Document:

exv4w2

 

EXHIBIT 4.2

     UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO NISOURCE FINANCE CORP. AND
NISOURCE INC. OR THEIR AGENT OR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

      

			
	No.: 1

CUSIP No.: 65473Q AR 4

ISIN No.: US65473QAR48
	 	$550,000,000

5.45% Notes due 2020

          NiSource Finance Corp., an Indiana corporation, promises to pay to Cede & Co, or registered
assigns, the principal sum of Five Hundred Fifty Million Dollars on September 15, 2020.

          Interest Payment Dates: March 15 and September 15

          Record Dates: March 1 and September 1

 

          Additional provisions of this Note are set forth on the other side of this Note.

Dated: September 16, 2005

	 	 	 	 	 	 	 
	 	 	NISOURCE FINANCE CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: David J. Vajda	 	 
	 	 	Title: Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Gary W. Pottorff	 	 
	 	 	Title: Corporate Secretary	 	 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

This is one of the Notes of the series

referred to in the within-mentioned Indenture.

JPMORGAN
CHASE BANK, N.A.

as Trustee

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	                    Authorized Officer	 	 

 

5.45% Notes due 2020

	1.	 	Interest

          NiSource Finance Corp., an Indiana corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Note at the rate per annum shown above. The
Company will pay interest semiannually on March 15 and September 15 of each year, commencing March
15, 2006. Interest on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from September 16, 2005. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue
principal and premium at the above rate and will pay interest on overdue installments of interest
at such rate to the extent lawful.

	2.	 	Method of Payment

          The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the March 1 or September 1 next preceding
the Interest Payment Date even if Notes are canceled after the Record Date and on or before the
Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts. Payments in respect of
the Notes represented by a Global Note (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified by The Depository
Trust Company.

	3.	 	Guarantee

          NiSource Inc., a Delaware corporation and parent of the Company, will fully and
unconditionally guarantee to each Holder of the Notes and to JPMorgan Chase Bank, N.A. (formerly,
The Chase Manhattan Bank), as Trustee (the “Trustee”) under the Indenture (as defined below) and
its successors all the Obligations of the Company under the Notes, including the due and punctual
payment of the principal of, premium, if any, and interest, if any, on the Notes (the “Security
Guarantee”). The Security Guarantee applies whether the payment is due at Stated Maturity, on an
Interest Payment Date or as a result of acceleration, redemption or otherwise. The Security
Guarantee includes payment of interest on the overdue principal of, premium, if any, and interest,
if any, on the Notes (if lawful) and all other Obligations of the Company under the Indenture. The
Security Guarantee will remain valid even if the Indenture is found to be invalid. NiSource Inc.
is obligated under the Security Guarantee to pay any guaranteed amount immediately after the
Company’s failure to do so.

 

	4.	 	Paying Agent and Security Registrar

          Initially, the Trustee will act as Paying Agent and Security Registrar. The Company may
appoint and change any Paying Agent or Security Registrar without notice to the Holders. The
Company may act as Paying Agent or Security Registrar.

	5.	 	Indenture

          The Company issued the Notes under an Indenture dated as of November 14, 2000, among the
Company, NiSource Inc. and the Trustee (as supplemented, the “Indenture”) and pursuant to an
Officers’ Certificate of the Company dated September 16, 2005 (the “Officer’s Certificate”). The
terms of the Notes include those stated in the Indenture and the Officer’s Certificate and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. sections
77aaa-77bbbb) as in effect on the date of the Officer’s Certificate (the “Act”). Capitalized terms
used herein and defined in the Indenture but not defined herein have the meanings ascribed thereto
in the Indenture. The Notes are subject to all such terms, and Holders of Notes are referred to
the Indenture and the Act for a statement of those terms.

          The Notes are senior unsecured obligations of the Company. The Notes issued on the Issue Date
will be treated as a single class for all purposes under the Indenture. The Indenture contains
covenants that limit the ability of the Company, NiSource Inc. and their Subsidiaries (other than
Utilities) to incur additional indebtedness and create liens on assets unless the total amount of
all the secured debt would not exceed 10% of Consolidated Net Tangible Assets. These covenants are
subject to important exceptions and qualifications.

	6.	 	Optional Redemption

          The Company may redeem all or part of the Notes at any time at its option at a redemption
price equal to the greater of (1) the principal amount of the Notes being redeemed plus accrued
interest to the Redemption Date or (2) the Make-Whole Amount for the Notes being redeemed. For
purposes of this provision:

          “Make-Whole Amount” means the sum, as determined by a Quotation Agent, of the present values
of the principal amount of the Notes to be redeemed, together with scheduled payments of interest
(exclusive of interest to the Redemption Date) from the Redemption Date to the Stated Maturity of
the Notes, in each case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate, plus accrued
interest on the principal amount of the Notes being redeemed to the Redemption Date.

          “Adjusted Treasury Rate” means, with respect to any Redemption Date, (i) the yield, under the
heading which represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15 (519)” or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant

 

Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the remaining term of the Notes, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue assuming a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption Date, in each case
calculated on the third Business Day preceding the Redemption Date, plus 0.30%.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to
the Stated Maturity of the Notes that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.

          “Comparable Treasury Price” means, with respect to any Redemption Date, if clause (ii) of the
definition of Adjusted Treasury Rate is applicable, the average of three, or such lesser number as
is obtained by the Trustee, Reference Treasury Dealer Quotations for such Redemption Date.

          “Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after
consultation with the Company.

          “Reference Treasury Dealer” means a primary U.S. Government securities dealer selected by the
Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by a Reference Treasury Dealer, of the bid and
asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its
principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.

