S-3/A

As filed with the Securities and Exchange Commission on December 16, 2004

Registration No. 333-120495

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

Form S-3

REGISTRATION STATEMENT

Under

The Securities Act of 1933

HSBC Finance Corporation

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 86-1052062
(I.R.S. Employer
Identification No.)

2700 Sanders Road

Prospect Heights, Illinois 60070

(847) 564-5000

(Address, including zip code, and telephone number, including area code, of

registrant’s principal executive offices)

Patrick D. Schwartz, Esq.

Vice President, Deputy General Counsel—Corporate and Assistant Secretary

HSBC Finance Corporation

2700 Sanders Road

Prospect Heights, Illinois 60070

(847) 564-6301

(Name, address, including zip code, and telephone number, including area code,

of agent for service)

With a copy to:

(Agents’ Counsel)

Scott N. Gierke, Esq.

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, Illinois 60606

(312) 984-7521

        Approximate date of commencement of proposed sale to public: From time to time after the effective date of this Registration Statement as determined by market conditions.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.    x

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Each Class	Amount to	Offering Price	Aggregate	Amount of
of Securities to be Registered	be Registered(1)	Per Unit(2)	Offering Price(2)	Registration Fee(3)
Medium Term Notes and Warrants to Purchase Medium Term Notes	$10,000,000,000	100%	$10,000,000,000	$1,267,000

(1)	This registration statement also relates to an indeterminate amount of registered securities that may be reoffered and resold on an ongoing basis after their initial sale in market-making transactions by affiliates of the registrant, including previously registered securities that have been already issued and sold by the registrant and its predecessors pursuant to other registration statements, all of the securities registered on which have been issued and sold.
(2)	Estimated solely for the purpose of computing the registration fee. Any offering of Medium Term Notes denominated in any foreign currency or foreign currency units will be treated as the equivalent in U.S. dollars based on the exchange rate applicable to the purchase of such Medium Term Notes from the Registrant.
(3)	Previously paid.

         The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

EXPLANATORY NOTE

      The prospectus contained herein relates to both of the following:

•  the initial offering of Medium Term Notes and Warrants to Purchase Medium Term Notes of HSBC Finance Corporation on a continuous or delayed basis, at an aggregate initial public offering price of up to $10,000,000,000; and

•  market-making transactions that may occur on a continuous or delayed basis in the securities described above, after they are initially offered and sold, and in Medium Term Notes and Warrants to Purchase Medium Term Notes, if any, of HSBC Finance Corporation, the initial offering and sale of which have already occurred.

      When the prospectus contained herein is delivered to a purchaser in the initial offering described above, the purchaser will be informed of that fact on the confirmation of sale. When the prospectus is delivered to a purchaser who is not so informed, it is delivered in a market-making transaction.

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING ANY OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION DATED DECEMBER 16, 2004

HSBC Finance Corporation

$10,000,000,000

Medium Term Notes

Due Nine Months or More From the Date Issued

     We may sell at various times up to $10,000,000,000 of medium term notes. The following terms may apply to the medium term notes; however, we will provide specific terms of the notes which we may offer in pricing supplements to this prospectus. You should read this prospectus and any pricing supplement carefully before you invest.

     •  Mature in 9 months or more from the date issued

     •  Fixed or floating interest rates. Any floating interest rate formula would be based on:

          •  Commercial paper rate

          •  Prime rate

          •  Federal funds effective rate

          •  LIBOR

          •  Treasury rate

          •  CMT rate

          •  Other indices described in a supplement to this prospectus

     •  Amortizing principal or single principal repayments at maturity

     •  Remarketing features

     •  Certificate or book-entry form

     •  Subject to redemption and repurchase at the option of HSBC Finance Corporation or a holder

     •  Not convertible or subject to a sinking fund

     •  Interest paid on fixed rate notes on May 15 and November 15

     •  Interest paid on floating rate notes monthly, quarterly, semi-annually, or annually

     •  Minimum denominations of $1,000, increased in multiples of $1,000

     When all of the $10,000,000,000 of notes have been sold we will have received at least $9,925,000,000 from the sale, after paying the agents commissions that in the aggregate will not exceed $75,000,000.

Neither the Securities and Exchange Commission nor any state securities commission has approved or

disapproved of these securities or determined if this prospectus is accurate or complete.

Any representation to the contrary is a criminal offense.

     HSBC Finance Corporation may use this prospectus in connection with the initial sale of these securities. In addition, HSBC Securities (USA) Inc., or other affiliates of HSBC Finance Corporation, may use this prospectus in market-making transactions in these or similar securities after their initial sale. UNLESS HSBC FINANCE CORPORATION OR ITS AGENT INFORMS THE PURCHASER OTHERWISE IN THE CONFIRMATION OF SALE, THIS PROSPECTUS IS BEING USED IN A MARKET-MAKING TRANSACTION.

HSBC

The date of this Prospectus is                     , 2004.

ABOUT THIS PROSPECTUS

      This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (“Commission” or “SEC”) utilizing a “shelf” registration process. Under this process, we may sell any combination of the medium term notes and/or warrants to purchase medium term notes described in this prospectus in one or more initial offerings up to a total dollar amount of $10,000,000,000. This prospectus may also be used in market-making transactions, as described under the heading “MANNER OF OFFERING.” This prospectus provides you with a general description of the securities we may offer. Each time we offer to sell securities, we will provide a pricing supplement to this prospectus (the “Pricing Supplement”) that will contain specific information about the terms of that offering. The Pricing Supplement may also add to, update or change information contained in this prospectus. You should read both this prospectus and any Pricing Supplement together with the additional information described under the heading “WHERE YOU CAN FIND MORE INFORMATION.” In this prospectus, “us”, “we”, the “Company” and “HSBC Finance” refer to HSBC Finance Corporation. Prior to December 15, 2004, HSBC Finance Corporation was known as Household International, Inc. Consequently, any references herein to HSBC Finance for any periods prior to December 15, 2004, shall be deemed to refer to Household International, Inc.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Certain of the matters discussed under the caption “HSBC FINANCE” and elsewhere in this prospectus or in the information incorporated by reference herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such information may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of HSBC Finance to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a list of such risks, uncertainties and factors you should refer to the information incorporated by reference herein. See “WHERE YOU CAN FIND MORE INFORMATION.”

HSBC FINANCE

      HSBC Finance and its subsidiaries offer a diversified range of financial services. HSBC Finance traces its origin through the same ownership to an office established in 1878. The address of its principal executive office is 2700 Sanders Road, Prospect Heights, Illinois 60070 (telephone 847-564-5000). HSBC Finance, formerly known as Household International, Inc., was acquired by a wholly-owned subsidiary of HSBC Holdings plc on March 28, 2003. On December 15, 2004, Household International, Inc.’s wholly-owned subsidiary, Household Finance Corporation, merged into Household International, Inc. and Household International, Inc. was renamed “HSBC Finance Corporation.”

      HSBC Finance is a subsidiary of HSBC Investments (North America) Inc., an indirect wholly owned subsidiary of HSBC Holdings plc. HSBC Holdings, headquartered in London, England, is one of the largest banking and financial services organizations in the world. HSBC Holdings’ ordinary shares are admitted to trading on the London Stock Exchange and are listed on The Stock Exchange of Hong Kong, Euronext Paris and the Bermuda Stock Exchange, and its American depository shares are listed on the New York Stock Exchange.

      We primarily provide middle-market consumers with several types of loan products in the United States, the United Kingdom, Canada, the Republic of Ireland, the Czech Republic and Hungary. The principal product of our consumer financial services business is the making of cash loans, real estate loans secured by first and second mortgages, sales finance loans and other unsecured loans directly to consumers in the United States. Loans are made through branch lending offices under the brands “HFC” and “Beneficial,” and through direct mail, correspondents, telemarketing and the Internet. We also acquire portfolios of open-end and closed-end, secured and unsecured loans.

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      We offer both MasterCard* and VISA* credit cards to residents throughout the United States primarily through strategic affinity relationships. We also purchase and service revolving charge card accounts originated by merchants. These accounts result from consumer purchases of goods and services from the originating merchant. We also directly originate closed-end sales contracts.

      We also make loans for the purchase of new and used vehicles. Installment contracts are secured by the vehicles and these contracts are purchased from franchised dealers. We also lend directly to customers through direct mail solicitations, Internet applications and alliance partner referrals. We also make tax refund anticipation loans. These loans are marketed to consumers at H&R Block offices, Jackson Hewitt offices and offices of other tax preparation services throughout the United States.

      Our subsidiaries primarily service the loans made by us and our subsidiaries.

      We offer credit life and credit accident, health and disability, unemployment, property, term life, collateral protection and specialty insurance products to our customers. Such insurance is generally written directly by, or reinsured with, one of our insurance affiliates.

      Internationally, our United Kingdom subsidiaries offer secured and unsecured lines of credit and closed-end loans, retail finance products, insurance products and credit cards and operate in England, Scotland, Wales, Northern Ireland and the Republic of Ireland. Offices were opened in the Czech Republic and Hungary to facilitate the expansion plans of one of our U.K. merchant alliances and have expanded to include branch lending offices. Our Canadian business offers consumer real estate secured and unsecured closed-end loans, insurance products, revolving credit, private label credit cards and retail finance products to middle and low income families and accepts deposits through its trust operations.

MANNER OF OFFERING

      The medium term notes and warrants to purchase medium term notes, if any, will be offered by HSBC Finance in connection with their initial issuance or by our affiliates in market-making transactions after their initial issuance. The securities offered in market-making transactions may be medium term notes or warrants to purchase medium term notes that we will not issue until after the date of this prospectus as well as our medium term notes or warrants to purchase medium term notes, if any, that have been previously issued.

      When we issue new medium term notes or warrants to purchase medium term notes, we may offer them for sale through dealers and agents, including our affiliates, or directly to purchasers. The applicable Pricing Supplement will include any required information about the firms we use and the discounts or commissions we may pay for their services.

      Our affiliates that we refer to above may include, among others, HSBC Securities (USA) Inc., for offers and sales in the United States, and other affiliates of HSBC Finance for offers and sales outside the United States.

      If you purchase medium term notes or warrants to purchase medium term notes in a market-making transaction, you will receive information about the price you pay and your trade and settlement dates in a separate confirmation of sale. A market-making transaction is one in which HSBC Securities (USA) Inc., or another of our affiliates, resells a medium term note or warrant to purchase medium term notes that it has previously acquired from another holder. A market-making transaction in a particular security occurs after the original issuance and sale of that security.

*   MasterCard and VISA are registered trademarks of MasterCard International Incorporated and VISA USA, Inc., respectively.

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USE OF PROCEEDS

      Unless otherwise indicated in the Pricing Supplement, we will apply the net proceeds from the sale of medium term notes (the “Notes”) to our general funds to be used in our financial services business, including the funding of investments in, or extensions of credit to, our affiliates. Pending such applications, the net proceeds will be used initially to reduce the amount of our outstanding commercial paper. The proceeds of such commercial paper are used in connection with our financial services business.

RATIO OF EARNINGS TO FIXED CHARGES

      The ratio of earnings to fixed charges for HSBC Finance and its subsidiaries for the periods indicated below was as follows:

								Year Ended December 31,
	Nine Months		March 29		January 1
	Ended		through		through			2002			2001		2000		1999
	September 30,		December 31,		March 28,
	2004		2003		2003
	(successor)		(successor)		(predecessor)			(predecessor)
Ratio of Earnings to Fixed Charges		1.87		2.21		1.47	(1)		1.57	(2)		1.66		1.63		1.75

(1)	The ratio for the period January 1 through March 28, 2003 has been negatively impacted by $167 million (after-tax) of HSBC Holdings acquisition related costs and other merger related items incurred by HSBC Finance. Excluding these charges, our ratio of earnings to fixed charges would have been 1.69 percent. This non-GAAP financial ratio is provided for comparison of our operating trends only.
(2)	The 2002 ratio has been negatively impacted by the $333 million (after-tax) settlement charge and related expenses and the $240 million (after-tax) loss on the disposition of Thrift assets and deposits. Excluding these charges, our ratio of earnings to fixed charges would have been 1.80 percent. This non-GAAP financial ratio is provided for comparison of our operating trends only.

      For purposes of calculating the ratio, earnings consist of net income to which has been added income taxes and fixed charges. Fixed charges consist of interest on all indebtedness and one-third of rental expense (the approximate portion representing interest).

      In accordance with the guidelines for accounting for business combinations, the purchase price paid by HSBC Holdings plc for its acquisition of HSBC Finance plus related purchase accounting adjustments have been “pushed down” and recorded in our financial statements for the period subsequent to March 28, 2003. This has resulted in a new basis of accounting reflecting the fair market value of our assets and liabilities for the “successor” periods beginning March 29, 2003. Information for all “predecessor” periods prior to the merger are presented using our historical basis of accounting, which impacts comparability to our “successor” periods.

IMPORTANT CURRENCY INFORMATION

      Each Note will be denominated in U.S. dollars, a foreign currency or units of a foreign composite currency (the “Specified Currency”) as specified in the applicable Pricing Supplement. Purchasers are required to pay for each Note in the Specified Currency for such Note. Currently, there are limited facilities in the United States for conversion of U.S. dollars into foreign currencies and vice versa, and banks currently do not offer non-U.S. dollar checking or savings account facilities in the United States. However, if requested by a prospective purchaser of Notes denominated in a Specified Currency other than U.S. dollars, the Agent soliciting the offer to purchase will arrange for the conversion of U.S. dollars into such Specified Currency to enable the purchaser to pay for such Notes. Such requests must be made on or before the third Business Day (as defined below) preceding the date of delivery of the Notes, or by such other date as determined by such Agent. Each such conversion will be made by the relevant Agent on such terms and subject to such conditions, limitations and charges as such Agent may from time to

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time establish in accordance with its regular foreign exchange practice. All costs of exchange will be borne by purchasers of the Notes.

      Unless otherwise indicated, currency amounts in this prospectus or any Pricing Supplement are stated in United States dollars (“$”, “dollars”, “U.S. dollars” or “U.S. $”).

DESCRIPTION OF MEDIUM TERM NOTES

General

      The Notes will constitute senior unsecured debt securities of HSBC Finance and will be issued under the indenture (the “Indenture”) between HSBC Finance and JPMorgan Chase Bank, N.A. (“JPMorgan Chase” or the “Trustee”), as Trustee, which incorporates therein the terms and conditions of the Standard Multiple-Series Indenture Provisions for Senior Debt Securities (the “Standard Provisions”). The Indenture and the Standard Provisions have been filed as exhibits to our Registration Statement which registers the Notes with the Commission. The following summaries do not purport to be complete and, where particular provisions of the Indenture or the Standard Provisions are referred to, such provisions, including definitions of certain terms, are incorporated by reference as part of such summaries, which are qualified in their entirety by such reference. The terms and conditions set forth herein will apply to each Note unless otherwise specified in the applicable Pricing Supplement and such Note.

      The Indenture provides that debt securities may be issued thereunder from time to time in one or more series and does not limit the aggregate principal amount of such debt securities except as may be otherwise provided with respect to any particular series of debt securities. The Notes will constitute a part of a series of debt securities, unlimited as to aggregate principal amount.

      The Notes will be offered on a continuing basis and each Note will have a stated maturity that is at least nine months from the date of issue, as selected by the purchaser and agreed to by us and as specified in the applicable Pricing Supplement. The Notes will be issued in registered form only and, if issued in U.S. dollars, in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000. Notes denominated in a Specified Currency other than U.S. dollars will be issued in the authorized denominations set forth in the applicable Pricing Supplement. Interest rates offered by us with respect to the Notes may differ depending upon, among other things, the aggregate principal amount of Notes purchased in any transaction.

      “Business Day” means (i) with respect to any Note, any day that is not a Saturday or Sunday and that is not a legal holiday for banking institutions in The City of New York, (ii) with respect to LIBOR Notes (as defined herein) only, any such date on which dealings in deposits in U.S. dollars are transacted in the London interbank market (a “London Business Day”), and (iii) if the Note is denominated in a Specified Currency other than U.S. dollars, including LIBOR Notes (a) a day on which banking institutions are not authorized or required by law or regulation to close in the principal financial center of the country issuing the Specified Currency and (b) a day on which banking institutions in such financial center are carrying out transactions in such Specified Currency. For Notes denominated in a Specified Currency that is a unit of a foreign composite currency, “Business Day” shall have the meaning set forth in the applicable Pricing Supplement.

      “Original Issue Discount Note” means a Note to be offered and sold at a discount below its stated principal amount, which Note provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof upon the occurrence and continuation of an Event of Default, or on the date of redemption or repayment (if any).

      Each Note will be issued in fully registered form and unless otherwise specified in the applicable Pricing Supplement, will be represented by a global security (a “Global Note”) registered in the name of a nominee of The Depository Trust Company (“DTC”). Notes denominated in U.S. dollars will be initially represented by a Global Note registered in the name of the Depository. A single Global Note will represent all Notes issued on the same day and having the same terms, including, but not limited to, the

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same Interest Payment Dates, rate of interest, maturity, and redemption or repayment provisions (if any). A beneficial interest in a Global Note will be shown on, and transfers thereof will be effected only through, records maintained by the Depository (with respect to interests of participants) and its participants (with respect to interests of persons other than participants). Payments of principal, premium, if any, and interest on Notes represented by a Global Note will be made through the Trustee to the Depository. See “—Book-Entry Notes” below.

      Unless otherwise specified in the applicable Pricing Supplement, the Notes will be denominated in U.S. dollars and payments of principal, premium, if any, and interest will be made in U.S. dollars. The principal, premium, if any, and interest on each Note denominated in any other Specified Currency is payable by us in U.S. dollars based on the equivalent of that Specified Currency converted into U.S. dollars. If the Specified Currency for a Note is other than U.S. dollars, we will (unless otherwise specified in the applicable Pricing Supplement) appoint an agent (the “Exchange Rate Agent”) to determine the exchange rate for converting all payments in respect of such Note into U.S. dollars in the manner described in the following paragraph. Unless otherwise specified in the applicable Pricing Supplement, JP Morgan Chase will act as the Exchange Rate Agent. Notwithstanding the foregoing, the Holder of a Note denominated in a Specified Currency other than U.S. dollars may (if the applicable Pricing Supplement and Note so indicate) elect to receive all such payments in the Specified Currency by delivery of a written request to JPMorgan Chase not later than fifteen calendar days prior to the applicable payment date. Such election will remain in effect until revoked by written notice to JPMorgan Chase received not later than fifteen calendar days prior to the applicable payment date.

      In the case of a Note denominated in a Specified Currency other than U.S. dollars, unless the Holder has elected otherwise, payment in respect of such Note shall be made in U.S. dollars calculated from the exchange rate as determined by the Exchange Rate Agent based on the highest firm bid quotation of U.S. dollars received by such Exchange Rate Agent at approximately 11:00 A.M. (or, in the case of a payment of principal, prior to the close of business), New York City time, on the second Business Day preceding the applicable payment date (or, if no such rate is quoted on such date, the last date on which such rate was quoted) from three recognized foreign exchange dealers in The City of New York selected by the Exchange Rate Agent and approved by us (one of which may be the Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on such payment date, of the aggregate amount of the Specified Currency payable on such payment date in respect of all Notes denominated in such Specified Currency. Unless otherwise set forth in the Pricing Supplement for the Note, all currency exchange costs will be borne by the Holders of such Notes by deduction from such payments. If no such bid quotations are available, payment will be made in the Specified Currency, unless such Specified Currency is unavailable due to the imposition of exchange controls or other circumstances beyond our control, in which case payment will be made as described under “Currency Risks—Payment Currency”.

      Unless otherwise specified in the applicable Pricing Supplement, payment of principal (premium, if any) and interest in U.S. dollars on certificated Notes will be made at the office or agency of the Company in the Borough of Manhattan, City and State of New York; 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 or, if such person designates an account not later than ten days prior to the date of such payment, by wire transfer to such account. Simultaneously with the election by any Holder to receive payments in a Specified Currency other than U.S. dollars (as provided above), such Holder shall provide appropriate payment instructions to the Trustee, and all such payments will be made in immediately available funds to an account maintained by the Holder with a bank located outside the United States.

      Unless otherwise specified in the applicable Pricing Supplement, if the principal of any Original Issue Discount Note is declared to be due and payable immediately as described under “—Events of Default” below, the amount of principal due and payable with respect to such Note shall be limited to the sum of the principal amount of such Note multiplied by the issue price (expressed as a percentage of the aggregate principal amount), plus the original issue discount accrued from the date of issue to the date of repayment.

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Redemption at the Option of HSBC Finance

      Unless otherwise specified in the applicable Pricing Supplement, the Notes will not be subject to any sinking fund. The Notes will be redeemable at the option of the Company prior to the stated maturity only if a date (the “Redemption Date”) is specified in the applicable Pricing Supplement. If so specified, the Notes will be subject to redemption at our option on any date on and after the Redemption Date in whole or from time to time in part in increments of $1,000 or such other minimum denomination specified in such Pricing Supplement (provided that any remaining principal amount thereof shall be at least $1,000 or such minimum denomination), at the applicable Redemption Price (as hereinafter defined), together with unpaid interest accrued to the date of redemption, on notice given not more than 60 nor less than 30 calendar days prior to the date of redemption and in accordance with the provisions of the Indenture. “Redemption Price”, with respect to a Note, means an amount equal to the Initial Redemption Percentage specified in the applicable Pricing Supplement (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount to be redeemed. The Initial Redemption Percentage, if any, applicable to a Note shall decline at each anniversary of the Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid principal amount to be redeemed.

Repayment at the Option of the Holder

      The Notes will be repayable by us at the option of the Holders thereof prior to the stated maturity only if one or more optional repayment dates (the “Repayment Date”) are specified in the applicable Pricing Supplement. If so specified, the Notes will be subject to repayment at the option of the Holders thereof on any Repayment Date in whole or from time to time in part in increments of $1,000 or such other minimum denomination specified in the applicable Pricing Supplement (provided that any remaining principal amount thereof shall be at least $1,000 or such other minimum denomination), at a repayment price equal to 100% of the unpaid principal amount to be repaid, together with unpaid interest accrued to the date of repayment. For any Note to be repaid, such Note must be received, together with the form thereon entitled “Option to Elect Repayment” duly completed, by the Trustee at its Corporate Trust Office (or such other address of which we will notify the Holders) not more than 60 nor less than 30 calendar days prior to the date of repayment. Exercise of such repayment option by the Holder will be irrevocable.

      Only the Depository may exercise the repayment option in respect of Global Notes representing Book-Entry Notes. Accordingly, beneficial owners of Global Notes that desire to have all or any portion of the Book-Entry Notes represented by such Global Notes repaid must instruct the participant through which they own their interest to direct the Depository to exercise the repayment option on their behalf by delivering the related Global Note and duly completed election form to the Trustee as aforesaid. In order to ensure that such Global Note and election form are received by the Trustee on a particular day, the applicable beneficial owner must so instruct the participant through which it owns its interest before such participant’s deadline for accepting instructions for that day. Different firms may have different deadlines for accepting instructions from their customers. Accordingly, beneficial owners should consult the participants through which they own their interest for the respective deadlines for such participants. All instructions given to participants from beneficial owners of Global Notes relating to the option to elect repayment shall be irrevocable. In addition, at the time such instructions are given, each such beneficial owner shall cause the participant through which it owns its interest to transfer such beneficial owner’s interest in the Global Note or Notes representing the related Book-Entry Notes, on the Depository’s records, to the Trustee. See “—Book-Entry Notes.”

      If applicable, we will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws or regulations in connection with any such repayment.

      We may at any time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by us may, at our discretion, be held, resold or surrendered to the Trustee for cancellation.

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Extendible Notes

      If so indicated in the Pricing Supplement relating to a Note, we will have the option to extend the original maturity specified in the Note for one or more periods of one to five whole years (each an “Extension Period”) up to but not beyond a final maturity date set forth in such Pricing Supplement (the “Final Maturity”). As used in this section, the “Stated Maturity” shall mean the original maturity specified in the Note or any later designated maturity as set forth in an Extension Notice (as defined below).

      We may exercise such option with respect to a Note by notifying the Trustee not more than 60 nor less than 30 days prior to the Stated Maturity of such Note. Not later than 20 days prior to the Stated Maturity of such Note, the Trustee will mail to the Holder of such Note a notice (the “Extension Notice”) setting forth (i) our election to extend the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in the case of a Fixed Rate Note, the interest rate applicable to the Extension Period or, in the case of a Floating Rate Note, the Spread or Spread Multiplier applicable to the Extension Period; and (iv) the provisions, if any, for redemption during the Extension Period, including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of such Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the following paragraph, such Note will have the same terms as prior to the mailing of such Extension Notice.

      Notwithstanding the foregoing, not later than 20 days prior to the Stated Maturity of a Note, we may, at our option, revoke the interest rate (in the case of a Fixed Rate Note) or the Spread or Spread Multiplier (in the case of a Floating Rate Note) provided for in the Extension Notice for such Note and establish a higher interest rate (in the case of a Fixed Rate Note) or a higher Spread or Spread Multiplier (in the case of a Floating Rate Note) for the Extension Period, by causing the Trustee to mail notice of such higher interest rate or higher Spread or Spread Multiplier, as the case may be, to the Holder of such Note. Such notice shall be irrevocable. All Notes with respect to which the Stated Maturity is extended will bear such higher interest rate (in the case of Fixed Rate Notes) or higher Spread or Spread Multiplier (in the case of Floating Rate Notes) for the Extension Period, whether or not tendered for repayment.

      If we extend the Stated Maturity of a Note, the Holder of such Note will have the option to elect repayment of such Note by us on the Stated Maturity at a price equal to the principal amount thereof, plus interest accrued to such date. In order for a Note to be repaid on the Stated Maturity once we have extended the Stated Maturity thereof, the Holder thereof must provide notice to us not less than ten days prior to the Stated Maturity.

Indexed Notes

      The principal amount payable at the stated maturity of, or the interest on a Note, or both, may be determined by reference to currencies, currency units, commodity prices, financial or non-financial indices or other factors (an “Indexed Note”). Indexed Notes will be so specified in the applicable Pricing Supplement. Holders of Indexed Notes may receive a principal amount at the stated maturity that is greater than or less than the face amount of such Notes depending upon the fluctuation of the relative value, rate or price of the specified index. Specific information pertaining to the method for determining the principal amount payable at the stated maturity, a historical comparison of the relative value, rate or price of the specified index and the face amount of the Indexed Note and certain additional United States Federal income tax considerations, if any, may be described in the applicable Pricing Supplement.

      An investment in Notes indexed, as to principal or interest or both, to one or more values of currencies (including exchange rates between currencies), commodities or interest rate indices entails significant risks that are not associated with similar investments in a conventional fixed-rate debt security. If the interest rate of such a Note is so indexed, it may result in an interest rate that is less than that payable on a conventional fixed-rate debt security issued at the same time, including the possibility that no

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interest will be paid, and, if the principal amount of such a Note is so indexed, the principal amount payable at stated maturity may be less than the original purchase price of such Note if allowed pursuant to the terms of such Note, including the possibility that no principal will be paid. The secondary market for such Notes will be affected by a number of factors, independent of HSBC Finance’s creditworthiness and the value of the applicable currency, including the volatility of the applicable currency, commodity or interest rate index, the time remaining to the stated maturity of such Notes, the amount outstanding of such Notes and market interest rates. The value of the applicable currency, commodity or interest rate index depends on a number of interrelated factors, including economic, financial and political events, over which we have no control. Additionally, if the formula used to determine the principal amount or interest payable with respect to such Notes contains a multiple or leverage factor, the effect of any change in the applicable currency, commodity or interest rate index may be increased. The historical experience of the relevant currencies, commodities or interest rate indices should not be taken as an indication of future performance of such currencies, commodities or interest rate indices during the term of any Note. The credit ratings assigned to our Medium Term Note program are a reflection of HSBC Finance’s credit status and in no way are a reflection of the potential impact of the factors discussed above, or any other factors, on the market value of the Notes. Accordingly, prospective investors should consult their own financial and legal advisors as to the risks entailed by an investment in such Notes and the suitability of such Notes in light of their particular circumstances.

Amortizing Notes

      We may from time to time offer Notes that provide for principal payments over the life of the Note (“Amortizing Notes”). Information concerning terms and conditions of any issue of Amortizing Notes will be provided in the applicable Pricing Supplement. A table setting forth repayment information in respect of each Amortizing Note will be included in the applicable Pricing Supplement and set forth on such Notes.

Interest Rates

      Each Note will bear interest from the date of issue at the rate per annum, or pursuant to the interest rate formula, specified therein and in the applicable Pricing Supplement until the principal thereof is paid or made available for payment. Interest will be payable on each Interest Payment Date and at stated maturity (or on the Redemption Date or Repayment Date if applicable). Interest will be payable to the person in whose name a Note is registered at the close of business on the Regular Record Date next preceding each Interest Payment Date; provided, however, interest payable at stated maturity or on a Redemption Date or Repayment Date will be payable to the person to whom principal shall be payable. Principal and any premium and interest payable at stated maturity or on a Redemption Date or Repayment Date will be paid upon the surrender of the Note at the office or agency of HSBC Finance in the Borough of Manhattan, City and State of New York. If the stated maturity, Redemption Date or Repayment Date of a Note falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest will be made on the next succeeding Business Day and no interest on such payment shall accrue for the period from and after such stated maturity, Redemption Date or Repayment Date. Unless otherwise specified in the applicable Pricing Supplement, the first payment of interest on any Note issued between a Regular Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Regular Record Date to the registered owner on such next Regular Record Date. Unless otherwise specified in the applicable Pricing Supplement, a “Record Date” shall be the fifteenth calendar day (whether or not a Business Day) immediately preceding the related Interest Payment Date.

      Interest rates, or interest rate formulas, are subject to change by us from time to time, but, except in the event we establish a higher interest rate, Spread or Spread Multiplier in conjunction with the exercise of an option to extend the maturity of a Note, no such change will affect any Note already issued or as to which an offer to purchase has been accepted by us.

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      Unless otherwise specified in the applicable Pricing Supplement, the interest rate will be determined in accordance with the applicable provisions below. Except as set forth above or in the applicable Pricing Supplement, the interest rate in effect on each day shall be (i) if such day is an Interest Reset Date (as hereinafter defined), the interest rate determined as of the Interest Determination Date (as hereinafter defined) immediately preceding such Interest Reset Date or (ii) if such day is not an Interest Reset Date, the interest rate determined as of the Interest Determination Date immediately preceding the most recent Interest Reset Date.

      Each Note will be a Note that bears interest at a fixed rate (a “Fixed Rate Note”), a Note that bears interest at a floating rate (a “Floating Rate Note”), an Amortizing Note or an Indexed Note. A Floating Rate Note will be determined by reference to an interest rate basis, which may be a fixed rate of interest (the “Base Rate”), or two or more Base Rates, which may be adjusted by a Spread and/or Spread Multiplier (each as defined below). A Floating Rate Note or Indexed Note may also have either or both of the following: (i) a maximum limitation, or ceiling, on the rate of interest which may accrue during any interest period; and (ii) a minimum limitation, or floor, on the rate of interest which may accrue during any interest period. The applicable Pricing Supplement will designate one of the following as applicable to each Note: (a) a fixed rate or rates per annum, in which case such Note will be a Fixed Rate Note, (b) the Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate Note, (c) LIBOR, in which case such Note will be a LIBOR Note, (d) the Treasury Rate, in which case such Note will be a Treasury Rate Note, (e) the CMT Rate, in which case such Note will be a CMT Rate Note, (f) the Federal Funds Rate, in which case such Note will be a Federal Funds Rate Note, (g) the Prime Rate, in which case such Note will be a Prime Rate Note, or (h) such other Base Rate or formula as is set forth in such Pricing Supplement. In addition, the Pricing Supplement may specify that two or more Base Rates (determined in the same manner as the Base Rates are determined for the types of Notes described above) will be applicable to the Note or that interest on Indexed Notes will be determined by reference to one or more currencies, currency units, commodity prices, financial or non-financial indices or other indices. The rate of interest on a Note may be reset daily, weekly, monthly, quarterly, semi-annually or annually (each an “Interest Reset Period”), on such dates (each an “Interest Reset Date”) as specified in the applicable Pricing Supplement.

      Unless otherwise specified in the applicable Pricing Supplement, the Interest Reset Dates will be, in the case of Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset the Tuesday of each week); (iii) monthly, the third Wednesday of each month, (iv) quarterly, the third Wednesday of March, June, September and December of each year, (v) semiannually the third Wednesday of the two months specified in the applicable Pricing Supplement; and (vi) annually, the third Wednesday of the month specified in the applicable Pricing Supplement. If any Interest Reset Date for any Floating Rate Note would otherwise be a day that is not a Business Day, such Interest Reset Date will be postponed to the next succeeding Business Day, except that in the case of a Floating Rate Note as to which LIBOR is an applicable Base Rate and such Business Day falls in the next succeeding calendar month, such Interest Reset Date will be the immediately preceding Business Day.

      The interest rate applicable to such Interest Reset Period commencing on the related Interest Reset Date will be the rate determined as of the applicable Interest Determination Date on or prior to the Calculation Date (as hereinafter defined). The “Interest Determination Date” with respect to the Federal Funds Rate and the Prime Rate will be the Business Day immediately preceding the applicable Interest Reset Date; the “Interest Determination Date” with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate will be the second Business Day immediately preceding the applicable Interest Reset Date; and the “Interest Determination Date” with respect to LIBOR will be the second London Business Day immediately preceding the applicable Interest Reset Date. With respect to the Treasury Rate, the “Interest Determination Date” will be the day in the week in which the applicable Interest Reset Date falls on which day Treasury bills (as hereinafter defined) are normally auctioned (Treasury bills are normally sold at an auction held on Monday of each week, unless that day is a legal holiday, in

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which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the applicable Interest Reset Date, the Interest Determination Date will be such preceding Friday. The “Interest Determination Date” pertaining to a Floating Rate Note the interest rate of which is determined by reference to two or more Base Rates will be the most recent Business Day which is at least two Business Days prior to the applicable Interest Reset Date for such Floating Rate Note on which each Base Rate is determinable. Each Base Rate will be determined as of such date, and the applicable interest rate will take effect on the applicable Interest Reset Date.

      The applicable Pricing Supplement will specify the Base Rate or Rates and the Spread and/or Spread Multiplier, if any, the terms of the extension option, if any, and the maximum or minimum interest rate limitation, if any, applicable to each Note. In addition, such Pricing Supplement will define or particularize for each Note the following terms, if applicable: Initial Interest Rate, Interest Payment Dates, Regular Record Dates, Index Maturity, Interest Determination Dates, stated maturity, Final Maturity and Redemption Date or Repayment Date. Unless otherwise provided in the applicable Pricing Supplement, JPMorgan Chase shall be the calculation agent (the “Calculation Agent”) with respect to the Notes. All determinations made by the Calculation Agent shall be at its sole discretion (except to the extent expressly provided herein that any determination is subject to our approval) and in absence of manifest error, shall be conclusive for all purposes and binding on Holders of the Notes and the Calculation Agent shall have no liability therefor.

      Unless otherwise specified in the applicable Pricing Supplement, the “Calculation Date” pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or the stated maturity or Redemption Date, as the case may be. Upon the request of the Holder of any Floating Rate Note, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective as a result of a determination made on the most recent Interest Determination Date with respect to such Floating Rate Note.

      All percentages resulting from any calculation on Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent or, in the case of Notes denominated other than in dollars, the nearest unit (with one-half cent or unit being rounded upward).

      The interest rate on each Floating Rate Note will be calculated by reference to the specified Base Rate or two or more Base Rates, in either case, (i) plus or minus the Spread, if any, and/ or (ii) multiplied by the Spread Multiplier, if any. The “Spread” is the number of basis points specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note, and the “Spread Multiplier” is the percentage specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note. “Index Maturity” means, with respect to a Floating Rate Note, the period to maturity of the instrument or obligation on which the interest rate is based, as specified in the applicable Pricing Supplement and in the Floating Rate Note.

