HSBC Finance Capital Trust IX and HSBC Finance Corporation Capital Securities UNDERWRITING AGREEMENT
Exhibit 1
Capital Securities
November __, 2005
HSBC Securities (USA) Inc.
HSBC Tower 10
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HSBC Tower 10
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Ladies and Gentlemen:
HSBC Finance Capital Trust IX (the “Trust”), a statutory trust organized under the Delaware
Statutory Trust Act (the “Delaware Act”) of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. Sections 3801 et seq.), proposes, upon the terms and conditions set forth
herein, to issue and sell 10,000 Capital Securities with an aggregate liquidation amount equal to
$1,000,000,000 (the “Capital Securities”) to the several Underwriters named in Schedule I hereto
(the “Underwriters”).
The Capital Securities will be guaranteed by HSBC Finance Corporation, a Delaware corporation
(the “Company”), with respect to distributions and payments upon liquidation, redemption and
otherwise (the “Capital Securities Guarantee”) pursuant to the Capital Securities Guarantee
Agreement (the “Capital Securities Guarantee Agreement”), dated as of November ___, 2005, between
the Company and BNY Midwest Trust Company, as trustee (the “Guarantee Trustee”). The entire
proceeds from the sale of the Capital Securities will be combined with the entire proceeds from the
sale by the Trust to the Company of its common securities (the “Common Securities”), and will be
used by the Trust to purchase the
$ of Junior Subordinated Deferrable Interest Notes due November
___, 2035 (the “Junior Subordinated Notes”) issued by the Company. The Capital Securities and the
Common Securities will be issued pursuant to the amended and restated declaration of trust of the
Trust, dated as of November ___, 2005 (the “Declaration”), among the Company, as Sponsor, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Regular Trustees”), BNY Midwest Trust
Company, as property trustee (the “Property Trustee”) and The Bank of New York (Delaware), as
Delaware trustee (the “Delaware Trustee” and together with the Regular Trustees and the Property
Trustee, the “Trustees”), and the holders from time to time of undivided beneficial interests in
the assets of the Trust. The Junior Subordinated Notes will be issued pursuant to an indenture,
dated as of May 15, 1995 (the “Base Indenture”), between the Company and ▇▇ ▇▇▇▇▇▇ Trust Company,
National Association, as trustee (the “Debt Trustee”), and a supplement to the Base Indenture,
dated as of November ___, 2005 (the “Supplemental Indenture” and together with the Base Indenture
and any other amendments or supplements thereto, the “Indenture”), between the Company and the Debt
Trustee.
The Trust and the Company (together, the “Offerors”) wish to confirm as follows their
agreement with you and the other several Underwriters on whose behalf you are acting as
representatives (the “Representatives”) in connection with the several purchases of the Capital
Securities by the Underwriters.
1. Registration Statement and Prospectus. The Offerors have filed with the Securities
and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Nos. 333-128369
and 333-128369-01) and a related preliminary prospectus for the registration under the Securities
Act of 1933 (the “1933 Act”) of (i) the Capital Securities, (ii) the Capital Securities Guarantee,
and (iii) the Junior Subordinated Notes to be issued and sold to the Trust by the Company, have
filed such amendments thereto, if any, and such amended preliminary prospectuses as may have been
required to the date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement (as amended) and the
prospectus constituting a part thereof (including, in each case, all documents incorporated or
deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act
and the information, if any, deemed to be part thereof pursuant to Rule 430A(b) of the rules and
regulations of the Commission under the 1933 Act (the “1933 Act Regulations”)), as from time to
time amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the “1934 Act”), or otherwise, are hereinafter referred to as the “Registration Statement”
and the “Prospectus”, respectively, except that, if any revised prospectus shall be provided to the
Underwriters by the Offerors for use in connection with the offering of the Capital Securities
which differs from the Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be filed by the Offerors
pursuant to Rule 424(b) of the 1933 Act Regulations), the term “Prospectus” shall refer to such
revised prospectus from and after the time it is first provided to the Underwriters for such use.
All references in this Agreement to financial statements and schedules and other information that
is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such financial statements
and schedules and other information that are or are deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934 Act that is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as the case may be.
2. Agreements to Sell and Purchase. The Trust hereby agrees, subject to all the terms
and conditions set forth herein, to issue and sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Offerors herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $100,000 per Capital Security, plus accrued
distributions, if any, from November ___, 2005, to the Closing Time (as hereinafter defined), the
number of Capital Securities set forth opposite the name of such Underwriter in Schedule I hereto
(or such number of Capital Securities increased as set forth in Section 10 hereof).
