Document:

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Exhibit 4.2

Eighth Supplemental Indenture

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

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

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

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

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

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

ARTICLE I

Definitions

     Section 1.1 Definition of Terms.

     Unless the context otherwise requires:

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

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

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

“Business Day” has the meaning set forth in Section 2.5(b).

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

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

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

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

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

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

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

“Fixed Rate Interest Period” has the meaning set forth in Section 2.5(a).

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

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

“Floating Rate Interest Period” has the meaning set forth in Section 2.5(c).

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

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

“London Business Day” has the meaning set forth in Section 2.5(b).

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

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

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

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

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

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

“Reference Banks” has the meaning set forth in Section 2.5(c).

“Telerate Page 3750” has the meaning set forth in Section 2.5(c).

ARTICLE II

General Terms And Conditions Of

The Notes

     Section 2.1 Designation and Principal Amount.

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

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Section 2.2 Maturity.

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

     Section 2.3 Form And Payment.

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

     Section 2.4 Depository Note.

     In connection with a Dissolution Event;

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

     Section 2.5 Interest.

	 	(a)	 	Each Note will bear interest at the rate of      % per annum (the “Fixed Coupon
Rate”) from the original date of issuance to but excluding December 15, 2015 (“Fixed
Rate Interest Period”), 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 Fixed Coupon Rate during the Fixed Coupon Rate Period, compounded
semiannually and payable (subject to the provisions of Article IV) semiannually in
arrears on            and            of each year (each, an “Fixed Rate
Interest Payment Date”), commencing on      , 2006 to the person in whose
name such Note or any predecessor Note is registered, at the close of business on the
Regular Record Date for such interest

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	 	 	 	installment, which shall be the close of business
on the Business Day next preceding that Fixed Rate Interest Payment Date. If pursuant
to the provisions of Section 2.11(c) of the Indenture the Notes are no longer
represented by a Depository Note, the Company may select a Regular Record Date for such
interest installment which shall be any date at least fifteen days before a Fixed Rate
Interest Payment Date.
	 
	 	(b)	 	The amount of Fixed Coupon Rate interest payable for any period during the
Fixed Coupon Rate Period will be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on the Notes is
not a Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such date.
“Business Day” means any day other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York and that is also a
London Business Day. “London Business Day” means any day on which dealing in deposits
in U.S. dollars are transacted in the London interbank market.
	 
	 	(c)	 	Commencing December 15, 2015, each Note, and any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) any overdue
installment of interest, will bear interest at a floating rate per annum equal to LIBOR
(as determined from time to time as provided below) plus      % (the “Floating Coupon
Rate”, and together with “Fixed Coupon Rate”, the “Coupon Rate”), such interest being
payable quarterly in arrears on each      ,        ,
and            of each year, beginning      , 2016 (each a “Floating
Rate Interest Payment Date”), until principal thereof becomes due and payable. Interest
payable on each Floating Rate Interest Payment Date will include interest accrued from
and including      , 2015 to but excluding the first Floating Rate Interest Payment
Date, or from the most recent Floating Rate Interest Payment Date to which interest has
been paid or duly provided for, but excluding the next Floating Rate Interest Payment
Date (each a “Floating Rate Interest Period”). The interest payment at maturity will
include interest accrued to but excluding the maturity date and will be payable to the
Person to whom principal is payable. The interest so payable, and punctually paid or
duly provided for, on any Floating Rate Interest Payment Date will, as provided in the
Indenture, be paid to the Holder of this Note (or one or more Predecessor Notes) of
record at the close of business on the Regular Record Date for such interest, which
shall be the close of business on the Business Day next preceding that Fixed Rate
Interest Payment Date except that interest payable at maturity shall be paid to the
same Person to whom the principal of this Note is payable. Interest paid on a Floating
Rate Interest Payment Date will be computed on the basis of the actual number of days
in the applicable Interest Period divided by 360. If a Floating Rate Interest Payment
Date is not a Business Day, such Floating Rate Interest Payment Date shall be postponed
to the next succeeding Business Day unless such day falls in the next calendar month,
in which case such Floating Rate Interest Payment Date shall be the immediately
preceding day that is not a Business Day.