      Except as provided below or in the applicable Pricing Supplement, interest will be payable, in the case of Floating Rate Notes which reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified in the applicable Pricing Supplement; (ii) quarterly, on the third Wednesday of March, June, September and December of each year, (iii) semiannually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; and (iv) annually, on the third Wednesday of the month of each year specified in the applicable Pricing Supplement (each, an “Interest Payment Date”) and, in each case, at stated maturity (or on the Redemption Date or Repayment Date, if applicable). If an Interest Payment Date specified in the applicable Pricing Supplement with respect to any Note would otherwise fall on a day that is not a Business Day, (i) with respect to a Fixed Rate Note, interest with respect to

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such Note will be paid on the next succeeding Business Day with the same force and effect as if paid on the due date, and no additional interest will be payable as a result of such delayed payment, and (ii) with respect to a Floating Rate Note, such Interest Payment Date will be postponed to the next succeeding Business Day with respect to such Note, except that in the case of a LIBOR Note, if such day falls in the next calendar month, such Interest Payment Date will be the immediately preceding day that is a Business Day with respect to such LIBOR Note.

      Unless otherwise indicated in the applicable Pricing Supplement, interest payments shall be the amount of interest accrued from, and including, the date of issue, or from, and including, the last date to which interest has been paid, to, but excluding, the Interest Payment Date, the stated maturity, the Redemption Date or the Repayment Date, as applicable. With respect to a Floating Rate Note, accrued interest from the date of issue or from the last date to which interest has been paid is calculated by multiplying the face amount of such Floating Rate Note by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day for which accrued interest is being calculated. The interest factor for each such day is computed by dividing the interest rate applicable to such day by 360, in the case of Commercial Paper Rate Notes, LIBOR Notes, Federal Funds Rate Notes and Prime Rate Notes, or by the actual number of days in the year, in the case of CMT Rate Notes and Treasury Rate Notes. The interest factor for Notes whose interest rate is calculated with reference to two or more Base Rates will be calculated in each period in the same manner as if only one of the applicable Base Rates applied.

      In addition to any Maximum Interest Rate that may apply to any Floating Rate Note, the interest rate on Floating Rate Notes will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application.

Fixed Rate Notes

      Each Fixed Rate Note will bear interest from its date of issue at the annual interest rate specified on the face thereof and in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, interest on Fixed Rate Notes will be payable semiannually on May 15 and November 15 of each year to the persons in whose names the Fixed Rate Notes are registered at the close of business on the April 30 and October 31 (each a “Record Date”) next preceding such Interest Payment Date. Interest payable at stated maturity (or on the Redemption Date or Repayment Date if applicable) will be payable to the persons to whom principal is payable. Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.

Commercial Paper Rate Notes

      Each Commercial Paper Rate Note will bear interest at the interest rate (calculated with reference to the Commercial Paper Rate and, if any, the Spread and/or Spread Multiplier) specified in such Commercial Paper Rate Note and in the applicable Pricing Supplement.

      Unless otherwise indicated in the applicable Pricing Supplement, “Commercial Paper Rate” means, with respect to any Interest Determination Date relating to a Commercial Paper Rate Note or any Interest Determination Date for a Note whose interest rate is determined with reference to the Commercial Paper Rate (a “Commercial Paper Interest Determination Date”), the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity specified in the applicable Pricing Supplement as published by the Board of Governors of the Federal Reserve System in “Statistical Release H.15(519), Selected Interest Rates” (“H.15(519)”), or any successor publication, under the heading “Commercial Paper—Nonfinancial”. In the event that such rate is not published by 3:00 P.M., New York City time on the Calculation Date pertaining to such Commercial Paper Interest Determination Date, then the Commercial Paper Rate shall be the rate on such Commercial Paper Interest Determination Date for commercial paper of the specified Index Maturity as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “Commercial Paper—Nonfinancial”. If by 3:00 P.M., New York City time on such

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Calculation Date the rate for a Commercial Paper Interest Determination Date is not yet published in either H.15(519) or H.15 Daily Update (or such other recognized electronic source), the rate for that Commercial Paper Interest Determination Date shall be calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean of the offered rates, as of 11:00 A.M., New York City time, on that Commercial Paper Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent (after consultation with us) for commercial paper of the specified Index Maturity placed for an industrial issuer whose bond rating is “AA”, or the equivalent, from a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date.

      “H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of The Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or any successor site or publication.

      “Money Market Yield” shall be a yield (expressed as a percentage rounded to the nearest one hundredth of a percent, with five one-thousandths of a percent rounded upward) calculated in accordance with the following formula:

Money Market Yield = D × 360
360 - (D × M) × 100

where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the interest period for which interest is being calculated.

LIBOR Notes

      Each LIBOR Note will bear interest at the interest rate (calculated with reference to LIBOR and, if any, the Spread and/or Spread Multiplier) specified in such LIBOR Note and in the applicable Pricing Supplement.

      Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will be determined by the Calculation Agent in accordance with the following provisions:

      (i) With respect to any Interest Determination Date for a Note whose interest rate is determined with reference to LIBOR (a “LIBOR Interest Determination Date”), LIBOR will be, as specified in the applicable Pricing Supplement, either: (a) if “LIBOR Reuters” is specified in the applicable Pricing Supplement, the arithmetic mean of the offered rates for deposits in U.S. dollars having the Index Maturity designated in the applicable Pricing Supplement, commencing on the second London Business Day immediately following that LIBOR Interest Determination Date, that appear on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR Interest Determination Date, if at least two such offered rates appear on the Designated LIBOR Page except that if the specified Designated LIBOR Page, by its terms provides only for a single rate, that single rate will be used (“LIBOR Reuters”), or (b) if “LIBOR Telerate” is specified in the applicable Pricing Supplement, the rate for deposits in U.S. dollars having the Index Maturity designated in the applicable Pricing Supplement, commencing on the second London Business Day immediately following that LIBOR Interest Determination Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on that LIBOR Interest Determination Date (“LIBOR Telerate”). “Designated LIBOR Page” means either (a) if “LIBOR Reuters” is designated in the applicable Pricing Supplement, the display on the Reuters Monitor Money Rates Service for the purpose of displaying the London interbank rates of major banks for the applicable index currency or its designated successor, or (b) if “LIBOR Telerate” is designated in the applicable Pricing Supplement, the display on Moneyline Telerate or any successor service, on the page specified in the applicable Pricing Supplement, or any other page as may replace that page on that service, for the purpose of displaying the London interbank rates of major banks for the applicable index currency. If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR

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will be determined as if LIBOR Telerate had been specified, and if the U.S. dollar is the index currency, as if Page 3750 had been specified. If (1) fewer than two offered rates appear and “LIBOR Reuters” is specified in the applicable Pricing Supplement, or (2) no rate appears and the applicable Pricing Supplement specifies either (x) “LIBOR Telerate” or (y) “LIBOR Reuters” and the Designated LIBOR Page by its terms provides only for a single rate, then, LIBOR in respect of that LIBOR Interest Determination Date will be determined as if the parties had specified the rate described in (ii) below.

      (ii) With respect to a LIBOR Interest Determination Date, LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date, at which deposits in U.S. dollars having the Index Maturity specified in the applicable Pricing Supplement are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Calculation Agent (after consultation with HSBC Finance), commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount not less than $1,000,000 equal to an amount that is representative for a single transaction in such market at such time. The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates at approximately 11:00 A.M., New York City time, on such LIBOR Interest Determination Date, quoted by three major banks in the City of New York, selected by the Calculation Agent (after consultation with HSBC Finance), for loans in U.S. dollars to leading European banks having the specified Index Maturity, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount not less than $1,000,000 equal to an amount that is representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date.

Treasury Rate Notes

      Each Treasury Rate Note will bear interest at the interest rate (calculated with reference to the Treasury Rate and, if any, the Spread and/or Spread Multiplier) specified in such Treasury Rate Note and in the applicable Pricing Supplement.

      Unless otherwise indicated in the Pricing Supplement, “Treasury Rate” means with respect to any Interest Determination Date relating to a Treasury Rate Note or any Interest Determination Date for a Note whose interest rate is determined with reference to the Treasury Rate (a “Treasury Interest Determination Date”), (i) the rate from the auction held on the applicable Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified in the applicable Pricing Supplement under the caption “INVESTMENT RATE” on the display on Moneyline Telerate (or any successor service) on page 56 or any other page as may replace page 56 on that service or page 57 or any other page as may replace page 57 on that service or, (ii) if the rate in clause (i) is not so published by 3:00 P.M., New York City time, on the related Calculation Date pertaining to such Treasury Interest Determination Date, the Bond Equivalent Yield of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/ Treasury Bills/ Auction High”, or (iii) if the rate in clause (ii) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills announced by the United States Department of the Treasury, or (iv) in the event that the rate referred to in clause (iii) is not announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the applicable Interest Determination Date of Treasury Bills having the Index Maturity specified in the applicable Pricing Supplement published in H.15(519) under the caption “U.S. Government Securities/ Treasury Bills/ Secondary Market”, or (v) if the rate referred to in clause (iv) is not so published by 3:00 p.m., New York City time, on the related calculation date, the rate on the applicable Interest Determination Date of the applicable Treasury Bills as

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published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption “U.S. Government Securities/ Treasury Bills/ Secondary Market”, or (vi) if the rate referred to in clause (v) is not so published by 3:00 p.m., New York City time, on the related Calculation Date, the rate on the applicable Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the applicable Interest Determination Date, of three primary United States government securities dealers, which may include the agent or its affiliates, selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the applicable Pricing Supplement, or (vii) if the dealers selected by the calculation agent are not quoting as mentioned in clause (vi), the rate in effect on the applicable Interest Determination Date.

      “Bond Equivalent Yield” means a yield calculated in accordance with the following formula and expressed as a percentage:

Bond Equivalent Yield	=	D x N	x	100
		360 - (D x M)

where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the interest period for which interest is being calculated.

CMT Rate Notes

      Unless otherwise specified in the applicable Pricing Supplement, “CMT Rate” means, with respect to any Interest Determination Date relating to a Floating Rate Note for which the interest rate is determined with reference to the CMT Rate (a “CMT Rate Interest Determination Date”), the rate displayed on the Designated CMT Moneyline Telerate Page under the caption “. . . Treasury Constant Maturities...Federal Reserve Board Release H.15. . . Mondays Approximately 3:45 P.M.,” under the column for the Designated CMT Maturity Index for (i) if the Designated CMT Moneyline Telerate Page is 7051, the rate on such CMT Rate Interest Determination Date and (ii) if the Designated CMT Moneyline Telerate Page is 7052, the weekly or monthly average, as specified in the applicable Pricing Supplement, for the week, or the month, as applicable, ended immediately preceding the week in which the related CMT Rate Interest Determination Date occurs. If such rate is no longer displayed on the relevant page or is not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519). If such rate is no longer published or is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Moneyline Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a “Reference Dealer”) in The City of New York (which may include the Agent or its affiliates) selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States (“Treasury Notes”) with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than

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such Designated CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; provided however, that if fewer than three Reference Dealers so selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury Notes with an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain from five Reference Dealers quotations for the Treasury Note with the shorter remaining term to maturity.

      “Designated CMT Moneyline Telerate Page” means the display on Moneyline Telerate on the page specified in the applicable Pricing Supplement (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)). If no such page is specified in the applicable Pricing Supplement, the Designated CMT Moneyline Telerate Page shall be 7052 for the most recent week.

      “Designated CMT Maturity Index” means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified in the applicable Pricing Supplement with respect to which the CMT Rate will be calculated. If no such maturity is specified in the applicable Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.

Federal Funds Rate Notes

      Each Federal Funds Rate Note will bear interest at the interest rate (calculated with reference to the Federal Funds Rate and, if any, the Spread and/or Spread Multiplier) specified in the applicable Pricing Supplement.

      Unless otherwise indicated in the Pricing Supplement, “Federal Funds Rate” means, with respect to any Interest Determination Date relating to a Federal Funds Rate Note or any Interest Determination Date for a Note whose interest rate is determined with reference to the Federal Funds Rate (a “Federal Funds Interest Determination Date”), the rate of interest for Federal Funds as published in H.15(519) under the heading “Federal Funds (Effective)” as displayed on Moneyline Telerate or any successor service, on page 120 or any other page as may replace the applicable page on that service, which is commonly referred to as “Moneyline Telerate Page 120,” or if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Federal Funds Interest Determination Date, the Federal Funds Rate will be the rate on such Federal Funds Interest Determination Date for Federal Funds published in H.15 Daily Update, or other electronic source used for the purpose of displaying the applicable rate, under the caption “Federal Funds/ Effective Rate.” If such rate is not published in either the H.15(519) or H.15 Daily Update (or such other electronic source) on such Calculation Date, the Federal Funds Rate will be calculated by the Calculation Agent and will be the arithmetic mean of the rates for the last transaction in overnight Federal Funds arranged by three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent (after consultation with HSBC Finance) prior to 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date; provided, however, that if the brokers selected as aforesaid by the Calculation Agent are not quoting as described above, the Federal Funds Rate in effect for the applicable period will be the Federal Funds Rate in effect on such Federal Funds Interest Determination Date.

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Prime Rate Notes

      Each Prime Rate Note will bear interest at the interest rate (calculated with reference to the Prime Rate and, if any, the Spread and/or Spread Multiplier) specified in the applicable Pricing Supplement.

      Unless otherwise indicated in the Pricing Supplement, “Prime Rate” means, with respect to any Interest Determination Date relating to a Prime Rate Note or any Interest Determination Date for a Note whose interest rate is determined with reference to the Prime Rate (a “Prime Rate Interest Determination Date”), the rate published in H.15(519), or any successor publication, for that day under the heading “Bank Prime Loan”. If on the Calculation Date pertaining to such Prime Rate Interest Determination Date such rate is not yet published in H.15(519), or any successor publication, the rate for that Prime Rate Interest Determination Date will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME 1 as such bank’s prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date. If fewer than four (4) such rates appear on the Reuters Screen USPRIME 1 for that Prime Rate Interest Determination Date, the Prime Rate will be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in a year divided by 360 for that Prime Rate Interest Determination Date by three (3) major money center banks in New York City selected by the Calculation Agent (after consultation with HSBC Finance); provided, however, that if the banks selected as aforesaid by the Calculation Agent are not quoting as described above, the Prime Rate in effect for the applicable period will be the Prime Rate in effect on such Prime Rate Interest Determination Date. “Reuters Screen USPRIME 1” means the display designated as page “USPRIME 1” on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME 1 on that service for the purpose of displaying prime rates or base lending rates of major United States banks).

Covenant Against Creation of Pledges or Liens

      All Notes are unsecured debt obligations of HSBC Finance. We covenant that, with the exceptions listed below, we will not issue, assume or guarantee any indebtedness for borrowed money secured by a mortgage, security interest, pledge or lien (“security interest”) of or upon any of our property, now owned or hereafter acquired, unless the Notes then outstanding are, by supplemental indenture, effectively secured by such security interest equally and ratably with all other indebtedness secured thereby for so long as such other indebtedness shall be so secured. The term “indebtedness for borrowed money” does not include any guarantee, cash deposit or other recourse obligation in connection with the sale, securitization or discount by us of finance or accounts receivables, trade acceptances, or other paper arising in the ordinary course of our business.

      The foregoing covenant does not apply to (a) security interests to secure the payment of the purchase price of property, shares of capital stock, or indebtedness acquired by us or the cost of construction or improvement of such property or the refinancing of all or any part of such secured indebtedness, provided that such security interests do not apply to any other property, shares of capital stock, or indebtedness of HSBC Finance; (b) security interests on property, shares of capital stock, or indebtedness existing at the time of acquisition by us; (c) security interests on property of a corporation which security interests exist at the time such corporation merges or consolidates with or into us or which security interests exist at the time of the sale or transfer of all or substantially all of the assets of such corporation to us; (d) security interests to secure any indebtedness of HSBC Finance to a subsidiary; (e) security interests in our property in favor of the United States of America or any state or agency or instrumentality thereof, or in favor of any other country or political subdivision, to secure partial, progress, advance, or other payments pursuant to any contract or statute or to secure any indebtedness incurred or guaranteed for the purpose of financing all or any part of the purchase price or the cost of construction of the property subject to such security interests; (f) security interests on properties financed through tax-exempt municipal obligations; provided that such security interests are limited to the property so financed; (g) security interests existing on December 1, 1993 (the original date of execution of the Indenture); and (h) any extension, renewal, refunding, or replacement (or successive extensions, renewals, refundings, or replacements), in whole or in part, of any security interest referred to in the foregoing clauses (a) through (g) inclusive; provided,

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however, that the principal amount of indebtedness secured in such extension, renewal, refunding, or replacement does not exceed the principal amount of indebtedness secured at the time by such security interest; provided, further, that such extension, renewal, refunding, or replacement of such security interest is limited to all or part of the property subject to such security interest so extended, renewed, refunded, or replaced.

      Notwithstanding the foregoing, we may, without equally and ratably securing the Notes, issue, assume, or guarantee indebtedness secured by a security interest not excepted pursuant to clauses (a) through (h) above if the aggregate amount of such indebtedness, together with all other indebtedness of, or guaranteed by, us existing at such time and secured by security interests not so excepted, does not at the time exceed 10% of our Consolidated Net Worth (as defined). In addition, an arrangement with any person providing for the leasing by us of any property, which property has been or is to be sold or transferred by us to such person with the intention that such property be leased back to us, shall not be deemed to create any indebtedness secured by a security interest if the obligation in respect to such lease would not be included as a liability on our consolidated balance sheet. The Holders of not less than a majority in principal amount of Notes at the time outstanding under the Indenture, on behalf of the Holders of all of the Notes issued under such Indenture, may waive compliance with the foregoing covenant. (Standard Provisions—Section 3.08)

Satisfaction, Discharge, and Defeasance of the Indenture and Notes

      If there is deposited irrevocably with the Trustee as trust funds for the benefit of the Holders of Notes denominated in U.S. dollars 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 on such Notes on the dates such payments are due in accordance with the terms of such Notes through their maturity, and if we have paid or caused to be paid all other sums payable by us under the Indenture with respect to such series, then we will be deemed to have satisfied and discharged the entire indebtedness represented by the Notes and all of our obligations under such Indenture with respect to such series, except as otherwise provided in such Indenture. In the event of any such defeasance, Holders of the Notes would be able to look only to such trust funds for payment of principal, premium, if any, and interest, if any, on their Notes. (Standard Provisions—Section 6.03)

      For federal income tax purposes, any such defeasance may be treated as a taxable exchange of the related Notes for an issue of obligations of the trust or a direct interest in the cash and securities held in the trust. In that case Holders of such Notes would recognize gain or loss as if the trust obligations or the cash or securities deposited, as the case may be, had actually been received by them in exchange for their Notes. Such Holders thereafter would be required to include in income a share of the income, gain or loss associated with the trust. The amount so required to be included in income could be a different amount and includable in income at different times than would be includable in the absence of defeasance. Prospective investors are urged to consult their own tax advisors as to the specific consequences to them of defeasance.

Modification of Indenture

      The Indenture provides that the Holders of not less than a majority in principal amount of each series of debt securities at the time outstanding under the Indenture, may enter into supplemental indentures for the purpose of amending, in any manner, provisions of such Indenture or of any supplemental indenture or modifying the rights of Holders of such series. However, no such supplemental indenture, without the consent of the Holder of each outstanding debt security, Note or debenture affected thereby, shall, among other things, (i) change the maturity of the principal of, or any installment of interest on any debt security, Note or debenture issued thereunder, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or (ii) reduce the aforesaid percentage of the debt securities, Notes or debentures, the consent of the Holders of which is required for any such

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waiver of compliance or for the execution of any such supplemental indenture. (Standard Provisions—Section 11.02)

      The Indenture may be amended or supplemented without the consent of any Holder of Notes under certain circumstances, including (i) to cure any ambiguity, defect or inconsistency in such Indenture, any supplemental indenture, or in the Notes; (ii) to evidence the succession of another corporation to HSBC Finance and to provide for the assumption of all our obligations under the Indenture and the Notes issued thereunder; (iii) to provide for uncertificated Notes in addition to certificated Notes issued thereunder; (iv) to make any change that does not adversely affect the rights of Holders of Notes issued thereunder; (v) to provide for a new series of Notes to be issued thereunder; or (vi) to add to rights of Holders of Notes issued thereunder or add additional Events of Default. (Standard Provisions—Section 11.01)

Successor Entity

      We may not consolidate with or merge into, or transfer, sell or lease our properties and assets as, or substantially as, an entirety to another entity unless the successor entity is a corporation incorporated within the United States and, after giving effect thereto, no default under the Indenture shall have occurred and be continuing. Thereafter, except in the case of a lease, all our obligations under the Indenture terminate. (Standard Provisions—Sections 10.01 and 10.02)

Events of Default

      The Indenture defines the following as Events of Default with respect to any series of debt securities issued thereunder: default for 30 days in the payment of any interest upon any Note, debt security or debenture issued under such Indenture; default in the payment of any principal of or premium on any such Note, debt security or debenture; default for 30 days in the deposit of any sinking fund or similar payment for such Notes or series of debt securities or debentures; default for 60 days after notice in the performance of any other covenant in the Indenture; certain defaults for 30 days after notice in the payment of principal or interest, or in the performance of other covenants, with respect to borrowed money under another indenture in which JPMorgan Chase is trustee which results in the principal amount of such indebtedness becoming due and payable prior to maturity, which acceleration has not been rescinded or annulled; and certain events of bankruptcy, insolvency or reorganization. We are required to file with the Trustee annually a certificate as to the absence of certain defaults under the Indenture. (Standard Provisions—Sections 7.01 and 3.05)

      If an Event of Default with respect to the Notes at the time outstanding occurs and is continuing, either the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes so affected, by notice as provided in the Indenture, may declare the principal amount of all the Notes so affected to be due and payable immediately. At any time after a declaration of acceleration with respect to the Notes has been made, but before a judgment or decree for payment of money has been obtained by the Trustee, the Holders of not less than a majority in principal amount of outstanding Notes so affected may, under certain circumstances, rescind or annul such declaration of acceleration. (Standard Provisions—Section 7.02)

      The Holders of not less than a majority in principal amount of the outstanding Notes may, on behalf of all Holders of similar Notes, waive any past default under the Indenture and its consequences with respect to such Notes, except a default (a) in the payment of principal of (or premium, if any) or interest, on any Note, or (b) in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Note issued thereunder. (Standard Provisions—Section 7.13)

      The Indenture provides that the Trustee may withhold notice to Holders of Notes of any default, except in payment of the principal of (or premium, if any) or interest, on any Note issued under the Indenture or in the payment of any sinking fund or similar payment, if it considers it in the interest of Holders of Notes to do so. (Standard Provisions—Section 8.02)

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      Holders of Notes may not enforce the Indenture except as provided therein. (Standard Provisions—Section 7.07) The Indenture provides that the Holders of a majority in principal amount of the outstanding debt securities issued under the Indenture have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. (Standard Provisions—Section 7.12) The Trustee will not be required to comply with any request or direction of Holders of Notes pursuant to the Indenture unless offered indemnity against costs and liabilities which might be incurred by the Trustee as a result of such compliance. (Standard Provisions—Section 8.03(e))

Concerning the Trustee

      We maintain a banking relationship with JPMorgan Chase or affiliates thereof. The Trustee or affiliates thereof also act as trustee under other indentures of HSBC Finance under which outstanding senior unsecured debt securities of HSBC Finance have been issued and may have other financial relations with us and other corporations affiliated with us.

Book-Entry Notes

      Unless otherwise indicated in the Pricing Supplement, the Notes will be issued in the form of one or more fully registered Global Notes, which will be deposited with, or on behalf of, DTC and registered in the name of the nominee of DTC. If so specified in a Pricing Supplement, a Global Note may be registered in the name of a depository other than DTC (DTC and such other depositories are referred to herein as the “Depository”). Except as set forth below, a Global Note may not be transferred except as a whole by the Depository to another nominee of the Depository or to a successor of the Depository or a nominee of such successor. Transfers of a Global Note will be effected only through records maintained by the Depository and its participants. Beneficial interests in Global Notes will be exchanged for Notes in definitive form only under limited circumstances described herein.

      DTC has advised HSBC Finance and HSBC Securities (USA) Inc. (the “Agents”) that it is a limited-purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic computerized book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC’s participants include securities brokers and dealers (including the Agents), banks (including JPMorgan Chase), trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by DTC only through participants. The rules applicable to DTC and its participants are on file with the Commission.

      Upon the issuance of a Global Note, the Depository will credit, on its book-entry registration and transfer system, the respective principal amounts of the Notes represented by such Global Note to the accounts of participants. The accounts to be credited shall be designated by the Agents through which a Note was sold, or by us if such Note was sold directly by us. Ownership of beneficial interests in a Global Note will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in a Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depository (with respect to interests of participants), or by participants or persons that may hold interests through participants (with respect to interests of persons other than participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in certificated form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Note.

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      So long as the Depository for a Global Note, or its nominee, is the registered owner thereof, the Depository or its nominee, as the case may be, will be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of Notes in certificated form and will not be considered the owners or Holders thereof under the Indenture.

      Principal and interest payments on Notes represented by a Global Note will be made to the Depository or its nominee, as the case may be, as the registered owner of such Global Note. Neither we, the Trustee nor the Depository will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We expect that the Depository, upon receipt of any payment of principal or interest in respect of a Global Note, will credit immediately the accounts of the related participants with payment in amounts proportionate to their respective holdings in principal amount of beneficial interest in such Global Note as shown on the records of the Depository. We also expect that payments by participants to owners of beneficial interests in a Global Note will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such participants and not of the Depository, the Agents, HSBC Finance or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.

      If the Depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by us within 90 days, we will issue Notes in certificated form in exchange for each Global Note. In addition, we may at any time determine not to have Notes represented by Global Notes, and, in such event, will issue Notes in certificated form in exchange for all Global Notes representing such Notes. In any such instance, an owner of a beneficial interest in a Global Note will be entitled to physical delivery in certificated form of Notes equal in principal amount to such beneficial interest and to have such Notes registered in its name. Notes so issued in certificated form will be issued in denominations of $1,000 (or such other denominations as shall be specified by us) or any amount in excess thereof which is an integral multiple of $1,000 and will be issued in registered form only, without coupons.

FOREIGN CURRENCY NOTES

Exchange Rates and Exchange Controls

      If appropriate, Pricing Supplements relating to Indexed Notes or Notes denominated in a Specified Currency other than U.S. dollars will contain information concerning historical exchange rates for such Specified Currency against the U.S. dollar, a description of the currency, any exchange controls as of the date of the applicable Pricing Supplement affecting such currency and any risk factors relating thereto. The information therein concerning exchange rates is furnished as a matter of information only and should not be regarded as indicative of the range of or trends in fluctuations in currency exchange rates that may occur in the future.

Payment Currency

      Except as set forth in the applicable Pricing Supplement, if payment on a Note is required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond our control, or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments with respect to such Note shall be made in U.S. dollars until such currency is again available or so used. The amount so payable on any date in such foreign currency shall be converted into U.S. dollars at a rate determined by the Exchange Rate Agent on the basis of the most recently available market exchange rate or as otherwise determined in good

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faith by us if the foregoing is impracticable. Any payment in respect of such Note made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture.

      All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion (except to the extent expressly provided herein that any determination is subject to our approval). In the absence of manifest error, such determinations shall be conclusive for all purposes and binding on Holders of the Notes and the Exchange Rate Agent shall have no liability therefor.

Foreign Currency Judgments

      The Notes will be governed by and construed in accordance with the laws of the State of Illinois. Courts in the United States customarily have not awarded judgments for money damages denominated in any currency other than U.S. dollars. If a Note is denominated in a Specified Currency other than U.S. dollars, it is believed that any judgment under Illinois law will be rendered in U.S. dollars, the amount of which would be determined by converting the foreign currency for the underlying obligation into U.S. dollars at a rate of exchange prevailing on the date the cause of action arose or the date of the entry of the judgment or decree.

DESCRIPTION OF NOTE WARRANTS

General

      We may issue, together with Notes or separately, warrants to purchase Notes (“Note Warrants”). If the Note Warrants are issued together with any Notes, they may be attached to or separate from such Notes. The Note Warrants are to be issued under one or more separate Warrant Agreements (each a “Note Warrant Agreement”) between HSBC Finance and a banking institution organized under the laws of the United States or one of the States thereof (each a “Warrant Agent”).

      The following statements with respect to the Note Warrants are summaries of the Note Warrant Agreement, a form of which is filed as an exhibit to the Registration Statement. Such summaries of certain provisions of the Note Warrant Agreement and the Note Warrants do not purport to be complete and such summaries are subject to the detailed provisions of the Note Warrant Agreement to which reference is hereby made for a full description of such provisions, including the definition of certain terms used herein, and for other information regarding the Note Warrants. Wherever particular provisions of the Note Warrant Agreement or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by such reference.

      The Note Warrants will be evidenced by Note Warrant Certificates (the “Note Warrant Certificates”) and, except as otherwise specified in a supplement to this prospectus specifying the terms of an issue of Note Warrants (the “Note Warrant Supplement”), may be traded separately from any Notes with which they may be issued. Note Warrant Certificates may be exchanged for new Note Warrant Certificates of different denominations at the office of the Warrant Agent. The holder of a Note Warrant does not have any of the rights of a Holder of a Note in respect of, and is not entitled to any payments on, any Notes issuable (but not yet issued) upon exercise of the Note Warrants. The Note Warrants may be issued in one or more series, and reference is made to the Note Warrant Supplement accompanying this prospectus relating to the particular series of Note Warrants offered thereby for the terms of, and other information with respect to such Note Warrants, including:

       • the title and the aggregate number of Note Warrants;

       • the designation, aggregate principal amount, currency or currencies and terms of the Notes that may be purchased upon exercise of the Note Warrants;

       • the price or prices at which such Note Warrants are exercisable;

       • the currency or currencies in which such Note Warrants are exercisable;

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       • the places at which such Note Warrants are exercisable and the date on which the right to exercise the Note Warrants shall commence and the date on which such right shall expire (the “Note Warrant Expiration Date”) or, if the Note Warrants are not continuously exercisable throughout such period, the specific date or dates on which they will be exercisable (each, a “Note Warrant Exercise Date”, which term shall also mean, with respect to Note Warrants continuously exercisable for a period of time, every date during such period);

       • the terms of any mandatory or optional call provisions;

       • the price or prices, if any, at which the Note Warrants may be redeemed at the option of the holder or will be redeemed upon expiration;

       • the identity of the Warrant Agent;

       • the exchanges, if any, on which such Note Warrants may be listed;

       • whether such Note Warrants shall be issued in book-entry form;

       • if applicable, the designation and terms of the Notes with which the Note Warrants are issued and the number of Note Warrants issued with each of such Notes;

       • if applicable, the date on and after which the Note Warrants and the related Notes will be separately transferable;

       • whether the Note Warrant Certificates will be in registered form or bearer form or both;

       • any applicable United States Federal income tax considerations;

       • when the Note Warrant Agreement, the Note Warrant Certificates and the Note Warrants may be amended;

       • the price at which the Note Warrants will be issued; and

       • any other terms of the Note Warrants.

Exercise of Note Warrants

      Note Warrants in registered form may be exercised by payment to the Warrant Agent of the exercise price, in each case in such currency or currencies as are specified in the Note Warrant, and by communicating to the Warrant Agent the identity of the holder of the Note Warrant and the number of Note Warrants to be exercised. Upon receipt of payment and the Note Warrant Certificate properly completed and duly executed at the office of the Warrant Agent, the Warrant Agent will, as soon as practicable, arrange for the issuance of the applicable Notes, the form of which shall be set forth in the Note Warrant Supplement. If less than all of the Note Warrants evidenced by a Note Warrant Certificate are exercised, a new Note Warrant Certificate will be issued for the remaining amounts of Note Warrants. A more complete summary for the exercise of Note Warrants in registered form and for exercises of Note Warrants in bearer form is contained in the Note Warrant Supplement accompanying this prospectus.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

      In the opinion of Sidley Austin Brown & Wood LLP, special tax counsel to HSBC Finance, the following summary correctly describes the material U.S. federal income tax considerations as of the date hereof of the acquisition, ownership and disposition of the Notes to beneficial owners (“Holders”) purchasing Notes at their original issuance. The following discussion may not be applicable to a particular series of Notes, depending on the terms and conditions established for such Notes in the Pricing Supplement. Further, the discussion does not address any tax consequences applicable to any Note Warrants. Any special U.S. federal income tax consequences of the acquisition, ownership and disposition of Notes and Note Warrants will be addressed in the applicable Pricing Supplement or Note Warrant Supplement. This summary is based on the Internal Revenue Code of 1986, as amended to the date

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hereof (the “Code”), legislative history, administrative pronouncements, judicial decisions and final, proposed and temporary Treasury Regulations, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. Any such changes may apply retroactively.

      This summary discusses only the principal U.S. federal income tax consequences to those Holders holding Notes as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax consequences that may be relevant to a Holder in light of the Holder’s particular circumstances or to Holders subject to special rules (including pension plans and other tax-exempt investors, banks, thrifts, real estate investment trusts, regulated investment companies, persons who hold Notes as part of a straddle, hedging, integrated, constructive sale or conversion transaction, insurance companies, dealers in securities or foreign currencies, and U.S. Holders (as defined below) whose functional currency (as defined in Section 985 of the Code) is not the U.S. dollar).

      Persons considering the purchase of Notes should consult their tax advisors with regard to the application of the U.S. federal income tax laws to their particular situations as well as any tax consequences to them arising under the laws of any state, local or foreign taxing jurisdiction.

Tax Consequences to U.S. Holders

      As used herein, the term “U.S. Holder” means a beneficial owner of a Note who or which is, for U.S. federal income tax purposes:

•  an individual citizen or resident of the United States,

•  a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, or

•  an estate or trust treated as a U.S. person under Section 7701(a)(30) of the Code.

      The term “Non-U.S. Holder” means a beneficial owner of a Note that is not a U.S. Holder.

Taxation of Interest

      The taxation of interest on a Note depends on whether the interest is “qualified stated interest” (as defined below). Interest that is qualified stated interest will generally be includible in a U.S. Holder’s income as ordinary interest income when actually or constructively received (if such Holder uses the cash method of accounting for federal income tax purposes) or when accrued (if such Holder uses an accrual method of accounting for federal income tax purposes). Interest that is not qualified stated interest is includible in a U.S. Holder’s income under the rules governing “original issue discount” described below, regardless of such U.S. Holder’s method of accounting. Notwithstanding the foregoing, interest that is payable on a Note with a maturity of one year or less from its issue date, referred to as a “Short-Term Note,” is included in a U.S. Holder’s income under the rules described below under “—Short-Term Notes.”

Definition of Qualified Stated Interest

      Interest on a Note is “qualified stated interest” if the interest is unconditionally payable, or will be constructively received under Section 451 of the Code, in cash or in property (other than debt instruments of HSBC Finance) at least annually at a single fixed rate (in the case of a Fixed Rate Note) or at a single “qualified floating rate” or “objective rate” (in the case of a Floating Rate Note that qualifies as a VRDI, as defined below). If a Floating Rate Note that qualifies as a VRDI provides for interest other than at a single qualified floating rate or single objective rate, special rules apply to determine the portion of such interest that constitutes qualified stated interest. See “Taxation of Original Issue Discount—Notes that are VRDIs” below.