In consideration of such purchases at the Closing Time (as defined below), the Company shall
pay to the Underwriters as compensation (in immediately available funds), at the Closing
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Time, $___ per Capital Security. The Underwriters shall inform the Company in writing at the
Closing Time of the number of Capital Securities so sold.
3. Terms of Public Offering. The Offerors have been advised by you that the
Underwriters propose to make a public offering of their respective portions of the Capital
Securities as soon as the Underwriters deem advisable after the Registration Statement has become
effective, this Agreement has been executed and delivered, and the Declaration, the Capital
Securities Guarantee Agreement and the Indenture have been qualified under the Trust Indenture Act
of 1939 (the “1939 Act”).
4. Delivery of the Capital Securities and Payment Therefor. Delivery to the
Underwriters of and payment for the Capital Securities shall be made at 9:00 A.M., Central Time, on
November ___, 2005 (the “Closing Time”). The Closing Time may be varied by agreement between you
and the Company.
The Capital Securities shall be delivered to you for the accounts of the several Underwriters
in book-entry form and in such authorized denominations as you may request and registered in the
name of CEDE & Co., as nominee for The Depository Trust Company against payment of the purchase
price therefor in immediately available funds.
5. Agreements of Offerors. The Offerors jointly and severally agree with the several
Underwriters as follows:
(a) The Offerors will notify the Representatives promptly, and confirm the notice in
writing, (i) of the effectiveness of the Registration Statement and any amendment thereto
(including any post-effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose. The
Offerors will make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Offerors will give the Representatives notice of their intention to file or
prepare (i) any amendment to the Registration Statement (including any post-effective
amendment), (ii) any amendment or supplement to the Prospectus (including any revised
prospectus which the Offerors propose for use by the Underwriters in connection with the
offering of the Capital Securities which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), or (iii) any document that would as a result thereof be incorporated by
reference in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such amendment, supplement or other
document within a reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment, supplement or other document or use
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any such prospectus to which the Representatives or counsel for the Underwriters shall
reasonably object. Subject to the foregoing, the Offerors will file the Prospectus pursuant
to Rule 424(b) and Rule 430A under the Act not later than the Commission’s close of business
on the second business day following the execution and delivery of this Agreement.
(c) The Offerors will deliver to the Representatives signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) as the Representatives may reasonably request and will
also deliver to the Representatives as many conformed copies of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of the
Underwriters.
(d) The Offerors will furnish to each Underwriter, from time to time during the period
when the Prospectus is required to be delivered under the 1933 Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may reasonably request for
the purposes contemplated by the 1933 Act or the respective applicable rules and regulations
of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act to be delivered in
connection with sales of the Capital Securities, any event shall occur as a result of which
it is necessary, in the opinion of counsel for the Underwriters or counsel to the Company
and the Trust, to amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is to be delivered to a
purchaser, or if it shall be necessary at any such time, to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Offerors will promptly prepare and file with the
Commission, subject to paragraph (b) above, such amendment or supplement as may be necessary
to correct such untrue statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements; and the Offerors will furnish to the Underwriters
a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriters, to qualify the
Capital Securities, the Capital Securities Guarantee and the Junior Subordinated Notes for
offering and sale under the applicable securities laws of such states and the other
jurisdictions of the United States as the Representatives may designate; provided, however,
that none of the Offerors shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified.
(g) The Company will make generally available to its security holders as soon as
practicable but not later than 45 days after the close of the period covered thereby, an
earnings statement of the Company (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve-month period beginning not later than the
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first day of the Company’s fiscal quarter next following the “effective date” (as
defined in said Rule 158) of the Registration Statement.
(h) During a period of 30 days from the date of this Agreement, neither the Trust nor
the Company will, without the prior written consent of the Representatives, directly or
indirectly, sell, offer to sell, contract to sell, grant any option for the sale of, or
otherwise dispose of, any Capital Securities, any security convertible into or exchangeable
into or exercisable for Capital Securities or the Junior Subordinated Notes or any debt
securities substantially similar to the Junior Subordinated Notes or equity securities
substantially similar to the Capital Securities (except for the Junior Subordinated Notes
and the Capital Securities issued pursuant to this Agreement).
