HSBC USA INC. SENIOR DEBT SECURITIES DISTRIBUTION AGREEMENT
HSBC
USA INC.
SENIOR
DEBT SECURITIES
June
10,
2008
To
the
Agents listed on the signature page hereof, and each person that shall
have become an Agent as provided in Section 2(d) hereof:
Dear
Sirs:
HSBC
USA
Inc., a Maryland corporation (the “Company”), confirms its agreement with the
Agents with respect to the issue and sale from time to time by the Company
(each, an “offering”) of its senior debt Securities (the “Securities”). Certain
of the Securities may constitute exchange traded notes issued under the ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (“▇▇▇▇▇▇▇ ▇▇▇▇▇”)
ELEMENTSS M
Platform
(“ELEMENTS”).
The
Securities will be issued as senior indebtedness of the Company. The Securities
will be issued pursuant to the provisions of an indenture, dated as of March
31,
2006 between the Company and Deutsche Bank Trust Company Americas , as trustee
(the “Trustee”), (as it may be supplemented or amended from time to time, the
“Indenture”). The Securities will have the maturities, interest rates,
redemption provisions, if any, and other terms as set forth in supplements
to
the Prospectus referred to below and in Term Sheets (as defined
below).
On
the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, you each agree, upon such appointment,
to
use reasonable efforts to solicit and receive offers to purchase Securities
upon
terms acceptable to the Company at such times and in such amounts as the Company
shall from time to time specify. In addition, you may also purchase Securities
as principal pursuant to the terms of a terms agreement relating to such sale
(a
“Terms Agreement”) in accordance with the provisions of Section 2(b)
hereof.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement (No. 333-133007), including a prospectus, relating
to
the Securities. Such registration statement, including the information
incorporated by reference therein and the exhibits thereto, as amended at any
Representation Date (as hereinafter defined), is hereinafter referred to as
the
“Registration Statement.” The prospectus included in the Registration Statement,
as supplemented by a prospectus supplement and one or more product supplements
and/or pricing supplements setting forth the terms of the Securities, including
all material incorporated by reference therein, in the form in which such
prospectus, prospectus supplement and product supplement(s) and/or final pricing
supplement have most recently been filed, or transmitted for filing, with the
Commission pursuant to paragraph (b) of Rule 424 of the rules and regulations
adopted by the Commission under the Securities Act of 1933 (the “Securities
Act”), is hereinafter referred to as the “Prospectus.” The terms “supplement,”
“amendment” and “amend” as used herein shall include all documents deemed to be
incorporated by reference in the Prospectus that are filed subsequent to the
date of the Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
SM ELEMENTSSM
is a
service ▇▇▇▇ of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.
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1. Representations
and Warranties.
The
Company represents and warrants to and agrees with each Agent as of the
Commencement Date (as hereinafter defined), as of each date on which you solicit
offers to purchase Securities, as of each date on which the Company accepts
an
offer to purchase Securities (including any purchase by you as principal
pursuant to a Terms Agreement), as of each Time of Sale (as hereinafter
defined), as of each date the Company issues and delivers Securities, and as
of
each date the Registration Statement or the Prospectus is amended or
supplemented, as follows (each, a “Representation Date”), it being understood
that such representations, warranties and agreements shall be deemed to relate
to the Registration Statement and the Prospectus, each as amended or
supplemented to each such date:
(a) The
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for
such purpose are pending before or threatened by the Commission; and no
proceeding pursuant to Section 8A of the Securities Act against the Company
or
any offering of the Securities has been initiated or threatened by the
Commission. The Company is not an “ineligible issuer” and is a “well-known
seasoned issuer,” in each case as defined in Rule 405 under the Securities Act,
in connection with the offering of the Securities.
(b) (i)
On
the date it became effective under the Securities Act, the Registration
Statement conformed in all respects to the requirements of the Securities Act,
the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) and the
rules and regulations adopted by the Commission under the Securities Act and
the
Trust Indenture Act (the “Rules and Regulations”) and did not include any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein not
misleading;
(ii) on
the
Commencement Date and on each other Representation Date, the Registration
Statement and the Prospectus will conform in all respects to the requirements
of
the Securities Act, the Trust Indenture Act and the Rules and Regulations and
will not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; and
(iii) at
each
of the times of amending or supplementing referred to in Section 5 hereof,
the
Registration Statement and the Prospectus as then amended or supplemented,
will
conform in all respects to the requirements of the Securities Act, the Trust
Indenture Act and the Rules and Regulations, and will not include any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein, in the case of
the
Prospectus in the light of the circumstances in which they were made, not
misleading,
except
that no representation is made with respect to statements in or omissions from
the Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by any Agent specifically
for
use therein or as to any Statement of Eligibility of a trustee under the Trust
Indenture Act filed as an exhibit to the Registration Statement.
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(c) The
documents incorporated by reference in the Prospectus as amended or
supplemented, when they became effective or were filed with the Commission,
as
the case may be, conformed in all material respects to the requirements of
the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading;
and
any further documents so filed and incorporated by reference in the Prospectus
and any amendments or supplements thereto, when they become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable,
and
the rules and regulations of the Commission thereunder and will not contain
an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Agent for use in the Prospectus as
amended or supplemented to relate to a particular issuance of
Securities;
(d) The
financial statements of the Company and its consolidated subsidiaries included
in the Registration Statement and Prospectus fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
on a consolidated basis at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved, except as
disclosed therein.
(e) KPMG
LLP,
the accountants who certified the financial statements of the Company and its
consolidated subsidiaries included in the Registration Statement and Prospectus,
are independent registered public accountants as required by the Securities
Act
and the rules thereunder, including Rule 2-01 of Regulation S-X.
(f) The
Time
of Sale Information at each Time of Sale and at the Commencement Date will
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, that the
Company makes no representation and warranty with respect to any statements
or
omissions made in reliance upon and in conformity with information relating
to
any Agent furnished to the Company in writing by such Agent expressly for use
in
such Time of Sale Information.
“Time
of
Sale” shall mean, with respect to any sale of Securities hereunder, any time at
or prior to the confirmation of the sale of such Securities.
“Time
of
Sale Information” shall mean the Prospectus most recently filed or transmitted
for filing as of such Time of Sale, each prospectus supplement to such
Prospectus that relates to the sale of Securities confirmed at such Time of
Sale
that has been filed or transmitted for filing as of such Time of Sale, each
preliminary prospectus or Term Sheet (as defined below), if any, that relates
to
the sale of Securities confirmed at such Time of Sale that has been filed or
transmitted for filing as of such Time of Sale and each “Free Writing
Prospectus” (as defined pursuant to Rule 405 under the Securities Act) that has
been prepared by or on behalf of the Company relating to such
Securities.
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(g) With
respect to an issuance of Securities through you, the Company (including its
agents and representatives, other than the Agents in their capacity as such
and
selected dealers engaged by the Agents) has not made, used, prepared,
authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any written communication (as defined in Rule 405 under
the
Securities Act) that constitutes an offer to sell or solicitation of an offer
to
buy the Securities, other than a Free Writing Prospectus approved in advance
by
you. At each Time of Sale, each such Free Writing Prospectus included in the
applicable Time of Sale Information complied in all material respects with
the
Securities Act, has been filed in accordance with the Securities Act (to the
extent required thereby), did not conflict with the information contained in
the
Registration Statement and Prospectus (but may provide information that is
different from or additional or supplemental to that in the Registration
Statement and Prospectus) and, when taken together with the Prospectus filed
prior to such Free Writing Prospectus, did not, and will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, that the Company makes no
representation and warranty with respect to any statements or omissions made
in
any such Free Writing Prospectus in reliance upon and in conformity with
information relating to any Agent furnished to the Company in writing by such
Agent for use in such Free Writing Prospectus.
(h) The
Company and each of its significant subsidiaries, as defined in Rule 1-02 of
Regulation S-X of the Commission (“significant subsidiaries”) has been duly
organized and is validly existing as a corporation under the laws of their
respective jurisdictions of incorporation, and has the power and authority
(corporate and other) to own its properties and conduct its businesses as
described in the Prospectus. The Company is duly registered as a Bank Holding
Company under the Bank Holding Company Act of 1956, as amended. The Company
and
each significant subsidiary is licensed, registered or qualified to conduct
the
business in which it is engaged in each jurisdiction where the conduct of its
business or the location of its properties requires such licenses, registration
or qualification, except for such jurisdictions where the failure to hold such
licenses or to so register or qualify will not have a Material Adverse Effect
(as hereinafter defined). All of the issued and outstanding stock of each
significant subsidiary has been duly authorized and validly issued and is fully
paid and non-assessable, and the capital stock of each significant subsidiary
owned by the Company, directly or through its subsidiaries, is owned free and
clear of any mortgage, pledge, lien, encumbrance, claim or equity.
(i) Each
of
this Agreement and any applicable Written Terms Agreement (as hereinafter
defined) has been duly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligations of the Company, enforceable
in accordance with its respective terms except as the enforceability thereof
(i)
may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors’ rights generally and (ii)
is subject to general principles of equity, regardless of whether such
enforceability is considered at a proceeding in equity or at law.
(j) The
Indenture has been duly qualified under the Trust Indenture Act and has been
duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its terms
except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors’ rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered at a
proceeding in equity or at law.
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(k) The
forms
of Securities have been duly authorized and established in conformity with
the
provisions of the Indenture; the Securities to be issued and sold by the Company
hereunder have been duly authorized for issuance and sale and, when the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and duly paid for by the purchasers
thereof, such Securities will have been duly executed, authenticated, issued
and
delivered, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance with their
respective terms except as the enforceability thereof (i) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting creditors’ rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered at a proceeding in equity or at law.
(l) The
execution and delivery by the Company of this Agreement, the Securities, the
Indenture and any applicable Written Terms Agreement and the performance by
the
Company of its obligations under this Agreement, the Securities, the Indenture,
and any applicable Terms Agreement will not contravene any provision of
applicable law or the Company’s constitutive documents or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment, order
or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order
of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Securities, the Indenture, and any applicable Terms Agreement, except such
as
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities; provided, that no
representation is made or warranty given as to whether the purchase of the
Securities constitutes a “prohibited transaction” under Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975
of
the Internal Revenue Code of 1986, as amended.
(m) There
has
not occurred any event or occurrence that results, or would result, in a
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a whole
(a
“Material Adverse Effect”), from that set forth in the Prospectus.
(n) There
are
no legal or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the properties of
the
Company or any of its subsidiaries is subject that (i) are reasonably expected
to have a Material Adverse Effect, or (ii) are required to be described in
the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are
not
described, filed or incorporated as required.