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Definition of Variable Rate Debt Instrument (VRDI)

      A Floating Rate Note will qualify as a variable rate debt instrument (“VRDI”) if all four of the following conditions are met. First, the “issue price” (as defined under “Taxation of Original Issue Discount”) of the Note must not exceed the total noncontingent principal payments by more than an amount equal to the lesser of (i) .015 multiplied by the product of the total noncontingent principal payments and the number of complete years to maturity from the issue date (or, in the case of an Amortizing Note or other Note that provides for payment of any amount other than qualified stated interest before maturity, its weighted average maturity) and (ii) 15% of the total noncontingent principal payments. A Note that does not provide for contingent principal will satisfy this requirement as long as it is not issued at a significant premium.

      Second, except as provided in the preceding paragraph, the Floating Rate Note must not provide for any principal payments that are contingent.

      Third, the Note must provide for stated interest (compounded or paid at least annually) at (i) one or more qualified floating rates, (ii) a single fixed rate and one or more qualified floating rates, (iii) a single objective rate or (iv) a single fixed rate and a single objective rate that is a “qualified inverse floating rate” (as defined below).

      Fourth, the Note must provide that a qualified floating rate or objective rate in effect at any time during the term of the Note is set at the value of the rate on any day that is no earlier than three months prior to the first day on which that value is in effect and no later than one year following that first day. For example, a Note could not provide for an interest rate based on the LIBOR rate in effect two years prior to each Interest Payment Date.

Definition of a Qualified Floating Rate

      Subject to certain exceptions, a variable rate of interest on a Note is a “qualified floating rate” if variations in the value of the rate can reasonably be expected to measure contemporaneous fluctuations in the cost of newly borrowed funds in the currency in which the Note is denominated. This definition includes a variable rate equal to (i) the product of an otherwise qualified floating rate and a Spread Multiplier that is greater than .65 but not more than 1.35 or (ii) an otherwise qualified floating rate (or the product described in clause (i)) plus or minus a Spread. If the variable rate equals the product of an otherwise qualified floating rate and a single Spread Multiplier greater than 1.35 or less than or equal to .65, however, such rate will generally be an objective rate. A variable rate will not be considered a qualified floating rate if the variable rate is subject to a cap, floor, governor (i.e., a restriction on the amount of increase or decrease in the stated interest rate) or similar restriction that is not fixed throughout the term of the Note and is reasonably expected as of the issue date to cause the yield on the Note to be significantly more or less than the expected yield determined without the restriction.

Definition of an Objective Rate

      Subject to certain exceptions, an “objective rate” is a rate (other than a qualified floating rate) that is determined using a single fixed formula and that is based on objective financial or economic information that is neither within the control of HSBC Finance (or a related party) nor unique to the circumstances of HSBC Finance (or a related party). A rate is not an objective rate if it is reasonably expected that the average value of the rate during the first half of the Note’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the term. The Internal Revenue Service (“IRS”) may designate rates other than those specified above that will be treated as objective rates. As of the date hereof, no such other rates have been designated. An objective rate is a “qualified inverse floating rate” if (i) the rate is equal to a fixed rate minus a qualified floating rate and (ii) the variations in the rate can reasonably be expected to reflect inversely contemporaneous variations in the cost of newly borrowed funds (disregarding any caps, floors, governors or similar restrictions that would not, as described above, cause a rate to fail to be a qualified floating rate).

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      If interest on a Note is stated at a fixed rate for an initial period of less than one year, followed by a variable rate that is either a qualified floating rate or an objective rate for a subsequent period, and the value of the variable rate on the issue date is intended to approximate the fixed rate, the fixed rate and the variable rate together constitute a single qualified floating rate or objective rate.

Taxation of Original Issue Discount

      U.S. Holders of Notes issued with original issue discount (“OID”) will be subject to special tax accounting rules, as described in greater detail below. Additional rules applicable to Notes having OID that are denominated in or determined by reference to a Specified Currency other than the U.S. Dollar are described under “Foreign Currency Notes” below. OID is the excess, if any, of a Note’s “stated redemption price at maturity” over the Note’s “issue price.” A Note’s “stated redemption price at maturity” is the sum of all payments provided by the Note (whether designated as interest or as principal) other than payments of qualified stated interest. The “issue price” of a Note is the first price at which a substantial amount of the Notes in the issuance that includes the Note is sold for money (excluding sales to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). If a Note is issued as part of an investment unit (e.g., together with a Note Warrant), the issue price of the investment unit is determined in the same manner and allocated between the Note and right (or rights) that comprise the unit based on their relative fair market values.

      U.S. Holders of Notes with OID (other than Short-Term Notes, as defined below) generally will be required to include such OID in income as it accrues in accordance with the constant yield method described below, irrespective of the receipt of the related cash payments. A U.S. Holder’s tax basis in a Note is increased by each accrual of OID and decreased by each payment other than a payment of qualified stated interest.

      The amount of OID with respect to a Note will be treated as zero if the OID is less than an amount equal to .0025 multiplied by the product of the stated redemption price at maturity and the number of complete years to maturity (or, in the case of an Amortizing Note or other Note that provides for payment of any amount other than qualified stated interest prior to maturity, the weighted average maturity of the Note). If the amount of OID is less than that amount, the OID that is not included in payments of stated interest is included in income as capital gain as principal payments are made. The amount includible with respect to a principal payment equals the product of the total amount of OID and a fraction, the numerator of which is the amount of such principal payment and the denominator of which is the stated principal amount of the Note.

Inclusion of OID in Income—Fixed Rate Notes

      In the case of a Fixed Rate Note issued with OID, the amount of OID includible in the income of a U.S. Holder for any taxable year is determined under the constant yield method, as follows. First, the “yield to maturity” of the Note is computed. The yield to maturity is the discount rate that, when used in computing the present value of all interest and principal payments to be made under the Note (including payments of qualified stated interest), produces an amount equal to the issue price of the Note. The yield to maturity is constant over the term of the Note and, when expressed as a percentage, must be calculated to at least two decimal places.

      Second, the term of the Note is divided into “accrual periods.” Accrual periods may be of any length and may vary in length over the term of the Note, provided that each accrual period is no longer than one year and that each scheduled payment of principal or interest occurs either on the final day of an accrual period or on the first day of an accrual period.

      Third, the total amount of OID on the Note is allocated among accrual periods. In general, the OID allocable to an accrual period equals the product of the “adjusted issue price” of the Note at the beginning of the accrual period and the yield to maturity of the Note, less the amount of any qualified stated interest allocable to the accrual period. The adjusted issue price of a Note at the beginning of the first accrual period is its issue price. Thereafter, the adjusted issue price of the Note is its issue price, increased by the

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amount of OID previously includible in the gross income of any holder and decreased by the amount of any payment previously made on the Note other than a payment of qualified stated interest. For purposes of computing the adjusted issue price of a Note, the amount of OID previously includible in the gross income of any U.S. Holder is determined without regard to “premium” and “acquisition premium”, as those terms are defined below under “Market Discount and Premium.”

      Fourth, the “daily portions” of OID are determined by allocating to each day in an accrual period its ratable portion of the OID allocable to the accrual period.

      A U.S. Holder includes in income in any taxable year the daily portions of OID for each day during the taxable year that such Holder held Notes. Under the constant yield method described above, U.S. Holders generally will be required to include in income increasingly greater amounts of OID in successive accrual periods.

Taxation of OID on Floating Rate Notes and Indexed Notes

      The taxation of OID (including interest that does not constitute qualified stated interest) on a Floating Rate Note or an Indexed Note will depend on whether the Note is a VRDI, as that term is described above under “—Taxation of Interest—Definition of a Variable Rate Debt Instrument (VRDI).”

Notes that are VRDIs

      In the case of a VRDI that provides for qualified stated interest (as defined above) the amount of qualified stated interest and OID, if any, includible in income during a taxable year is determined under the rules applicable to Fixed Rate Notes (described above) by assuming that the variable rate of interest is a fixed rate equal to (i) in the case of a qualified floating rate or a qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or qualified inverse floating rate, and (ii) in the case of an objective rate (other than a qualified inverse floating rate), the rate that reflects the yield that is reasonably expected for the Note. Qualified stated interest allocable to an accrual period is increased (or decreased) if the interest actually paid during an accrual period exceeds (or is less than) the interest assumed to be paid during the accrual period.

      If a Note that is a VRDI does not provide for qualified stated interest, the amount of interest and OID accruals are determined by constructing an equivalent fixed rate debt instrument, as follows:

      First, in the case of an instrument that provides for interest at a fixed rate, replace the fixed rate by a qualified floating rate (or qualified inverse floating rate, if applicable) such that the fair market value of the instrument as of the issue date would be approximately the same as the fair market value of an otherwise identical debt instrument that provides for the qualified floating rate (or qualified inverse floating rate) rather than the fixed rate.

      Second, determine the fixed rate substitute for each variable rate provided by the Note. The fixed rate substitute for each qualified floating rate provided by the Note is the value of that qualified floating rate on the issue date. If the Note provides for two or more qualified floating rates with different intervals between interest adjustment dates (for example, the 30-day Commercial Paper Rate and quarterly LIBOR), the fixed rate substitutes are based on intervals that are equal in length (for example, the 90-day Commercial Paper Rate and quarterly LIBOR, or the 30-day Commercial Paper Rate and monthly LIBOR). The fixed rate substitute for an objective rate that is a qualified inverse floating rate is the value of the qualified inverse floating rate on the issue date. The fixed rate substitute for an objective rate (other than a qualified inverse floating rate) is a fixed rate that reflects the yield that is reasonably expected for the Note.

      Third, construct an equivalent fixed rate debt instrument that has terms that are identical to those provided under the Note, except that the equivalent fixed rate debt instrument provides for the fixed rate substitutes determined in the second step, in lieu of the qualified floating rates or objective rate provided by the Note.

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      Fourth, determine the amount of qualified stated interest and OID for the equivalent fixed rate debt instrument under the rules described above for Fixed Rate Notes. These amounts are taken into account as if the U.S. Holder held the equivalent fixed rate debt instrument. See “Taxation of Interest” and “Taxation of Original Issue Discount—Fixed Rate Notes,” above.

      Fifth, make appropriate adjustments for the actual values of the variable rates. In this step, qualified stated interest or OID allocable to an accrual period is increased (or decreased) if the interest actually accrued or paid during the accrual period exceeds (or is less than) the interest assumed to be accrued or paid during the accrual period under the equivalent fixed rate debt instrument. In general, this increase or decrease is an adjustment to qualified stated interest for the accrual period if the equivalent fixed rate debt instrument constructed under the third step provides for qualified stated interest and the increase or decrease is reflected in the amount actually paid during the accrual period, and otherwise the increase or decrease is an adjustment to OID, if any, for the accrual period.

Notes that are not VRDIs

      Unless otherwise noted in the applicable Pricing Supplement, if any, Floating Rate Notes or Indexed Notes that are not VRDIs (“Contingent Notes”) will be treated as “contingent payment debt instruments” and will be taxable under the rules applicable thereto (the “Contingent Debt Regulations”) for U.S. federal income tax purposes. As a result, the Contingent Notes will generally be subject to the OID provisions of the Code and the regulations thereunder, and a U.S. Holder will be required to accrue interest income on the Contingent Notes as set forth below.

      First, HSBC Finance is required to determine, as of the issue date, the comparable yield for the Contingent Note. The comparable yield is generally the yield at which HSBC Finance would issue a fixed rate debt instrument with terms and conditions similar to those of the Contingent Note (including the level of subordination, term, timing of payments and general market conditions) but not taking into consideration the risk of the contingencies or the liquidity of the Contingent Note. Further, the comparable yield may not be less than the applicable Federal Rate announced monthly by the IRS (the “AFR”). In certain cases where Contingent Notes are marketed or sold in substantial part to tax-exempt investors or other investors for whom the prescribed inclusion of interest is not expected to have a substantial effect on their U.S. tax liability, the comparable yield for the Contingent Note is, without proper evidence to the contrary, presumed to be the AFR.

      Second, solely for purposes of determining the amount of interest income that a U.S. Holder will be required to accrue (and which HSBC Finance will be required to report on an IRS Form 1099), HSBC Finance will be required to construct a “projected payment schedule” for the Contingent Notes, determined under the Contingent Debt Regulations (the “Schedule”), representing a series of payments the amount and timing of which would produce a yield to maturity on the Contingent Notes equal to the comparable yield. The Schedule is determined as of the issue date and generally remains in place throughout the term of the Contingent Note. If a right to a contingent payment is based on market information, the amount of the projected payment is the forward price of the contingent payment. If a contingent payment is not based on market information, the amount of the projected payment is the expected value of the contingent payment as of the issue date. The Schedule must produce the comparable yield determined as set forth above. Otherwise, the Schedule must be adjusted under the rules set forth in the Contingent Debt Regulations.

      Third, under the usual rules applicable to Notes issued with OID and based on the Schedule, the interest income on the Contingent Note for each accrual period is determined by multiplying the comparable yield of the Contingent Note (adjusted for the length of the accrual period) by the Contingent Note’s adjusted issue price at the beginning of the accrual period (determined under rules set forth in the Contingent Debt Regulations). The amount so determined is then allocated on a ratable basis to each day in the accrual period that the U.S. Holder held the Contingent Note.

      Fourth, appropriate adjustments are made to the interest income determined under the foregoing rules to account for any differences between the Schedule and actual contingent payments. Under the rules set

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forth in the Contingent Debt Regulations, interest income is generally increased (or decreased) if the actual contingent payment is more (or less) than the projected payment. Differences between the actual amounts of any contingent payments made in a calendar year and the projected amounts of such payments are generally aggregated and taken into account, in the case of a positive difference, as additional interest income, or, in the case of a negative difference, first as a reduction in interest income for such year and thereafter, subject to certain limitations, as ordinary loss.

      The Contingent Debt Regulations require HSBC Finance to provide each U.S. Holder of a Contingent Note with the Schedule. If HSBC Finance does not create the Schedule or the Schedule is unreasonable, a U.S. Holder must set its own projected payment schedule and explicitly disclose the fact that the U.S. Holder’s schedule is being used and the reason therefor. Unless otherwise prescribed by the IRS, the U.S. Holder must make such disclosure on a statement attached to the U.S. Holder’s timely filed federal income tax return for the taxable year in which the Contingent Note was acquired.

      In general, any gain realized by a U.S. Holder on the sale, exchange or other disposition of a Contingent Note is interest income. Any loss on a Contingent Note accounted for under the method described above is ordinary loss to the extent it does not exceed such Holder’s prior interest inclusions on the Contingent Note (net of negative adjustments). Special rules also apply with respect to market discount and premium on Contingent Notes that may differ from the rules described below under “Market Discount and Premium.”

Other Rules

      Certain Notes having OID may be redeemed prior to maturity. Such Notes may be subject to rules that differ from the general rules discussed above relating to the tax treatment of OID. Purchasers of such Notes with a redemption feature should carefully examine the applicable Pricing Supplement and should consult their tax advisors with respect to such feature since the tax consequences with respect to interest and OID will depend, in part, on the particular terms and the particular features of the purchased Note.

Short-Term Notes

      In the case of a Note that matures one year or less from its date of issuance (a “Short-Term Note”), a cash method U.S. Holder of such a Note generally is not required to accrue OID for U.S. federal income tax purposes unless such Holder elects to do so. U.S. Holders who make such an election, U.S. Holders who report income for federal income tax purposes on the accrual method and certain other U.S. Holders, including banks and dealers in securities, are required to include OID in income on such Short-Term Notes as it accrues on a straight-line basis, unless an election is made to accrue the OID according to a constant yield method based on daily compounding. In the case of a U.S. Holder who is not required, and does not elect, to include the OID in income currently, stated interest will generally be taxable at the time it is received and any gain realized on the sale, exchange or other disposition of the Short-Term Note will be ordinary income to the extent of the OID accrued on a straight-line basis (or, if elected, according to a constant yield method based on daily compounding) through the date of sale, exchange or other disposition (generally reduced by prior payments of interest, if any). In addition, such Holders will be required to defer deductions for all or a portion of any interest paid on indebtedness incurred to purchase or carry Short-Term Notes in an amount not exceeding the accrued OID not previously included in income.

Extendible Notes

      If so indicated in the Pricing Supplement relating to a Note, HSBC Finance will have the option to extend the Stated Maturity of such Note. See “Description of Medium Term Notes—Extendible Notes” above. The treatment of a U.S. Holder of Notes with respect to which such an option has been exercised who does not elect to have HSBC Finance repay such Notes on the applicable original Stated Maturity is unclear and will depend, in part, on the terms established for such Notes by the Company pursuant to the exercise of such option (the “Revised Terms”). Such Holder may be treated for U.S. federal income tax

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purposes as having exchanged such Notes (the “Old Notes”) for new Notes with Revised Terms (the “New Notes”). If the U.S. Holder is treated as having exchanged Old Notes for New Notes, such exchange may be treated as either a taxable exchange or a tax-free recapitalization.

      If the exercise of the option by the Company is not treated as an exchange of Old Notes for New Notes, no gain or loss will be recognized by a U.S. Holder as a result thereof. If the exercise of the option is treated as a taxable exchange of Old Notes for New Notes, a U.S. Holder will recognize gain (and may or may not recognize loss, depending on the relevant Revised Terms) generally equal to the difference between the issue price of the Notes and such Holder’s tax basis in the Old Notes. If the exercise of the option is treated as a tax-free recapitalization, no loss will be recognized by a U.S. Holder as a result thereof and gain, if any, will be recognized to the extent of the fair market value of the excess, if any, of the principal amount of securities received over the principal amount of securities surrendered. In this regard, the meaning of the term “principal amount” is not clear. Such term could be interpreted to mean “issue price” with respect to securities that are received and “adjusted issue price” with respect to securities that are surrendered. Legislation to that effect has been introduced in the past. It is not possible to determine whether such legislation will be enacted in the future and, if enacted, whether it would apply to recapitalizations occurring prior to the date of enactment.

      The presence of such an option may also affect the calculation of OID, among other things. For purposes of such calculation, HSBC Finance will be deemed to exercise or not exercise an option in a manner that minimizes the yield on the Note. If the exercise of such option actually occurs or does not occur, contrary to what is deemed to occur pursuant to the foregoing rules, then, solely for purposes of the accrual of OID, the yield and maturity of the Note are redetermined by treating the Note as reissued on the date of the occurrence or non-occurrence of the exercise for an amount equal to its adjusted issue price on that date.

      The foregoing discussion of Extendible Notes is provided for general information only. Additional tax considerations may arise from the ownership of such Notes in light of the particular features or combination of features of such Notes. U.S. Holders intending to purchase Notes with such features should examine the applicable Pricing Supplement and should consult their own tax advisors.

Indexed Notes

      The U.S. federal income tax treatment of Indexed Notes will depend on whether or not the Note qualifies as a VRDI (as defined above under “Taxation of Interest—Definition of Variable Rate Debt Instrument (VRDI), Qualified Floating Rate and Objective Rate”). The treatment of an Indexed Note that qualifies as a VRDI is described above under “Taxation of Interest” and “Taxation of Original Issue Discount.” An Indexed Note that does not qualify as a VRDI will be treated as a Contingent Note (as defined above) assuming it is properly treated as indebtedness for federal income tax purposes, taxable in the manner described above under “Taxation of Original Issue Discount—Floating Rate Notes that are not VRDIs.” An Indexed Note denominated in U.S. dollars, and having payments of interest or principal determined with reference to a foreign currency, is generally subject to the special rules for Foreign Currency Notes described below under “Foreign Currency Notes.”

Amortizing Notes

      Payments received pursuant to an Amortizing Note may consist of both a principal component and an interest component. The interest component will generally be taxed as described in “Taxation of Interest” above. The principal component will generally constitute a tax-free return of capital that will reduce a U.S. Holder’s adjusted tax basis in the Note.

Market Discount

      If a U.S. Holder acquires a Note having a maturity date of more than one year from the date of its issuance and has a tax basis in the Note that is less than its “stated redemption price at maturity” (or, in the case of a Note with OID, less than its “adjusted issue price”), the amount of the difference will be

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treated as “market discount” for federal income tax purposes, unless such difference is less than ..0025 multiplied by the product of the stated redemption price at maturity and the number of complete years to maturity (from the date of acquisition). Under the market discount rules of the Code, a U.S. Holder will be required to treat any principal payment (or, in the case of a Note having OID, any payment that does not constitute a payment of qualified stated interest) on, or any gain on the sale, exchange, other disposition or other disposition of, a Note as ordinary income to the extent of the accrued market discount that has not previously been included in income. If such Note is disposed of in certain otherwise nontaxable transactions, accrued market discount will be includible as ordinary income to the U.S. Holder as if such Holder had sold the Note at its then fair market value. Market discount generally accrues on a straight-line basis over the remaining term of a Note except that, at the election of the U.S. Holder, market discount may accrue on a constant yield basis. A U.S. Holder may not be allowed to deduct immediately all or a portion of the interest expense on any indebtedness incurred or continued to purchase or to carry such Note. A U.S. Holder may elect to include market discount in income currently, as it accrues (either on a straight-line basis or, if the U.S. Holder so elects, on a constant yield basis), in which case the interest deferral rule set forth in the preceding sentence will not apply. An election to include market discount in income currently will apply to all debt instruments acquired by the U.S. Holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS.

Premium and Acquisition Premium

      A U.S. Holder that purchases a Note having OID for an amount that is greater than its adjusted issue price but less than or equal to the sum of all remaining amounts payable on the Note other than payments of qualified stated interest will be considered to have purchased such Note at an “acquisition premium.” In such a case, the amount of OID otherwise includible in the U.S. Holder’s income during an accrual period is reduced by a fraction. The numerator of this fraction is the excess of the adjusted basis of the Note immediately after its acquisition by the U.S. Holder over the adjusted issue price of the Note. The denominator of this fraction is the excess of the sum of all amounts payable on the Note after the purchase date, other than payments of qualified stated interest, over the Note’s adjusted issue price. As an alternative to reducing the amount of OID otherwise includible in income by this fraction, the U.S. Holder may elect to compute OID accruals by treating the purchase as a purchase at original issuance and applying the constant yield method described above.

      If a U.S. Holder purchases a Note for an amount in excess of the sum of all amounts payable on the Note after the date of acquisition (other than payments of qualified stated interest), such Holder will be considered to have purchased such Note with “amortizable bond premium” equal in amount to such excess, and generally will not be required to include any OID in income. Generally, a U.S. Holder may elect to amortize such premium as an offset to qualified stated interest income, using a constant yield method similar to that described above (see “—Taxation of Original Issue Discount”), over the remaining term of the Note (where such Note is not redeemable prior to its maturity date). In the case of Notes that may be redeemed prior to maturity, the premium is calculated assuming that the issuer or holder will exercise or not exercise its redemption rights in a manner that maximizes the U.S. Holder’s yield. A U.S. Holder who elects to amortize bond premium must reduce such Holder’s tax basis in the Note by the amount of the premium used to offset qualified stated interest income as set forth above. An election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by such Holder and may be revoked only with the consent of the IRS.

Election to Treat all Interest as OID

      A U.S. Holder may elect to include in gross income its entire return on a Note (i.e., in general, the excess of all payments to be received on the Note over the amount paid for the Note by such Holder) in accordance with a constant yield method based on the compounding of interest. Such an election for a Note with amortizable bond premium will result in a deemed election to amortize bond premium for all of the U.S. Holder’s debt instruments with amortizable bond premium and may be revoked only with the

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permission of the IRS with respect to debt instruments acquired after revocation. Similarly, such an election for a Note with market discount will result in a deemed election to accrue market discount in income currently for such Note and for all other debt instruments acquired by the U.S. Holder with market discount on or after the first day of the taxable year to which such election first applies, and may be revoked only with the permission of the IRS.

      The application of the foregoing rules may be different in the case of Contingent Notes. Accordingly, prospective purchasers should consult with their tax advisors with respect to the application of the market discount, acquisition premium and amortizable bond premium rules.

Sale, Exchange or Other Disposition of the Notes

      Upon the sale, exchange or other disposition of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or other disposition (not including any amount attributable to accrued but unpaid qualified stated interest) and such Holder’s adjusted tax basis in the Note. To the extent attributable to accrued but unpaid qualified stated interest, the amount realized by the U.S. Holder will be treated as a payment of interest. See “Taxation of Interest” above. A U.S. Holder’s adjusted tax basis in a Note will equal the cost of the Note to such Holder, increased by the amount of any market discount, discount with respect to a Short-Term Note and OID, in each case to the extent previously included in income by such Holder with respect to such Note, and reduced by any amortized bond premium, acquisition premium and principal payments received by such Holder and, in the case of a Note having OID, by the amounts of any other payments received included in the stated redemption price at maturity, as described above.

      Generally, gain or loss realized on the sale, exchange or other disposition of a Note will be capital gain or loss (except as provided under “Taxation of Original Issue Discount— Floating Rate Notes that are not VRDIs”, “Short-Term Notes” and “Market Discount and Premium” above and “Foreign Currency Notes” below), and will be long-term capital gain or loss if at the time of sale, exchange or other disposition the Note has been held for more than one year. The excess of net long-term capital gains over net short-term capital losses is taxed at a lower rate than ordinary income for certain non-corporate taxpayers. The distinction between capital gain or loss and ordinary income or loss is also relevant for purposes of, among other things, limitations on the deductibility of capital losses.

Foreign Currency Notes

      The following summary relates to Notes that are denominated in, or provide for payments determined by reference to, a currency or currency unit other than the U.S. dollar (“Foreign Currency Notes”).

      A U.S. Holder of a Foreign Currency Note who receives a payment of interest in a foreign currency that is not required to be included in income by such Holder prior to its receipt (e.g., stated interest, or in the case of a Note having OID qualified stated interest, received by a U.S. Holder using the cash method of accounting) will be required to include in income the U.S. dollar value of such foreign currency payment determined on the date such payment is received, regardless of whether the payment is in fact converted to U.S. dollars at that time, and such U.S. dollar value will be the U.S. Holder’s tax basis in the foreign currency.

      In the case of interest income on a Foreign Currency Note that is required to be included in income by a U.S. Holder prior to the receipt of payment (e.g., stated interest on a Foreign Currency Note held by a U.S. Holder using the accrual method of accounting, accrued OID, or accrued market discount includible in income as it accrues), a U.S. Holder will be required to include in income the U.S. dollar value of the interest income (including OID or market discount but reduced by acquisition premium and amortizable bond premium, to the extent applicable) that accrued during the relevant accrual period. OID, market discount, acquisition premium, and amortizable bond premium of a Foreign Currency Note are to be determined in the relevant foreign currency. Unless the U.S. Holder makes the election discussed below, the U.S. dollar value of such accrued income will be determined by translating such income at the average rate of exchange for each business day during the accrual period or, with respect to an accrual

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period that spans two taxable years, at the average rate for each business day during the partial period within the taxable year. Such U.S. Holder will recognize ordinary income or loss with respect to accrued interest income on the date such income is actually received, reflecting fluctuations in currency exchange rates between the time the income accrued and the date of payment. The amount of ordinary income or loss recognized will equal the difference between the U.S. dollar value of the foreign currency payment received (determined on the date such payment is received) and the U.S. dollar value of interest income that has accrued during such accrual period (as determined above). A U.S. Holder may elect to translate interest income (including OID and market discount) into U.S. dollars at the spot rate on the last day of the interest accrual period (or, in the case of a partial accrual period, the spot rate on the last date of the taxable year) or, if the date of receipt is within five business days of the last day of the interest accrual period, the spot rate on the date of receipt. Such U.S. Holder will recognize ordinary income or loss with respect to accrued interest income on the date such income is actually received, equal to the difference (if any) between the U.S. dollar value of the foreign currency payment received (determined on the date such payment is received) and the U.S. dollar value of interest income translated at the relevant spot rate described in the preceding sentence. Any such election will apply to all debt instruments held by the U.S. Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the U.S. Holder, and will be irrevocable without the consent of the IRS.

      The amount of accrued market discount (other than market discount currently includible in income) taken into account upon receipt of any partial principal payment or upon the sale, exchange, other disposition or other disposition of a Foreign Currency Note will be the U.S. dollar value of such accrued market discount determined on the date of receipt of such partial principal payment or on the date of such sale, exchange, other disposition or other disposition.

      Any gain or loss realized on the sale, exchange or other disposition of a Foreign Currency Note with amortizable bond premium by a U.S. Holder who has not elected to amortize such premium (under the rules described above) will be ordinary income or loss to the extent attributable to fluctuations in currency exchange rates determined as described in the second succeeding paragraph. Exchange gain or loss will be realized on any amortized bond premium with respect to any period by treating the bond premium amortized in such period as a return of principal as described in the second succeeding paragraph. Similar rules apply in the case of acquisition premium.

      A U.S. Holder’s tax basis in a Foreign Currency Note, and the amount of any subsequent adjustment to such Holder’s tax basis, will be the U.S. dollar value of the foreign currency amount paid for such Foreign Currency Note, or the U.S. dollar value of the foreign currency amount of the adjustment, determined on the date of such purchase or adjustment. In the case of an adjustment resulting from an accrual of OID or market discount, such adjustment will be made at the rate at which such OID or market discount is translated into U.S. dollars under the rules described above. A U.S. Holder that converts U.S. dollars to a foreign currency and immediately uses that currency to purchase a Foreign Currency Note denominated in the same currency normally will not recognize gain or loss in connection with such conversion and purchase. A U.S. Holder who purchases a Foreign Currency Note with previously owned foreign currency will recognize ordinary income or loss in an amount equal to the difference, if any, between such U.S. Holder’s tax basis in the foreign currency and the U.S. dollar value of the Foreign Currency Note on the date of purchase.

      Gain or loss realized upon the sale, exchange or other disposition of, or the receipt of principal on, a Foreign Currency Note, to the extent attributable to fluctuations in currency exchange rates, will be ordinary income or loss. Gain or loss attributable to fluctuations in exchange rates will equal the difference between (i) the U.S. dollar value of the foreign currency purchase price for such Note, determined on the date such Note is disposed of, and (ii) the U.S. dollar value of the foreign currency purchase price for such Note, determined on the date such U.S. Holder acquired such Note. Any portion of the proceeds of such sale, exchange or other disposition attributable to accrued interest income may result in exchange gain or loss under the rules set forth above. Such foreign currency gain or loss will be recognized only to the extent of the overall gain or loss realized by a U.S. Holder on the sale, exchange or other disposition of the Foreign Currency Note. In general, the source of such foreign currency gain or loss will be

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determined by reference to the residence of the U.S. Holder or the “qualified business unit” of such Holder on whose books the Note is properly reflected. Any gain or loss realized by a U.S. Holder in excess of such foreign currency gain or loss will be capital gain or loss (except to the extent of any accrued market discount not previously included in such Holder’s income or, in the case of a Short-Term Note, to the extent of any OID not previously included in such Holder’s income).

      A U.S. Holder will have a tax basis in any foreign currency received on the sale, exchange or other disposition of a Foreign Currency Note equal to the U.S. dollar value of such foreign currency, determined at the time of such sale, exchange or other disposition. Regulations provide a special rule for purchases and sales of publicly traded debt instruments by a cash method taxpayer under which units of foreign currency paid or received are translated into U.S. dollars at the spot rate on the settlement date of the purchase or sale. Accordingly, no exchange gain or loss will result from currency fluctuations between the trade date and the settlement of such a purchase or sale. An accrual method taxpayer may elect the same treatment required of cash method taxpayers with respect to the purchases and sale of publicly traded debt instruments provided the election is applied consistently. Such election cannot be changed without the consent of the IRS. U.S. Holders should consult their tax advisors concerning the applicability of the special rules summarized in this paragraph to Foreign Currency Notes.

      A Foreign Currency Note that is denominated either in a so-called hyperinflationary currency or in more than one currency (e.g., a Foreign Currency Note providing for payments determined by reference to the exchange rate of one or more specified currencies relative to an indexed currency), or that is treated as a Contingent Note under the rules described above may be subject to rules that differ from the general rules discussed above. U.S. Holders intending to purchase Foreign Currency Notes with such features should carefully examine the applicable Pricing Supplement and should consult with their own tax advisors with respect to the purchase, ownership and disposition of such Foreign Currency Notes.

Tax Consequences to Non-U.S. Holders

      Under present U.S. federal income tax law, and subject to the discussion of backup withholding below, payments of principal, interest (including OID, if any) and premium on the Notes by HSBC Finance or any paying agent to a Non-U.S. Holder will not be subject to withholding of U.S. federal income tax, provided that, in the case of interest:

•  such Holder does not own, actually or constructively, 10 percent or more of the total combined voting power of all classes of stock of HSBC Finance entitled to vote;

•  such Holder is not, for U.S. federal income tax purposes, a controlled foreign corporation related, directly or indirectly, to HSBC Finance through stock ownership;

•  such Holder is not a bank receiving interest described in Section 881(c)(3)(A) of the Code;

•  such interest is not contingent interest as described in Section 871(h)(4) of the Code (relating primarily to interest based on or determined by reference to income, profits, cash flow and other comparable attributes of HSBC Finance, or a party related to HSBC Finance); and

•  the certification requirements under Section 871(h) or Section 881(c) of the Code and Treasury Regulations thereunder (summarized below) are met.

      The certification requirements set forth in Section 871(h) or 881(c) of the Code are satisfied if either (1) the beneficial owner of the Note certifies, under penalties of perjury, to the last U.S. payor (or non-U.S. payor who is an authorized foreign agent of the U.S. payor, a “qualified intermediary,” a U.S. branch of a foreign bank or foreign insurance company, a “withholding foreign partnership” or a “withholding foreign trust”) in the chain of payment (the “Withholding Agent”) that such owner is a Non-U.S. Holder and provides such owner’s name and address, or (2) a securities clearing organization, a bank or another financial institution that holds customers’ securities in the ordinary course of its trade or business (a “financial institution”) that holds the Note certifies to the Withholding Agent, under penalties of perjury, that the certificate has been received from the beneficial owner by it or by a financial institution

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between it and the beneficial owner and furnishes the Withholding Agent with a copy thereof. Generally, this statement is made on IRS Form W-8BEN, or substantially similar form, which is effective for the remainder of the year of signature plus three full calendar years unless a change in circumstances makes any information on the form incorrect. Notwithstanding the preceding sentence, an IRS Form W-8BEN with a U.S. taxpayer identification number will remain effective until a change in circumstances makes any information on the form incorrect, provided that the Withholding Agent reports at least one payment annually to the beneficial owner on IRS Form 1042-S. The beneficial owner must inform the Withholding Agent (or financial institution) within 30 days of such change by furnishing a new IRS Form W-8BEN (and the financial institution must promptly so inform the Withholding Agent). A Non-U.S. Holder that is not an individual or corporation (or an entity treated as a corporation for U.S. federal income tax purposes) holding Notes on its own behalf may have substantially increased reporting requirements. In particular, in the case of Notes held by a foreign partnership (or foreign trust), the partners (or grantors or beneficiaries), rather than the partnership (or trust), are required to provide the certification discussed above, and the partnership (or trust) is required to provide certain additional information. If a Note is held through a non-U.S. securities clearing organization or a non-U.S. financial institution (other than a U.S. branch or office of such organization or institution) or a non-U.S. branch or office of a U.S. financial institution or U.S. clearing organization, the organization or institution must provide a signed statement on an IRS Form W-8IMY to the Withholding Agent. However, in such case, unless the organization or institution is a qualified intermediary, a withholding foreign partnership or withholding foreign trust, the signed statement must be accompanied by a copy of the IRS Form W-8BEN or the substantially similar form provided by the beneficial owner to the organization or institution and such other information that is required by the IRS Form W-8IMY and Treasury Regulations, and such information must be updated as required. If the institution or organization is a qualified intermediary, withholding foreign partnership or withholding foreign trust that has entered into a qualified intermediary or similar agreement with the IRS, it must provide the Withholding Agent or other intermediary such additional information as is required by the agreement, IRS Form W-8IMY and Treasury Regulations.