	7.	 	Notice of Redemption

          If the Company is redeeming less than all the Notes at any time, the Trustee will select the
Notes to be redeemed using a method it considers fair and appropriate. Notice of redemption will
be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed in accordance with Section 106 of the Indenture. Notes in denominations
larger than $1,000 principal amount may be redeemed in part but only in integral multiples of
$1,000. The Company will not know the exact Redemption Price until three Business Days before the
Redemption Date. Therefore, the notice of redemption will only describe how the

 

Redemption Price will be calculated. If money sufficient to pay the Redemption Price of and
accrued interest on all Notes (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such Redemption Date interest will cease to accrue on such Notes (or such
portions thereof) called for redemption.

	8.	 	Additional Notes

          The Company may, without the consent of the Holders of the Notes, create and issue Additional
Notes ranking equally with the Notes in all respects, including having the same CUSIP number, so
that such Additional Notes shall be consolidated and form a single series with the Notes and shall
have the same terms as to status, redemption or otherwise as the Notes. No Additional Notes may be
issued if an Event of Default has occurred and is continuing with respect to the Notes.

	9.	 	Denominations; Transfer; Exchange

          The Notes are in registered form without coupons in denominations of $1,000 principal amount
and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Security Registrar need not register the transfer or exchange of any Notes
selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the
Note not to be redeemed) for a period of 15 days before a selection of Notes to be redeemed.

	10.	 	Persons Deemed Owners

          The registered Holder of this Note may be treated as the owner of it for all purposes.

	11.	 	Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request. After any such payment,
Holders entitled to the money must look only to the Company and not to the Trustee, the Paying
Agent or NiSource Inc., as guarantor, for payment.

	12.	 	Satisfaction and Discharge

          Under the Indenture, the Company can terminate its obligations with respect to the Notes not
previously delivered to the Trustee for cancellation when those Notes have become due and payable
or will become due and payable at their Stated Maturity within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for giving notice of
redemption. The Company may terminate its obligations with respect to the Notes by depositing with
the Trustee, as funds in trust dedicated solely for that purpose, an amount sufficient to pay and
discharge

 

the entire indebtedness on the Notes. In that case, the Indenture will cease to be of further
effect and the Company’s obligations will be satisfied and discharged with respect to the Notes
(except as to the Company’s obligations to pay all other amounts due under the Indenture and to
provide certain Officers’ Certificates and Opinions of Counsel to the Trustee). At the expense of
the Company, the Trustee will execute proper instruments acknowledging the satisfaction and
discharge.

	13.	 	Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture and the Notes may
be amended with the written consent of the Holders of at least a majority in principal amount
outstanding of the Notes and (ii) any default or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount outstanding of the Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee shall be entitled to amend the Indenture to cure any ambiguity, omission,
defect or inconsistency, or to evidence the succession of another Person as obligor under the
Indenture, or to add to the Company’s or NiSource Inc.’s covenants or to surrender any right or
power conferred on the Company or NiSource Inc. under the Indenture, or to add events of default,
or to secure the Notes, or to evidence or provide for the acceptance or appointment by a successor
Trustee or facilitate the administration of the trusts under the Indenture by more than one
trustee, or to effect assumption by NiSource Inc. or one of its Subsidiaries of the Company’s
obligations under the Indenture, or to conform the Indenture to any amendment of the Trust
Indenture Act.

	14.	 	Defaults and Remedies

          Under the Indenture, Events of Default include: (i) default by the Company in the payment of
any interest upon any Note and the continuance of such default for 60 days; (ii) default by the
Company in the payment of principal of or any premium on any Note when due at Stated Maturity, on
redemption, by declaration or otherwise, and the continuance of such default for three Business
Days; (iii) default by the Company or NiSource Inc. in the performance of or breach of any covenant
or warranty in the Indenture and continuance of such default for 90 days after written notice to
the Company or NiSource Inc. from the Trustee or to the Company, NiSource Inc. and the Trustee from
the Holders of at least 33% in principal amount of the Outstanding Notes; (iv) default by the
Company or NiSource Capital Markets, Inc. under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or NiSource Capital Markets, Inc., or the Company or
NiSource Capital Markets, Inc. defaults under any mortgage, indenture or instrument under which
there may be issued, secured or evidenced indebtedness constituting a failure to pay in excess of
$50,000,000 of the principal or interest when due and payable, subject to certain cure rights; (v)
the guarantee by NiSource Inc. ceases to be in full force and effect or is disaffirmed or denied
(other than according to its terms), or is found to be unenforceable or invalid; or (vi) certain
events of bankruptcy, insolvency or reorganization of the Company, NiSource Capital Markets, Inc.
or NiSource Inc. If an Event of Default occurs and is continuing,

 

the Trustee or the Holders of at least 33% in principal amount of the Notes may declare all
the Notes to be due and payable immediately.

          Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in the interest of the Holders.

	15.	 	Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were not Trustee.

	16.	 	No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Company, NiSource Inc. or the
Trustee shall not have any liability for any obligations of the Company under the Notes or the
Indenture, or any obligations of NiSource Inc. under the Security Guarantee or the Indenture, or
for any claim based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Notes and the Security Guarantee.

	17.	 	Authentication

          This Note shall not be valid until an authorized signatory of the Trustee (or an
Authenticating Agent) manually signs the certificate of authentication on the other side of this
Note.

	18.	 	Abbreviations

          Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM
(=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

	19.	 	CUSIP, ISIN and Common Code Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. To the extent
such numbers have been issued,

 

the Company has caused ISIN and Common Code numbers to be similarly printed on the Notes and
has similarly instructed the Trustee. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

	20.	 	Governing Law.

          THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO CONTRARY CONFLICT OF LAWS OR CHOICE OF LAWS PROVISIONS OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION.

          The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture. Requests may be made to:

NiSource Finance Corp.

801 East 86th Avenue

Merrillville, Indiana 46410

Attention:
Corporate Secretary

 

ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

 

 

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

     and irrevocably appoint                                          agent to transfer this Note on the books of the Company. The agent
may substitute another to act for him.