8
(o) The
Company and its significant subsidiaries have all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and
have made all declarations and filings with, all federal, state, local and
other
governmental authorities, all self-regulatory organizations and all courts
and
other tribunals, to own, lease, license and use their respective properties
and
assets and to conduct their respective businesses in the manner described in
the
Prospectus, except to the extent that the failure to obtain or file would not
have a Material Adverse Effect.
(p) The
Company is not, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Prospectus, will not be required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
2. Solicitations
as Agents; Purchases as Principal.
(a) Solicitations
as Agents.
In
connection with your actions as selling agents, you agree to use reasonable
efforts to solicit offers to purchase Securities upon the terms and conditions
set forth in the Prospectus as then amended or supplemented, including by the
applicable product supplement and/or the Free Writing Prospectus and/or final
term sheet or pricing supplement. The Company may from time to time offer
Securities for sale otherwise than through an Agent.
The
Company reserves the right, in its sole discretion, to instruct you to suspend
at any time, for any period of time or permanently, the solicitation of offers
to purchase Securities. Upon receipt of instructions from the Company, you
will
forthwith suspend solicitations of offers to purchase Securities from the
Company until such time as the Company has advised you that such solicitation
may be resumed. While such solicitation is suspended, the Company shall not
be
required to deliver any certificates, opinions or letters in accordance with
Sections 5(a), 5(b) and 5(c); provided, that if the Registration Statement
or
Prospectus is amended or supplemented during the period of suspension (other
than by an amendment or supplement providing solely for (i) the specific terms
of the Securities, or (ii) for a change you deem to be immaterial), you shall
not be required to resume soliciting offers to purchase Securities until the
Company has delivered such certificates, opinions and letters as you may
request.
The
Company agrees to pay to you, as consideration for the sale of each Security
resulting from a solicitation made or an offer to purchase received by you
in
connection with an offering in which you were appointed as a selling agent,
compensation in an amount to be agreed upon. Without the prior approval of
the
Company, no Agent (acting on an agency basis) may reallow any portion of the
commission payable pursuant hereto to dealers or purchasers in connection with
the offer and sale of any Securities.
You
shall
communicate to the Company, orally or in writing, each offer to purchase
Securities received by you as agent that in your judgment should be considered
by the Company. The Company shall have the sole right to accept offers to
purchase Securities and may reject any offer in whole or in part. You shall
have
the right to reject any offer to purchase Securities that you consider to be
unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein. The procedural details relating to the issue and
delivery of Securities sold by you as agent and the payment therefor shall
be as
set forth in the Administrative Procedures (as hereinafter
defined).
9
Notwithstanding
anything contained in this Agreement to the contrary, no Agent shall engage
a
dealer to participate in a distribution of Securities pursuant to any selected
dealer agreement or similar documentation without the prior consent of the
Company.
(b) Purchases
as Principal.
Each
sale of Securities shall be made in accordance with the terms of this Agreement.
In connection with each such sale, the Company will enter into a Terms Agreement
that will provide for the sale of such Securities. Each Terms Agreement will
take the form of either (i) a written agreement between you and the Company,
which may be substantially in the form of Exhibit A hereto (a “Written Terms
Agreement”), or (ii) an oral agreement between you and the Company confirmed in
writing by either you to the Company or the Company to you.
Your
commitment to purchase Securities as principal pursuant to a Terms Agreement
shall be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the terms
and
conditions herein set forth. Each Terms Agreement relating to the Securities
shall specify the principal amount of Securities to be purchased by you pursuant
thereto, the price to be paid to the Company for such Securities, the maturity
date of such Securities, the interest rate and interest rate formula, if any,
applicable to such Securities and any other terms of such Securities. Each
such
Terms Agreement may also specify any requirements for officers’ certificates,
opinions of counsel and letters from the independent auditors of the Company,
pursuant to Section 4 hereof. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Securities by you.
Each
Terms Agreement shall specify the time and place of delivery of and payment
for
such Securities, as the case may be. Unless otherwise specified in a Terms
Agreement, the procedural details relating to the issue and delivery of
Securities purchased by you as principal and the payment therefor shall be
as
set forth in the Administrative Procedures. Each date of delivery of and payment
for Securities to be purchased by you as principal pursuant to a Terms
Agreement, as the case may be, is referred to herein as a “Settlement
Date.”
Unless
otherwise specified in a Terms Agreement, if you are purchasing Securities
as
principal you may resell such Securities to other dealers. Any such sales may
be
at a discount, which shall not exceed the amount set forth in the Free Writing
Prospectus (available prior to the Time of Sale) or Pricing Supplement (as
defined below), as applicable, relating to such Securities.
(c) Administrative
Procedures.
You and
the Company agree to perform the respective duties and obligations specifically
provided to be performed in the Administrative Procedures for ELEMENTS (the
“Administrative Procedures”) that are attached hereto as Exhibit B, as amended
from time to time. The Administrative Procedures may be amended only by written
agreement of the Company and you.
(d) Additional
Agents.
The
Company may from time to time appoint one or more additional entities
experienced in the distribution of Securities similar to the Securities (each
such additional institution herein referred to as an “Additional Agent”) as
agent(s) hereunder pursuant to an agent accession letter (an “Agent Accession
Letter”), substantially in the form attached hereto as Exhibit C, whereupon such
Additional Agent shall, subject to the terms and conditions of this Agreement
and the Agent Accession Letter, become a party to this Agreement as an agent,
vested with all of the authority, rights and powers and subject to all the
duties and obligations of an Agent as if originally named as an Agent hereunder.
The Company shall not appoint any Additional Agents with respect to ELEMENTS
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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(e) Delivery.
The
documents required to be delivered by Section 4 of this Agreement as a condition
precedent to your obligation to begin soliciting offers to purchase Securities
as agent of the Company shall be delivered at the office of Sidley Austin LLP,
not later than 4:00 p.m., New York time, on the date hereof, or at such other
time and/or place as you and the Company may agree upon in writing, but in
no
event later than the day prior to the earlier of (i) the date on which you
begin
soliciting offers to purchase Securities pursuant to such Offering and (ii)
the
first date on which the Company accepts any offer by you to purchase Securities.
The date of delivery of such documents is referred to herein as the
“Commencement Date.”
3. Agreements.
The
Company agrees with you (it being understood that each agreement of the Agents
contained in this Agreement is made severally, and not jointly)
that:
(a) Before
using, authorizing, approving, referring to or filing any Free Writing
Prospectus pertaining to a Security being offered by you, the Company will
furnish to you a copy of the proposed Free Writing Prospectus for review and
will not use, authorize, approve, refer to or file any such Free Writing
Prospectus to which you object in your reasonable judgment. The Company will
not
use, authorize, approve, refer to or file any Free Writing Prospectus with
respect to ELEMENTS without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇. The
Company will furnish to each Agent copies of the Prospectus and of the
Registration Statement (including the exhibits thereto relating to the offering
by the Company thereunder of the Securities, but excluding the documents
incorporated by reference), all amendments and supplements to the Prospectus
and
the Registration Statement, and each Free Writing Prospectus relating to the
Securities to be offered and sold, in each case as soon as available and in
such
quantities as shall be reasonably requested. If requested by an Agent, the
Company will prepare, prior to the applicable Time of Sale, with respect to
any
Securities to be sold through or to such Agent, a Free Writing Prospectus in
accordance with Section 3(a) hereof in the form of a term sheet or preliminary
pricing supplement with respect to such Securities (a “Term Sheet”) and will
file such Term Sheet with the Commission pursuant to Rule 433 under the
Securities Act not later than the time specified by such rule. The Company
will
file the final version of the Term Sheet, containing the final terms of the
relevant Securities, as a pricing supplement pursuant to the requirements of
Rule 424(b) of the Securities Act, two days after the earlier of the date such
terms became final or the date of first use (each a “Pricing
Supplement”).
(b) The
Company will promptly advise you (i) of the filing and effectiveness of any
amendment to the Registration Statement, (ii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for any additional information, (iii) of the issuance
by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for
that purpose, (iv) of the institution or threatening of any proceeding pursuant
to Section 8A of the Securities Act against the Company or any offering of
the
Securities and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale in
any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
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(c) If,
at
any time when a Prospectus or Time of Sale Information relating to the
Securities is required to be delivered under the Securities Act, any event
occurs or condition exists as a result of which, in your reasonable opinion
or
the opinion of the Company, the Prospectus or Time of Sale Information, as
then
amended or supplemented, would include an untrue statement of a material fact,
or omit to state any material fact necessary to make the statements therein,
in
the light of the circumstances when the Prospectus or Time of Sale Information,
as then amended or supplemented, is delivered to a purchaser, not misleading,
or
if, in your reasonable opinion or in the opinion of the Company, it is necessary
at any time to amend or supplement the Prospectus or Time of Sale Information,
as then amended or supplemented, to comply with applicable law, the Company
will
immediately notify you by telephone (with confirmation in writing) to suspend
solicitation of offers to purchase Securities and, if so notified by the
Company, you shall forthwith suspend such solicitation and cease using the
Prospectus or Time of Sale Information, as then amended or supplemented. If
the
Company shall decide to amend or supplement the Registration Statement,
Prospectus or Time of Sale Information, as then amended or supplemented, it
shall so advise you promptly by telephone (with confirmation in writing) and,
at
its expense, shall prepare and cause to be filed promptly with the Commission
an
amendment or supplement to the Registration Statement, Prospectus or Time of
Sale Information, as then amended or supplemented, satisfactory in all respects
to you, that will correct such statement or omission or effect such compliance
and will supply such amended or supplemented Prospectus or Time of Sale
Information to you in such quantities as you may reasonably request. If any
documents, certificates, opinions and letters furnished to you pursuant to
paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection with the
preparation and filing of such amendment or supplement are satisfactory in
all
respects to you, upon the filing with the Commission of such amendment or
supplement to the Prospectus or upon the effectiveness of an amendment to the
Registration Statement, you will resume the solicitation of offers to purchase
Securities hereunder.
(d) The
Company will make generally available to its security holders (as contemplated
by Rule 158 under the Securities Act) and to you as soon as practicable earning
statements that satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder covering twelve
month
periods beginning, in each case, not later than the first day of the Company’s
fiscal quarter next following the “effective date” (as defined in Rule 158 under
the Securities Act) of the Registration Statement with respect to each sale
of
the Securities. If such fiscal quarter is the first fiscal quarter of the
Company’s fiscal year, such earning statement shall be made available not later
than 90 days after the close of the period covered thereby and in all other
cases shall be made not later than 45 days after the close of the period covered
thereby.
