discount] [accrued interest] from
        , 20     , [in each case, the original issue discount will be amortized at a     %
annual rate, computed on an annual basis using a 360-day year consisting of twelve 30-day months].
Such purchase price of Warrant Debt Securities is referred to in this Agreement as the “Warrant
Price”. [The original issue discount for each $1,000 principal amount of Warrant Debt Securities
is $     ].

     Section 2.02. Duration of Warrants. Each Warrant evidenced by a Warrant Certificate
may be exercised in whole at any time, as

     *     Complete and modify the provisions of this Section as appropriate to reflect the
exact terms of the Offered Warrants and the Warrant Debt Securities. Specified herein, on or after
[the date thereof] [     , 20 ] and at or before 5 p.m.     time on          
        , 20     (the “Expiration Date”). Each Warrant not exercised at or before 5 p.m.
time on the Expiration Date shall become void, and all rights of the holder of the Warrant
Certificate evidencing such Warrant under this Agreement shall cease.

Section 2.03. Exercise of Warrants.

     (a) During the period specified in Section 2.02 any whole number of Warrants may be
exercised by providing certain information set forth on the reverse side of the Warrant
Certificate and by paying in full, in lawful money of the United States of America, [in
cash or by certified check or official bank check or by bank wire transfer, in each case]
[by bank wire transfer] in immediately available funds, the Warrant Price for each Warrant
exercised, to the Warrant Agent at its corporate trust office [or at          ],
provided that such exercise is subject to receipt within five business days of such
[payment] [wire transfer] by the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Debt Securities set forth on the reverse side of the Warrant
Certificate properly completed and duly executed. The date on which payment in full of the
Warrant Price is received by the Warrant Agent shall, subject to receipt of the Warrant
Certificate as aforesaid, be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in an
account of the Company maintained with it and shall advise the Company by telephone at the
end of each day on which a [payment] [wire transfer] for the exercise of Warrants is
received of the amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.

     (b) The Warrant Agent shall, from time to time, as promptly as practicable, advise the
Company and the Trustee under the Indenture of (i) the number of Warrants exercised in
accordance with the terms and conditions of this Agreement and the Warrant Certificates;
(ii) the instructions of each holder of the Warrant Certificates evidencing such Warrants
with respect to delivery of the Warrant Debt Securities to which such holder is entitled
upon such exercise; (iii) delivery of Warrant Certificates evidencing the balance, if any,
of the Warrants remaining after such exercise; and (iv) such other information as the
Company or the Trustee shall reasonably require.

     (c) As soon as practicable after the exercise of any Warrant, the Company shall issue,
pursuant to the Indenture, in authorized denominations to or upon the order of the holder
of the Warrant Certificate evidencing such Warrant, the Warrant Debt Securities to which
such holder is entitled [in fully registered form, registered in such name or names] [in
bearer form] as may be directed by such

 

 

holder*; [provided, however, the Company shall not be required to deliver any
unregistered Warrant Debt Securities in the United States]. If fewer than all of the
Warrants evidenced by such Warrant Certificate were exercised, the Company shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and deliver, a
new Warrant Certificate evidencing the number of such Warrants remaining unexercised.

     (d) The Company shall not be required to pay any stamp or other tax or other governmental
charge required to be paid in connection with any transfer involved in the issue of the
Warrant Debt Securities; and in the event that any such transfer is involved, the Company
shall not be required to issue or deliver any Warrant Debt Securities until such tax or
other charge shall have been paid or it has been established to the Company’s satisfaction
that no such tax or other charge is due.

     (e) Issuance of unregistered Warrant Debt Securities upon exercise of Warrants shall
be subject to such arrangements and procedures as shall be provided pursuant to Section
of the Indenture.]

ARTICLE III

Other Provisions Relating to Rights

of Holders of Warrant Certificates

     Section 3.01. No Rights as Warrant Debt Security Holder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder
thereof to any of the rights of a holder of Warrant Debt Securities, including, without limitation,
the right to receive the payment of principal of, premium (if any) or interest on Warrant Debt
Securities or to enforce any of the covenants in the Indenture.

     Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the
ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of
indemnity reasonably satisfactory to them and, in the case of mutilation, upon surrender thereof to
the Warrant Agent for cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in
exchange for or in lieu of the lost,           —*Subject
to change in accordance with changes in tax laws
and          regulations. Stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and
evidencing the same number of Warrants. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall represent an additional contractual obligation of the Company,
whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with
any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies
with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.

 

 

     Section 3.03. Holder of Warrant Certificate May Enforce Rights. Notwithstanding any
of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of
the Warrant Agent, the Trustee, the holder of any Warrant Debt Securities or the holder of any
other Warrant Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company suitable to enforce or
otherwise in respect of, his right to exercise the Warrants evidenced by his Warrant Certificate in
the manner provided in his Warrant Certificate and in this Agreement.

ARTICLE IV

Exchange and Transfer of Warrant Certificates

     Section 4.01. Exchange and Transfer of Warrant Certificates. Upon surrender at the
corporate trust office of the Warrant Agent [or     ], Warrant Certificates evidencing Warrants
may be exchanged for Warrant Certificates in other denominations evidencing such Warrants [If
registered Warrants — or may be transferred in whole or in part]; provided that such other Warrant
Certificates evidence the same aggregate number of Warrants as the Warrant Certificates so
surrendered. [If registered Warrants — The Warrant Agent shall keep, at its corporate trust office
[and at     ], books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at its corporate
trust office [or     ] for exchange [or transfer], properly endorsed or accompanied by
appropriate instruments of transfer and written instructions for transfer, all in form satisfactory
to the Company and the Warrant Agent.] No service charge shall be made for any exchange [or
transfer] of Warrant Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in connection with any such
exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or
transfer] an authorized officer of the Warrant Agent shall manually countersign and deliver to the
person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized
and executed by the Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or transfer] which will result in the issuance of a Warrant Certificate evidencing a
fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange [or transfer] of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer].

     Section 4.02. Treatment of Holders of Warrant Certificates. [Bearer warrants — Each
Warrant Certificate shall be transferable by delivery and shall be deemed negotiable and the bearer
of each Warrant Certificate may be treated by the Company, the Warrant Agent and all other persons
dealing with such bearer as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.] [Registered Warrants — The Company and the Warrant Agent may treat the registered
holder as the absolute Owner thereof for any purpose and as the person entitled to exercise the
rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.]

     Section 4.03. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [transfer] or exercise of the Warrants evidenced thereby shall,

 

 

if surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The Warrant Agent shall
deliver to the Company from time to time or otherwise dispose of cancelled Warrant Certificates in
a manner satisfactory to the Company.

ARTICLE V

Concerning the Warrant Agent

     Section 5.01. Warrant Agent. The Company hereby appoints          as
Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates, upon the
terms and subject to the conditions herein set forth; and hereby accepts such appointment. The
Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect
to such powers and authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.

     Section 5.02. Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts
its obligations herein set forth upon the terms and conditions hereof, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the holders from time
to time of the Warrant Certificates shall be subject:

     (a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant
Agent the compensation to be agreed upon with the Company for all services rendered by the
Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses
(including counsel fees) incurred by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising out of or in connection
with its acting as Warrant Agent hereunder, as well as the costs and expenses of defending
against any claim of such liability.

     (b) Agent for the Company. In acting under this Warrant Agreement and in connection
with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company
and does not assume any obligation or relationship of agency or trust for or with any of
the holders of Warrant Certificates or beneficial owners of Warrants.

     (c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, and the
advise of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in accordance
with the advice of such counsel.

     (d) Documents. The Warrant Agent shall be protected and shall incur no liability for
or in respect of any action taken or thing suffered by it in reliance upon any Warrant
Certificate, notice, direction, consent, certificate, affidavit, statement or other paper
or document reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.

 

 

     (e) Certain Transactions. The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest in, Warrants, with the same
rights that it or they would have if it were not the Warrant Agent hereunder, and, to the
extent permitted by applicable law, it or they may engage or be interested in any financial
or other transaction with the Company and may act on, or as depositary, trustee or agent
for, any committee or body of holders of Warrant Debt Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this
Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under
the Indenture.

     (f) No Liability for Interest. The Warrant Agent shall have no liability for
interest on any monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.

     (g) No Liability for Invalidity. The Warrant Agent shall have no liability with
respect to any invalidity of this Agreement or any of the Warrant Certificates.

     (h) No Responsibility for Representations. The Warrant Agent shall not be
responsible for any of the recitals or representations herein or in the Warrant
Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are
made solely by the Company.

     (i) No Implied Obligations. The Warrant Agent shall be obligated to perform only
such duties as are herein and in the Warrant Certificates specifically set forth, and no
implied duties or obligations shall be read into this Agreement or the Warrant Certificates
against the Warrant Agent. The Warrant Agent shall not be under any obligations to take
any action hereunder which may tend to subject it to any expense or liability,
reimbursement for which within a reasonable time is not, in its reasonable opinion, assured
to it. The Warrant Agent shall not be accountable or responsible for the use by the
Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the Company of
the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its covenants or
agreements contained herein or in the Warrant Certificates or in the case of the receipt of
any written demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except as provided
in Section 6.02 hereof, to make any demand upon the Company.

Section 5.03. Resignation and Appointment of Successor.

     (a) The Company agrees, for the benefit of the holders from time to time of
the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer exercisable.

