Document:

Exhibit 4.18

                                  HSBC USA INC.

                                ----------------

                                ----------------

                                    INDENTURE

                           Dated as of [    ], [  ]

                                ----------------

                              BANKERS TRUST COMPANY

                                   as Trustee

                                -----------------

               JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES

<PAGE>

                                  HSBC USA Inc.

                 Certain Sections of this Indenture relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

  Trust Indenture                                            Trust Agreement
    Act Section                                                  Section
--------------------                                       -------------------
  Section 310 (a)(1)    ........................................     6.08
              (a)(2)    ........................................     6.08
              (a)(3)    ........................................Not Applicable
              (a)(4)    ........................................Not Applicable
              (a)(5)    ........................................     6.08
              (b)       ........................................     6.07
  Section 311 (a)       ........................................     6.12
              (b)       ........................................     6.04
  Section 312 (a)       ........................................     4.01
              (b)       ........................................    4.02(b)
              (c)       ........................................     4.04
  Section 313 (a)       ........................................     4.04
              (b)       ........................................     4.04
              (c)       ........................................     4.04
              (d)       ........................................     4.04
  Section 314 (a)       ........................................    4.03(a)
              (b)       ........................................Not Applicable
              (c)(1)    ........................................     13.06
              (c)(2)    ........................................     13.06
              (c)(3)    ........................................Not Applicable
              (d)       ........................................Not Applicable
              (e)       ........................................     1.01
  Section 315 (a)       ........................................    6.01(a)
              (b)       ........................................     5.08
              (c)       ........................................    6.01(b)
              (d)       ........................................    6.01(c)
              (e)       ........................................     5.09
  Section 316 (a)(1)    ........................................     5.01
              (a)(2)    ........................................Not Applicable
              (b)       ........................................     15.02
              (c)       ........................................     7.01
  Section 317 (a)(1)    ........................................     5.02
              (a)(2)    ........................................     5.02
              (b)       ........................................     3.04
  Section 318 (a)       ........................................     13.08

Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be part of the Indenture.

<PAGE>

                                Table of Contents
                                                                         Page
                                                                         ----

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01.  Definitions..................................................1
               Additional Interest..........................................1
               Adjusted Treasury Rate.......................................1
               Affiliate....................................................2
               Authenticating Agent.........................................2
               Bank.........................................................2
               Bankruptcy Law...............................................2
               Board of Directors...........................................2
               Board Resolution.............................................2
               Business Day.................................................2
               Capital Securities...........................................2
               Capital Securities Guarantee.................................3
               Commission...................................................3
               Common Securities............................................3
               Company......................................................3
               Company Request or Company Order.............................3
               Comparable Treasury Issue....................................3
               Comparable Treasury Price....................................3
               Compounded Interest..........................................4
               Corporate Trust Office.......................................4
               Coupon Rate..................................................4
               Custodian....................................................4
               Declaration..................................................4
               Default......................................................4
               Defaulted Interest...........................................4
               Deferred Interest............................................4
               Definitive Securities........................................4
               Depositary...................................................4
               Dissolution Event............................................4
               Distribution.................................................4
               Event of Default.............................................4
               Exchange Act.................................................4
               Extended Interest Payment Period.............................5
               Federal Reserve..............................................5

                                       FSA

               Global Security..............................................5
               HSBC USA Capital Trust or Trust..............................5
               Indebtedness for Money Borrowed..............................5
               Indebtedness Ranking Junior to the Securities................5
               Indebtedness Ranking on a Parity with the Securities.........5
               Indenture....................................................6
               Initial Optional Prepayment Date.............................6
               Interest Payment Date........................................6
               Maturity Date................................................6
               Non Book-Entry Capital Securities............................6
               Officers.....................................................6
               Officers' Certificate........................................6
               Opinion of Counsel...........................................6
               Optional Prepayment Price....................................6
               Other Debentures.............................................6
               Other Guarantees.............................................6
               outstanding..................................................6
               Person.......................................................7
               Predecessor Security.........................................7
               Prepayment Price.............................................7
               Quotation Agent..............................................7
               Reference Treasury Dealer....................................7
               Reference Treasury Dealer Quotations.........................7
               Regulatory Capital Event.....................................7
               Responsible Officer..........................................8
               Securities...................................................8
               Securities Act...............................................8
               Securityholder...............................................8
               Security Register............................................8
               Senior Indebtedness..........................................8
               Special Event................................................8
               Special Event Prepayment Price...............................8
               Subsidiary...................................................9
               Tax Event....................................................9
               Trustee......................................................9
               Trust Indenture Act of 1939..................................9
               Trust Securities............................................10
               U.S. Government Obligations.................................10

                                   ARTICLE II

                                   SECURITIES

SECTION 2.01.  Forms Generally.............................................10
SECTION 2.02.  Execution and Authentication................................10
SECTION 2.03.  Form and Payment............................................11
SECTION 2.04.  Legends 11
SECTION 2.05.  Global Security.............................................11
SECTION 2.06.  Interest....................................................13
SECTION 2.07.  Transfer and Exchange.......................................13
SECTION 2.08.  Replacement Securities......................................14
SECTION 2.09.  Treasury Securities.........................................14
SECTION 2.10.  Temporary Securities........................................14
SECTION 2.11.  Cancellation................................................15
SECTION 2.12.  Defaulted Interest..........................................15
SECTION 2.13.  CUSIP Numbers...............................................16

                                   ARTICLE III

                        CERTAIN COVENANTS OF THE COMPANY

SECTION 3.01.  Payment of Principal, Premium and Interest..................16
SECTION 3.02.  Offices for Notices and Payments, etc.......................17
SECTION 3.03.  Appointments to Fill Vacancies in Trustee's Office..........17
SECTION 3.04.  Provision as to Paying Agent................................17
SECTION 3.05.  Certificate to Trustee......................................18
SECTION 3.06.  Compliance with Consolidation Provisions....................18
SECTION 3.07.  Limitation on Dividends.....................................19
SECTION 3.08.  Covenants as to HSBC USA Capital Trust......................19
SECTION 3.09.  Payment of Expenses.........................................20
SECTION 3.10.  Payment Upon Resignation or Removal.........................20

                                   ARTICLE IV

       SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEES

SECTION 4.01.  Securityholders' Lists......................................21
SECTION 4.02.  Preservation and Disclosure of Lists........................21
SECTION 4.03.  Reports of the Company......................................22
SECTION 4.04.  Reports by the Trustee......................................23

                                    ARTICLE V

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

SECTION 5.01.  Events of Default...........................................23
SECTION 5.02.  Payment of Securities on Default; Suit Therefor.............25
SECTION 5.03.  Application of Moneys Collected by Trustee..................27
SECTION 5.04.  Proceedings by Securityholders..............................27
SECTION 5.05.  Proceedings by Trustee......................................28
SECTION 5.06.  Remedies Cumulative and Continuing..........................29
SECTION 5.07.  Direction of Proceedings and Waiver of Defaults by Majority
                 of Securityholders........................................29
SECTION 5.08.  Notice of Defaults..........................................30
SECTION 5.09.  Undertaking to Pay Costs....................................30

                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 6.01.  Certain Duties and Responsibilities.........................30
SECTION 6.02.  Certain Rights of Trustee...................................32
SECTION 6.03.  Not Responsible for Recitals or Issuance of Securities......33
SECTION 6.04.  May Hold Securities.........................................33
SECTION 6.05.  Money Held in Trust.........................................33
SECTION 6.06.  Compensation and Reimbursement..............................33
SECTION 6.07.  Disqualification, Conflicting Interests.....................34
SECTION 6.08.  Corporate Trustee Required, Eligibility.....................35
SECTION 6.09.  Resignation and Removal, Appointment of Successor...........35
SECTION 6.10.  Acceptance of Appointment by Successor......................37
SECTION 6.11.  Merger, Conversion, Consolidation or Succession to
                 Business..................................................37
SECTION 6.12.  Preferential Collection of Claims Against Company...........38
SECTION 6.13.  Appointment of Authenticating Agent.........................38

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

SECTION 7.01.  Action by Securityholders...................................39
SECTION 7.02.  Proof of Execution by Securityholders.......................39
SECTION 7.03.  Who Are Deemed Absolute Owners..............................40
SECTION 7.04.  Securities Owned by Company Deemed Not Outstanding..........40
SECTION 7.05.  Revocation of Consents; Future Holders Bound................40

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

SECTION 8.01.  Purpose of Meetings.........................................41
SECTION 8.02.  Call of Meetings by Trustee.................................41
SECTION 8.03.  Call of Meetings by Company or Securityholders..............42
SECTION 8.04.  Qualifications for Voting...................................42
SECTION 8.05.  Regulations.................................................42
SECTION 8.06.  Voting......................................................43

                                   ARTICLE IX

                                  MODIFICATION

SECTION 9.01.  Without Consent of Securityholders..........................43
SECTION 9.02.  With Consent of Securityholders.............................44
SECTION 9.03.  Compliance with Trust Indenture Act; Effect of Supplemental
                 Indentures................................................45
SECTION 9.04.  Notation on Securities......................................46
SECTION 9.05.  Evidence of Compliance of Supplemental Indenture to be
                 Furnished Trustee.........................................46

                                    ARTICLE X

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 10.01.  Company May Consolidate, Etc., on Certain Terms............46
SECTION 10.02.  Successor Corporation to be Substituted for Company........47
SECTION 10.03.  Opinion of Counsel to be Given Trustee.....................47

                                   ARTICLE XI

                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 11.01.  Discharge of Indenture.....................................47
SECTION 11.02.  Deposited Moneys and U.S. Government Obligations to be
                 Held in Trust by Trustee..................................48
SECTION 11.03.  Paying Agent to Repay Moneys Held..........................48
SECTION 11.04.  Return of Unclaimed Moneys.................................49
SECTION 11.05.  Defeasance Upon Deposit of Moneys or U.S. Government
                 Obligations...............................................49

                                   ARTICLE XII

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 12.01.  Indenture and Securities Solely Corporate Obligations......50

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

SECTION 13.01.  Successors.................................................51
SECTION 13.02.  Official Acts by Successor Corporation.....................51
SECTION 13.03.  Surrender of Company Powers................................51
SECTION 13.04.  Address for Notices, Etc...................................51
SECTION 13.05.  Governing Law..............................................51
SECTION 13.06.  Evidence of Compliance with Conditions Precedent...........52
SECTION 13.07.  Business Days..............................................52
SECTION 13.08.  Trust Indenture Act to Control.............................52
SECTION 13.09.  Table of Contents, Headings, Etc...........................52
SECTION 13.10.  Execution in Counterparts..................................52
SECTION 13.11.  Separability...............................................53
SECTION 13.12.  Assignment.................................................53
SECTION 13.13.  Acknowledgement of Rights..................................53
SECTION 13.14.  Notice to Holders; Waiver..................................53

                                   ARTICLE XIV

                            PREPAYMENT OF SECURITIES

SECTION 14.01.  Special Event Prepayment...................................54
SECTION 14.02.  Optional Prepayment by Company.............................54
SECTION 14.03.  No Sinking Fund............................................55
SECTION 14.04.  Notice of Prepayment; Selection of Securities..............55
SECTION 14.05.  Payment of Securities Called for Prepayment................56

                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

SECTION 15.01.  Agreement to Subordinate...................................56
SECTION 15.02.  Obligation of the Company Unconditional and Payment
                 Permitted If No Default...................................59
SECTION 15.03.  Limitations on Duties to Holders of Senior Indebtedness....59
SECTION 15.04.  Notice to Trustee of Facts Prohibiting Payments............59
SECTION 15.05.  Application by Trustee of Moneys Deposited With It.........60
SECTION 15.06.  Subrogation................................................60
SECTION 15.07.  Subordination Rights Not Impaired by Acts or Omissions
                 of Bank or Holders of Senior Indebtedness................ 60
SECTION 15.08.  Authorization of Trustee to Effectuate Subordination
                of Securities..............................................61
SECTION 15.09.  Right of Trustee to Hold Senior Indebtedness...............61
SECTION 15.10.  Article XV Not to Prevent Events of Default................61
SECTION 15.11.  Article Applicable to Paying Agents........................61

                                   ARTICLE XVI

          EXTENSION OF INTEREST PAYMENT PERIOD AND DEFERRAL OF MATURITY

SECTION 16.01.  Extension of Interest Payment Period.......................61
SECTION 16.02.  Notice of Extension........................................63
SECTION 16.03.  Deferral of Maturity.......................................63
EXHIBIT A  Form of Security.................................................1

<PAGE>

                  THIS INDENTURE, dated as of [   ], [ ], between HSBC USA Inc.,
a Maryland corporation (hereinafter called the "Company"), having its principal
office at 452 Fifth Avenue, New York, New York 10018 and Bankers Trust Company,
a New York banking corporation, as trustee (hereinafter called the "Trustee"),
having its Corporate Trust Office at Four Albany Street, 4th Floor, New York,
New York 10006.

                              W I T N E S S E T H:

                  In consideration of the premises, and the purchase of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit of the respective holders from
time to time of the Securities, as follows:

                                    ARTICLE I
                                   DEFINITIONS

                  SECTION 1.01.  Definitions.

                  The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act of 1939, or which are by reference therein defined in the
Securities Act, shall (except as herein otherwise expressly provided or unless
the context otherwise requires) have the meanings assigned to such terms in said
Trust Indenture Act of 1939 and in said Securities Act. The following terms have
the meanings given to them in the Declaration): (i) Clearing Agency; (ii)
Delaware Trustee; (iii) Capital Security Certificate; (iv) Property Trustee; (v)
Administrators; and (vi) Direct Action. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision. Headings are
used for convenience of reference only and do not affect interpretation. The
singular includes the plural and vice versa.

                  "Additional Interest" shall have the meaning set forth in
Section 2.06(d).

                  ["Adjusted Treasury Rate" means, with respect to any
prepayment date pursuant to Section 14.01, the rate per annum equal to (i) the
yield, under the heading which represents the average for the immediately prior
week, appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity date corresponding to the Initial
Optional Prepayment Date (if no maturity date is within three months before or
after the Initial Optional Prepayment Date, yields for the two published
maturities most closely corresponding to the Initial Optional Prepayment Date
shall be interpolated 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 annum 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 principle amount) equal to the Comparable
Treasury Price for such prepayment date plus, in either case, (A) [ ]% if such
prepayment date occurs on or prior to December 30, [ ] and (B) [ ]% in all other
cases.]

                  "Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding the power to vote
10% or more of the outstanding voting securities or other ownership interests of
the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.

                  "Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
6.13.

                  "Bank" shall mean HSBC Bank USA.

                  "Bankruptcy Law" shall mean Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.

                  "Board of Directors" shall mean either the Board of Directors
of the Company or any duly authorized committee of that board.

                  "Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered a Saturday or a Sunday or a day on which
banking institutions in New York, New York or Buffalo, New York are authorized
or required by law or executive order to close.

                  "Business Day" shall mean, with respect to Securities, any day
other than a Saturday or a Sunday or a day on which banking institutions in New
York, New York or Buffalo, New York are authorized or required by law or
executive order to close.

                  "Capital Securities" shall mean undivided beneficial interests
in the assets of HSBC USA Capital Trust which rank pari passu with the Common
Securities issued by HSBC USA Capital Trust; provided, however, that if an Event
of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the holders of the Capital
Securities shall be paid in full the Distributions and the liquidation,
redemption and other payments to which they are entitled.

                  "Capital Securities Guarantee" shall mean any guarantee that
the Company may enter into with Bankers Trust Company or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of HSBC USA Capital Trust.

                  "Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act, or
if at any time after the executions Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

                  "Common Securities" shall mean undivided beneficial interests
in the assets of HSBC USA Capital Trust which rank pari passu with Capital
Securities issued by HSBC USA Capital Trust; provided, however, that if an Event
of Default (as defined in the Declaration) has occurred and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the holders of the Capital Securities shall be paid in full the
Distributions and the liquidation, redemption and other payments to which they
are entitled.