6. Representations and Warranties of the Offerors. The Offerors jointly and severally
represent and warrant to, and agree with, each Underwriter that:
(a) At the time the Registration Statement became or becomes effective, the
Registration Statement complied or will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the “1939 Act Regulations”), 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. The
Prospectus, at the date hereof (unless the term “Prospectus” refers to a prospectus that has
been provided to the Underwriters by the Trust for use in connection with the offering of
the Capital Securities and that differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case, at the time it is first
provided to the Underwriters for such use) and at Closing Time referred to in Section 2
hereof, will not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statement therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Offerors in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or Prospectus.
(b) The documents incorporated or deemed to be incorporated by reference in the
Registration Statement or Prospectus, at the time they were or hereafter are filed with the
Commission complied and will comply in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission under the 1934 Act (the “1934 Act
Regulations”), and, when read together with the other information in the Prospectus, at the
time the Registration Statement and any amendments thereto become effective and at the
Closing Time, 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, in
the light of the circumstances under which they were made, not misleading.
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(c) To the best of the Company’s knowledge, KPMG LLP, the accountants who certified the
financial statements and supporting schedules included in the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933 Act Regulations.
(d) The financial statements included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated subsidiaries as at
the dates indicated and the results of their operations for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have been prepared
in conformity with generally accepted accounting principles applied on a consistent basis;
and the supporting schedules included in the Registration Statement present fairly the
information required to be stated therein.
(e) Since the respective dates as of which information is given in the Registration
Statement and the Prospectus (exclusive of any amendments or supplements after the date
hereof), except as otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, financial position or business
affairs of the Company and its subsidiaries, considered as one enterprise, or the Trust,
whether or not arising in the ordinary course of business, and (B) there have been no
transactions entered into by the Trust or by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with respect to the Trust
or the Company and its subsidiaries, considered as one enterprise.
(f) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware with corporate power and authority to
own, lease and operate its properties and to conduct its business as described in the
Prospectus, to enter into and perform its obligations under this Agreement, the Declaration,
the Indenture and the Capital Securities Guarantee and to purchase, own, and hold the Common
Securities issued by the Trust; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which the character or
location of its properties or the nature or the conduct of its business requires such
qualification, except for any failures to be so qualified or in good standing which, taken
as a whole, are not materially adverse to the Company and its subsidiaries considered as one
enterprise.
(g) Each subsidiary of the Company which is a significant subsidiary (a “Subsidiary”)
as defined in Rule 405 of the 1933 Act Regulations, has been duly organized or incorporated
and is validly existing in good standing under the laws of the jurisdiction of its
incorporation, association or organization, has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign entity to transact business and is in good standing in each
jurisdiction in which the character or location of its properties or the nature or the
conduct of its business requires such qualification, except for any failures to be so
qualified or in good standing which, taken as a whole, are not materially adverse to the
Company and its subsidiaries considered as one enterprise; all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and
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validly issued, is fully paid and non-assessable; and the capital stock of each such
Subsidiary owned by the Company, directly or through subsidiaries, is owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(h) The authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus; and all of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and non-assessable.
(i) The Trust has been duly created and is validly existing and in good standing as a
business trust under the Delaware Act with the power and authority to own property and to
conduct its business as described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Capital Securities, the Common
Securities and the Declaration; the Trust is duly qualified to transact business as a
foreign company and is in good standing in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Trust; the Trust is not a
party to or otherwise bound by any agreement other than those described in the Prospectus;
the Trust is and will be classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation; and the Trust is and will
be treated as a consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(j) The Common Securities have been duly authorized by the Declaration and, when issued
and delivered by the Trust to the Company against payment therefor as described in the
Registration Statement and Prospectus, will be validly issued and (subject to the terms of
the Declaration) fully paid and non-assessable undivided beneficial interests in the assets
of the Trust and will conform to all statements relating thereto contained in the
Prospectus; the issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the Closing Time all of the issued and outstanding Common Securities
of the Trust will be directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(k) This Agreement has been duly authorized, executed and delivered by each of the
Offerors.
(l) The Declaration has been duly authorized by the Company and, at the Closing Time,
will have been duly executed and delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Declaration by the Property Trustee, the
Declaration will, at the Closing Time, be a valid and binding obligation of the Company and
the Regular Trustees, enforceable against the Company and the Regular Trustees in accordance
with its terms, except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors rights
generally or by general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) (the “Bankruptcy Exceptions”) and will
conform to all statements
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relating thereto in the Prospectus; and at the Closing Time, the Declaration will have
been duly qualified under the 1939 Act.