     (b) The Warrant Agent may at any time resign as such agent by giving written
notice to the Company of such intention on its part, specifying the date on which
its desired resignation shall become effective; provided that such date shall be
not less than three months after

 

 

the date on which such notice is given, unless the Company otherwise agrees.
The Warrant Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided, of
a successor Warrant Agent (which shall be a bank or trust company authorized under
the laws of the jurisdiction of its organization to exercise corporate trust
powers) and the acceptance of such appointment by such successor Warrant Agent.
The obligation of the Company under Section 5.02(a) shall continue to the extent
set forth therein, notwithstanding the resignation or removal of the Warrant Agent.

     (c) In case at any time the Warrant Agent shall resign, or shall be removed,
or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or shall file a petition seeking relief under Title II of the United States Code,
as now constituted or hereafter amended, or under any other applicable Federal or
State bankruptcy law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian of all or any
substantial part of its property, or shall admit in writing its inability to pay or
meet its debts as they mature, or if a receiver or custodian of it or of all or any
substantial part of its property shall be appointed, or if an order of any court
shall be entered for relief against it under the provisions of Title II of the
United States Code, as now constituted or hereafter amended, or under any other
applicable Federal or State bankruptcy or similar law, or if any public officer
shall have taken charge or control of the Warrant Agent or of its property or
affairs, for the purpose of rehabilitation, conservation or liquidation, a
successor Warrant Agent, qualified as set forth in subsection (b) above, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the Warrant Agent
shall cease to be Warrant Agent hereunder.

     (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder, and thereupon such successor Warrant Agent, without any
further act, deed or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of such predecessor with
like effect as if originally named as Warrant Agent hereunder, and such predecessor
upon payment of its charges and disbursements then unpaid, shall thereupon become
obligated to transfer, deliver and pay over, and such successor Warrant Agent shall
be entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.

     (e) Any corporation into which the Warrant Agent hereunder may be merged or
converted or any corporation with which the Warrant Agent may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which the
Warrant Agent shall be a party, or any corporation to which the Warrant Agent shall
sell or otherwise transfer all or substantially all the assets and business of the
Warrant

 

 

Agent shall be the successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that it shall be qualified as set forth above in
subsection (b).

ARTICLE VI

Miscellaneous

     Section 6.01 Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision contained
herein, or making any other provisions with respect to matters or questions arising under
this Agreement as the Company and the Warrant Agent may deem necessary or desirable;
provided that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.

     Section 6.02. Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the holder of
a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant
Agent shall promptly forward such notice or demand to the Company.

     Section 6.03. Addresses. Any communications from the Company to the Warrant
Agent with respect to this Agreement shall be addressed to          ,
attention:          , and any communications from the Warrant Agent
to the Company with respect to this Agreement shall be addressed to HSBC Finance
Corporation, 2700 Sanders Road, Prospect Heights, Illinois 60070, attention: Treasurer (or
such other address as shall be specified in writing by the Warrant Agent or by the
Company).

     Section 6.04. Applicable Law. The validity, interpretation and performance
of this Agreement and each Warrant Certificate issued hereunder and of the respective
terms and provisions thereof shall be governed by, and construed in accordance with, the
laws of the State of .

     Section 6.05. Delivery of Prospectus. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant Debt Securities
deliverable upon exercise of Warrants (the “Prospectus”), and the Warrant Agent agrees that
upon the exercise of any Warrant, the Warrant Agent will deliver to the holder of the
Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of
the Warrant Debt Securities issued upon such exercise, a Prospectus.

     Section 6.06. Obtaining of Governmental Approvals. The Company will from
time to time take all action which may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and securities
acts filings under United States Federal and State laws (including without limitation a
registration statement in respect of the Warrants and Warrant Debt Securities under the
Securities Act of 1933), which may be or become requisite in connection with the issuance,
sale, transfer, and delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer and delivery of the Warrant Debt Securities issued upon exercise
of

 

 

the Warrants or upon the expiration of the period during which the Warrants are
exercisable.

     Section 6.07. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the Company, the Warrant Agent and the holders of the Warrant
Certificates any right, remedy or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise or agreement hereof; and all covenants,
conditions, stipulations, promises and agreements in this Agreement contained shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their successors
and of the holders of the Warrant Certificates.

     Section 6.08. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

     Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.

     Section 6.10. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the Warrant
Agent for inspection by the holder of any Warrant Certificate. The Warrant Agent may
require such holder to submit his Warrant Certificate for inspection by it.

 

 

     In Witness Whereof: HSBC Finance Corporation has caused this Agreement to be
signed by one of its duly authorized officers, and its corporate seal to be affixed
hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries;
and has caused this Agreement to be signed by one of its duly authorized officers, and its
corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one
of its Assistant Secretaries, all as of the day and year first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	HSBC Finance
	 
	 	 	 	Corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	as Warrant Agent
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 

 

 

EXHIBIT A

(FORM OF WARRANT CERTIFICATE)

[Face of Warrant Certificate]

EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT

AS PROVIDED HEREIN

Warrant Certificates representing Warrants to purchase [Title of Warrant Debt

Securities] as described herein.

HSBC FINANCE CORPORATION WARRANTS TO PURCHASE [Title of

Warrant Debt Securities]

VOID AFTER 5 P.M.          TIME ON          , 20

     [No.]

               Warrants     This certifies that [the bearer is the] [     or registered
assigns is the registered] owner of the above indicated number of Warrants, each Warrant entitling
such [bearer] [owner] to purchase, at any time [after 5 p.m.     time on          , 20     
and] on or before 5 p.m. time on          , 20      ,          $     principal amount of
[Title of Warrant Debt Securities] (the “Warrant Debt Securities”), of HSBC FINANCE CORPORATION
(the “Company”), issued and to be issued under the Indenture (as hereinafter defined), on the
following basis:* [on          , 20     the exercise price of each Warrant is $     ; during
the period          from          ,20     through and including          , 20     , the exercise price
of each Warrant will be $     plus [accrued amortization of the original issue discount]
[accrued interest] from          , 20     ; on          , 20     the exercise price of each Warrant
will be $     ; during the period
from          , 20     , through and including          ,
20     , the exercise price of each Warrant will be $     plus [accrued amortization of the
original issue discount] [accrued interest]          *     Complete and modify the following provisions as appropriate to reflect the exact
terms of the Offered Warrants and the Warrant Debt Securities. from          , 20     ; [in each
case, the original issue discount will be amortized at a     % annual rate, computed on an annual
basis, using a 360-day year consisting of twelve 30-day months] (the “Warrant Price”). [The
original issue discount for each $1,000 principal amount of Warrant Debt Securities is $     .] The
holder may exercise the Warrants evidenced hereby by providing certain information set forth on the
back hereof and by paying in full in lawful money of the United States of America, [in cash or by
certified check or official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in immediately available funds, the Warrant Price for each Warrant exercised to the
Warrant Agent [as hereinafter defined] and by surrendering this Warrant Certificate, with the
purchase form on the back hereof duly executed at the corporate trust office of [name of Warrant
Agent], or its successor as warrant agent (the “Warrant Agent”), [or          ] at the address
specified on the reverse hereof and upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement [as hereinafter defined]. Any whole number of Warrants
evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt Securities in
registered form in denominations of $     and any integral multiples thereof. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.

 

 

     This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated
as of          , 20     (the “Warrant Agreement”), between the Company and the Warrant Agent and
is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at          ].

     The Warrant Debt Securities to be issued and delivered upon the exercise of the Warrants
evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture
dated as of          (the “Indenture”), between the Company and          , a organized
and existing under the laws of          , as Trustee, (     
and any successor to such Trustee being hereinafter referred to as the “Trustee”) and
will be subject to the terms and provisions contained in the Indenture. [In particular, issuance
of unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such
arrangements and procedures as shall be provided pursuant to Section          of the Indenture.]
Copies of the Indenture and the form of the Warrant Debt Securities are on file at the corporate
trust office of the Trustee [and at          ].

     [If Bearer Warrants — This Warrant Certificate, and all rights hereunder, may be transferred
by delivery and the Company and the Warrant Agent may treat the bearer hereof as the owner for all
purposes.]

     [If Registered Warrants — This Warrant Certificate may be transferred when surrendered at the
corporate trust office of the Warrant Agent [or          ] by the registered owner or his assigns,
in person or by an attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.]

     After countersignature by the Warrant Agent and prior to the expiration of this Warrant
Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant
Agent for Warrant Certificates representing the same aggregate number of Warrants.

     This Warrant Certificate shall not entitle the holder hereof to any of the rights of a holder
of the Warrant Debt Securities, including, without limitation, the right to receive payments of
principal of (premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce
any of the covenants of the Indenture.

     This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned
by the Warrant Agent.          Dated as of          , 20     .

	 	 	 	 	 	 	 
	 
	 	 	 	HSBC Finance
	 
	 	 	 	Corporation
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	As Warrant Agent
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	Countersigned:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Authorized Signature

 

 

[Reverse of Warrant Certificate]

(Instructions for Exercise of Warrant)

     To exercise the Warrants evidenced hereby, the holder must pay [in cash or by certified check
or official bank check or by bank wire transfer] [by bank wire transfer] in immediately available
funds the Warrant Price in full for Warrants exercised to [insert name of Warrant Agent] Corporate
Trust Department, [insert address of Warrant Agent], Attn:          [or          ], which
[payment] [wire transfer] must specify the name of the holder and the number of Warrants exercised
by such holder. In addition, the holder must complete the information required below and present
this Warrant Certificate in person or by mail (registered mail is recommended) to the Warrant Agent
at the addresses set forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire transfer].