                  "Company" shall mean HSBC USA Inc., a Maryland corporation,
and, subject to the provisions of Article Ten, shall include its successors and
assigns.

                  "Company Request" or "Company Order" shall mean a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.

                  ["Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity date corresponding
to the Initial Optional Prepayment Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Prepayment Date. If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Prepayment Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the calculation
of the Adjusted Treasury Rate pursuant to clause (ii) of the definition thereof
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month.]

                  ["Comparable Treasury Price" means, with respect to any
prepayment date pursuant to Section 14.01, (i) the average of the Reference
Treasury Dealer Quotations for such prepayment date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the average
of all such Quotations.]

                  "Compounded Interest" shall have the meaning set forth in
Section 16.01.

                  "Corporate Trust Office" means the principal corporate trust
office of the Trustee or its successors and assigns as provided hereunder at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this instrument is located at Four
Albany Street, 4th Floor, New York, New York 10006, Attention: Corporate Market
Services or at any other such address as the Trustee may designate from time to
time by notice to the parties hereto.

                  "Coupon Rate" shall have the meaning set forth in Section
2.06(a).

                  "Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.

                  "Declaration" means the Declaration of Trust of HSBC USA
Capital Trust, dated as of [   ], [ ] as amended or supplemented from time to
time.

                  "Default" shall mean any event specified in Section 5.02,
continued for the period of time, if any, and after giving of the notice, if
any, therein designated.

                  "Defaulted Interest" shall have the meaning specified in
Section 2.12.

                  "Deferred Interest" shall have the meaning set forth in
Section 16.01.

                  "Definitive Securities" shall mean those securities issued in
fully registered certificated form not otherwise in global form.

                  "Depositary" shall mean, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05(d).

                  "Dissolution Event" means the liquidation of the Trust
pursuant to the Declaration, and the distribution of the Securities held by the
Property Trustee to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.

                  "Distribution" means a distribution payable to holders of
Trust Securities, accumulating from the date of original issuance and payable
semi-annually in arrears on [   ] and [   ] of each year, commencing [   ],
[   ],  at the annual rate of [  ]% of the liquidation amount of $1,000 per
Trust Security.

                  "Event of Default" shall mean any event specified in Section
5.01, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                  "Extended Interest Payment Period" shall have the meaning set
forth in Section 16.01.

                  "Federal Reserve" shall mean the Board of Governors of the
Federal Reserve System.

                  "FSA" shall mean the Financial Supervisory Authority of the
United Kingdom.

                  "Global Security" means, with respect to the Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.

                  "HSBC USA Capital Trust" or "Trust" shall mean HSBC USA
Capital Trust [ ], a Delaware business trust created for the purpose of issuing
its undivided beneficial interests in connection with the issuance of Securities
under this Indenture.

                  "Indebtedness for Money Borrowed" means, when used with
respect to the Company, (a) any obligation of, or any obligation guaranteed by,
the Company, as the case may be, for the repayment of borrowed money, whether or
not evidenced by bonds, debentures, notes or other written instruments, (b)
similar obligations arising from off-balance sheet guarantees and direct credit
substitutes, (c) obligations associated with derivative products such as
interest rate and foreign exchange rate contracts, commodity contracts and
similar arrangements and (d) any deferred obligations for the payment of the
purchase price of property or assets.

                  "Indebtedness Ranking Junior to the Securities" means any
Indebtedness for Money Borrowed of the Company, whether outstanding on the date
of execution of this Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks junior to and not equally with or prior to the
Securities (and any other Indebtedness Ranking on a Parity with the Securities)
in right of payment upon the happening of any event of the kind specified in the
first sentence of the second paragraph of Section 15.01.

                  "Indebtedness Ranking on a Parity with the Securities" means
(i) Indebtedness for Money Borrowed of the Company, whether outstanding on the
date of execution of the Indenture or thereafter created, assumed or incurred,
which specifically by its terms ranks equally with and not prior to the
Securities in the right of payment upon the happening of any event of the kind
specified in the first sentence of the second paragraph of Section 15.01, and
(ii) all other debt securities, and guarantees in respect of those debt
securities, issued to any other trust, or a trustee of such trust, partnership
or other entity affiliated with the Company that is a financing vehicle of the
Company (a "financing entity") in connection with the issuance by such financing
entity of equity securities or other securities guaranteed by the Company
pursuant to an instrument that ranks pari passu with or junior in right of
payment to the Capital Securities Guarantee.

                  The securing of any Indebtedness for Money Borrowed of the
Company otherwise constituting Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities, as the case may be,
shall not be deemed to prevent such Indebtedness for Money Borrowed from
constituting Indebtedness Ranking on a Parity with the Securities or
Indebtedness Ranking Junior to the Securities.

                  "Indenture" shall mean this instrument as originally executed
or, if amended as herein provided, as so amended.

                  "Initial Optional Prepayment Date" shall have the meaning set
forth in Section 14.01.

                  "Interest Payment Date" shall have the meaning set forth in
Section 2.06.

                  "Maturity Date" shall mean [    ], [ ].

                  "Non Book-Entry Capital Securities" shall have the meaning set
forth in Section 2.05.

                  "Officers" shall mean any of the Chairman, a Vice Chairman,
the President, a Vice President, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
the Company.

                  "Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.

                  "Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Company, and who shall be acceptable to the
Trustee.

                  "Optional Prepayment Price" shall have the meaning set forth
in Section 14.02.

                  "Other Debentures" means all junior subordinated debentures
issued by the Company from time to time and sold to trusts to be established by
the Company (if any), in each case similar to the Trust.

                  "Other Guarantees" means all guarantees to be issued by the
Company with respect to capital securities (if any) and issued to other trusts
to be established by the Company (if any), in each case similar to the Trust.

                  The term "outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.04, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except:

                  (a) Securities theretofore cancelled by the Trustee or the
         Authenticating Agent or delivered to the Trustee for cancellation;

                  (b) Securities, or portions thereof, for the payment or
         prepayment of which moneys in the necessary amount shall have been
         deposited in trust with the Trustee or with any paying agent (other
         than the Company) or shall have been set aside and segregated in trust
         by the Company (if the Company shall act as its own paying agent);
         provided that, if such Securities, or portions thereof, are to be
         prepaid prior to maturity thereof, notice of such prepayment shall have
         been given as in Article Fourteen provided or provision satisfactory to
         the Trustee shall have been made for giving such notice; and

                  (c) Securities in lieu of or in substitution for which other
         Securities shall have been authenticated and delivered pursuant to the
         terms of Section 2.08 unless proof satisfactory to the Company and the
         Trustee is presented that any such Securities are held by bona fide
         holders in due course.

                  "Person" shall mean a legal person including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

                  "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.

                  "Prepayment Price" means the Special Event Prepayment Price or
the Optional Prepayment Price, as the context requires.

                  ["Quotation Agent" means the Reference Treasury Dealer
appointed by the Trustee after consultation with the Company.]

                  ["Reference Treasury Dealer" means (i) HSBC Securities, Inc.
and its respective successors; provided, however, that if the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by
the Trustee after consultation with the Company.]

                  ["Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any prepayment date pursuant to Section
14.01, the average, as determined by the Trustee, 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 prepayment date.]

                  "Regulatory Capital Event" means that the Company shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the
Federal Reserve or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the date of original issuance of the Capital Securities, the Capital Securities
do not constitute, or within 90 days of the date thereof, will not constitute,
Tier 1 Capital (or its then equivalent); provided, however, that the
distribution of the Securities in connection with the liquidation of the Trust
by the Company shall not in and of itself constitute a Regulatory Capital Event
unless such liquidation shall have occurred in connection with a Tax Event.

                  "Responsible Officer" means, when used with respect to the
Trustee, any officer within the Corporate Trust Office, including any vice
president, assistant vice president, director, managing director, any associate
or other officer within the Corporate Trust Office customarily performing
functions similar to those performed by the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

                  "Securities" means the Company's [     ]% Junior Subordinated
Deferrable Interest Debentures due [     ], as authenticated and issued under
this Indenture.

                  "Securities Act" shall mean the Securities Act of 1933, as
amended.

                  "Securityholder", "holder of Securities", or other similar
terms, shall mean any Person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof .

                  "Security Register" shall mean (i) prior to a Dissolution
Event, the list of holders provided to the Trustee pursuant to Section 4.01, and
(ii) following a Dissolution Event, any security register maintained by a
security registrar for the securities appointed by the Company following the
distribution of the Securities.

                  "Senior Indebtedness" shall mean all Indebtedness for Money
Borrowed, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, except Indebtedness Ranking on a Parity
with the Securities or Indebtedness Ranking Junior to the Securities, and any
deferrals, renewals or extensions of such Senior Indebtedness.

                  "Special Event" means either a Regulatory Capital Event or a
Tax Event as the case may be.

                  "Special Event Prepayment Price" shall mean, with respect to
any prepayment of the Securities pursuant to Section 14.01 hereof, an amount in
cash equal to [the greater of (i)] 100% of the principal amount of such
Securities plus any accrued and unpaid interest thereon to the date of
prepayment [or (ii) the sum, as determined by a Quotation Agent, of the present
values of [ ]% of the principal amount of such Securities plus the remaining
scheduled payments of interest thereon from the prepayment date to and including
the Initial Optional Prepayment Date discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate.]

                  "Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.

                  "Tax Event" means that the Company and the HSBC USA Capital
Trust shall have received an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, clarification of or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any judicial
decision or official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action") or (c) any amendment
to, clarification of or change in the administrative position or interpretation
of any Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental agency or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification or change is effective or such Administrative Action or decision
is announced, in each case, on or after [insert date of related prospectus
supplement], there is more than an insubstantial risk that (i) the HSBC USA
Capital Trust is, or will be within 90 days of the date of such opinion, subject
to United States federal income tax with respect to interest accrued or received
on the Securities or subject to more than a de minimis amount of taxes, duties
or other governmental charges, (ii) any portion of interest payable by the
Company to the HSBC USA Capital Trust on the Securities is not, or within 90
days of the date of such opinion will not be, deductible by the Company for
United States federal income tax purposes, or (iii) the Company could become
liable to pay, on the next date on which any amount would be payable with
respect to the Securities, any Additional Interest.

                  "Trustee" shall mean the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article Six hereof,
shall also include its successors and assigns as Trustee hereunder.

                  "Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture except as
provided in Section 9.03.

                  "Trust Securities" shall mean the Capital Securities and the
Common Securities, collectively.

                  "U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.

                                   ARTICLE II
                                   SECURITIES

                  SECTION 2.01.  Forms Generally.

                  The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject or usage. Each Security shall be
dated the date of its authentication. The Securities shall be issued in
denominations of $1,000 and integral multiples thereof.

                  SECTION 2.02.  Execution and Authentication.

                  Two Officers shall sign the Securities for the Company by
manual or facsimile signature. If an Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall nevertheless be valid.

                  A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.

                  The Trustee shall, upon a Company Order, authenticate for
original issue up to, and the aggregate principal amount of the Securities
outstanding at any time may not exceed, $[ ] aggregate principal amount of the
Securities.

                  SECTION 2.03.  Form and Payment.

                  Except as provided in Section 2.05, the Securities shall be
issued in fully registered certificated form without interest coupons. Principal
of and premium, if any, and interest on the Securities issued in certificated
form will be payable, the transfer of such Securities will be registrable and
such Securities will be exchangeable for Securities bearing identical terms and
provisions at the Corporate Trust Office of the Trustee; provided, however, that
payment of any interest may be made at the option of the Company (i) by check
mailed to the holder at such address as shall appear in the Security Register or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Security Register, provided that proper transfer instructions
have been received in writing by the relevant record date. Notwithstanding the
foregoing, so long as the holder of any Securities is the Property Trustee, the
payment of the principal of and premium, if any, and interest (including
Compounded Interest and Additional Interest, if any) on such Securities held by
the Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.

                  SECTION 2.04.  Legends.

                  Except as otherwise determined by the Company in accordance
with applicable law, each Global Security shall bear the applicable legends
relating to restrictions on transfer in substantially the form set forth on
Exhibit A hereto.

                  SECTION 2.05.  Global Security.

                  (a) In connection with a Dissolution Event:

                  (i) if any Capital Securities are held in book-entry form, the
         related Definitive Securities shall be presented to the Trustee (if an
         arrangement with the Depositary has been maintained) by the Property
         Trustee in exchange for one or more Global Securities (as may be
         required pursuant to Section 2.07) in an aggregate principal amount
         equal to the aggregate principal amount of all outstanding Securities,
         to be registered in the name of the Depositary, or its nominee, and
         delivered by the Trustee to the Depositary for crediting to the
         accounts of its participants pursuant to the instructions of the
         Property Trustee; the Company upon any such presentation shall execute
         one or more Global Securities in such aggregate principal amount and
         deliver the same to the Trustee for authentication and delivery in
         accordance with the Indenture; and payments on the Securities issued as
         a Global Security will be made to the Depositary; and

                  (ii) if any Capital Securities are held in certificated form,
         the related Definitive Securities may be presented to the Trustee by
         the Property Trustee and any Capital Security certificate which
         represents Capital Securities other than Capital Securities in
         book-entry form ("Non Book-Entry Capital Securities") will be deemed to
         represent beneficial interests in Securities presented to the Trustee
         by the Property Trustee having an aggregate principal amount equal to
         the aggregate liquidation amount of the Non Book-Entry Capital
         Securities until such Capital Security certificates are presented to
         the Security registrar for transfer or reissuance, at which time such
         Capital Security certificates will be cancelled and a Security,
         registered in the name of the holder of the Capital Security
         certificate, as the case may be, with an aggregate principal amount
         equal to the aggregate liquidation amount of the Capital Security
         certificate cancelled, will be executed by the Company and delivered to
         the Trustee for authentication and delivery in accordance with the
         Indenture. Upon the issuance of such Securities, Securities with an
         equivalent aggregate principal amount that were presented by the
         Property Trustee to the Trustee will be deemed to have been cancelled.

                  (b) The Global Securities shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon; provided that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
prepayments. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.05.

                  (c) The Global Securities may be transferred, in whole but not
in part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor Depositary
in any event in accordance with instructions given by the Company to the Trustee
as required by this Section 2.05.

                  (d) If at any time the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be, the
Company will execute, and the Trustee, upon written notice from the Company,
will authenticate and make available for delivery the Definitive Securities, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security. If
there is an Event of Default, the Depositary shall have the right to exchange
the Global Securities for Definitive Securities. In addition, the Company may at
any time determine that the Securities shall no longer be represented by a
Global Security. In the event of such an Event of Default or such a
determination, the Company shall execute, and subject to Section 2.07, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security. Upon the exchange of the Global Security for such Definitive
Securities, in authorized denominations, the Global Security shall be cancelled
by the Trustee. Such Definitive Securities issued in exchange for the Global
Security shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Securities to the Depositary for delivery to the Persons in
whose names such Definitive Securities are so registered.

                  SECTION 2.06.  Interest.

                  (a) Each Security will bear interest at the rate of [ ]% per
annum (the "Coupon Rate") from the most recent date to which interest has been
paid or, if no interest has been paid, from [ ], [ ], 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 semi-annually,
payable (subject to the provisions of Article Sixteen) semi-annually in arrears
on [ ] and [ ] of each year (each, an "Interest Payment Date"), commencing on [
], [ ], to the Person in whose name such Security or any predecessor Security is
registered, at the close of business on the regular record date for such
interest installment, which shall be the first day of the month in which the
relevant Interest Payment Date falls.

                  (b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month. In the event that any
Interest Payment Date falls on a day that 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), with the same force and effect as if made on the date such payment was
originally payable.