(m) The Capital Securities Guarantee Agreement has been duly authorized by the Company
and, when validly executed and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions,
and the Capital Securities Guarantee and the Capital Securities Guarantee Agreement will
conform to all statements relating thereto contained in the Prospectus; and the Capital
Securities Guarantee Agreement, at the Closing Time, will have been duly qualified under the
1939 Act.
(n) The Capital Securities have been duly authorized by the Declaration and, when
issued and delivered pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and (subject to the terms of the Declaration) fully
paid and non-assessable undivided beneficial interests in the Trust, will be entitled to the
benefits of the Declaration and will conform to all statements relating thereto contained in
the Prospectus; the issuance of the Capital Securities is not subject to preemptive or other
similar rights; and (subject to the terms of the Declaration) holders of Capital Securities
will be entitled to the same limitation of personal liability under Delaware law as extended
to stockholders of private corporations for profit.
(o) The Indenture has been duly authorized by the Company and, when validly executed
and delivered by the Company, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; the Indenture will conform
to all statements relating thereto contained in the Prospectus; and at the Closing Time, the
Indenture will have been duly qualified under the 1939 Act.
(p) The Junior Subordinated Notes have been duly authorized by the Company and, at the
Closing Time, will have been duly executed by the Company and, when authenticated in the
manner provided for in the Indenture and delivered against payment therefor as described in
the Prospectus, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, will be in the form contemplated by,
and entitled to the benefits of, the Indenture and will conform to all statements relating
thereto in the Prospectus.
(q) The Company’s obligations under the Capital Securities Guarantee are subordinate
and junior in right of payment to all liabilities of the Company and are pari passu with the
preferred stock issued by the Company.
(r) The Junior Subordinated Notes are subordinated and junior in right of payment to
all “senior indebtedness” (as defined in the Indenture) of the Company.
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(s) Each of the Regular Trustees of the Trust is an employee of the Company and has
been duly authorized by the Company to execute and deliver the Declaration; the Declaration
has been duly executed and delivered by the Regular Trustees and is a valid and binding
obligation of each Regular Trustee, enforceable against such Regular Trustee in accordance
with its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(t) None of the Offerors is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940, as amended
(the “1940 Act”).
(u) The execution, delivery and performance of this Agreement, the Declaration, the
Capital Securities, the Common Securities, the Indenture, the Junior Subordinated Notes ,
the Capital Securities Guarantee Agreement and the Capital Securities Guarantee and the
consummation of the transactions contemplated herein and therein and compliance by the
Offerors with their respective obligations hereunder and thereunder have been duly
authorized by all necessary action (corporate or otherwise) on the part of the Offerors and
do not and will not result in any violation of the charter or by-laws of the Company or any
subsidiary, or the Declaration or Certificate of Trust and do not and will not conflict
with, or result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust, the Company or any Subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which
the Trust, the Company or any Subsidiary is a party or by which it may be bound or to which
any of its properties may be subject (except for conflicts, breaches or defaults which would
not, individually or in the aggregate, be materially adverse to the Trust or the Company and
its subsidiaries considered as one enterprise, or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or court, domestic
or foreign, or any regulatory body or administrative agency or other governmental body
having jurisdiction over the Trust, the Company, or any Subsidiary or any of their
respective properties.
(v) Except as disclosed in the Prospectus, there is no action, suit or proceeding
before or by any government, governmental instrumentality or court, domestic or foreign, now
pending or, to the knowledge of the Trust or the Company, threatened, against or affecting
the Trust, the Company or any of its subsidiaries that is required to be disclosed in the
Prospectus, other than actions, suits or proceedings which are not reasonably expected,
individually or in the aggregate, to have a material adverse effect on the condition,
financial or otherwise, of the Trust or the Company and its subsidiaries considered as one
enterprise, or on the earnings, financial position or business affairs of the Trust or the
Company and its subsidiaries considered as one enterprise; and there are no contracts or
documents of the Company, any of its subsidiaries or the Trust that are required to be filed
as exhibits to the Registration Statement by the 1933 Act or by the 1933 Act Regulations
that have not been so filed.
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(w) No authorization, approval, consent or order of any court or governmental authority
or agency is necessary in connection with the issuance and sale of the Common Securities or
the offering of the Capital Securities, the Junior Subordinated Notes or the Capital
Securities Guarantee hereunder, except such as may be required under the 1933 Act or the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations or state or foreign
securities laws and the qualification of the Declaration, the Capital Securities Guarantee
Agreement and the Indenture under the 1939 Act.
