form8kdec8.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 3, 2010

__________________________________

Commission file number 1-8198

HSBC FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware _____________________________________ (State of incorporation)	86-1052062 ______________________________________________ (IRS Employer Identification Number)
26525 N. Riverwoods Boulevard Mettawa, Illinois ______________________________________________ (Address of principal executive offices)	60045 _____________________ (Zip Code)

Registrant's telephone number, including area code (224) 544-2000

Not Applicable

_________________________________________________________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

___________________________________________________________________________

The Exchange Offers

On October 28, 2010 HSBC Finance (“HSBC Finance” or the “Company”) commenced private offers to exchange certain outstanding debt securities for, in each case, its senior subordinated notes due January 2021 (each, an “Exchange Offer” and together the “Exchange Offers”). The Exchange Offers were conducted pursuant to Rule 144A and Regulation S of the Securities Act of 1933, as amended. Participation in the Exchange Offers was limited to holders of the Old Notes (as defined below) who had certified their status as (1) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933 (the “Securities Act”), or (2) a person who is not a “U.S. person” as defined under Regulation S under the Securities Act.

On December 3, 2010, the Company delivered an aggregate principal amount of $1,938,669,000 of its 6.676% Senior Subordinated Notes due January 15, 2021 (the “New Notes”) in exchange for the following: $607,870,000 aggregate principal amount of its 5.5% Senior Notes due January 19, 2016 (the “5.5% Notes”); $306,498,000 aggregate principal amount of it 5% Senior Notes due June 30, 2015 (the “5% Notes”); $75,465,000 aggregate principal amount of its 5.25% Senior Notes due January 15, 2014; (the “5.25% Notes due January 15, 2014”); $53,937,000 aggregate principal amount of its 5.25% Senior Notes due April 15, 2015 (the 5.25% Notes due April 15, 2015”); $530,620,000 aggregate principal amount of its 7.625% Senior Notes due May 17, 2032 (the “7.625% Notes”) and $222,73 8,000 aggregate principal amount of its 7.35% Senior Notes due November 27, 2032 (the “7.35% Notes”) (collectively, the “Old Notes”) pursuant to and subject to the terms of the Exchange Offers, plus accrued and unpaid interest on such Old Notes and cash in lieu of fractional portions of New Notes. The exchange ratios for the New Notes included an early tender payment of $50 principal amount of New Notes for each $1,000 principal amount of Old Notes tendered on or prior to the date set for early tender.

Further Issuance of New Notes

On December 8, 2010, the Company priced a further issuance of an additional $1,000,000,000 principal amount of its senior subordinated notes, which will be consolidated to form a single series with the New Notes and, accordingly, have the same terms as to status, redemption and otherwise as the New Notes. Settlement for the additional principal amount of the New Notes will occur on December 13, 2010.

Description of the New Notes

The New Notes constitute senior subordinated unsecured debt of the Company and were issued under an Indenture, dated as of December 17, 2008, as supplemented by a First Supplemental Indenture, dated as of December 3, 2010 (the “First Supplemental Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (as so supplemented, the “Indenture”). The New Notes and the Indenture are governed by, and shall be construed in accordance with, the laws of the State of Illinois.

Interest

Interest on the New Notes accrues at a fixed rate per annum equal to 6.676% and is payable semi-annually on each January 15, and July 15, beginning July 15, 2011. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months.

Subordination

The New Notes constitute the Company’s unsecured senior subordinated obligations and rank

·	subordinate and junior in right of payment to all of the Company’s existing and future senior indebtedness, which, for purposes of the Indenture, includes indebtedness for borrowed money and all other creditors;

·	equally in right of payment with any of the Company’s existing and future senior subordinated indebtedness;

·	senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the New Notes; and

·	structurally subordinated to all of the liabilities of the Company’s subsidiaries,

The indebtedness of the Company to which the New Notes are subordinate and junior is referred to herein as “senior indebtedness.” The Company is not directly limited in its ability to issue additional senior indebtedness.

In the event of any involuntary or voluntary event of insolvency, bankruptcy, receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and liabilities or similar proceedings or any liquidation, dissolution or winding-up of or relating to the Company as a whole, then the holders of senior indebtedness shall be entitled to receive payment in full of all principal and interest on all senior indebtedness before the holders of the New Notes are entitled to receive any payment on account of principal or interest upon the New Notes, and to that end (but subject to the power of a court of competent jurisdiction to make other equitable provision reflecting the rights conferred in the Indenture upon the senior indebtedness and the holders thereof with respect to the subordinated indebtedness represented by the New N otes and the holders thereof by a lawful plan of reorganization under applicable bankruptcy law) the holders of senior indebtedness shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash or property or securities, which may be payable or deliverable in any such proceedings in respect of the New Notes, except securities which are subordinate and junior in right of payment to the payment of all senior indebtedness then outstanding.

Events of Default

The only events of default under the Indenture are certain events of bankruptcy or insolvency. Failure to pay principal of, or premium or interest on, the New Notes or the failure of the Company to perform any of its other obligations under the New Notes or the Indenture do not constitute events of default under the Indenture. Under the Indenture, upon non-payment of principal or 30 days after non-payment of interest, the Trustee on behalf of the holders of New Notes, may institute bankruptcy or other insolvency proceedings against the Company.

Satisfaction, Discharge, Defeasance and Redemption of the Indenture and Senior Subordinated Notes

If there is deposited irrevocably with the Trustee as trust funds for the benefit of the holders of the New Notes an amount, in money or the equivalent in securities of the United States or securities the principal of and interest on which is fully guaranteed by the United States, sufficient to pay the principal, premium, if any, and interest, if any, on the New Notes on the dates such payments are due in accordance with the terms of the New Notes through their maturity, and if the Company has paid or caused to be paid all other sums payable by it under the Indenture, then the Company will be deemed to have satisfied and discharged the entire indebtedness represented by the New Notes and all of the obligations of the Company under the Indenture, except as otherwise provided in the Indenture. In the event of any such defeasance, holders of the New Notes would be able to look only to such trust funds for payment of principal, premium, if any, and interest, if any, on their New Notes.

The New Notes are not subject to redemption by the Company prior to maturity unless certain events occur involving U.S. taxation.

Any defeasance or redemption of the New Notes requires the prior written consent of The Board of Governors of the Federal Reserve System and the Financial Services Authority of the United Kingdom (unless either such approval is not required at the time established for defeasance or redemption).

Listing

The Company does not intend to apply for listing of the New Notes on any securities exchange or for quotation of the New Notes on any automated dealer quotation system.

Further Issues

The Company may from time to time, without notice to or the consent of the registered holders of the New Notes, create and issue further notes ranking pari passu with the New Notes and with identical terms in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest following the issue date of such further notes) in order that such further notes may be consolidated and form a single series with the New Notes and have the same terms as to status, redemption or otherwise as the New Notes.

Payment of Additional Amounts

The Company will, subject to certain exceptions and limitations, pay as additional interest on the New Notes, such additional amounts (“Additional Amounts”) as are necessary in order that the net payment by the Company or a paying agent of the principal of and interest on the New Notes to a holder who is a non-United States person (as defined in the Indenture), after deduction for any present or future tax, assessment or other governmental charge imposed by withholding with respect to the payment, will not be less than the amount provided in the New Notes. Except as specifically provided in the Indenture, the Company will not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority thereof or therein.

Redemption for Tax Reasons

If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or therein), or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings, the Company becomes or will become obligated to pay Additional Amounts with respect to the New Notes, the Company may, at its option redeem, in whole, but not in part, the New Notes on not less than 30 nor more than 60 days prior notice, at a redemption price equal to 100% of their principal amount, together with interest accrued but unpaid thereon to the date fixed for redemption.

The form of the Form of 6.676% Senior Subordinated Note due January 15, 2021 (Rule 144A), the form of the 6.676% Senior Subordinated Note due January 15, 2021 (Reg S) and the First Supplemental Indenture are filed as Exhibits 4.1, 4.2 and 4.3, respectively, and incorporated herein by reference.

Registration Rights Agreement

The Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) in connection with the issuance of the New Notes, pursuant to which the Company has agreed to cause a registration statement to be filed with the Securities and Exchange Commission, and to use its best efforts to cause such registration statement (along with a market making registration statement) to become effective, relating to senior subordinated notes of the Company, to be issued in exchange for the New Notes, which shall be on the same financial terms as the New Notes, but which will be registered under the Securities Act of 1933, as amended. Upon the occurrence of a “Registration Default,” as defined in the Registration Rights Agreement, the interest on the New Notes will be increased by 0.25% per annum d uring the 90-day period immediately following the occurrence of any such Registration Default, which rate shall increase to a maximum of 1.00 % per annum thereafter.