(e) The
Company will endeavor, in cooperation with the Agents, to qualify the Securities
for offer and sale under the securities or blue sky laws of such jurisdictions
as you shall reasonably request and to maintain such qualifications for as
long
as may be required for the distribution of the Securities.
(f) The
Company shall notify you promptly in writing of any downgrading that occurs
on
or following the Commencement Date, or of its receipt of any notice on or
following the Commencement Date of any intended or potential downgrading or
of
any review for possible change that does not indicate the direction of the
possible change, in the long-term senior unsecured debt rating accorded the
Company by any “nationally recognized statistical rating organization,” as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
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(g) Except
as
otherwise agreed by the Company and the Agents with respect to any particular
Securities, the Company will, whether or not any sale of Securities is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including: (i) the preparation
and
filing of the Registration Statement, the Prospectus and all amendments and
supplements thereto, and Time of Sale Information, (ii) the preparation,
issuance and delivery of the Securities, (iii) any fees and disbursements of
the
Company’s counsel and accountants and of the Trustee and its counsel, (iv) the
qualification of the Securities under securities or Blue Sky laws in accordance
with the provisions of Section 3(e), including filing fees and the fees and
disbursements of your counsel in connection therewith and in connection with
the
preparation of any blue sky or legal investment memoranda, (v) the printing
and
delivery to you in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto, of the Prospectus and any
amendments or supplements thereto, and the Time of Sale Information, (vi) the
printing and delivery to you of copies of the Indenture, and any blue sky or
legal investment memoranda, if any, (vii) any fees charged by rating agencies
for the rating of the Securities, (viii) the fees and expenses of listing any
of
the Securities on a national securities exchange, and (ix) the fees and
expenses, if any, incurred with respect to any filing with the Financial
Industry Regulatory Authority ( “FINRA”).
(h) The
Company acknowledges and agrees that (i) the purchase and sale of Securities
pursuant to this Agreement, including the determination of the price for the
Securities and your compensation, is, as far as the Company is concerned, an
arm’s-length commercial transaction between the Company, on the one hand, and
you, on the other hand, (ii) in connection therewith and with the process
leading to such transaction, you are acting solely as a principal and not the
agent (except to the extent explicitly set forth herein) or fiduciary of the
Company or any of its affiliates, (iii) you have not assumed any advisory or
fiduciary responsibility in favor of the Company or any of its affiliates with
respect to the offering of Securities contemplated by this Agreement or the
process leading thereto (irrespective of whether you have advised or are
currently advising the Company or any of its affiliates on other matters) or
any
other obligation to the Company or any of its affiliates with respect to any
offering of Securities except the obligations explicitly set forth in this
Agreement, (iv) you and your affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and
its affiliates, and (v) you have not provided any legal, accounting, regulatory
or tax advice with respect to the transactions contemplated by this Agreement,
and the Company has consulted its own legal and financial advisors to the extent
it deemed appropriate.
4. Conditions
of the Obligations of the Agents.
Your
obligation to solicit offers to purchase Securities as agent of the Company
in
connection with any offering of Securities and your obligation to purchase
Securities as principal pursuant to any Terms Agreement will be subject to
the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company’s officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of your obligation to
solicit offers to purchase Securities, at the time of such solicitation and
at
each Time of Sale and, in the case of your obligation to purchase Securities,
at
the time the Company accepts the offer to purchase such Securities and at the
time of issuance and delivery) and (in each case) to the following additional
conditions precedent when and as specified below:
(a) Prior
to
such solicitation or purchase, as the case may be:
13
(i) there
shall not have occurred any event or occurrence that results, or would result
in, a Material Adverse Effect from that set forth in the Prospectus or Time
of
Sale Information, as amended or supplemented at the time of such solicitation
or
at the time such offer to purchase was made, that is not described in the Time
of Sale Information and that, in your reasonable judgment, is material and
adverse and that makes it, in your reasonable judgment, impracticable or
inadvisable to market the Securities on the terms and in the manner contemplated
by the Prospectus or Time of Sale Information, as so amended or supplemented,
or
to proceed with the purchase of the Securities on the terms and in the manner
contemplated in the Prospectus or Time of Sale Information;
(ii) there
shall not have occurred any of the following: (a) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange;
(b) a general moratorium on commercial banking activities in New York or London
declared by the relevant regulatory authorities; and (c) any outbreak or
material escalation of hostilities or other national or international calamity
or crisis the effect of which shall be such as to make it, in your reasonable
judgment, impracticable or inadvisable to market the Securities on the terms
and
in the manner contemplated by the Prospectus or Time of Sale Information, as
so
amended or supplemented, or to proceed with the purchase of the Securities
on
the terms and in the manner contemplated in the Prospectus or Time of Sale
Information;
(iii) the
Prospectus, each Free Writing Prospectus and all other Time of Sale Information
shall have been timely filed with the Commission under the Securities Act (in
the case of a Free Writing Prospectus and all other Time of Sale Information,
to
the extent required by Rule 433 under the Securities Act); and
(iv) since
the
date on which the Company has filed with the Commission the Company’s most
recent Annual Report on Form 10-K, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the long-term senior unsecured debt rating
accorded the Company by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
except,
in each case described in paragraph (i), (ii) or (iv) above, as disclosed to
you
in writing by the Company prior to such solicitation or, in the case of a
purchase of Securities, before the offer to purchase such Securities was
made.
(b) On
the
Commencement Date and, if called for by any Terms Agreement, on the
corresponding Settlement Date, you shall have received:
(i) The
opinion, dated as of such date, of the Company’s counsel (which may be internal
counsel) to the effect set forth in Exhibit D.
(ii) The
opinion, dated as of such date, of Agents’ counsel to the effect set forth in
Exhibit E.
14
(c) On
the
Commencement Date and, if called for by any Terms Agreement, on the
corresponding Settlement Date, you shall have received a certificate of the
Company, dated the Commencement Date or such Settlement Date, as the case may
be, and signed by an authorized signatory of the Company holding a position
of
Managing Director or above, to the effect set forth in subparagraph (a)(iv)
above, and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of such date.
(d) On
the
Commencement Date and, if called for by any Terms Agreement, on the
corresponding Settlement Date, the Company’s independent auditors shall have
furnished to you a letter or letters, dated as of the Commencement Date or
such
Settlement Date, as the case may be, in form and substance satisfactory to
you
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Prospectus, as then amended or supplemented; provided that
each letter so furnished shall use a “cut-off date” no more than five business
days prior to the date of such letter.
5. Additional
Agreements of the Company.
(a)
Each time the Registration Statement, the Prospectus, or the Time of Sale
Information is amended or supplemented (other than by an amendment or supplement
providing solely for (i) the specific terms of the Securities or (ii) a change
you deem to be immaterial), the Company will deliver or cause to be delivered
forthwith to you, only if so requested by you, a certificate signed by an
authorized signatory of the Company holding a position of Managing Director
or
above, dated the date of such amendment or supplement, as the case may be,
in
form reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement, the
Prospectus or the Time of Sale Information as amended or supplemented to the
time of delivery of such certificate.
(b) Each
time
the Company files an Annual Report on Form 10-K or a Quarterly Report on Form
10-Q, the Company will furnish or cause to be furnished forthwith to you a
written opinion of counsel for the Company (which may be internal counsel).
Each
time the Company files an Annual Report on Form 10-K, the Agents shall be
furnished a written opinion of counsel for the Agents. Each opinion shall be
dated the date of such filing and shall be in a form of the same tenor as the
opinions referred to in Section 4(b), but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion. In lieu of such opinion, counsel last furnishing such an
opinion to you may furnish to you a letter to the effect that you may rely
on
such last opinion to the same extent as though it were dated the date of such
letter (except that statements in such last opinion will be deemed to relate
to
the Registration Statement and the Prospectus as amended or supplemented to
the
time of delivery of such letter).
(c) Each
time
the Company files (i) an Annual Report on Form 10-K, (ii) a Quarterly Report
on
Form 10-Q or (iii) a Current Report on Form 8-K that includes financial
statements or pro forma financial information required to be filed pursuant
to
Items 2.01 and 9.01 of Form 8-K, the Company shall cause its independent
auditors forthwith to furnish you with a letter, dated on or about the date
of
such amendment or supplement, as the case may be, in form satisfactory to you,
of the same tenor as the letter referred to in Section 4(d), with regard to
the
amended or supplemental financial information included or incorporated by
reference in the Registration Statement or the Prospectus as amended or
supplemented to the date of such letter; provided, that each letter so furnished
shall use a “cut-off date” no more than five business days prior to the date of
such letter.
15
(d) The
Company will, pursuant to reasonable procedures developed in good faith, retain
for a period of not less than three years copies of each Free Writing Prospectus
and other Time of Sale Information that is not filed with the Commission in
accordance with Rule 433 under the Securities Act and maintain records regarding
the timing of the delivery of all applicable Time of Sale
Information.
(e) The
Company will notify the Agents in writing promptly after learning of any event
or circumstance that has caused it to become an “ineligible issuer” or cease to
be a “well-known seasoned issuer,” each as defined in Rule 405 of the Securities
Act.
(f) The
Company will pay any filing fees required by Rule 457 of the Securities Act
in
connection with filing Time of Sale Information and each Free Writing
Prospectus, by the times required under the Securities Act.
6. Certain
Agreements of the Agents.
Each
Agent hereby represents and agrees, severally and not jointly,
that:
(a) without
the prior written consent of the Company, it has not and will not use or
authorize use of any Free Writing Prospectus, as defined in Rule 405 under
the
Securities Act (which term includes use of any written information furnished
to
the Commission by the Company and not incorporated by reference into the
Registration Statement and any press release issued by the Company) other than
(i) a Free Writing Prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included in a
previously filed Free Writing Prospectus or in the Prospectus, (ii) any Free
Writing Prospectus prepared pursuant to Section 3(a) above, or (iii) any issuer
or underwriter Free Writing Prospectus approved by the Company in advance in
writing;
(b) it
will,
pursuant to reasonable procedures developed in good faith, take steps to ensure
that any Free Writing Prospectus referred to in clause (a)(i) above will not
be
subject to broad unrestricted dissemination without the prior written consent
of
the Company;
(c) it
will
not, without the prior written consent of the Company, use any Free Writing
Prospectus that contains the final terms of the Securities unless such terms
have previously been included in a Free Writing Prospectus filed with the
Commission or otherwise made reasonably available to the purchasers of
Securities;
(d) it
will
retain copies of each Free Writing Prospectus used or referred to by it and
all
other Time of Sale Information, in accordance with Rule 433 under the Securities
Act;
(e) it
is not
subject to any pending proceeding under Section 8A of the Securities Act with
respect to any offering of Securities (and will promptly notify the Company
if
any such proceeding against it is initiated during such period of time after
the
first date of the public offering of the Securities as in the opinion of counsel
for the Agents a prospectus relating to the Securities is required by law to
be
delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Securities by any Agent or
dealer);
16
(f) it
shall,
pursuant to Rule 173 of the Securities Act, provide purchasers of Securities
from it a notice required thereby two business days following the completion
of
the sale;
(g) in
acting
as Agent under this Agreement and in connection with the sale of any Securities
by the Company (other than Securities sold to it pursuant to a Terms Agreement),
it shall make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Securities has been solicited by
it
and accepted by the Company, but it shall not have any liability to the Company
in the event any such purchase is not consummated for any reason;
7. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless each Agent and each person, if
any, who controls each Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim), as incurred, caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or the Prospectus (as amended
or
supplemented if the Company shall have furnished any amendments or supplements
thereto), any applicable Free Writing Prospectus or any applicable Time of
Sale
Information, or caused by any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to you furnished to the Company in writing by you for
use
therein.
