Exhibit 1
HSBC FINANCE CORPORATION
UNDERWRITING AGREEMENT
[Names of Representatives]
[Address]
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Dear Sirs:
From time to time HSBC Finance Corporation, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the underwriters
named in Schedule I to the applicable Pricing Agreement (with respect to each
such Pricing Agreement, the "Underwriters") certain of its debt securities (the
"Debt Securities") and, if applicable, warrants to purchase Debt Securities (the
"Warrants") specified in Schedule II to such Pricing Agreement (with respect to
each such Pricing Agreement, the "Designated Debt Securities" and the
"Designated Warrants").
The terms and rights of any particular issuance of Designated Debt
Securities shall be as specified in the applicable Pricing Agreement and in or
pursuant to the indenture, as it may be supplemented from time to time (the
"Indenture"), identified in such Pricing Agreement. The terms and rights of any
particular issuance of Designated Warrants shall be as specified in the
applicable Pricing Agreement and in the warrant agreement (the "Warrant
Agreement") identified in such Pricing Agreement. Each Pricing Agreement shall
constitute an agreement by the Company and the Underwriters to be bound by all
of the provisions of this Agreement.
1. Particular sales of Designated Debt Securities and Designated Warrants
may be made from time to time to the Underwriters of such Debt Securities and
Warrants for whom the firms designated as representatives of the Underwriters of
such Debt Securities and Warrants in the Pricing Agreement relating thereto will
act as representatives (the "Representatives"). The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
This Agreement shall not be construed as an obligation of the Company to sell
any of the Debt Securities or Warrants or as an obligation of any of the
Underwriters to purchase the Debt Securities or Warrants. The obligation of the
Company to issue and sell any of the Debt Securities or Warrants and the
obligation of any of the Underwriters to purchase any of the Debt
Securities or Warrants shall be evidenced by the Pricing Agreement with respect
to the Designated Debt Securities and Designated Warrants specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Debt Securities and the number of Designated Warrants, the public
offering price of such Designated Debt Securities, the purchase price to the
Underwriters of such Designated Debt Securities, the names of the Underwriters
of such Designated Debt Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Debt Securities and
Designated Warrants to be purchased by each Underwriter, whether any of such
Designated Debt Securities and Designated Warrants are to be purchased from the
Company pursuant to delayed delivery contracts on terms to be specified in the
Pricing Agreement and such contracts ("Delayed Delivery Contracts") and shall
set forth the date, time and manner of delivery of such Designated Debt
Securities and Designated Warrants and payment for such Designated Debt
Securities and Designated Warrants. The Pricing Agreement shall also specify (to
the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Debt Securities and Designated
Warrants. A Pricing Agreement shall be in the form of an executed writing (which
may be in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement (Registration No. 333-_____), as amended by
Post-Effective Amendment No. 1 thereto, in respect of the Debt Securities
and the Warrants has been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered or to be delivered to
the Representatives and, excluding exhibits to such registration statement,
but including all documents incorporated by reference therein, to the
Representatives for each of the other Underwriters and such registration
statement in such form has been declared effective by the Commission and no
stop order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in such
registration statement being hereinafter called a "Preliminary Prospectus";
such registration statement, including all exhibits thereto but excluding
each Form T-1, as amended at the time such registration statement or any
part thereof became effective, being hereinafter called the "Registration
Statement"; the prospectus included in the Registration Statement, in the
form in which it has most recently been filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 of Regulation C on or prior
to the date of this Agreement being hereinafter called the "Prospectus");
any reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents, if any, incorporated by
reference therein pursuant to the
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applicable form under the Securities Act of 1933, as amended (the "Act"),
as of the date of such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and so incorporated by reference; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Debt Securities and Designated Warrants in the form
in which it is filed with the Commission pursuant to Rule 424 under the Act
in accordance with Section 5(a) hereof including any documents incorporated
by reference therein as of the date of such filing or transmission;
(b) The documents incorporated by reference in the Prospectus, 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 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 in the Prospectus as amended or
supplemented, 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
Underwriter of Designated Debt Securities and Designated Warrants through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the rules and regulations of the Commission
thereunder; the Registration Statement and any amendment thereof (including
the filing of any annual report on Form 10-K), at the time it became
effective, did not contain an untrue statement of the material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and the Prospectus, at the time the
Registration Statement became
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effective did not, as of the date hereof does not and as of the Time of
Delivery (as hereinafter defined) will not, contain an 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, 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 Underwriter of Designated Debt Securities and Designated Warrants