[FORM OF ELECTION TO PURCHASE]

(To be executed upon exercise of Warrant.)

     The undersigned hereby irrevocably elects to exercise          Warrants, evidenced by this
Warrant Certificate, to purchase $     principal amount of the [Title of Debt Securities]
(the “Warrant Debt Securities”) of HSBC Finance Corporation and represents that he has tendered
payment for such Warrant Debt Securities [in cash or by certified check or official bank check or
by bank wire transfer, in each case] [by bank wire transfer] in immediately available funds to the
order of HSBC Finance Corporation c/o [insert name and address of Warrant Agent], in the amount of
$     in accordance with the terms hereof. The undersigned requests that said principal amount of
Warrant Debt Securities be in [bearer form in the authorized denominations] [fully registered form
in the authorized denominations, registered in such names and delivered] all as specified in
accordance with the instructions set forth below.

     If the number of Warrants exercised is less than all of the Warrants evidenced hereby, the
undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced
hereby be issued and delivered to the undersigned unless otherwise specified in the instructions
below

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	

	 	

	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	(Please Print)
	 
	 	 	 	 	 	 
	(Insert Social Security or

	Other Identifying Number

	of Holder)

	 	 	 	Address:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	
 
	

	 	 	 	Signature	 	 
	

	 	 	 	 	 	
 

 

 

     The Warrants evidenced hereby may be exercised at the following addresses:

By hand at

	 	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 

$                                                  

	 	 	 
	By mail at

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 

(Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant
Certificates evidencing unexercised Warrants.)

Reverse of Warrant Certificate

*[CERTIFICATE FOR DELIVERY OF BEARER BONDS]

HSBC FINANCE CORPORATION

Warrant Debt Securities

TO: HSBC FINANCE CORPORATION

[Name of Trustee],

as Trustee

     This certificate is submitted in connection with our request that you deliver to us $
principal amount of Warrant Debt Securities in bearer form upon exercise of Warrants. We hereby
certify that either (a) none of such Warrant Debt Securities will be held by or on behalf of a
United States Person, or (b) if a United States Person will have a beneficial interest in such
Warrant Debt Securities, such person is described in Section 165(j)(3)(A), (B) or (C) of the United
States Internal Revenue Code of 1954, as amended, and the regulations thereunder. As used herein,
“United States Person” means a citizen or resident of the United States, a corporation, partnership
or other entity created or organized in or under the laws of the United States or any political
subdivision thereof or an estate or trust whose income from sources without the United States is
includible in gross income for United States Federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

     We understand that this certificate is required in connection with certain tax legislation in
the United States. If administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we

 

 

irrevocably authorize you to produce this certificate or a copy thereof to any interested
party in such proceedings.

Dated:                                (Please print name)

*Subject to changes in accordance with changes in tax laws and regulations.

[If registered Warrant]

ASSIGNMENT

[FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES

TO TRANSFER WARRANTS EVIDENCED HEREBY]

	 	 	 
	FOR VALUE RECEIVED
hereby sells, assigns and transfers unto

	 	 
	 
	 	 
	Please insert social security

or other identifying number
	 	 
	 
	 	 
	
  
	 	 
	Please print name and address
including zip code)
	 	 
	 
	 	 
	
 
	 	 
	
 
	 	 

     the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute
and appoint          Attorney, to transfer said Warrant Certificate on the books of the
Warrant Agent with full power of substitution in the premises.

	 	 	 	 	 
	Dated

	 	Signature	 	 
	

	 	 	 	
 
	

	 	 	 	(Signature must conform in all respects to name of
holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee by a
bank, trust company or member broker of the New York
Stock Exchange.)

	 	 	 	 	 
	Signature Guaranteed

	

	 	 	
 	 

 

 

HSBC FINANCE CORPORATION

Form of Warrant Agreement

(for warrants sold attached to debt securities)

     This Warrant Agreement: dated as of          between HSBC Finance
Corporation, a Delaware corporation (the “Company”, which term includes any successor corporation
under the Indenture hereinafter referred to) and          as Warrant Agent (the “Warrant Agent”).

     Whereas, the Company has entered into an Indenture dated as of          (the
“Indenture”), with          , as Trustee (the “Trustee”), providing for the issuance from time to
time of its unsecured debt securities (“Debt Securities”), to be issued in one or more series as
provided in the Indenture; and

     Whereas,the Company proposes to sell [title of Debt Securities being offered] (the
“Offered Debt Securities”), with warrant certificates evidencing one or more warrants (the
“Warrants” or, individually a “Warrant”) representing the right to purchase [title of Debt
Securities purchasable through exercise of Warrants] (the “Warrant Debt Securities”), such warrant
certificates and other warrant certificates issued pursuant to this Agreement hereinafter referred
to as the “Warrant Certificates”; and

     Whereas, the Company desires the Warrant Agent to act on behalf of the Company in
connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and
in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions on which they may be issued, exchanged, exercised and
replaced;

     Now Therefore, in consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:

ARTICLE I

Issuance of Warrants and Execution

and Delivery of Warrant Certificates

     Section
1.01. Issuance of Warrants.             Warrants shall be initially issued in
connection with the issuance of the Offered Debt Securities [but shall be separately transferable
on and after          , 20     (the “Detachable Date”)] [shall not be separately transferable] and
each Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein, to purchase a Warrant
Debt Security in the principal amount of $     . Warrant Certificates shall be initially issued
in units with the Offered Debt Securities and each Warrant Certificate included in such unit shall
evidence          Warrants for each $     principal amount of Offered Debt Securities
included in such unit.

     Section 1.02. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate, whenever issued, shall be in [bearer] [registered] form substantially in the form set
forth in Exhibit A hereto, shall be dated          and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed, lithographed or
engraved thereon as the officers of the Company executing the same may approve (execution thereof
to be conclusive evidence of such

 

 

approval) and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant thereto orwith any
rule or regulation of any stock exchange on which the Warrant Certificates may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of the Company by either its
President, one of its Vice Presidents or one of its Assistant Treasurers under its corporate seal
and attested by its Secretary or any of its Assistant Secretaries. Such signatures may be manual
or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on
the Warrant Certificates. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates.

     No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall
be exercisable, until such Warrant Certificate has been countersigned by the manual signature of
the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by
the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

     In case any officer of the Company who shall have signed any of the Warrant Certificates
either manually or by facsimile signature shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such
Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed
such Warrant Certificates has ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by such persons as, at the actual date of the execution of
such Warrant Certificate, shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.

     [If bearer Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein
shall mean [If Offered Debt Securities with Warrants which are not immediately detachable, prior to
the Detachable Date, the registered owner of the OfferedDebt Security to which such Warrant
Certificate was initially attached (or the bearer if the Offered Debt Security is a bearer Debt
Security), and after such Detachable Date] the bearer of such Warrant Certificate.]

     [If registered Warrants — The term “holder” or “holder of a Warrant Certificate” as used
herein shall mean any person in whose name at the time any Warrant Certificate shall be registered
upon the books to be maintained by the Warrant Agent for that purpose. [If Offered Debt Securities
with Warrants which are not immediately detachable, or upon the register of the Offered Debt
Securities prior to the Detachable Date. The Company will, or will cause the registrar of the
Offered Debt Securities to make available at all times to the Warrant Agent such information as to
holders of the Offered Debt Securities with Warrants as may be necessary to keep the Warrant
Agent’s records up to date.]

     Section 1.03. Issuance of Warrant Certificates. Warrant Certificates evidencing the
right to purchase an aggregate principal amount not exceeding $     aggregate principal amount
of Warrant Debt Securities (except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed
by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or
from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly
executed on behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to $        aggregate principal amount of Warrant Debt
Securities and shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall
countersign a Warrant

 

 

Certificate only if the Warrant Certificate is issued in exchange or substitution for one or
more previously countersigned Warrant Certificates, [If registered Warrants — or in connection
with their transfer], as hereinafter provided or as provided in Section 2.03(c).

ARTICLE II

Warrant Price, Duration and Exercise of Warrants

     Section 2.01. Warrant Price.* [On          , 20     the exercise price of each Warrant
is $     . During the period from          , 20     through and including          , 20     the
exercise price of each Warrant will be $     plus [accrued amortization of the original issue
discount] [accrued interest] from          , 20     . On          , 20     the exercise price of *
Complete and modify the provisions of this Section as appropriate to reflect the exact terms
of the Offered Warrants and the Warrant Debt Securities, each Warrant will be $     . During the
period from          , 20     , through and including          , 20     , the exercise price of each
Warrant will be $     plus [accrued amortization of the original issue discount] [accrued
interest] from          , 20     , [in each case, the original issue discount will be amortized at a     %
annual rate, computed on an annual basis using a 360-day year consisting of twelve 30-day months].
Such purchase price of Warrant Debt Securities is referred to in this Agreement as the “Warrant
Price.” [The original issue discount for each $1,000 principal amount of Warrant Debt Securities
is $         ].