     “LIBOR” for each Floating Rate Interest Period will be determined by the Company
in accordance with the following provisions:

     (i) On each second London Business Day preceding the first day of any Floating
Rate Interest Period (each an “Interest Determination Date”), the Company will
ascertain the offered rate for three-month deposits in U.S. dollars in the London
interbank market, which appears on the Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination Date.

     (ii) If such rate does not appear on the Telerate Page 3750, or the Telerate
Page 3750 is unavailable, the Company will request four major banks in the London
interbank market (the “Reference Banks”) to provide the Company with their offered
quotation (expressed as a rate per annum) for three-month deposits in U.S. dollars to
leading banks in the London interbank market, in a principal amount equal to an
amount of not less

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than $1 million that is representative for a single transaction in
such market at such time, at approximately 11:00 a.m. (London time) on the Interest
Determination Date. If at least two such quotations are provided, LIBOR in respect
of that Interest Determination Date will be the arithmetic mean of such quotations.

     (iii) If less than two of the Reference Banks provide the Company with such
offered quotations, LIBOR in respect of that Interest Determination Date will be the
arithmetic mean of the rates quoted by three major banks in The City of New York
selected by the Company at approximately 11:00 a.m., New York City time, on that
Interest Determination Date for three-month loans in U.S. dollars to leading European
banks, in a principal amount equal to an amount of not less than $1 million that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Company are not quoting as
mentioned in this sentence, LIBOR will be LIBOR in effect on such Interest
Determination Date.

     “Telerate Page 3750” means the display designated as page “3750” on Moneyline
Telerate (or such other page as may replace the 3750 page on that service or such
other service or services as may be nominated by the British Bankers’ Association for
the purpose of displaying London interbank offered rates for U.S. dollar deposits).

	 	(d)	 	If at any time while the Property Trustee is the Holder of any Notes, the Trust
or the Property Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed by the
United States, or any other taxing authority, then, in any case, the Company will pay
as additional interest (“Additional Interest”) on the Notes held by the Property
Trustee, such additional amounts as shall be required so that the net amounts received
and retained by the Trust and the Property Trustee after paying such taxes, duties
assessments or other governmental charges will be equal to the amounts the Trust and
the Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.

ARTICLE III

Redemption Of The Notes And 

Acceleration Of Maturity

     Section 3.1 Tax Event Redemption.

     If a Tax Event has occurred and is continuing and:

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

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

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

Section 3.2 Optional Redemption By Company.

	 	(a)	 	Subject to the provisions of Article III of the Indenture and to Section 3.2(b)
hereof, the Company shall have the right to redeem the Notes, in whole or in part, from
time to time, on or after      , 2015, at the Redemption Price. Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60 days’
notice to the registered Holder of the Notes, at the Redemption Price. If the Notes are
only partially redeemed pursuant to this Section 3.2, the Notes will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; provided, that if at the
time of redemption, the Notes are registered as a Depository Note, the Depository shall
determine by lot the principal amount of such Notes held by each Holder to be redeemed.
	 
	 	(b)	 	If a partial redemption of the Notes would result in the delisting of the
Capital Securities issued by the Trust from any national securities exchange or other
organization on which the Capital Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Notes in whole.

     Section 3.3 No Sinking Fund.

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

     Section 3.4 Conditional Right to Advance Maturity.

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

     Section 3.5 Notice of Advancement of Maturity Date.

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

ARTICLE IV

Extension Of Interest Payment Period

     Section 4.1 Extension of Interest Payment Period.