through the Representatives expressly for use in the Prospectus as amended
or supplemented relating to such Debt Securities and Warrants;
(d) The financial statements included in the Registration Statement
present fairly the financial position of the Company and subsidiaries as of
the dates indicated and the results of their respective operations for the
periods specified; and said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a basis
which is consistent in all material respects during the periods involved;
(e) Since the date of the latest audited financial statements in the
Prospectus there has not been any material change in the capital stock or
long-term debt of the Company (except for changes resulting from the
purchase by the Company of its outstanding securities for sinking fund
purposes) or any material adverse change in the general affairs or
management or the consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(f) The Company and its significant subsidiaries within the meaning of
Rule 1-02 of Regulation S-X under the Act (the "significant subsidiaries")
are validly organized and existing corporations under the laws of their
respective jurisdictions of incorporation; and the Company and its
significant subsidiaries are duly authorized under statutes which regulate
the business of insurance or banking or the business of making loans or of
financing the sale of goods (commonly called "small loan laws," "consumer
finance laws," or "sales finance laws"), or are permitted under the general
interest statutes and related laws and court decisions, to conduct in the
various jurisdictions in which they do business the respective businesses
therein conducted by them as described in the Prospectus, except where
failure to be so authorized or permitted will not have a material adverse
effect on the business or consolidated financial condition of the Company
and its subsidiaries taken as a whole;
(g) There are no legal or governmental proceedings pending, other than
those referred to in the Prospectus, to which the Company or any of its
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subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, other than proceedings which are not
reasonably expected, individually or in the aggregate, to have a material
adverse effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(h) The Debt Securities and the Warrants have been duly authorized, and,
when issued and delivered pursuant to this Agreement, the Pricing Agreement
and any Delayed Delivery Contracts will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture and the Warrant Agreement under which such Debt Securities and
Warrants are to be issued, the Indenture and the Warrant Agreement to be
substantially in the forms filed as exhibits to the Registration Statement;
the Indenture has been duly authorized and, when executed and delivered by
the Company and the Trustee thereunder, the Indenture and the Warrant
Agreement will constitute valid and legally binding instruments enforceable
in accordance with their respective terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general principles
of equity; and the Debt Securities, the Warrants, the Indenture and the
Warrant Agreement conform to the descriptions thereof in the Prospectus as
originally filed with the Commission, and will conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(i) The issue and sale of the Debt Securities and the Warrants and
compliance by the Company with all of the provisions of the Debt
Securities, the Warrants, the Indenture, the Warrant Agreement, this
Agreement, any Pricing Agreement and any Delayed Delivery Contracts 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 of the property or assets of
the Company or any of its subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries may be 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 taken as a whole or materially adverse to the transactions
contemplated by this Agreement), nor will such action result in any
violation of the provisions of the Certificate or Articles of
Incorporation, as amended, or the By-Laws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation
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applicable to the Company or any of its subsidiaries of any court or of any
Federal, State or other regulatory authority or other governmental body
having jurisdiction over the Company or any of its subsidiaries; and no
consent, approval, authorization, order, registration or qualification of
or with any court or any such regulatory authority or other governmental
body is required for the issue and sale of the Debt Securities and the
Warrants or the consummation of the other transactions contemplated in this
Agreement, any Pricing Agreement, or any Delayed Delivery Contracts except
the registration under the Act of the Debt Securities and the Warrants, the
qualification of the Indenture under the Trust Indenture Act 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 Debt Securities and the Warrants by the
Underwriters; and
(j) KMPG LLP, who have certified certain financial statements of the
Company, are an independent registered public accounting firm as required
by the Act and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Debt Securities and Designated Warrants and authorization by the Representatives
of the release of such Designated Debt Securities and Designated Warrants, the
several Underwriters propose to offer such Designated Debt Securities and
Designated Warrants for sale upon the terms and conditions set forth in the
Prospectus and any amendment or supplement thereto relating to such Designated
Debt Securities and Designated Warrants.
4. Designated Debt Securities and Designated Warrants to be purchased by
each Underwriter pursuant to the Pricing Agreement relating thereto, in
book-entry form, and in such authorized denominations and registered in the name
of the nominee of The Depository Trust Company, shall be delivered by or on
behalf of the Company through the facilities of The Depository Trust Company to
the Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
same-day funds to the Company all at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery" for such Designated Debt Securities
and Designated Warrants.