(b) Each
Agent, severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to you, but only with
reference to statements made in reliance upon and in conformity with information
relating to such Agent furnished to the Company in writing by such Agent for
use
in the Registration Statement or any amendment thereof or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or
supplements thereto), any applicable Free Writing Prospectus or any applicable
Time of Sale Information.
(c) In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either paragraph (a) or (b) above, such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the respective Agents, in the case of parties
indemnified pursuant to paragraph (a) above, and by the Company, in the case
of
parties indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there were to be a
final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim),
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
17
(d) To
the
extent the indemnification provided for in paragraph (a) or (b) of this Section
7 is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein in connection with
any offering of Securities, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall contribute
to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
applicable Agent on the other hand from the offering of such Securities or
(ii)
if the allocation provided by clause (i) is not permitted by applicable law,
in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on
the one hand and each applicable Agent on the other hand in connection with
the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each applicable
Agent on the other hand in connection with the offering of such Securities
shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of such Securities (before deducting expenses) received by
the
Company and the total discounts and commissions received by such Agent in
respect thereof bear to the total offering price to the public of such
Securities. The relative fault of the Company on the one hand and of an Agent
on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the
Company or by an Agent and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
18
(e) The
Company and you agree that it would not be just or equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable
by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, you shall
not
be required to contribute any amount in excess of the amount by which the total
price at which the Securities referred to in paragraph (d) above that were
offered and sold to the public through you exceeds the amount of any damages
that you have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise
be
available to any indemnified party at law or in equity.
(f) The
indemnity and contribution provisions contained in this Section 7 and the
representations, warranties and other statements of the Company, its officers
and you set forth in or made pursuant to this Agreement or any Terms Agreement
will remain operative and in full force and effect regardless of any termination
of this Agreement or any such Terms Agreement, any investigation made by or
on
behalf of you or any person controlling you or by or on behalf of the Company,
its officers or directors or any person controlling the Company and acceptance
of and payment for any of the Securities.
8. Termination.
This
Agreement may be terminated at any time either by the Company or by you upon
the
giving of written notice of such termination to the other parties hereto, but
without prejudice to any rights, obligations or liabilities of either parties
hereto accrued or incurred prior to such termination. The termination of this
Agreement shall not cause or require termination of any Terms Agreement, and
the
termination of any such Terms Agreement shall not cause or require termination
of this Agreement. If this Agreement is terminated, the provisions of the third
paragraph of Section 2(a) and Sections 3(d), 3(g), 3(h), 5(d), 6, 7, 9, 13
and
14 shall survive; provided that if at the time of termination an offer to
purchase Securities has been accepted by the Company but the time of delivery
to
the purchaser or its agent of such Securities has not occurred, the provisions
of Sections 1, 2(b), 2(c), 3(b), 3(c), 3(e), 3(f), 3(g), 4 and 5 shall also
survive until such delivery has been made.
9. Notices.
All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to the Agents, at the address beneath such Agent’s signature on the
signature page hereof; or, if sent to the Company, will be mailed, delivered
or
telefaxed and confirmed to the Company at each of the following
addresses:
HSBC
USA
Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇/Structured Products
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
19
with
a
copy to:
HSBC
USA
Inc.
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq./Legal Department
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
10. Successors.
This
Agreement and any Terms Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
11. Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument.
12. Applicable
Law.
This
Agreement will be governed by and construed in accordance with the internal
laws
of the State of New York.
13. Submission
to Jurisdiction.
(a) The
Company agrees that any legal suit, action or proceeding brought by any Agent
or
by any person controlling any Agent, arising out of or based upon this Agreement
may be instituted in any State or Federal court in the Borough of Manhattan,
City and State of New York, and, to the fullest extent permitted by law, waives
any objection which it may now or hereafter have to the laying of venue of
any
such proceeding, and irrevocably submits to the jurisdiction of such court
in
any suit, action or proceeding.
(b) EACH
PARTY HERETO HEREBY AGREES TO IRREVOCABLY WAIVE ITS RESPECTIVE RIGHTS TO A
JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED BY THIS AGREEMENT.
EACH
PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN ITS RELATED FUTURE DEALINGS.
14. Headings.
The
headings of the sections of this Agreement have been inserted for convenience
of
reference only and shall not be deemed a part of this Agreement.
20
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us the enclosed duplicate hereof, whereupon this Agreement and
your acceptance shall represent a binding agreement between the Company and
you.
|
Very
truly yours,
|
||
|
HSBC
USA INC.
|
||
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Title:
Managing Director
|
||
21
The
foregoing Distribution Agreement is hereby confirmed and accepted by the
undersigned as an Agent as of the date first above written.
|
▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
|
||
|
Incorporated
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Title:
Authorized Signatory
|
||
|
Nuveen
Investments, LLC
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
||
|
Title:
Managing Director
|
||
Notices
hereunder shall be sent to:
▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
ELEMENTS
Nuveen
Investments, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
General
Counsel
22
EXHIBIT
A
TERMS
AGREEMENT
[DATE]
HSBC
USA
Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
|
Re:
|
ELEMENTSSM
Linked to the
|
|
|
due
,
(the
“ELEMENTS”)
|
Ladies
and Gentlemen:
We
understand that HSBC USA Inc. (the “Company”), proposes to issue and sell up to
$
aggregate principal amount (the “Maximum Aggregate Principal Amount”) of
ELEMENTS. The ELEMENTS are described in the Pricing Supplement,
dated ,
, to the Prospectus Addendum dated December
12, 2007, the Prospectus Supplement dated October 12, 2007 and the Prospectus,
dated April 5, 2006 (collectively, the “Prospectus”). Additional terms relating
to the ELEMENTS are set forth in Annex A hereto. The ELEMENTS will be subject
to
the ELEMENTS Administrative Procedures included as Exhibit B to the Distribution
Agreement (as defined below). Except as otherwise expressly provided herein,
all
terms used and not otherwise defined herein shall have the meanings ascribed
to
them in the Distribution Agreement.
Pursuant
to the Distribution Agreement dated June 10, 2008 (the “Distribution Agreement”)
among the Company, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
(“▇▇▇▇▇▇▇ ▇▇▇▇▇”) and Nuveen Investments, LLC (“Nuveen” and, together with
▇▇▇▇▇▇▇ ▇▇▇▇▇, the “ELEMENTS Agents”), whereby the ELEMENTS Agents have become
Agents under the Distribution Agreement, the ELEMENTS Agents hereby agree to
arrange for the purchase from the Company, and the Company hereby agrees to
sell, from time to time, to purchasers identified by the ELEMENTS Agents, the
Maximum Aggregate Principal Amount of ELEMENTS; provided,
that,
(i) the initial issuance of ELEMENTS shall be in the aggregate principal amount
of
$ (the
“Initial Issuance Principal Amount”), (ii) while the Company shall use its
reasonable efforts to issue additional ELEMENTS as requested by the ELEMENTS
Agents, it shall not be required to do so and (iii) the Company may, in its
sole
discretion, agree with the ELEMENTS Agents to issue more than the Maximum
Aggregate Principal Amount of ELEMENTS.
▇▇▇▇▇▇▇
▇▇▇▇▇ hereby agrees to purchase from the Company, and Nuveen hereby agrees
to
act as agent with respect to the offering of, the Initial Issuance Principal
Amount of ELEMENTS (the “Purchased ELEMENTS”) in the amounts and manner set
forth as follows. Delivery of and payment for the Purchased ELEMENTS shall
be
made on
,
at 10:00 a.m., New York City time,
which date and time may be postponed by agreement between the ELEMENTS Agents
and the Company (such date and time of delivery and payment for the Purchased
ELEMENTS being herein called the “Initial Settlement Date”). Delivery of the
Purchased ELEMENTS shall be made to ▇▇▇▇▇▇▇ ▇▇▇▇▇ on the Initial Settlement
Date
against payment by the ELEMENTS Agents to the Company of
$
in the manner described in the ELEMENTS Administrative Procedures or in such
other manner as the parties hereto shall agree.
A-1
The
ELEMENTS Agents may request the Company to make additional issuances of ELEMENTS
in accordance with the Distribution Agreement, the ELEMENTS Agreement dated
June
10, 2008 between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the ELEMENTS Administrative
Procedures, which supplemental ELEMENTS issuances shall be settled in accordance
with the ELEMENTS Administrative Procedures.
The
Company agrees to pay to ▇▇▇▇▇▇▇ ▇▇▇▇▇, on a quarterly basis,
basis points
( %) per annum (“Fees”) on the principal
amount of ELEMENTS outstanding, calculated on a daily basis, for all services
provided by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Nuveen. The Fees will accrue daily as
follows:
(Aggregate
Principal Amount x Index Factor x Fees)/365
Where:
“Aggregate
Principal Amount” means, with respect to any day, the aggregate stated principal
amount of the ELEMENTS outstanding on such day.
“Index
Factor” means the closing value of the Series Index at the relevant date divided
by the closing value of the Series Index on the Inception Date.
It
is
agreed that the materials identified on Annex B are Free Writing Prospectuses
that are “issuer free writing prospectuses” as defined in Rule 433(h)(1) under
the Securities Act that are hereby approved by the Company. It is also agreed
that the materials identified on Annex C are Free Writing Prospectuses that
are
not “issuer free writing prospectuses”, with respect to which (i) the Company
consents to the use by the Elements Agents and (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇ agrees that
such materials constitute information furnished to the Company in writing by
▇▇▇▇▇▇▇ ▇▇▇▇▇ for use in a Free Writing Prospectus under Section 7(b) of the
Distribution Agreement.