The Registration Rights Agreement is filed as Exhibit 4.4 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

___________________________________________________________________________

4.1	Form of 6.676% Senior Subordinated Note due January 15, 2021 (Rule 144A)

4.2	Form of 6.676% Senior Subordinated Note due January 15, 2021 (Reg S)

4.3	First Supplemental Indenture, dated as of December 3, 2010, between HSBC Finance Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee under which the 6.676% Senior Subordinated Notes due January 15, 2021 have been issued.

4.4	Form of Registration Rights Agreement, dated December 3, 2010, relating to 6.676% Senior Subordinated Notes due January 15, 2021 of HSBC Finance.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HSBC FINANCE CORPORATION (Registrant)
	By: /s/ Mick Forde
		Senior Vice President, General Counsel - Treasury and Assistant Secretary

Dated: December 9, 2010

EXHIBIT INDEX

4.1	Form of 6.676% Senior Subordinated Note due January 15, 2021 (Rule 144A)

4.2	Form of 6.676% Senior Subordinated Note due January 15, 2021 (Reg S)

4.3	First Supplemental Indenture, dated as of December 3, 2010, between HSBC Finance Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee under which the 6.676% Senior Subordinated Notes due January 15, 2021 have been issued.

4.4 Form of Registration Rights Agreement, dated December 3, 2010, relating to 6.676% Senior Subordinated Notes due January 15, 2021 of HSBC Finance.

EX-4.1 2 ex4-1144anote.htm FORM OF 6.676% SENIOR SUBORDINATED NOTE 144A ex4-1144anote.htm

Exhibit 4.1

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO HSBC FINANCE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; ( C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THE RESALE RESTRICTION TERMINATION DATE WILL BE THE DATE: (A) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF; AND (B) ON WHICH THE ISSUER INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS NOTE, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS NOTE.

FIXED RATE SENIOR SUBORDINATED NOTE (RULE 144A)

No. 001

CUSIP No. 40429CGB2

ISIN No. US40429CGB28

HSBC FINANCE CORPORATION

6.676% Senior Subordinated Note due January 15, 2021

HSBC FINANCE CORPORATION, a Delaware corporation (hereinafter called the “Company”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[_______________] on January 15, 2021, and to pay interest thereon at the rate per annum of 6.676% and Additional Interest, if any. The Company will pay interest and Additional Interest, if any, from December 3, 2010, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15 (beginning July 15, 2011), until the principal hereof is paid or duly provided for. The interest and Additional Interest, if any, so pay able, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Holder of this Note (or one or more Predecessor Notes) of record at the close of business on the Regular Record Date for such interest, which shall be the preceding January 1 or July 1 respectively (whether or not a Business Day), except that interest payable at maturity shall be paid to the same Person to whom the principal of this Note is payable. Interest and Additional Interest, if any, will be computed on the basis of a 360-day year of twelve 30-day months.

If an Interest Payment Date is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on the amount so payable for the period from and after the date such payment was due.

Payment of the principal of this Note and, unless otherwise paid as hereinafter provided, the interest (if any) thereon will be made at the office or agency of the Company in New York, New York or at such other office or agency as designated by the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check or draft mailed to the Person entitled thereto at the address appearing in the Note Register. Additional provisions of this Note are set forth on the reverse hereof.

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

Fixed Rate Senior Subordinated Note No. 001

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its facsimile corporate seal.

Dated: HSBC FINANCE CORPORATION

Attest: _____________________ By: ________________________

Name: Name:

Title: Title:

[TRUSTEE’S CERTIFICATE OF AUTHENTICATION FOR NOTES]

This is one of the Notes of the series designated herein referred to the within-mentioned Indenture.

Date: December 3, 2010

The Bank of New York Mellon Trust Company, N.A., as Trustee

By:________________________________

Authorized Officer

WHEREAS, all things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done.

Fixed Rate Senior Subordinated Note No. 001

[Reverse of Note]

HSBC Finance Corporation

6.676% Senior Subordinated Note due January 15, 2021

This Note is one of a duly authorized issue of Senior Subordinated Notes of the Company (herein called the “Notes”), issuable in series, unlimited in aggregate principal amount except as may be otherwise provided in respect of the Notes of a particular series, issued and to be issued under and pursuant to an Indenture dated as of December 17, 2008, as supplemented by a First Supplemental Indenture, dated as of December 3, 2010 (as so supplemented, herein called the “Indenture”), duly executed and delivered by the Company to The Bank of New York Mellon Trust Company, N.A., as Trustee, the Board Resolutions creating the Senior Subordinated Notes (the “Board Resolutions”) and the Officers’ Certificate dated December 3, 2010 establishing the terms of the 6.676% Senior Subordinated Notes due January 15, 2021 pursuant to the Indenture (the “Officers’ Certificate”) and is one of a series designated as the 6.676% Senior Subordinated Notes due January 15, 2021 (herein called the “6.676% Senior Subordinated Notes”). Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders. The 6.676% Senior Subordinated Notes are general unsecured obligations of the Company.

The Company may from time to time, without notice to or the consent of the registered Holders of the 6.676% Senior Subordinated Notes, create and issue further notes ranking pari passu with the 6.676% Senior Subordinated Notes and with identical terms in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such further notes or except for the first payment of interest following the issue date of such further notes) in order that such further notes may be consolidated and form a single series with the 6.676% Senior Subordinated Notes and have the same terms as to status, redemption or otherwise as the 6.676% Senior Subordinated Notes.

The 6.676% Senior Subordinated Notes are not redeemable prior to maturity and are not entitled to any sinking fund, except under certain limited circumstances relating to the obligation of the Company to pay Additional Amounts (as defined herein). The Company will, subject to certain exceptions and limitations set forth in the Board Resolutions and the Officers’ Certificate, pay as additional interest, such amounts ("Additional Amounts") as are necessary in order that the net payment by the Company or a paying agent of the principal of and interest on the 6.676% Senior Subordinated Notes to a holder who is a non-United States person (as defined below), after deduction for any present or future tax, assessment or other governmental charge of the United States or any political subdivision or taxing authority thereof or t herein, imposed by withholding with respect to the payment, will not be less than the amount provided herein to be then due and payable. Each reference to payment of principal and interest herein shall be deemed to include any such Additional Amounts. If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States (or any political subdivision or taxing authority thereof or therein), or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after October 28, 2010, the Company becomes or, based upon a written opinion of independent counsel selected by the Company, will become obligated to pay Additional Amounts as described herein, then the Company may at its option redeem, as a whole, but not in part, the 6.676% Senior Subordinated Notes on not less than 30 nor more than 60 days prior notice, at a redemption price equal to 100% of their principal amount, together with interest accrued but unpaid thereon to the date fixed for redemption.

"Non-United States person" means any person other than (i) a citizen or resident of the United States, (ii) a corporation or partnership (including any entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, or (iii) an estate or trust treated as a United States person under section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Company on this Note upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Note.

Any defeasance requires the prior consent of the Federal Reserve and indication from the FSA that it does not object (unless such approval or non-objection is not required by the Federal Reserve and the FSA, respectively, at the time established for defeasance).

If any Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. There is no right of acceleration in the case of default in the payment of principal or interest on the 6.676% Senior Subordinated Notes or in the performance of any other obligation of the Company under the 6.676% Senior Subordinated Notes.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the right and obligations of the Company and the rights of the Holders under the Indenture at any time by the Company with the consent of the Holders of at least a majority in aggregate principal amount of the Notes at the time Outstanding of each series which is affected by such amendment or modification, except that certain amendments specified in the Indenture may be made without approval of Holders of the Notes. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Notes of any series to waive on behalf of the Holders of such series of Notes compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indentu re and their consequences. Any such consent or waiver by the Holder of the Note shall be binding upon such Holder and upon all future Holders of this Note and any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.

The indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of the principal of (and premium, if any) and interest on all Senior Indebtedness as defined in the Indenture, and this Note is issued subject to such provisions and each Holder, by accepting the same, agrees to and shall be bound by such provisions, and authorizes the Trustee in his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and appoints the Trustee his attorney-in-fact for such purpose.

Holders of the 6.676% Senior Subordinated Notes may not enforce their rights pursuant to the Indenture or the 6.676% Senior Subordinated Notes except as provided in the Indenture. Subject only to Article XI of the Indenture, no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this 6.676% Senior Subordinated Note at the times, place and rate, and in the coin or currency herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, transfer of this Note is registrable on the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in New York, New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of the same series containing identical terms and provisions, of authorized denominations and for a like aggregate principal amount, will be issued to the designated transferee or transferees.

The 6.676% Senior Subordinated Notes are issuable in registered form without coupons in denominations of $1,000 or any integral multiple of $1,000 in excess thereof authorized by the Company. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes of the same series containing identical terms and provisions and of different authorized denominations, as requested by the Holder surrendering the same.