	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Your Signature:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Sign exactly as your name appears on the
other side of this Note.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature Guarantee:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature must be guaranteed	 	 	 	Signature	 	 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 

SECURITY GUARANTEE

          NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource Finance
Corp., an Indiana corporation (the “Company”) under the 5.45% Notes due 2020 (the “Notes”) of the
Company, including that (i) the principal of, premium, if any, and interest on the Notes shall be
promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes, if
lawful, and all other Obligations of the Company to the Holders or the Trustee shall be promptly
paid in full or performed, and (ii) in case of any extension of time of payment or renewal of any
Notes or any such other Obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance
so guaranteed, NiSource Inc. shall be obligated to pay or perform the same immediately.

          The obligations of NiSource Inc. to the Holders and to the Trustee pursuant to this Security
Guarantee and the Indenture are expressly set forth in Article Fifteen of the Indenture, and
reference is hereby made to such Indenture for the precise terms of this Security Guarantee.

          No stockholder, employee, officer, director or incorporator, as such, past, present or future,
of NiSource Inc. shall have any liability under this Security Guarantee by reason of his or its
status as such stockholder, employee, officer, director or incorporator.

          This Security Guarantee shall remain in full force and effect and continue notwithstanding any
petition filed by or against the Company for liquidation or reorganization.

          This Security Guarantee shall not be valid or obligatory for any purpose until the certificate
of authentication on the Note upon which this Security Guarantee is noted shall have been executed
by the Trustee under the Indenture by the manual signature of one of its authorized officers.

          THE TERMS OF ARTICLE FIFTEEN OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

          Capitalized terms used herein have the same meanings given in the Indenture unless otherwise
indicated.

	 	 	 	 	 	 	 
	 	 	NISOURCE INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: David J. Vajda	 	 
	 	 	Title:   Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Jeffrey W. Grossman	 	 
	 	 	Title:  Vice President and Controllerexv4w2

 

Exhibit 4.2

Eighth Supplemental Indenture

     EIGHTH SUPPLEMENTAL INDENTURE, dated as of      , 2005 (the “Supplemental
Indenture”), between HSBC Finance Corporation, a Delaware corporation (the “Company”), and J.P.
Morgan Trust Company, National Association, as trustee (the “Trustee”) under the Indenture dated as
of May 15, 1995 between the Company and the Trustee (the “Indenture”).

     WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for the
future issuance of the Company’s unsecured junior subordinated debt securities, to be issued from
time to time in one or more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as provided in the
Indenture;

     WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the
establishment of a new series of its debt securities to be known as its      % Junior Subordinated
Deferrable Interest Notes due      , 2035 (the “Notes”), the form and substance of such
Notes and the terms, provisions and conditions thereof to be set forth as provided in the Indenture
and this Supplemental Indenture;

     WHEREAS, Household Capital Trust IX, a Delaware statutory business trust (the “Trust”),
intends to offer to the public $        aggregate liquidation amount of its      % Trust
Preferred Securities (the “Preferred Securities”) and intends to issue to the Company, as sponsor,
its      % Trust Common Securities (the “Common Securities”, and together with the Preferred
Securities, the “Trust Securities”), representing undivided beneficial interests in the assets of
the Trust and proposes to invest the proceeds from such offering in $        aggregate
principal amount of the Notes; and

     WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental
Indenture, and all requirements necessary to make this Supplemental Indenture a valid instrument,
in accordance with its terms, and to make the Notes, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company, have been performed, and the
execution and delivery of this Supplemental Indenture has been duly authorized in all respects:

     NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by the holders
thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance
of the Notes and the terms, provisions and conditions thereof, the Company covenants and agrees
with the Trustee as follows:

ARTICLE I

Definitions

     Section 1.1 Definition of Terms.

     Unless the context otherwise requires:

	 	(a)	 	a term defined in the Indenture has the same meaning when used in this
Supplemental Indenture;
	 
	 	(b)	 	a term defined anywhere in this Supplemental Indenture has the same meaning
throughout;
	 
	 	(c)	 	the singular includes the plural and vice versa;
	 
	 	(d)	 	a reference to a Section or Article is to a Section or Article of this
Supplemental Indenture;
	 
	 	(e)	 	headings are for convenience of reference only and do not affect
interpretation;
	 
	 	(f)	 	the following terms have the meanings given to them in the Declaration: (i)
Clearing Agency (ii) Delaware Trustee; (iii)Dissolution Tax Opinion; (iv) No
Recognition Opinion; (v) Pricing Agreement; (vi) Property

1

 

	 	 	 	Trustee; (vii) Preferred Security Certificate; (viii) Redemption Tax Opinion; (ix)
Regular Trustees; (x) Special Event; (xi) Tax Event; and (xii) Underwriting
Agreement); and
	 
	 	(g)	 	the following terms have the meanings given to them in this Section l.l(g):

“Additional Interest” has the meaning set forth in Section 2.5(c).

“Compounded Interest” has the meaning set forth in Section 4.1.

“Coupon Rate” has the meaning set forth in Section 2.5(a).

“Declaration” means the Amended and Restated Declaration of Trust of Household Capital Trust
IX, a Delaware business trust, dated as of      , 2005.

“Deferred Interest” has the meaning set forth in Section 4.1.

“Dissolution Event” means that as a result of the occurrence and continuation of a Special
Event, the Trust is to be dissolved in accordance with the Declaration and the Notes held by
the Trustee are to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Declaration.

“Extended Interest Payment Period” has the meaning set forth in Section 4.1.

“Interest Payment Date” has the meaning set forth in Section 2.5(a).

“Maturity Date” means      , 2035, or such other earlier date as may be determined
by the Company pursuant to Section 3.4 herein.