(x) The Company and the Subsidiaries and the Trust possess adequate certificates,
authorities or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies to conduct the business now operated by them, and neither the Company nor
any of the Subsidiaries nor the Trust has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding would materially
and adversely affect the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise or of the Trust.
7. Indemnification and Contribution.
(a) Each of the Trust and the Company jointly and severally agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 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) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), 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, in the light of the circumstances under which
they were made, 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 based upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Capital Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law to so have been delivered, at
or prior to the written confirmation of the sale of the Capital Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
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(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Trust, the Company, its directors, its officers who sign the Registration Statement, the
trustees of the Trust and each person, if any, who controls the Company within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from the Trust and the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(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
paragraph (a) or (b) of this Section 7, 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated in the case of parties
indemnified pursuant to paragraph (a) of this Section 7, and by the Company, in the case of
parties indemnified pursuant to paragraph (b) of this Section 7. 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 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,
11
effect any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(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, 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 Trust and the Company on the one hand and the Underwriters on the
other hand from the offering of the Capital Securities or (ii) if the allocation provided by
clause (i) above 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 Trust and the Company on the one hand and of the Underwriters 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 Trust and the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Capital Securities shall be deemed to be
in the same respective proportions as the net proceeds from the offering of the Capital
Securities (before deducting expenses) received by the Trust and the total underwriting
discounts and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering price of the
Capital Securities. The relative fault of the Trust and the Company on the one hand and the
Underwriters 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 Trust and the
Company or by the Underwriters and the parties, relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in
proportion to the respective number of Capital Securities they have purchased hereunder, and
not joint.
(e) The Trust, the Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to
in paragraph (d) of this Section 7. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph 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, no Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the
12
Capital Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has 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 ▇▇▇▇ ▇▇▇) 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 Trust and the Company contained in
this Agreement shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Capital Securities.
8. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters to purchase the Capital Securities hereunder are subject to the following conditions:
(a) The Registration Statement shall have become effective not later than 5:30 P.M. on
the date hereof, or at such later time and date as may be approved in writing by the
Representatives; and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the 1933 Act Regulations and in accordance with Section 3(b) and prior to Closing
Time the Offerors shall have provided evidence satisfactory to the Representatives of such
timely filing.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President, Deputy General Counsel—Corporate and Assistant Secretary of the
Company, in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and to enter into and perform its obligations under
this Agreement, except where the failure to have such power and
13
authority would not be material to the Company and its subsidiaries
considered as one enterprise.
(iii) To the best of his knowledge and information, the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify or be in good standing would not be
material to the Company and its subsidiaries considered as one enterprise.
(iv) To the best of his knowledge and information, the Trust is duly
qualified and in good standing as a foreign entity in any jurisdiction in
which such qualification is necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Trust; and the Trust is not a party to or otherwise
bound by any agreement other than those described in the Prospectus.
(v) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and, to the best of his knowledge and information, is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the character or location of its
properties or the nature or conduct of its business requires such
qualification, except where the failure to have such power and authority or
to so qualify or be in good standing would not be material to the Company
and its subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best of his
knowledge and information, the capital stock of each such Subsidiary owned
by the Company, directly or through subsidiaries, is owned free and clear
of any perfected security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(vi) The Company has an authorized capitalization as set forth in the
Prospectus and all outstanding shares of its common and preferred stock
have been duly and validly authorized and issued and are fully paid and
nonassessable.
(vii) This Agreement has been duly authorized, executed and delivered
by the Company.
(viii) The Registration Statement is effective under the 1933 Act and,
and to the best of his knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has been issued
14
under the 1933 Act or proceeding therefor initiated or threatened by
the Commission.
(ix) At the time the Registration Statement became effective and at
the Closing Time, the Registration Statement (other than the financial
statements and supporting schedules and other financial or statistical data
included therein, as to which no opinion need be rendered) complied as to
form in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
(x) To the best of his knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto.
(xi) No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
offering, issuance or sale of the Capital Securities, the Capital
Securities Guarantee and the Junior Subordinated Notes to the Underwriters,
except (a) such as may be required under the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations or state securities
laws and (b) the qualification of the Declaration, the Capital Securities
Guarantee Agreement and the Indenture under the 1939 Act; and, to the best
of his knowledge and information, the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein and compliance by the Company and the Trust with their obligations
hereunder and will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries or the Trust pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
of the Subsidiaries or the Trust is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or
any of the Subsidiaries or the Trust 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 taken as a whole or
the Trust or materially adverse to the transactions contemplated by this
Agreement), nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company, or any
applicable law, administrative regulation or administrative or court
decree.