     Section 2.02. Duration of Warrants. Each Warrant evidenced by a Warrant Certificate
may be exercised in whole at any time, as specified herein, on or after [the date thereof] [          
        , 20     ] and at or before 5 p.m.     time on          , 20     (the
“Expiration Date”). Each Warrant not exercised at or before the close of business on the Expiration Date shall become void, and
all rights of the holder of the Warrant Certificate evidencing such Warrant under this Agreement
shall cease.

     Section 2.03. Exercise of Warrants.

     (a) During the period specified in Section 2.02 any whole number of Warrants
may be exercised by providing certain information set forth on the reverse side of
the Warrant Certificate and by paying in full, in lawful money of the United States
of America, [in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] in immediately available funds the
Warrant Price for each Warrant exercised to the Warrant Agent at its corporate
trust office [or at          ], provided that such exercise is subject to
receipt within five business days of such [payment] [wire transfer] by the Warrant
Agent of the Warrant Certificate with the form of election to purchase Warrant Debt
Securities set forth on the reverse side of the Warrant Certificate properly
completed and duly executed. The date on which payment in full of the Warrant
Price is received by the Warrant Agent shall, subject to receipt of the Warrant
Certificate as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in payment of
the Warrant Price in an account of the Company maintained with it and shall advise
the Company by telephone at the end of each day on which a [payment] [wire
transfer] for the exercise of Warrants is received of the amount so deposited to
its account. The Warrant Agent shall promptly confirm such telephone advice to the
Company in writing.

 

 

     (b) The Warrant Agent shall, from time to time, as promptly as practicable,
advise the Company and the Trustee under the Indenture of (i) the number of
Warrants exercised in accordance with the terms and conditions of this Agreement
and the Warrant Certificates, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the Warrant Debt
Securities to which such holder is entitled up on such exercise, (iii) delivery of
Warrant Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and (iv) such other information as the Company or the Trustee
shall reasonably require.

     (c) As soon as practicable after the exercise of any Warrant, the Company
shall issue, pursuant to the Indenture, in authorized denominations to or upon the
order of the holder of the Warrant Certificate evidencing such Warrant, the Warrant
Debt Securities to which such holder is entitled, [in fully registered form,
registered in such name or names] [in bearer form] as may be directed by such
holder* ;[provided, however, the Company shall not be required to deliver any
unregistered Warrant Debt Securities in the United States]. If fewer than all of
the Warrants evidenced by such Warrant Certificate were exercised, the Company
shall execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing the number of such
Warrants remaining unexecuted.

     (d) The Company shall not be required to pay any stamp or other tax or other
governmental charge required to be paid in connection with any transfer involved in
the issue of the Warrant Debt Securities; and in the event that any such transfer
is involved, the Company shall not be required to issue or deliver any Warrant Debt
Security until such tax or other charge shall have been paid or it has been
established to the Company’s satisfaction that no such tax or other charge is due.

     [(e) Issuance of unregistered Warrant Debt Securities upon exercise of
Warrants shall be subject to such arrangements and procedures as shall be provided
pursuant to Section     of the Indenture.]

ARTICLE III

Other Provisions Relating to Rights

of Holders of Warrant Certificates

     Section 3.01. No Rights as Warrant Debt Security Holder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder
thereof to any of the rights of a holder of Warrant Debt Securities, including, without limitation,
the right to receive the payment of principal of, premium (if any) or interest on Warrant Debt
Securities or to enforce any of the covenants in the Indenture.

     *     Subject to change in accordance with changes in tax laws and regulations.

     Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the
ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of
indemnity reasonably satisfactory to them and, in the case of mutilation, upon surrender thereof to
the Warrant Agent for cancellation, then, in the

 

 

absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the
Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and
evidencing the same number of Warrants. Upon the issuance of any new Warrant Certificate under
this Section, the Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall represent an additional contractual obligation of the Company,
whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with
any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies
with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.

     Section 3.03. Holder of Warrant Certificate May Enforce Rights. Notwithstanding any
of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of
the Warrant Agent, the Trustee, the holder of any Warrant Debt Securities or the holder of any
other Warrant Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company suitable to enforce or
otherwise in respect of, his right to exercise the Warrants evidenced by his Warrant Certificate in
the manner provided in his Warrant Certificate and in this Agreement.

ARTICLE IV

Exchange and Transfer of Warrant Certificates

     Section 4.01. Exchange and Transfer of Warrant Certificates. [If Offered Debt
Securities with Warrants which are immediately detachable — Upon] [If Offered Debt Securities
with Warrants which are not immediately detachable — Prior to the Detachable Date a Warrant
Certificate may be exchanged or transferred only together with the Offered Debt Security to which
the Warrant Certificate was initially attached, and only for the purpose of effecting or in
conjunction with an exchange or transfer of such Offered Debt Security. Prior to the Detachable
Date, each transfer of the Offered Debt Security [on the register of the Offered Debt Securities]
shall operate also to transfer the related Warrant Certificates. After the Detachable Date upon]
surrender at the corporate trust office of the Warrant Agent [or          ], Warrant Certificates
evidencing Warrants may be exchanged for Warrant Certificates in other denominations evidencing
such Warrants [If registered Warrants — or may be transferred in whole or in part], provided that
such other Warrant Certificates evidence the same aggregate number of Warrants as the Warrant
Certificates so surrendered. [If registered Warrants — The Warrant Agent shall keep, at its
corporate trust office [and at          ], books in which, subject to such reasonable regulations
as it may prescribe, it shall register Warrant Certificates and exchanges and transfers of
outstanding Warrant Certificates, upon the surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [or          ] for exchange [or transfer], properly endorsed
or accompanied by appropriate instruments of transfer and written instructions for transfer, all in
form satisfactory to the Company and the Warrant Agent]. No service charge shall be made for any
exchange [or transfer] of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover

 

 

any stamp or other tax or other governmental charge that may be imposed in connection with any
such exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or
transfer] an authorized officer of the Warrant Agent shall manually countersign and deliver to the
person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized
and executed by the Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or transfer] which will result in the issuance of a Warrant Certificate evidencing a
fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange [or transfer] of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer].

     Section 4.02. Treatment of Holders of Warrant Certificates. [If Offered Debt
Securities with bearer Warrants which are not immediately detachable — Subject to Section 4.01,
each] [If Offered Debt Securities with bearer Warrants which are immediately detachable — Each]
Warrant Certificate shall be transferable by delivery and shall be deemed negotiable and the bearer
of each Warrant Certificate may be treated by the Company, the Warrant Agent and all other persons
dealing with such bearer as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.] [If registered Warrants which are not immediately detachable —Every holder of a
Warrant Certificate, by accepting the same, consents and agrees with the Company, the Warrant Agent
and with every subsequent holder of such Warrant Certificate that until the Warrant Certificate is
transferred on the books of the Warrant Agent [or the register of the Offered Debt Securities prior
to the Detachable Date], the Company and the Warrant Agent may treat the registered holder as the
absolute owner thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.]

     Section 4.03. Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange [transfer] or exercise of the Warrants evidenced thereby shall, if
surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The Warrant Agent shall
deliver to the Company from time to time or otherwise dispose of cancelled Warrant Certificates in
a manner satisfactory to the Company.

ARTICLE V

Concerning the Warrant Agent

     Section 5.01. Warrant Agent. The Company hereby appoints          as
Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates, upon the
terms and subject to the conditions herein set forth, and          hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon
it in the Warrant Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.

 

 

     Section 5.02. Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts
its obligations herein set forth upon the terms and conditions hereof, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the holders from time
to time of the Warrant Certificates shall be subject:

     (a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant
Agent the compensation to be agreed upon with the Company for all services rendered by the
Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses
(including counsel fees) incurred by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising out of or in connection
with its acting as Warrant Agent hereunder, as well as the costs and expenses of defending
against any claim of such liability.

     (b) Agent for the Company. In acting under this Warrant Agreement and in connection
with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company
and does not assume any obligation or relationship of agency or trust for or with any of
the holders of Warrant Certificates or beneficial owners of Warrants.

     (c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, and the
advise of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in accordance
with the advice of such counsel.

     (d) Documents. The Warrant Agent shall be protected and shall incur no liability for
or in respect of any action taken or thing suffered by it in reliance upon any Warrant
Certificate, notice, direction, consent, certificate, affidavit, statement or other paper
or document reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.

     (e) Certain Transactions. The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest in, Warrants, with the same
rights that it or they would have if it were not the Warrant Agent hereunder, and, to the
extent permitted by applicable law, it or they may engage or be interested in any financial
or other transaction with the Company and may act on, or as depositary, trustee or agent
for, any committee or body of holders of Warrant Debt Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this
Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under
the Indenture.

     (f) No Liability for Interest. The Warrant Agent shall have no liability for
interest on any monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.

     (g) No Liability for Invalidity. The Warrant Agent shall have no liability with
respect to any invalidity of this Agreement or any of the Warrant Certificates.

     (h) No Responsibility for Representations. The Warrant Agent shall not be
responsible for any of the recitals or representations herein or in the Warrant

 

 

Certificates (except as to the Warrant Agent’s countersignature thereon), all of which
are made solely by the Company.

     (i) No Implied Obligations. The Warrant Agent shall be obligated to perform only
such duties as are herein and in the Warrant Certificates specifically set forth and no
implied duties or obligations shall be read into this Agreement or the Warrant Certificates
against the Warrant Agent. The Warrant Agent shall not be under any obligations to take
any action hereunder which may tend to subject it to any expense or liability,
reimbursement for which within a reasonable time is not, in its reasonable opinion, assured
to it. The Warrant Agent shall not be accountable or responsible for the use by the
Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the Company of
the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its covenants or
agreements contained herein or in the Warrant Certificates or in the case of the receipt of
any written demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except as provided
in Section 6.02 hereof, to make any demand upon the Company.