     The Company shall have the right, at any time during the term of the Notes, from time to time
to defer the payment of interest by extending the interest payment period of such Notes for up to
10 consecutive semiannual periods or 20 consecutive quarters, as applicable, or no more than 5
years in the aggregate (the “Extended Interest Payment Period”), provided that no Extended
Interest Payment Period may extend beyond the Maturity Date of the Notes. To the extent permitted
by applicable law, interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon at the applicable
Coupon Rate, compounded semiannually or quarterly as applicable, for each semiannual period or
quarter of the Extended Interest Payment Period (“Compounded Interest”). At the end of the Extended

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Interest Payment Period the Company shall pay all interest accrued and unpaid on the Notes
including any Additional Interest and Compounded Interest (“Deferred Interest”) which shall be
payable to the Holders of the Notes in whose names the Notes are registered in the Note Register on
the first record date after the end of the Extended Interest Payment Period. Before the termination
of any Extended Interest Payment Period, the Company may further extend such period, provided that
such period together with all such further extensions thereof shall not exceed 10 consecutive
semiannual periods or 20 consecutive quarters, as applicable, or more than 5 years in the aggregate
and provided further that no Extended Interest Payment Period may extend beyond the Maturity Date
of the Notes. Upon the termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may select a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof.

     Section 4.2 Notice of Extension.

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

ARTICLE V

Expenses And Guarantee

     Section 5.1 Payment of Expenses.

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

	 	(a)	 	pay for all costs and expenses relating to the offering, sale and issuance of
the Notes, including commissions to the underwriters payable pursuant to the
Underwriting Agreement and the Pricing Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 8.07 of the Indenture;
	 
	 	(b)	 	pay for all costs and expenses of the Trust (including, but not limited to,
costs and expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions to the underwriters in
connection therewith), the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation
	 
	 	 	 	of the Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying

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	 	 	 	agent(s), registrar(s), transfer
agent(s), travel expenses and costs and expenses incurred in connection with the
acquisition, financing, and disposition of Trust assets); and
	 
	 	(c)	 	pay any and all taxes (other than United States withholding taxes attributable
to the Trust or its assets) and all liabilities, costs and expenses with respect to
such taxes of the Trust.

ARTICLE VI

Subordination

     Section 6.1 Agreement to Subordinate.

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

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

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

     Section 6.2 Default on Senior Indebtedness.

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

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

     Section 6.3 Liquidation; Dissolution; Bankruptcy.

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

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instruments evidencing such Senior Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money’s
worth, after giving effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness before any payment or distribution is made to the Holders of Notes or to the
Trustee.

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

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

     Section 6.4 Subordination.

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

10

 

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

     Section 6.5 Trustee to Effectuate Subordination.

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

     Section 6.6 Notice by the Company.

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

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

11

 

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

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

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

     Section 6.8 Subordination May Not Be Impaired.

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

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

ARTICLE VII

Covenants

     Section 7.1 Listing on Exchanges.

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

     Section 7.2 Limitation on Dividends; Transactions with Affiliates.

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

12

 

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

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

     Section 7.3 Covenants as to the Trust.

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

ARTICLE VIII

Form of Note

     Section 8.1 Form of Note.

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

13

 

(FORM OF FACE OF NOTE)

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

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

	 	 	 	 	 
	No.

	 	 	$	 
	CUSIP No.
	 	 	 	 