      Even if a Non-U.S. Holder does not meet the above requirements, if the Non-U.S. Holder is entitled to the benefits of an income tax treaty to which the United States is a party, and the Non-U.S. Holder provides a properly completed IRS Form W-8BEN, such Non-U.S. Holder may obtain an exemption from or reduction of the withholding of tax (depending on the terms of the treaty).

      If a Non-U.S. Holder is engaged in a trade or business in the United States, and if interest (including OID or market discount) on the Note, or gain realized on the sale, exchange or other disposition of a Note, is effectively connected with the conduct of such trade or business, the Non-U.S. Holder, although exempt from withholding, will generally be subject to regular U.S. income tax on such interest (including any OID or market discount) or gain in the same manner as if it were a U.S. Holder. See “Tax Consequences to U.S. Holders” above. In lieu of the certification described above, such a holder will be required to provide to the Withholding Agent a properly executed IRS Form W-8ECI in order to claim an exemption from withholding. In addition, if such Non-U.S. Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments. For purposes of the branch profits tax, interest (including OID or market discount) on, and any gain recognized on the sale, exchange or other disposition of, a Note will be included in the earnings and profits of such Non-U.S. Holder if such interest is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States.

      Generally, a Non-U.S. Holder will not be subject to U.S. federal income tax with respect to gain realized on the sale, exchange or other disposition of a Note unless:

•  the gain is effectively connected with the U.S. Holder’s conduct of a trade or business within the United States, or

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•  in the case of a Non-U.S. Holder who is an individual, the Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met.

Notwithstanding these two bullet points, a Non-U.S. Holder will not be subject to U.S. federal income tax to the extent that a treaty reduction or exemption applies and the appropriate documentation is provided.

Backup Withholding and Information Reporting

      U.S. Holders. When required, HSBC Finance will report to the IRS amounts paid on or with respect to the Notes and the amount of any tax withheld from such payments.

      A non-corporate U.S. holder may be subject to backup withholding on payments made on or with respect to the Notes and on payment of the proceeds from the disposition of a Note. In general, backup withholding will apply to a U.S. holder if:

•  the U.S. Holder fails to furnish his or her taxpayer identification number (“TIN”) (which, for an individual, would be his or her Social Security number) to the payor in the manner required,

•  the U.S. Holder furnishes an incorrect TIN and the payor is so notified by the IRS,

•  the payor is notified by the IRS that the Non-U.S. Holder has failed properly to report payments of interest and dividends, or

•  under certain circumstances, the U.S. Holder fails to certify, under penalties of perjury, that the U.S. Holder has furnished a correct TIN and has not been notified by the IRS that the U.S. Holder is subject to backup withholding for failure to report interest and dividend payments.

      Backup withholding does not apply with respect to payments made to certain exempt recipients such as corporations and tax-exempt organizations.

      Non-U.S. Holders. A Non-U.S. holder will not be subject to backup withholding provided that the Non-U.S. Holder has provided an IRS Form W-8BEN (or other permitted certification), together with all appropriate attachments, signed under penalties of perjury, identifying itself and certifying that it is not a U.S. person. Certain information reporting requirements may still apply even if an exemption from backup withholding is established.

      The payment of the proceeds from the disposition of the Notes to or through the U.S. office of any broker, U.S. or foreign, will be subject to information reporting and possible backup withholding unless the Non-U.S. Holder certifies as to its non-U.S. status under penalties of perjury or otherwise establishes an exemption. The payment of the proceeds from the disposition of the Notes to or through a non-U.S. office of a non-U.S. broker will not be subject to information reporting or backup withholding unless the non-U.S. broker is:

•  a U.S. person;

•  a controlled foreign corporation;

•  a U.S. branch of a foreign bank or foreign insurance company;

•  a foreign partnership controlled by U.S. persons or engaged in U.S. trade or business; or

•  a foreign person 50 percent or more of whose gross income is effectively connected with the conduct of a U.S. trade or business for a specified three-year period.

      In the case of the payment of the proceeds from the disposition of the Notes to or through a non-U.S. office of a broker that is described above, information reporting (but not backup withholding) is required with respect to the payment unless the broker has documentary evidence in its files that confirming the status of the Non-U.S. Holder or the Non-U.S. Holder otherwise establishes an exemption.

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      Non-U.S. Holders should consult their tax advisors regarding the application of information reporting and backup withholding in their particular situations, the availability of an exemption therefrom, and the procedure for obtaining the exemption, if available. Any amounts withheld from payment to a Non-U.S. Holder under the backup withholding rules will be allowed as a credit against the Non-U.S. Holder’s federal income tax liability and may entitle the Non-U.S. Holder to a refund, provided that the required information is furnished to the IRS.

      THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

OFFERING OF MEDIUM TERM NOTES AND WARRANTS

Initial Offering and Sale

      We may sell the Notes and Note Warrants, if any, from time to time in their initial offering through HSBC Securities (USA) Inc. (the “Agents”), which has agreed to use its reasonable efforts to solicit purchases of the Notes and Note Warrants, and we may also sell the Notes and Note Warrants, if any, to the Agents as principal for resale to investors and other purchasers at varying prices related to prevailing market prices at the time of resale to be determined by the Agents or, if so agreed, at a fixed public offering price. HSBC Securities (USA) Inc. is an affiliate of HSBC Finance, as described below. We may also sell the Notes and Note Warrants, if any, from time to time directly on our own behalf or through an affiliated entity. We may designate additional parties to be “Agents” for purposes of offering or soliciting sales of the Notes and Note Warrants on the same terms and conditions as the Agents have agreed to. The names of any other agents so appointed will be set forth in the applicable Pricing Supplement. We reserve the right to withdraw, cancel or modify the offer made hereby without notice and will have the sole right to accept offers to purchase Notes and Note Warrants. We or the Agents may reject any proposed purchase of Notes and Note Warrants in whole or in part. We will pay each of the Agents a commission, in the form of a discount not to exceed ..750%, depending upon maturity, of the principal amount of Notes sold through such Agents, and may also sell Notes to any Agents, as principal, at a discount to be agreed upon at the time of sale. The commission with respect to a Note with a stated maturity in excess of 30 years from the date of issue will be agreed to by us and the Agents through which such Note is sold at the time of such sale.

      The Agents may offer the Notes and Note Warrants, if any, they have purchased as principal to other dealers. The Agents may sell Notes to any dealer at a discount and, unless otherwise specified in the applicable Pricing Supplement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agents from us. Unless otherwise indicated in the applicable Pricing Supplement, any Note sold to the Agents as principal will be purchased by such Agents at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a Note of identical maturity, and may be resold by the Agents to investors and other purchasers from time to time as described above. After the initial public offering of Notes to be resold to investors and other purchasers, the public offering price (in the case of Notes to be resold at a fixed public offering price) and any dealer discount may be changed.

      Unless otherwise specified in the applicable Pricing Supplement, payment of the purchase price for the Notes will be required to be made in immediately available funds on the date of settlement.

      Offers to purchase Notes directly from us may be made by contacting the Money and Capital Markets Group of HSBC Finance at 2700 Sanders Road, Prospect Heights, Illinois 60070 (Phone: 847-564-6330).

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      We have agreed to indemnify the Agents against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the Agents may be required to make in respect thereof.

      HSBC Finance and HSBC Securities (USA) Inc. are wholly owned indirect subsidiaries of HSBC Holdings. HSBC Securities (USA) Inc., a broker-dealer subsidiary of HSBC Holdings, is a member of the National Association of Securities Dealers, Inc. (“NASD”) and may participate in offerings of the Notes and Note Warrants. Accordingly, offerings of the Notes and Note Warrants in which HSBC Securities (USA) Inc. participates will conform to the requirements of Rule 2720 of the Conduct Rules of the NASD, and any Agents offering the Notes and Note Warrants in such offerings will not confirm sales to any accounts over which they exercise discretionary authority without the prior approval of the customer. The maximum underwriting discounts and commissions to be received by any NASD member or independent broker/ dealer in connection with any distribution of the notes will not exceed 8% of the principal amount of such note.

      The Notes are a new issue of securities with no established trading market and will not be listed on any securities exchange. No assurance can be given as to the existence or liquidity of a secondary market for the Notes.

      The Agents and certain affiliates thereof engage in transactions with and perform services for us in the ordinary course of business.

Market-Making Resales by Affiliates

      This prospectus together with the applicable Pricing Supplement and your confirmation of sale may also be used by HSBC Securities (USA) Inc. in connection with offers and sales of the Notes and Note Warrants, if any, in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. In a market-making transaction, HSBC Securities (USA) Inc. may resell a security it acquires from other holders after the original offering and sale of the security. Resales of this kind may occur in the open market or may be privately negotiated, at prevailing market prices at the time of resale or at related or negotiated prices. In these transactions, HSBC Securities (USA) Inc. may act as principal or agent, including as agent for the counterparty in a transaction in which HSBC Securities (USA) Inc. acts as principal, or as agent for both counterparties in a transaction in which HSBC Securities (USA) Inc. does not act as principal. HSBC Securities (USA) Inc. may receive compensation in the form of discounts and commissions, including from both counterparties in some cases. Other affiliates of HSBC Finance may also engage in transactions of this kind and may use this prospectus for this purpose. Neither HSBC Securities (USA) Inc. nor any other affiliate of HSBC Finance has an obligation to make a market in any of the Notes or Note Warrants and may discontinue any market-making activities at any time without notice, in its sole discretion.

      The initial aggregate offering price specified on the cover of this prospectus relates to notes we have not yet issued. This amount does not include the medium term notes or warrants to purchase medium term notes to be sold in market-making transactions. The latter include medium term notes and warrants to purchase medium term notes to be issued after the date of this prospectus, as well as medium term notes and warrants to purchase medium term notes, if any, previously issued.

      HSBC Finance does not expect to receive any proceeds from market-making transactions. HSBC Finance does not expect that HSBC Securities (USA) Inc. or any other affiliate that engages in these transactions will pay any proceeds from its market-making resales to HSBC Finance.

      Information about the trade and settlement dates, as well as the purchase price, for a market-making transaction will be provided to the purchaser in a separate confirmation of sale.

      Unless HSBC Finance or an agent informs you in your confirmation of sale that your security is being purchased in its original offering and sale, you may assume that you are purchasing your security in a market-making transaction.

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ERISA MATTERS

      The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), imposes certain restrictions on employee benefit plans (“Plans”) that are subject to ERISA and on persons who are fiduciaries with respect to such Plans. In accordance with the ERISA’s general fiduciary requirements, a fiduciary with respect to any such Plan who is considering the purchase of Notes on behalf of such Plan should determine whether such purchase is permitted under the governing Plan documents and is prudent and appropriate for the Plan in view of its overall investment policy and the composition and diversification of its portfolio. Other provisions of ERISA and Section 4975 of the Code prohibit certain transactions between a Plan and persons who have certain specified relationships to the Plan (“parties in interest” within the meaning of ERISA or “disqualified persons” within the meaning of Section 4975 of the Code). Thus, a Plan fiduciary considering the purchase of Notes should consider whether such a purchase might constitute or result in a prohibited transaction under ERISA or Section 4975 of the Code.

      HSBC Finance may be considered a “party in interest” or a “disqualified person” with respect to many Plans that are subject to ERISA. The purchase of Notes by a Plan that is subject to the fiduciary responsibility provisions of ERISA or the prohibited transaction provisions of Section 4975 of the Code (including individual retirement accounts and other plans described in Section 4975(e)(1) of the Code) and with respect to which HSBC Finance is a party in interest or a disqualified person may constitute or result in a prohibited transaction under ERISA or Section 4975 of the Code, unless such Notes are “marketable obligations” (as defined in Section 407(e) of ERISA) or are acquired pursuant to and in accordance with an applicable exemption, such as Prohibited Transaction Class Exemption (“PTCE”) 84-14 (an exemption for certain transactions determined by an independent qualified professional asset manager), PTCE 91-38 (an exemption for certain transactions involving bank collective investment funds), PTCE 90-1 (an exemption for certain transactions involving insurance company pooled separate accounts) or PTCE 95-60 (an exemption for certain transactions involving insurance company general accounts). Any pension or other employee benefit plan proposing to acquire any Notes should consult with its counsel.

WHERE YOU CAN FIND MORE INFORMATION

      HSBC Finance files annual, quarterly and special reports and other information with the SEC. You may read and copy any document filed by HSBC Finance at the SEC’s public reference room in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. SEC filings are also available to the public on the SEC’s website at http://www.sec.gov.

      The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file with the SEC later will automatically update and supersede this information. We incorporate by reference the HSBC Finance documents listed below (originally filed under the name of Household International, Inc.) and any future filings made by HSBC Finance with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all of the securities:

•  Annual Report on Form 10-K for the year ended December 31, 2003;

•  Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2004; and

•  Current Reports on Form 8-K dated March 1, May 17, August 2, November 15 and December 15, 2004.

      You may request a copy of these filings, at no cost, by writing, emailing or telephoning us at: HSBC Finance Corporation, Office of the Secretary, 2700 Sanders Road, Prospect Heights, Illinois 60070, email: darcie.j.oakes@us.hsbc.com, Telephone: (847) 564-5000. These filings are also available on our website at www.household.com.

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      You should rely only on the information incorporated by reference or provided in this prospectus or any Pricing Supplement. We have not authorized anyone else to provide you with different or additional information. You should not assume that the information in this prospectus or any Pricing Supplement is accurate as of any date other than the date on the front of those documents.

LEGAL OPINIONS

      The legality of the Notes and Note Warrants will be passed upon for HSBC Finance by Patrick D. Schwartz, Vice President and Deputy General Counsel—Corporate for HSBC Finance. Sidley Austin Brown & Wood LLP, Chicago, Illinois has acted as special tax counsel to HSBC Finance in connection with tax matters related to the issuance of the Notes. Certain legal matters will be passed upon for the Agents by McDermott Will & Emery LLP, Chicago, Illinois. Mr. Schwartz is a full-time employee and an officer of HSBC Finance and owns, and holds options to purchase, equity securities of HSBC Holdings.

EXPERTS

      The consolidated financial statements of HSBC Finance as of December 31, 2003 and 2002 and for the periods January 1 through March 28, 2003 and March 29 through December 31, 2003 and for each of the years in the two year period ended December 31, 2002, which are included in our Annual Report on Form 10-K, have been incorporated by reference in this prospectus and in the registration statement in reliance upon the report of KPMG LLP, an independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report states that as a result of the acquisition of HSBC Finance by HSBC Holdings plc on March 28, 2003, the consolidated financial information for the period after the acquisition is presented on a different cost basis than that for the periods before the acquisition and, therefore, is not comparable.

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     No dealer, salesman or other person has been authorized to give any information or to make any representation not contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by us or any underwriter or agent. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. The delivery of this prospectus at any time does not imply that the information herein or therein is correct as of any time subsequent to their respective dates.

TABLE OF CONTENTS

Prospectus

	Page
About This Prospectus		2
Special Note Regarding Forward-Looking Statements		2
HSBC Finance		2
Manner of Offering		3
Use of Proceeds		4
Ratio of Earnings to Fixed Charges		4
Important Currency Information		4
Description of Medium Term Notes		5
Foreign Currency Notes		21
Description of Note Warrants		22
Certain United States Federal Income Tax Considerations		23
Offering of Medium Term Notes and Warrants		37
ERISA Matters		39
Where You Can Find More Information		39
Legal Opinions		40
Experts		40

$10,000,000,000

HSBC

Finance

Corporation

Medium Term Notes

PROSPECTUS

HSBC

[       l       ], 2004

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

Estimated Expenses:
	Printing & Engraving Fees		$	100,000
	Fees of Trustee			90,000
	Accountants’ Fees and Expenses			150,000
	Blue Sky Qualification Fees and Expenses			5,000
	NASD Filing Fee			30,500
	SEC Filing Fee			1,267,000	*
	Rating Agency Fees			1,000,000
	Legal Fees and Expenses			25,000
	Miscellaneous			32,500
		Total	$	2,700,000

* Actual

Item 15. Indemnification of Directors and Officers.

      The General Corporation Law of Delaware (Section 145) gives Delaware corporations broad powers to indemnify their present and former directors and officers and those of affiliated corporations against expenses incurred in the defense of any lawsuit to which they are made parties by reason of being or having been such directors or officers, subject to specified conditions and exclusions; gives a director or officer who successfully defends an action the right to be so indemnified; and authorizes HSBC Finance to buy directors’ and officers’ liability insurance. Such indemnification is not exclusive of any other right to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or otherwise.

      Article VIII of the Restated Certificate of Incorporation of HSBC Finance provides for indemnification to the fullest extent permitted by Section 145 of the General Corporation Law of Delaware for all persons that it may indemnify thereto. HSBC Finance has purchased liability policies which indemnify HSBC Finance’s officers and directors against loss arising from claims by reason of their legal liability for acts as officers and directors, subject to limitations and conditions as set forth in the policies.

      Pursuant to agreements which HSBC Finance may enter into with underwriters or agents (the form of which is included as an exhibit to this Registration Statement), officers and directors of HSBC Finance may be entitled to indemnification by such underwriters or agents against certain liabilities, including liabilities under the Securities Act of 1933, as amended, arising from information appearing in the Registration Statement or any Prospectus which has been furnished to HSBC Finance by such underwriters or agents.

Item 16. Exhibits.

1	Form of Distribution Agreement.
4.1	Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated as of December 15, 2004 amending and restating the Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated June 1, 1992.

II-1

4.2	Amended and Restated Indenture for Senior Debt Securities dated as of December 15, 2004 between HSBC Finance Corporation (successor to Household Finance Corporation) and JPMorgan Chase Bank, N.A., as Trustee, amending and restating the Indenture for Senior Debt Securities dated as of December 1, 1993 between Household Finance Corporation and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank (National Association)), as Trustee.
4.3	Forms of Warrant Agreement.
5	Opinion and Consent of Mr. Patrick D. Schwartz, Vice President, Deputy General Counsel— Corporate and Assistant Secretary of HSBC Finance Corporation.
8	Opinion and Consent of Sidley Austin Brown & Wood LLP, re: tax matters.
12	Statement on the Computation of Ratio of Earnings to Fixed Charges (Incorporated by reference from Exhibit 12 to HSBC Finance Corporation’s Annual Report on Form 10-K for the year ended December 31, 2003 and Exhibit 12 to HSBC Finance Corporation’s Quarterly Report on Form 10-Q for the period ended September 30, 2004).
23.1	Consent of KPMG LLP, Independent Registered Public Accounting Firm.
23.2	Consent of Mr. Patrick D. Schwartz, Vice President, Deputy General Counsel— Corporate and Assistant Secretary of HSBC Finance Corporation, is contained in his opinion (Exhibit 5).
23.3	Consent of Sidley Austin Brown & Wood LLP is contained in their opinion (Exhibit 8).
24	Power of Attorney (included on page II-4).
25	Statement of eligibility of JPMorgan Chase Bank, N.A.

Item 17. Undertakings.

      The undersigned Registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this Registration Statement:

      (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

      (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement;

      (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement.

      (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-2

      (4) That for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (5) That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this Registration Statement as of the time it was declared effective.

      (6) That for purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions set forth or described in Item 15 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person, in connection with the securities registered hereby, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Prospect Heights, and State of Illinois, on the 16th day of December, 2004.

HSBC FINANCE CORPORATION

By  /s/ BEVERLEY A. SIBBLIES

Beverley A. Sibblies

Senior Vice President — Chief Accounting Officer

      Each person whose signature appears below constitutes and appoints P. D. Schwartz, L. S. Mattenson, M. J. Forde and K.P. Buschardt-Pisarczyk and each or any of them (with full power to act alone), as his/her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him/her in his/her name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission, any and all amendments (including post-effective amendments) to the Registration Statement, granting unto each such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that such attorney-in-fact and agent or their substitutes may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-3 has been signed below by the following persons in the capacities indicated on the 16th day of December, 2004.

Signature	Title
* (W. F. Aldinger)	Chairman, Chief Executive Officer and Director
* (S. C. Penney)	Senior Executive Vice President and Chief Financial Officer
/s/ BEVERLEY A. SIBBLIES (B. A. Sibblies)	Senior Vice President — Chief Accounting Officer
* (W. R. P. Dalton)	Director
* (R. J. Darnall)	Director
* (G. G. Dillon)	Director
* (A. Disney)	Director
* (J. A. Edwardson)	Director

II-4

Signature		Title
* (J. D. Fishburn)		Director
* (C. F. Freidheim, Jr.)		Director
* (R. K. Herdman)		Director
* (A. W. Jebson)		Director
* (L. E. Levy)		Director
* (G. A. Lorch)		Director
* (J. D. Nichols)		Director
* (L. M. Renda)		Director
* (S. J. Stewart)		Director
*By:	/s/ PATRICK D. SCHWARTZ Patrick D. Schwartz Attorney-in-fact

      The Registrant reasonably believes that the security rating to be assigned to the Securities registered hereunder will make the Securities “investment grade securities” pursuant to Transaction Requirement B-2 of Form S-3.

II-5

EXHIBIT INDEX

Exhibit
Number		Document Description
	1	Form of Distribution Agreement.
	4.1	Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated as of December 15, 2004 amending and restating the Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated June 1, 1992.
	4.2	Amended and Restated Indenture for Senior Debt Securities dated as of December 15, 2004 between HSBC Finance Corporation (successor to Household Finance Corporation) and JPMorgan Chase Bank, N.A., as Trustee, amending and restating the Indenture for Senior Debt Securities dated as of December 1, 1993 between Household Finance Corporation and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank (National Association)), as Trustee.
	4.3	Forms of Warrant Agreement.
	5	Opinion and Consent of Mr. Patrick D. Schwartz, Vice President, Deputy General Counsel— Corporate and Assistant Secretary of HSBC Finance Corporation.
	8	Opinion and Consent of Sidley Austin Brown & Wood LLP, re: tax matters.
	12	Statement on the Computation of Ratio of Earnings to Fixed Charges (Incorporated by reference from Exhibit 12 to HSBC Finance Corporation’s Annual Report on Form 10-K for the year ended December 31, 2003 and Exhibit 12 to HSBC Finance Corporation’s Quarterly Report on Form 10-Q for the period ended September 30, 2004).
	23.1	Consent of KPMG LLP, Independent Registered Public Accounting Firm.
	23.2	Consent of Mr. Patrick D. Schwartz, Vice President, Deputy General Counsel— Corporate and Assistant Secretary of HSBC Finance Corporation, is contained in his opinion (Exhibit 5).
	23.3	Consent of Sidley Austin Brown & Wood LLP is contained in their opinion (Exhibit 8).
	24	Power of Attorney (included on page II-4).
	25	Statement of eligibility of JPMorgan Chase Bank, N.A.

EX-1

Exhibit 1

HSBC FINANCE CORPORATION

Medium Term Notes
Due Nine Months or More
from the Date Issued

DISTRIBUTION AGREEMENT

                   , 200_

[Name of Agents]
[Address]

Dear Sirs:

     HSBC Finance Corporation, a Delaware corporation (the “Company”), confirms its agreement with each of you (each an “Agent” and collectively the “Agents”) with respect to the issue and sale by the Company of its Medium Term Notes (the “Notes”) and, if applicable, warrants to purchase Notes (the “Warrants”) having an aggregate initial offering price of up to $10,000,000,000 (or the equivalent thereof if any of the Notes are denominated in one or more foreign currencies or foreign composite currency units). The Notes will constitute a part of a series of senior debt securities, unlimited as to aggregate principal amount, to be issued under the Amended and Restated Indenture dated as of December 15, 2004 (the “Indenture”) between the Company and JPMorgan Chase Bank, N.A. (the “Trustee”), which incorporates therein the terms and conditions of the Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated as of December 15, 2004. The terms and rights of any particular issuance of Warrants shall be as specified in the applicable warrant agreement (the “Warrant Agreement”).

     Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes and Warrants, directly or through an affiliated entity, on its own behalf at any time and to any person, the Company hereby (i) appoints each of you as an agent of the Company for the purpose of soliciting purchases of the Notes and Warrants from the Company by others and (ii) agrees that whenever the Company determines to sell Notes and Warrants directly to any Agent as principal for resale to others, it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section 2(b) hereof.

     1. The Company represents and warrants to, and agrees with, each Agent as of the Closing Time, as of each Settlement Date hereinafter referred to, and as of the times referred to in Sections 6(a) and 6(b) hereof (in each case the “Representation Date”), as follows:

     (a) A registration statement on Form S-3, as amended by Amendment No. 1 thereto (Registration No. 333-120495) in respect of the Notes and Warrants has been filed with the Securities and Exchange Commission (the “Commission”) in the form heretofore delivered to you and such registration statement in such form has been declared effective by the Commission and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (such registration statement, including all exhibits thereto but excluding Form T-1, as amended at the time such registration statement or any part thereof became effective, being hereinafter called the “Registration Statement”; the prospectus relating to the Notes and Warrants constituting a part of such registration statement, including any documents incorporated by reference therein as of such filing, being hereinafter called the “Prospectus”; any reference herein to the Prospectus shall be deemed to include the documents incorporated by reference therein pursuant to the applicable form under the Securities Act of 1933, as amended (the “Act”), as of the date of the Prospectus; any reference to any amendment or supplement to the Prospectus shall be deemed to refer to and include any documents filed after the date of the Prospectus under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and so incorporated by reference; any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus relating to the Notes and Warrants as each time amended or supplemented in the form in which it is filed with the Commission pursuant to Rule 424 of Regulation C under the Act, including documents incorporated by reference therein as aforesaid as of the date of such filing);

     (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus and any amendments or supplements thereto, when they become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Agent expressly for use in the Prospectus as amended or supplemented to relate to a particular issuance of Notes and Warrants;

     (c) The Registration Statement and the Prospectus conform, and any amendments or supplements thereto will conform, when they become effective or are filed with the Commission, as the case may be, and as of each subsequent Representation Date will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission thereunder and do not and will not as of its effective date as to the Registration Statement and as of its filing date and as of each Representation Date as to the Prospectus contain an untrue statement of a

2

material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Agent expressly for use in the Prospectus as amended or supplemented to relate to a particular issuance of Notes and Warrants;

     (d) The financial statements included or incorporated by reference in the Registration Statement present fairly the financial position of the Company and subsidiaries as of the dates indicated and the results of their respective operations for the periods specified; and said financial statements have been prepared in conformity with generally accepted accounting principles applied on a basis which is consistent in all material respects during the periods involved;

     (e) The Company and its significant subsidiaries, as defined in Rule 1-02 of Regulation S-X of the Commission (“significant subsidiaries”), are validly organized and existing corporations under the laws of their respective jurisdictions of incorporation; and the Company and its significant subsidiaries are duly authorized under statutes which regulate the business of insurance or banking or the business of making loans or of financing the sale of goods (commonly called “small loan laws,” or “sales finance laws”), or are permitted under the general interest statutes and related laws and court decisions to conduct in the various jurisdictions in which they do business the respective businesses therein conducted by them as described in the Prospectus except where failure to be so authorized or permitted will not have a material adverse effect on the business or consolidated financial condition of the Company and its subsidiaries taken as a whole;

     (f) There are no legal or governmental proceedings pending, other than those referred to in the Prospectus, to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, other than proceedings which are not reasonably expected, individually or in the aggregate, to have a material adverse effect on the consolidated financial position, shareholders’ equity or results of operations of the Company and its subsidiaries taken as a whole; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

     (g) The Notes have been duly authorized, and, when issued and delivered pursuant to this Agreement and any Terms Agreement and the Indenture, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the applicable Indenture; when any Warrants have been duly authorized, executed, countersigned, issued and delivered pursuant to this Agreement, the Warrant Agreement and any Terms Agreement against payment of the consideration therefor, such Warrants will have been duly authorized, executed, countersigned, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Warrant Agreement which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the

3

Company and the Trustee and constitutes, and the Warrant Agreement when duly authorized, executed and delivered by the Company will constitute, a valid and legally binding instrument enforceable in accordance with its terms except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general principles of equity; and the Indenture conforms to the description thereof in the Prospectus as originally filed with the Commission, and the Notes, the Warrants and the Warrant Agreement relating to any particular issuance of Notes and Warrants will conform to the description thereof in the Prospectus as amended or supplemented;

     (h) The issue and sale of the Notes and Warrants and the compliance by the Company with all of the provisions of the Notes and Warrants, the Indenture, the Warrant Agreement, this Agreement and any Terms Agreement will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for conflicts, breaches and defaults which would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries taken as a whole or materially adverse to the transactions contemplated by this Agreement), nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation, as amended, or the By-Laws of the Company or any of its subsidiaries or any statute or order, rule or regulation applicable to it, of any court or any Federal, State or other regulatory authority or any other governmental body having jurisdiction over it; and no consent, approval, authorization, order, registration or qualification of or with any court or other such regulatory authority or other governmental body is required for the issue and sale of the Notes and Warrants or the consummation of the other transactions contemplated in this Agreement or any Terms Agreement except the registration under the Act of the Notes and Warrants referred to in Section 1(a) hereof, the qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under State securities or Blue Sky laws in connection with the purchase and distribution of the Notes and Warrants by the Agents;

     (i) The Company and its subsidiaries taken as a whole have not sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as it may be amended or supplemented there has not been any material change in the capital stock or long-term debt of the Company (except for changes resulting from the purchase by the Company of its outstanding securities for sinking fund purposes) or any material adverse change in the general affairs or management, or the consolidated financial position, shareholders’ equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented; and

4

     (j) KPMG LLP, who have certified certain financial statements included or to be included in the Registration Statement and the Prospectus, are an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder.

     Any certificate signed by any officer of the Company and delivered to any Agent or to counsel for such Agent in connection with an offering of Notes and Warrants shall be deemed a representation and warranty by the Company to you as to the matters covered thereby.

     2. (a) Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, each Agent agrees, as agent of the Company, to use its reasonable efforts to solicit offers to purchase the Notes and Warrants upon the terms and conditions set forth in the Prospectus as it may be amended or supplemented.

     The Company reserves the right, in its sole discretion, to suspend, at any time, the solicitation of purchases of the Notes and Warrants. Upon receipt of instructions from the Company, each Agent will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised it that such solicitation may be resumed.

     The Company agrees to pay each Agent a commission, in the form of a discount, equal to the percentage of the principal amount of each Note sold by the Company (including upon exercise of a Warrant) as a result of a solicitation made by such Agent as set forth in Schedule A hereto.

     As Agent, each of you is authorized to solicit orders for the Notes only in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000 at a purchase price equal to 100% of their principal amount. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Notes and Warrants received by such Agent. The Company shall have the sole right to accept offers to purchase the Notes and Warrants and may reject any such offer in whole or in part. Each Agent shall have the right to reject any offer to purchase the Notes and Warrants received by it in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein.

     (b) Purchases as Principal. Each sale of Notes to any Agent as principal shall be made in accordance with the terms of this Agreement and pursuant to a separate agreement which will provide for the sale of such Notes and Warrants to, and the purchase and re-offering thereof by, such Agent. Each such separate agreement, which may be an oral agreement between such Agent and the Company, confirmed in writing (which may take the form of an exchange of any standard form of written telecommunications between you and the Company) and which shall be with respect to such information (as applicable) as is specified in Exhibit A hereto, is herein referred to as a “Terms Agreement.” Each Agent is authorized to utilize a selling or dealer group in connection with the resale of the Notes and Warrants purchased. An Agent’s commitment to purchase Notes and Warrants pursuant to any Terms Agreement shall be deemed

5

to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth.

     (c) Procedures. Administrative procedures respecting the sale of Notes shall be agreed upon from time to time by each Agent, the Company and the Trustee (the “Procedures”). Each Agent, on the one hand, and the Company, on the other hand, agree to perform the respective duties and obligations specifically provided to be performed herein and in the Procedures.

     (d) Delivery. The documents required to be delivered by Section 5 hereof shall be delivered at the office of HSBC Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois, on the date hereof, or at such other time as the Agents and the Company may agree upon in writing (the “Closing Time”).

     3. The Company agrees with each Agent:

     (a) To make no further amendment or any supplement to the Registration Statement or Prospectus relating to the Notes and Warrants which shall be disapproved by you promptly after reasonable notice thereof; to furnish you with copies of any such amendment or supplement; to file promptly and to furnish you simultaneously with copies of all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act subsequent to the date hereof and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Notes and Warrants; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement, or any amended Registration Statement has become effective, or any supplement or amendment to the Prospectus has been filed, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus, of the suspension of the qualification of the Notes and Warrants for offering or sale in any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and in the event of the issuance of any stop order or of any order preventing or suspending the use of any prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal;

     (b) Promptly from time to time to take such action as you may reasonably request to qualify the Notes and Warrants for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings in such jurisdictions for as long as may be necessary to complete the distribution, provided that in connection therewith, the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;

     (c) To furnish you with copies of each amendment and supplement to the Registration Statement and of each Prospectus as amended or supplemented, as filed pursuant to Rule 424 under the Act, in such quantities as you may from time to time reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of

6

any of the Notes and Warrants and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus or to file under the Exchange Act any document to be incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to immediately notify you and instruct you to cease the solicitation of offers to purchase the Notes and Warrants in your capacity as Agent of the Company and to cease sales of any Notes and Warrants you may then own as principal, and to prepare and furnish without charge to you as many copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance;

     (d) With respect to each sale of Notes and Warrants, the Company will make generally available to the Note and Warrant holders as soon as practicable, but not later than 90 days after the close of the period covered thereby, earnings statements of the Company and its subsidiaries (in form complying with the provisions of Rule 158 under the Act) covering a twelve month period beginning, in each case, not later than the first day of the Company’s fiscal quarter next following the Closing Time, each Settlement Date and each Representation Date;

     (e) During the period beginning on the date of any Terms Agreement stating that the restrictions of this Section 3(e) shall be applicable and continuing to and including the earlier of (i) the termination of trading restrictions on the Notes purchased in accordance with such Terms Agreement, as notified to the Company by you, and (ii) the Settlement Date with respect to such Terms Agreement, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company (except debt securities issued on exercise of warrants), other than Notes offered or sold as contemplated herein, which mature more than nine months after the Settlement Date with respect to such Terms Agreement and which are substantially similar to the Notes and Warrants, without your prior written consent;

     (f) On or prior to the date on which there shall be released to the general public preliminary or definitive interim financial statement information related to the Company with respect to each of the first three quarters of each fiscal year or preliminary financial statement information with respect to any fiscal year, to furnish such information to you, confirmed in writing, and to cause the Prospectus to be amended or supplemented to include or incorporate by reference capsule consolidated financial information with respect to the results of operations of the Company and subsidiaries for the period between the end of the preceding fiscal year and the end of such quarter or for such fiscal year, as the case may be, and corresponding information for the comparable period of the preceding fiscal year, as well as such other information and explanations as shall be necessary for an understanding of such amounts or as shall be required by the Act or the rules and regulations of the Commission thereunder; provided, however, that if on the date of such release you shall have suspended solicitation of purchases of the Notes and Warrants in your capacity as Agent pursuant to a request from the Company, and shall not then hold any Notes or Warrants as principal, the Company shall not be obligated so to amend or

7

supplement the Prospectus until such time as the Company shall determine that solicitations of purchases of the Notes and Warrants should be resumed or shall subsequently enter into a new Terms Agreement with you; and

     (g) On or prior to the date on which there shall be released to the general public financial information included in or derived from the audited consolidated financial statements of the Company and subsidiaries for the preceding fiscal year, to cause the Registration Statement and the Prospectus to be amended, whether by the filing of documents pursuant to the Exchange Act, the Act or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent registered public accounting firm with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements or as shall be required by the Act or the rules and regulations of the Commission thereunder; provided, however, that if on the date of such release you shall have suspended solicitation of purchases of the Notes and Warrants in your capacity as Agent pursuant to a request from the Company, and shall not then hold any Notes and Warrants as principal, the Company shall not be obligated so to amend or supplement the Prospectus until such time as the Company shall determine that solicitation of purchases of the Notes and Warrants should be resumed or shall subsequently enter into a new Terms Agreement with you.