5. The Company agrees with each of the Underwriters of any Designated Debt
Securities and Designated Warrants:
(a) To make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Debt Securities and Warrants and prior
to the Time of Delivery for such Debt Securities and Warrants which shall
be disapproved by the
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Representatives promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such
Time of Delivery and furnish the Representatives with copies thereof and to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act for so long as the delivery
of a prospectus is required in connection with the offering or sale of such
Debt Securities and Warrants, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or become
effective, or any supplement to the Prospectus or any amended Prospectus
has been filed or transmitted for filing, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any
Prospectus, of the suspension of the qualification of such Debt Securities
and Warrants for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and in the event of
the issuance of any such stop order or of any such order preventing or
suspending the use of any Prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Debt Securities and
Warrants for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Debt Securities and Warrants, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended
or supplemented in such quantities as the Representatives may from time to
time reasonably request, and, if the delivery of a prospectus is required
at any time in connection with the offering or sale of such Debt Securities
and Warrants and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such
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document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than ninety days after the close of
the period covered thereby, an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and covering a period of at least twelve consecutive months
beginning not later than the first day of the fiscal quarter following the
Time of Delivery; and
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Debt Securities and Designated Warrants and continuing
to and including the later of (i) the termination of trading restrictions
on such Designated Debt Securities and Designated Warrants, as notified to
the Company by the Representatives and (ii) the Time of Delivery for such
Designated Debt Securities and Designated Warrants, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
(except for Debt Securities issued upon exercise of warrants) which mature
more than nine months after such Time of Delivery and which are
substantially similar to such Designated Debt Securities, without the prior
written consent of the Representatives, provided, however, that in no event
shall the foregoing period extend more than fifteen calendar days from the
date of the Pricing Agreement.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Debt Securities and the Warrants
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or reproducing this Agreement, any Pricing Agreement, any Delayed
Delivery Contract, any Indenture and supplements thereto, any Warrant
Agreement and amendments thereto, and any Blue Sky Survey and Legal
Investment Memorandum; (iii) all expenses in connection with the
qualification of the Debt Securities and the Warrants for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky Survey and Legal
Investment Memorandum; (iv) any fees charged by securities rating services
for rating the Debt Securities; (v) any filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the terms
of the sale of the Debt Securities and the Warrants, and the fees and
disbursements of counsel for the Underwriters in connection therewith; (vi)
the cost of preparing the Debt
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Securities and the Warrants; (vii) the fees and expenses of any Trustee and any
agent of any Trustee, the fees and expenses of any warrant agent, and the fees
and disbursements of counsel for any Trustee or any warrant agent in connection
with any Indenture, Warrant Agreement, the Debt Securities and the Warrants; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Debt Securities or Warrants by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Debt Securities
and any Designated Warrants hereunder shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of the Time of Delivery for such Designated
Debt Securities and Designated Warrants, true and correct, the condition that
the Company shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the Time of Delivery for
such Designated Debt Securities and Designated Warrants, with respect to
the incorporation of the Company, the validity of the Indenture, the
Designated Debt Securities, the Designated Warrants, the Warrant Agreement,
the Registration Statement, the Prospectus as amended or supplemented and
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Counsel for the Company shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to
you, 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;
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(ii) The significant subsidiaries of the Company are validly
organized and existing corporations under the laws of their
respective jurisdictions of incorporation;
(iii) The Company and its significant subsidiaries are duly
authorized under statutes which regulate the business of insurance or
banking or the business of making loans or of financing the sale of
goods (commonly called "small loan laws," "consumer finance laws," or
"sales finance laws"), or are permitted under the general interest
statutes and related laws and court decisions, to conduct in the
various jurisdictions in which they do business the respective
businesses therein conducted by them as described in the Prospectus,
except where failure to be so permitted or failure to be so authorized
will not have a material adverse effect on the business or
consolidated financial condition of the Company and its subsidiaries
taken as a whole;
(iv) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the
outstanding shares of its common stock have been duly and validly
authorized and issued, are fully paid and nonassessable and are
indirectly owned by the Company's ultimate parent, HSBC Holdings plc;
(v) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending, other than those referred to or
incorporated in the Prospectus, 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 such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Debt Securities and the Designated Warrants have been
duly authorized, executed and delivered by the Company;
(vii) Each Delayed Delivery Contract has been duly authorized,
executed and delivered by the Company and is a valid and legally
binding agreement of the Company in accordance with its terms;
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(viii) The Indenture and the Warrant Agreement have been duly
authorized, executed and delivered by the Company, and constitute
valid and legally binding instruments of the Company enforceable in
accordance with their respective 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 or by general principles of equity; the Indenture
has been duly qualified under the Trust Indenture Act; and all taxes
and fees required to be paid with respect to the execution of the
Indenture and the Warrant Agreement and the issuance of the Designated
Debt Securities and the Designated Warrants have been paid;
(ix) The Designated Debt Securities and the Designated Warrants
have been duly authorized and executed and, when the Designated Debt