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

The Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

This 6.676% Senior Subordinated Note is exchangeable by the Company only if (x) the Depository notifies the Company that it is unwilling or unable to continue as Depository for this Global Note or if at any time the Depository ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended and a successor depositary has not been appointed by the Company within 90 days, or (y) the Company in its sole discretion determines that this 6.676% Senior Subordinated Note shall be exchangeable for certificated Notes in registered form; provided, that the certificated Notes so issued by the Company in exchange for this permanent Global Note shall be in denominations of $1,000 and any integral multiple of $1,000 in excess thereof and be of like aggregate principal amount and tenor as the portion of this permanent Gl obal Note to be exchanged, and provided further that, unless the Company agrees otherwise, Notes of this series in certificated registered form will be issued in exchange for this permanent Global Note, or any portion hereof, only if such Notes in certificated registered form were requested by written notice to the Trustee or the Securities Registrar by or on behalf of a Person who is beneficial owner of an interest hereof given through the Holder hereof. Except as provided above, owners of beneficial interests in this permanent Global Note will not be entitled to receive physical delivery of Notes in certificated registered form and will not be considered the Holders thereof for any purpose under the Indenture.

In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of December 3, 2010, between the Company and the parties named on the signature pages thereof, including the right to receive Additional Interest.

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

This 6.676% Senior Subordinated Note shall be construed in accordance with and governed by the laws of the State of Illinois.

Fixed Rate Senior Subordinated Note No. 001

ASSIGNMENT FORM

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


Name and Address of Assignee

___________________________________________(____________________)
Social Security Number or other identifying number of Assignee

the within 6.676% Senior Subordinated Note and all rights thereunder, hereby irrevocably constituting and appointing ______________________ Attorney to transfer said 6.676% Senior Subordinated Notes on the books of the Company, with full power of substitution in premises.

Dated:____________________________________________________________

NOTICE: The Signature to this Assignment must correspond with the name written upon the face of this 6.676% Senior Subordinated Note in every particular, without alteration or enlargement or any change whatever.

Fixed Rate Senior Subordinated Note No. 001

EX-4.2 3 ex4-2regsnote.htm FORM OF 6.676% SENIOR SUBORDINATED NOTE REG S ex4-2regsnote.htm

Exhibit 4.2

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION.

THE RESALE RESTRICTION TERMINATION DATE WILL BE THE DATE: (A) THAT IS AT LEAST 40 DAYS AFTER THE LAST ORIGINAL ISSUE DATE HEREOF; AND (B) ON WHICH THE ISSUER INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS NOTE, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS NOTE.

THE RIGHTS ATTACHING TO THIS REGULATION S NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR OTHER NOTES OF THIS SERIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

FIXED RATE SENIOR SUBORDINATED NOTE (REGULATION S)

No. 001

CUSIP No. U4428DCD4

ISIN No. USU4428DCD40

HSBC FINANCE CORPORATION

6.676% Senior Subordinated Note due January 15, 2021

Fixed Rate Senior Subordinated Note No. 001

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its facsimile corporate seal.

Dated: HSBC FINANCE CORPORATION

Attest: _____________________ By: ________________________

Name: Name:

Title: Title:

[TRUSTEE’S CERTIFICATE OF AUTHENTICATION FOR NOTES]

This is one of the Notes of the series designated herein referred to the within-mentioned Indenture.

Date: December 3, 2010

The Bank of New York Mellon Trust Company, N.A., as Trustee

By:________________________________

Authorized Officer

WHEREAS, all things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done.

Fixed Rate Senior Subordinated Note No. 001

[Reverse of Note]

HSBC Finance Corporation

6.676% Senior Subordinated Note due January 15, 2021

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

This 6.676% Senior Subordinated Note shall be construed in accordance with and governed by the laws of the State of Illinois.

Fixed Rate Senior Subordinated Note No. 001

ASSIGNMENT FORM

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


Name and Address of Assignee

___________________________________________(____________________)
Social Security Number or other identifying number of Assignee

Dated:____________________________________________________________

Fixed Rate Senior Subordinated Note No. 001

EX-4.3 4 ex4-3firstsuppindenture.htm FIRST SUPPLEMENTAL INDENTURE (BANK OF NEW YORK) ex4-3firstsuppindenture.htm

Exhibit 4.3

Execution Copy

HSBC FINANCE CORPORATION

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., TRUSTEE

______________

FIRST SUPPLEMENTAL INDENTURE

Dated as of December 3, 2010

Supplemental to Indenture

Dated as of December 17, 2008

______________

Senior Subordinated Notes

FIRST SUPPLEMENTAL INDENTURE, dated as of the 3rd day of December, 2010 (hereinafter called the “First Supplemental Indenture”), between HSBC FINANCE CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter sometimes called the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association (hereinafter sometimes called the “Trustee”), as Trustee under the indenture of the Company, dated as of December 17, 2008 (such indenture is hereinafter called the “Indenture”).

RECITALS OF THE COMPANY

WHEREAS, the Indenture provides for the issuance from time to time of unsecured and subordinated debentures, notes or other evidences of indebtedness of the Company in one or more series in an unlimited aggregate principal amount;

WHEREAS, Section 10.01 of the Indenture provides, among other things, that the Company and the Trustee may amend the Indenture to (1) establish the form or terms of Notes of any series as permitted by Section 2.01 of the Indenture, (2) add to the covenants of the Company, and (3) to cure any ambiguity or make any change that does not adversely affect the interests of the Holders of Notes of any series in any material respect;

WHEREAS, as contemplated by Section 10.01 of the Indenture, the Company and the Trustee desire to amend and supplement the terms of the Indenture to allow for the issuance of Notes in reliance on Rule 144A and Regulations S, which will not be registered at the time of issuance under the Securities Act of 1933, as amended (the “Securities Act”), and for their subsequent exchange for Exchange Notes, to make certain other related changes to the Indenture that will not adversely effect the interests of the Holders of Notes of any series in any material respect; and

WHEREAS, the Company represents that all acts and things necessary to constitute these presents a valid indenture and agreement according to its terms, have been done and performed, and the execution of this First Supplemental Indenture has in all respects been duly authorized, and the Company, in the exercise of legal right and power in it vested, is executing this First Supplemental Indenture;

NOW, THEREFORE, in consideration of the premises and the sum of One Dollar to it duly paid by the Trustee at the execution of these presents, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee, for the equal and proportionate benefit of the respective Holders from time to time, on and after the date hereof, of the Notes (and of the coupons, if any, appertaining thereto) or of a series thereof, as follows:

Section 1. Definitions

Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

For all purposes of this First Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words of similar import used in this First Supplemental Indenture refer to this First Supplemental Indenture as a whole and not to any particular section hereof.

Section 2. Amendments to Certain Provisions

Certain provisions of the Indenture are amended as follows:

(a) Amendments to Recitals

(i) The “General Form of Reverse of Note” in the Recitals in the Indenture shall be amended by adding the phrase "and Additional Interest, if any" immediately after "accrued interest" at the end of the second and third paragraphs relating to redemption.

(ii) The following paragraph shall be added to the paragraph ending “as requested by the Holder surrendering the same.” in the “General Form of Reverse of Note” in the Recitals in the Indenture:

“[If applicable, insert- In addition to the rights provided to Holders under the Indenture, Holders of these Notes will have the rights set forth in the Registration Rights Agreement, including the right to receive Additional Interest.]”

(b) Amendments to Article I

(i) The following definitions shall be added to Section 1.01 and replace any existing definitions (as applicable) in the Indenture prior to the date hereof, each in appropriate alphabetical order:

“144A Global Note” means a Global Note bearing the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, that shall be issued in a denomination equal to the outstanding principal amount of the Notes of a particular series sold in reliance on Rule 144A.

“Additional Interest” means any additional interest due and payable on any series of Notes pursuant to a Registration Rights Agreement applicable to such Series. Unless the context otherwise requires, the term “interest,” when used in this Indenture with respect to any series of Notes as to which Additional Interest is due and payable, shall mean the interest payable in accordance with the terms of such Note plus such Additional Interest.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and regulations of the Depositary that apply to such transfer or exchange.

“Broker-Dealer” has the meaning set forth in the applicable Registration Rights Agreement.

“Clearstream” means Clearstream Banking S.A. and any successor thereto.

“Dealer Manager” has the meaning set forth in any Registration Rights Agreement, if applicable.

“Depositary” means, with respect to any series of Notes issuable in global form, the person specified as the Depositary with respect to such series pursuant to Section 3.01, and any and all successors appointed as Depositary under the Indenture and having become such under the Indenture.

“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear system, and any successor thereto.