     4. The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the cost of preparing and filing the registration statement referred to in Section 1(a) hereof and all amendments thereto, (ii) the cost of preparation, issuance and delivery of the Notes and Warrants, (iii) the fees, disbursements and expenses of the Company’s accountants, of the Trustee and its counsel and of any warrant agent and its counsel, (iv) the cost of qualification of the Notes and Warrants under State securities laws in accordance with the provisions of Section 3(b) hereof, including filing fees and the fees and disbursements of counsel for the Agents in connection therewith and in connection with the preparation of any Blue Sky Memorandum, (v) the cost of printing and delivering to each Agent in quantities as hereinabove stated copies of the registration statement referred to in Section 1(a) hereof and all amendments thereto, the Prospectus, any amendment or supplement to the Prospectus, and the Prospectus as amended or supplemented, (vi) the cost of printing and delivering to each Agent copies of the Indenture, the Warrant Agreement and any Blue Sky Memorandum, (vii) any fees charged by rating agencies for the rating of the Notes, (viii) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., and (ix) the cost of the printing or reproducing of this Agreement and any Terms Agreement.

     5. Each Agent’s obligations to solicit offers to purchase the Notes and Warrants as Agent of the Company and to purchase Notes and Warrants pursuant to any Terms Agreement shall be subject to the condition that all representations and warranties and other statements of the Company herein are, at the date hereof, at the Closing Time and at each Settlement Date with respect to any applicable Terms Agreement and at each other Representation Date, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

8

     (a) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;

     (b) McDermott Will & Emery LLP, counsel for the Agents, shall have furnished to you at the Closing Time and at each Settlement Date with respect to any Terms Agreement such opinion or opinions, dated the Closing Time and such Settlement Date, respectively, with respect to the incorporation of the Company, the validity of the Indenture, the Notes, the Registration Statement, the Prospectus as amended or supplemented, and other related matters as you may reasonably request, and such counsel shall have received such documents, certificates and information as they may reasonably request to enable them to pass upon such matters;

     (c) Counsel for the Company shall have furnished to you at the Closing Time and at each Settlement Date with respect to any Terms Agreement his written opinion, dated the Closing Time and such Settlement Date, respectively, in form and substance satisfactory to you, to the effect that:

     (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware;

     (ii) The significant subsidiaries of the Company are validly organized and existing corporations under the laws of their respective jurisdictions of incorporation;

     (iii) The Company and its significant subsidiaries are duly authorized under statutes which regulate the business of insurance or banking or the business of making loans or of financing the sale of goods (commonly called “small loan laws,” “consumer finance laws,” or “sales finance laws”), or are permitted under the general interest statutes and related laws and court decisions, to conduct in the various jurisdictions in which they do business the respective businesses therein conducted by them as described in the Prospectus, except where failure to be so permitted or failure to be so authorized will not have a material adverse effect on the business or consolidated financial condition of the Company and its subsidiaries taken as a whole;

     (iv) The Company has an authorized capitalization as set forth in the Prospectus as amended or supplemented and all of the outstanding shares of its common stock have been duly and validly authorized and issued, are fully paid and non-assessable and are indirectly owned by the Company’s ultimate parent HSBC Holdings plc;

     (v) To the best of such counsel’s knowledge, there are no legal or governmental proceedings pending, other than those referred to or incorporated in the Prospectus, to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which individually or in the aggregate is material, and, to the best of such counsel’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

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     (vi) This Agreement and any Terms Agreement with respect to the Notes have been duly authorized, executed and delivered by the Company;

     (vii) The Indenture has been authorized, executed and delivered by the Company, and constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms except as enforcement of the provisions thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditor’s rights or by general principles of equity; the Indenture has been duly qualified under the Trust Indenture Act; and all taxes and fees required to be paid with respect to the execution of the Indenture and the issuance of the Notes have been paid;

     (viii) The Notes have been duly authorized and, when the Notes have been duly executed, authenticated, issued and delivered against payment of the agreed consideration therefor, the Notes will constitute valid and legally binding obligations of the Company and, with like exceptions as noted in subdivision (vii) above, will be entitled to the benefits provided by the Indenture; and the Notes and the Indenture conform to the descriptions thereof in the Prospectus as amended or supplemented;

     (ix) The issue and sale of the Notes and the Warrants, and the compliance by the Company with all of the provisions of the Notes, the Warrants, the Indenture, the Warrant Agreement, this Agreement and any Terms Agreement will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement, or other agreement or instrument, known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for conflicts, breaches and defaults which would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries taken as a whole or materially adverse to the transactions contemplated by this Agreement) nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation, as amended, or the By-Laws of the Company or any of its subsidiaries or, to the best of such counsel’s knowledge, any statute or any order, rule or regulation applicable to the Company or any of its subsidiaries of any court or of any Federal, State or other regulatory authority or other governmental body having jurisdiction over the Company or any of its subsidiaries; and no consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental body is required for the issue and sale of the Notes and Warrants or the consummation of the other transactions contemplated in this Agreement and any Terms Agreement, except the registration under the Act of the Notes and Warrants, the qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under State securities or Blue Sky laws in connection with the public offering of the Notes and Warrants by the Agents;

     (x) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules therein, as to which such

10

counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of documents which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, in the case of documents which were filed under the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading;

     (xi) The Registration Statement has become and is now effective under the Act and, to the best of such counsel’s knowledge, no proceedings for a stop order in respect of the Registration Statement are pending or threatened under Section 8(d) or 8(e) of the Act; and

     (xii) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the Closing Time or Settlement Date at which such opinion is delivered (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; such counsel has no reason to believe that the Registration Statement or any amendment thereof (including the filing of any annual report on Form 10-K) at the time it became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as amended or supplemented at the time it was last filed pursuant to Rule 424 under the Act contained or as amended or supplemented at the Closing Time or at the Settlement Date at which such opinion is delivered contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and such counsel does not know of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required;

     (d) At the Closing Time and at each Settlement Date with respect to any Terms Agreement there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus as amended or supplemented or since the date of such Terms Agreement, any material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries, taken as a whole, or in the earnings or affairs of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, and you shall have received a certificate of the President, or a Vice President of the Company dated the Closing Time or such Settlement Date, to the effect (i) that there has been no such material adverse change, (ii) that the other representations and warranties of the Company

11

contained in Section 1 are true and correct with the same force and effect as though expressly made at and as of the date of such certificate, (iii) that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the date of such certificate, and (iv) that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission;

     (e) At the Closing Time and at each Settlement Date with respect to any Terms Agreement so requiring, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to you a letter or letters, dated the Closing Time or Settlement Date, as the case may be, in form and substance satisfactory to you, and as to such matters as you may reasonably request;

     (f) Your obligations to purchase Notes and Warrants pursuant to any Terms Agreement will be subject to the following further conditions: (a) the rating assigned by any nationally recognized statistical rating organization, as that term is defined by the Commission for purpose of Rule 436(g) promulgated under the Act, to any senior debt securities of the Company as of the date of such Terms Agreement shall not have been lowered since that date and (b) there shall not have come to your attention any facts that would cause you to believe that the Prospectus, as amended or supplemented at the time it was required to be delivered to a purchaser of the Notes and Warrants, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading; and

     (g) If any condition specified in this Section 5 shall not have been fulfilled, this Agreement and any Terms Agreement may be terminated by such Agent by notice to the Company at any time at or prior to the Closing Time or applicable Settlement Date, and such termination shall be without liability of any party to any other party, except that the covenants set forth in Section 3(c) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreements set forth in Section 7 hereof, and the provisions of Sections 8 and 12 hereof shall remain in effect.

     6. The Company covenants and agrees with each Agent that:

     (a) Each acceptance by the Company of any offer for the purchase of Notes and Warrants, and each sale of Notes and Warrants to you pursuant to a Terms Agreement, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to you pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to the purchaser or his agent, or you, of the Notes and Warrants relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended and supplemented to each such time);

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     (b) Each time that the Registration Statement or the Prospectus shall be amended or supplemented or there is filed with the Commission any document to be incorporated by reference into the Prospectus (other than by (i) an amendment or supplement providing solely for a change in the interest rates of the Notes or a change in the principal amount of Notes remaining to be sold or similar changes, or (ii) a report filed by the Company under the Exchange Act relating to a non-material event or to an event that does not have an adverse effect on the Company) or, if so indicated in the applicable Terms Agreement, the Company sells Notes and Warrants to you pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished to you forthwith a certificate in form satisfactory to you to the effect that the statements contained in the certificates referred to in Section 5(d) hereof which were last furnished to you are true and correct at the time of such amendment or supplement or filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, certificates of the same tenor as the certificates referred to in said Section 5(d), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificates, provided that in case the Prospectus is amended or supplemented pursuant to Section 3(f) hereof to include or incorporate by reference capsule consolidated financial information, such certificate need not be delivered at the time the corresponding Quarterly Report on Form 10-Q or Annual Report on Form 10-K is filed, or at the time, following the close of a fiscal year, that a Current Report on Form 8-K containing audited financial statements and other financial information for such fiscal year is filed, so long as the information so filed is consistent with such capsule information;

     (c) Each time that the Registration Statement or the Prospectus shall be amended or supplemented or there is filed with the Commission any document to be incorporated by reference into the Prospectus (other than by (i) an amendment or supplement solely providing for a change in the interest rates of the Notes or a change in the principal amount of Notes remaining to be sold or similar changes, (ii) a report filed by the Company under the Exchange Act relating to a non-material event or to an event that does not have an adverse effect on the Company, or (iii) setting forth or incorporating by reference financial statements or other financial information as of and for a fiscal quarter or fiscal year) or, if so indicated in the applicable Terms Agreement, the Company sells Notes and Warrants to you pursuant to a Terms Agreement, the Company shall furnish or cause to be furnished forthwith to you and your counsel a written opinion of counsel for the Company, or other counsel satisfactory to you, dated the date of delivery of such opinion, in form satisfactory to you, of the same tenor as the opinion referred to in Section 5(c) hereof but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion or, in lieu of such opinion, counsel last furnishing such opinion to you shall furnish you with a letter to the effect that you may rely on such last opinion to the same extent as though it were dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance); and

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     (d) Each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information (other than preliminary financial statement information) relating to the Company or any of its subsidiaries or there is filed with the Commission any document incorporated by reference into the Prospectus which contains additional financial information or, if so indicated in the applicable Terms Agreement, the Company shall cause the Company’s independent registered public accounting firm to furnish you a letter, dated the date of filing of such amendment, supplement or document with the Commission, or the date of such sale, as the case may be, in form satisfactory to you, of the same tenor as the letter referred to in Section 5(e) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter. In the event that, following the close of a fiscal year, audited financial statements and other additional financial information are contained in a Current Report on Form 8-K and the same information is subsequently contained in a timely filed Annual Report on Form 10-K, then such letter need only be furnished at the time such Annual Report on Form 10-K is filed.

     7. (a) The Company will indemnify and hold each Agent harmless against any losses, claims, damages or liabilities, joint or several, to which such Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such Agent for any legal or other expenses reasonably incurred by such Agent in connection with investigating or defending any such action or claim, as such expenses are incurred; provided, however, that the Company shall not be liable to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Prospectus or the Prospectus as amended or supplemented or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein.

     (b) Each Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus or the Prospectus as amended or supplemented, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in

14

connection with investigating or defending any such action or claim, as such expenses are incurred.

     (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.

     (d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 7 is for any reason held to be unenforceable although applicable in accordance with its terms, the Company, on the one hand, and such Agent, on the other hand, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnification incurred by the Company, on the one hand, and the Agent, on the other hand, in such proportion that the Agent is responsible for that portion represented by the percentage that the total commissions and underwriting discounts received by the Agent to the date of such liability bears to the total sales price received by the Company from the sale of Notes and Warrants to the date of such liability, and the Company is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

     (e) The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls an Agent within the meaning of the Act; and each Agent’s obligations under this Section 7 shall be in addition to any liability which such Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.

     8. In soliciting purchases of the Notes from the Company, each Agent is acting solely as agent for the Company and not as principal. Each Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes and Warrants from the Company has been solicited by such Agent and accepted by the Company but such Agent shall not have any liability to the Company in the event any such purchase is not

15

consummated for any reason. If the Company shall default in its obligation to deliver Notes and Warrants to a purchaser whose offer it has accepted, the Company (i) shall hold the Agent harmless against any loss, claim, or damage arising from or as a result of such default by the Company, and (ii) shall pay to the Agent any commission to which it would have been entitled in connection with such sale.

     9. The respective indemnities, agreements, representations, warranties and other statements of the Company and each Agent, as set forth in this Agreement or any Terms Agreement or made by the Company and each Agent, respectively, pursuant to this Agreement or any terms Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of each Agent or any controlling person of such Agent, or the Company, or any officer or director or controlling person of the Company and shall survive delivery of and payment for any of the Notes and Warrants.

     10. This Agreement may be terminated for any reason, at any time by the Company as to any Agent or by any Agent as to such Agent upon the giving of 30 days’ written notice of such termination to such Agent or the Company, as the case may be. Each Agent may also terminate any Terms Agreement to which it is a party, immediately upon notice to the Company, at any time prior to the Settlement Date relating thereto (i) if there has been, since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, of the Company and its subsidiaries, or in the earnings, affairs or business prospects of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, or (ii) if there has occurred any outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in such Agent’s judgment, impracticable to market the Notes and Warrants or enforce contracts for the sale of the Notes and Warrants, or (iii) if trading generally on the New York Stock Exchange has been suspended or materially limited, or (iv) there has been a material disruption in the securities settlement or clearance system services in the United States, or (v) if a banking moratorium has been declared by either Federal or New York authorities. In the event of any such termination, neither party will have any liability to the other party thereto, except that (i) such Agent shall be entitled to any commissions earned in accordance with the third paragraph of Section 2(a) hereof, (ii) if at the time of termination (A) such Agent shall own any of the Notes and Warrants or (B) an offer to purchase any of the Notes and Warrants has been accepted by the Company but the time of delivery to the purchaser or his agent of the Notes and Warrants relating thereto has not occurred, the covenants set forth in Sections 3 and 6 hereof shall remain in effect until such Notes and Warrants are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 3(d) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreements set forth in Section 7 hereof, and the provisions of Sections 9 and 15 hereof shall remain in effect.

     11. All statements, requests, notices and agreements hereunder shall be in writing or by telecopy if promptly confirmed in writing, and if to you shall be sufficient in all respects if delivered or sent by registered mail to the address specified on the cover page of this Distribution Agreement; and if to the Company shall be sufficient in all respects if delivered or sent by

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registered mail to the address of the Company set forth in the Registration Statement, Attention: Secretary.

     12. This Agreement and any Terms Agreement shall inure to the benefit of and be binding upon the respective Agents and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Terms Agreement or any provision herein or therein contained. This Agreement and any Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase.

     13. Each Agent severally represents and agrees that such Agent (i) has anti-money laundering policies and procedures in place in accordance with the requirements imposed by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended (the “USA Patriot Act”), and any rules and regulations promulgated thereunder, and the Foreign Assets Control Regulations issued by the Office of Foreign Assets Control of the United Stated Department of the Treasury, in each case to the extent applicable to such Agent; and (ii) has implemented an anti-money laundering compliance program pursuant to NASD Rule 3011, to the extent applicable to such Agent.

     14. Time shall be of the essence of this Agreement.

     15. This Agreement shall be construed in accordance with the laws of the State of New York.

     16. This agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

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     If the foregoing is in accordance with your understanding, please sign and return to us three counterparts hereof, and upon the acceptance hereof by each Agent, this letter and such acceptance hereof shall constitute a binding agreement between each Agent and the Company.

	Very truly yours,
	HSBC FINANCE CORPORATION
	By
Accepted as of the date hereof
[Name of Agent]
By:

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EXHIBIT A

     The following terms, if applicable, shall be agreed to by the Agent and the Company pursuant to each oral or written Terms Agreement.

Notes

Principal Amount: $

Interest Rate:

          If Fixed Rate Note, Interest Rate:

          If Floating Rate Note:

          Interest Rate Basis:

          Initial Interest Rate:

          Initial Interest Reset Date:

          Spread or Spread Multiplier, if any:

          Interest Rate Reset Month(s):

          Interest Payment Month(s):

          Index Maturity:

          Maximum Interest Rate, if any:

          Minimum Interest Rate, if any:

          Interest Rate Reset Period:

          Interest Payment Period:

          Calculation Agent:

          Specified Currency:

     If Redeemable:

          Initial Redemption Date:

     Date of Maturity:

     Purchase Price:    %

     Settlement Date and Time:

     Additional Terms

     Warrants

     Warrant Exercise Price:

     Principal Amount of Notes Issuable on

     Exercise of Warrant:

     Date After Which Warrants are Exercisable:

     Expiration Date:

     Detachable Date:

     Additional Terms:

Also, agreement as to whether the following will be required:

     Officer’s Certificate pursuant to Section 6(b) of the Distribution Agreement.

     Legal Opinion pursuant to Section 6(c) of the Distribution Agreement.

     Comfort Letter pursuant to Section 6(d) of the Distribution Agreement.

     Stand-off Agreement pursuant to Section 3(e) of the Distribution Agreement.

Schedule A

Term	Commission Rates
From 9 months to less than l year		.100	%
From l year to less than 18 months		.125	%
From 18 months to less than 2 years		.150	%
From 2 years to less than 3 years		.200	%
From 3 years to less than 4 years		.300	%
From 4 years to less than 5 years		.400	%
From 5 years to less than 6 years		.500	%
From 6 years to less than 7 years		.550	%
From 7 years to less than 10 years		.600	%
From 10 years to less than 15 years		.625	%
From 15 years to less than 20 years		.700	%
From 20 years to less than 30 years		.750	%
30 years or more	(to be negotiated)

EX-4.1

Exhibit 4.1

HSBC FINANCE CORPORATION
(AS SUCCESSOR TO HOUSEHOLD FINANCE CORPORATION)

AMENDED AND RESTATED

STANDARD MULTIPLE-SERIES
INDENTURE
PROVISIONS FOR
SENIOR DEBT SECURITIES

December 15, 2004

Amending and restating the
Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated
as of June 1, 1992 to give effect to the merger of Household Finance
Corporation with and into HSBC Finance Corporation

HSBC FINANCE CORPORATION
Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt
Securities______________________

TABLE OF CONTENTS*

		Page
	ARTICLE I
	Definitions and Other Provisions of General Application
Section 1.01	Definitions
	Act		9
	Affiliate; Control		9
	Authorized Newspaper		9
	Board of Directors		9
	Board Resolution		9
	Business Day		9
	Commission; SEC		10
	Company		10
	Company Request; Company Order; Company Consent		10
	Company Trust Office		10
	Depository		10
	Depository Note		10
	Dollar		10
	ECU		10
	Event of Default		10
	Foreign Currency		10
	Holder		10
	Indenture		11
	Independent		11
	Interest		11
	Interest Payment Date		11
	Maturity		11
	Notes		11
	Note Register; Note Registrar		11
	Officer’s Certificate		11
	Opinion of Counsel		11
	Original Issue Discount Note		11
	Outstanding		11
	Paying Agent		12
	Person		12
	Predecessor Notes		12
	Redemption Date		12
	Redemption Price		12
	Regular Record Date		12

*This Table of Contents does not constitute a part of the Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt Securities is convenience of reference only.

2

		Page
	Responsible Officer		12
	Special Record Date		13
	Stated Maturity		13
	Subsidiary		13
	Trustee		13
	Trust Indenture Act, TIA		13
	Voting Stock		13
Section 1.02	Compliance Certificates and Opinions		13
Section 1.03	Form of Documents Delivered to Trustee		14
Section 1.04	Acts of Holders		14
Section 1.05	Notices, etc., to Trustee and Company		15
Section 1.06	Notices to Holders; Waiver		15
Section 1.07	Conflict with Trust Indenture Act		16
Section 1.08	Effect of Headings and Table of Contents		16
Section 1.09	Successors and Assigns		16
Section 1.10	Separability Clause		16
Section 1.11	Benefits of Indenture		16
Section 1.12	Governing Law		16
Section 1.13	Payment on Business Day		16
Section 1.14	Incorporation by Reference of Trust Indenture Act		16
	ARTICLE II
	Issue, Execution and Registration of Notes
Section 2.01	Issuance of Notes in Series		17
Section 2.02	Authentication and Delivery of Notes		17
Section 2.03	Execution of Notes		18
Section 2.04	Temporary Notes		18
Section 2.05	Exchanges and Transfers of Notes		19
Section 2.06	Mutilated, Destroyed, Lost or Stolen Notes		19
Section 2.07	Payment of Interest; Interest Rights Preserved		20
Section 2.08	Persons Deemed Owners		21
Section 2.09	Cancellation of Notes		21
Section 2.10	Appointment of Authenticating Agent		21
Section 2.11	Securities Issuable in the Form of a Depository Note		22

3

		Page
	ARTICLE III
	Covenants
Section 3.01	Payment of Principal, Premium and Interest		24
Section 3.02	Maintenance of Office or Agency		24
Section 3.03	Money for Note Payments to be Held in Trust		24
Section 3.04	Payment of Taxes and Other Claims		25
Section 3.05	Statement as to Compliance		25
Section 3.06	Corporate Existence		25
Section 3.07	Filing of Reports		25
Section 3.08	Not to Subject Property to Lien Without Securing Notes Ratably; Waiver of Covenant		26
	ARTICLE IV
	Repayment at Option of Holders
Section 4.01	Optional Repayment of Notes		28
Section 4.02	Repayment Procedure for Notes		28
	ARTICLE V
	Redemption of Notes; Sinking Funds
Section 5.01	Applicability of Redemption Provision		29
Section 5.02	Election to Redeem; Notice to Trustee		29
Section 5.03	Selection by Trustee of Notes to be Redeemed		29
Section 5.04	Notice of Redemption		29
Section 5.05	Deposit of Redemption Price		30
Section 5.06	Notes Payable on Redemption Date		30
Section 5.07	Notes Redeemed in Part		30
Section 5.08	Sinking Funds		30
Section 5.09	Satisfaction of Sinking Fund Payments with Notes		30
Section 5.10	Redemption of Notes for Sinking Fund		31
	ARTICLE VI
	Satisfaction and Discharge
Section 6.01	Satisfaction and Discharge of Indenture		32
Section 6.02	Application of Trust Money		32
Section 6.03	Satisfaction, Discharge, and Defeasance of Notes of any Series		32

4

		Page
	ARTICLE VII
	Remedies
Section 7.01	Events of Default		34
Section 7.02	Acceleration of Maturity; Rescission and Annulment		35
Section 7.03	Collection of Indebtedness and Suits for Enforcement by Trustee		35
Section 7.04	Trustee May File Proofs of Claim		36
Section 7.05	Trustee May Enforce Claims Without Possession of Notes		36
Section 7.06	Application of Money Collected		36
Section 7.07	Limitation on Suits		37
Section 7.08	Unconditional Right of Holders to Receive Principal, Premium and Interest		37
Section 7.09	Restoration of Rights and Remedies		37
Section 7.10	Rights and Remedies Cumulative		37
Section 7.11	Delay or Omission Note Waiver		38
Section 7.12	Control by Holders		38
Section 7.13	Waiver of Past Defaults		38
Section 7.14	Undertaking for Costs		38
Section 7.15	Waiver of Stay or Extension Laws		39
	ARTICLE VIII
	The Trustee
Section 8.01	Certain Duties and Responsibilities		40
Section 8.02	Notice of Defaults		40
Section 8.03	Certain Rights of Trustee		41
Section 8.04	Not Responsible for Recitals or Issuance of Notes		41
Section 8.05	May Hold Notes		41
Section 8.06	Money Held in Trust		42
Section 8.07	Compensation and Reimbursement		42
Section 8.08	Corporate Trustee Required; Eligibility; Disqualification; Conflicting Interests		42
Section 8.09	Preferential Collection of Claims Against Company		42
Section 8.10	Resignation and Removal; Appointment of Successor		42
Section 8.11	Acceptance of Appointment of Successor		43
Section 8.12	Merger, Conversion, Consolidation or Succession to Business		44

5

	ARTICLE IX
	Holders’ Lists and Reports by Trustee and Company
Section 9.01	Company to Furnish Trustee Names and Addresses of Holders	45
Section 9.02	Preservation of Information; Communication to Holder	45
Section 9.03	Reports by Trustee	45
	ARTICLE X
	Consolidation, Merger, Conveyance, Transfer or Lease
Section 10.01	Company May Consolidate, etc. only on Certain Terms	46
Section 10.02	Successor Corporation Substituted	46
	ARTICLE XI
	Supplemental Indentures
Section 11.01	Supplemental Indentures Without Consent of Holders	47
Section 11.02	Supplemental Indentures With Consent of Holders	47
Section 11.03	Execution of Supplemental Indentures	48
Section 11.04	Effect of Supplemental Indentures	48
Section 11.05	Conformity with Trust Indenture Act	48
Section 11.06	Reference in Notes to Supplemental Indentures	48
Schedule A	General Form of Note	A-1

6

     Tie of certain provisions of Trust Indenture Act of 1939 with Amended and Restated Standard Multiple-Series Indenture Provisions for senior Debt Securities, dated as of December 15, 2004, of HBSC Finance Corporation. *

			Section of
Section of Act			Indenture
	310	(a)(1)		8.08
		(a)(2)		8.08
		(a)(3)		Not Applicable
		(a)(4)		Not Applicable
		(b)		8.08, 8.10
	311	(a)		8.09
		(b)		8.09
	312	(a)		9.01, 9:02	(a)
		(b)		9.02 (b)
		(c)		9.02(b)
	313	(a)		9.03(a)
		(b)		9.03(a)
		(c)		9.03(a)
		(d)		9.03(c)
	314	(a)		3.07
		(b)		Not Applicable
		(c)(1)		1.02
		(c)(2)		1.02
		(c)(3)		Not Applicable
		(d)		Not Applicable
		(e)		1.02
	315	(a)		8.01(a)
				8.01(c)
		(b)		8.02
				9.03(a)
		(c)		8.01(b)

*This tie of provisions does not constitute a part of the Indenture and is for convenience of reference only.

7

			SECTION
SECTION OF ACT			OF INDENTURE
	315	(d)		8.01	(c)
		(d)(1)		8.01	(c)(1)
		(d)(2)		8.01	(c)(2)
		(d)(3)		8.01	(c)(3)
		(e)		7.14
	316	(a)		1.01
		(a)(1)(A)		7.02
				7.12
		(a)(1)(B)		7.13
		(a)(2)	Not Applicable
		(b)		7.08
	317	(a)(1)		7.03
		(a)(2)		7.04
		(b)		3.03
	318	(a)		1.07

8

ARTICLE I

Definitions and other Provisions
of General Application

Section 1.01. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1)  the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular;

(2) all other terms used herein which are defined in the TIA, either directly or by reference therein, have the meanings assigned to them therein; and

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles.

     “Act” when used with respect to any Holder has the meaning specified in Section 1.04.

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Authorized Newspaper” when used in connection with the name of a particular city, means a newspaper, printed in an official language of the country of publication, of general circulation and customarily published in such city on each Business Day, whether or not published on Saturdays, Sundays or holidays. Whenever successive weekly publications in an Authorized Newspaper are required hereunder they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or in different Authorized Newspapers,

     “Board of Directors” means either the board of directors of the Company, any duly authorized committee of that board, or any officer of the Company duly authorized by the board of directors of the Company or a duly authorized committee of that board.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

     “Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a legal holiday for banking institutions in the particular city with reference to which the determination as to Business Day is being made.

9

     “Commission” or “SEC” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.

     “Company” means the Person named as the Company in the Indenture until a successor corporation shall have become such pursuant to the applicable provisions of the Indenture, and thereafter Company shall mean such successor corporation.

     “Company Request”, “Company Order” and “Company Consent” mean, respectively, a written request, order or consent signed in the name of the Company by its Chairman or President or a Group Executive or Vice President, and by its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller, Secretary or an Assistant Secretary, and delivered to the Trustee.

     “Corporate Trust Office” shall mean the principal office of the Trustee as set forth in the Indenture.

     “Depository” shall mean, with respect to Notes of any series for which the Company shall determine that such Notes will be issued as a Depository Note, The Depository Trust Company, New York, New York, another clearing agency or any successor registered under the Securities Exchange Act of 1934, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

     “Depository Note” shall mean, with respect to any series of Notes, a Note executed by the Company and authenticated and delivered by the Trustee to the Depository or pursuant to the Depository’s instruction, all in accordance with this Indenture and pursuant to a Company Order, which (i) shall be registered as to principal and interest in the name of the Depository or its nominee and (ii) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Notes of such series.

     “Dollar” means the coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.

     “ECU” means the European Currency Unit as defined and revised from time to time by the Council of the European Communities.

     “Event of Default” has the meaning specified in Section 7.01.

     “Foreign Currency” means a currency issued by the government of any country other than the United States.

     “Holder” means a Person in whose name a Note is registered in the Note Register.

10

     “Indenture” means the Indenture between the Company and the Trustee which incorporates therein the terms and provisions hereof, and, unless the context otherwise indicates, all indentures supplemental thereto from time to time in effect. The term “Indenture” also includes the terms of particular series of Notes established as contemplated by Section 2.01.

     “Independent” when used with respect to any specified Person means such a Person who (1) is in fact independent, (2) does not have any material direct or indirect financial interest in the Company or in any other obligor upon the Notes or in any Affiliate of the Company or of such other obligor, and (3) is not connected with the Company or such other obligor or any Affiliate of the Company or of such other obligor, as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person’s opinion or certificate shall be furnished to the Trustee, such Person shall be appointed by a Company Order, and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.

     “Interest", when used with respect to an Original Issue Discount Note which by its terms bears interest only after Maturity, means interest payable after Maturity.

     “Interest Payment Date” means the Stated Maturity of interest on Notes of a particular series.

     “Maturity” when used with respect to Notes of a particular series means the date on which the principal or any installment of principal of such Notes becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

     “Notes” means all debt securities issued under this Indenture, regardless of series, which may be in the General Form of Note attached hereto as Schedule A, with any insertions, omissions and variations as the Board of Directors may determine in accordance with the provisions of the Indenture, or in such other form as may be established by a Board Resolution or in one or more indentures supplemental thereto.

     “Note Register” and “Note Registrar” have the respective meanings specified in Section 2.05.

     “Officers’ Certificate” means a certificate signed by the Chairman or President, or a Group Executive or Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. Wherever this Indenture requires that an Officers’ Certificate be signed also by an accountant or other expert, such accountant or other expert (except as otherwise expressly provided in this Indenture) may be in the employ of the Company.

     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company or other counsel reasonably satisfactory to the Trustee.

     “Original Issue Discount Note” means any Note which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 7.02.

     “Outstanding” when used with respect to Notes means, as of the date of determination, all Notes theretofore authenticated and delivered under the Indenture, except:

          (i) Notes theretofore cancelled by the Trustee or any authenticating agent, or delivered to the Trustee or any authenticating agent for cancellation;

11

          (ii) Notes or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent, other than the Company, in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Notes, provided that, if such Notes or any portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made;

          (iii) Notes which have been paid pursuant to Section 2.06 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to the Indenture other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a bonafide purchaser in whose hands such Notes are valid obligations of the Company; and

          (iv) any such Notes which have been defeased pursuant to Section 6.03.provided, however, that in determining whether the Holders of the requisite principal amount of Notes Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or for any other purpose, (i) Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which the Trustee knows to be so owned shall be so disregarded, and Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is Dot the Company or any other obligor upon the Notes or any Affiliate of the Company or such other obligor, and (ii) the principal amount of an Original Issue Discount Note that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration pursuant to Section 7.02.

     "Paying Agent” means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Notes on behalf of the Company.

     “Person” means any individual, corporation, partnership, joint venture association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

     “Predecessor Notes” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for purposes of this definition, any Note authenticated and delivered under Section 2.06 in exchange for or in lieu of a mutilated, destroyed, lost, or stolen Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost, or stolen Note.

     “Redemption Date” when used with respect to any Note to be redeemed means the date fixed for such redemption by or pursuant to the Indenture, any indenture supplemental thereto, or resolution of the Board of Directors as provided in Section 2.01 hereof.

     “Redemption Price” when used with respect to any Note be redeemed means the price at which it is to be redeemed pursuant to the Indenture, any indenture supplemental thereto, or resolution of the Board of Directors as provided in Section 2.01 hereof.

     “Regular Record Date” for the interest payable on any Interest Payment Date means, with respect to Notes of any series, the date specified as the Regular Record Date therefor in the relevant supplemental indenture or resolution of the Board of Directors authorizing such series of Notes.

     “Responsible Officer” when used with respect to the Trustee means an officer of the Trustee assigned to the Corporate Trust Office, including any Vice President or Assistant

12

Vice President, any Trust Officer or Assistant Trust Officer, or any other Officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

     “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.

     “Stated Maturity” when used with respect to any Note or any installment of principal thereof or any installment of interest thereon means the date specified in such Note as the fixed date on which the principal of such Note or such installment of principal or interest is due and payable.

     “Subsidiary” of the Company means any corporation at least a majority of the shares of the Voting Stock (or the equivalent thereof, in the case of corporations organized outside the United States of America) of which shall at the time be owned, directly or indirectly, by the Company or by one or more Subsidiaries or by the Company and one or more Subsidiaries.

     “Trustee” means the Person named as the Trustee in the Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of the Indenture, and thereafter Trustee shall mean such successor Trustee.

     “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended, as it may be amended from time to time.

     “Voting Stock”, as applied to the stock of any corporation, means stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the directors of such corporation, other than stock having such power only by reason of the happening of a contingency.

     Section 1.02. Upon any application or request by the Company to the Trustee to take any action under any provision of the Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of the Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture shall include:

          (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

          (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

          (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

          (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

13

     Section 1.03. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Person as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, in so far as it relates to factual matters, upon a certificate or opinion of, or representations by, any officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under the Indenture, they may, but need not, be consolidated and form one instrument.

     Section 1.04. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by the Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 8.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.04.

     (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by an officer of a corporation or a member of a partnership, on behalf of such corporation or partner-ship, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner which the Trustee deems sufficient and the Trustee may in any instance require proof with respect to any of the matters referred to in this Section 1.04.

     (c) The ownership of Notes shall be proved by the Note Register.

     (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

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     (e) In determining whether the Holders of the requisite principal amount of Outstanding Notes of any series have given any request, demand, authorization, direction, notice, consent or waiver under the Indenture, the principal amount of an Original Issue Discount Note that may be counted in making such determination and that shall be deemed to be Outstanding for such purposes shall be equal to the amount of the principal thereof that would be due and payable pursuant to the terms of such Original Issue Discount Note upon a declaration of acceleration pursuant to Section 7.02 at the time the taking of such action by the Holders of such requisite principal amount of Outstanding Notes is evidenced to the Trustee, as provided in Subsection (a) of this Section.

     (f) For the purposes of calculating the principal amount of Notes of any series denominated in ECU’s or a currency issued by the government of any country other than the United States for any purpose under the Indenture, the principal amount of such Notes at any time outstanding shall be deemed to be that amount of Dollars that could be obtained for such principal amount on the basis of a spot rate of exchange specified to the Trustee in an Officers’ Certificate for ECU 1s or such currency into Dollars as of the date of any such calculation.

     Section 1.05. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by the Indenture to be made upon, given or furnished to or filed with,

          (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the Indenture or at any other address previously furnished in writing to the Trustee by the Company.

     Section 1.06. Where the Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. Where the Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made that is satisfactory to the Trustee shall constitute a sufficient notification for every purpose hereunder.

In case, by reason of the suspension of publication of any Authorized Newspaper, or by reason of any other cause, it shall be impossible to make publication of any notice in an Authorized Newspaper or Authorized Newspapers as required by the Indenture, then such method of publication or notification as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice.