Securities and the Designated Warrants have been duly authenticated,
issued and delivered against payment of the agreed consideration
therefor, the Designated Debt Securities and the Designated Warrants
will constitute valid and legally binding obligations of the Company
and, with like exception as noted in subdivision (viii) above, will be
entitled to the benefits provided by the Indenture and the Warrant
Agreement; and the Designated Debt Securities, the Designated
Warrants, the Indenture and the Warrant Agreement conform to the
descriptions thereof in the Prospectus as amended or supplemented;
(x) The issue and sale of the Designated Debt Securities and
the Designated Warrants, and the compliance of the Company with all of
the provisions of the Designated Debt Securities, the Designated
Warrants, the Indenture, the Warrant Agreement and this Agreement,
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 of
the property or assets of the Company or any of its subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement, or other agreement or instrument, known to such counsel to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries may be 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
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subsidiaries taken as a whole or materially adverse to the
transactions contemplated by this Agreement), nor will such action
result in any violation of the provisions of the Certificate or
Articles of Incorporation, as amended, or the By-Laws of the Company
or any of its subsidiaries or, to the best of such counsel's
knowledge, any statute or any order, rule or regulation applicable to
the Company or any of its subsidiaries of any court or of any Federal,
State or other regulatory authority or other governmental body having
jurisdiction over the Company or any of its subsidiaries; and no
consent, approval, authorization, order, registration or qualification
of or with any court or any such regulatory authority or other
governmental body is required for the issue and sale of the Designated
Debt Securities or the consummation of the other transactions
contemplated in this Agreement and the Pricing Agreement, except the
registration under the Act of the Designated Debt Securities and the
Designated Warrants, the qualification of the Indenture under the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under State
securities or Blue Sky laws in connection with the public offering of
the Designated Debt Securities and the Designated Warrants by the
Underwriters;
(xi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need 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 Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of documents which became effective
under the Act, 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, in the case of
documents which were filed under the Exchange Act with the Commission,
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 when such documents
were so filed, not misleading;
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(xii) The Registration Statement has become and is now
effective under the Act and, to the best of such counsel's knowledge,
no proceedings for a stop order in respect of the Registration
Statement are pending or threatened under Section 8(d) or 8(e) of the
Act; and
(xiii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Debt Securities and the Designated Warrants (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; such counsel has no reason
to believe that the Registration Statement or any amendment thereof
(including the filing of any annual report on Form 10-K) at the time
it became effective 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 as amended or supplemented at the time it was filed or
transmitted for filing pursuant to Rule 424 under the Act contained or
as amended or supplemented at the Time of Delivery 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; and
such counsel does not know of any contracts or exhibits required to be
filed with the Registration Statement which are not so filed;
(d) At the Time of Delivery for the Designated Debt Securities and the
Designated Warrants, KPMG LLP, an independent registered public
accounting firm, shall have furnished to the Representatives a letter,
dated such Time of Delivery, in form and substance satisfactory to the
Representatives, to the effect set forth in the form of such letter
furnished to counsel for the Underwriters by said firm prior to the date
of this Agreement, and as to such other matters as the Representatives
may reasonably request;
(e) (i) The Company and its subsidiaries taken as a whole, shall not
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court
-13-
or governmental action, order or decree and (ii) since the respective
dates as of which information is given in the Prospectus as amended or
supplemented there shall not have been any material change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change in the general affairs or management, or the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented, the effect of
which in any such case described in clause (i) or (ii) is in the judgment
of the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Debt Securities and the Designated Warrants on the terms and
in the manner contemplated in the Prospectus as amended or supplemented;
(f) Subsequent to the date of the Pricing Agreement relating to the
Designated Debt Securities and the Designated Warrants no downgrading
shall have occurred in the rating accorded the Company's senior debt
securities by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule 436(g)
of the Act;
(g) Subsequent to the date of the Pricing Agreement relating to the
Designated Debt Securities and the Designated Warrants there shall not
have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in
New York declared by either Federal or New York State authorities;
(iii) a material disruption in the securities settlement or clearance
system services in the United States; or (iv) the outbreak or material
escalation of hostilities or the declaration by the United States of a
national emergency or war, or any other calamity or crisis, if, in the
case of clause (iii) or (iv) above, the effect of any such event specified
in clause (iii) or (iv) in the reasonable judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Debt Securities and the
Designated Warrants on the terms and in the manner contemplated in the
Prospectus as amended or supplemented; and
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Debt Securities
and the Designated Warrants certificates of officers of the Company
satisfactory tothe Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery (provided that, each representation and warranty which
refers to the Prospectus in Section 2 hereof shall be in relation to the
Prospectus as amended or supplemented relating to the Designated Debt
Securities and the Designated Warrants), as to the performance by the
Company of all of its obligations hereunder to be performed at or
prior to
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such Time of Delivery, and as to such other matters as the Representatives
may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, Preliminary Prospectus
Supplement, the Registration Statement, the Prospectus or the Prospectus as
amended or supplemented, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim, as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, Preliminary Prospectus
Supplement, the Registration Statement, the Prospectus or the Prospectus as