“Exchange Notes” means any Notes containing terms identical to Notes of a particular series bearing a Private Placement Legend (except that such Exchange Notes shall be registered under the Securities Act and shall not include a Private Placement Legend) that are issued and exchanged for any such Notes pursuant to the applicable Registration Rights Agreement in an Exchange Offer in accordance with Section 2.13(c).

“Exchange Offer” has the meaning set forth in the applicable Registration Rights Agreement.

“Exchange Offer Registration Statement” has the meaning set forth in the applicable Registration Rights Agreement.

“First Supplemental Indenture” means the First Supplemental Indenture, dated as of December 3, 2010, to the Indenture.

“Global Notes” means, individually and collectively, any Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee and that bears the legend set forth in Section 2.11(a) issued in global form issued in accordance with Section 2.13(a) or 2.13(c).

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

“Initial Purchaser” has the meaning set forth in the applicable Registration Rights Agreement, if applicable.

“Legended Regulation S Global Note” means a Global Note bearing the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of any series of Notes initially sold in reliance on Rule 903 of Regulation S.

“Letter of Transmittal” means, as applicable, the letter of transmittal to be prepared by the Company and sent to all Holders of any series of Notes for use by such Holders in connection with an Exchange Offer.

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and with respect to DTC, shall include Euroclear and Clearstream).

“Private Placement Legend” means the legend set forth in Section 2.13(d) to be placed on all Notes issued under this Indenture without registration under the Securities Act, except where otherwise permitted by the provisions of this Indenture.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Registration Rights Agreement” means any registration rights agreement between the Company and the other parties thereto pursuant to which the Company agrees to register one or more specified series of Notes under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Global Note deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, that shall be issued in a denomination equal to the outstanding principal amount of the Notes of a particular series sold in reliance on Regulation S.

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 903” means Rule 903 promulgated under the Securities Act.

“Rule 904” means Rule 904 promulgated under the Securities Act.

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the applicable Registration Rights Agreement.

“Unlegended Regulation S Global Note” means a Global Note deposited with or on behalf of and registered in the name of the Depositary or its nominee and issued upon expiration of the Restricted Period.

“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

“Unrestricted Global Note” means a Global Note that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes, and that does not bear the Private Placement Legend.

“U.S. Person” means a U.S. person as defined in Rule 902(o) under the Securities Act.

The following definition shall be deleted from Section 1.01 of the Indenture:

“Special Record Date” for the payment of any Defaulted Interest (as defined in Section 2.07) means a date fixed by the Trustee pursuant to Section 2.07.

(i) The following paragraphs will be added at the end of Section 2.01:

“Any Notes of a particular series offered and sold in reliance on Regulation S shall be issued initially in the form of a Legended Regulation S Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with The Bank of New York Mellon Trust Company, N.A., as custodian for The Depository Trust Company (“DTC”), and registered in the name of the Depositary or the nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Following the termination of the Restricted Period, beneficial interests in a Legended Regulation S Global Note may be exchanged for beneficial interests in an Unlegended Regulation S Global Note pursuant to Section 2.13 and the Applicable Pr ocedures. Simultaneously with the authentication of an Unlegended Regulation S Global Note, the Trustee shall cancel the relevant Legended Regulation S Global Note. During the Restricted Period, transfers of beneficial interests in a Legended Regulation S Global Note shall be made only to or for the accounts of designated agents holding on behalf of Euroclear or Clearstream. The aggregate principal amount of any Regulation S Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.

Any Notes of a particular series issued under this Indenture and any Exchange Notes subsequently issued for Notes of such series shall be treated as a single series for all purposes under this Indenture.”

(ii) Section 2.05 shall be amended by inserting the following phrase immediately after “Subject to the provisions of Section 2.11, at the option of the Holder,” appearing at the beginning of the second and third paragraphs of Section 2.05:

“and subject to any applicable restrictions set forth in Section 2.13”

(iii) Section 2.07 shall be amended and restated in its entirety as set forth below:

“Interest and Additional Interest, if any, on any Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered in the Note Register at the close of business on the Regular Record Date for such interest.

Each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.”

(iv) Section 2.11(a) shall be amended by inserting the following phrase immediately after “Except as otherwise specified in Section 2.11 of the Indenture” appearing at the beginning of the last sentence of Section 2.11(a):

“and subject to any applicable restrictions set forth in Section 2.13”

(v) Section 2.11(b) shall be amended by inserting the following phrase immediately after the phrase "or to a nominee of such successor Depository" appear at the end of the last sentence of Section 2.11(b):

"provided, however, that beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.13(a) or (c) hereof"

(vi) Section 2.13 shall be added as follows

“SECTION 2.13. Special Transfer Provisions.

(a) Transfer and Exchange of Beneficial Interests in Restricted Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Legended Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than any Initial Purchaser). 60;Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Note Registrar to effect the transfers described in this Section 2.13(a)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.13(a)(i) above, the transferor of such beneficial interest must deliver to the Note Registrar (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.13(c), the requirements of this Section 2.13(a)(ii) shall be deemed to have been satisfied upon receipt by the Note Registrar of the instructions contained in the Letter of Transmittal delivered by the holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Notes pursuant to Section 2.13(f).

(iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.13(a)(ii) above and the Note Registrar receives the following:

(A) if the transferee shall take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit A, including the certifications in item (1) thereof; and

(B) if the transferee shall take delivery in the form of a beneficial interest in a Legended Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit A, including the certifications in item (2) thereof.

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any Holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.13(a)(ii) above and:

(A) such exchange or transfer is effected pursuant an Exchange Offer in accordance with an applicable Registration Rights Agreement and the Holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal (1) it is not an affiliate (as defined in Rule 144) of the Company, (2) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Notes to be issued in such Exchange Offer and (3) it is acquiring the Exchange Notes in its ordinary course of business;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

(D) the Note Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B, including the certifications in item (a) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit A, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Note Registrar or the Company so requests or if the Applicable Procedures so require, an opinion of counsel in form reasonably acceptable to the Note Registrar and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer pursuant to this Section 2.13(a) is effected at a time when a Global Note has not yet been issued, the Company shall issue and, in accordance with Sections 2.02 and 2.03 hereof, the Trustee shall authenticate one or more Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(b) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.13(b), the Note Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Note Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Note Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents a nd information, as applicable, required pursuant to the following provisions of this Section 2.13(b).

(i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Note Registrar receives the following:

(A) if the transfer shall be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit A, including the certifications in item (1) thereof; and

(B) if the transfer shall be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit A, including the certifications in item (3) thereof.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the applicable Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that (1) it is not an affiliate (as defined in Rule 144) of the Company, (2) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Notes to be issued in such Exchange Offer and (3) it is acquiring the Exchange Notes in its ordinary course of business;

(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the applicable Registration Rights Agreement;

(C) any such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the applicable Registration Rights Agreement; or

(D) the Note Registrar receives a certificate from such Holder in the form of Exhibit B, including the certifications in item (c) thereof and, if the Note Registrar so requests, an opinion of counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Note Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(c) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the applicable Registration Rights Agreement, the Company shall issue and, in accordance with Sections 2.02 and 2.03, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not affiliates (as defined in Rule 144) of the Company, (y) they are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any Person to participate in, a distribution of the E xchange Notes to be issued in such Exchange Offer and (z) they are acquiring the Exchange Notes in their ordinary course of business and (ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Restricted Global Notes so accepted Unrestricted Global Notes in the appropriate principal amount.

(d) Private Placement Legend. Except as permitted below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) that are not registered under the Securities Act shall bear a legend in substantially the following form:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO HSBC FINANCE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THE RESALE RESTRICTION TERMINATION DATE WILL BE THE DATE: (A) THAT IS AT LEAST [ONE YEAR][40 DAYS] AFTER THE LAST ORIGINAL ISSUE DATE HEREOF; AND (B) ON WHICH THE ISSUER INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS NOTE, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS NOTE.

Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (a)(iv), (b)(ii), (b)(iii) or (c) to this Section 2.13 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(e) Regulation S Global Note Legend. Each Regulation S Global Note shall bear a legend in substantially the following form:

THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR OTHER NOTES OF THIS SERIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

(f) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 3.09 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(g) Certifications, Certificates and Opinions. All certifications, certificates and opinions of counsel required to be submitted to the Note Registrar pursuant to this Section 2.13 to effect a registration of transfer or exchange may be submitted by facsimile followed by delivery of the original.”

(d) Amendments to Article III

(i) The following sentence shall be added to the end of Section 3.01:

"The Company shall pay Additional interest, if any in the same manner on the dates and in the amounts set forth in the applicable Registration Rights Agreement."

(ii) The following sentence shall be added to the end of Section 3.07

“Additionally, for so long as any Note bearing a Private Placement Legend remains outstanding, the Company shall furnish to the Holders of any such Note and to their prospective transferees, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.”