“Ministerial Action” has the meaning set forth in Section 3.1.

“90 Day Period” has the meaning set forth in Section 3.1.

“Non Book Entry Preferred Securities” has the meaning set forth in Section 2.4(b).

“Paying Agent” means J.P. Morgan Trust Company, National Association, until a successor
paying agent has been appointed and has accepted such appointment.

“Redemption Price” has the meaning set forth in Section 3.1.

ARTICLE II

General Terms And Conditions Of

The Notes

     Section 2.1 Designation and Principal Amount.

     There
is hereby authorized a series of debt securities designated the
“    % Junior
Subordinated Deferrable Interest Notes due      , 2035”, limited in aggregate principal
amount to $    , which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Notes pursuant to Section 2.02 of the Indenture.

2

 

Section 2.2 Maturity.

     The Maturity Date will be      , 2035, or such other earlier date as may be
determined by the Company pursuant to Section 3.4 herein, and the date on which the Notes mature
and on which the principal shall be due and payable together with all accrued and unpaid interest
thereon.

     Section 2.3 Form And Payment.

     Except as provided in Section 2.4, the Notes shall be issued in fully registered certificated
form without interest coupons. Principal and interest on the Notes issued in certificated form will
be payable, the transfer of such Notes will be registrable and such Notes will be exchangeable for
Notes bearing identical terms and provisions at the office or agency of the Trustee; provided,
however, that payment of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Note Register. Notwithstanding the
foregoing, so long as the registered Holder of any Notes is the Property Trustee, the payment of
the principal of (and premium, if any) and interest on such Notes held by the Property Trustee will
be made by wire transfer at such place and to such account as may be designated by the Property
Trustee.

     Section 2.4 Depository Note.

     In connection with a Dissolution Event;

	 	(a)	 	the Notes in certificated form may be presented to the Trustee by the Property
Trustee in exchange for a Depository Note in an aggregate principal amount equal to
all Outstanding Notes, to be registered in the name of the Depository, or its nominee,
and delivered by the Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Regular Trustees. The Company upon any
such presentation shall execute a Depository Note in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery in accordance with
the Indenture and this Supplemental Indenture. Payments on the Notes issued as a
Depository Note will be made to the Depository; and
	 
	 	(b)	 	if any Preferred Securities are held in non book-entry certificated form, the
Notes in certificated form may be presented to the Trustee by the Property Trustee and
any Preferred Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee (“Non Book-Entry
Preferred Securities”) will be deemed to represent beneficial interests in Notes
presented to the Trustee by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates will be
cancelled and a Note registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred Security Certificate as
the case may be, with an aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Security Certificate cancelled will be executed by the Company
and delivered to the Trustee for authentication and delivery in accordance with the
Indenture and this Supplemental Indenture. On issue of such Notes, Notes with an
equivalent aggregate principal amount that were presented by the Property Trustee to
the Trustee will be deemed to have been cancelled.

     Section 2.5 Interest.

	 	(a)	 	Each Note will bear interest at the rate of      % per annum (the “Coupon
Rate”) from the original date of issuance until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded quarterly and payable (subject to the provisions of Article IV)
quarterly in arrears
on      ,        ,     and
    of each year (each, an “Interest Payment Date”), commencing on      ,
2006 to the person in whose name such Note or any predecessor Note is registered, at
the close of business on the Regular Record Date for such interest installment, which
shall be the close of business on the

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	 	 	 	Business Day next preceding that Interest Payment Date. If pursuant to the provisions
of Section 2.11(c) of the Indenture the Notes are no longer represented by a
Depository Note, the Company may select a Regular Record Date for such interest
installment which shall be any date at least fifteen days before an Interest Payment
Date.
	 
	 	(b)	 	The amount of interest payable for any period will be computed (i) for any full
90-day quarterly interest payment period, on the basis of a 360-day year of twelve
30-day months and (ii) for any period shorter than a full 90-day quarterly interest
payment period for which interest payments are computed, on the basis of a 30-day
month, and for periods of less than a month, the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on the Notes is
not a Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such date.
	 
	 	(c)	 	If at any time while the Property Trustee is the Holder of any Notes, the Trust
or the Property Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed by the
United States, or any other taxing authority, then, in any case, the Company will pay
as additional interest (“Additional Interest”) on the Notes held by the Property
Trustee, such additional amounts as shall be required so that the net amounts received
and retained by the Trust and the Property Trustee after paying such taxes, duties
assessments or other governmental charges will be equal to the amounts the Trust and
the Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.

ARTICLE III

Redemption Of The Notes And 

Acceleration Of Maturity

     Section 3.1 Tax Event Redemption.

     If a Tax Event has occurred and is continuing and:

	 	(a)	 	the Company has received a Redemption Tax Opinion; or
	 
	 	(b)	 	after receiving a Dissolution Tax Opinion, the Regular Trustees shall have been
informed by tax counsel rendering the Dissolution Tax Opinion that a No Recognition
Opinion cannot be delivered to the Trust,

then, notwithstanding Section 3.2, the Company shall have the right upon not less than 30 days nor
more than 60 days notice to the registered Holders of the Notes to redeem the Notes in whole or in
part for cash, at the redemption price set forth below, within 90 days following the occurrence of
such Tax Event (the “90 Day Period”), provided that, if at the time there is available to the
Company the opportunity to eliminate within the 90 Day Period, the Tax Event by taking some
ministerial action (“Ministerial Action”), such as filing a form or making an election, or pursuing
some other similar reasonable measure which has no adverse effect on the Company, the Trust or the
Holders of the Trust Securities issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption; and provided, further, that the Company shall have no right to redeem
the Notes while the Trust is pursuing any Ministerial Action pursuant to its obligations under the
Declaration.

     The Redemption Price shall be equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption (the “Redemption Price”).