amended or supplemented or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter of Designated Debt Securities and Designated Warrants through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any Preliminary Prospectus supplement, the Registration
Statement, the Prospectus or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any Preliminary Prospectus supplement, the Registration Statement,
the Prospectus or the Prospectus as amended or supplemented, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim, as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in
-15-
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 8 is unavailable to
an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Underwriters of the Designated Debt Securities and the Designated Warrants on
the other from the offering of the Designated Debt Securities and the Designated
Warrants to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Debt Securities and the Designated Warrants
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statements of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) 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 which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
-16-
damages or liabilities (or action in respect thereof) referred to above in this
subsection (d) shall be deemed to include 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 subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Debt
Securities and the Designated Warrants underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Debt Securities and Designated Warrants in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Debt Securities and Warrants and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Debt Securities and the Designated Warrants which it has agreed to
purchase under the Pricing Agreement relating to such Designated Debt Securities
and Designated Warrants, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Designated Debt
Securities and Designated Warrants on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Debt Securities and Designated
Warrants, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Debt Securities and Designated
Warrants on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Debt Securities and Designated Warrants, or the
Company notifies the Representatives that it has so arranged for the purchase of
such Designated Debt Securities and Designated Warrants, the Representatives or
the Company shall have the right to postpone the Time of Delivery for such
Designated Debt Securities and Designated Warrants for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus as amended or supplemented, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this
-17-
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Debt Securities and Designated Warrants.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Debt Securities and the Designated Warrants of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate principal amount of such Designated Debt
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of the Designated Debt Securities to be purchased at
the Time of Delivery for such Designated Debt Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Designated Debt Securities and the number of Designated
Warrants which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Debt Securities and Designated Warrants and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Designated Debt Securities and the
number of Designated Warrants which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Debt Securities and the Designated
Warrants of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Debt Securities and the Designated Warrants of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate principal amount of Designated Debt
Securities and the number of Designated Warrants which remain unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated Debt
Securities to be purchased at the Time of Delivery for such Designated Debt
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require nondefaulting
Underwriters to purchase Designated Debt Securities and Designated Warrants of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Debt Securities and Designated Warrants shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Designated Debt Securities and the
Designated Warrants.
-18-
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Debt Securities and the Designated Warrants
covered by such Pricing Agreement except as provided in Section 6 and Section 8
hereof; but, if for any other reason Designated Debt Securities and Designated
Warrants are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated Debt
Securities and Designated Warrants, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Debt
Securities and Designated Warrants except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Debt Securities and Designated Warrants shall act on behalf of each
of such Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by such Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or sent by
registered mail to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be sufficient in all respects if
delivered or sent by registered mail to the address of the Company set forth in
the Registration Statement: Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by registered mail to such Underwriter.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Debt
Securities or Warrants from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement.
15. This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of Illinois.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be
-19-
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
* * *
-20-
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof.
Very truly yours,
HSBC Finance Corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Accepted as of the date hereof:
[Names of Representatives]
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
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-21-
ANNEX I
PRICING AGREEMENT
[Names of Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto
[Address]
----------, ----
Dear Sirs:
HSBC Finance Corporation (the "Company") proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement dated __________,
(the "Underwriting Agreement"), between the Company on the one hand and [names
of co-representatives[s] named therein] on the other hand, to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Designated
Debt Securities and the Designated Warrants specified in Schedule II hereto less
the principal amount of Designated Debt Securities and the number of Designated
Warrants covered by delayed delivery contracts ("Delayed Delivery Contracts") as
provided below (such Designated Debt Securities and Designated Warrants covered
by Delayed Delivery Contracts being hereinafter referred to collectively as
Contract Securities). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Pricing Agreement to the same extent as if such provision had been
set forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this
Pricing Agreement, except that each of the representations and warranties set
forth in Section 2 of the Underwriting Agreement with respect to the Prospectus
or the information contained in the Prospectus shall constitute a representation
or warranty thereof (a) as of the date of the Underwriting Agreement with
respect to the Prospectus, and also (b) as of the date of this Pricing Agreement
with respect to the Prospectus as amended or supplemented. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Debt Securities, in
the form heretofore delivered to you is now proposed to be filed with, or in the
case of a supplement transmitted for filing to, the Commission.