Each
ELEMENTS Agent agrees to perform its duties and obligations specifically
provided to be performed by it in accordance with the terms and provisions
of
the Distribution Agreement and the ELEMENTS Administrative Procedures, as
amended or supplemented hereby. Except as otherwise provided herein, the
provisions of the Distribution Agreement and the ELEMENTS Administrative
Procedures and the related definitions are incorporated by reference herein
and
shall be deemed to have the same force and effect as if set forth in full
herein.
A-2
▇▇▇▇▇▇▇
▇▇▇▇▇’▇ obligation to purchase any ELEMENTS hereunder is subject to the accuracy
of, at the time of such purchase, the Company’s representations and warranties
contained in the Distribution Agreement and to the Company’s performance and
observance of all applicable covenants and agreements contained therein, and
the
satisfaction of all conditions precedent contained therein, including, without
limitation, those pursuant to Section 4 thereof; provided,
that no
additional documents shall be required to be delivered by the Company to the
ELEMENTS Agents on any Settlement Date pursuant to Section 4
thereof.
This
Agreement shall be subject to the termination provisions of Section 8 of the
Distribution Agreement. If this Agreement is terminated, the provisions of
Sections 3(h),
6(g), 7, 9, 10, 12, 13 and 14
of the
Distribution Agreement shall survive for the purposes of this
Agreement.
A-3
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York. This Agreement may be executed in one or more counterparts
and the executed counterparts taken together shall constitute one and the same
agreement.
|
▇▇▇▇▇▇▇
LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
|
|
|
By:_________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
NUVEEN
INVESTMENTS, LLC
|
|
|
By:_________________________________
|
|
|
Name:
|
|
|
Title:
|
Accepted
and Agreed:
HSBC
USA
INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
A-4
Annex
A
ADDITIONAL
TERMS OF ELEMENTS OFFERED HEREBY
|
Title:
|
|
|
Initial
Issuance Principal Amount:
|
|
|
Interest:
|
|
|
Series
Index:
|
|
|
Inception
Date:
|
|
|
Initial
Settlement Date:
|
|
|
Maturity
Date:
|
|
|
Authorized
denominations:
|
|
|
Investor
Fee:
|
|
|
Price
to Public for Initial Issuance:
|
|
|
Proceeds
to Issuer:
|
A-1
Annex
B
Issuer
Free Writing Prospectuses
|
·
|
Information
on ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(the “ELEMENTS website”) identified “IFWP” on the screen shots attached
hereto
|
|
·
|
Fact
sheet for the ELEMENTS attached
hereto
|
B-1
Annex
C
Permitted
Free Writing Prospectuses
|
·
|
Information
on the ELEMENTS website, other than information that is an Issuer
Free
Writing Prospectus
|
|
·
|
The
generic ELEMENTS brochure attached
hereto
|
|
·
|
The
ELEMENTS current offerings list attached
hereto
|
C-1
EXHIBIT
B
ELEMENTS
ADMINISTRATIVE PROCEDURES
These
Administrative Procedures will govern the offering, sale and repurchase of
ELEMENTS Book-Entry Notes (“ELEMENTS”) on a continuous basis by HSBC USA Inc.
(the “Issuer”) pursuant to the Distribution Agreement dated June 10, 2008 (the
“Distribution Agreement”) among the Issuer and the agents party thereto. Each
issue of ELEMENTS will be part of the Issuer’s Medium-Term Notes. For the
initial offering of each issue of ELEMENTS, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (“▇▇▇▇▇▇▇ ▇▇▇▇▇”) and such other
agents as are named in the Terms Agreement for such offering will act as agents
of the Issuer (the “ELEMENTS Agents”).
All
ELEMENTS will be represented by ELEMENTS Global Master Book-Entry Notes
(“ELEMENTS Master Global Notes”) delivered to Deutsche Bank Trust Company
Americas, as Trustee (the “Trustee”) under the Indenture dated as of March 31,
2006 (the “Indenture”). An owner of an ELEMENTS Note will not be entitled to
receive a certificate representing such Note.
The
Trustee will act as Paying Agent, Issuing Agent and Registrar for payments
on
the Notes and will perform the other duties specified herein and the Indenture.
To the extent the procedures set forth below conflict with the provisions of
the
Notes, the Indenture, operating procedures of The Depository Trust Company
(“DTC”) or the Distribution Agreement, the relevant provisions of the Notes, the
Indenture, DTC’s operating procedures and the Distribution Agreement shall
control.
Other
than as otherwise specified herein, until such time as the Issuer shall specify
otherwise by written notice to the ELEMENTS Agents and the Trustee, payments
in
U.S. dollars to the Issuer hereunder shall be made to The Bank of New York,
for
the account of the Issuer.
Part
I: Administrative Procedures For ELEMENTS Book-Entry Notes
The
custodial, document control and administrative functions described below will
be
applicable to the ELEMENTS. Unless otherwise provided herein, all times refer
to
New York City time.
|
Issuance:
|
On
the initial date of settlement for each series of ELEMENTS, the Issuer
will issue an executed and authenticated ELEMENTS Master Global Note
in
fully registered form for the ELEMENTS issued on such date and for
subsequent issuances of ELEMENTS of such series.
Each
Master Global Note will be dated and issued as of the date of its
initial
authentication by the Trustee. Each subsequent entry on the Master
Global
Note shall be dated the date of such subsequent issuance of ELEMENTS
of
such series. There will be a separate Master Global Note for each
series
of ELEMENTS.
|
B-1
|
Identification
Numbers:
|
The
Issuer will arrange with the CUSIP Service Bureau of Standard & Poor’s
Corporation (the “CUSIP Service Bureau”) for the reservation of CUSIP
numbers for assignment to each series of ELEMENTS. The Issuer will
assign
CUSIP numbers to ELEMENTS Notes as described below. The Issuer will
notify
the CUSIP Service Bureau periodically of the CUSIP numbers that it
has
assigned to ELEMENTS Notes. All Master Global Notes representing
the same
series of ELEMENTS will bear the same CUSIP number.
|
|
|
Registration:
|
Each
ELEMENTS Master Global Note will be registered in the name of CEDE
&
CO., as nominee for DTC, on the Securities Register maintained by
the
Trustee under the Indenture. The beneficial owner of an ELEMENTS
Note (or
one or more indirect participants in DTC designated by such owner)
will
hold their positions through one or more direct or indirect participants
in DTC (with respect to such ELEMENTS Note, the “Participants”). DTC
records will only reflect the direct Participants in whose accounts
ELEMENTS are held. The Participants will be responsible for maintaining
records of their beneficial owners.
|
|
|
Transfers:
|
Transfers
of an ELEMENTS Note will be accomplished by book entries made by
Participants and, in turn, by DTC, acting on behalf of beneficial
transferors and transferees of such ELEMENTS
Note.
|
B-2
|
Maturities:
|
The
Maturity Date for each series issue of ELEMENTS will be a date not
less
than nine months from the Issue Date for such Note and each Master
Global
Note of the same series will have the same Maturity Date. “Maturity Date,”
“Stated Maturity,” and “Maturity” shall have the meanings provided in each
ELEMENTS Note. In the event that payment at maturity is deferred
beyond
the stated Maturity Date, no interest or other payments will accrue
or be
payable with respect to that deferred payment.
|
|
|
Business
Day:
|
Business
Day shall have the meaning provided in each ELEMENTS Note.
|
|
|
Trading
Day
|
Trading
Day shall have the meaning provided in each ELEMENTS Note.
|
|
|
Valuation
Date:
|
Valuation
Date shall have the meaning provided in each ELEMENTS Note.
The
final Valuation Date for each issue of ELEMENTS will be specified
in each
ELEMENTS Note.
|
|
|
Issuance
Valuation Date:
|
For
the initial issuance of a series of ELEMENTS, Issuance Valuation
Date
means the Inception Date, as defined in the ELEMENTS Note. For subsequent
issuances of a series of ELEMENTS, unless otherwise provided in an
ELEMENTS Note, Issuance Valuation Date means the first Trading Day
following the date of acceptance by the Issuer of an offer to purchase
ELEMENTS.
|
B-3
|
Issuance
Value:
|
For
the initial issuance of a series of ELEMENTS, Issuance Value means
$10.00
per ELEMENT (the “stated principal amount”). For subsequent issuances of a
series of ELEMENTS, Issuance Value means $10.00 times the index factor
on
the Issuance Valuation Date times the fee factor on such Issuance
Valuation Date.
|
|
|
Denominations;
Minimum Subsequent Issues; Minimum Repurchases by the Issuer at the
Option
of the Holder:
|
Minimum
Denominations:
ELEMENTS Notes denominated in U.S. dollars will be issued in stated
principal amounts of $10.00 or any integral multiple thereof.
Minimum
Subsequent Issuances:
After the initial issuance of a series of ELEMENTS, additional ELEMENTS
of
such series may be issued in minimum amounts as shall be agreed upon
by
▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Issuer).
Minimum
Repurchases by the Issuer:
After the initial Repurchase Date specified in each ELEMENTS Note,
ELEMENTS will be subject to repurchase by the Issuer at the option
of a
Holder in minimum amounts of $2.5 million aggregate stated principal
amount.
|
|
|
Interest:
|
ELEMENTS
will not bear interest.
|
|
|
Payments
of Principal:
|
Payments
upon Holder’s Exercise of Optional Repurchase by the
Issuer.
Unless otherwise provided in an ELEMENTS Note, a Repurchase Date
is the
third Business Day following a Valuation Date (other than the final
Valuation Date). Holders of ELEMENTS may elect to have their ELEMENTS
repurchased by the Issuer on any Repurchase Date, in minimum amounts
of
$2.5 million aggregate stated principal
amount.
|
B-4
|
In
the event that payment upon repurchase is deferred beyond the original
Repurchase Date as provided in the ELEMENTS Note, no interest or
other
amount will accrue or be payable with respect to that deferred
payment.
Detailed
Repurchase Procedures are set forth in Exhibit III hereto.
Payments
at Maturity.
The Calculation Agent, no later than the day following the final
Valuation
Date, will notify the Issuer of the final valuation level and maturity
amount. The Issuer will confirm by email and notify the Trustee of
the
amounts of such payments with respect to each such ELEMENTS Master
Global
Note no later than the second Business Day preceding the Stated Maturity
of such ELEMENTS Master Global Note. At such Maturity, the Issuer
will pay
such amounts to the Trustee, and the Trustee in turn will pay such
amounts
to DTC at the times and in the manner set forth below under “Manner of
Payment”. If any Maturity of an ELEMENTS Master Global Note is not a
Business Day, the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on such payment
for
the period from and after such Maturity, unless otherwise stated
in the
ELEMENTS Master Global Note. Promptly after payment to DTC of the
amounts
due at the Maturity of such ELEMENTS Master Global Note, the Trustee
will
cancel such ELEMENTS Master Global Note and deliver it to the Issuer
with
an appropriate debit advice, or, at the Issuer’s option, destroy such
ELEMENTS Note and provide certification thereof to the Issuer, subject
to
applicable document retention requirements. Upon request, the Trustee
will
deliver to the Issuer a written statement indicating the total principal
amount of Outstanding ELEMENTS Global
Securities.
|
B-5
|
Manner
of Payment.