(xii) Each document filed pursuant to the 1934 Act (other than the
financial statements and supporting schedules and other financial or
statistical data included therein, as to which no opinion need be rendered)
15
and incorporated or deemed to be incorporated by reference in the
Prospectus complied when so filed as to form in all material respects with
the 1934 Act and the 1934 Act Regulations.
(xiii) To the best of his knowledge and information and other than as
disclosed in the Registration Statement, 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 individually or in the aggregate is material, and, to the
best of his knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(xiv) The Declaration has been duly qualified under the 1939 Act.
(xv) The Capital Securities Guarantee Agreement has been duly
authorized, executed and delivered by the Company and, assuming it is duly
authorized, executed and delivered by the Guarantee Trustee, constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; and the Capital
Securities Guarantee Agreement has been duly qualified under the ▇▇▇▇ ▇▇▇.
(xvi) To the best of his knowledge, all of the issued and outstanding
Common Securities of the Trust are directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equitable right.
(xvii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution, and delivery
thereof by the Debt Trustee, is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; the Indenture has been duly qualified under the 1939
Act; and the Indenture conforms to the description thereof in the
Prospectus.
(xviii) The Junior Subordinated Notes have been duly authorized and
executed by the Company and, when authenticated by the Trustee in the
manner provided in the Indenture and delivered against payment therefor,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy
16
Exceptions; and the Junior Subordinated Notes conform to the
description thereof in the Prospectus.
(xix) Neither the Company nor the Trust is an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
1940 Act.
(xx) The Common Securities, the Capital Securities and the Declaration
conform in all material respects to all statements relating thereto
contained in the Prospectus.
(2) The favorable opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., Special Delaware
counsel to the Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly formed and is validly existing in good
standing as a statutory trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the formation and
valid existence of the Trust as a statutory trust have been made; the Trust
has all necessary power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this Agreement, the Capital
Securities and the Common Securities.
(ii) The Declaration constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Bankruptcy Exceptions.
(iii) The Common Securities have been duly authorized by the
Declaration and are validly issued beneficial interests in the assets of
the Trust, and the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(iv) The Capital Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the
Declaration), when delivered to and paid for by the Underwriters pursuant
to this Agreement, will be validly issued, fully paid and non-assessable
beneficial interests in the assets of the Trust; the holders of the Capital
Securities will (subject to the terms of the Declaration) be entitled to
the same limitation of personal liability under Delaware law as is extended
to stockholders of private corporations for profit; and the issuance of the
Capital Securities is not subject to preemptive or other similar rights.
(v) This Agreement has been duly authorized, executed and delivered by
the Trust.
17
(vi) The execution, delivery and performance of this Agreement, the
Declaration, the Capital Securities and the Common Securities, the
consummation of the transactions contemplated herein and therein, and the
compliance by the Trust with its obligations hereunder and thereunder do
not and will not result in any violation of the Declaration or Certificate
of Trust, or any applicable law, rule or regulation of the State of
Delaware.
(3) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, LLP, counsel for BNY Midwest Trust Company, as Property Trustee under the
Declaration, and Guarantee Trustee under the Capital Securities Guarantee
Agreement, in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) BNY Midwest Trust Company is an Illinois trust company with trust
powers, duly organized, validly existing and in good standing under the
laws of the State of Illinois with all necessary power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of the Declaration and the Capital Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the Property Trustee
of the Declaration and the execution, delivery and performance by the
Guarantee Trustee of the Capital Securities Guarantee Agreement have been
duly authorized by all necessary corporate action on the part of the
Property Trustee and the Guarantee Trustee, respectively. The Declaration
and the Capital Securities Guarantee Agreement have been duly executed and
delivered by the Property Trustee and the Guarantee Trustee, respectively,
and constitute the legal, valid and binding obligations of the Property
Trustee and the Guarantee Trustee, respectively, enforceable against the
Property Trustee and the Guarantee Trustee, respectively, in accordance
with their terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the Declaration and
the Capital Securities Guarantee Agreement by the Property Trustee and the
Guarantee Trustee, respectively, does not conflict with or constitute a
breach of the Articles of Incorporation or Bylaws of the Property Trustee
and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or registration with
or notice to, any Illinois or federal banking authority is required for the
execution, delivery or performance by the Property Trustee and the
Guarantee Trustee of the Declaration and the Capital Securities Guarantee
Agreement.