4

 

Section 3.2 Optional Redemption By Company.

	 	(a)	 	Subject to the provisions of Article III of the Indenture and to Section 3.2(b)
hereof, the Company shall have the right to redeem the Notes, in whole or in part, from
time to time, on or after      , 2010, at the Redemption Price. Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60 days’
notice to the registered Holder of the Notes, at the Redemption Price. If the Notes are
only partially redeemed pursuant to this Section 3.2, the Notes will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; provided, that if at the
time of redemption, the Notes are registered as a Depository Note, the Depository shall
determine by lot the principal amount of such Notes held by each Holder to be redeemed.
	 
	 	(b)	 	If a partial redemption of the Notes would result in the delisting of the
Preferred Securities issued by the Trust from any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company shall not
be permitted to effect such partial redemption and may only redeem the Notes in whole.

     Section 3.3 No Sinking Fund.

     The Notes are not entitled to the benefit of any sinking fund.

     Section 3.4 Conditional Right to Advance Maturity.

     If a Tax Event has occurred and is continuing the Company shall have the right, prior to
dissolution of the Trust, to advance the Maturity Date of the Notes to the minimum extent required
in order to allow the Company to deduct the interest payments on the Notes for United States
federal income tax purposes; provided, however, the resulting Maturity Date shall not be less than
15 years from the original issuance of the Notes or earlier than      , 2020. The Company may
elect to advance the Maturity Date only if it has received an opinion of nationally recognized
independent tax counsel to the Company experienced in such matters (which opinion may rely on
published revenue rulings of the Internal Revenue Service), to the effect that (i) after the
Maturity Date has been advanced, interest paid on the Notes will be deductible by the Company for
United States federal income tax purposes and (ii) advancing the Maturity Date will not result in a
taxable event to holders of the Preferred Securities.

     Section 3.5 Notice of Advancement of Maturity Date.

     If the Company elects to advance the Maturity Date of the Notes pursuant to Section 3.4, the
Company shall give written notice of such election to the Trustee, the Regular Trustees and the
Property Trustee, and the Trustee shall give notice to the holders of the Preferred Securities not
less than 30 and not more than 60 days prior to the effective date of such election.

ARTICLE IV

Extension Of Interest Payment Period

     Section 4.1 Extension of Interest Payment Period.

     The Company shall have the right, at any time during the term of the Notes, from time to time
to defer the payment of interest by extending the interest payment period of such Notes for up to
20 consecutive quarters (the “Extended Interest Payment Period”), provided that no Extended
Interest Payment Period may extend beyond the Maturity Date of the Notes. To the extent permitted
by applicable law, interest, the payment of which has been deferred because of the extension of
the interest payment period pursuant to this Section 4.1, will bear interest thereon at the Coupon
Rate, compounded quarterly, for each quarter of the Extended Interest Payment Period (“Compounded
Interest”). At the end of the Extended Interest Payment Period the Company shall pay all interest
accrued and unpaid on the Notes including any Additional Interest and Compounded Interest
(“Deferred Interest”) which shall be payable to the Holders of the Notes in whose names the Notes
are registered in the Note Register on the first record date after the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters and provided further that no Extended Interest
Payment Period may

5

 

extend beyond the Maturity Date of the Notes. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end thereof.

     Section 4.2 Notice of Extension.

	 	(a)	 	If the Property Trustee is the only registered Holder of the Notes at the time
the Company selects an Extended Interest Payment Period, the Company shall give written
notice to both the Regular Trustees and the Property Trustee of its selection of such
Extended Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record date or
the date such Distributions are payable to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred Securities
issued by the Trust, but in any event at least one Business Day before such record
date.
	 
	 	(b)	 	If the Property Trustee is not the only Holder of the Notes at the time the
Company selects an Extended Interest Payment Period, the Company shall give the Holders
of the Notes written notice of its selection of such Extended Interest Payment Period
10 Business Days before the earlier of (i) the next succeeding Interest Payment Date,
or (ii) the date the Company is required to give notice of the record or payment date
of such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Notes, but in any event at least two
Business Days before such record date.
	 
	 	(c)	 	The quarter in which any notice is given pursuant to paragraphs (a) or (b) of
this Section 4.2 shall be counted as one of the 20 quarters permitted in the maximum
Extended Interest Payment Period permitted under Section 4.1.

ARTICLE V

Expenses And Guarantee

     Section 5.1 Payment of Expenses.

     In connection with the offering, sale and issuance of the Notes to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company shall:

	 	(a)	 	pay for all costs and expenses relating to the offering, sale and issuance of
the Notes, including commissions to the underwriters payable pursuant to the
Underwriting Agreement and the Pricing Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 8.07 of the Indenture;
	 
	 	(b)	 	pay for all costs and expenses of the Trust (including, but not limited to,
costs and expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions to the underwriters in
connection therewith), the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation
	 
	 	 	 	of the Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), travel expenses and costs and expenses incurred in connection with the
acquisition, financing, and disposition of Trust assets); and
	 
	 	(c)	 	pay any and all taxes (other than United States withholding taxes attributable
to the Trust or its assets) and all liabilities, costs and expenses with respect to
such taxes of the Trust.

6

 

ARTICLE VI

Subordination

     Section 6.1 Agreement to Subordinate.

     The Company covenants and agrees, and each Holder of Notes issued hereunder by such Holder’s
acceptance thereof likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article VI; and each Holder of a Note, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such provisions.

     The payment by the Company of the principal of, (premium, if any) and interest on all Notes
issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and
junior in right of payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of this Indenture or thereafter incurred.

     No provision of this Article VI shall prevent the occurrence of any default or Event of
Default hereunder.

     Section 6.2 Default on Senior Indebtedness.