                  (c) Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law) at the rate per annum of [ ]% thereof, compounded
semi-annually. The term "interest", as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Interest, as applicable.

                  (d) During such time as the Property Trustee is the holder of
any Securities, the Company shall pay any additional amounts on the Securities
as may be necessary in order that the amount of Distributions then due and
payable by the HSBC USA Capital Trust on the outstanding Trust Securities shall
not be reduced as a result of any additional taxes, duties or other governmental
charges to which the Trust has become subject as a result of a Tax Event
("Additional Interest").

                  SECTION 2.07.  Transfer and Exchange.

                  To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive Securities
and Global Securities upon a Company Request. All Definitive Securities and
Global Securities issued upon any registration of transfer or exchange of
Definitive Securities or Global Securities shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Definitive Securities or Global Securities surrendered upon
such registration of transfer or exchange.

                  No service charge shall be made to a holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.

                  The Company shall not be required to (i) issue, register the
transfer of or exchange Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of prepayment or any
notice of selection of Securities for prepayment under Article Fifteen hereof
and ending at the close of business on the day of such mailing; or (ii) register
the transfer of or exchange any Security so selected for prepayment in whole or
in part, except the unprepaid portion of any Security being prepaid in part.

                  Prior to due presentment for the registration of a transfer of
any Security, the Trustee and the Company may deem and treat the Person in whose
name anyhe absolute owner of such Security for the purpose of receiving payment
of principal of and premium, if any, and interest on such Securities, and
neither the Trustee nor the Company shall be affected by notice to the contrary.

                  SECTION 2.08.  Replacement Securities.

                  If any mutilated Security is surrendered to the Trustee, or
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. An indemnity bond must be supplied by
the holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee or any Authenticating Agent from any loss that
any of them may suffer as a result of or in connection with the replacement of
any Security. The Company or the Trustee may charge such holder for its expenses
in replacing a Security.

                  Every replacement Security is an obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.

                  SECTION 2.09.  Treasury Securities.

                  In determining whether the holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any Affiliate of the Company shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that a Responsible Officer of the Trustee actually
knows to be so owned shall be so considered.

                  SECTION 2.10.  Temporary Securities.

                  Pending the preparation of Definitive Securities, the Company
may execute, and upon Company Order, the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.

                  If temporary Securities are issued, the Company shall cause
Definitive Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 3.02
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in exchange therefor the same
aggregate principal amount of Definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as Definitive Securities.

                  SECTION 2.11.  Cancellation.

                  The Company at any time may deliver Securities to the Trustee
for cancellation. Upon a Company Request, the Trustee or its duly appointed
agent shall cancel all Securities surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall retain or destroy
cancelled Securities in accordance with its normal practices (subject to the
record retention requirement of the Exchange Act) unless the Company directs
that cancelled Securities be returned to it. The Company may not issue new
Securities to replace Securities that have been prepaid or paid or that have
been delivered to the Trustee for cancellation.

                  SECTION 2.12.  Defaulted Interest.

                  Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the holder
on the relevant regular record date by virtue of having been such holder; and
such Defaulted Interest shall be paid by the Company, at its election, as
provided in clause (a) or clause (b) below:

                  (a) The Company may make payment of any Defaulted Interest on
         Securities to the Persons in whose names such Securities (or their
         respective Predecessor Securities) are registered at the close of
         business on a special record date for the payment of such Defaulted
         Interest, which shall be fixed in the following manner: the Company
         shall notify the Trustee in writing of the amount of Defaulted Interest
         proposed to be paid on each such Security and the date of the proposed
         payment, and at the same time the Company shall deposit with the
         Trustee an amount of money equal to the aggregate amount proposed to be
         paid in respect of such Defaulted Interest or shall make arrangements
         satisfactory to the Trustee for such deposit prior to the date of the
         proposed payment, such money when deposited to be held in trust for the
         benefit of the Persons entitled to such Defaulted Interest as in this
         clause provided. Thereupon the Trustee shall fix a special record date
         for the payment of such Defaulted Interest which shall not be more than
         15 nor less than 10 days prior to the date of the proposed payment and
         not less than 10 days after the receipt by the Trustee of the notice of
         the proposed payment. The Trustee shall promptly notify the Company of
         such special record date and, in the name and at the expense of the
         Company, shall cause notice of the proposed payment of such Defaulted
         Interest and the special record date therefor to be mailed, first class
         postage prepaid, to each Securityholder at his or her address as it
         appears in the Security Register, not less than 10 days prior to such
         special record date. Notice of the proposed payment of such Defaulted
         Interest and the special record date therefor having been mailed as
         aforesaid, such Defaulted Interest shall be paid to the Persons in
         whose names such Securities (or their respective Predecessor
         Securities) are registered on such special record date and shall be no
         longer payable pursuant to the following clause (b).

                  (b) The Company may make payment of any Defaulted Interest on
         any Securities in any other lawful manner not inconsistent with the
         requirements of any securities exchange on which such Securities may be
         listed, and upon such notice as may be required by such exchange, if,
         after notice given by the Company to the Trustees of the proposed
         payment pursuant to this clause, such manner of payment shall be deemed
         practicable by the Trustee.

                  SECTION 2.13.  CUSIP Numbers.

                  The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of prepayment as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.

                                   ARTICLE III
                        CERTAIN COVENANTS OF THE COMPANY

                  SECTION 3.01.  Payment of Principal, Premium and Interest.

                  The Company covenants and agrees for the benefit of the
holders of the Securities that it will duly and punctually pay or cause to be
paid the principal of and premium, if any, and interest on the Securities at the
place, at the respective times and in the manner provided herein. Each
installment of interest on the Securities may be paid by mailing checks for such
interest payable to the order of the holder of Security entitled thereto as they
appear in the Security Register.

                  SECTION 3.02.  Offices for Notices and Payments, etc.

                  So long as any of the Securities remains outstanding, the
Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency where the Securities may be presented for payment, an office or
agency where the Securities may be presented for registration of transfer and
for exchange as in this Indenture provided and an office or agency where notices
and demands to or upon the Company in respect of the Securities or of this
Indenture may be served. The Company will give to the Trustee written notice of
the location of any such office or agency and of any change of location thereof.
Until otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
Corporate Trust Office of the Trustee. In case the Company shall fail to
maintain any such office or agency in the Borough of Manhattan, The City of New
York, or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the Corporate Trust Office of the Trustee.

                  In addition to any such office or agency, the Company may from
time to time designate one or more offices or agencies outside the Borough of
Manhattan, The City of New York, where the Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.

                  SECTION 3.03.  Appointments to Fill Vacancies in Trustee's
Office.

                  The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.

                  SECTION 3.04.  Provision as to Paying Agent.

                  (a) If the Company shall appoint a paying agent other than the
         Trustee with respect to the Securities, it will cause such paying agent
         to execute and deliver to the Trustee an instrument in which such agent
         shall agree with the Trustee, subject to the provision of this Section
         3.04,

                           (1) that it will hold all sums held by it as such
                  agent for the payment of the principal of and premium, if any,
                  or interest on the Securities (whether such sums have been
                  paid to it by the Company or by any other obligor on the
                  Securities of such series) in trust for the benefit of the
                  holders of the Securities; and

                           (2) that it will give the Trustee notice of any
                  failure by the Company (or by any other obligor on the
                  Securities) to make any payment of the principal of and
                  premium or interest on the Securities when the same shall be
                  due and payable.

                  (b) If the Company shall act as its own paying agent, it will,
         on or before each due date of the principal of and premium, if any, or
         interest on the Securities, set aside, segregate and hold in trust for
         the benefit of the holders of the Securities a sum sufficient to pay
         such principal, premium or interest so becoming due and will notify the
         Trustee of any failure to take such action and of any failure by the
         Company (or by any other obligor under the Securities) to make any
         payment of the principal of and premium, if any, or interest on the
         Securities when the same shall become due and payable.

                  (c) Anything in this Section 3.04 to the contrary
         notwithstanding, the Company may, at any time, for the purpose of
         obtaining a satisfaction and discharge with respect to the Securities
         hereunder, or for any other reason, pay or cause to be paid to the
         Trustee all sums held in trust for any such series by the Trustee or
         any paying agent hereunder, as required by this Section 3.04, such sums
         to be held by the Trustee upon the trusts herein contained.

                  (d) Anything in this Section 3.04 to the contrary
         notwithstanding, the agreement to hold sums in trust as provided in
         this Section 3.04 is subject to Sections 11.03 and 11.04.

                  SECTION 3.05.  Certificate to Trustee.

                  The Company will deliver to the Trustee on or before a date
not more than four months after the end of each fiscal year in each year,
commencing with the first fiscal year ending after the date hereof, so long as
Securities are outstanding hereunder, an Officers' Certificate, one of the
signers of which shall be the principal executive, principal financial or
principal accounting officer of the Company stating that in the course of the
performance by the signers of their duties as officers of the Company they would
normally have knowledge of any default by the Company in the performance of any
covenants contained herein, stating whether or not they have knowledge of any
such default and, if so, specifying each such default of which the signers have
knowledge and the nature thereof. For purposes of this paragraph, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under the Indenture.

                  SECTION 3.06.  Compliance with Consolidation Provisions.

                  The Company will not, while any of the Securities remain
outstanding, consolidate with or merge into any other Person, or merge into
itself, sell or convey all or substantially all of its property to any other
Person unless the provisions of Article Ten hereof are complied with.

                  SECTION 3.07.  Limitation on Dividends.

                  The Company will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company
(including any Other Debentures) that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any Subsidiary of the
Company (including under Other Guarantees) if such guarantee ranks pari passu or
junior in right of payment to the Securities (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee and (d) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock; (e) 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 (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans) if at such time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) if such Securities are held by the Property
Trustee, the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (iii) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period pursuant to Section 16.01, or any extension thereof, and
shall not have rescinded such notice, and such extension, or any extension
thereof, shall be continuing.

                  SECTION 3.08.  Covenants as to HSBC USA Capital Trust.

                  In the event Securities are issued to HSBC USA Capital Trust
or a trustee of such trust in connection with the issuance of Trust Securities
by HSBC USA Capital Trust, for so long as such Trust Securities remain
outstanding, the Company will (i) directly or indirectly maintain 100% direct
ownership of the Common Securities of HSBC USA Capital Trust; provided, however,
that any successor of the Company, permitted pursuant to Article Ten, may
succeed to the Company's ownership of such Common Securities, (ii) use its
reasonable efforts to cause HSBC USA Capital Trust (a) to remain a business
trust, except in connection with a distribution of Securities to the holders of
Trust Securities in liquidation of HSBC USA Capital Trust, the redemption of all
of the Trust Securities of HSBC USA Capital Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of HSBC
USA Capital Trust, and (b) to otherwise continue not to be classified as an
association taxable as a corporation or a partnership for United States federal
income tax purposes and (iii) to use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an individual beneficial interest in
the Securities.

                  SECTION 3.09.  Payment of Expenses.

                  In connection with the offering, sale and issuance of the
Securities to the HSBC USA Capital Trust and in connection with the sale of the
Trust Securities by the HSBC USA Capital Trust, the Company, in its capacity as
borrower with respect to the Securities, shall:

                  (a) pay all costs and expenses relating to the offering, sale
         and issuance of the Securities, including compensation of the Trustee
         in accordance with the provisions herein;

                  (b) pay all costs and expenses of the HSBC USA Capital Trust
         (including, but not limited to, costs and expenses relating to the
         organization of the HSBC USA Capital Trust, the offering, sale and
         issuance of the Trust Securities (including commissions to the initial
         purchasers 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 HSBC USA Capital 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), duplicating, travel and telephone and
         other telecommunications expenses and costs and expenses incurred in
         connection with the acquisition, financing, and disposition of HSBC USA
         Capital Trust assets;

                  (c) be primarily and fully liable for any indemnification
         obligations arising with respect to the Declaration;

                  (d) 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; and

                  (e) pay all other fees, expenses, debts and obligations (other
         than the Trust Securities) related to HSBC USA Capital Trust.

                  SECTION 3.10.  Payment Upon Resignation or Removal.

                  Upon termination of this Indenture or the removal or
resignation of the Trustee, unless otherwise stated, the Company shall pay to
the Trustee all amounts accrued and owing to the date of such termination,
removal or resignation. Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may be,
pursuant to Section 5.7 of the Declaration, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.

                                   ARTICLE IV
                    SECURITYHOLDERS' LISTS AND REPORTS BY THE
                             COMPANY AND THE TRUSTEE

                  SECTION 4.01.  Securityholders' Lists.

                  The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee:

                  (a) on a semi-annual basis on each regular record date for the
         Securities, a list, in such form as the Trustee may reasonably require,
         of the names and addresses of the Securityholders as of such record
         date; and

                  (b) at such other times as the Trustee may request in writing,
         within 30 days after the receipt by the Company, of any such request, a
         list of similar form and content as of a date not more than 15 days
         prior to the time such list is furnished, provided, however, no such
         lists need be furnished so long as the Trustee is in possession thereof
         by reason of its acting as Security registrar.

                  SECTION 4.02.  Preservation and Disclosure of Lists.

                  (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Securities
registrar (if so acting) hereunder. The Trustee may destroy any list furnished
to it as provided in Section 4.01 upon receipt of a new list so furnished.

                  (b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Securities or with holders of all Securities with respect to their rights
under this Indenture and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within five Business Days after the receipt of such application, at its election
either:

                  (1) afford such applicants access to the information preserved
         at the time by the Trustee in accordance with the provisions of
         subsection (a) of this Section 4.02, or

                  (2) inform such applicants as to the approximate number of
         holders of all Securities, whose names and addresses appear in the
         information preserved at the time by the Trustee in accordance with the
         provisions of subsection (a) of this Section 4.02, and as to the
         approximate cost of mailing to such Securityholders the form of proxy
         or other communication, if any, specified in such application.

                  If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or
other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
Securities or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

                  (c) Each and every holder of Securities, by receiving and
holding the same, agrees with Company and the Trustee that neither the Company
nor the Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Securities in accordance with the provisions of subsection (b) of this
Section 4.02, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).

                  SECTION 4.03.  Reports of the Company.

                  (a) The Company covenants and agrees to file with the Trustee,
within 15 days after the date on which the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as said Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.

                  (b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.

                  (c) The Company covenants and agrees to transmit by mail to
all holders of Securities, as the names and addresses of such holders appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section 4.03 as
may be required by rules and regulations prescribed from time to time by the
Commission.

                  (d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                  SECTION 4.04.  Reports by the Trustee.

                  (a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 60 days after December 31 of each year, commencing
December 31, [ ], deliver to Securityholders a brief report, dated as of such
December 31, which complies with the provisions of such Section 313(a).

                  (b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission and
with the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.

                                    ARTICLE V
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

                  SECTION 5.01.  Events of Default.

                  One or more of the following events of default shall
constitute an Event of Default hereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

                  (a) the entry by a court having jurisdiction in the premises
         of (1) a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable federal or state
         bankruptcy, insolvency, reorganization or similar law or (2) a decree
         or order under any applicable federal or state law appointing a
         receiver or similar official of the Bank or of substantially all its
         property, and the continuance in the case of any proceedings under
         clause (1) above of any such decree or order for relief or any such
         other decree or order unstayed and in effect for a period of 60
         consecutive days; or

                  (b) the commencement by the Company of a voluntary case under
         any applicable federal or state bankruptcy, insolvency, reorganization
         or other similar law of any other case or proceeding to be adjudicated
         a bankrupt or insolvent, or the consent by the Company to the entry of
         a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable federal or state
         bankruptcy, insolvency, reorganization or similar law or to the
         commencement of any bankruptcy or insolvency case or proceeding against
         it, or the filing by the Company of a petition or answer or consent
         seeking reorganization or relief under any applicable federal or state
         law, or the consent by the Company to the filing of such petition or to
         the appointment of or taking possession by a custodian, receiver,
         liquidator, assignee, trustee sequestrator or similar official of the
         Company or of substantially all its property.