18
(4) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇
LLP, counsel for the Underwriters, in form and substance satisfactory to the
Underwriters with respect to the legal existence of the Company, the Capital
Securities, the Indenture, the Junior Subordinated Notes, the Capital Securities
Guarantee Agreement, this Agreement, the Registration Statement, the Prospectus and
other related matters as the Representatives may require.
In giving its opinion, ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP may rely as to certain matters of
Delaware law upon the opinion of, counsel for the Offerors, which shall be delivered in
accordance with Section 8(b)(1) and (2) hereto.
(5) The favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, special tax
counsel to the Company and the Trust, as to certain Federal tax matters set forth
in the Prospectus under “Certain Federal Income Tax Consequences”, in form and
substance satisfactory to the Representatives.
(6) In giving their opinions required by subsections (b) (1) and (b)(4),
respectively, of this Section, ▇▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP shall
each additionally state that nothing has come to their attention that has caused
them to believe that the Registration Statement (except for financial statements
and schedules and other financial or statistical data included or incorporated by
reference, therein, as to which counsel need make no statement), at the time it
became effective or at the Closing Time, 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 or that the Prospectus
(except for financial statements and schedules and other financial or statistical
data included or incorporated by reference therein, as to which counsel need make
no statement), at the date thereof or at Closing Time, included an untrue statement
of a material fact or omitted 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.
(7) At Closing Time, there shall not have been, since the date hereof or since
the respective dates as of which information is given in the Registration Statement
and the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust or the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of a Managing Director or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company and a certificate of a
Trustee of the Trust, and dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and warranties
in Section 6 hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Trust and the Company have
complied with all agreements and satisfied all conditions on its part to be
19
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the Commission.
(8) At Closing Time, the Representatives shall have received from KPMG LLP, a
letter dated such date, in form and substance satisfactory to the Representatives.
(9) At Closing Time, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Capital Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Offerors, in connection with the
issuance and sale of the Capital Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and ▇▇▇▇▇▇▇▇▇ Will &
▇▇▇▇▇ LLP, counsel for the Underwriters.
(10) At Closing Time, there shall not have occurred any decrease in the
ratings of any of the debt securities of the Company or of the Capital Securities
by any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g) under the Act).
If any condition specified in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Representatives by notice to
the Offerors at any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 9 hereof.
9. Expenses. The Company agrees to pay the following costs and expenses and all other
costs and expenses incident to the performance by it and by the Trust of its and the Trust’s
respective and joint obligations hereunder: (i) the preparation, printing (or reproduction), and
filing with the Commission of the Registration Statement (including financial statements and
exhibits thereto), each preliminary prospectus, the Prospectus, each amendment or supplement to any
of them, this Agreement, the Declaration, the Capital Securities Guarantee, the Indenture and the
Statement of Eligibility and Qualification of each of the Property Trustee, the Guarantee Trustee
and the Debt Trustee; (ii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the Registration
Statement, each preliminary prospectus, the Prospectus, the documents incorporated therein by
reference, and all amendments or supplements to any of them, as may be reasonably requested for use
in connection with the offering and sale of the Capital Securities; (iii) the preparation, printing
(or reproduction), execution and delivery of the Declaration, the Capital Securities Guarantee and
the Indenture and the preparation, printing, authentication, issuance and delivery of the Capital
Securities, including any stamp taxes in connection with the original issuance of the Capital
Securities; (iv) the printing (or reproduction) and delivery of this Agreement, the Blue Sky
Memorandum and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering the Capital Securities; (v) the registration of the Capital Securities
20
under the Exchange Act and the listing of the Securities on the New York Stock Exchange; (vi)
the registration or qualification of the Capital Securities for offer and sale under the securities
or Blue Sky laws of the several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to the preparation,
printing (or reproduction), and delivery of the Blue Sky Memorandum and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filing required to be made with the National Association of Securities Dealers,
Inc.; (viii) the fees and expenses of the Property Trustee, the Guarantee Trustee and the Debt
Trustee; (ix) the fees and expenses associated with obtaining ratings for the Capital Securities
and the Junior Subordinated Notes from nationally recognized statistical rating organizations; and
(x) the fees and expenses of the Company’s accountants and the fees and expenses of counsel
(including local and special counsel) for the Offerors.