     In the event and during the continuation of any default by the Company in the payment of
principal, premium, interest or any other payment due on any Senior Indebtedness of the Company, or
in the event that the maturity of any Senior Indebtedness of the Company, has been accelerated
because of a default, then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption payments) of, or premium, if any, or interest on the Notes
including payment with respect to any obligation due under the Preferred Securities Guarantee.

     In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee
or any Holder when such payment is prohibited by the preceding paragraph of this Section 6.2, such
payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the
holders of such Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that the holders of such
Senior Indebtedness (or their representative or representatives or a trustee) notify the Trustee
within 90 days of such payment of the amounts then due and owing on such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the holders of such
Senior Indebtedness.

     Section 6.3 Liquidation; Dissolution; Bankruptcy.

     Upon any payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any dissolution or winding-up
or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness of the
Company, shall first be paid in full, or payment thereof provided for in money in accordance with
its terms, before any payment is made by the Company, as the case may be, on account of the
principal (and premium, if any) or interest on the Notes; and upon any such dissolution or
winding-up or liquidation or reorganization any payment by the Company, or distribution of assets
of the Company of any kind or character, whether in cash, property or securities, to which the
Holders of the Notes or the Trustee would be entitled to receive from the Company, except for the
provisions of this Article VI, shall be paid by the Company, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by
the Holders of the Notes or by the Trustee under this Indenture if received by them or it, directly
to the holders of Senior Indebtedness of the Company, (pro rata to the holders of the respective
amounts of Senior Indebtedness, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money’s
worth, after giving effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness before any payment or distribution is made to the Holders of Notes or to the
Trustee.

7

 

     In the event that, notwithstanding the foregoing, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee or the Holders of the Notes before all Senior
Indebtedness of the Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Indebtedness.

     For purposes of this Article VI, the words “cash, property or securities” shall not be deemed
to include shares of stock of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article VI with respect to
the Notes to the payment of all Senior Indebtedness of the Company that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article X of the Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 6.3 if such other
corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article X of the Indenture. Nothing in Section 6.2 or in this Section 6.3
shall apply to claims of, or payments to, the Trustee under or pursuant to Section 8.07 of the
Indenture.

     Section 6.4 Subordination.

     Subject to the payment in full of all Senior Indebtedness of the Company, the rights of the
Holders of the Notes shall be subrogated to the rights of the holders of such Senior Indebtedness
to receive payments or distributions of cash, property or securities of the Company applicable to
such Senior Indebtedness until the principal of (and premium, if any) and interest on the Notes
shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to
the holders of such Senior Indebtedness of any cash, property or securities to which the Holders of
the Notes or the Trustee would be entitled except for the provisions of this Article VI, and no
payment over pursuant to the provisions of this Article VI, to or for the benefit of the holders of
such Senior Indebtedness by Holders of the Notes or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company, and the Holders of the Notes,
be deemed to be a payment by the Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article VI are and are intended solely for the purposes of
defining the relative rights of the Holders of the Notes, on the one hand, and the holders of
Senior Indebtedness of the Company on the other hand. Nothing contained in this Article VI or
elsewhere in this Indenture or in the Notes is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness of the Company, and the Holders of the
Notes the obligation of the Company which is absolute and unconditional, to pay to the Holders of
the Notes the principal of (and premium, if any) and interest on the Notes as and when the same
shall become due and payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Notes and creditors of the Company other than the holders of
Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Note from exercising all remedies otherwise permitted by applicable law upon default
under the Indenture, subject to the rights, if any, under this Article VI of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

     Upon any payment or distribution of assets of the Company referred to in this Article VI, the
Trustee, subject to the provisions of Section 8.01 of the Indenture, and the Holders of the Notes,
shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders of the Notes, for
the purposes of ascertaining the Persons entitled to

8

 

participate in such distribution, the holders of Senior Indebtedness of the Company, the amount
thereof or payable thereon, and any other, facts pertinent thereto or to this Article VI.

     Section 6.5 Trustee to Effectuate Subordination.

     Each Holder of Notes by such Holder’s acceptance thereof authorizes and directs the Trustee on
such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article VI and appoints the Trustee such Holder’s attorney-in-fact
for any and all such purposes.

     Section 6.6 Notice by the Company.

     The Company shall give prompt written notice to a Responsible Officer of the Trustee of any
fact known to the Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article VI. Notwithstanding the
provisions of this Article VI or any other provision of the Indenture and this Supplemental
Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee in respect of the Notes pursuant
to the provisions of this Article VI, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the Trustee from the Company
or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt
of any such written notice, the Trustee, subject to the provisions of Section 8.01 of the
Indenture, shall be entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this Section 6.6 at least
two Business Days prior to the date upon which by the terms hereof any money may become payable for
any purpose (including, without limitation, the payment of the principal of (or premium, if any) or
interest on any Note), then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.

     The Trustee, subject to the provisions of Section 8.01 of the Indenture, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of
such Senior Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and if such evidence is not furnished the Trustee may defer any
payment to such Person pending judicial determination as to the right of such Person to receive
such payment.

9

 

     Section 6.7 Rights of the Trustee; Holders of Senior Indebtedness.

     The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article VI in respect of any Senior Indebtedness at any time held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.

     With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are specifically set forth in
this Article VI, and no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions
of Section 8.01 of the Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of Notes, the Company, or any other Person
money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article VI or otherwise.

     Section 6.8 Subordination May Not Be Impaired.

     No right of any present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be
charged with.

     Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Indebtedness of the Company may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Notes, without incurring responsibility to the Holders
of the Notes and without impairing or releasing the subordination provided in this Article VI or
the obligations hereunder of the Holders of the Notes to the holders of such Senior Indebtedness,
do any one or more the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement
in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under
which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, and any other Person.

ARTICLE VII

Covenants

     Section 7.1 Listing on Exchanges.