HSBC FINANCE CORPORATION

JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTE DUE      , 2035

     HSBC Finance Corporation, a Delaware corporation (the “Company”, which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ______________________ or registered assigns, the
principal sum of $_____________ Dollars on      , 2035, and to pay interest on said
principal sum (i) from      , 2005 or from the most recent interest payment date (each
such date, a “Fixed Rate Interest Payment Date”) to which interest has been paid or duly provided
for to but excluding      ,2015, semiannually (subject to deferral as set forth herein) in
arrears on            and            of each year commencing      , 2006, at the rate of
% per annum, 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 semiannually and (ii) from ..........,
2015, or from the most recent Floating Rate Interest Payment Date (as defined herein) to which
interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on      ,        , and            of each year (beginning on
        , 2016) until the principal hereof shall have become due (each a “Floating Rate Interest Payment
Date”, together with Fixed Rate Interest Payment Date, each an “Interest Payment Date”) and
payable, at a floating rate per annum equal to LIBOR (as determined from time to time as provided
on the reverse hereof) plus      %, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum, compounded quarterly. The amount of
interest payable on any Fixed Rate Interest Payment Date shall be computed on the basis of a
360-day year of twelve 30-day months. The amount of interest payable on any Floating Interest Rate
Payment Date shall be computed on the basis of the actual number of days in the applicable Floating
Rate Period (as defined on the reverse hereof) divided by 360. In the event that any date on which
interest is payable on this Note is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided
in the Indenture, be paid to the person in whose name this Note (or one or more Predecessor Notes,
as defined in said Indenture) is registered at the close of business on the Regular Record Date for
such interest installment [which shall be the close of business on the day preceding such Interest
Payment Date]. [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE INDENTURE THE NOTES ARE NO
LONGER REPRESENTED BY A Depository Note — which shall be the close of business on the fifteenth
day preceding such Interest Payment Date.] Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable

14

 

to the registered Holders on such Regular
Record Date, and may be paid to the person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to the registered
Holders of this series of Notes not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any)
and the interest on this Note shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the registered Holder at such
address as shall appear in the Note Register. Notwithstanding the foregoing, so long as the Holder
of this Note is the Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Note will be made at such place and to such account as may be designated by the
Property Trustee.

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

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

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

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

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

     Dated
____________________________________________________________________________________________________

     HSBC FINANCE CORPORATION

     By _______________________________________________________________________________________________________

     Attest

     By
_______________________________________________________________________________________________________

                                        
                                                         Assistant Secretary

15

 

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

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

     J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

	 	 	 	 	 
	_____________________________

as Trustee

	 	or
	 	_____________________________
as Authentication Agent
	 
	By
_____________________________
             Authorized Signatory

	 	 	 	By
_____________________________
             Authorized Signatory
	 
	 

	 	 	 	 

16

 

(FORM OF REVERSE OF NOTE)

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

     “LIBOR” for each Floating Rate Interest Period (as defined below) will be determined by the Company
in accordance with the following provisions:

     (i) On each second London Business Day preceding the first day of any Floating Rate Interest
Period (each an “Interest Determination Date”), the Company will ascertain the offered rate for
three-month deposits in U.S. dollars in the London interbank market, which appears on the Telerate
Page 3750 as of 11:00 a.m. (London time) on such Interest Determination Date.

     (ii) If such rate does not appear on the Telerate Page 3750, or the Telerate Page 3750 is
unavailable, the Company will request four major banks in the London interbank market (the
“Reference Banks”) to provide the Company with their offered quotation (expressed as a rate
per annum) for three-month deposits in U.S. dollars to leading banks in the London interbank
market, in a principal amount equal to an amount of not less than $1 million that is representative
for a single transaction in such market at such time, at approximately 11:00 a.m. (London time) on
the Interest Determination Date. If at least two such quotations are provided, LIBOR in respect of
that Interest Determination Date will be the arithmetic mean of such quotations.

     (iii) If less than two of the Reference Banks provide the Company with such offered
quotations, LIBOR in respect of that Interest Determination Date will be the arithmetic mean of the
rates quoted by three major banks in The City of New York selected by the Company at approximately
11:00 a.m., New York City time, on that Interest Determination Date for three-month loans in U.S.
dollars to leading European banks, in a principal amount equal to an amount of not less than $1
million that is representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Company are not quoting as mentioned in
this sentence, LIBOR will be LIBOR in effect on such Interest Determination Date.

     “Floating Rate Interest Period” shall mean the period beginning on and including      ,
2015 to but excluding the first Floating Rate Interest Payment Date and each successive period from
and including a Floating Rate Interest Payment Date to but excluding the next Floating Rate
Interest Payment Date or maturity date, as the case may be.