                  If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding may declare the principal amount of and all accrued but unpaid
interest on all Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the holders of the
outstanding Securities), and upon any such declaration the same shall become
immediately due and payable. Upon payment of such amounts, all obligations of
the Company in respect of the payment of principal of and interest on the
Securities shall terminate.

                  At any time after the principal of the Securities shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay (A) all overdue installments of interest upon all the
Securities and the principal of and premium, if any, on any and all Securities
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest, at the same rate as the rate of interest specified in the Securities
to the date of such payment or deposit) and (B) such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and (ii) any
and all Defaults under the Indenture shall have been cured, waived or otherwise
remedied as provided herein, then, in every such case, the holders of a majority
in aggregate principal amount of the Securities then outstanding, by written
notice to the Company and to the Trustee, may rescind and annul such declaration
and its consequences, but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.

                  In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the holders of the Securities shall be restored,
respectively, to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.

                  SECTION 5.02.  Payment of Securities on Default; Suit
Therefor.

                  "Default", wherever used herein, means any one of the
following events (whatever the reason for such Default and whether it shall be
voluntary or involuntary or be effected by operation of law pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) under the Indenture:

                  (a) an Event of Default has occurred with respect to the
         Securities, as specified in Section 5.01;

                  (b) the Company fails to pay the principal of (or premium, if
         any, on) any Security at the Maturity thereof, whether or not such
         payment is prohibited by Article XV hereof; or

                  (c) the Company fails to pay any installment of interest on
         any Security when such interest becomes due and payable and such
         failure is continued for 30 days, whether or not such payment is
         prohibited by Article XV hereof.

                  The Company covenants that if a Default shall have occurred
and be continuing, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities, the whole amount that
then shall have become due and payable on all such Securities for principal and
premium, if any, or interest, or both, as the case may be, with interest upon
the overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law and, if the Securities are
held by HSBC USA Capital Trust or a trustee of such trust, without duplication
of any other amounts paid by HSBC USA Capital Trust or trustee in respect
thereof) upon the overdue installments of interest at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith.

                  In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Securities and collect in the manner provided by law out of the
property of the Company or any other obligor on the Securities wherever situated
the moneys adjudged or decreed to be payable.

                  If a Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

                  In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Securities
under Title 11, United States Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Securities
and, in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable compensation to the Trustee
and each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a result
of negligence or bad faith) and of the Securityholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Securities, or
to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Securities in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings,
and to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of its
charges and expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.

                  Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.

                  All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof on
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Securities.

                  In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party), the Trustee shall be held to represent all
the holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.

                  SECTION 5.03.  Application of Moneys Collected by Trustee.

                  Any moneys collected by the Trustee shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially paid,
and upon surrender thereof if fully paid:

                  First: To the payment of costs and expenses of collection
applicable to the Securities and reasonable compensation to the Trustee, its
agents, attorneys and counsel, and of all other expenses and liabilities
incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith;

                  Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article Fifteen;

                  Third: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due and be
unpaid, to the payment of the amounts then due and unpaid upon Securities for
principal of (and premium, if any) and interest on the Securities, in respect of
which or for the benefit of which money has been collected, ratably, without
preference of priority of any kind, according to the amounts due on such
Securities for principal (and premium, if any) and interest, respectively; and

                  Fourth:  To the Company.

                  SECTION 5.04.  Proceedings by Securityholders.

                  No holder of any Security shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the
Securities specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate principal amount of
the Securities then outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee an indemnity satisfactory to the
Trustee in its reasonable discretion against the costs, expenses and liabilities
to be incurred therein or thereby, and the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity shall have failed to institute
any such action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the taker and holder of every Security with every other
taker and holder and the Trustee, that no one or more holders of Securities
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Securities, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities.

                  Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of (premium, if any) and interest on such Security, on or after the
same shall have become due and payable, or to institute suit for the enforcement
of any such payment, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.

                  The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities.

                  SECTION 5.05.  Proceedings by Trustee.

                  In case an Event of Default occurs with respect to Securities
and is continuing, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

                  SECTION 5.06.  Remedies Cumulative and Continuing.

                  All powers and remedies given by this Article Five to the
Trustee or to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and remedies available
to the Trustee or the holders of the Securities, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect to
the Securities, and no delay or omission of the Trustee or of any holder of any
of the Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.04, every
power and remedy given by this Article Five or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.

                  SECTION 5.07.  Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders.

                  The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that (subject to the provisions of Section 6.01) the Trustee shall have
the right to decline to follow any such direction if the Trustee shall determine
that the action so directed would be unjustly prejudicial to the holders not
taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Trustee in personal liability. Prior to any declaration accelerating
the maturity of the Securities, the holders of a majority in aggregate principal
amount of the Securities at the time outstanding may on behalf of the holders of
all of the Securities waive any past default and its consequences except a
default (a) in the payment of principal of or premium, if any, or interest on
any of the Securities (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and premium, if any, and principal
due otherwise than by acceleration has been deposited with the Trustee) or (b)
in respect of covenants or provisions hereof which cannot be modified or amended
without the consent of the holder of each Security affected; provided, however,
that if the Securities are held by Property Trustee, such waiver or modification
to such waiver shall not be effective until the holders of a majority in
aggregate liquidation amount of Trust Securities shall have consented to such
waiver or modification to such waiver; provided further, that if the consent of
the holder of each outstanding Security is required, such waiver shall not be
effective until each holder of the Trust Securities shall have consented to such
waiver. Upon any such waiver, the default covered thereby shall be deemed to be
cured for all purposes of this Indenture and the Company, the Trustee and the
holders of the Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. Whenever any default
hereunder shall have been waived as permitted by this Section 5.07, said default
shall for all purposes of the Securities and this Indenture be deemed to have
been cured and to be not continuing.

                  SECTION 5.08.  Notice of Defaults.

                  The Trustee shall, within 90 days after the occurrence of a
default known to the Trustee with respect to the Securities mail to all
Securityholders, as the names and addresses of such holders appear upon the
Security register, notice of defaults known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section 5.08 being hereby defined to be the events specified
in clauses (a), (b) and (c) of Section 5.02, not including periods of grace, if
any, provided for therein); and provided that, except in the case of default in
the payment of the principal of or premium, if any, or interest on any of the
Securities, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or a Responsible Officer or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the Securityholders.

                  SECTION 5.09.  Undertaking to Pay Costs.

                  All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after the
same shall have become due and Payable.

                                   ARTICLE VI

                                   THE TRUSTEE

                  SECTION 6.01.  Certain Duties and Responsibilities.

                  (a) With respect to Securities, except during the continuance
of an Event of Default or Default with respect to the Securities:

                           (1) the Trustee undertakes to perform such duties and
         only such duties as are specifically set forth in this Indenture, and
         no implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

                           (2) in the absence of bad faith on its part, the
         Trustee may conclusively rely, as to the truth of the statements and
         the correctness of the opinions expressed therein, upon an Officers'
         Certificate or Opinion of Counsel or any other certificates or opinions
         furnished to the Trustee and conforming to the requirements of this
         Indenture; but in the case of any Officers' Certificate or Opinion of
         Counsel or any other such certificates or opinions which by any
         provisions hereof are specifically required to be furnished to the
         Trustee, the Trustee shall be under a duty to examine the same to
         determine whether or not they conform to the requirements of this
         Indenture.

                  (b) In case a Default with respect to the Securities has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

                  (c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                           (1) this subsection shall not be construed to limit
         the effect of subsection (a) of this Section 6.01;

                           (2) the Trustee shall not be liable for any error of
         judgment made in good faith by a Responsible Officer, unless it shall
         be proved that the Trustee was negligent in ascertaining the pertinent
         facts;

                           (3) the Trustee shall not be liable with respect to
         any action taken, suffered or omitted to be taken by it, with respect
         to the Securities, in good faith in accordance with the direction of
         the holders of a majority in principal amount of the outstanding
         Securities relating to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee, or exercising any
         trust or power conferred upon the Trustee under this Indenture with
         respect to the Securities; and

                           (4) the Trustee shall not be required to expend or
         risk its own funds or otherwise incur any financial liability in the
         performance of any of its duties hereunder, or in the exercise of any
         of its rights or powers, if it shall have reasonable grounds for
         believing that repayment of such funds or indemnity satisfactory to the
         Trustee in its reasonable discretion against such risk or liability is
         not reasonably assured to it.

                  (d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 6.01.

                  SECTION 6.02.  Certain Rights of Trustee.

                  Except as otherwise provided in Section 6.01:

                  (a) the Trustee may conclusively rely and shall be fully
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, coupon or other paper
         or document believed by it to be genuine and to have been signed or
         presented by the proper party or parties;

                  (b) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by a Company Request or Company Order
         and any resolution of the Board of Directors shall be sufficiently
         evidenced by a Board Resolution;

                  (c) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) shall
         be entitled to and in the absence of bad faith on its part may
         conclusively rely upon an Officers' Certificate and/or an Opinion of
         Counsel;

                  (d) the Trustee may consult with counsel (who may be counsel
         to the Company) and the advice of such counsel or any Opinion of
         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 reliance thereon;

                  (e) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the holders of the Securities pursuant to this
         Indenture, unless such holders shall have offered to the Trustee
         security or indemnity satisfactory to the Trustee, in its reasonable
         discretion, against the costs, expenses and liabilities that might be
         incurred by it in compliance with such request or direction;

                  (f) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, coupon or other paper or
         document, but the Trustee, in its discretion, may make such further
         inquiry or investigation into such facts or matters as it may see fit,
         and, if the Trustee shall determine to make such further inquiry or
         investigation, it shall be entitled to examine the books, records and
         premises of the Company, personally or by agent or attorney;

                  (g) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder; and

                  (h) the Trustee shall not be liable for any action taken or
         omitted by it in good faith and believed by it to be authorized or
         within the discretion, rights or powers conferred upon it by this
         Indenture.

                  (i) the Trustee shall not be under any obligation to take any
         action that is discretionary under the provisions of this Indenture;

                  (j) the Trustee shall not be charged with knowledge of any
         default or Event of Default unless either (1) a Responsible Officer of
         the Trustee shall have actual knowledge thereof or (2) the Trustee
         shall have received notice thereof from the Company or a
         Securityholder; and

                  (k) no permissive power or authority available to the Trustee
         shall be construed as a duty.

                  SECTION 6.03.  Not Responsible for Recitals or Issuance of
Securities.

                  The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, of the Securities or to any prospectus relating to the Securities.
The Trustee shall not be accountable for the use or application by the Company
of any Securities or the proceeds thereof.

                  SECTION 6.04.  May Hold Securities.

                  The Trustee, any paying agent, the Security registrar or any
other agent of the Company or the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities, and, subject to
Sections 310(a)(5), 310(b) and 311 of the Trust Indenture Act, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
paying agent, Security registrar or such other agent.

                  SECTION 6.05.  Money Held in Trust.

                  Money held by the Trustee or any paying agent (except the
Company) in trust hereunder need not be segregated from other funds except to
the extent required by law. Neither the Trustee nor any paying agent shall be
under any liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

                  SECTION 6.06.  Compensation and Reimbursement.

                  The Company agrees:

                  (1) to pay to the Trustee from time to time such compensation
         in U.S. dollars for all services rendered by it hereunder as may be
         mutually agreed upon in writing by the Company and the Trustee (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

                  (2) to reimburse the Trustee in U.S. dollars upon its request
         for all reasonable expenses, disbursements and advances incurred or
         made by the Trustee in accordance with any provision of this Indenture
         or arising out of or in connection with the acceptance or
         administration of this trust or performance of any of its entities
         hereunder (including the reasonable compensation and the expenses and
         disbursements of its agents and counsel), except any such expense,
         disbursement or advance as may be attributable to its negligence or bad
         faith; and

                  (3) to indemnify in U.S. dollars the Trustee for, and to hold
         it harmless against, any loss, liability or expense incurred without
         negligence or bad faith on its part, arising out of or in connection
         with the acceptance or administration of this trust or performance of
         its duties hereunder, including the costs and expenses of defending
         itself against any claim or liability in connection with the exercise
         or performance of any of its powers or duties hereunder.

                  When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Sections 5.01(c) and 5.01(d),
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar laws.

                  As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities, upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of amounts due on the
Securities.

                  The obligations of the Company hereunder to compensate and
indemnify the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness under this Indenture and shall survive the satisfaction
and discharge of this Indenture or the earlier resignation or removal of the
Trustee.

                  SECTION 6.07.  Disqualification, Conflicting Interests.

                  (a) The Trustee shall comply with Section 310(b) of the Trust
Indenture Act; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.

                  (b) If Section 310(b) of the Trust Indenture Act is amended at
any time after the date of this Indenture to change the circumstances under
which a Trustee shall be deemed to have a conflicting interest with respect to
the Securities or to change any of the definitions in connection therewith, this
Section 6.07 shall be automatically amended to incorporate such changes.

                  SECTION 6.08.  Corporate Trustee Required, Eligibility.

                  There shall at all times be a Trustee hereunder that shall be
a corporation organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and having its Corporate Trust Office or an agency in New York,
New York; provided, however, that if Section 310(a) of the Trust Indenture Act
or the rules and regulations of the Commission under the Trust Indenture Act at
any time permit a corporation organized and doing business under the laws of any
other jurisdiction to serve as trustee of an indenture qualified under the Trust
Indenture Act, this Section 6.08 shall be automatically amended to permit a
corporation organized and doing business under the laws of any such other
jurisdiction to serve as Trustee hereunder. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall comply with Section
310(a)(5) of the Trust Indenture Act. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

                  SECTION 6.09.  Resignation and Removal, Appointment of
Successor.

                  (a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.10.

                  (b) The Trustee may resign at any time with respect to the
Securities by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities.

                  (c) The Trustee may be removed at any time with respect to the
Securities and a successor Trustee appointed by act of the holders of a majority
in principal amount of the outstanding Securities, delivered to the Trustee and
to the Company.

                  (d)  If at any time:

                           (1) the Trustee shall fail to comply with Section
         6.07(a) with respect to the Securities after written request therefor
         by the Company or by any holder who has been a bona fide holder of a
         Security for at least six months, or

                           (2) the Trustee shall cease to be eligible under
         Section 6.08 with respect to the Securities and shall fail to resign
         after written request therefor by the Company or by any holder who has
         been a bona fide holder of a Security for at least six months, or

                           (3) the Trustee shall become incapable of acting or a
         decree or order for relief by a court having jurisdiction in the
         premises shall have been entered in respect of the Trustee in an
         involuntary case under the federal bankruptcy laws, as now or hereafter
         constituted, or any other applicable federal or state bankruptcy,
         insolvency or similar law; or a decree or order by a court having
         jurisdiction in the premises shall have been entered for the
         appointment of a receiver, custodian, liquidator, assignee, trustee,
         sequestrator (or other similar official) of the Trustee or of its
         property or affairs, or any public officer shall take charge or control
         of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation, winding up or liquidation, or

                           (4) the Trustee shall commence a voluntary case under
         the federal bankruptcy laws, as now or hereafter constituted, or any
         other applicable federal or state bankruptcy, insolvency or similar law
         or shall consent to the appointment of or taking possession by a
         receiver, custodian, liquidator, assignee, trustee, sequestrator (or
         other similar official) of the Trustee or its property or affairs, or
         shall make an assignment for the benefit of creditors, or shall admit
         in writing its inability to pay its debts generally as they become due,
         or shall take corporate action in furtherance of any such action,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Securities, or (ii) subject to Section 5.09, any
holder who has been a bona fide holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee for the Securities.