10. Effective Date of Agreement. This Agreement shall become effective: (i) upon the
execution and delivery hereof by the parties hereto; or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the Capital Securities may
commence, when notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time as this Agreement
shall have become effective, it may be terminated by the Company or the Trust, by notifying you, or
by you, as Representatives of the several Underwriters, by notifying the Offerors.
If any one or more of the Underwriters shall fail or refuse to purchase Capital Securities
which it or they are obligated to purchase hereunder, and the aggregate number of Capital
Securities which such defaulting Underwriter or Underwriters are obligated but fail or refuse to
purchase is not more than one-tenth of the aggregate number of the Capital Securities, each
non-defaulting Underwriter shall be obligated, severally, in the proportion which the number of
Capital Securities set forth opposite its name in Schedule I hereto bears to the aggregate number
of Capital Securities set forth opposite the names of all non-defaulting Underwriters, to purchase
the Capital Securities which such defaulting Underwriter or Underwriters are obligated, but failed
or refused, to purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Capital Securities and the aggregate number of Capital Securities with respect to which such
default occurs is more than one-tenth of the aggregate number of the Capital Securities and
arrangements satisfactory to you and the Offerors for the purchase of such Capital Securities by
one or more non-defaulting Underwriters or other party or parties approved by you and the Offerors
are not made within 36 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Offerors. In any such case which does not result
in termination of this Agreement, either you or the Offerors shall have the right to postpone the
Closing Time, but in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this Agreement. The term
“Underwriter” as used in this Agreement includes, for all purposes of this Agreement, any party not
listed in Schedule I hereto who, with your approval and the approval of the Offerors, purchases
Capital Securities which a defaulting Underwriter is obligated, but fail or refuses, to purchase.
21
Any notice under this Section 10 may be given by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
11. Termination. This Agreement shall be subject to termination by notice given by
you to the Offerors, if (a) after the execution and delivery of this Agreement and prior to the
Closing Time (i) trading generally shall have been suspended or materially limited on or by, as the
case may be, either of the New York Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of the Company shall have been suspended on any
exchange, (iii) a general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, (iv) there shall have occurred any
outbreak or escalation of hostilities or any calamity or crisis that, in your judgment, is material
and adverse, or (v) a material disruption has occurred in commercial banking or securities
settlement or clearance activities in the United States and (b) in the case of any of the events
specified in clauses (a)(i) through (v), such event, singly or together with any other such event,
makes it, in your judgment, impracticable to market the Capital Securities on the terms and in the
manner contemplated in the Prospectus.
12. Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11 hereof,
notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered
(i) if to the Offerors, to the Company, or to the Trust, care of the Company, at the office of the
Company at the address specified in the Prospectus, Attention: Secretary; or (ii) if to you, as
Representatives of the several Underwriters, care of HSBC Securities (USA) Inc.
This Agreement has been and is made solely for the benefit of the several Underwriters, the
Trust, the Company, the Company’s directors and officers, the Trustees, and the other controlling
persons referred to in Section 7 hereof and their respective successors and assigns, to the extent
provided herein, and no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term “successor” nor the term “successors and assigns” as used in this
Agreement shall include a purchaser from any Underwriter of any of the Capital Securities in his
status as such purchaser.
13. Applicable Law; Counterparts. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts made and to be
performed within the State of New York.
This Agreement may be signed in various counterparts which together constitute one and the
same instrument. If signed in counterparts, this Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and delivered on behalf of each party hereto.
22
Please confirm that the foregoing correctly sets forth the agreement among the Trust, the
Company and the several Underwriters.
| Very truly yours, HSBC FINANCE CAPITAL TRUST IX |
||||
| By: | ||||
| as Regular Trustee | ||||
| By: | ||||
| as Regular Trustee | ||||
| By: | ||||
| as Regular Trustee | ||||
| HSBC FINANCE CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Confirmed as of the date first above mentioned on
behalf of themselves and the other several
Underwriters named in Schedule I hereto.
HSBC Securities (USA) Inc.
As Representatives of the Underwriters
| By: | HSBC Securities (USA) Inc. |
| By: |
23
SCHEDULE I
HSBC FINANCE CAPITAL TRUST IX
Capital Securities
Capital Securities
| Number of | ||||
| Underwriter | Capital Securities | |||
HSBC Securities (USA) Inc. |
||||
Total |
10,000 | |||
24