(e) Amendments to Article VI

(i) Section 6.08 shall be amended by deleting the Section in its entirety and restating Section 6.08 as set forth below:

“Subject only to Article XI of the Indenture but otherwise notwithstanding any other provision in this Indenture, and to the extent required by applicable law, the Holder of any Note shall have the right which is absolute and unconditional to receive payment of the principal (and premium, if any) and interest on such Note on the respective Stated Maturities expressed in such Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.”

(f) Amendment to Article IX

(i) Section 9.01 shall be amended by inserting the following phrase after "the performance of every covenant of the Indenture" appearing in clause (1) of Section 9.01:

"and any applicable Registration Rights Agreement"

(g) Additional Amendment to Indenture Generally

(i) References in the Indenture to the payment of principal of (and premium, if any) and interest or the payment of accrued interest, shall be amended to insert at the end of each such phrase "Additional Interest, if any".

(h) Addition of Exhibits

(i) Exhibits A and B to this First Supplemental Indenture shall be added as Exhibits A and B, respectively, to the Indenture.

Section 3. Miscellaneous Provisions

This First Supplemental Indenture is executed by the Company, and by the Trustee upon the Company’s request, pursuant to the provisions of Section 7.03 of the Indenture, and the terms and conditions hereof shall be deemed to be part of the Indenture for all purposes. The Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

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

The Trustee assumes no responsibility for the correctness of the recitals herein contained, which shall be taken as the statements of the Company. The Trustee makes no representations and shall have no responsibility as to the validity or sufficiency of this First Supplemental Indenture or the due authorization and execution hereof by the Company.

This First Supplemental Indenture and each Note shall be deemed to be a contract made under the laws of the State of Illinois and for all purposes shall be construed in accordance with the laws of such state without regard to the conflicts of law principles.

IN WITNESS WHEREOF, HSBC Finance Corporation has caused this First Supplemental Indenture to be duly signed by its Treasurer, Assistant Treasurer or its Secretary or an Assistant Secretary thereunto duly authorized, and The Bank of New York Mellon Trust Company, N.A., as Trustee under the Indenture, has caused this First Supplemental Indenture to be duly signed by one of its Vice Presidents or Assistant Vice Presidents thereunto duly authorized.

HSBC FINANCE CORPORATION

By /s/ William H. Kesler

Name: William H. Kesler

Title: Executive Vice President

and Treasurer

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

By /s/ D.G. Donovan

Name: D. G. Donovan

Title: Vice President

EXHIBIT A

FORM OF CERTIFICATE OF TRANSFER

HSBC Finance Corporation

26525 North Riverwoods Blvd.

Mettawa, IL 60045

Attention: [________]

Telephone: (224) 544-[______]

The Bank of New York Mellon Trust Company, N.A.

2 North LaSalle St.

Chicago, IL 60602

Attention: [______________]

Facsimile: (312) [________]

Re: HSBC Finance Corporation

Reference is hereby made to the Indenture, dated as of December 17, 2008 between HSBC Finance Corporation, a Delaware corporation (the “Company”) and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by a First Supplemental Indenture, dated as of December 3, 2010 (as supplemented, the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

___________________ (the “Transferor”) owns and proposes to transfer the [Note] [Notes] or interest in such [Note] [Notes] specified in Annex A hereto, in the principal amount of $___________ in such [Note] [Notes] or interests (the “Transfer”), to ________________ (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky Notes laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

2. Check if Transferee will take delivery of a beneficial interest in a Legended Regulation S Global Note, or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was ex ecuted in, on or through the facilities of a designated offshore Notes market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than any Initial Purchaser or Dealer Manager). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Legended Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

3. Check and complete if transfer is pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky Notes laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or

(b) such Transfer is being effected to the Company or a subsidiary thereof; or

(c) such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with any applicable prospectus delivery requirements under the Securities Act.

4. Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

(a) Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky Notes laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to th e restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky Notes laws of any state of the United States and, in the case of a transfer from a Restricted Global Note or a Restricted Definitive Note, the Transferor hereby further certifies that (a) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore Notes market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (b) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (c) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (d) the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person, and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial inte rest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky Notes laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, t he transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

NYDOCS01/1096107.6 A-

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

Dated:

[Insert Name of Transferor]

By:

Name:

Title:

Please designate your DTC Participant's name and Participant Number and provide contact information below:

Name of DTC Participant:___________________________________

DTC Participant Number: ____________

Client Reference No.:_______________________________________

Contact Information

Name: __________________________________

Telephone No.: ___________________________

Fax No.: ________________________________

Email: __________________________________

NYDOCS01/1096107.6 A-

ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a) a beneficial interest in the:

(i) 144A Global Note (CUSIP __________); or

(ii) Regulation S Global Note (CUSIP __________); or

(b) a Restricted Definitive Note.

2. After the Transfer the Transferee will hold:

[CHECK ONE]

(a) a beneficial interest in the:

(i) 144A Global Note (CUSIP __________); or

(ii) Regulation S Global Note (CUSIP __________); or

(iii) Unrestricted Global Note (CUSIP __________); or

(b) a Restricted Definitive Note; or

in accordance with the terms of the Indenture.

NYDOCS01/1096107.6 A-

EXHIBIT B

FORM OF CERTIFICATE OF EXCHANGE

HSBC Finance Corporation

26525 North Riverwoods Blvd.

Mettawa, IL 60045

Attention: [________]

Telephone: (224) 544-[______]

The Bank of New York Mellon Trust Company, N.A.

2 North LaSalle St.

Chicago, IL 60602

Attention: [______________]

Facsimile: (312) [________]

Re: HSBC Finance Corporation - [Insert Title of Notes]

Reference is hereby made to the Indenture, dated as of December 17, 2008, as supplemented between HSBC Finance Corporation, a Delaware corporation (the “Company”) and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by a First Supplemental Indenture, dated as of December 3, 2010 (as supplemented, the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

__________________________ (the “Owner”) owns and proposes to exchange the [Note] [Notes] or interest in such [Note] [Notes] specified herein, in the principal amount of $____________ in such [Note] [Notes] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

(a) Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the 220;Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky Notes laws of any state of the United States.

(b) Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not req uired in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky Notes laws of any state of the United States.

(c) Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain comp liance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky Notes laws of any state of the United States.

(d) Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed o n the Restricted Definitive Note and in the Indenture and the Securities Act.

NYDOCS01/1096107.6 B-

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

Dated:

[Insert Name of Transferor]

By:

Name:

Title:

Please designate your DTC Participant's name and Participant Number and provide contact information below:

Name of DTC Participant:___________________________________

DTC Participant Number: ____________

Client Reference No.:_______________________________________

Contact Information

Name: __________________________________

Telephone No.: ___________________________

Fax No.: ________________________________

Email: __________________________________

NYDOCS01/1096107.6 B-

EX-4.4 5 ex4-4regrightsagmt.htm 6.676% SENIOR SUBORDINATED NOTES REGISTRATION RIGHTS AGMT ex4-4regrightsagmt.htm

Exhibit 4.4

$1,938,669,000

HSBC FINANCE CORPORATION

6.676% Senior Subordinated Notes due January 15, 2021

REGISTRATION RIGHTS AGREEMENT

December 3, 2010

HSBC Securities (USA) Inc.

452 Fifth Avenue, Tower 3

New York, New York 10018

Dear Sirs:

HSBC Finance Corporation, a Delaware corporation (the “Company”), has made an offer to exchange the 6.676% Senior Subordinated Notes due January 15, 2021 (the “Initial Securities”) of the Company for certain of its issued and outstanding 5.5% Senior Notes due January 19, 2016, 5% Senior Notes due June 30, 2015, 5.25% Senior Notes due January 15, 2014 and 5.25% Senior Notes due April 15, 2015 (together, the “First Exchange Offer Notes” and the exchange offer for such First Exchange Offer Notes, the “First Exchange Offer”) and 7.625% Senior Notes due May 17, 2032 and 7.35% Senior Notes due November 27, 2032 (together, the “Second Exchange Offer Notes” and the exchange of fer for such Second Exchange Offer Notes, the “Second Exchange Offer” and, together with the First Exchange Offer, the “Exchange Offers”) upon the terms and conditions set forth in the offering memoranda relating to the respective Exchange Offers, each dated October 28, 2010 (each, an “Offering Memorandum” and together, the “Offering Memoranda”). For the avoidance of doubt, unless otherwise specified, references herein to (i) an Offering Memorandum shall be construed to apply to both Offering Memoranda and (ii) an exchange offer shall be construed to apply to both Exchange Offers. The Initial Securities will be issued upon the terms set forth in the Offering Memorandum, for which HSBC Securities (USA) Inc. has agreed to act as dealer manager (the “Dealer Manager”), pursuant to a dealer manager agreement, dated as of October 28, 2010 (the “Manager Agreement”) between the Company and the Dealer Manager. The Initial Securities will be issued pursuant to the indenture, dated as of December 17, 2008, among the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”), as amended and supplemented by a supplemental indenture, dated as of the date hereof (such indenture as amended and supplemented, the “Indenture”). As an inducement to the Dealer Manager, the Company agrees with the Dealer Manager, for the benefit of the holders of the Initial Securities (including, without limitation, the Dealer Manager and the Market Maker (as defined in Annex E herein)) and the Exchange Securities (as defined below) (collectively the “Holders”), as follows:

1. Registered Exchange Offer. The Company shall, at its own cost, prepare and, not later than 180 days after (or if the 180th day is not a business day, the first business day thereafter) the date of original issue of the Initial Securities (the “Issue Date”), file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Exchange Offer Registration Statement”) on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”), with respect to a proposed offer (the “Registered Exchange Offer”) to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the “Exchange Securities” and together with the Initial Securities, the “Securities”) of the Company issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) that would be registered under the Securities Act. The Company shall use its reasonable best efforts to promptly cause such Exchange Offer Registration Statement to become effective under the Securities Act within 270 days (or if the 270th day is not a business day, the first business day thereafter) after the Issue Date of the Initial Securities and shall keep the Exchange Offer Registration Statement effecti ve for not less than 30 days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the “Exchange Offer Registration Period”).

If the Company effects the Registered Exchange Offer the Company will be entitled to close the Registered Exchange Offer 30 days after the commencement thereof provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer.

Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall as soon as practicable (but in any event not later than 20 days after such effectiveness) thereafter commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities (as defined in Section 6 hereof) electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder’s business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.

The Company acknowledges that, pursuant to current interpretations by the Commission’s staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder that is a broker-dealer electing to exchange Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an “Exchanging Dealer”), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section, and (c) Annex C hereto in the “Plan of Distribution” section of such prospectus in connection with a sale of any such Exc hange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) a Dealer Manager that elects to sell Exchange Securities acquired in exchange for Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.

The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or the Dealer Manager, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Dealer Manager have sold all Exchange Securities held by them (unless such period is extended purs uant to Section 3(j) below) and (ii) the Company shall make such prospectus, and any amendment or supplement thereto, available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.

In connection with the Registered Exchange Offer, the Company shall:

(a) mail, or caused to be mailed, to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(b) keep the Registered Exchange Offer open for not less than 20 days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders;

(c) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate of the Trustee;

(d) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and

(e) otherwise comply with all applicable laws.

As soon as practicable after the close of the Registered Exchange Offer the Company shall:

(x) accept for exchange all the Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer;

(y) deliver, or cause to be delivered, to the Trustee for cancellation all the Initial Securities so accepted for exchange; and

(z) cause the Trustee to authenticate and deliver promptly to each Holder of Initial Securities, or Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.

The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.

Interest on each Exchange Security issued pursuant to the Registered Exchange Offer will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the Issue Date.

Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, 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 and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

2. Shelf Registration. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within 315 days of the Issue Date, (iii) the Dealer Manager so requests with respect to the Initial Securities not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange, the Company shall take the following actions:

(a) The Company shall, at its cost, as promptly as practicable (but in no event more than 60 days after so required or requested pursuant to this Section 2) file with the Commission and thereafter shall use its reasonable best efforts to cause to be declared effective (unless it becomes effective automatically upon filing) a registration statement on an appropriate form under the Securities Act, (the “Shelf Registration Statement” and, together with the Exchange Offer Registration Statement, a “Registration Statement”), relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 6 hereof) by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration State ment and Rule 415 under the Securities Act (hereinafter, the “Shelf Registration”); provided, however, that no Holder (other than a Dealer Manager) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.

(b) The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the Issue Date or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement have been sold pursuant thereto. The Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sel l such Securities during that period, unless such action is required by applicable law.

(c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of its respective effective date, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

3. Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:

(a) The Company shall (i) furnish to the Dealer Manager, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that the Dealer Manager (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as the Dealer Manager reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the “Description of the Exchange Offer” section and in Annex C hereto in the “Plan of Distribution” section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by the Dealer Manager, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” reasonably acceptable to the Dealer Manager, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential “underwriter” status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the ̶ 0;Exchange Act”)) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a “Participating Broker-Dealer”), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Dealer Manager based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include in the prospectus included in the Shelf Registration Statement (or, if permitted by Commission Rule 430B(b), in a prospectus supplement that becomes a part thereof pursuant to Commission Rule 430B(f)) that is delivered to any Holder pursuant to Section 3(d) and (f), the names of the Holders, who propose to sell Securities pursuant to the Shelf Registration Statement, as selling securityholders.

(b) The Company shall give written notice to the Dealer Manager, the Holders of the Securities and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

(i) when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;

(iii) 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, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, and of the happening of any event that causes the Company to become an “ineligible issuer,” as defined in Commission Rule 405;

(iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

(v) of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

(c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.

(d) The Company shall furnish to each Holder, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment or supplement thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). The Company shall not, without the prior consent of the Dealer Manager, make any offer relating to the Securities that would constitute a “free writing prospectus,” as defined in Commission Rule 405.

(e) The Company shall deliver to the Dealer Manager, and to each Exchanging Dealer and Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Dealer Manager or any such Exchanging Dealer or Holder requests, all exhibits thereto (including those incorporated by reference).

(f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(g) The Company shall deliver to the Dealer Manager, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by the Dealer Manager, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by th e prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.

(h) Prior to any public offering of the Securities, pursuant to any Registration Statement, the Company shall use its reasonable best efforts to register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or “blue sky” laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdict ion where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject.

(i) The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement.

(j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Dealer Manager, t he Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Dealer Manager, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Dealer Manager, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j). During the period during which the Company is required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company will, prior to the three-year expiration of that Shelf Registration Statement file, and use its reasonable best efforts to cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.

(k) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Exchange Securities and provide the applicable trustee with printed certificates for the Exchange Securities in a form eligible for deposit with The Depository Trust Company.

(l) The Company will (a) comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and (b) will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period, provided, however, that compliance by the Company with the periodic, curre nt and other reporting requirements of the Exchange Act shall satisfy the Company’s obligations under this paragraph (l)(b).

(m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

(n) The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.

(o) Subject to Section 8, the Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration.

(p) In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney or accountant agent retained by the Holders of the Securities or any such underwriters, all relevant financial and other records, pertinent corporate documents and properties of the Company, and (ii) cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by any such persons, in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation wit hin the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated by the Dealer Manager on its own behalf or, if on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof.

(q) Subject to Section 8, in the case of any Shelf Registration, the Company, if requested by any Holder of Securities covered thereby, shall cause (i) their counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement in form, substance and scope customarily covered in opinions delivered in connection with sales of securities pursuant to shelf registrations, (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with sales of securities pursuant to shelf registrations; subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

(r) In the case of the Registered Exchange Offer, if requested by the Dealer Manager or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Dealer Manager or such Participating Broker-Dealer signed opinions in substantially similar forms to those delivered pursuant to Sections 8(c), (d), (e) and (f) of the Manager Agreement with such changes as are customary in connection with the preparation of a Registration Statement and sales thereunder and (ii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Registration Statement to deliver to such Dealer Manager or such Participating Broker-Dealer a comfort letter, in such form as i s customary in connection with the preparation of a Registration Statement and sales thereunder.

(s) If a Registered Exchange Offer is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other person as directed by the Company) in exchange for the Exchange Securities, the Company shall mark, or cause to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities; in no event shall the Initial Securities be marked as paid or otherwise satisfied.

(t) The Company will use its reasonable best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm the ratings that will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.

(u) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Conduct Rules (the “Rules”) of the Financial Industry Regulatory Authority, Inc.) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a “qualified independent underwriter” (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules.

(v) The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby.

4. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof (including the reasonable fees and expenses, if any, of counsel for the Dealer Manager and the Market Maker incurred in connection with the Registered Exchange Offer), whether or not the Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel designated by the Holders of a majority in principal amount of the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith.

5. Indemnification. (a) The Company agrees to indemnify and hold harmless (i) each Holder of the Securities, any Participating Broker-Dealer, the Market Maker and each person, if any, who controls such Holder, such Participating Broker-Dealer or Market Maker within the meaning of the Securities Act or the Exchange Act (each Holder and any Participating Broker-Dealer and Market Maker and such controlling persons are referred to collectively as the “Indemnified Parties”) from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or “issuer free writing prospectus,” as defined in Commission Rule 433 (“Issuer FWP”), relating to a Shelf Registration, 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 shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder, Participating Broker-Dealer, the Market Maker or other person and furnished to the Company by or on behalf of such Holder, Participating Broker Dealer, the Market Maker or other person specifically for inclusion therein; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party and (ii) the Market Maker from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in c onnection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), that arise out of, or are based upon, any breach by the Company of their representations, warranties and agreements contained in this Annex E hereof. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders.