Section 5.03. Resignation and Appointment of Successor.

     (a) The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all
the Warrant Certificates are no longer exercisable.

     (b) The Warrant Agent may at any time resign as such agent by giving written notice to
the Company of such intention on its part, specifying the date on which its desired
resignation shall become effective; provided that such date shall be not less than three
months after the date on which such notice is given unless the Company otherwise agrees.
The Warrant Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall take effect
upon the appointment by the Company, as hereinafter provided, of a successor Warrant Agent
(which shall be a bank or trust company authorized under the laws of the jurisdiction of
its organization to exercise corporate trust powers) and the acceptance of such appointment
by such successor Warrant Agent. The obligation of the Company under Section 5.02(a) shall
continue to the extent set forth therein, notwithstanding the resignation or removal of the
Warrant Agent.

     (c) In case at any time the Warrant Agent shall resign, or shall be removed, or shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file a
petition seeking relief under Title II of the United States Code, as now constituted or
hereafter amended, or under any other applicable Federal or State bankruptcy law or similar
law or make an assignment for the benefit of its creditors or shall consent to the
appointment of a receiver or custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it under the
provisions of Title II of the United States Code, as now constituted or hereafter amended,
or under any

 

 

other applicable Federal or State bankruptcy or similar law, or if any public officer
shall have taken charge or control of the Warrant Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor Warrant Agent,
qualified as set forth in subsection (b) above, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the appointment of a
successor Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.

     (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay
over, and such successor Warrant Agent shall be entitled to receive, all monies, securities
and other property on deposit with or held by such predecessor, as Warrant Agent hereunder.

     (e) Any corporation into which the Warrant Agent hereunder may be merged or converted
or any corporation with which the Warrant Agent may be consolidated, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially all the
assets and business of the Warrant Agent shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that it shall be qualified as set forth above in
subsection (b).

ARTICLE VI

Miscellaneous

     Section 6.01 Amendment. This Agreement may be amended by the parties hereto,
without the consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision contained herein, or
making any other provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided that such action shall
not adversely affect the interests of the holders of the Warrant Certificates.

     Section 6.02. Notices and Demands to the Company and Warrant Agent. If the Warrant
Agent shall receive any notice or demand addressed to the Company by the holder of a Warrant
Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall
promptly forward such notice or demand to the Company.

     Section 6.03. Addresses. Any communications from the Company to the Warrant Agent
with respect to this Agreement shall be addressed to          , Attention:          , and any
communications from the Warrant Agent to the Company with respect to
this Agreement shall be addressed to          , Attention:          (or such
other address as shall be specified in writing by the Warrant Agent or by the Company).

 

 

     Section 6.04. Applicable Law. The validity, interpretation and performance of this
Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions
thereof shall be governed by, and construed in accordance with, the laws of the State of
        .

     Section 6.05. Delivery of Prospectus. The Company will furnish to the Warrant Agent
sufficient copies of a prospectus relating to the Warrant Debt Securities deliverable upon exercise
of Warrants (the “Prospectus”), and the Warrant Agent agrees that upon the exercise of any Warrant,
the Warrant Agent will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with the delivery of the Warrant Debt Securities issued upon such
exercise, a Prospectus.

     Section 6.06. Obtaining of Governmental Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and securities acts filings under
United States Federal and State laws (including without limitation a registration statement in
respect of the Warrants and Warrant Debt Securities under the Securities Act of 1933), which may be
or become requisite in connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and delivery of the
Warrant Debt Securities issued upon exercise of the Warrants or upon the expiration of the period
during which the Warrants are exercisable.

     Section 6.07. Persons Having Rights under Warrant Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the provisions hereof
is intended, or shall be construed, to confer upon, or give to, any person or corporation other
than the Company, the Warrant Agent and the holders of the Warrant Certificates any right, remedy
or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement hereof; and all covenants, conditions, stipulations, promises and agreements in this
Agreement contained shall be for the sole and exclusive benefit of the Company and the Warrant
Agent and their Successors and of the holders of the Warrant Certificates.

     Section 6.08. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

     Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.

     Section 6.10. Inspection of Agreement. A copy of this Agreement shall be available
at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection
by the holder of any Warrant Certificate. The Warrant Agent may require such holder to submit his
Warrant Certificate for inspection by it.

In witness Whereof, HSBC Finance Corporation has caused this Agreement to be signed by one
of its duly authorized officers, and its corporate seal to be affixed hereunto, and the same to
be attested by its Secretary or one of its Assistant Secretaries, all as of the day and year
first above written.

 

 

	 	 	 	 	 	 	 
	 
	 	 	 	HSBCFinance
	 
	 	 	 	Corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	As Warrant Agent
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 

 

 

EXHIBIT A

(FORM OF WARRANT CERTIFICATE)

[Face of Warrant Certificate]

     [Form of Legend if Prior to this —Warrant Certificate cannot Debt Securities
with          be transferred or exchanged — —unless attached to a
[Title Warrants which are not of Offered Debt Securities] — —immediately
detachable:- —

Exercisable Only if Countersigned By the Warrant

Agent as Provided Herein

     Warrant Certificates representing Warrants to purchase [Title of Warrant Debt Securities] as
described herein.

HSBC FINANCE CORPORATION

Warrants to Purchase

[Title of Warrant Debt Securities]

Void After 5 P.M.

Time on, 20

	 	 	 
	[No.]

	 	Warrants

     This certifies that [the bearer is the] [     or registered assigns is the registered] owner
of the above-indicated number of Warrants, each Warrant entitling such [bearer] [owner] to
purchase, at any time [after 5 P.M.          time on          , 20     and] on or before 5 P.M.
time on          , 20     , $     principal amount of [Title of Warrant Debt Securities] (the
“Warrant Debt Securities”), of HSBC Finance Corporation (the “Company”), issued and to be issued
under the Indenture (as hereinafter defined), on the following basis:* [on          , 20     the
exercise price of each Warrant is $     ; during the period from          , 20     , through and
including *     Complete and modify the following provision as appropriate to reflect the
exact terms of the Offered Warrants and the Warrant Debt Securities.          , 20     , the
exercise price of each Warrant will be $     plus [accrued amortization of the original issue
discount] [accrued interest] from, 20     ; on          , 20     the exercise price of each Warrant
will be $     ; during the period from ,          20     , through and including          ,20     the exercise price of each
Warrant will be $     plus [accrued amortization of the original
issue discount] [accrued interest] from          ,20     ; [in each case, the original issue discount
will be amortized at a     % annual rate, computed on an annual basis, using a 360-day year
consisting of twelve 30-day months] (the “Warrant Price”). [The original issue discount for each
$1,000 principal amount of Warrant Debt Securities is $     .] The holder may exercise the
Warrants evidenced hereby by providing certain information set forth on the back hereof and by
paying in full in lawful money of the United States of America, [in cash or by certified check or
official bank check or by bank wire transfer, in each case,] [by bank wire transfer] in immediately
available funds, the Warrant Price for each Warrant

 

 

exercised to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed at the corporate trust office
of [name of Warrant Agent], or its successor as warrant agent (the “Warrant Agent”), [or ] at
the address specified on the reverse hereof and upon compliance with and subject to the conditions
set forth herein and in the Warrant Agreement (as hereinafter defined).

     Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to
purchase Warrant Debt Securities in registered form in denominations of $        and any integral
multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.

     This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated
as of          , 20     (the “Warrant Agreement”), between the Company and the Warrant Agent and
is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at          ].

     The Warrant Debt Securities to be issued and delivered upon the exercise of the Warrants
evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture
dated as of          (the “Indenture”), between the Company and          , a organized
and existing under the laws of          , as Trustee, (     
and any successor to such Trustee being hereinafter referred to as the “Trustee”) and
will be subject to the terms and provisions contained in the Indenture. [In particular, issuance of
unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such
arrangements and procedures as shall be provided pursuant to Section     of the Indenture.]
Copies of the Indenture and the form of the Warrant Debt Securities are on file at the corporate
office of the Trustee [and at          ].

     [If Offered Debt Securities with bearer Warrants which are not immediately detachable — Prior
to          , 20     this Warrant Certificate may be exchanged or transferred only together with the
[Title of Offered Debt Securities] (“Offered Debt Securities”) to which this Warrant Certificate
was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange
or transfer of such Offered Debt Security. After such date, this [If Offered Debt Securities with
bearer Warrants which are immediately detachable — This] Warrant Certificate, and all rights
hereunder, may be transferred by delivery, and the Company and the Warrant Agent may treat the
bearer hereof as the owner for all purposes.]

     [If Offered Debt Securities with registered Warrants which are not immediately detachable —
Prior to          , 20     this Warrant Certificate may be exchanged or transferred only together with
the [Title of Offered Debt Securities] (“Offered Debt Securities”) to which this Warrant
Certificate was initially attached, and only for the purpose of effecting, or in conjunction with,
an exchange or transfer of such Offered Debt Security. After such date, this [If Offered Debt
Securities with registered Warrants which are immediately detachable — This] Warrant Certificate
may be transferred when surrendered at the corporate trust office of the Warrant Agent [or
] by the registered owner or his assigns, in person or by an attorney duly authorized in writing,
in the manner and subject to the limitations provided in the Warrant Agreement.]