Each Underwriter, on behalf of itself and each of its affiliates that
participates in the initial distribution of the Designated Debt Securities,
severally represents and agrees that:
(a) (i) it and each affiliate has not offered or sold
and, prior to the expiration of the period ending six
months from the issue date of the Designated Debt
Securities, will not offer or sell any Designated
Debt Securities to persons in the United Kingdom
except to those persons whose ordinary activities
involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for
the purposes of their businesses or otherwise in
circumstances which have not resulted and will not
result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 (as amended);
(ii) it has only communicated or caused to be
communicated and will only communicate or cause to be
communicated any invitation or inducement to engage
in investment activity (within the meaning of section
21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the
issue or sale of any Notes in circumstances in which
section 21(1) of the FSMA does not apply to the
Company;
(iii) it and each such affiliate has complied and
will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation
to the Designated Debt Securities in, from or
otherwise involving the United Kingdom;
(iv) it and each such affiliate will not offer or
sell any Designated Debt Securities directly or
indirectly in Japan or to, or for the benefit of any
Japanese person (as hereinafter defined) or to
others, for re-offering or re-sale directly or
indirectly in Japan or to any Japanese person except
pursuant to an exemption from the registration
requirements of, and otherwise in compliance with
Securities and Exchange Law of Japan and any other
applicable laws and regulations of Japan. For
purposes of this subparagraph (iv), "Japanese person"
shall mean any person resident in Japan, including
any corporation or other entity organized under the
laws of Japan;
(v) it and each such affiliate is aware of the fact
that no German selling prospectus (VERKAUFSPROSPEKT)
has been and will be published in respect of the sale
of the Designated Debt Securities and that it will
comply with the Securities Selling Prospectus Act
(the "Act") of the Federal Republic of Germany
(WERTPAPIER-VERKAUFSPROSPEKTGESETZ). In particular,
each it and each such affiliate has undertaken not to
engage in public offering (OFFENTLICHE ANBIETEN) in
the Federal Republic of Germany with respect to any
Designated Debt Securities otherwise than in
accordance with the Act and any other act replacing
or supplementing the Act and all other applicable
laws and regulations; and
-2-
(vi) the Designated Debt Securities are being issued
and sold outside the Republic of France and that, in
connection with their initial distribution, it and
each such affiliate has not offered or sold and will
not offer or sell, directly or indirectly, any
Designated Debt Securities to the public in the
Republic of France, and that it has not distributed
and will not distribute or cause to be distributed to
the public in the Republic of France the Prospectus
Supplement, the Prospectus or any other offering
material relating to the Designated Debt Securities
and that such offers, sales and distributions have
been and shall be made in France only to (i)
qualified investors (INVESTISSEURS QUALFIES) and/or
(ii) a restricted group of investors (CERCLE
RESTREINT D'INVESTISSEURS), all as defined in Article
6 of ORDONNANCE no. 67-833 dated 28th September, 1967
(as amended) and DECRET no. 98-880 dated 1st October,
1998; and
(b) it and each such affiliate has not offered, sold or
delivered and it and each such affiliate will not
offer, sell or deliver, directly or indirectly, any
of the Designated Debt Securities or distribute the
Prospectus as amended or supplemented or any other
offering material relating to the Designated Debt
Securities, in or from any jurisdiction except under
circumstances that will, to the best if it or each
such affiliate's knowledge and belief, result in
compliance with the applicable laws and regulations
thereof and which will not impose any obligations on
the Company except as contained in the Underwriting
Agreement.
(c) such underwriter and each such affiliate (i) has
anti-money laundering policies and procedures in
place in accordance with the requirements imposed by
Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, as amended (the "USA
Patriot Act"), and any rules and regulations
promulgated thereunder, and the Foreign Assets
Control Regulations issued by the Office of Foreign
Assets Control of the United States Department of the
Treasury, in each case to the extent applicable to
them; and (ii) has implemented an anti-money
laundering compliance program pursuant to NASD Rule
3011, to the extent applicable to them.