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     Section 1.07. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in the Indenture by any of the provisions of TIA, such required or deemed provision shall control.

     Section 1.08. The Article headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

     Section 1.09. All covenants and agreements in the Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

     Section 1.10. In case any provision in the Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     Section 1.11. Nothing in the Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under the Indenture.

     Section 1.12. The Indenture and each Note issued hereunder shall be construed in accordance with and governed by the laws of the State of Illinois, provided that the immunities and standard of care of the Trustee in connection with the administration of its trusts hereunder shall be construed in accordance with and governed by the laws of the State of New York.

     Section 1.13. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Note shall not be a Business Day, then (notwithstanding any other provision of this Indenture) payment of interest or principal (and premium, if any), as the case may be, need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, or Stated Maturity, as the case may be.

     Section 1.14. Whenever the Indenture refers to a section of the TIA, that section, as in effect on any particular date, is incorporated by reference in and made a part of the Indenture. If the numerical designation of a section of the TIA is changed subsequent to the date of the Indenture as a result of an amendment to the TIA, then the reference in the Indenture to such section shall be deemed to refer to the numerical designation of such section as amended.

     The following TIA terms used in this Indenture have the following meanings:

               “indenture securities” means the Notes.

               “indenture security holder” means a Noteholder.

               “indenture to be qualified” means the Indenture.

               “indenture trustee” or “institutional trustee” means the Trustee.

               “obligor” on the indenture securities means the Company or any other obligor on the Notes.

All other TIA terms used in the Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by the TIA or such statute or rule.

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ARTICLE II

Issue, Execution and Registration of Notes

     Section 2.01. At the option of the Company, the Notes issued hereunder, which are unlimited in aggregate principal amount except as may be otherwise provided in respect of the Notes of a particular series, may be issued in one or more series. The Notes of each series may be generally in the form provided in Schedule A hereto (with any such insertions, omissions and variations as determined by the Board of Directors), to bear such series designation, to mature on such date, to bear interest at such rate and payable on such dates, and to have such other terms and provisions (including redemption rights, call or put provisions, different currency of denomination, which may be Dollars, Foreign Currency, ECU or other currency or unit specified therein, and including any addition to, or modification or deletion of, any Event of Default or any covenant of the Company specified herein with respect to Notes of the series), all as shall, prior to the authentication thereof, be established, consistently with the other provisions of the Indenture, by resolution of the Board of Directors and set forth in an Officers’ Certificate, or in one or more supplemental indentures approved by the Board of Directors. The Notes of any series may be issued as a Depository Note.

All Notes of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and (subject to Section 2.02) set forth in such Officers’ Certificate or in any such indenture supplemental hereto.

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.

     Section 2.02. From time to time the Company may execute and deliver to the Trustee, and the Trustee shall thereupon authenticate and deliver to or upon a Company Order, Notes of any series duly established pursuant to Section 2.01, upon receipt by the Trustee of:

     (a) the Board Resolution (i) authorizing the execution and requesting the authentication and delivery of the Notes applied for in the principal amount therein specified, designating the series of such Notes and specifying the Officer or Officers of the Company to whom or upon whose order such Notes shall be delivered; and (ii) which, as permitted by Section 2.01, establishes the terms of such series of Notes and which, if applicable, authorizes the execution of an indenture supplemental hereto creating such series of Notes or, if an Officer of the Company has been duly authorized with respect to the foregoing, a certificate from such Officer to the Trustee authorizing the above actions and a Board Resolution evidencing such officer’s authority;

     (b) an Officers’ Certificate pursuant to Section 2.01 or, if the Notes of such series are to be issued pursuant to a supplemental indenture, a supplemental indenture duly executed on behalf of the Company, in form satisfactory to the Trustee, creating such series of Notes;

     (c) an Officers’ Certificate pursuant to Section 1.02; and

     (d) an Opinion of Counsel pursuant to Section 1.02 to the effect that: (i) the form and terms of such Notes have been established in conformity with the provisions of the Indenture;

          (ii) all conditions precedent to the authentication and delivery of such Notes have been complied with and that such Notes, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions

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specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors’ rights and to general equity principles;

          (iii) all laws and requirements in respect of the execution and delivery by the Company of such Notes have been complied with; and

          (iv) the Company is not in default in any of its obligations under the Indenture, and the issuance of such Notes will not result in any such default.

If all Notes of a series are not to be originally issued at one time, it shall not be necessary to deliver the documents described in this Section 2.02 at or prior to the time of authentication of each Note of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Note of such series to be issued.

     Section 2.03. The Notes shall be executed on behalf of the Company by its Chairman or President or one of its Group Executives or Vice Presidents under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any of such Officers on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signatures of individuals who were at any time the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

     All Notes shall be dated the date of their authentication.

No Note shall be entitled to any benefit under the Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein or in Schedule A hereto executed by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

     Section 2.04. Pending the preparation of definitive Notes of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, or cause to be delivered, temporary Notes of such series which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Notes may determine, as evidenced by their signing of such Notes.

If temporary Notes of any series are issued, the Company will cause definitive Notes of such series to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes of any series the Company shall execute and the Trustee shall authenticate and deliver, or cause to be delivered, in exchange therefor a like principal amount of definitive Notes of such series, of authorized denominations. Until so exchanged the temporary Notes shall in all respects be entitled to the same benefits under the Indenture as the definitive Notes.

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     Section 2.05. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a Note Register in which, subject to such reasonable regulations as the Company may prescribe, the Company shall, subject to Section 2.11, provide for the registration of Notes and for registrations of transfer of Notes. The Trustee is hereby appointed Note Registrar for the purpose of registering Notes and registering transfers of Notes as herein provided.

Subject to the provisions of Section 2.11, upon surrender for registration of transfer of any Note at any office or agency of the Company maintained for that purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of the same series containing identical terms and provisions, of any authorized denominations and for a like aggregate principal amount.

Subject to the provisions of Section 2.11, at the option of the Holder, Notes may be exchanged for other Notes of the same series containing identical terms and provisions, of any authorized denominations and for a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under the Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.04, Section 5.07 or Section 11.06 not involving any registration of transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Note of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Notes of such series selected for redemption under Section 5.04 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Note so selected for redemption in whole or in part.

     Section 2.06. A mutilated Note may be surrendered to the Company and thereupon the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of the same series and of like tenor and principal amount, bearing a number not contemporaneously outstanding.

     If there be delivered to the Company and to the Trustee

(i) evidence to their satisfaction of the destruction, loss or theft of an Note of any series, and

(ii) such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Note has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of such series and of like tenor and principal amount, bearing a number not contemporaneously outstanding.

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In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note Under this Section 2.06, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Note issued pursuant to this Section 2.06 in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes of the same series containing identical terms and provisions duly issued hereunder.

The provisions of this Section 2.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the re-placement or payment of mutilated, destroyed, lost or stolen Notes.

Section 2.07. Interest 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 at the close of business on the Regular Record Date for such interest.

Any interest on any Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or Clause (2) below:

          (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in the Clause (1) provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each Holder at his address as it appears in the Note Register, not less than 10 days prior to such Special Record Date. The Trustee shall, upon a Company Request and in the name and at the expense of the Company, cause a similar notice to be published at least once in an Authorized Newspaper in New York City but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

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          (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause (2), such payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 2.07, each Note delivered under the 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.

     Section 2.08. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Note is registered as the owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 2.07) interest on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

     Section 2.09. All Notes surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking or purchase fund payment provided in respect of any series of Notes shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 2.09, except as expressly permitted by the Indenture. All cancelled Notes held by the Trustee shall be destroyed by the Trustee and the Trustee shall deliver to the Company a certificate of such destruction.

     Section 2.10. The Trustee shall, if requested in writing so to do by the Company, promptly appoint an agent or agents of the Trustee who shall have authority to authenticate Notes of any series in the name and on behalf of the Trustee. Such appointment by the Trustee shall be evidenced by a certificate executed by a Responsible Officer of the Trustee delivered to the Company prior to the effectiveness of such appointment designating such agent or agents and stating that all appropriate corporate action has been taken by the Trustee in connection with such appointment.

Any such authenticating agent shall be an agent acceptable to the Company and shall at all times be a corporation which is organized and doing business under the laws of the United States or of any State, is authorized under such laws to act as authenticating agent, has a combined capital and surplus of at least $5,000,000, and is subject to supervision or examination by Federal or State authority.

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time, and upon written request of the Company to the Trustee shall, terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company.

Any such authenticating agent shall have the rights and immunities of the Trustee set forth in Sections 2.08, 8.03, 8.04 and 8.05 to the same extent and as fully to all intents and purposes as though such authenticating agent had been expressly named in place of the Trustee.

If an appointment is made pursuant to this Section 2.10 with respect to any series of Notes, such Notes shall have endorsed thereon, in addition to the Trustee’s Certificate of

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Authentication, an alternate Trustee’s Certificate of Authentication substantially in the following form:

     (Alternate Form of the Trustee’s Certificate of Authentication)

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

[                                                  ]
as Trustee
By
	Authenticating Agent
By
	Authorized Officer

     Section 2.11. (a) If the Company shall establish pursuant to Section 201 that the Notes of a particular series are to be issued as a Depository Note, then the Company shall execute and the Trustee shall, in accordance with Sections 2.02 and 2.03 and the Company Order delivered to the Trustee thereunder, authenticate and deliver, a Depository Note which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Notes of such series, (ii) shall be registered in the name of the Depository or its nominee, (iii) shall be delivered by the Trustee to the Depository or pursuant to the Depository’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Note may be transferred, in whole but not in part, only to another nominee of the Depository or to a successor Depository or to a nominee of such successor Depository”

     (b) Notwithstanding any other provision of this Section 2.11 or of Section 2.05, the Depository Note of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depository for such series, or to a successor Depository for such series selected or approved by the Company or to a nominee of such successor Depository.

     (c) If at any time the Depository for a series of Notes notifies the Company that it is unwilling or unable to continue as Depository for such series or if at any time the Depository for such series shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor Depository for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Notes of such series and the Company will execute, and the Trustee will authenticate and deliver, Notes of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Depository Note of such series then Outstanding in exchange for such Depository Note. In addition, the Company may at any time determine that the Notes of any series shall no longer be represented by a Depository Note and that the provisions of this Section 2.11 shall no longer apply to the Notes of such series. In such event the Company will execute and the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver Notes of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Depository Note of such series in exchange for such Depository Note. Upon the exchange of the Depository Note for such Notes in definitive

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registered form without coupons, in authorized denominations, the Depository Note shall be cancelled by the Trustee. Such Notes in definitive registered form issued in exchange for the Depository Note pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee.

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ARTICLE III

Covenants

     Section 3.01. The Company will duly and punctually pay the principal of (and premium, if any) and interest on the Notes in accordance with the terms of the Notes and the Indenture.

     Section 3.02. The Company will maintain an office or agency at each place at which the principal of (and premium, if any) or interest on any of the Notes is payable, where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and of any change in the location, of each such office or agency. If at any time the Company shall fail to maintain any such office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands.

     Section 3.03. If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on, any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

If the Company shall have one or more Paying Agents, it will, on or before each due date of the principal of (and premium, if any) or interest on, any of the Notes, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 3.03, that such Paying Agent will:

     (1) hold all sums held by it for the payment of principal of (and premium, if any) or interest on Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

     (2) give the Trustee notice of any default by the Company (or any other obligor upon the Notes) in the making of any such payment of principal (and premium, if any) or interest; and

     (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

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The Company may at any time, for the purpose of obtaining the satisfaction and discharge of the Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Note and remaining unclaimed for three years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in New York City, or mail to each such Holder, or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, or mailing any unclaimed balance of such money then remaining will be repaid to the Company.

     Section 3.04. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon it or upon its income, profits or property, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon its property; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

     Section 3.05. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement (which need not comply with Section 1.02) signed by the Chairman or President, or a Group Executive or Vice President and by the Treasurer, an Assistant Treasurer, the Controller or an Assistant Controller, or the Secretary or an Assistant Secretary of the Company, either of which shall be a Principal Executive Officer, Principal Financial Officer or Principal Accounting Officer, stating, as to each signer thereof, whether or not to the best of his knowledge, the Company is in default in the performance of any of its obligations under the Indenture, and, if there is a default in the fulfillment of any such obligation, specifying each such default known to him and the nature and status thereof.

     Section 3.06. Subject to Article X, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve or cause to be preserved any right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.

     Section 3.07. The Company shall file with the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Company also shall comply with the other provisions of TIA §314(a).

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     Section 3.08. (a) The Company will not issue, assume or guarantee any indebtedness for borrowed money (referred to in this Section as “indebtedness,” which term shall not include any guarantee, cash deposit or other recourse obligation in connection with the sale, securitization or discount by the Company of finance or accounts receivables, trade acceptances or other paper arising in the ordinary course of its business) secured by a mortgage, security interest, pledge or lien (referred to in this Section as “mortgage” or “mortgages”) of or upon any property of the Company whether such property is owned at the date of this Indenture or thereafter acquired, without making effective provision whereby the Notes (together with, if the Company shall so determine, any other indebtedness issued, assumed or guaranteed by the Company and then existing or thereafter created) shall be secured by such mortgage equally and ratably with (or, at the option of the Company, prior to) such indebtedness, so long as such indebtedness shall be so secured; provided that the foregoing shall not apply to any of the following:

     (1) mortgages of or upon any property acquired, constructed or improved by, or of or upon any shares of capital stock or indebtedness acquired by, the Company after the date of the Indenture (A) to secure the payment of all or any part of the purchase price of such property, shares of capital stock or indebtedness upon the acquisition thereof by the Company, or (B) to secure any indebtedness issued, assumed or guaranteed by the Company prior to, at the time of, or within 360 days after (i) in the case of property, the later of the acquisition, completion of construction (including any improvements on existing property) or commencement of commercial operation of such property or (ii) in the case of shares of capital stock or indebtedness, the acquisition of such shares of capital stock or indebtedness, which indebtedness is issued, assumed or guaranteed for the purpose of financing or refinancing all or any part of the purchase price of such property, shares of capital stock or indebtedness and, in the case of property, the cost of construction thereof or improvements thereon, provided that in the case of any such acquisition, construction or improvement of property, the mortgage shall not apply to any property, shares of capital stock or indebtedness theretofore owned by the Company other than, in the case of any such construction or improvement, any theretofore unimproved or substantially unimproved real property on which the property so constructed or the improvement is located;

     (2) mortgages of or upon any property, shares of capital stock or indebtedness, which mortgages exist at the time of acquisition of such property, shares or indebtedness by the Company;

     (3) mortgages of or upon any property of a corporation, which mortgages exist at the time such corporation is merged with or into or consolidated with the Company or which mortgages exist at the time of a sale or transfer of the properties of a corporation as an entirety or substantially as an entirety to the Company;

     (4) mortgages to secure indebtedness of the Company to any Subsidiary;

     (5) mortgages in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country or political subdivision, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred or guaranteed for the purpose of financing or refinancing all or any part of the purchase price of the property, shares of capital stock or indebtedness subject to such mortgages, or the cost of constructing or improving the property subject to such mortgages (including, with-out limitation, mortgages incurred in connection with pollution control, industrial revenue or similar financings);

     (6) mortgages on properties financed through tax-exempt municipal obligations; provided that such mortgages are limited to the property so financed;

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     (7) mortgages existing on the date of execution of the Indenture; and

     (8) any extension, renewal, refunding or replacement (or successive extensions, renewals or replacements) in whole or in part of any mortgage existing at the date of the Indenture or any mortgage referred to in the foregoing Clauses (1) through (7), inclusive, provided, however, that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal, refunding or replacement, and that such extension, renewal, refunding or replacement shall be limited to all or a part of the property (plus improvements and construction on such property), shares of capital stock or indebtedness which was subject to the mortgage so extended, renewed, refunded or replaced.

     (b) Notwithstanding the provisions of subsection (a) of this Section, the Company may, without equally and ratably securing the Notes, issue, assume or guarantee indebtedness secured by a mortgage not excepted by Clauses (1) through (8) of such subsection (a), if the aggregate amount of such indebtedness, together with all other indebtedness of, or indebtedness guaranteed by, the Company existing at such time and secured by mortgages not so excepted, does not at the time exceed 10% of the Company’s Consolidated Net Worth. “Consolidated Net Worth” shall be the difference between the Company’s consolidated assets and consolidated liabilities as shown on the Company’s most recent audited consolidated financial statement prepared in accordance with generally accepted accounting principles.

     (c) An arrangement with any Person providing for the leasing by the Company of any property, which property has been or is to be sold or transferred by the Company to such Person with the intention that such property be leased back to the Company, shall not be deemed to create any indebtedness secured by a mortgage if the obligations in respect of such lease would not be included as liabilities on a consolidated balance sheet of the Company.

The Company may fail or omit in any particular instance to comply with the covenant set forth in this Section 3.08 if the Company shall have obtained and filed with the Trustee prior to the time for such compliance the consent in writing of the Holders of at least a majority in aggregate principal amount of all of the Notes at the time Outstanding either waiving such compliance in such instance or generally waiving compliance with such covenant, but no such waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon.

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ARTICLE IV

Repayment at Option of Holders

     Section 4.01. If the Board Resolution or supplemental indenture, as the case may be, with respect to the Notes of any particular series so provides, such Notes shall be subject to repayment at the option of the Holder prior to their Stated Maturity, on such terms as set forth in the Board Resolution or supplemental indenture pertaining to such Notes, upon the receipt by the Company of the notice entitled, “Option to Elect Repayment” as specified in Section 4.02.

     Section 4.02. To be repaid at the option of the Holder, Notes must be received, with the notice entitled “Option to Elect Repayment” on the reverse of the Notes duly completed, which notice may be generally in the form set forth in Schedule A hereto (with any such insertions, omissions and variations as determined by the Board of Directors), by the Trustee at its Corporate Trust Office (or at such other place of which the Company shall from time to time notify the Holders of the Notes) within the periods specified by the terms of the Notes. Effective exercise of the repayment option by the Holder shall be irrevocable. Upon such completion and receipt of such form, Notes for which the option has been exercised become due and payable on the repayment date at the repayment price plus accrued interest (if any), except that interest, the Stated Maturity of which is on or prior to such repayment date, shall be payable to the Holders of such Notes of record on the relevant Record Dates according to their terms and the provisions of Section 2.07. From and after such repayment date (unless the Company shall default in the payment of the repayment price) such Notes shall cease to bear interest.

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ARTICLE V

Redemption of Notes; Sinking Funds

     Section 5.01. Notes of any series, which are redeemable before their Stated Maturity at the option of the Company or otherwise shall be redeemable in accordance with their terms and in accordance with the following provisions of this Article V.

     Section 5.02. The election of the Company to redeem Notes of any series shall be evidenced by a Board Resolution or, if an Officer of the Company has been duly authorized with respect to the redemption of Notes, a certificate from such Officer to the Trustee authorizing such actions as are necessary or appropriate to effect the redemption and a Board Resolution evidencing such Officer’s authority. In case of any redemption at the option of the Company of less than all of the Notes of any series the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee by Company Order of such Redemption Date and of the principal amount of Notes to be redeemed.

     Section 5.03. If less than all the Notes of any series are to be redeemed, and unless otherwise provided with respect to the Notes of any particular series, the particular Notes to be redeemed shall be selected by the Trustee from the Outstanding Notes of such series not previously called for redemption, by lot or by such other method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal of Notes, provided, however, that except with respect to Notes being redeemed pursuant to the operation of a sinking fund, no such partial redemption shall reduce the portion of the principal amount of a Note of such series not redeemed to less than the minimum denomination for a Note of that series. The portions of the principal of Notes so selected for partial redemption shall be equal to the smallest authorized denomination of the Notes of such series or an integral multiple thereof.

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of the Indenture, unless the context otherwise requires, all provisions relating to the redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the portion of the principal of such Note which has been or is to be redeemed.

     Section 5.04. Notice of redemption shall be given not less than 30 or more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed, at his address appearing in the Note Register.

     All notices of redemption shall state:

     (1) the series designation of the Notes to be redeemed,

     (2) the Redemption Date,

     (3) the Redemption Price,

     (4) if less than all Outstanding Notes of such series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Notes of such Holder to be redeemed,

     (5) that on the Redemption Date the Redemption Price will become due and payable upon each such Note, and that, if applicable, interest thereon shall cease to accrue from and after said date,

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     (6) the place where such Notes are to be surrendered for payment of the Redemption Price, which shall be the office or agency of the Company at any place at which the principal of such Notes is payable, and

     (7) if Notes are to be redeemed pursuant to any sinking or purchase fund established for any series of Notes, that the redemption is being made for the purposes of such sinking or purchase fund.

Notice of redemption of Notes to be redeemed at the option of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

     Section 5.05. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 3.03) an amount of money sufficient to pay the Redemption Price plus accrued interest of all the Notes which are to be redeemed on that date.

     Section 5.06. Notice of redemption having been given as aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Company shall default in the payment of the Redemption Price) such Notes shall cease to bear interest. Upon surrender of such Notes for redemption in accordance with such notice, such Notes shall be paid by the Company at the Redemption Price. Interest, the Stated Maturity of which is on or prior to the Redemption Date, shall be payable to the Holders of such Notes of record on the relevant Record Dates according to their terms and the provisions of Section 2.07.

If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Note.

     Section 5.07. Any Note which is to be redeemed only in part shall be surrendered to the Trustee or Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to such Holder, without service charge, a new Note or Notes of the same series, of any authorized denominations as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered.

     Section 5.08. The provisions of this Article V shall be applicable to any sinking fund for the retirement of Notes of any series except as otherwise specified as contemplated in such Notes.

The minimum amount of any sinking fund payment provided for by the terms of Notes of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Notes of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Notes of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 5.09. Each sinking fund payment shall be applied to the redemption of Notes of any series as provided for by the terms of Notes of such series.

     Section 5.09. The Company (1) may deliver to the Trustee for cancellation Outstanding Notes of a series (other than any previously called for redemption) and (2) may apply as a credit Notes of a series containing identical terms and provisions which have been redeemed either at the election of the Company pursuant to the terms of such Notes or through the application of permitted optional sinking fund payment pursuant to

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the terms of such Notes, in each case in satisfaction of all or any part of any mandatory sinking fund payment with respect to the Notes of such series required to be made pursuant to the terms of such Notes as provided for by the terms of such Notes; provided that such Notes shall not have been previously so credited. Such Notes shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Notes for redemption through operation of the mandatory sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly

     Section 5.10. Not less than 45 days prior to each sinking fund payment date for Notes of any series, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing mandatory sinking fund payment and optional sinking fund payment, if any, for that series of Notes pursuant to the terms thereof, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Notes of that series pursuant to Section 5.09 and will also deliver to the Trustee any Notes to be so delivered if not theretofore delivered. Not less than 30 days before each such sinking fund payment date the Company shall cause to be selected the Notes to be redeemed upon such sinking fund payment in the manner specified in Section 5.03 and shall cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 5.04. The Company shall deposit the amount of cash, if any, required for such sinking fund payment with the Trustee in the manner provided in Section 5.05. Such notice having been duly given, the redemption of such Notes shall be made upon the terms and in the manner stated in Sections 5.06 and 5.07.

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ARTICLE VI

Satisfaction and Discharge

     Section 6.01. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Notes if herein or in any supplemental indenture expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture, when

     (1) either

     (A) all Notes theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.06, and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 3.03) have been delivered to the Trustee for cancellation; or

     (B) all such Notes not theretofore delivered to the Trustee for cancellation

     (i) have become due and payable, or

     (ii) will become due and payable at their Stated Maturity within one year, or

     (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company, in the case of (B) (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Notes which have become due and payable), or to their Stated Maturity or Redemption Date, as the case may be;

     (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

     (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the Indenture have been complied with.

Notwithstanding the satisfaction and discharge of the Indenture, the obligations of the Company to the Trustee under Section 8.07, the obligations of the Trustee to any authenticating agent under Section 2.10 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (i) of this Section, the obligations of the Trustee under Section 6.02 and the last paragraph of Section 3.03 shall survive.

     Section 6.02. Subject to the provisions of the last paragraph of Section 3.03, all money deposited with the Trustee pursuant to Section 6.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and the Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

     Section 6.03. Unless this Section 6.03 shall be deemed inapplicable to a series of Notes pursuant to the Board Resolution or supplemental indenture creating such series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the

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Outstanding Notes of any such series and the Trustee, at the demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of such indebtedness, when

     (1) either

     (A) with respect to all Outstanding Notes of such series,

     (i) the Company has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of discharging such indebtedness an amount sufficient to pay and discharge the entire indebtedness on all Outstanding Notes of such series for principal (and premium, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by the penultimate paragraph of this Section 6.03, as the case may be; or

     (ii) the Company has deposited or caused to be deposited with the Trustee as obligations in trust for the purpose of discharging such indebtedness such amount of direct obligations of, or obligations the principal of and interest on which are fully guaranteed by, the United States of America and which are not callable at the option of the issuer thereof as will, together with the income to accrue thereon without consideration of any reinvestment thereof, be sufficient to pay and discharge the entire indebtedness on all Outstanding Notes of such series for principal (and perm-um, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by the penultimate paragraph of this Section 6.03, as the case may be; or

     (B) the Company has properly fulfilled such other means of satisfaction and discharge as is specified in the Board Resolution or supplemental indenture applicable to the Notes of such series; and

     (2) the Company has paid or caused to be paid all other sums payable with respect to the Outstanding Notes of such series; and

     (3) the Company has delivered to the Trustee a certificate of a firm of independent public accountants certifying as to the sufficiency of the amounts deposited pursuant to subsections (A)(i) or (ii) of this Section for payment of the principal (and premium, if any) and interest on the dates such payments are due, an Officers’ Certificate and an Opinion of Counsel, each such Certificate and Opinion stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the entire indebtedness on all Outstanding Notes of any such series have been complied with.

Any deposits with the Trustee referred to in Section 6.03(1)(A) above shall be irrevocable and shall be made under the terms of an escrow trust agreement in form and substance satisfactory to the Trustee. If any Outstanding Notes of such series are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory sinking fund requirement, the Company shall make such arrangements as are satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

Upon the satisfaction of the conditions set forth in this Section 6.03 with respect to all the Outstanding Notes of any series, the terms and conditions of such series, including the terms and conditions with respect thereto set forth in the Indenture, shall no longer be binding upon, or applicable to, the Company, other than the provisions of Sections 2.05, 2.06 and 3.02 and other than the right of Holders of Notes of such series to receive, from the trust fund described in this Section, payment of the principal of and the interest on such Notes when such payments are due and other than the rights, powers, duties and immunities of the Trustee hereunder (including the obligations of the Company to the Trustee under Section 8.07).

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ARTICLE VII

Remedies

     Section 7.01. “Event of Default”, wherever used herein with respect to Notes of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgement, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

     (1) default in the payment of any interest upon any Note of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

     (2) default in the payment of the principal of (or premium, if any, on) any Note of that series at its Maturity; or

     (3) default in the deposit under Section 5.10 of any installment of any sinking fund or similar payment with respect to Notes of that series when and as payable by the terms of the Board Resolution or supplemental indenture establishing such series, and continuance of such default for a period of 30 days; or

     (4) default in the performance, or breach, of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 7.01 specifically dealt with or which has expressly been included in the Indenture solely for the benefit of Notes of a series other than that series), and continuance of such default or breach for the period of time and after the notice specified below;

(5)	the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the Federal Bankruptcy Code or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or
(6)	the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable Federal or State law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or
(7)	default by the Company beyond any period of grace provided for with respect thereto in any payment of principal or interest on any obligation for borrowed money, other than any of the Notes, under an indenture in which the Trustee is acting as the trustee for security holders, or in the performance of any other term, condition or covenant contained in any such indenture, which results in the principal amount of such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise be due and payable, without such acceleration being rescinded or annulled within the period and after the notice specified below, and such principal amount exceeds $150,000,000.

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A default with respect to any series of Notes under clause (4) or clause (7) is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the outstanding Notes of that series notify the Company and the Trustee, of the default and the Company does not cure the default within 60 days in the case of clause (4) and 30 days in the case of clause (7) after receipt of the notice. The notice must specify the default, demand that it be remedied and state that the notice is a “Notice of Default”.

     Section 7.02. If an Event of Default occurs with respect to Notes of any series at the time Outstanding and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes of that series may declare the principal of all the Notes of that series (or, if the Notes of that series are Original Issue Discount Notes, such portion of the principal amount thereof as may be specified in the terms of such Notes) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal shall become immediately due and payable.

At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article VII provided, the Holders of a majority in principal amount of the Notes then Outstanding of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

     (1) the Company has paid or deposited with the Trustee a sum sufficient to pay

     (A) all overdue installments of interest, if any, on all Notes of that series,

     (B) the principal of (and premium, if any, on) any Notes of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or the respective rates borne by the Notes of that series,

     (C) to the extent that payment of such interest is lawful, interest upon overdue installments of interest, if any, at the rate or the respective rates borne by the Notes of that series or at a rate otherwise specified therein, and

     (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

     (2) all Events of Default, other than the non-payment of the principal of Notes of that series which have become due solely by such acceleration, have been cured or waived as provided in Section 7.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Section 7.03. The Company covenants that if

     (1) default is made in the payment of any installment of interest on any Notes when such interest becomes due and payable and such default continues for a period of 30 days, or

     (2) default is made in the payment of the principal of (or premium, if any, on) any Notes at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Notes, the whole amount then due and payable on such Notes for principal (and premium, if any) and interest, with interest upon the overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the rate or respective rates borne by such Notes or at the rate or respective rates specified therein; and, in addition thereto, such further amount as shall be sufficient to cover

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the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amount forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

     Section 7.04. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

     (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

     (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

     Section 7.05. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes in respect of which such judgment has been recovered.

     Section 7.06. Any money collected by the Trustee pursuant to this Article VII shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the

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distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Notes, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

     First: To the payment of all amounts due the Trustee under Section 8.07;

     Second: To the payment of the amounts then due and unpaid upon the Notes for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal (and premium, if any) and interest, respectively; and

     Third: To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.

     Section 7.07. No Holder of any Note of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

     (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes of that series;

     (2) the Holders of not less than 25% in principal amount of the Outstanding Notes of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

     (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

     (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

     (5) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Holders of a majority in principal amount of the Outstanding Notes of such series; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under the Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

     Section 7.08. Notwithstanding any other provision in the Indenture, the Holder of any Note shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and (subject to Section 2.07) 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.

     Section 7.09. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under the Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders shall, subject to any determination in such proceeding be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

     Section 7.10. No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other

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right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

     Section 7.11. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or acquiescence therein. Every right and remedy given by this Article VII or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

     Section 7.12. The Holders of a majority in principal amount of the Outstanding Notes of a series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to such series, provided that

     (1) such direction shall not be in conflict with any rule of law or with the Indenture, and

     (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

     Section 7.13. The Holders of a majority in principal amount of the Outstanding Notes of any series affected by an Event of Default may on behalf of the Holders of such series of Notes waive any past default hereunder and its consequences, except a default

     (1) in the payment of the principal of (or premium, if any) or interest on any Note of such series, or

     (2) in respect of a covenant or provision hereof which under Section 11.02 cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

     Section 7.14. All parties to the Indenture agree, and each Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered, or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 7.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of any series of the Outstanding Notes, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Note on or after the respective Stated Maturities expressed in such Note for such interest (or, in the case of redemption, on or after the Redemption Date).

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     Section 7.15. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of the Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

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ARTICLE VIII

The Trustee

     Section 8.01. (a) Except during the continuance of an Event of Default:

     (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Indenture, and no implied covenants or obligations shall be read into the Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of the Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Indenture.

     (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

     (c) No provision of the Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

     (1) this Subsection (c) shall not be construed to limit the effect of Subsection (a) of this Section 8.01;

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

     (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Notes of a series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Indenture with respect to such series; and

     (4) no provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.

     Section 8.02. Within 90 days after the occurrence of any default hereunder, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Note Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provide, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Note or in the payment of any sinking or purchase fund installment, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders; and provided, further, that in the case of any default of the character specified in Section 7.01(4) no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section 8.02 the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default.

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     Section 8.03. Except as otherwise provided in Section 8.01:

     (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

     (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

     (c) whenever in the administration of the Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

     (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

     (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders pursuant to the Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

     (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;

     (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and

     (h) the Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Indenture.

     Section 8.04. The recitals contained herein and in the Notes, except the certificate of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of the Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of Notes or the proceeds thereof.

     Section 8.05. The Trustee, any Paying Agent, Note Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 8.08 and 8.09 may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Note Registrar or such other agent.

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     Section 8.06. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

     Section 8.07. The Company agrees

     (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

     (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of the Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

     (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

As security for the performance of the obligations of the Company under this Section 8.07 the Trustee shall have a lien prior to the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Notes.

     Section 8.08. (a) The Indenture shall always have a Trustee with respect to the Notes of each series which satisfies the requirements of TIA § 310(a)(1). The Trustee shall always have a combined capital and surplus of at least $5,000,000 as set forth in its most recent annual report of condition.

     (b) The Trustee is subject to TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); it being understood that for the purposes of the Indenture, with respect to Notes of any series, the provisions of TIA § 310(b) with respect to conflicting interests relating to “other securities” shall be interpreted to include Notes of each other series and with respect to “other indentures” shall include the provisions of the Indenture relating to the Notes of such other series. In determining whether the Trustee has a conflicting interest as defined in TIA § 310(b)(1), the indentures set forth in the Indenture, if any, are excluded.

     Section 8.09. The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

     Section 8.10. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 8.11.

     (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

     (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Notes, delivered to the Trustee and to the Company.

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     (d) If at any time:

     (1) the Trustee shall fail to comply with Section 8.08(b) after written request therefor by the Company or by any Holder who has been a bona fide Holder for at least six months, or

     (2) the Trustee shall cease to be eligible under Section 8.08(a) and shall fail to resign after written request therefor by the Company or by any such Holder, or

     (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 7.14, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

     (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Notes delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

     (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to the Holders as their names and addresses appear in the Note Register. Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office.

     Section 8.11. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 8.07. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article VIII.

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     Section 8.12. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes.

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ARTICLE IX

Holders’ Lists and Reports by Trustee and Company

     Section 9.01. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, between May 1 and May 15 and between November 1 and November 15 in each 12 months’ period beginning with June 1, 1992, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days prior to the time such information is furnished. So long as the Trustee is the Note Registrar no such list need be furnished.

     Section 9.02. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 9.01 and the names and addresses of Holders received by the Trustee in its capacity as Note Registrar. The Trustee may destroy any list furnished to it as provided in Section 9.01 upon receipt of a new list so furnished.

     (b) Holders of Notes may communicate pursuant to TIA § 3l2(b) with other Holders with respect to their rights under the Indenture or the Notes. The Company, the Trustee, the Note Registrar, and anyone else shall have the protection of TIA § 312(c).

     Section 9.03. (a) The term “reporting date”, as used in this Section 9.03, means either May 15 or November 15 as selected by the Trustee. Within 60 days after the reporting date in each year, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Note Register, a brief report dated as of such reporting date in accordance with and to the extent required by TIA § 313(a). The Trustee shall also comply with TIA § 313(b).

     (b) Reports pursuant to this Section 9.03 shall be transmitted by mail:

     (1) all Holders of Notes, as the names and addresses of such Holders appear in the Note Register;

     (2) to such Holders of Notes as have, within the 2 years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and except in the case of reports pursuant to TIA § 313(b), to all Holders of Notes whose names and addresses have been furnished to or received by the Trustee pursuant to Section 9.01.

     (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Notes are listed, and also with the Commission. The Company will notify the Trustee when the Notes are listed on any stock exchange.

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ARTICLE X

Consolidation, Merger, Conveyance, Transfer or Lease

     Section 10.01. The Company shall not consolidate with or merge into any other corporation or convey, transfer, sell or lease its properties and assets as, or substantially as, an entirety to any Person, unless:

     (1) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer, sale or lease the properties and assets of the Company as, or substantially as, an entirety shall be a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Notes and the performance of every covenant of this Indenture on the part of the Company to be performed or observed;

     (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Section 10.01 and that all conditions precedent herein provided for relating to such transaction have been complied with.