     “Telerate Page 3750” means the display designated as page “3750” on Moneyline Telerate (or
such other page as may replace the 3750 page on that service or such other service or services as
may be nominated by the British Bankers’ Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits).

     In the event of the occurrence and continuation of a Tax Event, in certain circumstances this
Note may become due and payable at the redemption price set forth below (the “Redemption Price”).
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines. The Redemption Price shall be equal
to 100% of the principal amount plus any accrued but unpaid interest thereon to the date of such
redemption. In addition, the Company shall have the right to redeem this Note at the option of the
Company, without premium or penalty, in whole or in part at any time on or after      , 2015,
at the Redemption Price (an “Optional Redemption”). Any redemption pursuant to this paragraph will
be made upon not less than 30 nor more than 60 days’ notice, at the Redemption Price. If the Notes

17

 

are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be
redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that if, at
the time of redemption, the Notes are registered as a Depository Note, the Depository shall
determine by lot the principal amount of such Notes held by each Holder to be redeemed.

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

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

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

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

     The Company shall have the right at any time during the term of the Notes from time to time to
extend the interest payment period of such Notes to up to 10 semiannual periods or 20 consecutive
quarters, as applicable, or no more than 5 years in the aggregate (an “Extended Interest Payment
Period”), at the end of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Notes to the extent that payment of
such interest is enforceable under applicable law), provided that no Extended Interest Payment
Period may extend beyond the Maturity Date of the Notes. Before the termination of any such
Extended Interest Payment Period, the Company may further extend such Extended Interest Payment
Period, provided that such Extended Interest Payment Period together with all such further
extensions thereof shall not exceed 10 consecutive semiannual periods or 20 consecutive quarters,
as applicable, or more than 5 years in the aggregate and provided further that no Extended Interest
Payment Period may extend beyond the Maturity Date of the Notes. At the termination of any such
Extended Interest Payment Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may select a new Extended Interest Payment Period.

     As provided in the Indenture and subject to certain limitations therein set forth, this Note
is transferable by the registered Holder hereof on the Note Register of the Company, upon surrender
of this Note for registration of transfer at the office or agency

18

 

of the Company in Chicago,
Illinois accompanied by written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge payable in relation
thereto.

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

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

     The notes of this series are issuable only in registered form without coupons in denominations
of $100,000 and any integral multiple thereof. This Depository Note is exchangeable for Notes in
definitive form only under certain limited circumstances set forth in the Indenture. Notes of this
series so issued are issuable only in registered form without coupons in denominations of $100,000
and any integral multiple thereof. As provided in the Indenture and subject to certain limitations
herein and therein set forth, Notes of this series so issued are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination, as requested by
the Holder surrendering the same.

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

19

 

ARTICLE IX

Additional Event of Default; Modification and Waiver

     Section 9.1 Additional Event of Default.

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

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

20

 

Section 9.2 MODIFICATION AND WAIVER.

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

ARTICLE X

Original Issue of Notes

     Section 10.1 Original Issue of Notes.

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

ARTICLE XI

Miscellaneous

     Section 11.1 Ratification of Indenture.

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

     Section 11.2 Trustee Not Responsible for Recitals.

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

     Section 11.3 Governing Law.

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

     Section 11.4 Separability.

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

21

 

     Section 11.5 Counterparts.

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

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

	 	 	 	 	 
	 	HSBC FINANCE CORPORATION

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

Attest:

__________________________________

William H. Kesler

Vice President

	 	 	 	 	 
	 	J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	 
 	 
	 	 	  	 
	 	 	 	 
	 

22exv4w3

 

Exhibit 4.3

     DECLARATION OF TRUST, dated as of September 15, 2005, among HSBC Finance Corporation, a
Delaware corporation, as Sponsor, and BNY Midwest Trust Company, The Bank of New York (Delaware),
William H. Kesler, Beverley A. Sibblies and Dennis J. Mickey, as Trustees. The Sponsor and the
Trustees hereby agree as follows:

     1. The trust created hereby shall be known as “HSBC Finance Capital Trust IX”, in which name
the Trustees, or the Sponsor to the extent provided herein, may conduct the business of the Trust,
make and execute contracts, and sue and be sued.