The Company confirms that it has made or is causing to be made on its
behalf an application for the Designated Debt Securities to be listed on the
Luxembourg Stock Exchange (the "Exchange"). The Company will endeavor promptly
to obtain such listing and for such purpose the Company agrees to deliver to the
Exchange copies of the Prospectus Supplement and Prospectus relating to the
Designated Debt Securities and such other documents, information and
undertakings as may be required for the purpose of obtaining and maintaining
such listing. The Company shall use its best efforts to maintain the listing of
the Designated Debt Securities on the Exchange for so long as any Designated
Debt Securities are outstanding, unless otherwise agreed
-3-
to by the Representatives, and except as may be otherwise provided in the
Prospectus Supplement.
The Company hereby authorizes the Underwriters to solicit offers to
purchase Designated Debt Securities and Designated Warrants from the Company
pursuant to Delayed Delivery Contracts, substantially in the form of Schedule
III attached hereto but with such changes therein as you and the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements,
and as compensation therefor the Company will pay to you, for the accounts of
the Underwriters, at the Time of Delivery, a commission of __% of the principal
amount of Designated Debt Securities for which Delayed Delivery Contracts have
been made. Delayed Delivery Contracts are to be with institutional investors of
the types mentioned in the penultimate paragraph under the caption "Plan of
Distribution" in the Prospectus and subject to other conditions therein set
forth. The Company will enter into a Delayed Delivery Contract in each case
arranged by the Underwriters where the Company has advised you of its approval
of the proposed sale of Contract Securities to the purchaser thereunder;
provided, however, that the minimum principal amount of Designated Debt
Securities covered by any Delayed Delivery Contract with any purchaser or any
Delayed Delivery Contract with affiliated purchasers shall be $________ and the
aggregate principal amount of Designated Debt Securities covered by Delayed
Delivery Contracts shall not exceed $________, unless the Company shall
otherwise agree in writing. However, if the aggregate principal amount of
Designated Debt Securities requested for delayed delivery is less than
$________, the Company will have the right to reject all requests. The
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts.
The amount of Contract Securities to be deducted from the principal amount
of Designated Debt Securities and the number of Designated Warrants to be
purchased by each Underwriter as set forth in Schedule I hereto shall be, in
each case, the amount of Contract Securities which the Company has been advised
by you have been attributed to such Underwriter, provided that if the Company
has not been so advised, the amount of Contract Securities to be so deducted
shall be, in each case, that proportion of Contract Securities which the
principal amount of Designated Debt Securities and the number of Designated
Warrants to be purchased by such Underwriter under this Agreement bears to the
total principal amount of the Designated Debt Securities (rounded as you may
determine to the nearest $1,000 principal amount) and the total number of
Designated Warrants. The total principal amount of Designated Debt Securities to
be purchased by all the Underwriters shall be $________ less the principal
amount of the Designated Debt Securities covered by Delayed Delivery Contracts
and the total number of Designated Warrants so purchased shall be less the
number of Designated Warrants covered by such Contracts. The Company will
deliver to you not later than 3:30 o'clock p.m., Chicago time, on the business
day preceding the Time of Delivery (or such other time and date as you and the
Company may agree upon in writing) a written notice setting forth the principal
amount of Designated Debt Securities and the number of Designated Warrants
covered by Delayed Delivery Contracts.
-4-
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price to the Underwriters set forth in
Schedule II hereto, the principal amount of Designated Debt Securities and
number of Designated Warrants set forth opposite the name of such Underwriter in
Schedule I hereto less such Underwriter's portion of Contract Securities
determined as provided in the preceding paragraph.
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this Pricing Agreement and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement Among Underwriters, the form of which
shall be supplied to the Company upon request.