     Section 10.02. Upon any consolidation or merger, or any conveyance, transfer, sale or lease of the properties and assets of the Company as, or substantially as, an entirety in accordance with Section 10.01, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer, sale or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Notes.

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ARTICLE XI

Supplemental Indentures

     Section 11.01. Without the consent of any Holder, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

     (1) to create a new series of Notes;

     (2) to evidence the succession of another corporation to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Notes contained;

     (3) to add to the covenants of the Company for the benefit of the Holders of all or any series of Notes (and if such covenants are to be for the benefit of less than all series of Notes, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

     (4) to mortgage, pledge, convey, assign and transfer to the Trustee any property or assets as security for the Notes and to specify the terms and conditions upon which such property or assets are to be held and dealt with by the Trustee and to set forth such other provisions in respect thereof as may be required by the Indenture or as may, consistent with the provisions of the Indenture, be deemed appropriate by the Company and the Trustee, or to correct or amplify the description of any such property or assets at any time so mortgaged, pledged, conveyed and transferred to the Trustee;

     (5) to add any additional Events of Default with respect to all or any series of Notes;

     (6) to cure any ambiguity, defect, or inconsistency or to correct or supplement any provision contained herein or in any supplemental indenture or in any Notes issued hereunder;

     (7) to provide for uncertificated Notes in addition to certificated Notes;

     (8) to add to or change any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the issuance of Notes in bearer form, registrable or not registrable as to principal, and with or without interest coupons;

     (9) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes of one or more series and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 8.11; or

     (10) to make any change that does not adversely affect the rights of any Holder of Notes which are outstanding.

     Section 11.02. Subject to the provisions of Section 7.12 and Section 7.13, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Notes of each series which are affected, evidenced by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes of such series thereof under the Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby, (1) change the Stated Maturity of the principal of, or

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any installment of interest on, any Note, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or reduce the principal amount of an Original Issue Discount Note that would be due and payable upon a declaration of acceleration of the Maturity thereof, or change the coin or currency in which any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

     (2) reduce the percentage in principal amount of the Outstanding Notes of any series, the consent of whose Holders is required for such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

     (3) modify any of the provisions of this Section 11.02 or Section 7.13, except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each Note affected thereby provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 3.08, or the deletion of this proviso, in accordance with the requirements of Sections 8.11 and 11.01(9).

It shall not be necessary for any Act of Holders under this Section 11.02 to approve the particular form of any proposed supplemental in-denture, but it shall be sufficient if such Act shall approve the substance thereof.

     Section 11.03. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article XI or the modification thereby of the trusts created by the Indenture, the Trustee shall be entitled to receive, and (subject to Section 8.01) shall be fully protected in relying upon, an Opinion of Counsel, stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that such supplemental indenture is a valid and binding obligation of the Company in accordance with its terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affect the Trustee’s own rights, duties or immunities under the Indenture or otherwise.

     Section 11.04. Upon the execution of any supplemental indenture under this Article XI, the Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

     Section 11.05. Every supplemental indenture executed pursuant to this Article XI shall conform to the requirements of TIA as then in effect.

     Section 11.06. Notes authenticated and delivered after the execution of any applicable supplemental indenture pursuant to this Article XI may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

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Schedule A

General Form of Note
[Form of Face of Note]

[If the Note is an Original Issue Discount Note, insert-For purposes of Sections 1271-1273 of the United States Internal Revenue Code of 1986, as amended, the issue price of this Note is      % of its principal amount and the issue date is,                200  .]

No.

HSBC FINANCE CORPORATION

.... Note

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, or registered assigns, the principal sum of           on. [If the Note is to bear interest prior to Maturity, insert—, and to pay interest thereon at the rate per annum [of          %] [set forth on the reverse of this Note]. The Company will pay interest from, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, [Insert frequency of interest periods.] (beginning) on,           until the principal hereof is paid or duly provided for. The interest so payable, 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

[If applicable, insert—except that interest payable at Maturity shall be paid to the same Person to whom the principal of this Note is payable.] Interest will be computed on the basis of [Insert method of computing interest]. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder of this Note (or one or more Predecessor Notes) of record at the close of business on a Special Record Date fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to Holders not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.] [If the Security is not to bear interest prior to Maturity, insert—         The principal of this Note shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Note shall bear interest at the rate of      % per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of           % per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.]

Payment of the principal of (and premium, if any) on this Note and, unless otherwise paid as hereinafter provided, the interest (if any) thereon will be made at the office or agency of

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the Company in the, 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 his 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.

In Witness Whereof, the Company has caused this instrument to be duly executed under its facsimile corporate seal.

Dated:	HSBC Finance Corporation
Attest:	By:

[Form of Reverse of Note]

HSBC Finance Corporation

....Note

This Note is one of a duly authorized issue of 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, 200   (herein called the “Indenture”), duly executed and delivered by the Company to [insert name of Trustee], as Trustee, and is one of a series designated as Notes due (herein called the           “Notes”), [Insert, as applicable-unlimited in aggregate principal amount, - or- limited in aggregate principal amount to $           .] 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.

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[At the Company’s Option, Additional Provisions Applicable to

Interest Rate May be inserted here]

[If applicable, insert—The Notes of this series are subject to redemption upon not less than 30 days’ notice by mail, [if applicable, insert—(1) on          in any year commencing with the year           and ending with the year           through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount and (2)] at any time [on or after                ,200_], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percent-ages of the principal amount): If redeemed [on or before                    ,     %, and if redeemed] during the 12-month period beginning               of the               -years indicated,

	Redemption		Redemption
Year	Price	Year	Price

and thereafter at a Redemption Price equal to     % of the principal amount, together in the case of any such redemption [if applicable, insert—[whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Notes, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert—The Notes of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on in any year commencing with the year and ending with the year through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during a 12- month period beginning of the years indicated,

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	Redemption Price	Redemption Price for
	for Redemption	Redemption
	Through	Otherwise Than
	Operation of the	Through Operation of
Year	Sinking Fund	the Sinking Fund

and thereafter at a Redemption Price equal to     -% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Notes, of record at the close of business on the relevant Regular Record Dates referred to on the face hereof, all as provided in the Indenture].

[The sinking fund for this series provides for the redemption on in each year beginning with the year and ending with the year of [not less than] $          [(“mandatory sinking fund”) and not more than $          ] aggregate principal amount of Notes of this series. [Notes of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made in the inverse order in which they become due.]

[In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

[If applicable, insert—The Notes of this series will be repayable on                    ,                    , at the option of the holders of the Notes of this series, at 100% of their principal amount together with interest (if any) payable to the date of repayment, except that interest, the Stated Maturity of which is on or prior to such repayment date, shall be payable to the            Holders of Notes of this series, or one or more predecessor Notes, of record on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. In order for a Note of this series to be repaid, the Trustee must receive at its office or agency in (or at such other address of which the Company may from time to time notify Holders), during the period from and including,           to and including                (or, if such ,is not a Business Day, the next succeeding Business Day) (i) this Note with the form entitled “Option to Elect Repayment” on the reverse of this Note duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name of the Holder of this Note, the principal amount of this Note, the amount of this Note to be repaid, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note to be repaid with the form entitled “Option to Elect Repayment” on the reverse of this Note duly completed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and such Note and form duly completed are received by the Company by such fifth Business Day. Any such notice received by the Company during the period from and including, to and including, shall be irrevocable. The repayment option may be

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exercised by the Holder of this Note for less than the entire principal amount of this Note provided the principal amount which is to be repaid is equal to $          or an integral multiple of $          . All questions as to the validity, eligibility (including time of receipt) and acceptance of any Note of this series for repayment will be determined by the Company, whose determination will be final and binding.]

[If the Note is not an Original Issue Discount Note, -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.]

[If the Note is an Original Issue Discount Note, —If an Event of Default with respect to Notes of this series shall occur and be continuing, an amount of principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to—Insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and interest, if any, on the Notes of this series shall terminate.]

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.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights 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 Out-standing 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 Indenture and their consequences. Any such consent or waiver by the Holder of this 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 here for or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.

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

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terms and provisions, of authorized denominations and for a like aggregate principal amount, will be issued to the designated transferee or transferees.

The Notes are issuable only as registered Notes without coupons in denominations of                -. 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.

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

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[Form of Trustee’s Certificate of
Authentication for Notes]

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

[Insert Name of Trustee]
	as Trustee
		By
			Authorized Officer

[Form of “Option to Elect Repayment”,
if Applicable, for Notes].
Option to Elect Repayment

The undersigned hereby requests and irrevocably instructs the Company to repay the within Note on the first occurring not less than nor more than days after the date of receipt of the within Note by the Trustee at

Attention:                                        (or at such other place of which the Company shall from time to time notify the Holder of the within Note), at a price equal to the principal amount thereof, [together with interest to the date of repayment], to the undersigned at

                                                                                                                  
Please Print or Typewrite Name and Address of the undersigned

Dated
	NOTICE: The Signature to This Request and Instruction Must Correspond With the Name as Written Upon the Face of the Note in Every Particular Without Alteration or Enlargement of any Change Whatever.

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EX-4.2

Exhibit 4.2

AMENDED AND RESTATED
INDENTURE
FOR
SENIOR DEBT SECURITIES
dated as of
December 15, 2004

     This Amended and Restated Indenture, dated as of December 15, 2004 (“Amended and Restated Indenture”), is between HSBC Finance Corporation (formerly known as Household International, Inc. and as successor to Household Finance Corporation), a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company” or “HSBC Finance”) and having its principal office at 2700 Sanders Road, Prospect Heights, Illinois 60070, and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank (National Association)), a national banking association organized and existing by virtue of the banking laws of the United States of America (hereinafter called the “Trustee”), and having its principal Corporate Trust Office at The City of New York, New York.

WITNESSETH:

     Whereas, Household Finance Corporation (“HFC”) and the Trustee have heretofore entered into an Indenture for Senior Debt Securities dated as of December 1, 1993 (as amended and supplemented to date, hereinafter called the “Original Indenture”); and

     Whereas, under the Original Indenture, HFC created and issued from time to time Notes of a series known as the Medium Term Notes due nine months or more from date of issue (hereinafter called the “Medium Term Notes”); and

     Whereas, prior to the date hereof, HSBC Finance and HFC entered into an Agreement and Plan of Merger, under which HFC will merge as of the date hereof with and into HSBC Finance, with HSBC Finance as the surviving corporation, and all obligations of HFC will become direct obligations of HSBC Finance, including all Medium Term Notes issued and outstanding under the Original Indenture (hereinafter referred to as the “Merger”); and

     Whereas, Section 10.01 of the Original Indenture provides, among other things, that HFC will not merge into any other corporation unless the surviving corporation in such merger (if other than the HFC) expressly assumes, by supplemental indenture, the due and punctual payment of the principal of (and premium, if any) and interest on all issued and outstanding Medium Term Notes and the performance of every covenant of the Original Indenture on the part of HFC required to be performed under the Original Indenture; and

     Whereas, HSBC Finance desires to supplement the Original Indenture to expressly assume the due and punctual payment of the principal of (and premium, if any) and interest on all issued and outstanding Medium Term Notes and the performance of every covenant of the Original Indenture on the part of the Company required to be performed under the Original Indenture and to amend and restate the Original Indenture to evidence the merger of HFC into HSBC Finance; and

     Whereas, all things necessary to make this Amended and Restated Indenture a valid agreement of HSBC Finance and to make the Medium Term Notes which may be issued on or after the date hereof, when executed by HSBC Finance and authenticated and delivered by the Trustee and duly issued by HSBC Finance, the valid obligations of HSBC Finance, and, in accordance with their and its terms, have been done.

     Now, Therefore, This Amended and Restated Indenture Witnesseth:

Compliance with Article X of the Original indenture

     As required by Section 10.01 of the Original Indenture, HSBC Finance hereby expressly and irrevocably assumes, as of the date hereof, the due and punctual payment of the principal of (and premium, if any) and interest on all the Medium Term Notes issued and outstanding as of the date hereof and the performance of every covenant of the Original Indenture on the part of HFC required to be performed under the Original Indenture.

     Pursuant to Section 10.02 of the Original Indenture, HSBC Finance shall succeed to, and be substituted for, and may exercise every right and power of, HFC under the Original Indenture with the same effect as if HSBC Finance had been named as the Company herein.

Amendment and restatement of Original Indenture terms

     For and in consideration of the premises and the purchase of Notes to be issued hereunder by Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as follows:

     Article 1. Standard Provisions. Except as specifically act forth herein all of the terms, conditions, covenants and provisions contained in the Company’s Amended and Restated Standard Multiple-Series Indenture Provisions for Senior Debt Securities dated as of December 15, 2004 (the “Provisions”), a copy of which is attached hereto, are incorporated herein by reference in their entirety and shall be deemed to be a part hereof to the same went as if such provisions had been set forth in full herein. All capitalized terms which are used herein and not otherwise defined herein are defined in the Provisions and are used herein with the same meanings as in the Provisions. The Provisions, together with this Amended and Restated Indenture, are deemed to be the “Amended and Restated Indenture.”

     Article 2. Conflicts. The Indenture dated as of October 1, 1992 and the Amended and Restated Indenture for Senior Debt Securities (providing for the issuance of the Company’s InterNotes) dated as of December 15, 2004, each between the Company and the Trustee, are excluded for purposes of Section 8.08(b) of the Provisions.

     Article 3. Designation and Terms of the Medium Term Notes. A series of Notes created pursuant to this Amended and Restated Indenture shall be known and designated as the “Medium Term Notes due nine months or more from date of issue” of the Company.

     Each Medium Term Note will be dated and issued as of the dale of its authentication by the Trustee. Each Medium Term Note shall also bear an Original Issue Date (as hereinafter defined) which, with respect to any Medium Term Note (or any portion thereof), shall mean the date of its original issue. as specified in such Medium Term Note (the “Original Issue Date”), and such Original Issue Date shall remain the same if such Medium Term Note is subsequently issued upon transfer, exchange, or substitution of such Medium Term Note regardless of its date of authentication. Principal on any Medium Term Note shall become due and payable on such date nine months or more from the Original Issue Date of such Note, as specified on such Note. Interest rates, or interest rate formulas, will be subject to change by the Company from time to time, but no such change will affect any Medium Term Notes theretofore issued. Interest shall be computed on the basis Specified in each Medium Term Note.

     Each Medium Term Note will bear interest from the Original Issue Date or from the most recent date to which interest has been paid or duly provided for, at the rate per annum stated, or pursuant to the interest rate formula specified, therein until the principal thereof is paid or made available for payment. Interest will be payable on each Interest Payment Date and at Maturity. Interest will be payable to the person in whose name a Note is registered at the close of business on the Regular Record Date next preceding each Interest Payment Date; provided, however, interest payable at Maturity will be payable to the person to whom principal shall be payable. The first payment of interest on any Medium Term Note issued between a Regular Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Regular Record Date to the registered owner on such next Regular Record Date.

     Payment of principal of the Medium Term Notes and, unless otherwise paid as hereinafter provided, the interest thereon will be made at the office or agency of the Company in the Borough of Manhattan, City and State of New York, 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 his address appearing in the Note register or by wire transfer to an account designated by such person not later than ten days prior to the date of such payment.

     The Regular Record Date referred to in Section 2.07 of the Provisions for the payment of the interest on any Medium Term Notes payable, and punctually paid or duly provided for, on any Interest Payment Date (other than at Maturity) shall be such day (whether or not a Business Day) preceding such Interest Payment Date as is specified in such Medium Term Note, and in the ease of interest payable at Maturity shall be the date such that interest payable at Maturity is paid to the same person to whom principal with respect to any Medium Term Note is payable. Unless otherwise specified in such Medium Term Note, the City of New York shall be the reference city for determining a Business Day.

     The Medium Term Notes may be issued only as registered notes, without coupons, in denominations of $1,000 and any larger denomination which is an integral multiple of $1,000.

     Upon the execution of this Amended and Restated Indenture, or from time to time thereafter, Medium Term Notes, without limitation as to aggregate principal amount, may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Medium Term Notes to or upon a Company Order.

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     Article 4. Redemption of Medium Term Notes. Each Medium Term Note may be redeemed by the Company in whole or in part if so provided pursuant to the terms of such Medium Term Note issued by the Company. Notwithstanding the provisions of Section 5.03 of the Provisions, the Company may redeem any Medium Term Note which by its terms is redeemable prior to Stated Maturity without also redeeming any other Medium Term Note which is redeemable prior to Stated Maturity. The selection of Medium Term Notes to be redeemed prior to Stated Maturity shall be in the sole discretion of the Company.

     Article 5. Global Notes. The Medium Term Notes may be represented in whole or in part in the form of one or more Global Notes. “Global Note” means a registered Note evidencing all or a part of the Medium Term Notes, issued to the Depository for such Medium Term Notes in accordance with this Article and bearing the legend prescribed in this Article. The Company shall execute and the Trustee shall, in accordance with this Article and the Company Order with respect to the Medium Term Notes, authenticate and deliver one or more Global Notes in temporary or permanent form that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the Outstanding Medium Term Notes to be represented by one or more Global Notes, (ii) shall be registered in the name of the Depository for such Global Note or Notes or the nominee of such Depository, (iii) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instruction and (iv) shall bear a legend substantially to the following effect: “Unless this Certificate is presented by an authorized representative of the Depository for registration transfer, exchange or payment, and any Certificate issued is registered in the name as requested by the authorized representative and any payment is made to the Depository, any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful.”

     Notwithstanding Section 2.05 of the Provisions, unless and until it is exchanged in whole or in part for Notes in definitive form, a Global Note representing all or a portion of the Medium Term Notes may not be transferred except as a whole by the Depository, to a nominee of such Depository or by nominee of such Depository to such Depository or another nominee of such Depository or by such Depository or any such nominee to a successor Depository for Medium Term Notes or a nominee of such successor Depository.

     The third paragraph of Section 2.05 of the Provisions shall not apply to Medium Term Notes issued in the form of Global Notes.

     If at any time the Depository for the Medium Term Notes notifies the Company that it is unwilling or unable to continue as Depository for the Medium Term Notes or if at any time the Depository of the Medium Term Notes shall no longer be eligible under this Article, the Company shall appoint a successor Depository with respect to the Medium Term Notes. If a successor Depository for the Medium Term Notes is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Medium Term Notes, will authenticate and deliver Medium Term Notes in definitive form in an aggregate principal amount equal to the principal amount of the Global Note or Notes representing such Medium Term Notes in exchange for such Global Note or Notes.

     The Company may at any time and in its sole discretion determine that the Medium Term Notes issued in the form of one or more Global Notes shall no longer be represented by such Global Note or Notes. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Medium Term Notes will authenticate and deliver, Medium Term Notes in definitive form in an aggregate principal amount equal to the principal amount of the Global Note or Notes representing such Medium Term Notes in exchange for such Global Note or Notes.

     The Depository for such Medium Term Notes may surrender a Global Note or Notes for such Medium Term Notes in exchange in whole or in part for Medium Term Notes in definitive form on such terms as are acceptable to the Company and such Depository. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge:

          (i) to each Person specified by such Depository a new Medium Term Note or Notes, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Pearson’s beneficial interest in the Global Note; and

          (ii) to such Depository a new Global Note in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Note and the aggregate principal amount of Medium Term Notes delivered to Holders thereof.

     In any exchange provided for in this Article, the Company will execute and the Trustee will authenticate and deliver Medium Term Notes in definitive registered form in authorized denominations.

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     Upon the exchange of a Global Note for Medium Term Notes in definitive form, such Global Note shall be cancelled by the Trustee. Medium Term Notes issued in exchange for a Global Note pursuant to this Article shall be registered in such names and in such authorized denominations as the Depository for such Global Note, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Medium Term Notes to the persons in whose names such Medium Term Notes are so registered.

     Article 6. Currencies. The currency of the Medium Term Notes shall be either Dollars, ECUs, Foreign Currency or any unit of a composite of currencies (which composite may or may not include Foreign Currencies or Dollars), which currency shall be specifically identified in the Medium Term Note if such currency is not Dollars.

     Medium Term Notes denominated in any currency other than Dollars shall be issued in such denominations as specified in the applicable Medium Term Note.

     Article 7. Original Issue Discount Notes. The Medium Term Notes may be Original Issue Discount Notes.

     Article 8. Other Terms and Provisions. The Medium Term Notes may be offered and sold at such prices, including such terms and provisions as to (i) repayment of the principal of such Note at the option of the Company or the holder thereof or, (ii) the currency in which interest or principal payments on the Medium Term Note will be made, if different from the currency in which the Medium Term Note is denominated, or (iii) the method for, or the cancellation of, the payment of principal, premium, if any, and interest on any Medium Term Note, as determined by any authorized representative of the Company, with such determination being conclusively evidenced by such representative’s signature on the Medium Term Note.

     Article 9. Supplemental Indentures. The Company may, by supplemental indenture, amend this Amended and Restated Indenture to provide for additional definitions, terms, and provisions relating to Medium Term Notes. Any such supplemental indenture will not adversely affect the rights and privileges of Holders of Medium Term Notes issued prior to such supplemental indenture. Any supplemental indentures entered into under the Original Indenture shall remain in full force and effect under this Amended and Restated Indenture.

     Article 10. Effective Time. This Amended and Restated Indenture shall become effective on the date and at the time of the consummation of the Merger.

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TESTIMONIUM

     This Amended and Restated Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

     In Witness Whereof, the parties hereto have caused this Amended and Restated Indenture to be duly executed and attested, all as of the day and year first written above. In addition, by its signature below, the Trustee acknowledges and agrees that this Amended and Restated Indenture is delivered in a form satisfactory to the Trustee for purposes of Section 10.01 of the Original Indenture.

	HSBC Finance Corporation
	By:	/s/ AUTHORIZED SIGNATORY
Attest:
/s/ AUTHORIZED SIGNATORY
Assistant Secretary
	JPMorgan Chase bank, N.A.
	as Trustee
	By:	/s/ AUTHORIZED SIGNATORY
		Authorized Officer
Attest:
/s/ AUTHORIZED SIGNATORY
Authorized Officer

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EX-4.3

EXHIBIT 4.3

HSBC FINANCE CORPORATION

Form of Warrant Agreement
(for warrants sold alone)

     This Warrant Agreement dated as of          between HSBC Finance Corporation, a corporation organized under the laws of the State of Delaware (the “Company”, which term includes any successor corporation under the Indenture hereinafter referred to) and as Warrant Agent (the “Warrant Agent”).

     Whereas, the Company has entered into an Indenture dated as of          (the “Indenture”), with          , as Trustee (the “Trustee”), providing for the issuance from time to time of its unsecured debt securities (the “Debt Securities”), to be issued in one or more series as provided in the Indenture; and

     Whereas, the Company proposes to sell warrant certificates evidencing one or more warrants (the “Warrants” or, individually a “Warrant”) representing the right to purchase [title of debt securities purchasable through exercise of Warrants] (the “Warrant Debt Securities”), such warrant certificates and other warrant certificates issued pursuant to this Agreement hereinafter referred to as the “Warrant Certificates”; and

     Whereas, the Company desires the Warrant Agent to act on behalf of the Company in connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, exchanged, exercised and replaced;

     Now, Therefore, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I

Issuance of Warrants and Execution
and Delivery of Warrant Certificates

     Section 1.01. Issuance of Warrants. Each Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase a Warrant Debt Security in the principal amount of $     .

     Section 1.02. Execution and Delivery of Warrant Certificates. Each Warrant Certificate, whenever issued, shall be in [bearer] [registered] form substantially in the form set forth in Exhibit A hereto, shall be dated and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Warrant Certificates may be listed, or to

conform to usage. The Warrant Certificates shall be signed on behalf of the Company by either its President, one of its Vice Presidents or one of its Assistant Treasurers under its corporate seal and attested by its Secretary or any of its Assistant Secretaries. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates.

     No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been duly issued hereunder.

     In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates has ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer.          [If bearer Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein shall mean the bearer of such Warrant Certificate.]

     [If registered Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein shall mean any person in whose name at the time any Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose.]

     Section 1.03. Issuance of Warrant Certificates. Warrant Certificates evidencing the right to purchase an aggregate principal amount not exceeding $     aggregate principal amount of Warrant Debt Securities (except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, countersign Warrant Certificates evidencing Warrants representing the right to purchase up to $     aggregate principal amount of Warrant Debt Securities and shall deliver such Warrant Certificates to or upon the order of the Company. Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate only if the Warrant Certificate is issued in exchange or substitution for one or more previously countersigned Warrant Certificates, [If registered Warrants or in connection with their transfer], as hereinafter provided or as provided in Section 2.03(c).

ARTICLE II

Warrant Price, Duration and Exercise of Warrants

     Section 2.01. Warrant Price*. [On     , 20      the exercise price of each Warrant is $     . During the period from     , 20 through and including     , 20     the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from     , 20     . On     , 20     the exercise price of each Warrant will be $     . During the period from     ,

20     , through and including     , 20     , the exercise price of each Warrant will be $      plus [accrued amortization of the original issue discount] [accrued interest] from         , 20     , [in each case, the original issue discount will be amortized at a     % annual rate, computed on an annual basis using a 360-day year consisting of twelve 30-day months]. Such purchase price of Warrant Debt Securities is referred to in this Agreement as the “Warrant Price”. [The original issue discount for each $1,000 principal amount of Warrant Debt Securities is $     ].

     Section 2.02. Duration of Warrants. Each Warrant evidenced by a Warrant Certificate may be exercised in whole at any time, as

     *     Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Offered Warrants and the Warrant Debt Securities. Specified herein, on or after [the date thereof] [     , 20 ] and at or before 5 p.m.     time on                   , 20     (the “Expiration Date”). Each Warrant not exercised at or before 5 p.m. time on the Expiration Date shall become void, and all rights of the holder of the Warrant Certificate evidencing such Warrant under this Agreement shall cease.

Section 2.03. Exercise of Warrants.

     (a) During the period specified in Section 2.02 any whole number of Warrants may be exercised by providing certain information set forth on the reverse side of the Warrant Certificate and by paying in full, in lawful money of the United States of America, [in cash or by certified check or official bank check or by bank wire transfer, in each case] [by bank wire transfer] in immediately available funds, the Warrant Price for each Warrant exercised, to the Warrant Agent at its corporate trust office [or at          ], provided that such exercise is subject to receipt within five business days of such [payment] [wire transfer] by the Warrant Agent of the Warrant Certificate with the form of election to purchase Warrant Debt Securities set forth on the reverse side of the Warrant Certificate properly completed and duly executed. The date on which payment in full of the Warrant Price is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate as aforesaid, be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in an account of the Company maintained with it and shall advise the Company by telephone at the end of each day on which a [payment] [wire transfer] for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephone advice to the Company in writing.

     (b) The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company and the Trustee under the Indenture of (i) the number of Warrants exercised in accordance with the terms and conditions of this Agreement and the Warrant Certificates; (ii) the instructions of each holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Debt Securities to which such holder is entitled upon such exercise; (iii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise; and (iv) such other information as the Company or the Trustee shall reasonably require.

     (c) As soon as practicable after the exercise of any Warrant, the Company shall issue, pursuant to the Indenture, in authorized denominations to or upon the order of the holder of the Warrant Certificate evidencing such Warrant, the Warrant Debt Securities to which such holder is entitled [in fully registered form, registered in such name or names] [in bearer form] as may be directed by such

holder*; [provided, however, the Company shall not be required to deliver any unregistered Warrant Debt Securities in the United States]. If fewer than all of the Warrants evidenced by such Warrant Certificate were exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate evidencing the number of such Warrants remaining unexercised.

     (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Debt Securities; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Debt Securities until such tax or other charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.

     (e) Issuance of unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such arrangements and procedures as shall be provided pursuant to Section of the Indenture.]

ARTICLE III

Other Provisions Relating to Rights
of Holders of Warrant Certificates

     Section 3.01. No Rights as Warrant Debt Security Holder Conferred by Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder thereof to any of the rights of a holder of Warrant Debt Securities, including, without limitation, the right to receive the payment of principal of, premium (if any) or interest on Warrant Debt Securities or to enforce any of the covenants in the Indenture.

     Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of indemnity reasonably satisfactory to them and, in the case of mutilation, upon surrender thereof to the Warrant Agent for cancellation, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost,           —*Subject to change in accordance with changes in tax laws and          regulations. Stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing the same number of Warrants. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.

     Section 3.03. Holder of Warrant Certificate May Enforce Rights. Notwithstanding any of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the holder of any Warrant Debt Securities or the holder of any other Warrant Certificate, may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce or otherwise in respect of, his right to exercise the Warrants evidenced by his Warrant Certificate in the manner provided in his Warrant Certificate and in this Agreement.

ARTICLE IV

Exchange and Transfer of Warrant Certificates

     Section 4.01. Exchange and Transfer of Warrant Certificates. Upon surrender at the corporate trust office of the Warrant Agent [or     ], Warrant Certificates evidencing Warrants may be exchanged for Warrant Certificates in other denominations evidencing such Warrants [If registered Warrants — or may be transferred in whole or in part]; provided that such other Warrant Certificates evidence the same aggregate number of Warrants as the Warrant Certificates so surrendered. [If registered Warrants — The Warrant Agent shall keep, at its corporate trust office [and at     ], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and exchanges and transfers of outstanding Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at its corporate trust office [or     ] for exchange [or transfer], properly endorsed or accompanied by appropriate instruments of transfer and written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent.] No service charge shall be made for any exchange [or transfer] of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or transfer] an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized and executed by the Company, as so requested. The Warrant Agent shall not be required to effect any exchange [or transfer] which will result in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or transfer] of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer].

     Section 4.02. Treatment of Holders of Warrant Certificates. [Bearer warrants — Each Warrant Certificate shall be transferable by delivery and shall be deemed negotiable and the bearer of each Warrant Certificate may be treated by the Company, the Warrant Agent and all other persons dealing with such bearer as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.] [Registered Warrants — The Company and the Warrant Agent may treat the registered holder as the absolute Owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.]

     Section 4.03. Cancellation of Warrant Certificates. Any Warrant Certificate surrendered for exchange [transfer] or exercise of the Warrants evidenced thereby shall,

if surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof. The Warrant Agent shall deliver to the Company from time to time or otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to the Company.

ARTICLE V

Concerning the Warrant Agent

     Section 5.01. Warrant Agent. The Company hereby appoints          as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates, upon the terms and subject to the conditions herein set forth; and hereby accepts such appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant Certificates and hereby and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof.

     Section 5.02. Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the holders from time to time of the Warrant Certificates shall be subject:

     (a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including counsel fees) incurred by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, as well as the costs and expenses of defending against any claim of such liability.

     (b) Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the holders of Warrant Certificates or beneficial owners of Warrants.

     (c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, and the advise of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

     (d) Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or thing suffered by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.

     (e) Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Debt Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under the Indenture.

     (f) No Liability for Interest. The Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

     (g) No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates.

     (h) No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

     (i) No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth, and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligations to take any action hereunder which may tend to subject it to any expense or liability, reimbursement for which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or responsible for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.02 hereof, to make any demand upon the Company.

Section 5.03. Resignation and Appointment of Successor.

     (a) The Company agrees, for the benefit of the holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrant Certificates are no longer exercisable.

     (b) The Warrant Agent may at any time resign as such agent by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided that such date shall be not less than three months after

the date on which such notice is given, unless the Company otherwise agrees. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date when it shall become effective. Such resignation or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a successor Warrant Agent (which shall be a bank or trust company authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers) and the acceptance of such appointment by such successor Warrant Agent. The obligation of the Company under Section 5.02(a) shall continue to the extent set forth therein, notwithstanding the resignation or removal of the Warrant Agent.

     (c) In case at any time the Warrant Agent shall resign, or shall be removed, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file a petition seeking relief under Title II of the United States Code, as now constituted or hereafter amended, or under any other applicable Federal or State bankruptcy law or similar law or make an assignment for the benefit of its creditors or consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed, or if an order of any court shall be entered for relief against it under the provisions of Title II of the United States Code, as now constituted or hereafter amended, or under any other applicable Federal or State bankruptcy or similar law, or if any public officer shall have taken charge or control of the Warrant Agent or of its property or affairs, for the purpose of rehabilitation, conservation or liquidation, a successor Warrant Agent, qualified as set forth in subsection (b) above, shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.

     (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder.

     (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant

Agent shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that it shall be qualified as set forth above in subsection (b).

ARTICLE VI

Miscellaneous

     Section 6.01 Amendment. This Agreement may be amended by the parties hereto, without the consent of the holder of any Warrant Certificate, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable; provided that such action shall not adversely affect the interests of the holders of the Warrant Certificates.

     Section 6.02. Notices and Demands to the Company and Warrant Agent. If the Warrant Agent shall receive any notice or demand addressed to the Company by the holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company.

     Section 6.03. Addresses. Any communications from the Company to the Warrant Agent with respect to this Agreement shall be addressed to          , attention:          , and any communications from the Warrant Agent to the Company with respect to this Agreement shall be addressed to HSBC Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois 60070, attention: Treasurer (or such other address as shall be specified in writing by the Warrant Agent or by the Company).

     Section 6.04. Applicable Law. The validity, interpretation and performance of this Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions thereof shall be governed by, and construed in accordance with, the laws of the State of .

     Section 6.05. Delivery of Prospectus. The Company will furnish to the Warrant Agent sufficient copies of a prospectus relating to the Warrant Debt Securities deliverable upon exercise of Warrants (the “Prospectus”), and the Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of the Warrant Debt Securities issued upon such exercise, a Prospectus.

     Section 6.06. Obtaining of Governmental Approvals. The Company will from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States Federal and State laws (including without limitation a registration statement in respect of the Warrants and Warrant Debt Securities under the Securities Act of 1933), which may be or become requisite in connection with the issuance, sale, transfer, and delivery of the Warrant Certificates, the exercise of the Warrants, the issuance, sale, transfer and delivery of the Warrant Debt Securities issued upon exercise of

the Warrants or upon the expiration of the period during which the Warrants are exercisable.

     Section 6.07. Persons Having Rights under Warrant Agreement. Nothing in this Agreement expressed or implied and nothing that may be inferred from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company, the Warrant Agent and the holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof; and all covenants, conditions, stipulations, promises and agreements in this Agreement contained shall be for the sole and exclusive benefit of the Company and the Warrant Agent and their successors and of the holders of the Warrant Certificates.

     Section 6.08. Headings. The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

     Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.

     Section 6.10. Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection by the holder of any Warrant Certificate. The Warrant Agent may require such holder to submit his Warrant Certificate for inspection by it.

     In Witness Whereof: HSBC Finance Corporation has caused this Agreement to be signed by one of its duly authorized officers, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries; and has caused this Agreement to be signed by one of its duly authorized officers, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries, all as of the day and year first above written.

	HSBC Finance
	Corporation
	By:
Attest:
	By:
		as Warrant Agent
Attest:

EXHIBIT A

(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]

EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT
AS PROVIDED HEREIN

Warrant Certificates representing Warrants to purchase [Title of Warrant Debt
Securities] as described herein.

HSBC FINANCE CORPORATION WARRANTS TO PURCHASE [Title of
Warrant Debt Securities]

VOID AFTER 5 P.M.          TIME ON          , 20

     [No.]