     2. The Sponsor hereby assigns, transfers, conveys and sets over to the Trustees the sum of
$10. The Trustees hereby acknowledge receipt of such amount in trust from the Sponsor, which
amount shall constitute the initial trust estate. The Trustees hereby declare that they will hold
the trust estate in trust for the Sponsor. It is the intention of the parties hereto that the
Trust created hereby constitutes a statutory trust under Chapter 38 of title 12 of the Delaware
Code, 12 Del. C. §§3801 et seq. (the “Statutory Trust Act”), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Delaware Secretary of State substantially in the form attached
hereto or in such other form as the Trustees may approve.

     3. The Sponsor and the Trustees will enter into an amended and restated Declaration of Trust,
satisfactory to each such party and substantially in the form included as Exhibit 4(d) to the 1933
Act Registration Statement referred to below, or in such other form as the Trustees may approve, to
provide for the contemplated operation of the Trust created hereby and the issuance of the Capital
Securities and common interests referred to therein. Prior to the execution and delivery of such
amended and restated Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect of the trust estate, except as otherwise required by applicable law or as
may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise. However, notwithstanding the foregoing, all Trustees may
take all actions deemed proper as are necessary to effect the transactions contemplated herein.

     4. The Sponsor and the Trustees hereby authorize and direct the Sponsor, as the agent of the
Trust, (i) to file with the Securities and Exchange Commission (the “Commission”) and execute, in
each case on behalf of the Trust, (a) the Registration Statement on Form S-3 (the “1933 Act
Registration Statement”) including pre-effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities Act of 1933, as amended, of the
Capital Securities of the Trust and (b) a Registration Statement on Form 8-A (the “1934 Act
Registration Statement”) (including all pre-effective and post-effective amendments thereto)
relating to the Registration of the Capital Securities of the Trust under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to file with The New York Stock Exchange and
execute on behalf of the Trust a listing application and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or desirable to cause the
Capital Securities of the Trust to be listed on The New York Stock Exchange; (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Capital Securities under the securities or “Blue Sky” laws
of such jurisdictions as the Sponsor, on behalf of the Trust, may deem

 

 

necessary or desirable; (iv)
to execute and deliver letters or documents to, or instruments for filing with, a depository
relating to the Capital Securities of the Trust; and (v) to execute, deliver and perform on behalf
of the Trust one or more underwriting agreements, dealer manager agreements, escrow agreements and
other related agreements providing for or relating to the sale of the Capital Securities of the
Trust. The Trustees further hereby ratify and approve all actions having previously been taken
with respect to the foregoing. In the event that any filing referred to in clauses (i) — (iii)
above is required by the rules and regulations of the Commission, The New York Stock Exchange or
state securities or blue sky laws or is advised by the Sponsor, to be executed on behalf of the
Trust by the Trustees, William H. Kesler, Beverley A. Sibblies and Dennis J. Mickey, in their
capacities as Trustees of the Trust, are hereby authorized and directed to join in any such filing
and to execute on behalf of the Trust any and all of the foregoing, it being understood that
neither The Bank of New York (Delaware) or BNY Midwest Trust Company in its capacity as Trustee of
the Trust, shall be required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, The New York Stock
Exchange or state securities or blue sky laws. In connection with all of the foregoing, the
Sponsor and each such Trustee, solely in its capacity as Trustee of the Trust, hereby constitutes
and appoints Patrick D. Schwartz, L.S. Mattenson, Michael J. Forde and Karen P.
Buschardt-Pisarczyk, and each of them, as his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and resubstitution, for the Sponsor
or such Trustee or in the Sponsor’s or such Trustee’s name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, shall do or cause to be done by virtue hereof.