                  (e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities and shall comply with the applicable requirements of Section 6.10.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
shall be appointed by act of the holders of a majority in principal amount of
the outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities shall have been so appointed by
the Company or the holders of the Securities and accepted appointment in the
manner hereinafter provided, any holder who has been a bona fide holder of a
Security for at least six months may, subject to Section 5.09, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities and each appointment of a
successor Trustee with respect to the Securities in the manner and to the extent
provided in Section 13.14 to the holders of Securities. Each notice shall
include the name of the successor Trustee with respect to the Securities and the
address of its Corporate Trust Office.

                  (g) The retiring Trustee shall not be liable for any of the
acts or omissions of any Successor Trustee hereunder.

                  SECTION 6.10.  Acceptance of Appointment by Successor.

                  (a) In the case of an appointment hereunder of a successor
Trustee with respect to the Securities, each such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 6.06.

                  (b) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) of this Section, as the case may be.

                  (c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

                  SECTION 6.11.  Merger, Conversion, Consolidation or Succession
to Business.

                  Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities. In case any Securities shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities, in either its own name or that of its
predecessor Trustee, with the full force and effect which this Indenture
provides for the certificate of authentication of the Trustee.

                  SECTION 6.12.  Preferential Collection of Claims Against
Company.

                  If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

                  SECTION 6.13.  Appointment of Authenticating Agent.

                  As long as any Securities remain outstanding, the Trustee may,
by an instrument in writing, appoint an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon exchange, registration of
transfer or partial redemption. Securities authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by such Trustee. Except as
otherwise provided herein, wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or to the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a Certificate of Authentication executed on behalf of such Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$10,000,000 (determined as provided in Section 6.08 with respect to the Trustee)
and subject to supervision or examination by federal or state authority.

                  Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business or corporate trust business of any Authenticating
Agent, shall continue to be the Authenticating Agent with respect to all
Securities for which it served as Authenticating Agent without the execution or
filing of any paper or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time, and if it shall
cease to be eligible shall, resign by giving written notice of resignation to
the applicable Trustee and to the Company.

                  Upon receiving such a notice of resignation, or in case at any
time any Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.13 with respect to all Securities, the Trustee
shall upon Company Request appoint a successor Authenticating Agent, and the
Company shall provide notice of such appointment to all holders of Securities in
the manner and to the extent provided in Section 13.14. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent. The
Company agrees to pay to the Authenticating Agent from time to time reasonable
compensation including reimbursement of its reasonable expenses for its
services. The Authenticating Agent for the Securities shall have no
responsibility or liability for any action taken by it as such at the direction
of the Trustee. The Authenticating Agent shall be entitled to all of the rights,
immunities, privileges and indemnities of the Trustee hereunder.

                                   ARTICLE VII
                         CONCERNING THE SECURITYHOLDERS

                  SECTION 7.01.  Action by Securityholders.

                  Whenever in this Indenture it is provided that the holders of
a specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders duly
called and held in accordance with the provisions of Article Eight, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Securityholders.

                  If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for the determination of
Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

                  SECTION 7.02.  Proof of Execution by Securityholders.

                  Subject to the provisions of Sections 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his agent or
proxy shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by the
Security Register or by a certificate of the Security registrar. The Trustee may
require such additional proof of any matter referred to in this Section as it
shall deem necessary.

                  The record of any Securityholders' meeting shall be proved in
the manner provided in Section 8.06.

                  SECTION 7.03.  Who Are Deemed Absolute Owners.

                  Prior to due presentment for registration of transfer of any
Security, the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Security registrar may deem the person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him as, the absolute owner of such Security (whether or not such Security
shall be overdue) for the purpose of receiving payment of or on account of the
principal of and premium, if any, and interest on such Security and for all
other purposes; and neither the Company nor the Trustee nor any Authenticating
Agent nor any paying agent nor any transfer agent nor any Security registrar
shall be affected by any notice to the contrary. All such payments so made to
any holder for the time being or upon his order shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.

                  SECTION 7.04.  Securities Owned by Company Deemed Not
Outstanding.

                  In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Securities which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Securities and that the pledgee is not the Company or any such other
obligor or person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.

                  SECTION 7.05.  Revocation of Consents; Future Holders Bound.

                  At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Security specified in
this Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor) the
serial number of which is shown by the evidence to be included in the Securities
the holders of which have consented to such action may, by filing written notice
with the Trustee at its principal office and upon proof of holding as provided
in Section 7.02, revoke such action so far as concerns such Security (or so far
as concerns the principal amount represented by any exchanged or substituted
Security). Except as aforesaid any such action taken by the holder of any
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security, and of any Security issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Security or any Security issued in exchange or
substitution therefor.

                                  ARTICLE VIII
                            SECURITYHOLDERS' MEETINGS

                  SECTION 8.01.  Purpose of Meetings.

                  A meeting of Securityholders may be called at any time and
from time to time pursuant to the provisions of this Article Eight for any of
the following purposes:

                  (a) to give any notice to the Company or to the Trustee, or to
         give any directions to the Trustee, or to consent to the waiving of any
         default hereunder and its consequences, or to take any other action
         authorized to be taken by Securityholders pursuant to any of the
         provisions of Article Five;

                  (b) to remove the Trustee and nominate a successor trustee
         pursuant to the provisions of Article Six;

                  (c) to consent to the execution of an indenture or indentures
         supplemental hereto pursuant to the provisions of Section 9.02; or

                  (d) to take any other action authorized to be taken by or on
         behalf of the holders of any specified aggregate principal amount of
         such Securities under any other provision of this Indenture or under
         applicable law.

                  SECTION 8.02.  Call of Meetings by Trustee.

                  The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 8.01, to be held at such time and at
such place in the Borough of Manhattan, The City of New York, as the Trustee
shall determine. Notice of every meeting of the Securityholders, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.

                  SECTION 8.03.  Call of Meetings by Company or Securityholders.

                  In case at any time the Company pursuant to a resolution of
the Board of Directors, or the holders of at least 10% in aggregate principal
amount of the Securities then outstanding, shall have requested the Trustee to
call a meeting of Securityholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in said Borough of Manhattan for such meeting and may
call such meeting to take any action authorized in Section 8.01, by mailing
notice thereof as provided in Section 8.02.

                  SECTION 8.04.  Qualifications for Voting.

                  To be entitled to vote at any meeting of Securityholders a
person shall be (a) a holder of one or more Securities or (b) a person appointed
by an instrument in writing as proxy by a holder of one or more Securities. The
only persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

                  SECTION 8.05.  Regulations.

                  Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Securities and
of the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.

                  The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

                  Subject to the provisions of Section 8.04, at any meeting each
holder of Securities or proxy therefor shall be entitled to one vote for each
$1,000 principal amount of Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of the meeting
to be not outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Securities held by him or instruments in writing as
aforesaid duly designating him as the person to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to the
provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

                  SECTION 8.06.  Voting.

                  The vote upon any resolution submitted to any meeting of
holders of Securities shall be by written ballots on which shall be subscribed
the signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.

                  Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                                   ARTICLE IX
                                  MODIFICATION

                  SECTION 9.01.  Without Consent of Securityholders.

                  The Company and the Trustee may from time to time and at any
time amend, waive or supplement the Indenture, without the consent of the
Securityholders, for one or more of the following purposes:

                  (a) to evidence the succession of another corporation to the
         Company, or successive successions, and the assumption by the successor
         corporation of the covenants, agreements and obligations of the Company
         pursuant to Article Ten hereof;

                  (b) to add to the covenants of the Company such further
         covenants, restrictions or conditions for the protection of the
         Securityholders as the Board of Directors and the Trustee shall
         consider to be for the protection of the Securityholders, and to make
         the occurrence, or the occurrence and continuance, of a default in any
         of such additional covenants, restrictions or conditions a default or
         an Event of Default permitting the enforcement of all or any of the
         remedies provided in this Indenture as herein set forth; provided,
         however, that in respect of any such additional covenant, restriction
         or condition such modification may provide for a particular period of
         grace after default (which period may be shorter or longer than that
         allowed in the case of other defaults) or may provide for an immediate
         enforcement upon such default or may limit the remedies available to
         the Trustee upon such default;
                  (c) to cure any ambiguity or to correct or supplement any
         provision contained herein or in any supplemental indenture which may
         be defective or inconsistent with any other provision contained herein
         or in any supplemental indenture, or to make such other provisions in
         regard to matters or questions arising under this Indenture; provided
         that any such action shall not materially adversely affect the
         interests of the holders of the Securities;

                  (d) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities;

                  (e) to make provision for transfer procedures, certification,
         book-entry provisions and all other matters required or otherwise
         necessary, desirable or appropriate in connection with the issuance of
         Securities to holders of Capital Securities in the event of a
         distribution of Securities by HSBC USA Capital Trust following a
         Dissolution Event;

                  (f) to qualify or maintain qualification of this Indenture
         under the Trust Indenture Act; or

                  (g) to make any change that does not adversely affect the
         rights of any Securityholder in any material respect.

                  The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture to effect such modification, to make
any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

                  Any modification to the Indenture authorized by the provisions
of this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.

                  SECTION 9.02.  With Consent of Securityholders.

                  With the consent (evidenced as provided in Section 7.01) of
the holders of a majority in aggregate principal amount of the Securities at the
time outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time modify the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the holders of the Securities; provided, however, that no such modification
shall, without the consent of the holders of each Security then outstanding and
affected hereby, (i) change the Maturity Date of any Security (except as
contemplated by Article Sixteen), or reduce the rate or extend the time of
payment of interest thereon (except as contemplated by Article Sixteen), or
reduce the principal amount thereof, or reduce any amount payable on prepayment
thereof, or make the principal thereof, or any interest or premium on, the
Securities payable in any coin or currency other than that provided in the
Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof, without the consent of the holder of each Security so
affected, or (ii) reduce the percentage of the principal amount of the
Securities the holders of which are required to consent to any such modification
to the Indenture, provided, however, that if the Securities are held by HSBC USA
Capital Trust, such modification shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
modification; provided, further, that if the consent of the holder of each
outstanding Security is required, such modification shall not be effective until
each holder of the Trust Securities shall have consented to such modification.

                  Upon the request of the Company accompanied by a copy of a
resolution of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture affecting such
modification, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture. The Trustee shall be
entitled to receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.

                  Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, prepared
by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

                  It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.

                  SECTION 9.03.  Compliance with Trust Indenture Act; Effect of
Supplemental Indentures.

                  Any supplemental indenture executed pursuant to the provisions
of this Article Nine shall comply with the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article Nine, this Indenture shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

                  SECTION 9.04.  Notation on Securities.

                  Securities authenticated and delivered after the execution of
any supplemental indenture affecting such series pursuant to the provisions of
this Article Nine may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee or the Authenticating
Agent and delivered in exchange for the Securities then outstanding.

                  SECTION 9.05.  Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee.

                  The Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Nine.

                                    ARTICLE X
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

                  SECTION 10.01.  Company May Consolidate, Etc., on Certain
Terms.

                  Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other Person (whether or not affiliated with the Company, as the case may
be), or successive consolidations or mergers in which the Company, as the case
may be, or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or lease of the property of the Company,
as the case may be, or its successor or successors as an entirety, or
substantially as an entirety, to any other person (whether or not affiliated
with the Company, as the case may be, or its successors or successors)
authorized to acquire and operate the same; provided that (a) the Company is the
surviving Person, or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, conveyance, transfer
or lease of property is made is a Person organized and existing under the laws
of the United States or any State thereof or the District of Columbia, (b) upon
any such consolidation, merger, sale, conveyance, transfer or lease, the due and
punctual payment of the principal of (and premium, if any) and interest on the
Securities according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept or
performed by the Company shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the Person formed by such consolidation, or into which the Company,
as the case may be, shall have been merged, or by the Person which shall have
acquired such property, (c) after giving effect to such consolidation, merger,
sale, conveyance, transfer or lease, no Default or Event of Default shall have
occurred and be continuing and (d) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance, transfer or lease, and the assumption
by any successor entity, and such supplemental indenture comply with this
Article X and that all conditions precedent herein provided for relating to such
transaction have been complied with.

                  SECTION 10.02.  Successor Corporation to be Substituted for
Company.

                  In case of any such consolidation, merger, conveyance or
transfer and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and premium, if
any, and interest on all of the Securities and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the Company thereupon shall be
relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of HSBC USA, Inc., any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee or the Authenticating Agent; and, upon
the order of such successor Person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee or
the Authenticating Agent shall authenticate and deliver any Securities which
previously shall have been signed and delivered by the officers of the Company
to the Trustee or the Authenticating Agent for authentication, and any
Securities which such successor Corporation thereafter shall cause to be signed
and delivered to the Trustee or the Authenticating Agent for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Indentures
had been issued at the date of the execution hereof.

                  SECTION 10.03.  Opinion of Counsel to be Given Trustee.

                  The Trustee, subject to the provisions of Section 6.01 and
6.02, shall be entitled to receive an Opinion of Counsel as conclusive evidence
that any consolidation, merger, sale, conveyance, transfer or lease, and any
assumption, permitted or required by the terms of this Article Ten complies with
the provisions of this Article Ten.

                                   ARTICLE XI
                     SATISFACTION AND DISCHARGE OF INDENTURE

                  SECTION 11.01.  Discharge of Indenture.

                  When (a) the Company shall deliver to the Trustee for
cancellation all Securities theretofore authenticated (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.08) and not theretofore cancelled, or
(b) all the Securities not theretofore cancelled or delivered to the Trustee for
cancellation shall (i) have become due and payable, or (ii) by their terms will
become due and payable at maturity within one year or are to be called for
prepayment within one year under arrangements satisfactory to the Trustee for
the giving of notice of prepayment, and the Company shall deposit or cause to be
deposited with the Trustee, in trust, funds for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness of Securities on the
Maturity Date or upon prepayment all of the Securities (other than any
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.08) not theretofore cancelled or
delivered to the Trustee for cancellation, including principal and premium, if
any, and interest due or to become due to the Maturity Date or prepayment date,
as the case may be, but excluding, however, the amount of any moneys for the
payment of principal of or premium, if any, or interest on the Securities (1)
theretofore repaid to the Company in accordance with the provisions of Section
11.04, or (2) paid to any State of the United States or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except for the provisions of Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04,
6.06, 6.09 and 11.04 hereof shall survive until such Securities shall mature and
be paid. Thereafter, Sections 6.09 and 11.04 shall survive, and the Trustee, on
demand of the Company accompanied by any Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee and its agents for
any costs or expenses thereafter reasonably and properly incurred by them in
connection with this Indenture or the Securities.

                  SECTION 11.02.  Deposited Moneys and U.S. Government
Obligations to be Held in Trust by Trustee.

                  Subject to the provisions of Section 11.04, all moneys and
U.S. Government Obligations deposited with the Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular Securities for the payment of
which such moneys or U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 11.05 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the holders of outstanding Securities.

                  SECTION 11.03.  Paying Agent to Repay Moneys Held.

                  Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Securities (other than the Trustee)
shall, upon written demand of the Company, be repaid to it or paid to the
Trustee, and thereupon such paying agent shall be released from all further
liability with respect to such moneys.

                  SECTION 11.04.  Return of Unclaimed Moneys.

                  Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of or premium, if any, or interest on
Securities and not applied but remaining unclaimed by the holders of Securities
for two years after the date upon which the principal of or premium, if any, or
interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee or such paying agent on
written demand; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
and all liability of the Trustee or such paying agent with respect to such
moneys shall thereupon cease.

                  SECTION 11.05.  Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.