               Warrants     This certifies that [the bearer is the] [     or registered assigns is the registered] owner of the above indicated number of Warrants, each Warrant entitling such [bearer] [owner] to purchase, at any time [after 5 p.m.     time on          , 20      and] on or before 5 p.m. time on          , 20      ,          $     principal amount of [Title of Warrant Debt Securities] (the “Warrant Debt Securities”), of HSBC FINANCE CORPORATION (the “Company”), issued and to be issued under the Indenture (as hereinafter defined), on the following basis:* [on          , 20     the exercise price of each Warrant is $     ; during the period          from          ,20     through and including          , 20     , the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from          , 20     ; on          , 20     the exercise price of each Warrant will be $     ; during the period from          , 20     , through and including          , 20     , the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest]          *     Complete and modify the following provisions as appropriate to reflect the exact terms of the Offered Warrants and the Warrant Debt Securities. from          , 20     ; [in each case, the original issue discount will be amortized at a     % annual rate, computed on an annual basis, using a 360-day year consisting of twelve 30-day months] (the “Warrant Price”). [The original issue discount for each $1,000 principal amount of Warrant Debt Securities is $     .] The holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full in lawful money of the United States of America, [in cash or by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] in immediately available funds, the Warrant Price for each Warrant exercised to the Warrant Agent [as hereinafter defined] and by surrendering this Warrant Certificate, with the purchase form on the back hereof duly executed at the corporate trust office of [name of Warrant Agent], or its successor as warrant agent (the “Warrant Agent”), [or          ] at the address specified on the reverse hereof and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement [as hereinafter defined]. Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt Securities in registered form in denominations of $     and any integral multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the holder hereof a new Warrant Certificate evidencing the number of Warrants remaining unexercised.

     This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of          , 20     (the “Warrant Agreement”), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at          ].

     The Warrant Debt Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture dated as of          (the “Indenture”), between the Company and          , a organized and existing under the laws of          , as Trustee, (      and any successor to such Trustee being hereinafter referred to as the “Trustee”) and will be subject to the terms and provisions contained in the Indenture. [In particular, issuance of unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such arrangements and procedures as shall be provided pursuant to Section          of the Indenture.] Copies of the Indenture and the form of the Warrant Debt Securities are on file at the corporate trust office of the Trustee [and at          ].

     [If Bearer Warrants — This Warrant Certificate, and all rights hereunder, may be transferred by delivery and the Company and the Warrant Agent may treat the bearer hereof as the owner for all purposes.]

     [If Registered Warrants — This Warrant Certificate may be transferred when surrendered at the corporate trust office of the Warrant Agent [or          ] by the registered owner or his assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement.]

     After countersignature by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant Agent for Warrant Certificates representing the same aggregate number of Warrants.

     This Warrant Certificate shall not entitle the holder hereof to any of the rights of a holder of the Warrant Debt Securities, including, without limitation, the right to receive payments of principal of (premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants of the Indenture.

     This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent.          Dated as of          , 20     .

	HSBC Finance
	Corporation
	By:
		As Warrant Agent
Attest:
Countersigned:
	By:
		Authorized Signature

[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)

     To exercise the Warrants evidenced hereby, the holder must pay [in cash or by certified check or official bank check or by bank wire transfer] [by bank wire transfer] in immediately available funds the Warrant Price in full for Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department, [insert address of Warrant Agent], Attn:          [or          ], which [payment] [wire transfer] must specify the name of the holder and the number of Warrants exercised by such holder. In addition, the holder must complete the information required below and present this Warrant Certificate in person or by mail (registered mail is recommended) to the Warrant Agent at the addresses set forth below. This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within five business days of the [payment] [wire transfer].

[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Warrant.)

     The undersigned hereby irrevocably elects to exercise          Warrants, evidenced by this Warrant Certificate, to purchase $     principal amount of the [Title of Debt Securities] (the “Warrant Debt Securities”) of HSBC Finance Corporation and represents that he has tendered payment for such Warrant Debt Securities [in cash or by certified check or official bank check or by bank wire transfer, in each case] [by bank wire transfer] in immediately available funds to the order of HSBC Finance Corporation c/o [insert name and address of Warrant Agent], in the amount of $     in accordance with the terms hereof. The undersigned requests that said principal amount of Warrant Debt Securities be in [bearer form in the authorized denominations] [fully registered form in the authorized denominations, registered in such names and delivered] all as specified in accordance with the instructions set forth below.

     If the number of Warrants exercised is less than all of the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced hereby be issued and delivered to the undersigned unless otherwise specified in the instructions below

Dated:
	Name:
		(Please Print)
(Insert Social Security or
Other Identifying Number
of Holder)	Address:
	Signature

     The Warrants evidenced hereby may be exercised at the following addresses:
By hand at

$                                                  

By mail at

(Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant Certificates evidencing unexercised Warrants.)

Reverse of Warrant Certificate
*[CERTIFICATE FOR DELIVERY OF BEARER BONDS]
HSBC FINANCE CORPORATION
Warrant Debt Securities

TO: HSBC FINANCE CORPORATION

[Name of Trustee],
as Trustee

     This certificate is submitted in connection with our request that you deliver to us $ principal amount of Warrant Debt Securities in bearer form upon exercise of Warrants. We hereby certify that either (a) none of such Warrant Debt Securities will be held by or on behalf of a United States Person, or (b) if a United States Person will have a beneficial interest in such Warrant Debt Securities, such person is described in Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1954, as amended, and the regulations thereunder. As used herein, “United States Person” means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof or an estate or trust whose income from sources without the United States is includible in gross income for United States Federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States.

     We understand that this certificate is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we

irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.

Dated:                                (Please print name)

*Subject to changes in accordance with changes in tax laws and regulations.

[If registered Warrant]
ASSIGNMENT

[FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES
TO TRANSFER WARRANTS EVIDENCED HEREBY]

FOR VALUE RECEIVED hereby sells, assigns and transfers unto

Please insert social security
or other identifying number

Please print name and address including zip code)

     the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint          Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises.

Dated	Signature
		(Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York Stock Exchange.)

Signature Guaranteed

HSBC FINANCE CORPORATION

Form of Warrant Agreement
(for warrants sold attached to debt securities)

     This Warrant Agreement: dated as of          between HSBC Finance Corporation, a Delaware corporation (the “Company”, which term includes any successor corporation under the Indenture hereinafter referred to) and          as Warrant Agent (the “Warrant Agent”).

     Whereas, the Company has entered into an Indenture dated as of          (the “Indenture”), with          , as Trustee (the “Trustee”), providing for the issuance from time to time of its unsecured debt securities (“Debt Securities”), to be issued in one or more series as provided in the Indenture; and

     Whereas,the Company proposes to sell [title of Debt Securities being offered] (the “Offered Debt Securities”), with warrant certificates evidencing one or more warrants (the “Warrants” or, individually a “Warrant”) representing the right to purchase [title of Debt Securities purchasable through exercise of Warrants] (the “Warrant Debt Securities”), such warrant certificates and other warrant certificates issued pursuant to this Agreement hereinafter referred to as the “Warrant Certificates”; and

     Whereas, the Company desires the Warrant Agent to act on behalf of the Company in connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, exchanged, exercised and replaced;

     Now Therefore, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I

Issuance of Warrants and Execution
and Delivery of Warrant Certificates

     Section 1.01. Issuance of Warrants.             Warrants shall be initially issued in connection with the issuance of the Offered Debt Securities [but shall be separately transferable on and after          , 20     (the “Detachable Date”)] [shall not be separately transferable] and each Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase a Warrant Debt Security in the principal amount of $     . Warrant Certificates shall be initially issued in units with the Offered Debt Securities and each Warrant Certificate included in such unit shall evidence          Warrants for each $     principal amount of Offered Debt Securities included in such unit.

     Section 1.02. Execution and Delivery of Warrant Certificates. Each Warrant Certificate, whenever issued, shall be in [bearer] [registered] form substantially in the form set forth in Exhibit A hereto, shall be dated          and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (execution thereof to be conclusive evidence of such

approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto orwith any rule or regulation of any stock exchange on which the Warrant Certificates may be listed, or to conform to usage. The Warrant Certificates shall be signed on behalf of the Company by either its President, one of its Vice Presidents or one of its Assistant Treasurers under its corporate seal and attested by its Secretary or any of its Assistant Secretaries. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates.

     No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been duly issued hereunder.

     In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates has ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer.

     [If bearer Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein shall mean [If Offered Debt Securities with Warrants which are not immediately detachable, prior to the Detachable Date, the registered owner of the OfferedDebt Security to which such Warrant Certificate was initially attached (or the bearer if the Offered Debt Security is a bearer Debt Security), and after such Detachable Date] the bearer of such Warrant Certificate.]

     [If registered Warrants — The term “holder” or “holder of a Warrant Certificate” as used herein shall mean any person in whose name at the time any Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose. [If Offered Debt Securities with Warrants which are not immediately detachable, or upon the register of the Offered Debt Securities prior to the Detachable Date. The Company will, or will cause the registrar of the Offered Debt Securities to make available at all times to the Warrant Agent such information as to holders of the Offered Debt Securities with Warrants as may be necessary to keep the Warrant Agent’s records up to date.]

     Section 1.03. Issuance of Warrant Certificates. Warrant Certificates evidencing the right to purchase an aggregate principal amount not exceeding $     aggregate principal amount of Warrant Debt Securities (except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, countersign Warrant Certificates evidencing Warrants representing the right to purchase up to $        aggregate principal amount of Warrant Debt Securities and shall deliver such Warrant Certificates to or upon the order of the Company. Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall countersign a Warrant

Certificate only if the Warrant Certificate is issued in exchange or substitution for one or more previously countersigned Warrant Certificates, [If registered Warrants — or in connection with their transfer], as hereinafter provided or as provided in Section 2.03(c).

ARTICLE II

Warrant Price, Duration and Exercise of Warrants

     Section 2.01. Warrant Price.* [On          , 20     the exercise price of each Warrant is $     . During the period from          , 20     through and including          , 20     the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from          , 20     . On          , 20     the exercise price of * Complete and modify the provisions of this Section as appropriate to reflect the exact terms of the Offered Warrants and the Warrant Debt Securities, each Warrant will be $     . During the period from          , 20     , through and including          , 20     , the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from          , 20     , [in each case, the original issue discount will be amortized at a     % annual rate, computed on an annual basis using a 360-day year consisting of twelve 30-day months]. Such purchase price of Warrant Debt Securities is referred to in this Agreement as the “Warrant Price.” [The original issue discount for each $1,000 principal amount of Warrant Debt Securities is $         ].

     Section 2.02. Duration of Warrants. Each Warrant evidenced by a Warrant Certificate may be exercised in whole at any time, as specified herein, on or after [the date thereof] [                   , 20     ] and at or before 5 p.m.     time on          , 20     (the “Expiration Date”). Each Warrant not exercised at or before the close of business on the Expiration Date shall become void, and all rights of the holder of the Warrant Certificate evidencing such Warrant under this Agreement shall cease.

     Section 2.03. Exercise of Warrants.

     (a) During the period specified in Section 2.02 any whole number of Warrants may be exercised by providing certain information set forth on the reverse side of the Warrant Certificate and by paying in full, in lawful money of the United States of America, [in cash or by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] in immediately available funds the Warrant Price for each Warrant exercised to the Warrant Agent at its corporate trust office [or at          ], provided that such exercise is subject to receipt within five business days of such [payment] [wire transfer] by the Warrant Agent of the Warrant Certificate with the form of election to purchase Warrant Debt Securities set forth on the reverse side of the Warrant Certificate properly completed and duly executed. The date on which payment in full of the Warrant Price is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate as aforesaid, be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in an account of the Company maintained with it and shall advise the Company by telephone at the end of each day on which a [payment] [wire transfer] for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephone advice to the Company in writing.

     (b) The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company and the Trustee under the Indenture of (i) the number of Warrants exercised in accordance with the terms and conditions of this Agreement and the Warrant Certificates, (ii) the instructions of each holder of the Warrant Certificates evidencing such Warrants with respect to delivery of the Warrant Debt Securities to which such holder is entitled up on such exercise, (iii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise, and (iv) such other information as the Company or the Trustee shall reasonably require.

     (c) As soon as practicable after the exercise of any Warrant, the Company shall issue, pursuant to the Indenture, in authorized denominations to or upon the order of the holder of the Warrant Certificate evidencing such Warrant, the Warrant Debt Securities to which such holder is entitled, [in fully registered form, registered in such name or names] [in bearer form] as may be directed by such holder* ;[provided, however, the Company shall not be required to deliver any unregistered Warrant Debt Securities in the United States]. If fewer than all of the Warrants evidenced by such Warrant Certificate were exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate evidencing the number of such Warrants remaining unexecuted.

     (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Debt Securities; and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Debt Security until such tax or other charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.

     [(e) Issuance of unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such arrangements and procedures as shall be provided pursuant to Section     of the Indenture.]

ARTICLE III

Other Provisions Relating to Rights
of Holders of Warrant Certificates

     Section 3.01. No Rights as Warrant Debt Security Holder Conferred by Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle the holder thereof to any of the rights of a holder of Warrant Debt Securities, including, without limitation, the right to receive the payment of principal of, premium (if any) or interest on Warrant Debt Securities or to enforce any of the covenants in the Indenture.

     *     Subject to change in accordance with changes in tax laws and regulations.

     Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of indemnity reasonably satisfactory to them and, in the case of mutilation, upon surrender thereof to the Warrant Agent for cancellation, then, in the

absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing the same number of Warrants. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.

     Section 3.03. Holder of Warrant Certificate May Enforce Rights. Notwithstanding any of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the holder of any Warrant Debt Securities or the holder of any other Warrant Certificate, may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce or otherwise in respect of, his right to exercise the Warrants evidenced by his Warrant Certificate in the manner provided in his Warrant Certificate and in this Agreement.

ARTICLE IV

Exchange and Transfer of Warrant Certificates

     Section 4.01. Exchange and Transfer of Warrant Certificates. [If Offered Debt Securities with Warrants which are immediately detachable — Upon] [If Offered Debt Securities with Warrants which are not immediately detachable — Prior to the Detachable Date a Warrant Certificate may be exchanged or transferred only together with the Offered Debt Security to which the Warrant Certificate was initially attached, and only for the purpose of effecting or in conjunction with an exchange or transfer of such Offered Debt Security. Prior to the Detachable Date, each transfer of the Offered Debt Security [on the register of the Offered Debt Securities] shall operate also to transfer the related Warrant Certificates. After the Detachable Date upon] surrender at the corporate trust office of the Warrant Agent [or          ], Warrant Certificates evidencing Warrants may be exchanged for Warrant Certificates in other denominations evidencing such Warrants [If registered Warrants — or may be transferred in whole or in part], provided that such other Warrant Certificates evidence the same aggregate number of Warrants as the Warrant Certificates so surrendered. [If registered Warrants — The Warrant Agent shall keep, at its corporate trust office [and at          ], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and exchanges and transfers of outstanding Warrant Certificates, upon the surrender of the Warrant Certificates to the Warrant Agent at its corporate trust office [or          ] for exchange [or transfer], properly endorsed or accompanied by appropriate instruments of transfer and written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent]. No service charge shall be made for any exchange [or transfer] of Warrant Certificates, but the Company may require payment of a sum sufficient to cover

any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange [or transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or transfer] an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized and executed by the Company, as so requested. The Warrant Agent shall not be required to effect any exchange [or transfer] which will result in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or transfer] of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange [or transfer].

     Section 4.02. Treatment of Holders of Warrant Certificates. [If Offered Debt Securities with bearer Warrants which are not immediately detachable — Subject to Section 4.01, each] [If Offered Debt Securities with bearer Warrants which are immediately detachable — Each] Warrant Certificate shall be transferable by delivery and shall be deemed negotiable and the bearer of each Warrant Certificate may be treated by the Company, the Warrant Agent and all other persons dealing with such bearer as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.] [If registered Warrants which are not immediately detachable —Every holder of a Warrant Certificate, by accepting the same, consents and agrees with the Company, the Warrant Agent and with every subsequent holder of such Warrant Certificate that until the Warrant Certificate is transferred on the books of the Warrant Agent [or the register of the Offered Debt Securities prior to the Detachable Date], the Company and the Warrant Agent may treat the registered holder as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.]

     Section 4.03. Cancellation of Warrant Certificates. Any Warrant Certificate surrendered for exchange [transfer] or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof. The Warrant Agent shall deliver to the Company from time to time or otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to the Company.

ARTICLE V

Concerning the Warrant Agent

     Section 5.01. Warrant Agent. The Company hereby appoints          as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates, upon the terms and subject to the conditions herein set forth, and          hereby accepts such appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant Certificates and hereby and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof.

     Section 5.02. Conditions of Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the holders from time to time of the Warrant Certificates shall be subject:

     (a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including counsel fees) incurred by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, as well as the costs and expenses of defending against any claim of such liability.

     (b) Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the holders of Warrant Certificates or beneficial owners of Warrants.

     (c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, and the advise of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

     (d) Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or thing suffered by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.

     (e) Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Debt Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under the Indenture.

     (f) No Liability for Interest. The Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

     (g) No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates.

     (h) No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant

Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

     (i) No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligations to take any action hereunder which may tend to subject it to any expense or liability, reimbursement for which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or responsible for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.02 hereof, to make any demand upon the Company.

Section 5.03. Resignation and Appointment of Successor.

     (a) The Company agrees, for the benefit of the holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrant Certificates are no longer exercisable.

     (b) The Warrant Agent may at any time resign as such agent by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided that such date shall be not less than three months after the date on which such notice is given unless the Company otherwise agrees. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date when it shall become effective. Such resignation or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a successor Warrant Agent (which shall be a bank or trust company authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers) and the acceptance of such appointment by such successor Warrant Agent. The obligation of the Company under Section 5.02(a) shall continue to the extent set forth therein, notwithstanding the resignation or removal of the Warrant Agent.

     (c) In case at any time the Warrant Agent shall resign, or shall be removed, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file a petition seeking relief under Title II of the United States Code, as now constituted or hereafter amended, or under any other applicable Federal or State bankruptcy law or similar law or make an assignment for the benefit of its creditors or shall consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed, or if an order of any court shall be entered for relief against it under the provisions of Title II of the United States Code, as now constituted or hereafter amended, or under any

other applicable Federal or State bankruptcy or similar law, or if any public officer shall have taken charge or control of the Warrant Agent or of its property or affairs, for the purpose of rehabilitation, conservation or liquidation, a successor Warrant Agent, qualified as set forth in subsection (b) above, shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent. Upon the appointment of a successor Warrant Agent and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.

     (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder.

     (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant Agent shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that it shall be qualified as set forth above in subsection (b).

ARTICLE VI

Miscellaneous

     Section 6.01 Amendment. This Agreement may be amended by the parties hereto, without the consent of the holder of any Warrant Certificate, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable; provided that such action shall not adversely affect the interests of the holders of the Warrant Certificates.

     Section 6.02. Notices and Demands to the Company and Warrant Agent. If the Warrant Agent shall receive any notice or demand addressed to the Company by the holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company.

     Section 6.03. Addresses. Any communications from the Company to the Warrant Agent with respect to this Agreement shall be addressed to          , Attention:          , and any communications from the Warrant Agent to the Company with respect to this Agreement shall be addressed to          , Attention:          (or such other address as shall be specified in writing by the Warrant Agent or by the Company).

     Section 6.04. Applicable Law. The validity, interpretation and performance of this Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions thereof shall be governed by, and construed in accordance with, the laws of the State of         .

     Section 6.05. Delivery of Prospectus. The Company will furnish to the Warrant Agent sufficient copies of a prospectus relating to the Warrant Debt Securities deliverable upon exercise of Warrants (the “Prospectus”), and the Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of the Warrant Debt Securities issued upon such exercise, a Prospectus.

     Section 6.06. Obtaining of Governmental Approvals. The Company will from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States Federal and State laws (including without limitation a registration statement in respect of the Warrants and Warrant Debt Securities under the Securities Act of 1933), which may be or become requisite in connection with the issuance, sale, transfer and delivery of the Warrant Certificates, the exercise of the Warrants, the issuance, sale, transfer and delivery of the Warrant Debt Securities issued upon exercise of the Warrants or upon the expiration of the period during which the Warrants are exercisable.

     Section 6.07. Persons Having Rights under Warrant Agreement. Nothing in this Agreement expressed or implied and nothing that may be inferred from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company, the Warrant Agent and the holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof; and all covenants, conditions, stipulations, promises and agreements in this Agreement contained shall be for the sole and exclusive benefit of the Company and the Warrant Agent and their Successors and of the holders of the Warrant Certificates.

     Section 6.08. Headings. The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

     Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.

     Section 6.10. Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection by the holder of any Warrant Certificate. The Warrant Agent may require such holder to submit his Warrant Certificate for inspection by it.

In witness Whereof, HSBC Finance Corporation has caused this Agreement to be signed by one of its duly authorized officers, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries, all as of the day and year first above written.

	HSBCFinance
	Corporation
	By:
		As Warrant Agent
Attest:
	By:
Attest:

EXHIBIT A

(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]

     [Form of Legend if Prior to this —Warrant Certificate cannot Debt Securities with          be transferred or exchanged — —unless attached to a [Title Warrants which are not of Offered Debt Securities] — —immediately detachable:- —

Exercisable Only if Countersigned By the Warrant
Agent as Provided Herein

     Warrant Certificates representing Warrants to purchase [Title of Warrant Debt Securities] as described herein.

HSBC FINANCE CORPORATION
Warrants to Purchase
[Title of Warrant Debt Securities]

Void After 5 P.M.
Time on, 20

[No.] Warrants

     This certifies that [the bearer is the] [     or registered assigns is the registered] owner of the above-indicated number of Warrants, each Warrant entitling such [bearer] [owner] to purchase, at any time [after 5 P.M.          time on          , 20     and] on or before 5 P.M. time on          , 20     , $     principal amount of [Title of Warrant Debt Securities] (the “Warrant Debt Securities”), of HSBC Finance Corporation (the “Company”), issued and to be issued under the Indenture (as hereinafter defined), on the following basis:* [on          , 20     the exercise price of each Warrant is $     ; during the period from          , 20     , through and including *     Complete and modify the following provision as appropriate to reflect the exact terms of the Offered Warrants and the Warrant Debt Securities.          , 20     , the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from, 20     ; on          , 20     the exercise price of each Warrant will be $     ; during the period from ,          20     , through and including          ,20     the exercise price of each Warrant will be $     plus [accrued amortization of the original issue discount] [accrued interest] from          ,20     ; [in each case, the original issue discount will be amortized at a     % annual rate, computed on an annual basis, using a 360-day year consisting of twelve 30-day months] (the “Warrant Price”). [The original issue discount for each $1,000 principal amount of Warrant Debt Securities is $     .] The holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full in lawful money of the United States of America, [in cash or by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] in immediately available funds, the Warrant Price for each Warrant

exercised to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant Certificate, with the purchase form on the back hereof duly executed at the corporate trust office of [name of Warrant Agent], or its successor as warrant agent (the “Warrant Agent”), [or ] at the address specified on the reverse hereof and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement (as hereinafter defined).

     Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Debt Securities in registered form in denominations of $        and any integral multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the holder hereof a new Warrant Certificate evidencing the number of Warrants remaining unexercised.

     This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of          , 20     (the “Warrant Agreement”), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at          ].

     The Warrant Debt Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture dated as of          (the “Indenture”), between the Company and          , a organized and existing under the laws of          , as Trustee, (      and any successor to such Trustee being hereinafter referred to as the “Trustee”) and will be subject to the terms and provisions contained in the Indenture. [In particular, issuance of unregistered Warrant Debt Securities upon exercise of Warrants shall be subject to such arrangements and procedures as shall be provided pursuant to Section     of the Indenture.] Copies of the Indenture and the form of the Warrant Debt Securities are on file at the corporate office of the Trustee [and at          ].

     [If Offered Debt Securities with bearer Warrants which are not immediately detachable — Prior to          , 20     this Warrant Certificate may be exchanged or transferred only together with the [Title of Offered Debt Securities] (“Offered Debt Securities”) to which this Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Debt Security. After such date, this [If Offered Debt Securities with bearer Warrants which are immediately detachable — This] Warrant Certificate, and all rights hereunder, may be transferred by delivery, and the Company and the Warrant Agent may treat the bearer hereof as the owner for all purposes.]

     [If Offered Debt Securities with registered Warrants which are not immediately detachable — Prior to          , 20     this Warrant Certificate may be exchanged or transferred only together with the [Title of Offered Debt Securities] (“Offered Debt Securities”) to which this Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Debt Security. After such date, this [If Offered Debt Securities with registered Warrants which are immediately detachable — This] Warrant Certificate may be transferred when surrendered at the corporate trust office of the Warrant Agent [or ] by the registered owner or his assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement.]

     [If Offered Debt Securities with Warrants which are not immediately detachable — Except as provided in the immediately preceding paragraph, after] [If Offered Debt

Securities with Warrants which are immediately detachable — After] countersignature by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate t rust office of the Warrant Agent for Warrant Certificates representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the holder hereof to any of the rights of a holder of the Warrant Debt Securities, including, without limitation, the right to receive payments of principal of (premium, if any) or interest, if any, on the Warrant Debt Securities or to enforce any of the covenants of the Indenture.

     This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent.

Dated as of          , 20     .

	HSBC Finance
	Corporation
	By:
		As Warrant Agent
Attest:
Countersigned:
	By:
		Authorized Signature

[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)

     To exercise the Warrants evidenced hereby, the holder must pay [in cash or by certified check or official bank check or by bank wire transfer] [by bank wire transfer] in immediately available funds the Warrant Price in full for Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department [insert address of Warrant Agent], Attn.          [or          ], which [payment] [wire transfer] must specify the name of the holder and the number of Warrants exercised by such holder. In addition, the holder must complete the information required below and present this Warrant Certificate in person or by mail (registered mail is recommended) to the Warrant Agent at the addresses set forth below. This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within five business days of the [payment] [wire transfer].

[Form of Election to Purchase]
(to be executed upon exercise of Warrant)

     The undersigned hereby irrevocably elects to exercise Warrants, evidenced by this Warrant Certificate, to purchase $ principal amount of the [Title of Debt Securities] (the “Warrant Debt Securities”) of          and represents that he has tendered payment for such Warrant Debt Securities [in cash or by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] in immediately available funds to the order of HSBC Finance Corporation c/o [insert name and address of Warrant Agent] in the amount of $     in accordance with the terms hereof. The undersigned

requests that said principal amount of Warrant Debt Securities be in [bearer form in the authorized denominations] [fully registered form in the authorized denominations, registered in such names and delivered] all as specified in accordance with the instructions set forth below.

     If the number of Warrants exercised is less than all of the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced hereby be issued and delivered to the undersigned unless otherwise specified in the instructions below.

Dated:
	Name:
		(Please Print)
(Insert Social Security or
Other Identifying Number
of Holder)	Address:
	Signature

     The Warrants evidenced hereby may be exercised at the following addresses:
By hand at

By mail at

(Instructions as to form and delivery of Warrant Debt Securities and, if applicable, Warrant Certificates evidencing unexercised Warrants.)

Reverse of Warrant Certificate
*[Certificate for Delivery of Bearer Bonds]

HSBC FINANCE CORPORATION
Warrant Debt Securities

TO: HSBC FINANCE CORPORATION

     This certificate is submitted in connection with our request that you deliver to us $ principal amount of Warrant Debt Securities in bearer form upon exercise of Warrants. We hereby certify that either (a) none of such Warrant Debt Securities will be held by or on behalf of a United States Person, or (b) if a United States Person will have a beneficial interest in such Warrant Debt Securities, such person is described in Section 165 (j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1954, as amended, and the regulations thereunder. As used herein, “United States Person” means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof or an estate or trust whose income from sources without the United States is includible in gross income for United States Federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States.

     We understand that this certificate is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.

Dated: (Please print name)

*Subject to changes in accordance with changes in tax laws and regulations.

[If registered Warrant]
ASSIGNMENT

(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)

FOR VALUE RECEIVED

hereby sells, assigns and transfers unto

Please insert social security

or other identifying number

Please print name and address

including zip code)

the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint          Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises.

Dated	Signature
		(Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York Stock Exchange.)

Signature Guaranteed

EX-5

Exhibits 5 and 23.2

December 16, 2004

HSBC Finance Corporation
2700 Sanders Road
Prospect Heights, IL 60070

Re: HSBC Finance Corporation
Registration Statement on Form S-3
for $10 Billion of Medium Term Notes
and Warrants to Purchase Medium Term Notes

Gentlemen:

As Vice President, Deputy General Counsel-Corporate and Assistant Secretary of HSBC Finance Corporation (“HSBC Finance”), I am generally familiar with the proceedings in connection with HSBC Finance’s Registration Statement on Form S-3 (the “Registration Statement”) in which $10,000,000,000 aggregate principal amount of Medium Term Notes and Warrants to Purchase Medium Term Notes of HSBC Finance are being registered. Each issuance of Medium Term Notes will constitute senior debt of HSBC Finance and will be issuable under an Amended and Restated Indenture dated as of December 15, 2004 between HSBC Finance and JPMorgan Chase Bank, N.A., as Trustee (the “Indenture”). The Warrants, if and when issued, will be issuable under a warrant agreement between HSBC Finance and a national or state banking institution (the “Warrant Agreement”). The foregoing Indenture and the form of the Warrant Agreement have been filed with the Securities and Exchange Commission (the “Commission”) as exhibits to the Registration Statement.

Based upon my review of the records and documents of HSBC Finance, I am of the opinion that:

1.	HSBC Finance is a corporation duly incorporated and validly existing under the laws of the State of Delaware.
2.	The Indenture has been duly authorized, executed and delivered by HSBC Finance, and constitutes the valid and legally binding instrument of HSBC Finance enforceable in accordance with its terms, except as enforcement of the provisions thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.	The Warrant Agreement will, after being duly authorized, executed and delivered by HSBC Finance, constitute a valid and legally binding instrument of HSBC Finance enforceable in accordance with its terms, except as enforcement of the provisions thereof may be limited

HSBC Finance Corporation
December 16, 2004
Page 2

by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

4.

When the issuance of the Medium Term Notes and the Warrants to Purchase Medium Term Notes, as the case may be, has been duly authorized by appropriate corporate action, and such Medium Term Notes and Warrants to Purchase Medium Term Notes have been duly executed, authenticated, issued and delivered against payment of the agreed consideration therefor in accordance with the Indenture or the Warrant Agreement, and as described in the Registration Statement, including the Prospectus and Pricing Supplement relating to such Medium Term Notes and Warrants to Purchase Medium Term Notes, such Medium Term Notes and Warrants to Purchase Medium Term Notes will be legally and validly issued and will be the legal and binding obligations of HSBC Finance enforceable in accordance with their terms, except as enforcement of the provisions thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

I hereby consent to the use of my name and my opinion in the Prospectus and any Pricing Supplement filed pursuant to Rule 430A or 424 of Regulation C of the Securities Act of 1933, as amended (the “Act”), in connection with the Registration Statement relating thereto, including any references to my opinions set forth in the documents incorporated by reference therein, and to the filing of this consent as an exhibit to the Registration Statement. In giving such consent I do not admit that I am in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Patrick D. Schwartz

Patrick D. Schwartz

EX-8

Exhibits 8 and 23.3

[Sidley Austin Brown & Wood LLP Letterhead]

December 16, 2004

HSBC Finance Corporation
2700 Sanders Road
Prospect Heights, Illinois 60070

Ladies and Gentlemen:

     We have acted as special United States tax counsel to HSBC Finance Corporation (the “Company”) in connection with its filing of the Securities and Exchange Commission Amendment No. 1 to Form S-3 Registration Statement (the “Registration Statement”) dated as of December 16, 2004. The Registration Statement includes the prospectus (the “Prospectus”) dated as of December 16, 2004. This opinion is being furnished to the Company pursuant to Item 16 (which references Exhibit 8) of the Registration Statement.

     In arriving at the opinion expressed below, we have examined the Registration Statement, the Prospectus and such other documents as we have considered necessary. Based upon and subject to the foregoing, we are of the opinion that the statements set forth in the Prospectus under the heading “Certain United States Federal Income Tax Considerations” to the extent they constitute matters of federal income tax law or legal conclusions with respect thereto are correct in all material respects.

     In giving the foregoing opinion, we express no opinion as to the laws of any jurisdiction other than the law of the United States of America.

     This opinion letter is provided to the Company only and, without our prior written consent, may not be relied upon by any other person. This opinion letter is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated herein.

     This opinion letter is rendered as of the date hereof based on the law and facts in existence on the date hereof, and we do not undertake, and hereby disclaim, any obligation to advise you of any changes in law or fact, whether or not material, which may be brought to our attention at a later date.

Very truly yours,

/s/ Sidley Austin Brown & Wood LLP

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

To the Board of Directors of HSBC Finance Corporation:

We consent to the incorporation of our report dated March 1, 2004, included in the Annual Report on Form 10-K of HSBC Finance Corporation (the Company) (formerly Household International, Inc.) as of December 31, 2003 (successor basis) and December 31, 2002 (predecessor basis) and for the period January 1, 2003 through March 28, 2003 (predecessor basis), for the period March 29, 2003 through December 31, 2003 (successor basis), and for each of the years in the two-year period ended December 31, 2002 (predecessor basis), into the Company’s Amendment No.1 to the Registration Statement relating to Medium Term Notes and Warrants to Purchase Medium Term Notes (the Registration Statement) on Form S-3 and to the reference to our firm under the heading “Experts” in the Registration Statement.

Our report dated March 1, 2004 contains an explanatory paragraph that states effective March 28, 2003, HSBC Holdings plc acquired all of the outstanding stock of Household International, Inc. (now HSBC Finance Corporation) in a business combination accounted for as a purchase. As a result of the acquisition, the consolidated financial information for the period after the acquisition is presented on a different cost basis than that for the periods before the acquisition and, therefore, is not comparable.

/s/ KPMG LLP

Chicago, Illinois
December 16, 2004

EX-25

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

	13-4994650
(State of incorporation	(I.R.S. employer
if not a national bank)	identification No.)

1111 Polaris Parkway
Columbus, Ohio		43271
(Address of principal executive offices)	(Zip Code)

Thomas F. Godfrey
Vice President and Assistant General Counsel
JPMorgan Chase Bank, National Association
1 Chase Manhattan Plaza, 25^th Floor
New York, NY 10081
Tel: (212) 552-2192
(Name, address and telephone number of agent for service)

HSBC Finance Corporation
(Exact name of obligor as specified in its charter)

Delaware	86-1052062
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification No.)

2700 Sanders Road
Prospect Heights, Illinois		60070
(Address of principal executive offices)	(Zip Code)

MEDIUM TERM NOTES
(Title of the indenture securities)

GENERAL

Item 1. General Information.

     Furnish the following information as to the trustee:

     (a) Name and address of each examining or supervising authority to which it is subject.

       Comptroller of the Currency, Washington, D.C.

       Board of Governors of the Federal Reserve System, Washington, D.C., 20551

       Federal Deposit Insurance Corporation, Washington, D.C., 20429.

     (b) Whether it is authorized to exercise corporate trust powers.

     Yes.

Item 2. Affiliations with the Obligor and Guarantors.

     If the obligor or any guarantor is an affiliate of the trustee, describe each such affiliation.

     None.

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Item 16. List of Exhibits

     List below all exhibits filed as a part of this Statement of Eligibility.

     1. A copy of the Articles of Association of JPMorgan Chase Bank, N.A. (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference).

     2. A copy of the Certificate of Authority of the Comptroller of the Currency for the trustee to commence business. (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference).

     3. None, the authority of the trustee to exercise corporate trust powers being contained in the documents described in Exhibits 1 and 2.

     4. A copy of the existing By-Laws of the Trustee. (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference).

     5. Not applicable.

     6. The consent of the Trustee required by Section 321(b) of the Act. (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference).

     7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. (see Exhibit 7 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference).

     8. Not applicable.

     9. Not applicable.

SIGNATURE

     Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, N.A., has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 15th day of December  , 2004.

JPMORGAN CHASE BANK, N.A.
By  /s/	James D. Heaney
	James D. Heaney
	Vice President

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