(b) Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any such controlling persons.

(c) The Market Maker Agrees to indemnify and hold harmless the (i) Company and its respective directors and officers who sign the Market Making Registration Statement (as defined in Annex E hereto) and (ii) any person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company and its respective officers, directors, partners, employees, representatives and agents of each such Person (any person referred to in clause (i) or (ii) may hereinafter be referred to as a “Company Indemnified Party”) to the same extent as the foregoing indemnity from the Company to each of the Indemnified Parties, but only with respect to claims and actions based on information relating to the Market Maker furnished in writing by the Ma rket Maker expressly for use in the Market Making Registration Statement and any prospectus forming a part of the Market Making Registration Statement.

(d) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a), (b) or (c) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemn ified party otherwise than under subsection (a), (b) or (c) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably 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 will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior writt en consent of the indemnified party, effect any settlement of any pending or threatened action 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 (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(e) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a), (b) or (c) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a), (b) or (c) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder, Participating Broker Dealer, Market Maker or such other indemnified party, as the case may be, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (e). Notwithstanding any other provision of this Section 5(e), neither the Holders of the Securities, any Participating Broker Dealer, nor the Market Maker shall not required to contribute any amount in excess of the amount by which the net proceeds received by such Holders, Participating Broker Dealer or Market Maker from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders, Participating Broker Dealer or Market Maker have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (e), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company.

(f) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

6. Additional Interest Under Certain Circumstances. (a) Additional interest (the “Additional Interest”) with respect to the Initial Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iii) below a “Registration Default”:

(i) If the Company fails to file the Exchange Offer Registration Statement with the Commission on or prior to the 180th day after the Issue Date;

(ii) If the Exchange Offer Registration Statement is not declared effective by the Commission on or prior to the 270th day after the Issue Date;

(iii) If neither the Registered Exchange Offer is consummated nor, if required in lieu thereof, the Shelf Registration Statement has not become effective within 315 days of the Issue Date;

(iv) If after the Exchange Offer Registration Statement becomes effective (A) such Exchange Offer Registration Statement thereafter ceases to be effective (unless such ineffectiveness is cured within the 270-day period described above); or (B) such Exchange Offer Registration Statement or the related prospectus ceases to be usable in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Exchange Offer Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Exchange Offer Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder;

(v) If required in lieu of the Exchange Offer Registration Statement, the Shelf Registration Statement after it becomes effective (A) thereafter ceases to be effective; or (B) such Shelf Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Shelf Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, (2) it shall be necessary to amend su ch Shelf Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder, or (3) such Shelf Registration Statement has expired before a replacement Shelf Registration Statement has become effective; and such Shelf Registration Statement has been declared effective but ceases to be effective or usable for more than 90 days, whether or not consecutive, during any twelve-month period.

Additional Interest shall accrue on the Initial Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured. Additional Interest shall accrue at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase to a maximum of 1.00% per annum thereafter. Following the cure of all Registration Defaults, the accrual of Additional Interest on the Initial Securities will cease and the interest rate will revert to the applicable original rate set forth in the title of the Securities.

(b) A Registration Default referred to in Section 6(a)(v)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceedin g promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 90 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.

(c) Any amounts of Additional Interest due pursuant to clause (i), (ii), (iii), (iv) or (v) of Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Initial Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.

(d) “Transfer Restricted Securities” means each Security until (i) the date on which such Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of a Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement or (iii) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement.

7. Rules 144 and 144A. The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securitie s Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Dealer Manager upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

8. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering (“Managing Underwriters”) will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering and shall be reasonably acceptable to the Company (such acceptance not to be unreasonably withheld or delayed).

No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

9. Miscellaneous.

(a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company, the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents, and in the case of any of the provisions of Annex E or hereof or Section 5 hereof as they relate to the Market Maker, the written consent of the Market Maker.

(b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:

(1) if to a Holder of the Securities, at the most current address given by such Holder to the Company.

(2) if to the Dealer Manager;

c/o HSBC Securities (USA) Inc.

452 Fifth Avenue, Tower 3

New York, New York 10018

Attention: Transaction Management

Fax: 212-525-0238

Telephone: 212-525-3652

with a copy to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Attention: Stuart K. Fleischmann

Fax: 646-848-7527

Telephone: 212-848-7527

(3) if to the Company, at its address as follows:

HSBC Finance Corporation

2625 North Riverwoods Blvd.

Mettawa, Illinois 60045

Attention: Senior Vice President – Money and Capital Markets

Fax: (224) 552-4443

Telephone: (224) 544-4443

with a copy to:

HSBC Finance Corporation

2625 North Riverwoods Blvd.

Mettawa, Illinois 60045

Attention: Mick Forde, Senior Vice President,

General Counsel - Treasury and

Assistant Secretary

Fax: 224-552-2945

Telephone: 224-544-2945

(4) if to the Market Maker;

c/o HSBC Securities (USA) Inc.

452 Fifth Avenue, Tower 3

New York, New York 10018

Attention: Transaction Management

Fax: 212-525-0238

Telephone: 212-525-3652

with a copy to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Attention: Stuart K. Fleischmann

Fax: 646-848-7527

Telephone: 212-848-7527

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient’s facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.

(c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders or the Market Maker herein or otherwise conflicts with the provisions hereof.

(d) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns.

(e) Counterparts. This Agreement may be executed in any number of counterparts (which may be in electronic form, i.e., “PDF”) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

(h) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(i) Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

NYDOCS01/1248513.4

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Dealer Manager and the Company in accordance with its terms.

Very truly yours,

HSBC Finance Corporation

By: /s/ William H. Kesler

Name: William H. Kesler

Title: Executive Vice President and Treasurer

[Signature Page to Registration Rights Agreement]

The foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written.

HSBC SECURITIES (USA) INC.

By: /s/ Diane M. Kenna

Name: Diane M. Kenna

Title: Senior Vice President

HSBC SECURITIES (USA) INC.,

in its role as Market Maker

By: /s/ Diane M. Kenna

Name: Diane M. Kenna

Title: Senior Vice President

[Signature Page to Registration Rights Agreement]

ANNEX A

Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. Th e Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

ANNEX B

Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See “Plan of Distribution.”

ANNEX C

PLAN OF DISTRIBUTION

Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until &# 160; , 20 , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.(1)

The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securitie s. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

(1) In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus, if required.

ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name: ____________________________________________

Address: ___________________________________________

___________________________________________

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

ANNEX E

Market Making.

(a) For so long as any of the Securities or Exchange Securities are outstanding and HSBC Securities (USA) Inc. (in such capacity, the “Market Maker”) or any of its affiliates (as defined in the rules and regulations of the Commission) owns any equity securities of the Company or any of its affiliates and proposes to make a market in the Securities or Exchange Securities as part of its business in the ordinary course, the following provisions shall apply for the sole benefit of the Market Maker:

(i)

The Company shall (A) on the date that the Exchange Offer Registration Statement or, if required hereby, the Shelf Registration Statement is filed with the Commission, file a registration statement (the “Market Making Registration Statement”, including all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and any document incorporated by reference therein) (which may be the Exchange Offer Registration Statement or the Shelf Registration Statement if permitted by the rules and regulations of the Commission) and use their reasonable efforts to cause such Market Making Registration Statement to be declared effective by the Commission on or prior to the consummation of the Exchange Offer or the effective date of the S helf Registration Statement, as applicable; (B) periodically amend such Market Making Registration Statement so that the information contained therein complies with the requirements of Section 10(a) under the Securities Act; (C) amend the Market Making Registration Statement or amend or supplement the related prospectus when necessary to reflect any material changes in the information provided therein; and (D) amend the Market Making Registration Statement when required to do so in order to comply with Section 10(a)(3) of the Securities Act; provided, however, that (1) prior to filing the Market Making Registration Statement, any amendment thereto or any supplement to the related prospectus, the Company will furnish to the Market Maker copies of all such documents proposed to be filed, which documents will be subject to the review of the Market Maker and its counsel and (2) the Company will not file the Market Making Registration Statement, any amendment thereto or any amendment or supplement to the related prospectus to which the Market Maker and its counsel shall reasonably object unless the Company is advised by counsel that such Market Making Registration Statement, amendment or supplement is required to be filed under applicable securities laws and the Company will provide the Market Maker and its counsel with copies of the Market Making Registration Statement, the related prospectus and each amendment and supplement thereto filed.