     5. This Declaration of Trust may be executed in one or more counterparts.

     6. The number of Trustees initially shall be five (5) and thereafter the number of Trustees
shall be such number as shall be fixed from time to time by a written instrument signed by the
Sponsor which may increase or decrease the number of Trustees; provided, however, that the number
of Trustees shall in no event be less than three (3); and provided, further that to the extent
required by the Statutory Trust Act, one Trustee shall either be a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which has its principal place of
business in the State of Delaware. Subject to the foregoing, the Sponsor is entitled to appoint or
remove without cause any Trustee at any time. The Trustees may resign upon thirty days prior
notice to the Sponsor; provided, however, that no resignation of The Bank of New York (Delaware)
shall be effective until a successor Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such successor Delaware Trustee and delivered to the Trust,
the Sponsor and The Bank of New York (Delaware).

	     7.	 	(a) To the fullest extent permitted by applicable law, the Sponsor agrees to indemnify the
Trustees and any officers, directors, shareholders, members,
partners, employees,

 

 

	       	 	representatives, nominees, custodians or agents of the Trustees (each of such persons being
referred to as an “Indemnified Person”) for, and to hold each Indemnified Person 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 the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and expenses) of
defending itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this paragraph 7 shall survive the termination of this Declaration.

(b) The Indemnified Persons shall not be liable, responsible or accountable in damages or
otherwise to the Trust, the Sponsor, the Trustees or any holder of the Capital Securities
for any loss, damage or claim incurred by reason of any act or omission performed or omitted
by the Indemnified Persons in good faith on behalf of the Trust and in a manner the
Indemnified Persons reasonably believed to be within the scope of authority conferred on the
Indemnified Persons by this Declaration or by law, except that the Indemnified Persons shall
be liable for any such loss, damage or claim incurred by reason of the Indemnified Person’s
negligence or bad faith with respect to such acts or omissions.

(c) The Indemnified Persons shall be fully protected in relying in good faith upon the
records of the Trust and upon such information, opinions, reports or statements presented to
the Trust by any person as to matters the Indemnified Persons reasonably believes are within
such other person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust.

(d) The provisions of this Section shall survive the termination of this Declaration or
the earlier resignation or removal of the Indemnified Persons.

     8. This Declaration shall be governed by, and construed in accordance with, the laws of the
State of Delaware (without regard to conflict of laws principles).

     9. The Trust may dissolve without issuing any Capital Securities at the election of the
Sponsor.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Declaration of Trust to be duly
executed as of the day and year first above written.

	 	 	 	 	 
	 	HSBC FINANCE CORPORATION

as Sponsor

 	 
	 	By:  	/s/ EDGAR D. ANCONA
 	 
	 	 	Name:  	Edgar D. Ancona 	 
	 	 	Title:  	Senior Vice President - Treasurer 	 
	 
	 
	 	BNY MIDWEST TRUST COMPANY,

as Trustee

 	 
	 	By:  	/s/ D. G. DONOVAN
 	 
	 	 	Name:  	D. G. Donovan 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	THE BANK OF NEW YORK (DELAWARE),

as Trustee

 	 
	 	By:  	/s/ JAMES LONGSHAW
 	 
	 	 	Name:  	James Longshaw 	 
	 	 	Title:  	SVP 	 
	 
	 	 	 
	 	                                         /s/ WILLIAM H. KESLER
 	 
	 	William H. Kesler 	 
	 	as Trustee 	 
	 
	 	 	 
	 	                                         /s/ DENNIS J. MICKEY
 	 
	 	Dennis J. Mickey 	 
	 	as Trustee 	 
	 
	 	 	 
	 	                                          /s/ BEVERLEY A. SIBBLIES
 	 
	 	Beverley A. Sibblies      	 
	 	as Trustee

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