                  Subject to the prior approval of the Federal Reserve and the
FSA, if such approval is then required under applicable capital guidelines or
policies of the Federal Reserve and the FSA, respectively, the Company shall be
deemed to have been Discharged (as defined below) from its respective
obligations with respect to the Securities on the 91st day after the applicable
conditions set forth below have been satisfied with respect to the Securities at
any time after the applicable conditions set forth below have been satisfied:

                  (1) The Company shall have deposited or caused to be deposited
         irrevocably with the Trustee or the Defeasance Agent (as defined below)
         as trust funds in trust, specifically pledged as security for, and
         dedicated solely to, the benefit of the holders of the Securities (i)
         money in an amount, or (ii) U.S. Government Obligations which through
         the payment of interest and principal in respect thereof in accordance
         with their terms will provide, not later than one day before the due
         date of any payment, money in an amount, or (iii) a combination of (i)
         and (ii), sufficient, in the opinion (with respect to (ii) and (iii))
         of a nationally recognized firm of independent public accountants
         expressed in a written certification thereof delivered to the Trustee
         and the Defeasance Agent, if any, to pay and discharge each installment
         of principal of and interest and premium, if any, on the outstanding
         Securities on the dates such installments of principal, interest or
         premium are due;

                  (2) if the Securities are then listed on any national
         securities exchange, the Company shall have delivered to the Trustee
         and the Defeasance Agent, if any, an Opinion of Counsel to the effect
         that the exercise of the option under this Section 11.05 would not
         cause such Securities to be delisted from such exchange;

                  (3) no Default or Event of Default with respect to the
         Securities shall have occurred and be continuing on the date of such
         deposit; and

                  (4) the Company shall have delivered to the Trustee and the
         Defeasance Agent, if any, an Opinion of Counsel to the effect that
         holders of the Securities will not recognize income, gain or loss for
         United States federal income tax purposes as a result of the exercise
         of the option under this Section 11.05 and will be subject to United
         States federal income tax on the same amount and in the same manner and
         at the same times as would have been the case if such option had not
         been exercised, and such opinion shall be accompanied by a private
         letter ruling to that effect received from the United States Internal
         Revenue Service or a revenue ruling pertaining to a comparable form of
         transaction to that effect published by the United States Internal
         Revenue Service.

                  "Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by, and obligations
under, the Securities and to have satisfied all the obligations under this
Indenture relating to the Securities (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except (A)
the rights of holders of Securities to receive, from the trust fund described in
clause (1) above, payment of the principal of and the interest and premium, if
any, on the Securities when such payments are due; (B) the Company's obligations
with respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and
(C) the rights, powers, trusts, duties and immunities of the Trustee hereunder.

                  "Defeasance Agent" means another financial institution which
is eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act hereunder. In the event
such a Defeasance Agent is appointed pursuant to this Section, the following
conditions shall apply:

                  (1) The Trustee shall have approval rights over the document
         appointing such Defeasance Agent and the document setting forth such
         Defeasance Agent's rights and responsibilities;

                  (2) The Defeasance Agent shall provide verification to the
         Trustee acknowledging receipt of sufficient money and/or U.S.
         Government Obligations to meet the applicable conditions set forth in
         this Section 11.05.

                                   ARTICLE XII
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

                  SECTION 12.01.  Indenture and Securities Solely Corporate
Obligations.

                  No recourse for the payment of the principal of or premium, if
any, or interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person to the Company, either
directly or through the Company or any successor Person to the Company, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the
Securities.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

                  SECTION 13.01.  Successors.

                  All the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.

                  SECTION 13.02.  Official Acts by Successor Corporation.

                  Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.

                  SECTION 13.03.  Surrender of Company Powers.

                  The Company by instrument in writing executed by authority of
2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor Person.

                  SECTION 13.04.  Address for Notices, Etc.

                  Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company addressed to it at the address of its principal office specified
in the first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company. Any notice, direction,
request or demand by any Securityholder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if given or made in
writing at the Corporate Trust Office of the Trustee, addressed to the Trustee
at Four Albany Street, 4th Floor, New York, New York 10006 ((fax) 212-250-6392).

                  SECTION 13.05.  Governing Law.

                  This Indenture and each Security shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of said State,
without regard to conflicts of laws principles thereof.

                  SECTION 13.06.  Evidence of Compliance with Conditions
Precedent.

                  Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.

                  Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

                  SECTION 13.07.  Business Days.

                  In any case where the date of payment of principal of or
premium, if any, or interest on the Securities will not be a Business Day, the
payment of such principal of or premium, if any, or interest on the Securities
need not be made on such date but may be made on the next succeeding Business
Day (and without any interest or other payment in respect of any such delay)
with the same force and effect as if made on the date of payment and no interest
shall accrue for the period from and after such date.

                  SECTION 13.08.  Trust Indenture Act to Control.

                  If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included in this Indenture by any of Sections 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.

                  SECTION 13.09.  Table of Contents, Headings, Etc.

                  The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered apart hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.

                  SECTION 13.10.  Execution in Counterparts

                  This 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.

                  SECTION 13.11.  Separability.

                  In case any one or more of the provisions contained in this
Indenture or in the Securities 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 Indenture or of
the Securities, but this Indenture and the Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.

                  SECTION 13.12.  Assignment.

                  The Company will have the right, upon written notice thereof
delivered to the Trustee, at all times to assign any of its respective rights or
obligations under this Indenture to a direct or indirect wholly owned Subsidiary
of the Company, provided that, in the event of any such assignment, the Company,
as the case may be, will remain liable for all such obligations. Subject to the
foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.

                  SECTION 13.13.  Acknowledgment of Rights.

                  The Company acknowledges that, with respect to any Securities
held by HSBC USA Capital Trust or a trustee of such Trust, if the Property
Trustee of such Trust fails to enforce its rights under this Indenture as the
holder of the Securities held as the assets of HSBC USA Capital Trust, any
holder of Capital Securities may institute legal proceedings directly against
the Company to enforce such Property Trustee's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee or
any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of or premium, if any, or interest on
the Securities when due, the Company acknowledges that a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or premium, if any, or interest on the
Securities having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder on or after the respective due date
specified in the Securities.

                  SECTION 13.14.  Notice to Holders; Waiver.

                  Where this Indenture provides for notice to holders of any
event by the Company or the Trustee, such notice shall be sufficiently given to
registered holders (unless otherwise herein expressly provided) if in writing
and mailed, first class postage prepaid, to such registered holders as their
names and addresses appear in the Security Register, within the time prescribed;
provided, however, that, in any case where notice to registered holders is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular registered holder shall affect the sufficiency of such
notice with respect to other registered holders, and any notice that is mailed
in the manner herein provided shall be conclusively deemed to have been received
by such registered holder, whether or not such registered holder actually
receives such notice.

                  In the event of suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by mail, then
such notification as shall be given with the approval of the Trustee shall
constitute sufficient notice for every purpose hereunder.

                  Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by registered holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance on such waiver.

                                   ARTICLE XIV
                            PREPAYMENT OF SECURITIES

                  SECTION 14.01.  Special Event Prepayment.

                  If a Special Event has occurred and is continuing the Company
shall have the right, prior to [   ] , [  ] (the "Initial Optional Prepayment
Date"), notwithstanding Section 14.02(a) but subject to Section 14.02(c), upon
(i) not less than 45 days written notice to the Trustee and (ii) not less than
30 days nor more than 60 days written notice to the Securityholders, to prepay
the Securities, in whole (but not in part) at any time within 90 days following
the occurrence of such Special Event, at the Special Event Prepayment Price.
Following a Special Event, the Company shall take such action as is necessary to
promptly determine the Special Event Prepayment Price, including without
limitation the appointment by the Company of a Quotation Agent. The Special
Event Prepayment Price shall be paid prior to 12:00 noon, New York time, on the
date of such prepayment or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Special Event Prepayment Price by 10:00 a.m., New York time, on the date such
Special Event Prepayment Price is to be paid.

                  SECTION 14.02.  Optional Prepayment by Company.

                  (a) Subject to the provisions of this Article Fourteen, the
Company shall have the right to prepay the Securities, in whole or in part, from
time to time, on or after [   ], [  ], at [   ]% of the outstanding principal
balance of the Securities (such amount, the "Optional Prepayment Price"), plus,
in each case, accrued and unpaid interest thereon (including Additional Interest
and Compounded Interest, if any) to the applicable date of prepayment.

                  If the Securities are only partially prepaid pursuant to this
Section 14.02, the Securities will be prepaid pro rata or by lot or by any other
method utilized by the Trustee; provided that if at the time of prepayment the
Securities are registered as a Global Security, the Depositary shall determine,
in accordance with its procedures, the principal amount of such Securities held
by each holder of a Security to be prepaid. The Optional Prepayment Price shall
be paid prior to 12:00 noon, New York time, on the date of such prepayment or at
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Prepayment
Price by 10:00 a.m., New York time, on the date such Optional Prepayment Price
is to be paid.

                  (b) Notwithstanding the first sentence of Section 14.02, upon
the entry of an order for dissolution of the HSBC USA Capital Trust by a court
of competent jurisdiction, the Securities thereafter will be subject to optional
prepayment, in whole only, but not in part, on or after [ ], [ ], at the
Optional Prepayment Price set forth in this Section 14.02 and otherwise in
accordance with this Article Fourteen.

                  (c) Any prepayment of Securities pursuant to Section 14.01 or
Section 14.02 shall be subject to the Company obtaining the prior approval of
the Federal Reserve and the FSA, if such approval is then required under
applicable capital guidelines or policies of the Federal Reserve and the FSA,
respectively.

                  SECTION 14.03.  No Sinking Fund.

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

                  SECTION 14.04.  Notice of Prepayment; Selection of Securities.

                  In case the Company shall desire to exercise the right to
prepay all, or, as the case may be, any part of the Securities in accordance
with their terms, it shall fix a date for prepayment and shall mail a notice of
such prepayment at least 30 and not more than 60 days prior to the date fixed
for prepayment to the holders of Securities so to be prepaid as a whole or in
part at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Security designated for
prepayment as a whole or in part shall not affect the validity of the
proceedings for the prepayment of any other Security.

                  Each such notice of prepayment shall specify the CUSIP number,
if any, of the Securities to be prepaid, the date fixed for prepayment, the
prepayment price at which the Securities are to be prepaid (or the method by
which such prepayment price is to be calculated), the place or places of payment
that payment will be made upon presentation and surrender of the Securities,
that interest accrued to the date fixed for prepayment will be paid as specified
in said notice, and that on and after said date interest thereon or on the
portions thereof to be prepaid will cease to accrue. If less than all the
Securities are to be prepaid the notice of prepayment shall specify the numbers
of the Securities to be prepaid. In case any Security is to be prepaid in part
only, the notice of prepayment shall state the portion of the principal amount
thereof to be prepaid and shall state that on and after the date fixed for
prepayment, upon surrender of such Security, a new Security or Securities in
principal amount equal to the unprepaid portion thereof will be issued.

                  On or prior to the prepayment date specified in the notice of
prepayment given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents an amount of money sufficient to
redeem on the prepayment date all the Securities so called for prepayment at the
appropriate Prepayment Price, together with accrued interest to the date fixed
for prepayment.

                  The Company will give the Trustee notice not less than 45 days
prior to the prepayment date as to the aggregate principal amount of Securities
to be prepaid and the Trustee shall select, in such manner as in its sole
discretion it shall deem appropriate and fair, the Securities or portions
thereof (in integral multiples of $1,000, except as otherwise set forth in the
applicable form of Security) to be prepaid. Any determination made by the
Trustee pursuant to this Section 14.04 shall be conclusive and binding upon the
Company and the Securityholders in the absence of manifest error and the Trustee
shall have no liability in connection with such determination.

                  SECTION 14.05.  Payment of Securities Called for Prepayment.

                  If notice of prepayment has been given as provided in Section
14.04, the Securities or portions of Securities with respect to which such
notice has been given shall become due and payable on the date and at the place
or places stated in such notice at the applicable Prepayment Price, together
with interest accrued to the date fixed for prepayment (subject to the rights of
holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the prepayment
date), and on and after said date (unless the Company shall default in the
payment of such Securities at the Prepayment Price, together with interest
accrued to said date) interest on the Securities or portions of Securities so
called for prepayment shall cease to accrue. On presentation and surrender of
such Securities at a place of payment specified in said notice, the said
Securities or the specified portions thereof shall be paid and prepaid by the
Company at the applicable Prepayment Price, together with interest accrued
thereon to the date fixed for prepayment (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the prepayment date).

                  Upon presentation of any Security prepaid in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unprepaid portion of the Security so presented.

                                   ARTICLE XV
                        SUBORDINATION OF DEBT SECURITIES

                  SECTION 15.01.  Agreement to Subordinate.

                  The Company, for itself, its successors and assigns, covenants
and agrees, and each holder of a Security likewise covenants and agrees by his
or her acceptance thereof, that the obligation of the Company to make any
payment on account of the principal of (and premium, if any) and interest on
each and all of the Securities shall be subordinate and junior in right of
payment to the Company's obligations to the holders of Senior Indebtedness.

                  In the event of any insolvency, bankruptcy, receivership,
conservatorship, reorganization, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or any liquidation, dissolution or winding-up
of or relating to the Company as a whole, whether voluntary or involuntary, all
obligations of the Company to holders of Senior Indebtedness shall be entitled
to be paid in full before any payment, whether in cash, property or otherwise,
shall be made on any account of the principal of (or premium, if any) or
interest on any of the Securities. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
holders, together with the holders of Indebtedness Ranking on a Parity with the
Securities, shall be entitled ratably to be paid from the remaining assets of
the Company the amounts at the time due and owing on account of unpaid principal
of (and premium, if any) and interest, if any, on the Securities before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any Indebtedness Ranking Junior to the Securities or any
capital stock. In addition, in the event of any such proceeding, if any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), including any such payment or distribution that may be payable or
deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Securities, shall be received by the
Trustee or the holders before all Senior Indebtedness is paid in full, such
payment or distribution shall be held (in trust if received by such holders) for
the benefit of and shall be paid over to the holders of such Senior Indebtedness
or their representative or representatives or to the trustee or trustees under
any indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably, for application to the payment of
all Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.

                  The subordination provisions of the foregoing paragraph shall
not be applicable to amounts at the time due and owing on the Securities on
account of the unpaid principal of (or premium, if any) or interest, if any, on
the Securities for the payment of which funds have been deposited in trust with
the Trustee or any paying agent or have been set aside by the Company in trust
in accordance with the provisions of this Indenture; nor shall such provisions
impair any rights, interests, remedies or powers of any secured creditor of the
Company in respect of any security the creation of which is not prohibited by
the provisions of this Indenture.

                  The holders of Securities and the Trustee, in respect of any
claims of such holders to payment of any principal, premium or interest in
respect of any Securities, by their acceptance thereof will be deemed to have
waived any right of set-off or counterclaim that such holders or (subject to
Section 6.06) the Trustee, respectively, in such respect, might otherwise have.

                  The securing of any Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities shall not be deemed
to prevent such Indebtedness from constituting Indebtedness Ranking on a Parity
with the Securities or Indebtedness Ranking Junior to the Securities,
respectively.

                  The Company shall give prompt written notice to the Trustee of
any insolvency, bankruptcy, receivership, conservatorship, reorganization,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings or any liquidation, dissolution or winding-up or relating to the
Company as a whole, whether voluntary or involuntary, or of any default with
respect to any Senior Indebtedness that would prevent the Trustee from making
any payment in respect of the Securities under this Section. The Trustee,
subject to the provisions of Section 6.01, shall be entitled to assume that, and
may act as if, no such event has occurred unless a Responsible Officer of the
Trustee assigned to the Corporate Trust Office has received at the Corporate
Trust Office of the Trustee from the Company or any one or more holders of
Senior Indebtedness or any trustee therefor (who shall have been certified or
otherwise established to the satisfaction of the Trustee to be such a holder or
trustee) written notice thereof. Upon any distribution of assets of the Company
referred to in this Article Fifteen, the Trustee and holders shall be entitled
to rely conclusively upon a certificate of the liquidating trustee or agent, or
any order or decree entered by a court of competent jurisdiction, or other
Person making any distribution to the Trustee or to the holders for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, and the Trustee, subject to the provisions of
Article Six, and the holders of the Securities shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or to the holders of the Securities for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent to this Article Fifteen. In the absence of any such liquidating
trustee, agent or other Person, the Trustee, subject to Section 6.01, shall be
entitled to rely conclusively upon a written notice by a Person representing
himself or herself to be a holder of Senior Indebtedness (or a trustee or
representative on behalf of such holder) as evidence that such Person is a
holder of such Senior Indebtedness (or is such a trustee or representative). In
the event that the Trustee determines, in its discretion, that further evidence
is required with respect to the right of any Person, as a holder of Senior
Indebtedness, to participate in any payment or distribution pursuant to this
Section 15.01, 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, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Section 15.01, 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.