Very truly yours,
HSBC Finance Corporation
By:_____________________________________
(Title)
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By:___________________________
(Title)
-5-
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED NUMBER OF
DEBT DESIGNATED
SECURITIES WARRANTS
TO BE TO BE
PURCHASED PURCHASED
--------------- -------------
UNDERWRITER
[Name(s) of Representative(s)]....................................... $
[Name of other Underwriters]......................................... _________ _________
Total............................................................. $_________ _________
_________ _________
SCHEDULE II
DESIGNATED DEBT SECURITIES
Title of Designated Debt Securities:
[___%] [Floating Rate] [Zero Coupon] Notes due
Aggregate principal amount:
$________
Price to Public:
___% of the principal amount of the Designated Debt Securities, plus
accrued interest from __________ to the Time of Delivery [and accrued
amortization, if any, from __________ to the Time of Delivery]
Purchase Price by Underwriters:
___% of the principal amount of the Designated Debt Securities, plus
accrued interest from __________ to the Time of Delivery [and accrued
amortization, if any, from __________ to the Time of Delivery]
Indenture:
Indenture, dated __________, ____ , between the Company and
__________, as Trustee
Maturity:
Interest Rate:
[___%] [Zero Coupon]
Interest Payment Dates:
[months and dates]
Regular Record Dates:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Debt Securities may be redeemed in whole or in part at
the option of the Company, in the amount of $__________ or an integral
multiple thereof, [on or after __________, at the following redemption
prices (expressed in percentages of principal amount). If redeemed
during the 12-month period beginning
YEAR REDEMPTION PRICE
and thereafter at 100% of their principal amount, together in each
case with accrued interest to the redemption date.]
[on any interest payment date falling in or after __________,
__________, at the election of the Company, at a redemption price
equal to the principal amount thereof, plus accrued interest to the
date of redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax
law]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Debt Securities are entitled to the benefit of a
sinking fund to retire $_______ principal amount of Designated Debt
Securities on __________ in each of the years through at 100% of their
principal amount plus accrued interest] [, together with [cumulative]
[non- cumulative] redemptions at the option of the Company to retire
an additional $________ principal amount of Designated Debt Securities
in the years through at 100% of their principal amount plus accrued
interest].
DESIGNATED WARRANTS
Warrant Exercise Price:
Principal Amount of Designated Debt Securities Issuable on Exercise of One
Warrant:
Date after which Warrants are Exercisable:
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Expiration Date:
Detachable Date:
Bearer or Registered
MISCELLANEOUS
Time of Delivery:
Closing Location:
Type of Funds:
[Other Terms]*:
---------------
* A description of particular tax, accounting or other unusual features of
the Securities should be set forth, or referenced to an attached and
accompanying description, if necessary to the issuer's understanding of the
transaction contemplated. Such a description might appropriately be in the
form in which such features will be described in the Prospectus Supplement
for the offering.
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SCHEDULE III
DELAYED DELIVERY CONTRACT
HSBC Finance Corporation,
[Name and address of Representative(s)]
Attention:
----------, ----
Dear Sirs:
The undersigned hereby agrees to purchase from
HSBC Finance Corporation
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned, $________ principal amount of the Company's [full title of Debt
Securities] and [full title of Warrants] (hereinafter collectively called the
"Securities"), offered by the Company's Prospectus dated __________, as
supplemented by a supplement dated __________, __________, receipt of a copy of
which is hereby acknowledged, at a purchase price of ___% of the principal
amount of the Debt Securities, plus accrued interest from the date from which
interest accrues as set forth below, and on the further terms and conditions set
forth in this contract.
The undersigned will purchase the Securities from the Company on
__________, (the "Delivery Date"), and interest on the Securities so purchased
will accrue from __________, __________.
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company by wire transfer of same-day
funds, on the Delivery Date upon delivery through the facilities of The
Depository Trust Company to the undersigned of the Securities then to be
purchased by the undersigned in book-entry form and in such denominations and
registered in the name of the nominee of The Depository Trust Company.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject to the conditions that (1) the
purchase of Securities to be made by the undersigned shall not on the Delivery
Date be prohibited under the laws of the jurisdiction to which the undersigned
is subject and (2) the Company, on or before __________, __________, shall have
sold to the several Underwriters, pursuant to the Underwriting Agreement and
Pricing Agreement each dated __________, __________, with the Company, an
aggregate principal amount of Debt Securities equal to $__________, and an
aggregate number of Warrants equal to __________, minus the aggregate principal
amount of Debt Securities and aggregate number of Warrants covered by this
contract and other contracts similar to this contract. The obligation of the
undersigned to take delivery of and make payment for Securities shall not be
affected by the failure of any purchaser to take delivery of and make payment
for Securities pursuant to other contracts similar to this contract.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the Opinion of Counsel for the Company
delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Securities
hereby agreed to be purchased by it under the laws of the jurisdiction to which
the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract shall be construed in accordance with and governed by the
laws of the State of
Illinois.
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this contract) is in the Company's sole discretion and that,
without limiting the foregoing, acceptances of such contracts need not be on a
first-come, first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
By:
------------------------------------
(Signature)
------------------------------------
(Name and Title)
------------------------------------
(Address)
Accepted, , .
----------------- ---------------
HSBC Finance Corporation
By:
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