     [If Offered Debt Securities with Warrants which are not immediately detachable — Except as
provided in the immediately preceding paragraph, after] [If Offered Debt

 

 

Securities with Warrants which are immediately detachable — After] countersignature by the
Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may
be exchanged at the corporate t rust office of the Warrant Agent for Warrant Certificates
representing the same aggregate number of Warrants. This Warrant Certificate shall
not entitle the holder hereof to any of the rights of a holder of the Warrant Debt Securities,
including, without limitation, the right to receive payments of principal of (premium, if any) or
interest, if any, on the Warrant Debt Securities or to enforce any of the covenants of the
Indenture.

     This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned
by the Warrant Agent.

Dated as of          , 20     .

	 	 	 	 	 	 	 
	 
	 	 	 	HSBC
Finance
	 
	 	 	 	Corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	As Warrant Agent
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	
 	 	 	 	 
	 
	 	 	 	 	 	 
	Countersigned:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Authorized Signature

[Reverse of Warrant Certificate]

(Instructions for Exercise of Warrant)

     To exercise the Warrants evidenced hereby, the holder must pay [in cash or by certified check
or official bank check or by bank wire transfer] [by bank wire transfer] in immediately available
funds the Warrant Price in full for Warrants exercised to [insert name of Warrant Agent] Corporate
Trust Department [insert address of Warrant Agent], Attn.          [or          ], which
[payment] [wire transfer] must specify the name of the holder and the number of Warrants exercised
by such holder. In addition, the holder must complete the information required below and present
this Warrant Certificate in person or by mail (registered mail is recommended) to the Warrant Agent
at the addresses set forth below. This Warrant Certificate, completed and duly executed, must be
received by the Warrant Agent within five business days of the [payment] [wire transfer].

[Form of Election to Purchase]

(to be executed upon exercise of Warrant)

     The undersigned hereby irrevocably elects to exercise Warrants, evidenced by this Warrant
Certificate, to purchase $ principal amount of the [Title of Debt Securities] (the “Warrant Debt
Securities”) of          and represents that he has tendered payment for such Warrant Debt
Securities [in cash or by certified check or official bank check or by bank wire transfer, in each
case,] [by bank wire transfer] in immediately available funds to the order of HSBC Finance
Corporation c/o [insert name and address of Warrant Agent] in the amount of $     in accordance
with the terms hereof. The undersigned

 

 

requests that said principal amount of Warrant Debt Securities be in [bearer form in the
authorized denominations] [fully registered form in the authorized denominations, registered in
such names and delivered] all as specified in accordance with the instructions set forth below.

     If the number of Warrants exercised is less than all of the Warrants evidenced hereby, the
undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced
hereby be issued and delivered to the undersigned unless otherwise specified in the instructions
below.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	

	 	

	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	(Please Print)
	 
	 	 	 	 	 	 
	(Insert Social Security or

	Other Identifying Number

	of Holder)
	 	Address:
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	
 
	

	 	 	 	Signature	 	 
	

	 	 	 	 	 	
 

     The Warrants evidenced hereby may be exercised at the following addresses:

By hand at

	 	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 

By mail at

	 	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 
	 

	 	 
	
 
	 	 

(Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant
Certificates evidencing unexercised Warrants.)

Reverse of Warrant Certificate

*[Certificate for Delivery of Bearer Bonds]

HSBC FINANCE CORPORATION

Warrant Debt Securities

 

 

TO: HSBC FINANCE CORPORATION

     This certificate is submitted in connection with our request that you deliver to us $
principal amount of Warrant Debt Securities in bearer form upon exercise of Warrants. We hereby
certify that either (a) none of such Warrant Debt Securities will be held by or on behalf of a
United States Person, or (b) if a United States Person will have a beneficial interest in such
Warrant Debt Securities, such person is described in Section 165 (j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1954, as amended, and the regulations thereunder. As used
herein, “United States Person” means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the United States or any
political subdivision thereof or an estate or trust whose income from sources without the United
States is includible in gross income for United States Federal income tax purposes regardless of
its connection with the conduct of a trade or business within the United States.

     We understand that this certificate is required in connection with certain tax legislation in
the United States. If administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such proceedings.

	 	 	 	 	 
	Dated:

	 	 	 	(Please print name)
	

	 	
 	 	 

*Subject to changes in accordance with changes in tax laws and regulations.

[If registered Warrant]

ASSIGNMENT

(Form of Assignment to be Executed if Holder Desires

to Transfer Warrants Evidenced Hereby)

	 	 	 
	FOR VALUE RECEIVED

	 	 
	hereby sells, assigns and transfers unto
	 	 
	 
	 	 
	Please insert social security
	 	 
	or other identifying number
	 	 
	 
	 	 
	
 
	 	 
	 
	 	 
	Please print name and address
	 	 
	including zip code)
	 	 
	 
	 	 
	
 
	 	 
	 
	 	 
	
 
	 	 

 

 

the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute
and appoint          Attorney, to transfer said Warrant Certificate on the books of the
Warrant Agent with full power of substitution in the premises.

	 	 	 	 	 	 
	Dated

	 	Signature	 	 
	

	 	 	 	
 
	

	 	 	 	(Signature must conform in all respects to name of
holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee by a
bank, trust company or member broker of the New York
Stock Exchange.)

	 	 	 	 
	Signature Guaranteedexv4w2

 

Exhibit 4.2

AMENDED AND RESTATED

INDENTURE

FOR

SENIOR DEBT SECURITIES

dated as of December 15, 2004

     This Amended and Restated Indenture, dated as of December 15, 2004,
between HSBC Finance Corporation (formerly known as Household International,
Inc. and as successor to Household Finance Corporation), a corporation duly
organized and existing under the laws of the State of Delaware (hereinafter
called the “Company” or “HSBC Finance”) and having its principal office at 2700 Sanders Road,
Prospect Heights, Illinois 60070, and JPMorgan Chase Bank, N.A. (formerly known
as The Chase Manhattan Bank), a national banking association organized and
existing by virtue of the banking laws of the United States of America
(hereinafter called the “Trustee”), and having its principal Corporate Trust
Office in The City of New York, New York, which office, at the date hereof, is
located at 4 New York Plaza, New York, New York 10004.

WITNESSETH:

     Whereas, Household Finance Corporation (“HFC”) and the Trustee have
heretofore entered into an Indenture for Senior Debt Securities dated as of
March 1, 2001 and amended and restated as of April 30, 2003 (as amended and
supplemented to date, hereinafter called the “Original Indenture”); and

     Whereas, under the Original Indenture, HFC created and issued from time to
time Notes of a series known as InterNotes® (hereinafter the “InterNotes”), due
nine months or more from date of issue; and

     Whereas, prior to the date hereof, HSBC Finance and
HFC entered into an Agreement and Plan of Merger, under which
HFC will merge as of the date hereof with and into HSBC Finance, with HSBC
Finance as the surviving corporation, and all obligations of HFC will become
direct obligations of HSBC Finance, including all InterNotes issued and
outstanding under the Original Indenture (hereinafter referred to as the
“Merger”); and

     Whereas, Section 10.01 of the Original Indenture provides, among other
things, that HFC will not merge into any other corporation unless the surviving
corporation in such merger (if other than the HFC) expressly assumes, by
supplemental indenture, the due and punctual payment of the principal of (and
premium, if any) and interest on all issued and outstanding InterNotes and the
performance of every covenant of the Original Indenture on the part of HFC
required to be performed under the Original Indenture; and

     Whereas, HSBC Finance desires to supplement the Original Indenture to
expressly assume the due and punctual payment of the principal of (and premium,
if any) and interest on all the Notes and the performance of every covenant of
the Original Indenture on the part of the

 

 

Company required to be performed under the Original Indenture and to amend
and restate the Original Indenture to evidence the merger of HFC into HSBC
Finance; and

     Whereas, all things necessary to make this Amended and Restated Indenture
a valid agreement of HSBC Finance and to make the InterNotes which may be
issued on or after the date hereof, when executed by HSBC Finance and
authenticated and delivered by the Trustee and duly issued by HSBC Finance, the
valid obligations of HSBC Finance, and, in accordance with their and its terms,
have been done.

          NOW, THEREFORE, THIS AMENDED AND RESTATED INDENTURE WITNESSETH:

Compliance with Article X of the Original indenture

     As required by Section 10.01 of the Original Indenture, HSBC Finance
hereby expressly and irrevocably assumes, as of the date hereof, the due and
punctual payment of the principal of (and premium, if any) and interest on all
the InterNotes issued and outstanding as of the date hereof and the performance
of every covenant of the Original Indenture on the part of HFC required to be
performed under the Original Indenture.

     Pursuant to Section 10.02 of the Original Indenture, HSBC Finance shall
succeed to, and be substituted for, and may exercise every right and power of,
HFC under the Original Indenture with the same effect as if HSBC Finance had
been named as the Company herein.