                  SECTION 15.02.  Obligation of the Company Unconditional and
Payment Permitted If No Default.

                  Subject to the provisions of this Article Fifteen and the
terms of the Securities, nothing contained in this Article Fifteen or elsewhere
in this Indenture is intended to or shall impair, as between the Company and the
holders, the obligation of the Company, which is absolute and unconditional, to
pay to such holders the principal of (and premium, if any) and interest on the
Securities when, where and as the same shall become due and payable, all in
accordance with the terms of the Securities, or is intended to or shall affect
the relative rights of such holders and creditors of the Company other than the
holders of Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Fifteen of the holders of Senior Indebtedness
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

                  SECTION 15.03.  Limitations on Duties to Holders of Senior
Indebtedness.

                  In the event and during the continuation of any default in the
payment of principal of, or premium, if any, or interest on, any Senior
Indebtedness beyond any applicable period of grace, or in the event that any
event of default with respect to any Senior Indebtedness shall have occurred and
be continuing, or would occur as a result of the payment referred to
hereinafter, permitting the holders of such Senior Indebtedness (or a trustee on
behalf of the holders thereof) to accelerate the maturity thereof, then, unless
and until such default or event of default shall have been cured or waived or
shall have ceased to exist, no payment of principal of, or premium (if any) or
interest, if any, on the Securities, or in respect of any prepayment, exchange,
retirement, purchase or other acquisition of any of the Securities, shall be
made by the Company.

                  SECTION 15.04.  Notice to Trustee of Facts Prohibiting
Payments.

                  Notwithstanding any of the provisions of this Article Fifteen
or any other provision of this Indenture, the Trustee shall not at any time be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of funds to or by the Trustee unless and until a
Responsible Officer of the Trustee assigned to its Corporate Trust Division
shall have received at the Corporate Trust Office written notice thereof from
the Company or from one or more holders of Senior Indebtedness or from any
trustee therefor who shall have been certified by the Company or otherwise
established to the reasonable satisfaction of the Trustee to be such a holder or
trustee; and, prior to the receipt of such written notice, the Trustee, subject
to the provisions of Section 6.01, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if prior to the fifth Business
Day preceding the date upon which by the terms hereof any such funds may become
payable, or if prior to the third Business Day preceding the date of the
execution of instruments pursuant to Section 11.01 acknowledging satisfaction
and discharge of this Indenture, the Trustee shall not have received with
respect to such funds the notice provided for in this Section 15.04, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and/or apply the same to
the purpose for which they were received and shall not be affected by any notice
to the contrary that may be received by it on or after such date; provided,
however, no such application shall affect the obligations under this Article
Fifteen of the Persons receiving such moneys from the Trustee.

                  SECTION 15.05.  Application by Trustee of Moneys Deposited
With It.

                  Anything in this Indenture to the contrary notwithstanding,
any deposit of a sum by the Company with the Trustee or any agent (whether or
not in trust) for any payment of the principal of (and premium, if any) or
interest on any Securities shall, except as provided in Section 15.04, is
subject to the provisions of Section 15.01.

                  SECTION 15.06.  Subrogation.

                  Subject to the payment in full of all Senior Indebtedness, the
holders of the Securities shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to such Senior Indebtedness until the Securities shall be
paid in full, and none of the payments or distributions to the holders of such
Senior Indebtedness to which the holders of the Securities or the Trustee would
be entitled except for the provisions of this Article Fifteen or of payments
over, pursuant to the provisions of this Article Fifteen, to the holders of such
Senior Indebtedness by the holders of such Securities or the Trustee shall, as
among the Company, its creditors other than the holders of such Senior
Indebtedness, and the holders of such Securities, be deemed to be a payment by
the Company to or on account of such Senior Indebtedness; it being understood
that the provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the holders of such Securities, on one hand,
and the holders of the Senior Indebtedness, on the other hand.

                  SECTION 15.07.  Subordination Rights Not Impaired by Acts or
Omissions of Bank or Holders of Senior Indebtedness.

                  No right of any present or future holders of any Senior
Indebtedness 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 with which any such
holder may have or be otherwise charged. The holders of Senior Indebtedness may,
at any time or from time to time and in their absolute discretion, change the
manner, place or terms of payment, change or extend the time of payment of, or
renew or alter, any such Senior Indebtedness, or amend or supplement any
instrument pursuant to which any such Senior Indebtedness is issued or by which
it may be secured, or release any security therefor, or exercise or refrain from
exercising any other of their rights under the Senior Indebtedness including,
without limitation, the waiver of default thereunder, all without notice to or
assent from the holders or the Trustee and without affecting the obligations of
the Company, the Trustee or the holders under this Article Fifteen.

                  SECTION 15.08.  Authorization of Trustee to Effectuate
Subordination of Securities.

                  Each holder of a Security, by his or her acceptance thereof,
authorizes and expressly directs the Trustee on his or her behalf to take such
action as may be necessary or appropriate to effectuate, as between the holders
and the holders of Senior Indebtedness, the subordination provided in this
Article Fifteen. If, in the event of any proceeding or other action relating to
the Company referred to in the second paragraph of Section 15.01, a proper claim
or proof of debt in the form required in such proceeding or action is not filed
by or on behalf of the holders prior to fifteen days before the expiration of
the time to file such claim or claims, then the holder or holders of Senior
Indebtedness shall have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the holders.

                  SECTION 15.09.  Right of Trustee to Hold Senior Indebtedness.

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

                  SECTION 15.10.  Article XV Not to Prevent Events of Default
or Default.

                  The failure to make a payment pursuant to the terms of the
Securities by reason of any provision in this Article Fifteen shall not be
construed as preventing the occurrence of an Event of Default or Default.

                  SECTION 15.11.  Article Applicable to Paying Agents.

                  The term "Trustee" as used in this Article Fifteen shall
(unless the context shall otherwise require) be construed as extending to and
including each paying agent appointed by the Company and acting hereunder within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Fifteen in addition to or in place of the Trustee;
provided, however, that Sections 15.04 and 15.09 shall not apply to the Company
or any Affiliate of the Company if the Company or such Affiliate acts as paying
agent. Any Paying Agent acting hereunder shall be entitled to all of the rights,
protections, privileges and immunities of the Trustee hereunder.

                                   ARTICLE XVI
         EXTENSION OF INTEREST PAYMENT PERIOD AND DEFERRAL OF MATURITY

                  SECTION 16.01.  Extension of Interest Payment Period.

                  (a) So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding [ ]
consecutive [semi-annual][quarterly] periods, including the first such
[semi-annual][quarterly] period during such extension period (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable; provided that no Extended Interest Payment
Period may extend beyond the Maturity Date. 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 16.01, will
bear interest thereon at the Coupon Rate compounded [semi-annually] [quarterly]
for each [semi-annual] [quarterly] period 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 Securities,
including any Additional Interest and Compounded Interest (together, "Deferred
Interest") that shall be payable to the holders of the Securities in whose names
the Securities are registered in the Security Register on the first record date
after the end of the Extended Interest Payment Period. Holders of the Securities
(and holders of the Trust Securities while Trust Securities are outstanding)
will be required to accrue interest income for United States federal income tax
purposes prior to the receipt of cash attributable to such income.

                  (b) During any such Extended Interest Payment Period, the
Company may not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock (which includes common and preferred stock), (ii) make
any payment of principal, interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company (including any Other Debentures)
that rank pari passu with or junior in right of payment to the Securities or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company (including any Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the Securities (other than (a) dividends or distributions in shares
of or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Capital Securities Guarantee, (d) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (e) 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 (f) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers or employees or any of the Company's dividend reinvestment plans).

                  (c) Before the expiration of any Extended Interest Payment
Period, the Company may further defer payments of interest by further extending
such period, provided that such period, together with all such previous and
further extensions within such Extended Interest Payment Period, shall not
exceed [ ] consecutive [semi-annual] [quarterly] periods, including the first
such [semi-annual] [quarterly] period of such Extended Interest Payment Period,
or extend beyond the Maturity Date of the Securities. Upon the expiration of any
Extended Interest Payment Period and the payment of all Deferred Interest then
due, the Company may elect to commence 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, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.

                  SECTION 16.02.  Notice of Extension.

                  (a) If the Property Trustee is the only registered holder of
the Securities at the time the Company selects an Extended Interest Payment
Period, the Company shall give written notice to the Administrators, the
Property Trustee and the Trustee of its election of such Extended Interest
Payment Period (or an extension thereof) at least [ ] Business Days before the
earlier of (i) the date on which distributions on the Trust Securities issued by
HSBC USA Capital Trust are payable except for the election to begin or extend
such Extended Interest Payment Period, or (ii) the date the Administrators are
required to give notice of the record date, or the date such Distributions are
payable, to any national securities exchange or to holders of the Capital
Securities issued by the Trust, but in any event at least [ ] Business Days
before such record date.

                  (b) If the Property Trustee is not the only holder of the
Securities at the time the Company selects an Extended Interest Payment Period,
the Company shall give the holders of the Securities and the Trustee written
notice of its selection of such Extended Interest Payment Period at least [ ]
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 any national securities exchange.

                  (c) The [semi-annual] [quarterly] period in which any notice
is given pursuant to paragraphs (a) or (b) of this Section 16.02 shall be
counted as one of the [ ] [semi-annual] [quarterly] periods permitted in the
maximum Extended Interest Payment Period permitted under Section 16.01. There is
no limitation on the number of times that the Company may elect to begin
Extended Interest Payment Period.

                  SECTION 16.03.  Deferral of Maturity.

                  If the Company does not pay all or any part of the principal
of the Securities at the Maturity Date, the obligation to make such payment at
the Maturity Date shall be deferred automatically until the first Business Day
after the date that falls six months after the Maturity Date. Any payment so
deferred will accrue interest at the Coupon Rate for the period of such deferral
and shall not be deemed to have become or be due prior to such first Business
Day for any purpose (including, without limitation, for the purposes of
ascertaining whether or not any Event of Default has occurred).

                  Bankers Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written .

                                             HSBC USA INC.

                                             By:
                                                 -----------------------------
                                             Name:
                                             Title:

                                             BANKERS TRUST COMPANY,
                                             as Trustee

                                             By:
                                                 -----------------------------
                                             Name:
                                             Title:

<PAGE>

                                    EXHIBIT A

                           (FORM OF FACE OF SECURITY)

                  [IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

                  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC")
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC (AND ANY PAYMENT
HEREON 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 IN AS MUCH AS SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

         [This capital security may not be purchased by an employee benefit plan
subject to the employee retirement income security act of 1974, as amended
("erisa"), a plan subject to section 4975 of the U.S. internal revenue code of
1986, as amended (the "Code"), an entity whose underlying assets include the
assets of any such plan, or a governmental or church plan which is subject to
any federal, state or local law that is substantially similar to the provisions
of section 406 of ERISA or section 4975 of the code.]

<PAGE>
                                  HSBC USA INC.

             [ ]% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

                                DUE [    ], [  ]

No.                                                               $[      ]

                  HSBC USA INC., a Maryland corporation (the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to the Securityholder or its
registered assigns, the principal sum of [ ] Dollars on [ ], [ ] (the "Maturity
Date" which is subject to deferral as set forth herein), unless previously
prepaid, and to pay interest on the outstanding principal amount hereof from [
], [ ], 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,
semi-annually (subject to deferral as set forth herein) in arrears on [ ] and [
] of each year, commencing [ ], [ ], 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 semi-annually. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which the principal of (or premium, if any) or interest on this Security
is payable is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with the same force and
effect as if made on such date. Capitalized terms used in this Security but not
defined herein shall have the meanings assigned to them in the Indenture.

                  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 Security (or one or more
Predecessor Securities, 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 first day of the month in which the relevant interest payment date
falls. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the holders on such regular record date
and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) 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 holders of Securities 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 Securities 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 interest on this
Security shall be payable at the office or agency of the Trustee in New York
City maintained for that purpose or at the office of such paying agent or paying
agents as the Company may designate from time to time in any coin or currency of
the United States of America that 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 (i) check mailed to the
holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the relevant record
date. Notwithstanding the foregoing, so long as the holder of this Security is
the Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Security will be made at such place and to such account as may
be designated by the Property Trustee.

                  The indebtedness evidenced by this Security 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 Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Security, 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.

                  This Security 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.

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

<PAGE>

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

Dated: [     ], [  ]

                                             HSBC USA INC.

                                             By:
                                                 -----------------------------
                                             Name:
                                             Title:

Corporate Seal
Attest:

By:
    -----------------------------
Name:
Title:

                     (FORM OF CERTIFICATE OF AUTHENTICATION)
                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Securities referred to in the
within-mentioned Indenture.

Dated: [     ], [  ]
                                             BANKERS TRUST COMPANY,
                                             as Trustee

                                             By:
                                                 -----------------------------
                                                 Authorized Signatory

<PAGE>

                          (FORM OF REVERSE OF SECURITY)

                  This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of [ ], [ ]
(the "Indenture"), duly executed and delivered between the Company and Bankers
Trust Company, as Trustee (the "Trustee"), to which Indenture 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 Securities.

                  Upon the occurrence and continuation of a Special Event, the
Company shall have the right , prior to [ ], [ ], to prepay this Security in
whole (but not in part) at the Special Event Prepayment Price. "Special Event
Prepayment Price" shall mean, with respect to any prepayment of the Securities
following a Special Event, an amount in cash equal to [the greater of (i)] 100%
of the principal amount of such Securities to be prepaid [or (ii) the sum, as
determined by a Quotation Agent, of the present values of [ ]% of the principal
amount of the Securities plus the remaining scheduled payments of interest
thereon from the prepayment date to and including the Initial Optional
Prepayment Date discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to the date of
such prepayment.]

                  In addition, the Company shall have the right to prepay this
Security, in whole or in part, at any time on or after [ ], [ ], at the Optional
Prepayment Price of [ ] % plus accrued and unpaid interest thereon (including
Additional Interest and Compounded Interest, if any) to the applicable date of
prepayment.

                  The Optional Prepayment Price or the Special Event Prepayment
Price, as the case requires, shall be paid prior to 12:00 noon, New York time,
on the date of such prepayment or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Prepayment Price by 10:00 a.m., New York City
time, on the date such Prepayment Price is to be paid. Any prepayment pursuant
to this paragraph will be made upon not less than 30 days nor more than 60 days
notice to the Securityholders. If the Securities are only partially prepaid by
the Company pursuant to an Optional Prepayment, the Securities will be prepaid
pro rata or by lot or by any other method utilized by the Trustee; provided that
if, at the time of prepayment, the Securities are registered as a Global
Security, the Depositary shall determine the particular Securities to be prepaid
in accordance with its procedures.

                  In the event of prepayment of this Security in part only, a
new Security or Securities for the unprepaid portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.

                  Notwithstanding the foregoing, any prepayment of Securities by
the Company shall be subject to the prior approval of the Board of Governors of
the Federal Reserve System of the United States of America (the "Federal
Reserve") and the Financial Supervisory Authority of the United Kingdom (the
"FSA"), if such approval is then required under capital guidelines or policies
of the Federal Reserve and the FSA, respectively.