The total amount of any payment due in respect of any ELEMENTS Master
Global Note at Maturity shall be paid by the Issuer to the Trustee
in
funds available for use by the Trustee as of 9:30 A.M. (New York
City
time) on such date. The Issuer will make such payment in respect
of such
ELEMENTS Master Global Note by wire transfer (in accordance with
procedures and instructions previously agreed upon with the Trustee).
The
Trustee will pay DTC in its normal course of payment for debt securities.
Thereafter on such date, DTC will pay, in accordance with its operating
procedures then in effect, such amounts in funds available for immediate
use to the respective direct Participants in whose names the ELEMENTS
Notes represented by such ELEMENTS Master Global Note are recorded
by DTC.
Payment to DTC is the responsibility of the Issuer, disbursement
of such
payments to direct Participants is the responsibility of DTC, and
disbursement of payments to beneficial owners is the responsibility
of the
direct and indirect Participants. Neither the Issuer nor the Trustee
shall
have any direct or indirect responsibility or liability for the payment
by
DTC to such Participants of any payments in respect of the ELEMENTS
Notes.
Withholding
Taxes.
The amount of any taxes required under applicable law to be withheld
from
any payment on an ELEMENTS Note will be determined and withheld by
the
Participant or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such
Note.
|
B-6
|
Issuance
of ELEMENTS:
|
Initial
ELEMENTS Series Issuance:
Each initial ELEMENTS Series issuance will be documented by a written
Terms Agreement.
Subsequent
ELEMENTS Series Issuance:
After the initial issuance of an ELEMENTS series, unless otherwise
instructed by the Issuer, the Elements Agents will advise the Issuer
promptly of all offers to purchase ELEMENTS of such series, other
than
those rejected by the Elements Agents in whole or in part in the
exercise
of their reasonable discretion. Unless otherwise agreed by the Issuer
and
the ELEMENTS Agents, the Issuer has the sole right to accept offers
to
purchase ELEMENTS Notes and may reject any such offer in whole or
in part.
Offers to purchase ELEMENTS Notes accepted orally by the Issuer shall
not
be binding on the Issuer until the terms relating to such ELEMENTS
Notes
are approved by the Issuer in a supplemental Terms Agreement, as
described
below under “Settlement Procedures” and in Exhibit II.
|
|
|
Settlement:
|
The
receipt by the Issuer of immediately available funds in payment for
ELEMENTS Notes and the authentication and issuance of the ELEMENTS
Master
Global Note (including the entry in the records of the Issuer maintained
by the Trustee of the further provisions of such Note relating to
the
issuance of such Note) shall constitute “settlement” with respect to such
Note. The initial offer to purchase a series of ELEMENTS accepted
by the
Issuer will be settled on the fifth Business Day following the Issuance
Valuation Date. All subsequent offers to purchase ELEMENTS of such
series
accepted by the Issuer will be settled on the fourth Business Day
following the Issuance Valuation Date pursuant to the timetable for
settlement set forth below, unless the Issuer and the purchaser,
after
consultation with the Trustee, agree to settlement on a different
date.
|
B-7
|
Detailed
Settlement Procedures for an initial ELEMENTS series issuance are
set
forth in Exhibit I hereto and detailed Settlement Procedures for
a
subsequent ELEMENTS series issuance are set forth in Exhibit II
hereto.
If
settlement of an ELEMENTS Note is rescheduled or canceled, ▇▇▇▇▇▇▇
▇▇▇▇▇,
the Trustee and the Issuer will execute reversal procedures. The
Trustee
will deliver to DTC, through DTC’s Participant Terminal System, a
cancellation message to such effect by no later than 2:00 P.M. on
the
Business Day immediately preceding the scheduled settlement
date.
|
||
|
Suspension
of Solicitation; Amendment or Supplement:
|
Subject
to the Issuer’s representations, warranties and covenants contained in the
Distribution Agreement, the Issuer may instruct each ELEMENTS Agent
to
suspend solicitation of offers to purchase ELEMENTS Notes at any
time.
Upon receipt of such instructions, each ELEMENTS Agent will forthwith
suspend such solicitation until such time as it has been advised
by the
Issuer that such solicitation may be resumed. The Issuer will, consistent
with its obligations under the Distribution Agreement, promptly advise
each ELEMENTS Agent and the Trustee whether any accepted offers
outstanding at the time such ELEMENTS Agent suspended solicitation
may be
settled and whether copies of the Prospectus as in effect at the
time of
the suspension, together with the appropriate Prospectus Supplement,
may
be delivered in connection with the settlement of such offers. The
Issuer
will have the sole responsibility for such decision and for any
arrangements that may be made in the event that the Issuer determines
that
such offers may not be settled or that copies of the Prospectus and
such
Prospectus Supplement may not be so
delivered.
|
B-8
Exhibit
I
Initial
Issuance Creation Schedule and Settlement Procedures
(Days
are both Trading Days and Business Days)
All
times are New York City Time
|
T-30
|
T-1
|
Trade
Date
|
T
+1
|
T
+2
|
T
+3
|
T
+4
|
|
A
|
B
|
Valuation
Date and Pricing Date
C,
D
|
E
|
F
|
Settlement
Date
G,
H, I
|
|
A.
|
In
connection with the initial issuance of any new series of ELEMENTS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ or other applicable Elements Agent involved in the
initial
issuance of such series (“ML”) shall provide the Issuer with the general
terms of the proposed series, the associated swap, the underlying
index
and license particulars, the listing details and the marketing materials
to be utilized. If ML and the Issuer agree to proceed with the proposed
series of ELEMENTS and, at the Issuer’s option, the Issuer identifies an
acceptable swap counterparty (the “SC”) willing to provide a hedge, a
preliminary prospectus supplement shall be prepared and filed with
the
SEC, supplemental marketing material (including any Fact Sheets or
Web
site content) (the content of which shall be satisfactory to each
of the
Issuer and ML in their respective sole discretion) shall be prepared
and,
if required, filed with the SEC as an issuer Free Writing Prospectus
or an
underwriter Free Writing Prospectus, and the Issuer shall file a
listing
application with the securities exchange on which such series is
to be
listed.
|
|
B.
|
On
or prior to T-1, ML shall prepare, or cause to be prepared, a term
sheet
(a “Term Sheet”) containing at least the following
information:
|
|
1.
|
Preliminary
principal amount.
|
|
2.
|
Stated
Maturity Date.
|
|
3.
|
The
Index and the method by which the principal amount thereof payable
at
Maturity or upon repurchase shall be
determined.
|
|
4.
|
Issuance
Valuation Date for determination of the Initial Index
Level.
|
|
5.
|
Settlement
date.
|
|
6.
|
Issue
Price ($10).
|
|
7.
|
CUSIP
number of the Master Global
Note.
|
I-1
|
8.
|
If
applicable, the identity and contact information of any SC, the details
of
the swap, amounts of any payments, and payments dates, spread, day
count
convention, adjustments to notional amount and periodic
payments.
|
The
Term
Sheet shall be sent by ML to the Issuer for review and acceptance. The Term
Sheet shall be returned to ML by the Issuer. The Issuer shall promptly send
the
Term Sheet to the Trustee and, if applicable, the SC.
|
C.
|
By
9:00 A.M. (NYC time) on the Trade Date, ML, the Issuer and, if applicable,
the SC (via pricing call or other method of communication), shall
agree
upon the final principal amount and number of ELEMENTS units and
the swap
notional amount.
|
|
D.
|
As
soon as possible on the Trade Date, ML, the Issuer and, if applicable,
the
SC shall agree upon the Initial Index
Level.
|
|
E.
|
ML
shall supplement the Term Sheet for the information in (C) and (D)
above,
and send to the Issuer, the Trustee and, if applicable, the
SC.
|
|
F.
|
Within
two business days of the Trade Date, the Issuer shall file the final
Prospectus Supplement with the SEC. By this time the Issuer shall
have
paid the SEC filing fee to cover the issuance of the
ELEMENTS.
|
|
G.
|
The
Trustee will authenticate the ELEMENTS Master Global
Note.
|
|
H.
|
9:00
A.M.: ML will wire transfer (via Fed Wire, in accordance with procedures
and instructions previously agreed upon with the Issuer) to a designated
account of the Issuer funds available for immediate use in the amount
equal to the price of the ELEMENTS Notes to be issued. ML will set
up a
deposit on the DTC Participant Terminal System instructing DTC to
withdraw
such Note from the Trustee’s participant account and deposit such Note
into ML’s participant account. The Trustee will approve this instruction
posted by ML through DTC’s Participant Terminal System after the Issuer
has confirmed receipt of funds. The initial issuance of a series
of
ELEMENTS will close via DTC FAST in units for each
CUSIP.
|
|
I.
|
ML
will use the DTC Underwriting System to confirm the settlement of
the
delivery versus payment for the ELEMENTS
Notes.
|
I-2
Exhibit
II
Subsequent
Issuance Creation Schedule and Settlement Procedures
(Days
are both Trading Days and Business Days)
All
times are New York City Time
|
T-2
|
T-1
|
Trade
Date
|
T+1
|
T+2
|
T+3
|
|
Creation
Order Placed and Accepted by the Issuer
A
|
B
|
Valuation
Date (Close of Business)
|
C,
D
|
E
|
Settlement
Date
F,
G, H
|
|
A.
|
Prior
to 3:00 P.M. on T-2, an investor and its broker-dealer will notify
▇▇▇▇▇▇▇
▇▇▇▇▇ or other applicable Elements Agent involved in an offer to
purchase
an amount of an outstanding series of ELEMENTS (“ML”) of an offer to
purchase an amount of an outstanding series of ELEMENTS (as shall
be
agreed upon by ML and the Issuer). ML shall communicate this to the
Issuer
and, if applicable, the swap counterparty (the “SC”) by 5:00 P.M. on
T-2.
|
|
B.
|
By
10:00 A.M. on T-1, the Issuer shall notify ML if it rejects the offer
in
(A) above. If the Issuer does not reject the offer, ML shall prepare,
or
cause to be prepared, a term sheet (a “Term Sheet”) containing at least
the following information:
|
|
1.