     If the Notes are to be issued as a Depository Note in connection with the distribution of the
Notes to the holders of the Preferred Securities issued by the Trust upon a Dissolution Event, the
Company will use its best efforts to list such Notes on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.

     Section 7.2 Limitation on Dividends; Transactions with Affiliates.

     (a) If (i) there shall have occurred any event that would constitute an Event of Default or
(ii) the Company shall be in default with respect to its payment of any obligations under the
Preferred Securities Guarantee relating to the Trust, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of employees, officers, directors
or consultants, (ii) as a result of an exchange or conversion of any class or series of the
Company’s capital stock for any other class or series of the Company’s capital stock, or (iii) the
purchase of fractional interests in shares of the Company’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the

10

 

security being converted or exchanged), and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior to the Notes. However, nothing herein will limit the
Company’s ability to pay stock dividends where the dividend stock is the same stock as that on
which the dividend is being paid.

     (b) If the Company shall have given notice of its election to defer payments of interest on
the Notes by extending the interest payment period as provided in Article IV of this Supplemental
Indenture and such period, or any extension thereof, shall be continuing, then (i) the Company
shall not declare or pay any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital stock (other than (x)
repurchases, redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or consultants, (y) as a result of an exchange or
conversion of any class or series of the Company’s capital stock for any other class or series of
the Company’s capital stock, or (z) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), and (ii) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities
issued by the Company which rank pari passu with or junior to the Notes. However, nothing herein
will limit the Company’s ability to pay stock dividends where the dividend stock is the same stock
as that on which the dividend is being paid.

     Section 7.3 Covenants as to the Trust.

     For so long as such Trust Securities remain outstanding, the Company will (i) maintain 100%
direct or indirect ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the Company’s ownership of
the Common Securities, (ii) use its reasonable efforts to cause the Trust (a) to remain a statutory
business trust, except in connection with the distribution of Notes to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust,
or certain mergers, consolidations or amalgamations, each as permitted by the Declaration of the
Trust, and (b) to otherwise continue to be classified as a grantor trust for United States federal
income tax purposes.

ARTICLE VIII

Form of Note

     Section 8.1 Form of Note.

     The Notes, and the Trustee’s Certificate of Authentication to be endorsed thereon are to be
substantially in the following forms:

(FORM OF FACE OF NOTE)

     [IF THE NOTE IS TO BE A Depository Note, INSERT — This Note is a Depository Note within the
meaning of the Indenture hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository. This Note is exchangeable for Notes registered in the name of a person
other than the Depository or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer of this note as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in limited circumstances.

     Unless this Note is presented by an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any Note issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]

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	No.
	 	$	 	 
	CUSIP No.
	 	 	 	 

HSBC FINANCE CORPORATION

% JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTE DUE      , 2035

     HSBC Finance Corporation, a Delaware corporation (the “Company”, which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ___or registered assigns, the
principal sum of $___Dollars on      , 2035, and to pay interest on said
principal sum from      , 2005 or from the most recent interest payment date (each such
date, an “Interest Payment Date”) to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on      ,        ,
and            of each year commencing      , 2006, at the rate of      % per annum until
the principal hereof shall have become due and payable, and on any overdue principal and premium,
if any, and (without duplication and to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at the same rate per annum, compounded
quarterly. The amount of interest payable on any Interest Payment Date shall be computed (i) for
any full 90-day quarterly interest payment period, on the basis of a 360-day year of twelve 30-day
months and (ii) for any period shorter than a full 90-day quarterly interest payment period for
which interest payments are computed, on the basis of a 30-day month, and for periods of less than
a month, the actual number of days elapsed per 30-day month. In the event that any date on which
interest is payable on this Note is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided
in the Indenture, be paid to the person in whose name this Note (or one or more Predecessor Notes,
as defined in said Indenture) is registered at the close of business on the Regular Record Date for
such interest installment [which shall be the close of business on the day preceding such Interest
Payment Date]. [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE INDENTURE THE NOTES ARE NO
LONGER REPRESENTED BY A Depository Note — which shall be the close of business on the fifteenth
day preceding such Interest Payment Date.] Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders on such Regular
Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to the registered
Holders of this series of Notes not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any)
and the interest on this Note shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the registered Holder at such
address as shall appear in the Note Register. Notwithstanding the foregoing, so long as the Holder
of this Note is the Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Note will be made at such place and to such account as may be designated by the
Property Trustee.

     The indebtedness evidenced by this Note is, to the extent provided in the Indenture,
subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness,
and this Note is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions.

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     This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be
valid or become obligatory for any purpose until the Certificate of Authentication hereon shall
have been signed by or on behalf of the Trustee.

     Unless the Certificate of Authentication hereon has been executed by the Trustee referred to
on the reverse side hereof, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.

     The provisions of this Note are continued on the reverse side hereof and such continued
provisions shall for all purposes have the same effect as though fully set forth at this place.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

	 	 	 	 	 	 	 
	 

	 	Dated	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC FINANCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Assistant Secretary
	 	 

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

     This is one of the Notes of the series of Notes described in the within-mentioned Indenture.

     J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	as Trustee	 	or	 	as Authentication Agent	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By
	 	 	 	 	 	By	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory
	 	 	 	 	 	Authorized Signatory	 	 

(FORM OF REVERSE OF NOTE)

     This Note is one of a duly authorized series of Notes of the Company (herein sometimes
referred to as the “Notes”), specified in the Indenture, all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of May 15, 1995 duly executed and delivered
between the Company and J.P. Morgan Trust Company, National Association (formerly known as The
First National Bank of Chicago), a national banking association, as Trustee (the “Trustee”), as
supplemented by the Eighth Supplemental Indenture dated as of      , 2005 between the
Company and the Trustee (the Indenture as so supplemented, the “Indenture”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company
and the Holders of the Notes. By the terms of the Indenture, the Notes are issuable in series which
may vary as to amount, date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Notes is limited in aggregate principal amount as specified in said Eighth
Supplemental Indenture.