(ii)

The Company shall notify the Market Maker and, if requested by the Market Maker, confirm such advice in writing, (A) when any Market Making Registration Statement, any post-effective amendment to the Market Making Registration Statement or any amendment or supplement to the related prospectus has been filed, and, with respect to any Market Making Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the Commission for any post-effective amendment to the Market Making Registration Statement, any supplement or amendment to the related prospectus or for additional information; (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Market Making Registration Statement or the initiation of any proceedings for that purpose, including the receipt of the Company o f any notice of objection of the Commission to the use of Market Making Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities or Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose; and (E) of the happening of any event that makes any statement made in the Market Making Registration Statement, the related prospectus or any amendment or supplement thereto untrue or that requires the making of any changes in the Market Making Registration Statement, such prospectus or any amendment or supplement thereto, in order to make the statements therein not misleading.

(iii)

If any event contemplated by (a)(ii)(B) through (E) herein occurs during the period for which the Company is required to maintain an effective Market Making Registration Statement, the Company shall promptly prepare and file with the Commission a post-effective amendment to the Market Making Registration Statement or an amendment or supplement to the related prospectus or file any other required document so that the prospectus will not include 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.

(iv)

In the event of the issuance of any stop order suspending the effectiveness of the Market Making Registration Statement, any notice of objection pursuant to Rule 401(g)(2) under the Securities Act or of any order suspending the qualification of the Securities or Exchange Securities for sale in any jurisdiction, the Company shall promptly use its reasonable efforts to obtain its withdrawal, including by filing an amendment to the Market Making Registration Statement on the proper form as necessary.

(v)

The Company shall furnish to the Market Maker, without charge, (i) at least one conformed copy of the Market Making Registration Statement and any post-effective amendment thereto; and (ii) as many copies of the related prospectus and any amendment or supplement thereto as the Market Maker may reasonably request.

(vi)	The Company shall consent to the use of the prospectus contained in the Market Making Registration Statement or any amendment or supplement thereto by the Market Maker in connection with its market-making activities.

(vii)

Notwithstanding the foregoing provisions of this Annex E, the Company may for valid business reasons, including, without limitation, a potential material acquisition, divestiture of assets or other material corporate transaction, notify the Market Maker in writing that the Market Making Registration Statement is no longer effective or the prospectus included therein is no longer usable for offers and sales of Securities or Exchange Securities; provided that the use of the Market Making Registration Statement or the prospectus contained therein shall not be suspended for more than 90 consecutive days. The Market Maker agrees that upon receipt of any notice from the Company pursuant to this clause (a)(vii), it will discontinue use of the prospectus contained in the Market Making Registration Statement until receipt of copies of the supplemented or amended prospectus relating thereto or until advised in writing by the Company that the use of the prospectus contained in the Market Making Registration Statement may be resumed.

(b) In connection with the Market Making Registration Statement, the Company shall (i) make reasonably available for inspection by a representative of, and counsel acting for, the Market Maker all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) use its reasonable efforts to have its officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative or counsel or the Market Maker, in each case as shall be reasonably necessary to enable the Market Maker to conduct a reasonable investigation within Section 11 of the Securities Act.

(c) In connection with the Market Making Registration Statement and prior to the initial effective date thereof, the Company shall use its reasonable efforts to register or qualify the Securities or Exchange Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Market Maker reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities or Exchange Securities covered by the Market Making Registration Statement; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any jurisdiction where it would not otherwi se be required to so qualify, (ii) file any general consent to subject itself to service of process in any such jurisdictions or (iii) subject itself to taxation in any such jurisdiction if it not so then subject.

(d) The Company represents and agrees that the Market Making Registration Statement, any post-effective amendments thereto, any amendments or supplements to the related prospectus and any documents filed by them under the Exchange Act will, when they become effective or are filed with the Commission, as the case may be, conform in all material respects to the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission thereunder and will not, as of the effective date of such Market Making Registration Statement or post-effective amendments and as of the filing date of amendments or supplements to such prospectus or filings under the Exchange Act, contain an untrue statement of a mate rial 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; provided that no representation or warranty is made as to information contained in or omitted from the Market Making Registration Statement or the related prospectus in reliance upon and in conformity with written information furnished to the Company by the Market Maker specifically for inclusion therein, which information the parties hereto agree will be limited to the statements concerning the market making activities of the Market Maker to be set forth on the cover page and in the “Plan of Distribution” section of the prospectus (the “Market Maker’s Information”).

(e) At the time of effectiveness of the Market Making Registration Statement and concurrently with each time the Market Making Registration Statement or the related prospectus shall be amended or such prospectus shall be supplemented, the Company shall (if requested by the Market Maker) furnish the Market Maker with a certificate of its Chief Executive Officer or any Senior Vice President and its Chief Financial Officer to the effect that:

(i)	the Market Making Registration Statement has been declared effective;

(ii)

in the case of an amendment to the Market Making Registration Statement, such amendment has become effective under the Securities Act as of the date and time specified in such certificate, if applicable; and in the case of an amendment or supplement to the prospectus, such amendment or supplement to the prospectus was filed with the Commission pursuant to the subparagraph of Rule 424(b) under the Securities Act specified in such certificate on the date specified therein;

(iii)

to the knowledge of such officers, no stop order suspending the effectiveness of the Market Making Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; and

(iv)

such officers have examined the Market Making Registration Statement and the prospectus (and, in the case of an amendment or supplement, such amendment or supplement) and, to the knowledge of such officers, as of the date of such Market Making Registration Statement, prospectus, amendment or supplement, as applicable, the Market Making Registration Statement and the related prospectus, as amended or supplemented, if applicable, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(f) At the time of effectiveness of the Market Making Registration Statement and concurrently with each time the Market Making Registration Statement or the related prospectus shall be amended or such prospectus shall be supplemented, the Company shall (if requested by the Market Maker) furnish the Market Maker with the written opinion of counsel for the Company satisfactory to the Market Maker to the effect that:

(i)	the Market Making Registration Statement has been declared effective;

(ii)

in the case of an amendment to the Market Making Registration Statement, such amendment has become effective under the Securities Act as of the date and time specified in such opinion, if applicable; and in the case of an amendment or supplement to the prospectus, such amendment or supplement to the prospectus was filed with the Commission pursuant to the subparagraph of Rule 424(b) under the Securities Act specified in such opinion on the date specified therein;

(iii)

to the knowledge of such counsel, no stop order suspending the effectiveness of the Market Making Registration Statement has been issued, including any notice of objection of the Commission to the use of the Market Making Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, and no proceeding for that purpose is pending or threatened by the Commission; and

(iv)

such counsel has reviewed the Market Making Registration Statement and the prospectus (and, in the case of an amendment or supplement, such amendment or supplement) and participated with officers of the Company and independent public accountants for the Company in the preparation of such Market Making Registration Statement and prospectus (and, in the case of an amendment or supplement, such amendment or supplement) and has no reason to believe that (except for the financial statements and other financial and statistical data contained therein as to which such counsel need express no belief) as of the date of such Market Making Registration Statement, prospectus, amendment or supplement, as applicable, the Market Making Registration Statement and the prospectus, as amended or supplemented, if applicable, contained any untrue statement of a material fa ct or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(g) At the time of effectiveness of the Market Making Registration Statement and concurrently with each time the Market Making Registration Statement or the related prospectus shall be amended or such prospectus shall be supplemented to include audited annual financial information, the Company shall (if requested by the Market Maker) furnish the Market Maker and its counsel with a letter of a firm of independent public accountants for the Company of nationally recognized standing in form satisfactory to the Market Maker, addressed to the Market Maker and dated the date of delivery of such letter, (i) confirming that they are independent public accountants within the rules and regulations of the Commission and the Pu blic Company Accounting Oversight Board (United States) and as required by the Securities Act and (ii) in all other respects, substantially in the form of the letter delivered to the Initial Purchasers pursuant to Section 8(h) of the Manager Agreement, with, in the case of an amendment or supplement that includes audited financial information, such changes as may be necessary to reflect the amended or supplemented financial information.

(h) The Company, on the one hand, and the Market Maker, on the other hand, hereby agrees to indemnify each other, and, if applicable, contribute to the other, in accordance with Section 5 of this Agreement.

(i) The Company will comply with the provisions of this Annex E at its own expense and will reimburse the Market Maker for its expenses associated with this Annex E (including reasonable fees of counsel for the Market Maker).

(j) The agreements contained in this Annex E and the representations, warranties and agreements contained in this Agreement shall survive all offers and sales of the Securities and Exchange Securities and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

(k) For purposes of this Annex E, (i) any reference to the terms “amend,” “amendment” or “supplement” with respect to the Market Making Registration Statement or the prospectus contained therein shall be deemed to refer to and include the filing under the Exchange Act of any document deemed to be incorporated therein by reference and (ii) any reference to the terms “Securities” or “Exchange Securities” shall be deemed to refer to and include any securities issued in exchange for or with respect to such Securities or Exchange Securities.

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