Amendment and restatement of Original Indenture terms

     For and in consideration of the premises and the purchase of Notes to be
issued hereunder by Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Notes or of series
thereof, as follows:

     Article 1. Standard Provisions. Except as specifically set forth herein,
all of the terms, conditions, covenants and provisions contained in the
Company’s Amended and Restated Standard Multiple-Series Indenture Provisions
for Senior Debt Securities dated as of December 15, 2004 (the “Provisions”), a
copy of which is attached hereto, are incorporated herein by reference in their
entirety and, except as specifically noted herein, shall be deemed to be a part
hereof to the same extent as if such provisions had been set forth in full
herein. All capitalized terms which are used herein and not otherwise defined
herein are defined in the Provisions and are used herein with the same meanings
as in the Provisions. The Provisions, together with this Indenture, are deemed
to be the “Indenture.”

     Article 2. Conflicts. As provided in Section 8.08(b) of the Provisions,
the following indentures are excluded:

The Indenture dated as of October 1, 1992 and the Amended and Restated
Indenture for Senior Debt Securities dated as of December 15, 2004
(providing for the issuance of the Company’s Medium Term Notes) between
the Company and the Trustee

- 2 -

 

     Article 3. Designation and Terms of the InterNotes. A series of Notes
created pursuant to this Indenture shall be known and designated as the “HSBC
Finance InterNotes” of the Company.

     Each InterNote will be dated and issued as of the date of its
authentication by the Trustee. Each InterNote shall also bear an Original
Issue Date (as hereinafter defined) which, with respect to any InterNote (or
any portion thereof), shall mean the date of its original issue, as specified
in such InterNote (the “Original Issue Date”), and such Original Issue Date
shall remain the same if such InterNote is subsequently issued upon transfer,
exchange, or substitution of such InterNote regardless of its date of
authentication. Principal of any InterNote shall become due and payable on
such date nine months or more from the Original Issue Date of such Note, as
specified on such Note. Interest rates, or interest rate formulas, will be
subject to change by the Company from time to time, but no such change will
affect any InterNote theretofore issued. Interest shall be computed on the
basis specified in each InterNote.

     Each InterNote will bear interest from the Original Issue Date, or from
the most recent date to which interest has been paid or duly provided for, at
the rate per annum stated, or pursuant to the interest rate specified, therein
until the principal thereof is paid or made available for payment. Interest
will be payable either monthly, quarterly, semi-annually or annually on each
Interest Payment Date and at Maturity. Interest will be payable to the person
in whose name a Note is registered at the close of business on the Regular
Record Date next preceding each Interest Payment Date; provided, however,
interest payable at Maturity will be payable to the person to whom principal
shall be payable.

     The Interest Payment Dates for an InterNote that provides for monthly
interest payments at a fixed rate of interest per annum shall be the fifteenth
day of each calendar month beginning in the first calendar month following the
month the InterNote was issued. In the case of an InterNote that provides for
quarterly interest payments at a fixed rate of interest per annum, the Interest
Payment Dates shall be the fifteenth day of every third month, beginning in the
third calendar month following the month the InterNote was issued. In the case
of an InterNote that provides for semi-annual interest payments at a fixed rate
of interest per annum, the Interest Payment Dates shall be the fifteenth day of
every sixth month, beginning in the sixth calendar month following the month
the InterNote was issued. In the case of an InterNote that provides for annual
interest payments at a fixed rate of interest per annum, the Interest Payment
Dates shall be the fifteenth day of every twelfth month, beginning in the
twelfth calendar month following the month the InterNote was issued. The
Regular Record Date referred to in Section 2.07 of the Provisions with respect
to any Interest Payment Date for an InterNote that provides for interest at a
fixed rate of interest per annum will be the first day of the calendar month
(whether or not a Business Day) in which such Interest Payment Date occurs,
except that the Regular Record Date with respect to the final Interest Payment
Date will be the final Interest Payment Date.

     Unless otherwise provided with respect to a particular InterNote, the
Interest Payment Dates for an InterNote that provides for monthly interest
payments pursuant to an interest rate formula shall be the third Wednesday of
each calendar month beginning in the first calendar month following the month
the InterNote was issued. Unless otherwise provided with respect to a
particular InterNote, the Interest Payment Dates for an InterNote that provides
for quarterly

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interest payments pursuant to an interest rate formula shall be the third
Wednesday of March, June, September and December of each year, beginning in the
first such month following the month the InterNote was issued. Unless
otherwise provided with respect to a particular InterNote, the Interest Payment
Dates for an InterNote that provides for semi-annual interest payments pursuant
to an interest rate formula shall be the third Wednesday of the two months of
each year specified in such InterNote. Unless otherwise provided with respect
to a particular InterNote, the Interest Payment Dates for an InterNote that
provides for annual interest payments pursuant to an interest rate formula
shall be the third Wednesday of the month of each year specified in such
InterNote. Unless otherwise provided with respect to a particular InterNote,
the Regular Record Date referred to in Section 2.07 of the Provisions with
respect to any Interest Payment Date for an InterNote that provides for
interest pursuant to an interest rate formula will be the fifteenth calendar
day (whether or not a Business Day) immediately preceding such Interest Payment
Date.

     Payment of principal of the InterNotes and, unless otherwise paid as
hereinafter provided, the interest thereon will be made at the office or agency
of the Company in New York, New York; provided, however, that payment of
interest may be made at the option of the Company by check or draft mailed to
the Person entitled thereto at his address appearing in the Note Register or by
wire transfer to an account designated by such Person to the Paying Agent not
later than ten days prior to the date of such payment.

     Unless otherwise specified in an InterNote, the cities of New York, New
York and Chicago, Illinois shall be the reference cities for determining a
Business Day.

     The InterNotes may be issued only as registered notes, without coupons, in
minimum denominations of $1,000 and any larger denomination which is an
integral multiple of $1,000.

     Upon the execution of this Indenture, or from time to time thereafter,
InterNotes, without limitation as to aggregate principal amount, may be
executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said InterNotes to or upon
a Company Order.

     Article 4. Redemption of InterNotes. Each InterNote may be redeemed by
the Company in whole or in part if so provided pursuant to the terms of such
InterNote issued by the Company. Notwithstanding the provisions of Section
5.03 of the Provisions, the Company may redeem any InterNote which by its terms
is redeemable prior to Stated Maturity without also redeeming any other
InterNote which is redeemable prior to Stated Maturity. The selection of
InterNotes to be redeemed prior to Stated Maturity shall be in the sole
discretion of the Company.

     Article 5. Repayment of InterNotes at Option of Holders. Each InterNote
shall be subject to repayment by the Company at the option of the Holder prior
to its Stated Maturity if so provided pursuant to the terms of such InterNote
issued by the Company, on such terms as set forth in such InterNote.

     Article 6. Survivor’s Option. If so specified in any InterNote, the
representative of a deceased beneficial owner of the InterNote or a beneficial
interest in the InterNote shall have the option to elect repayment of such
InterNote or interest following the death of the owner (a

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“Survivor’s Option”). Unless otherwise specifically provided for on the
face of the InterNote, no Survivor’s Option may be exercised if the deceased
owner of the InterNote or a beneficial interest in the InterNote acquired such
InterNote or interest less than six months prior to exercise of the Survivor’s
Option.

     Pursuant to exercise of the Survivor’s Option, the Company shall repay any
InterNote (or portion thereof) properly tendered for repayment by or on behalf
of the person (the “Representative”) that has authority to act on behalf of the
deceased beneficial owner of such InterNote under the laws of the appropriate
jurisdiction (including, without limitation, the personal representative,
executor, surviving joint tenant or surviving tenant by the entirety of such
deceased beneficial owner) at a price equal to 100 % of the principal amount of
the beneficial interest of the deceased owner in such InterNote plus accrued
interest to the date of such repayment, subject to the following limitations:

     (a) The Company may, in its sole discretion, limit the
aggregate principal amount of InterNotes as to which exercises of
the Survivor’s Option shall be accepted in any calendar year (the
“Annual Put Limitation”) to the greater of 2% of the Outstanding
principal amount of the InterNotes as of the end of the most
recent calendar year or $2,000,000. The Company in its sole
discretion may also limit to $250,000 for any calendar year, the
aggregate principal amount of InterNotes (or portions thereof) as
to which exercise of the Survivor’s Option will be accepted with
respect to any individual deceased owner of beneficial interests
in such InterNotes (the “Individual Put Limitation”).

     (b) The Company shall not make principal repayments pursuant
to exercise of the Survivor’s Option in amounts that are less than
$1,000, or other than in integral multiples of $1,000.

     (c) Any InterNote (or portion thereof) tendered pursuant to a
valid exercise of the Survivor’s Option may not be withdrawn.

     Each InterNote (or portion thereof) that is tendered pursuant to valid
exercise of the Survivor’s Option shall be accepted promptly in the order all
such InterNotes are tendered, except for any InterNote (or portion thereof) the
acceptance of which would contravene (i) the Annual Put Limitation, if applied,
or (ii) the Individual Put Limitation, if applied, with respect to the relevant
individual deceased owner of beneficial interests therein. If, as of the end
of any calendar year, the aggregate principal amount of InterNotes (or portions
thereof) that have been accepted pursuant to exercise of the Survivor’s Option
during such year has exceeded either the Annual Put Limitation, if applied, or
the Individual Put Limitation, if applied, for such year, any exercise(s) of
the Survivor’s Option with respect to InterNotes (or portions thereof) not
accepted during such calendar year because such acceptance would have
contravened either such limitation, if applied, shall be deemed to be tendered
in the following calendar year in the order all such InterNotes (or portions
thereof) were tendered. Unless otherwise specified in such InterNote, any
InterNote (or portion thereof) accepted for repayment pursuant to exercise of
the Survivor’s Option shall be repaid on the first Interest Payment Date that
occurs 20 or more calendar days after the date of such acceptance.