|
Amount
(as shall be agreed upon by ML and the
Issuer).
|
|
2.
|
CUSIP
number for the ELEMENTS series.
|
|
3.
|
Stated
Maturity Date for the ELEMENTS
series.
|
|
4.
|
The
Index for the ELEMENTS series and the method by which the principal
amount
thereof payable at Maturity or upon repurchase shall be
determined.
|
|
5.
|
Issuance
Valuation Date.
|
|
6.
|
Settlement
Date.
|
|
7.
|
The
identity of DTC participant for settlement on behalf of the beneficial
owner of the ELEMENTS (the “Settlement DTC
Participant”).
|
II-1
|
8.
|
If
applicable, the identity and contact information of any SC, the details
of
the swap, amounts of any payments, and payments dates, spread, day
count
convention, adjustments to notional amount and periodic payments.
|
By
11:00
A.M., the Term Sheet shall be sent by ML to the Issuer and, if applicable,
the
SC for review and acceptance. By 12:00 noon, the SC shall have informed the
Issuer if it accepts the Term Sheet and the Issuer shall have informed ML and
the SC if it accepts the Term Sheet (other than Item B.7 above). Upon
acceptance, the Issuer shall promptly send the Term Sheet to ML, the Trustee
and, if applicable, the SC.
|
C.
|
Prior
to 11:00 a.m. on the Business Day following the Issuance Valuation
Date,
ML shall notify the Issuer of the Issuance Value, and ML shall supplement
the Term Sheet and send to the Issuer. The Issuer shall send the
Term
Sheet to the Trustee and the SC.
|
|
D.
|
Each
acceptance by the Issuer of an offer to purchase an ELEMENTS Note
shall
constitute a representation and warranty by the Issuer to the Trustee
that
(i) such ELEMENTS Note is then, and at the time of issuance and sale
thereof will be, duly authorized for issuance and sale by the Issuer
and
(ii) the Master Global Note representing such ELEMENTS Note will
conform
with the terms of the Indenture.
|
|
E.
|
Within
two business days of the Trade Date, the Issuer shall file any necessary
prospectus supplement with the SEC. By this time the Issuer shall
have
paid the SEC filing fee to cover the issuance of the
ELEMENTS.
|
|
F.
|
9:00
A.M.: ML will wire transfer (via Fed Wire, in accordance with procedures
and instructions previously agreed upon with the Issuer) to a designated
account of the Issuer funds available for immediate use in the an
amount
equal to the increase in the principal amount of the ELEMENTS Master
Global Note. ML will set up a deposit on the DTC Participant Terminal
System instructing DTC to withdraw such Note from the Trustee’s
participant account and deposit such Note into ML’s participant account.
The Trustee will approve this instruction posted by ML through DTC’s
Participant Terminal System after the Issuer has confirmed receipt
of
funds. The Trustee will make an entry in the records of the Issuer
maintained by the Trustee for the further provisions of the ELEMENTS
Master Global Note.
|
|
G.
|
ML
will use the DTC Underwriting System to confirm the settlement of
the
delivery versus payment for the ELEMENTS Note to the purchaser’s
Settlement DTC Participant.
|
|
H.
|
The
Trustee will follow the Issuer’s instructions as to the transfer of funds
in the Issuer’s account at The Bank of New
York.
|
II-2
Exhibit
III
Repurchase
Schedule
(This
Schedule assumes that all days are Trading Days and Business
Days)
|
T
-
1
|
Trade
Date
|
T
+
1
|
T+2
|
T
+
3
|
|
Notice
of Redemption
A
|
Valuation
Date
DVP
Trade Date
B,
C, D
|
Notice
of Final Repurchase Details
E,
F, G, H
|
I,
J
|
Settlement
Date
K,
L, M, N, O
|
|
A.
|
By
5:00 P.M. NYC time, any broker (“Broker”), on behalf of a beneficial
holder (“Holder”) or itself, will notify the Issuer of an irrevocable
repurchase request in a minimum amounts of $2.5 million aggregate
stated
principal amount. The Repurchase form will list the number of Units,
CUSIP
number, Repurchase Date and settlement instructions (i.e., the contact
information and wire instructions, including Broker’s DTC Participant
(“Settlement DTC Participant”)).
|
|
B.
|
The
Issuer shall inform the Trustee and, if applicable, the Swap Counterparty
(“SC”) of notices received.
|
|
C.
|
By
10:00 A.M. NYC time, the Issuer sends affirmation to Broker and/or
Settlement DTC Participant of request for repurchase - affirmation
will
clearly state that repurchase requires the Settlement DTC Participant
to:
|
|
(i)
|
book
the delivery leg of a delivery vs. payment (“DVP”) trade on the Business
Day following the Valuation Date facing the Issuer;
and
|
III-1
|
(ii)
|
deliver
the ELEMENTS to the Issuer versus payment as booked for settlement
via DTC
at or prior to 10:00 A.M. NYC time on the Settlement
Date.
|
|
D.
|
The
Issuer determines the Repurchase Price and, if necessary, agrees
with the
SC calculations under the Swap
Agreement.
|
|
E.
|
If
necessary, the SC unwinds the swap (and swap documentation is
appropriately adjusted).
|
|
F.
|
By
10:00 A.M. (NYC time), the Issuer delivers details of units and values
to
be repurchased, including Repurchase Price, and swap cash flows on
Repurchase Date to the Trustee and, if applicable, the SC. The Issuer
notifies Settlement DTC Participant of final price for DVP
trade.
|
|
G.
|
The
Issuer books receive versus payment leg of DVP trade referred to
in
(C) above.
|
|
H.
|
Settlement
DTC Participant books deliver versus payment leg of DVP trade referred
to
in (C) above.
|
|
I.
|
The
Issuer authorizes the Trustee to take appropriate action on the Settlement
Date.
|
|
J.
|
The
Issuer notifies ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the other Elements Agents of the
details
of the proposed repurchase.
|
|
K.
|
The
Issuer and Settlement DTC Participant confirm DVP trade details booked
on
T+1 for Trade Date T and Settlement Date T + 3 in (G) and (H)
above.
|
|
L.
|
DVP
between the Issuer and Settlement DTC Participant settles on Settlement
Date; Settlement DTC Participant receives cash; the Issuer receives
ELEMENTS.
|
|
M.
|
The
Issuer initiates action for DWAC of any ELEMENTS to be surrendered
to the
Trustee on the Settlement Date and confirms to the Trustee that it
has
done so.
|
|
N.
|
The
Trustee approves DWAC of ELEMENTS to be surrendered on the Settlement
Date.
|
|
O.
|
DWAC
confirmed; Trustee reduces position on Master Global Note on Settlement
Date.
|
III-2
EXHIBIT
C
AGENT
ACCESSION LETTER
[Date]
[Name
of
Agent]
[Address
of Agent]
Dear
Sirs:
HSBC
USA
Inc., a Maryland corporation (the “Company”), has previously entered into a
Distribution Agreement, dated June 10, 2008 (the “Distribution Agreement”),
among the Company and the other agents signatory thereto (the “Existing
Agents”), with respect to the issue and sale from time to time by the Company of
the Company’s senior debt Securities (the “Securities”). The Securities will be
issued under an indenture, dated as of March 31, 2006, between the Company
and
Deutsche Bank Trust Company Americas, as trustee (the “Trustee”), (as may be
supplemented or amended from time to time, the “Indenture”). The Distribution
Agreement permits the Company to appoint one or more additional persons to
act
as agent with respect to the Securities, on terms substantially the same as
those contained in the Distribution Agreement. A copy of the Distribution
Agreement, including the Administrative Procedures with respect to the issuance
of the Securities attached thereto as Exhibit B, is attached hereto.
In
accordance with Section 2(d) of the Distribution Agreement we hereby confirm
that, with effect from the date hereof, you shall become a party to, and an
Agent under, the Distribution Agreement, vested with all the authority, rights
and powers, and subject to all duties and obligations of an Agent as if
originally named as such under the Distribution Agreement.
Except
as
otherwise expressly provided herein, all terms used herein which are defined
in
the Distribution Agreement shall have the same meanings as in the Distribution
Agreement. Your obligation to act as Agent hereunder shall be subject to you
having received copies of the most recent documents (including any prior
documents referred to therein) previously delivered to the Existing Agents
pursuant to Sections 4 and 5 of the Distribution Agreement and letters from
the counsel referred to in Section 4(b) of the Distribution Agreement and the
Company’s independent auditors entitling you to rely on their opinions and
comfort letter, respectively, delivered pursuant to the Distribution Agreement
(to the extent such opinions and comfort letter do not, by their terms permit
you as an Additional Agent to rely on them).
By
your
signature below, you confirm that such documents are to your satisfaction.
For
purposes of Section 9 of the Distribution Agreement, you confirm that your
notice details are as set forth immediately beneath your signature.
Each
of
the parties to this letter agrees to perform its respective duties and
obligations specifically provided to be performed by each of the parties in
accordance with the terms and provisions of the Distribution Agreement and
the
Administrative Procedures, as amended or supplemented hereby.
C-1
Notwithstanding
anything in the Distribution Agreement to the contrary, except as otherwise
provided in a Written Terms Agreement with respect to a particular offering
of
Securities, the obligations of each of the Existing Agents and the Additional
Agent(s) under Section 7 of the Distribution Agreement are several and not
joint, and in no case shall any Existing Agent or Additional Agent (except
as
may be provided in any agreement among them) be responsible under Section 7(d)
to contribute any amount in excess of the commissions received by such Existing
Agent or Additional Agent from the offering of the Securities.
This
Agreement shall be governed by the laws of the State of New York. This Agreement
may be executed in one or more counterparts and the executed counterparts taken
together shall constitute one and the same agreement.
If
the
foregoing correctly sets forth the agreement among the parties hereto, please
indicate your acceptance hereof in the space provided for that purpose below.
|
Very
truly yours,
|
||
|
HSBC
USA INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
CONFIRMED
AND ACCEPTED, as of the date first above written
[Insert
name of Additional Agent and information pursuant to Section 9 of the
Distribution Agreement]
C-2
EXHIBIT
D
FORM
OF COMPANY COUNSEL OPINION
To
each
of the Parties
named
in
Schedule I hereto
Ladies
and Gentlemen:
This
opinion is addressed to you pursuant to Section 4 of the Distribution Agreement
dated June
10,
2008 (the
“Distribution Agreement”) relating to Senior Debt Securities (the "Notes") of
HSBC USA Inc. (the “Company”).