                  In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Securities
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 a majority in aggregate
principal amount of the Securities 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 modifying in any manner the rights of the holders of the
Securities; provided, however, that, except as provided in Section 9.02 of the
Indenture, no such modification shall, without the consent of each holder of
Securities then outstanding and affected thereby, (i) change the Maturity Date
of any Securities, or reduce the principal amount of the Securities or any
prepayment premium thereon, or reduce the rate or extend the time of payment of
interest thereon, or make the principal of, or interest or premium on, the
Securities payable in any coin or currency other than U.S. dollars, or impair or
affect the right of any holder of the Securities to institute suit for payment
thereof without the consent of the holder or each Security so affected, or (ii)
reduce the percentage of the principal amount of the Securities, the holders of
which are required to consent to any such modification. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any of the Securities or
a default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Security and of
any Security issued in exchange heretofore 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 Security.

                  No reference herein to the Indenture and no provision of this
Security 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 Security at the time and place and at the
rate and in the money herein prescribed.

                  So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding [ ] consecutive
[semi-annual] [quarterly] periods, including the first such [semi-annual]
[quarterly] period during such extension period, but not to extend beyond the
Maturity Date of the Securities (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 Securities to the
extent that payment of such interest is enforceable under applicable law. Before
the termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed [ ] consecutive [semi-annual] [quarterly]
periods, including the first [semi-annual] [quarterly] period during such
Extended Interest Payment Period, or extend beyond the Maturity Date of the
Securities. Upon the expiration of any such Extended Interest Payment Period and
the payment of all accrued and unpaid interest and any additional amounts then
due, the Company may commence a new Extended Interest Payment Period, subject to
the foregoing requirements.

                  If the Company does not pay all or any part of the principal
of the Securities at the Maturity Date, the obligation to make such payment at
the Maturity Date shall be deferred automatically until the first Business Day
after the date that falls six months after the Maturity Date. Any payment so
deferred will accrue interest at the Coupon Rate for the period of such deferral
and shall not be deemed to have become or be due prior to such first Business
Day for any purpose (including, without limitation, for the purposes of
ascertaining whether or not any Event of Default has occurred).

                  The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or prepay, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or prepay any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Securities or (iii) make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company (including under Other Guarantees) if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a result of a
reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the exchange or
conversion provisions of such capital stock or the security being exchanged or
converted and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers or employees or any of the Company's dividend reinvestment plans) if at
such time (i) there shall have occurred any event of which the Company has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would constitute an Event of Default and (b) in respect of which the
Company shall not have taken reasonable steps to cure, (ii) the Company shall be
in default with respect to its payment of any obligations under the Capital
Securities Guarantee or (iii) the Company shall have given notice of its
election of the exercise of its right to extend the interest payment period as
provided in the Indenture and shall not have rescinded such notice, and any such
extension shall have commenced.

                  Subject to the prior approval of the Federal Reserve and the
FSA if such approval is then required under capital guidelines or policies of
the Federal Reserve and the FSA, respectively, the Company will have the right
at any time to liquidate the HSBC USA Capital Trust and cause the Securities to
be distributed to the holders of the Trust Securities in liquidation of the
Trust.

                  The Securities are issuable only in registered form without
coupons in denominations of $25.00 and any integral multiple thereof. As
provided in the Indenture and subject to the transfer restrictions limitations
as may be contained herein and therein from time to time, this Security is
transferable by the holder hereof on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities 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
Security, the Company, the Trustee, any paying agent and the registrar may deem
and treat the holder hereof as the absolute owner hereof (whether or not this
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Security 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 registrar shall be affected by any
notice to the contrary.

                  No recourse shall be had for the payment of the principal of
or premium, if any, or interest on this Security, 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 Person,
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.

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

                  THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.Exhibit 4(jj)

                            FIXED RATE SENIOR NOTE

REGISTERED                                                  REGISTERED No. R-1
U.S.$500,000,000                                              CUSIP: 617446HB8
                                                            ISIN: US617446HB86
                                                        COMMON CODE: 014595732

     Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
(as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate 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.

     Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this certificate may not be transferred except as
a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.

                       MORGAN STANLEY DEAN WITTER & CO.
                              5.80% NOTE DUE 2007

     Morgan Stanley Dean Witter & Co., a Delaware corporation (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to Cede & Co., or registered assigns, the principal sum of FIVE HUNDRED
MILLION United States Dollars (U.S.$500,000,000), on April 1, 2007 (the
"Maturity Date") (except to the extent redeemed prior to the Maturity Date),
and to pay interest thereon at the rate of 5.80% per annum from April 3, 2002,
until the principal hereof is paid or duly made available for payment,
semiannually in arrears on the 1st day of April and October in each year (each
such date, an "Interest Payment Date"), commencing on October 1, 2002, and on
the Maturity Date.

     Reference is hereby made to the further provisions of this certificate
set forth on the succeeding pages hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

<PAGE>

     IN WITNESS WHEREOF, Morgan Stanley Dean Witter & Co. has caused this
Registered Global Security to be duly executed.

DATED: April 3, 2002                    MORGAN STANLEY DEAN WITTER & CO.

                                        By:
                                           -----------------------------------
                                           Name:   Alexander C. Frank
                                           Title:  Treasurer

TRUSTEE'S CERTIFICATE
      OF AUTHENTICATION

This is one of the Securities referred
   to in the within-mentioned
   Senior Indenture.

JPMORGAN CHASE BANK,
      as Trustee

By:
    -----------------------------------------------
    Authorized Officer

                                       2

<PAGE>

                              Reverse of Security

     Interest on this Registered Global Security (as described below) will
accrue from and including the most recent Interest Payment Date to which
interest has been paid or duly provided for, or, if no interest has been paid
or duly provided for, from and including April 3, 2002, until, but excluding,
the date the principal hereof has been paid or duly made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the person in whose name this
Registered Global Security (or one or more predecessor Registered Global
Securities) is registered at the close of business on the fifteenth day of the
month preceding such Interest Payment Date (whether or not a Business Day (as
defined below)) (each such date, a "Record Date"). As used herein, "Business
Day" means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or regulation to close in The City of New York. Interest shall be computed
on the basis of a 360-day year of twelve 30-day months. Interest payments on
this Registered Global Security will include interest accrued to but excluding
the Interest Payment Dates or the Maturity Date (or any earlier redemption
date), as the case may be.

     In the case where an Interest Payment Date or the Maturity Date (or any
redemption date) does not fall on a Business Day, payment of interest,
premium, if any, or principal otherwise payable on such date need not be made
on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date or the Maturity
Date (or any such redemption date), and no interest on such payment shall
accrue for the period from and after the Interest Payment Date or the Maturity
Date (or any such redemption date) to such next succeeding Business Day.

     Payment of the principal of this Registered Global Security, any premium
and the interest due on the Maturity Date or on any redemption date will be
made upon surrender of this Registered Global Security at the office or agency
of the Issuer maintained for that purpose in the Borough of Manhattan, The
City of New York, or at such other paying agency as the Issuer may determine.
Payment of the principal of and interest on this Registered Global Security
will be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Issuer, interest may be paid by
wire transfer or by mailing checks for such interest payable to or upon the
written order of such Holder at its last address as it appears on the registry
books of the Issuer.

     This Registered Global Security is one of the duly authorized debt
securities of the Issuer (the "Securities" and, individually, a "Security")
issued or to be issued under and pursuant to an Amended and Restated Senior
Indenture dated as of May 1, 1999, between the Issuer and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as Trustee (the "Trustee," which
term includes any successor Trustee under the Senior Indenture) (as may be
amended or supplemented from time to time, the "Senior Indenture"), to which
Senior Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities of the Issuer, the Trustee and Holders of the Securities and
the terms upon which the Securities are, and are to be, authenticated and
delivered. The terms of the Senior

                                       3

<PAGE>

Indenture are hereby incorporated by reference herein. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption or
repayment provisions (if any), may be subject to different sinking, purchase
or analogous funds (if any) and may otherwise vary as provided in the Senior
Indenture. This security is a Registered Global Security of a series of
Securities designated as the 5.80% Notes Due 2007 of the Issuer (the "Notes").

     The Notes will not be subject to any sinking fund and will not be
repayable at the option of the Holder prior to maturity. The Notes may be
redeemed in whole or in part at the option of the Issuer at any time prior to
the Maturity Date, upon the giving of a notice of redemption as described
below, at the Redemption Price (as defined below), together with interest
accrued and unpaid hereon to the date of redemption. Notice of redemption
shall be mailed to the registered holders of the Registered Global Securities
designated for redemption by first-class mail at their addresses as the same
shall appear on the registry of the Issuer not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the conditions and
provisions of the Senior Indenture. In the event of redemption of this
Registered Global Security in part only, a new Registered Global Security or
Registered Global Securities for the amount of the unredeemed portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

     The "Redemption Price" as to any date of redemption shall be equal to the
greater of (i) 100% of the principal amount of the Notes to be redeemed on
such redemption date and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the Notes to be redeemed on
such redemption date (not including any portion of such payments of interest
accrued to the redemption date) discounted to the redemption date on a
semiannual basis (assuming a 360- day year consisting of twelve 30-day months)
at the Treasury Rate (as defined below) calculated as of the third Business
Day immediately preceding the applicable redemption date (the "Calculation
Date") plus 15 basis points. The Issuer shall give the Trustee notice of the
amount of the applicable Redemption Price promptly after the calculation
thereof, and the Trustee shall have no responsibility for such calculation.

     The "Treasury Rate" with respect to any Calculation Date shall be (i) the
yield, under the heading that represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication that is published weekly
by the Board of Governors of the Federal Reserve System and that establishes
yields on actively traded U.S. Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (as defined below); provided
that if no maturity is within three months before or after the Remaining Life
(as defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will 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 annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue
calculated using a price for the Comparable Treasury

                                       4

<PAGE>

Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Calculation Date.

     "Comparable Treasury Issue" means the U.S. Treasury security selected by
the Calculation Agent (as defined below) as having a maturity comparable to
the remaining term ("Remaining Life") of the Notes to be redeemed 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 such Notes.

     "Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations (as defined below) for such Calculation Date, after
excluding the highest and lowest Reference Treasury Dealer Quotations, or (2)
if the Calculation Agent obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.

     "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any Calculation Date, the
average, as determined by the Calculation Agent, 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 Calculation Agent at 5:00 p.m.,
New York City time, on the Calculation Date.

     "Reference Treasury Dealer" means (1) Morgan Stanley & Co. Incorporated
and its successors, provided, however, that if the foregoing shall cease to be
a primary U.S. government securities dealer in New York City (a "Primary
Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer, and (2) any other Primary Treasury Dealer selected by the
Calculation Agent after consultation with the Issuer.

     "Calculation Agent" means Morgan Stanley & Co. Incorporated, or if that
firm is unwilling or unable to select the Comparable Treasury Issue, an
investment banking institution of national standing appointed by the Trustee
after consultation with the Issuer.

     This Registered Global Security and all obligations of the Issuer
hereunder are direct, unsecured obligations of the Issuer and rank without
preference or priority among themselves and pari passu with all other existing
and future unsecured and unsubordinated indebtedness of the Issuer, subject to
certain statutory exceptions in the event of liquidation upon insolvency.

     This Registered Global Security, and any Registered Global Security or
Registered Global Securities issued upon transfer or exchange hereof, is
issuable only in fully registered form, without coupons, and in denominations
of U.S.$1,000 and any integral multiple of U.S.$1,000 in excess thereof.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in the Borough of Manhattan, The City of New York,
a register for the registration and transfer of Notes. Subject to the
limitations, terms and conditions set forth herein and in the Senior
Indenture, this Registered Global Security may be transferred at the aforesaid
office of the Trustee by

                                       5

<PAGE>

surrendering this Registered Global Security for cancellation, and thereupon
the Issuer shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees, in exchange herefor, a new Registered
Global Security or Registered Global Securities having identical terms and
provisions and having a like aggregate principal amount in authorized
denominations. Upon the occurrence of certain events specified in Section 2.08
of the Senior Indenture, this Registered Global Security is exchangeable at
the office of the Trustee for definitive registered Notes without coupons of
authorized denominations in an equal aggregate principal amount and having
identical terms and provisions as the surrendered Registered Global Security.

     All Registered Global Securities surrendered for transfer or exchange
shall be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to, the Issuer and the Trustee
and executed by the registered Holder or by the Holder's attorney duly
authorized in writing. The Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such exchange or registration of transfer.

     In case an Event of Default, as defined in the Senior Indenture, with
respect to the Notes shall have occurred and be continuing, the principal
hereof 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 Senior Indenture.

     The Senior Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Senior Indenture then Outstanding and affected, voting as one class, to add
any provisions to, or change in any manner or eliminate any of the provisions
of, such Senior Indenture or modify in any manner the rights of the Holders of
the Securities of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the Holder of each outstanding
Security affected thereby, (i) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption or
repayment thereof, or change the currency of payment thereof, or reduce the
amount of any original issue discount security payable upon acceleration or
provable in bankruptcy, or impair or affect the rights of any Holder to
institute suit for the payment thereof or (ii) reduce the aforesaid percentage
in principal amount of Securities of any series issued under such Senior
Indenture, the consent of the Holders of which is required for any such
modification. It is also provided in the Senior Indenture that, with respect
to certain defaults or Events of Default regarding the Securities of any
series, prior to any declaration accelerating the maturity of such Securities,
the Holders of a majority in aggregate principal amount Outstanding of the
Securities of all series with respect to which an Event of Default shall have
occurred and be continuing (voting as a single class) may, on behalf of the
Holders of all such Securities, waive any such past default or Event of
Default and its consequences. The preceding sentence shall not, however, apply
to any default in the payment of the principal of or interest on any of the
Securities. Any such consent or waiver by the Holder of this Registered Global
Security (unless revoked as provided in the Senior Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Registered Global Security and any Securities which may be

                                       6

<PAGE>

issued in exchange or substitution herefor or on registration of transfer
hereof, irrespective of whether or not any notation thereof is made upon this
Registered Global Security or such other Securities.

     No provision of this Registered Global Security or of the Senior
Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Registered Global Security at the time, place and rate, and
in the coin or currency, herein prescribed unless otherwise agreed between the
Issuer and the registered Holder of this Registered Global Security.

     The Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this
Registered Global Security (whether or not this Registered Global Security
shall be overdue and notwithstanding any notation of ownership or other
writing hereon), for the purpose of receiving payment of, or on account of,
the principal hereof and, subject to the provisions on the face hereof,
interest hereon, and for all other purposes, and none of the Issuer, the
Trustee or any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.

     No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Senior Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Issuer or of any successor corporation,
either directly or through the Issuer or any successor corporation, under any
rule of law, statute or constitutional provision or by the enforcement of
penalty or assessment or by any legal or equitable proceeding or otherwise,
all such liability being expressly waived and released by the acceptance
hereof and as part of the consideration for the issue hereof.

     This Registered Global Security shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New York.

     All terms used in this Registered Global Security, which are defined in
the Senior Indenture and not otherwise defined herein, shall have the meanings
assigned to them in the Senior Indenture.

     Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Registered Global Security shall not be
entitled to any benefit under the Senior Indenture or be valid or obligatory
for any purpose.

                                       7

<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

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[PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE]

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[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Registered Global Security, and all rights thereunder, hereby
irrevocably constituting and appointing

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attorney to transfer such security on the books of the Issuer, with full power
of substitution in the premises.

Dated:                                         Signature:
       ------------------------------------              ---------------------

NOTICE:  The signature to this assignment must correspond with the name as
         written upon the face of the within Registered Global Security in
         every particular without alteration or enlargement or any change
         whatsoever.

                                       8

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