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     In order for a Survivor’s Option to be validly exercised with respect to
any InterNote (or portion thereof), the Trustee must receive from the
Representative of the deceased owner (i) a written request for repayment signed
by the Representative, and such signature must be guaranteed by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc. (the “NASD”) or a commercial bank or trust company
having an office or correspondent in the United States, (ii) tender of an
InterNote (or portion thereof) to be repaid, (iii) appropriate evidence
satisfactory to the Trustee and the Company that (A) the deceased acquired a
beneficial interest in such InterNote at least six months prior to exercise,
(B) the death of such beneficial owner has occurred and (C) the Representative
has authority to act on behalf of the deceased beneficial owner, (iv) if
applicable, a properly executed assignment or endorsement, and (v) if the
beneficial interest in such InterNote is held by a nominee of the deceased
beneficial owner, a certificate or letter satisfactory to the Trustee and the
Company from such nominee attesting to the deceased’s ownership of a beneficial
interest in such InterNote, and (vi) tax waivers and such other instruments or
documents that the Trustee or the Company reasonably requires in order to
establish the validity of ownership of the InterNotes and the claimant’s
entitlement to payment. Notwithstanding the foregoing, the eligibility or
validity of any exercise of the Survivor’s Option, shall be subject to the
final approval of the Company, in its sole discretion, which final approval
shall be final and binding on all parties. In the event that an InterNote (or
any portion thereof) tendered for repayment pursuant to valid exercise of the
Survivor’s Option is not accepted, the Trustee shall deliver a notice by
first-class mail to the Representative, that states the reason such InterNote
(or portion thereof) has not been accepted for payment.

     The death of a person owning an InterNote in joint tenancy or tenancy by
the entirety with another or others shall be deemed the death of the owner of
the InterNote, and the entire principal amount of the InterNote so held shall
be subject to repayment, together with interest accrued thereon to the
repayment date. The death of a person owning an InterNote by tenancy in common
shall be deemed the death of an owner of an InterNote only with respect to the
deceased owner’s interest in the InterNote so held by tenancy in common; except
that in the event an InterNote is held by husband and wife as tenants in
common, the death of either shall be deemed the death of the owner of the
InterNote, and the entire principal amount of the InterNote so held shall be
subject to repayment. The death of a person who, during his or her lifetime,
was entitled to substantially all of the beneficial interests of ownership of
an InterNote, shall be deemed the death of the owner thereof for purposes of
this provision, regardless of the registered holder, if such beneficial
interest can be established to the satisfaction of the Trustee and the Company.
Such beneficial interest shall be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Transfers to Minors Act, community
property or other joint ownership arrangements between a husband and wife and
custodial and trust arrangements where one person has substantially all of the
beneficial ownership interest in the InterNote during his or her lifetime.

     For InterNotes represented by a Global Note, the Depository or its nominee
shall be the holder of such InterNote and therefore shall be the only entity
that can exercise the Survivor’s Option for such InterNote. To obtain
repayment pursuant to exercise of the Survivor’s Option with respect to such
InterNote, the Representative must provide to the broker or other entity
through which the beneficial interest in such InterNote is held by the deceased
owner (i) the documents described in clauses (i), (iii) and (vi) of the second
preceding paragraph and (ii)

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instructions to such broker or other entity to notify the Depository of
such Representative’s desire to obtain repayment pursuant to exercise of the
Survivor’s Option. Such broker or other entity shall provide to the Trustee
(i) the documents received from the Representative referred to in clause (i) of
the preceding sentence and (ii) a certificate satisfactory to the Trustee from
such broker or other entity stating that it represents the deceased beneficial
owner. Such broker or other entity shall be responsible for disbursing any
payments it receives pursuant to exercise of the Survivor’s Option to the
appropriate Representative.

     Article 7. Global Notes. The InterNotes will be issued initially in the
form of Global Notes. “Global Note” means a registered Note evidencing one or
more InterNotes, issued to the Depository for such InterNotes in accordance
with this Article and bearing the legend prescribed in this Article. A single
Global Note will represent all Notes issued on the same day and having the same
terms, including, but not limited to, the same Interest Payment Dates, rate of
interest, Stated Maturity, and redemption or repayment provisions (if any),
including any Survivor’s Option. The Company shall execute and the Trustee
shall, in accordance with this Article and the Company Order with respect to
the InterNotes, authenticate and deliver one or more Global Notes in temporary
or permanent form that (i) shall represent and shall be denominated in an
aggregate amount equal to the aggregate principal amount of the InterNotes to
be represented by one or more Global Notes, (ii) shall be registered in the
name of the Depository for such Global Note or Notes or the nominee of such
Depository, (iii) shall be delivered by the Trustee to such Depository or
pursuant to such Depository’s instructions and (iv) shall bear a legend
substantially to the following effect in addition to the legend required by
Section 2.11(a) of the Provisions: “Unless this Global Note is presented by an
authorized representative of the Depository to the Issuer or its agent for
registration of transfer, exchange or payment, and any InterNote issued is
registered in the name of the Depository or in such other name as is requested
by the Depository, any transfer, pledge or other use hereof for value or
otherwise by or to any person shall be wrongful inasmuch as the registered
owner hereof, the Depository, has an interest herein.”

     Notwithstanding Section 2.05 of the Provisions, unless and until it is
exchanged in whole or in part for Notes in definitive form, a Global Note
representing one or more InterNotes may not be transferred except as a whole by
the Depository, to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor Depository for the InterNotes or
a nominee of such successor Depository.

     The third paragraph of Section 2.05 of the Provisions shall not apply to
InterNotes issued in the form of Global Notes.

     If at any time the Depository for the InterNotes notifies the Company that
it is unwilling or unable to continue as Depository for the InterNotes or if at
any time the Depository for the InterNotes shall no longer be registered or in
good standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, the Company shall appoint a successor
Depository with respect to the InterNotes. If a successor Depository for the
InterNotes is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive InterNotes, will authenticate

- 7 -

 

and deliver InterNotes in definitive form in an aggregate principal amount
equal to the principal amount of the Global Note or Notes representing such
InterNotes in exchange for such Global Note or Notes.

     The Company may at any time and in its sole discretion determine that the
InterNotes issued in the form of one or more Global Notes shall no longer by
represented by such Global Note or Notes. In such event the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive InterNotes will authenticate and
deliver InterNotes in definitive form in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such InterNotes
in exchange for such Global Note or Notes.

     The Depository for such InterNotes may surrender a Global Note or Notes
for such InterNotes in exchange in whole or in part for InterNotes in
definitive form on such terms as are acceptable to the Company and such
Depository. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge:

     (i) to each Person specified by such Depository a
new InterNote or Notes, of any authorized denomination
as requested by such Person in aggregate principal
amount equal to and in exchange for such Person’s
beneficial interest in the Global Note; and

     (ii) to such Depository a new Global Note in a
denomination equal to the difference, if any, between
the principal amount of the surrendered Global Note
and the aggregate principal amount of InterNotes
delivered to Holders thereof.

     In any exchange provided for in this Article, the Company will execute and
the Trustee will authenticate and deliver InterNotes in definitive registered
form in authorized denominations.

     Upon the exchange of a Global Note for InterNotes in definitive form, such
Global Note shall be cancelled by the Trustee. InterNotes issued in exchange
for a Global Note pursuant to this Article shall be registered in such names
and in such authorized denominations as the Depository for such Global Note,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such InterNotes to the
persons in whose names such InterNotes are so registered.

     Article 8. Amendments. Notwithstanding Articles II and XI of the
Provisions, the Company may, by Board Resolution or by Supplemental Indenture,
amend this Indenture to provide for additional definitions, terms and
provisions relating to InterNotes. Any such Board Resolution or Supplemental
Indenture will not adversely affect the rights and privileges of Holders of
InterNotes issued prior to such Board Resolution or Supplemental Indenture and
shall not affect the Trustee’s own rights, duties or immunities under this
Indenture or otherwise without its prior written consent.

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     Article 9. Effective Time. This Amended and Restated Indenture shall
become effective on the date and at the time of consummation of the Merger.

TESTIMONIUM

     This Amended and Restated Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Indenture to be duly executed and attested, all as of the day and year
first written above. In addition, by its signature below, the Trustee
acknowledges and agrees that this Amended and Restated Indenture is delivered
in a form satisfactory to the Trustee for purposes of Section 10.01 of the
Original Indenture.

	 	 	 	 	 
	 	 	HSBC FINANCE CORPORATION
	 
	 	 	 	 
	

	 	By:
	 	     /s/ AUTHORIZED SIGNATORY
	

	 	 	 	
 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	          /s/ AUTHORIZED SIGNATORY
	 	 	 	 
	
 
	 	 	 	 
	          Assistant Secretary
	 	 	 	 
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	as Trustee
	

	 	By:
	 	     /s/ AUTHORIZED SIGNATORY
	

	 	 	 	
 
	 

	 	 	 	Authorized Officer
	Attest:
	 	 	 	 
	 
	 	 	 	 
	          /s/ AUTHORIZED SIGNATORY
	 	 	 	 
	
 
	 	 	 	 
	          Authorized Officer
	 	 	 	 

- 9 -

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