I
have
examined, or caused to be examined, such records and documents pertaining to
the
Notes as I have considered necessary or appropriate as a basis for the opinions
set forth herein. As to any facts material to my opinions which I did not
independently establish or verify, I have relied upon statements or
representations of officers and representatives of the Company. Certain
capitalized terms not otherwise defined herein have the meanings assigned to
them in the Distribution Agreement. Based upon the foregoing and upon my
familiarity, as Executive Vice President and Deputy General Counsel of the
Company, with the affairs of the Company, I am of the opinion that:
1. The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Maryland, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus dated April 5, 2006 (the “Base Prospectus”) as
supplemented by (A) the Prospectus Supplement dated October 12, 2007 (the
“Prospectus Supplement”), (B) the Product Supplement dated October 23, 2007 (the
“Product Supplement”) and (C) the Prospectus Addendum dated December 12, 2007
(the “Prospectus Addendum”, and together with the Base Prospectus, Prospectus
Supplement, and Product Supplement, the “Prospectus”).
2. The
Company is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended.
3. All
of
the issued shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable.
4. The
Company has been duly qualified as a foreign corporation for the transaction
of
business and is in good standing under the laws of each other jurisdiction
in
which it owns or leases properties, or conducts any business, so as to require
such qualification, or is subject to no material liability or disability by
reason of failure to be so qualified or in good standing in any such
jurisdiction.
5. Each
subsidiary of the Company which is a “significant subsidiary” (each, a
“Significant Subsidiary”) as defined in Rule 405 of Regulation C of the rules
and regulations promulgated under the Securities Act of 1933, as amended (the
“1933 Act”) has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization; and all of the issued shares
of capital stock of each Significant Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
D-1
6. The
Indenture dated as of March 31, 2006 (the “Indenture”) has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding instrument of the Company enforceable in accordance with its terms,
except as enforcement of the provisions thereof may be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors’ rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and all taxes and fees required to be paid with respect to
the
execution of the Indenture and the issuance of the Notes have been
paid.
7. The
Indenture has been duly qualified under the Trust Indenture Act.
8. The
Notes
have been duly authorized and executed and, when the Notes have been duly
authenticated, issued and delivered against payment of the agreed consideration
therefor, the Notes will constitute valid and legally binding obligations of
the
Company, and will be entitled to the benefits of the Indenture, with the
exception noted in item 6 above.
9. The
terms
of the Notes conform with the description thereof in the Prospectus, as amended
or supplemented.
10. The
Company is not and, after giving effect to the offering and sale of the Notes
and the application of the proceeds thereof as described in the Prospectus,
will
not be an “investment company” as defined in the Investment Company Act of 1940,
as amended
11. To
the
best of my knowledge and other than as set forth in the Base Prospectus as
supplemented by the Prospectus Supplement, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the
subject which if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries considered as one enterprise; and, to the
best of my knowledge, no such proceedings are threatened or contemplated by
governmental authorities or by others.
12. The
issue
and sale of the Notes by the Company and the compliance by the Company with
all
of the provisions of the Distribution Agreement and the Indenture and the
consummation of the transactions therein contemplated will not conflict with
or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to me to which the Company
or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject (except for conflicts, breaches and
defaults which would not, individually or in the aggregate, be materially
adverse to the Company and its subsidiaries considered as one enterprise),
nor
will such action result in any violation of the provisions of the Articles
of
Incorporation or bylaws of the Company or any statute, rule or regulation or
any
order known to me of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties.
D-2
13. No
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue
and
sale of the Notes or the consummation by the Company of the transactions
contemplated by the Distribution Agreement, except such consents as have already
been obtained, and such consents, approvals, authorizations, registrations
or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Agents.
14. The
documents incorporated by reference in the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by the Company prior to
the
date hereof (other than the financial statements and related schedules therein,
as to which I express no opinion), when they became effective or were filed
with
the Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
15. Both
the
registration statement on Form S-3 (File No. 333-133007) relating to securities
of the Company, including the Notes (as may be amended or supplemented by the
Company prior to the date hereof, the “Registration Statement”) and the
Prospectus (other than the financial statements and related schedules therein,
as to which I express no opinion) comply as to form in all material respects
with the requirements of the 1933 Act and the rules and regulations thereunder;
and I do not know of any amendment to the Registration Statement required to
be
filed with the Commission or of any contracts or other documents of a character
required to be filed with the Commission as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as
required.
As
Executive Vice President and Deputy General Counsel of the Company, I am
generally familiar with (i) the proceedings in connection with the Registration
Statement, in which Debt Securities, Preferred Stock, Depositary Shares,
Warrants, Purchase Contracts, Units or any combination of the foregoing, of
the
Company were registered, and (ii) the offering and sale of Senior Unsecured
Notes under the Registration Statement. In addition, I,
or
attorneys acting under my supervision, have been involved in the preparation
of
filings made on behalf of the Company under the 1934 Act (the “Filings”) and the
Prospectus. Based on discussions with representatives of the Company and
attorneys acting under my supervision, I have no reason to believe that (i)
the
Registration Statement as of its effective date, or any amendment thereto made
by the Company prior to the date hereof, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (other than the
financial statements and related schedules therein as to which no independent
review by me or such attorneys has been made); (ii) any of such Filings, and
documents incorporated by reference in such Filings, when they were so filed,
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (iii) the Prospectus contained,
or as of the date hereof contains, an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements and related schedules
contained therein as to which no independent review by me or such attorneys
has
been made).
D-3
16. I
have no
reason to believe that the documents incorporated by reference in the
Prospectus, when such documents became effective or were filed, or in the case
of a registration statement which became effective under the 1933 Act, contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The
foregoing opinions are being delivered to you for the purpose stated herein
and
may not be publicly disseminated, assigned, transmitted or used by any party
for
any other purpose without my express written consent.
Very
truly yours,
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
D-4
SCHEDULE
I
▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Nuveen
Investments, LLC
D-5
EXHIBIT
E
FORM
OF AGENTS’ COUNSEL OPINION
▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
Nuveen
Investments, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
We
have
acted as your counsel in connection with the proposal by HSBC USA Inc., a
Maryland corporation (the “Company”) to issue and sell, through you,
exchange-traded notes (the “Notes”), pursuant to the Distribution Agreement
dated June 10, 2008 between you and the Company (the “Distribution Agreement”).
The Notes will be issued from time to time pursuant to provisions of the
Indenture, dated as of March 31, 2006, between the Company and Deutsche Bank
Trust Company Americas, as Trustee (in such capacity, the “Trustee”). This
letter is being delivered to you pursuant to Section 4(b)(ii) of the
Distribution Agreement. All terms used herein and defined in the Distribution
Agreement shall, unless otherwise defined herein, have the meanings set forth
therein.
We
have
not independently verified the accuracy, completeness or fairness of the
statements made or included in the Registration Statement on Form S-3ASR (File
No. 333-133007) filed by the Company under the Securities Act of 1933, as
amended (the “Securities Act”), as it became effective under the Securities Act
(the “Registration Statement”) or the Company’s prospectus dated April 5, 2006
(the “Prospectus”)
filed by
the Company pursuant to Rule 424(b)(2) of the rules and regulations of the
Securities and Exchange Commission (the “Commission”) under the Securities
Act,
or
in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2007, the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2008 and the Company’s Current Reports on Form 8-K filed on February 4,
2008, April 16, 2008, April 21, 2008, May 2, 2008 and May 5, 2008 (collectively,
the “Exchange Act Documents”), each as filed under the Securities Exchange Act
of 1934, as amended, and incorporated by reference or deemed to be incorporated
by reference in the Prospectus, and we take no responsibility
therefor.
E-5
In
connection with the execution and delivery of the Distribution Agreement, and
under the circumstances applicable to the proposal to issue and sell the Notes,
we participated in conferences with certain officers and employees of the
Company, representatives of KPMG LLP and with in-house counsel to the Company
in
the course of the preparation by the Company of the Registration Statement
and
the Prospectus (excluding the Exchange Act Documents) and also reviewed certain
records and documents furnished to us by the Company, as well as the documents
delivered to you at the closing. We did not participate in the preparation
of
the Exchange Act Documents or review such documents prior to their filing with
the Commission. Based
upon our review of the Registration Statement, the Prospectus and the Exchange
Act Documents, our reviews made in connection with the preparation of the
Registration Statement and the Prospectus (excluding the Exchange Act
Documents), our participation in the conferences referred to above, our review
of the records and documents as described above, and our understanding of the
U.S. federal securities laws and the experience we have gained in our practice
thereunder:
|
(i)
|
we
advise you that each of the Registration Statement, as of its effective
date, and the Prospectus, as of its date, appeared, on its face,
to be
appropriately responsive, in all material respects, to the requirements
of
the Securities Act and the applicable rules and regulations of the
Commission thereunder, except that in each case we express no belief
with
respect to the financial statements or other financial or statistical
data contained
in, incorporated or deemed incorporated by reference in, or omitted
from
the Registration Statement, the Prospectus or the Exchange Act Documents,
and
|
E-6
|
(ii)
|
nothing
has come to our attention that causes us to believe that the Registration
Statement (including the Exchange Act Documents on file with the
Commission on the effective date of the Registration Statement),
as of its
effective date, contained any untrue statement of a material fact
relating
to the Company or omitted to state any material fact relating to
the
Company required to be stated therein or necessary in order to make
the
statements therein not misleading or that the Prospectus (including
the
Exchange Act Documents), as of its date or as of the date hereof,
contained or contains any untrue statement of a material fact relating
to
the Company or omitted or omits to state any material fact relating
to the
Company necessary in order to make the statements therein, in the
light of
the circumstances under which they were made, not misleading, except
that
in each case we express no belief with respect to the financial statements
or other financial or statistical data contained in, incorporated
or
deemed incorporated by reference in, or omitted from the Registration
Statement, the Prospectus or the Exchange Act
Documents.
|
E-7
This
letter is being delivered in connection with the execution and delivery of
the
Distribution Agreement. It is not delivered in connection with any particular
issuance of Notes pursuant thereto. Our role in connection with the Distribution
Agreement and the transactions contemplated thereby has been limited to the
preparation and delivery of this letter relating to the Registration Statement
and the Prospectus. Accordingly, we do not express any opinion or view with
respect to the Distribution Agreement or the transactions contemplated thereby,
including any particular issuance of Notes thereunder, or with respect to any
pricing supplement or prospectus supplement to the Prospectus relating to the
Distribution Agreement or the transactions contemplated thereby, including
any
particular issuance of Notes thereunder, nor to any statement made in or omitted
from any such pricing supplement or prospectus supplement.
This
letter is delivered to you in connection with the above-described transaction.
This letter may not be relied upon by you for any other purpose, or relied
upon
by, or furnished to, any other person, firm or corporation.
Very
truly yours,
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
E-8