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     In the event of the occurrence and continuation of a Tax Event, in certain circumstances this
Note may become due and payable at the redemption price set forth below (the “Redemption Price”).
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines. The Redemption Price shall be equal
to 100% of the principal amount plus any accrued but unpaid interest thereon to the date of such
redemption. In addition, the Company shall have the right to redeem this Note at the option of the
Company, without premium or penalty, in whole or in part at any time on or after      , 2010,
at the Redemption Price (an “Optional Redemption”). Any redemption pursuant to this paragraph will
be made upon not less than 30 nor more than 60 days’ notice, at the Redemption Price. If the Notes
are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be
redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that if, at
the time of redemption, the Notes are registered as a Depository Note, the Depository shall
determine by lot the principal amount of such Notes held by each Holder to be redeemed.

     In the event of redemption of this Note in part only, a new Note or Notes of this series for
the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof. In the event of the occurrence and continuation of a Tax Event, in certain circumstances
the Company may elect to advance the Maturity Date of this Note to the minimum extent required in
order to allow the Company to deduct the interest payments on the Notes for United States federal
income tax purposes. However, the Maturity Date will not be advanced to a date less than 15 years
from the original issuance of the Notes.

     In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal of all of the Notes may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the conditions provided in
the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the Notes of each series
affected at the time outstanding, as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Notes; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Notes of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the Holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Note then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Notes of any series at the time outstanding affected thereby, on
behalf of all of the Holders of the Notes of such series, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Notes of such series. Any such consent
or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and
of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this
Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Note at the time and place and at the rate
and in the money herein prescribed.

     The Company shall have the right at any time during the term of the Notes from time to time to
extend the interest payment period of such Notes to up to 20 consecutive quarters (an “Extended
Interest Payment Period”), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the Notes to the
extent that payment of such interest is enforceable under applicable law), provided that no
Extended Interest Payment Period may extend beyond the Maturity Date of the Notes. Before the
termination of any such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment Period together with
all such further extensions thereof shall not exceed 20 consecutive quarters and provided further
that no Extended

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Interest Payment Period may extend beyond the Maturity Date of the Notes. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and
any additional amounts then due, the Company may select a new Extended Interest Payment Period.

     As provided in the Indenture and subject to certain limitations therein set forth, this Note
is transferable by the registered Holder hereof on the Note Register of the Company, upon surrender
of this Note for registration of transfer at the office or agency of the Company in Chicago,
Illinois accompanied by written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge payable in relation
thereto.

     Prior to due presentment for registration of transfer of this Note, the Company, the Trustee,
any paying agent and any Note Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor
any Note Registrar shall be affected by any notice to the contrary.

     No recourse shall be had for the payment of the principal of or the interest on this Note, or
for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the consideration for
the issuance hereof, expressly waived and released.

     The notes of this series are issuable only in registered form without coupons in denominations
of $25 and any integral multiple thereof. This Depository Note is exchangeable for Notes in
definitive form only under certain limited circumstances set forth in the Indenture. Notes of this
series so issued are issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to certain limitations
herein and therein set forth, Notes of this series so issued are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination, as requested by
the Holder surrendering the same.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

ARTICLE IX

Additional Event of Default; Modification and Waiver

     Section 9.1 Additional Event of Default.

     “Event of Default”, wherever used in the Indenture or this Supplemental Indenture with respect
to the Notes, in addition to the Events of Default set forth in Section 7.01 of the Indenture shall
include the following event:

the Trust shall have voluntarily or involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in connection with (i) the distribution of Notes
to Holders of Trust Securities in liquidation of their interests in the Trust, (ii) the
redemption of all of the outstanding Trust Securities of the Trust or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of the Trust.

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Section 9.2 MODIFICATION AND WAIVER.

     The covenant set forth in Section 7.2 of this Supplemental Indenture shall not be modified or
waived without the consent of the Holders of each Note affected thereby.

ARTICLE X

Original Issue of Notes

     Section 10.1 Original Issue of Notes.

     Notes in the aggregate principal amount of $        may, upon execution of this
Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Notes to or upon the written order of
the Company, signed by its Chairman, its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.

ARTICLE XI

Miscellaneous

     Section 11.1 Ratification of Indenture.

     The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and
confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

     Section 11.2 Trustee Not Responsible for Recitals.

     The recitals herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no representation as to
the validity or sufficiency of this Supplemental Indenture.

     Section 11.3 Governing Law.

     This Supplemental Indenture and each Note shall be deemed to be a contract made under the
internal laws of the State of Illinois, and for all purposes shall be construed in accordance with
the laws of said State.

     Section 11.4 Separability.

     In case any one or more of the provisions contained in this Supplemental Indenture or in the
Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this
Supplemental Indenture or of the Notes, but Supplemental Indenture and the Notes shall be construed
as if such invalid or illegal or unenforceable provision had never been contained herein or
therein.

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     Section 11.5 Counterparts.

     This Supplemental Indenture may be executed in any number of counterparts each of which shall
be an original; but such counterparts shall together constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and attested, on the date or
dates indicated in the acknowledgments and as of the day and year first above written.

	 	 	 	 	 
	 	HSBC FINANCE CORPORATION

 	 
	 	By  	 	 
	 	 	P. D. Schwartz 	 
	 	 	Vice President, Deputy General Counsel – Corporate
and Assistant Secretary 
	 

Attest:

	 	 	 
	 	 	 
	William H. Kesler
	 	 
	Vice President

	 	 

	 	 	 	 	 
	 	J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee
	 	 	 	 
	 	By  	 	 
	 	 	 	 
	 	 	 	 
	 

17

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