S-3/A

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

Registration No. 333-120496

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	86-1052062
(State or other jurisdiction of incorporation or organization)	(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	Proposed
		Maximum	Maximum
		Offering Price	Aggregate
Title of Each Class	Amount to	Per Unit(2)	Offering Price(2)	Amount of
of Securities to be Registered	be Registered(1)			Registration Fee(3)
Senior Debt Securities	$5,000,000,000	100%	$5,000,000,000	$633,500

(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.
(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 Senior Debt Securities of HSBC Finance on a continuous or delayed basis, at an aggregate initial public offering price of up to $5,000,000,000; and

      — market-making transactions that may occur on a continuous or delayed basis in the securities described above, after they are initially sold, and in Senior Debt Securities, if any, of HSBC Finance, 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

$5,000,000,000

HSBC Finance InterNotes®

          We may offer to sell our HSBC Finance InterNotes® from time to time. The specific terms of each issue of InterNotes® are set prior to the time of sale and will be described in a separate pricing supplement. You should read this prospectus and that supplement carefully before you invest.

          We may offer the notes through agents who purchase the notes as principal and receive a concession. The maximum amount we expect to receive is from $4,990,000,000 to $4,842,500,000, after paying the agents concessions of between $10,000,000 and $157,500,000. The agents are not required to sell any specific amount of notes but will use their reasonable best efforts to sell the notes. We also may offer the notes directly. We have not set a date for the termination of our offering.

          The agents have advised us that from time to time they may purchase and sell notes in the secondary market, but they are not obligated to make a market in the notes and may suspend or completely stop that activity at any time. We do not intend to list the notes on any stock exchange.

          Potential purchasers of the notes should read and consider the information set forth in “Risk Factors” on page 6.

          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any pricing supplement is accurate or complete. Any representation to the contrary is a criminal offense.

          HSBC Finance 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, may use this prospectus in market-making transactions in these or similar securities after their initial sale. UNLESS HSBC FINANCE OR ITS AGENT INFORMS THE PURCHASER OTHERWISE IN THE CONFIRMATION OF SALE, THIS PROSPECTUS IS BEING USED IN A MARKET-MAKING TRANSACTION.

Joint Lead Managers and Lead Agents

Banc of America Securities LLC HSBC Incapital LLC

Agents

Charles Schwab & Co., Inc.	Citigroup
Edward D. Jones & Co., L.P.	Fidelity Capital Markets,   a division of National Financial Services, LLC
Merrill Lynch & Co.	Morgan Stanley
RBC Dain Rauscher Inc.	UBS Financial Services Inc.
Wachovia Securities

Prospectus dated [       l       ], 2004

TABLE OF CONTENTS

		Page
SUMMARY			3
ABOUT THIS PROSPECTUS			6
RISK FACTORS			6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			7
HSBC FINANCE			7
MANNER OF OFFERING			9
USE OF PROCEEDS			9
RATIO OF EARNINGS TO FIXED CHARGES			9
DESCRIPTION OF INTERNOTES®			10
	General		10
	Payment of Principal and Interest		11
	Interest and Interest Rates		11
	Payment of Interest		17
	Redemption and Repayment		19
	Survivor’s Option		19
	Book-Entry Notes		21
	Limitation on Liens		23
	Defeasance		24
	Modification of the Indenture		24
	Consolidation, Merger or Sale		25
	Event of Default		25
	Concerning the Trustee		25
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES			26
	Interest		26
	Short-Term Notes		26
	Market Discount		27
	Bond Premium		27
	Election to Treat all Interest as OID		28
	Sale, Exchange, Retirement or Other Disposition of Notes		28
	Backup Withholding and Information Reporting		29
ERISA CONSIDERATIONS			29
	General		29
	Prohibited Transactions		29
PLAN OF DISTRIBUTION			30
	Initial Offering and Sale		30
	Market-Making Resales by Affiliates		32
WHERE YOU CAN FIND MORE INFORMATION			32
LEGAL OPINIONS			33
EXPERTS			33

InterNotes® is a registered trademark of Incapital Holdings LLC.

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SUMMARY

      This section summarizes the legal and financial terms of the notes that are described in more detail in “Description of InterNotes®”. Specific terms of any particular notes are set at the time of sale and are contained in the pricing supplement relating to those notes. That supplement may also add to or update the information contained in this prospectus. You should read the more detailed information appearing in this prospectus and in the pricing supplement before you decide to purchase any of the notes.

Issuer	HSBC Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois 60070; phone (847) 564-5000
Purchasing Agent	The purchasing agent is Incapital LLC
Joint Lead Managers and Lead Agents	The joint lead managers and lead agents are Banc of America Securities LLC, HSBC Securities (USA) Inc. and Incapital LLC
Agents	The agents include: Charles Schwab & Company, Incorporated Citigroup Global Markets Inc. Edward D. Jones & Co., L.P. Fidelity Capital Markets,   a division of National Financial Services, LLC Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated RBC Dain Rauscher Inc. UBS Financial Services Inc. Wachovia Capital Markets, LLC
Title of Notes	HSBC Finance InterNotes®
Amount	We may issue up to $5,000,000,000 of notes in connection with this prospectus. There are no limitations on our ability to issue additional indebtedness in the form of InterNotes® or otherwise.
Denominations	The notes will be issued and sold in denominations of $1,000 and multiples of $1,000 (unless otherwise stated in the pricing supplement).
Status	The notes are our senior, unsecured obligations. The notes rank equally with our other existing and future unsecured senior indebtedness.
Maturities	The notes are due nine months or more from the date of issue.

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Interest	• Each note bears interest from the issue date at either a fixed or floating rate of interest. Any floating interest rate formula would be based on:
	• LIBOR;
	• the Treasury rate;
	• the Prime rate;
	• the Federal Funds rate; or
	• another index described in the applicable pricing supplement.
	• Interest on each note is payable either monthly, quarterly, semi-annually or annually on each interest payment date and on the maturity date. Interest also will be paid on the date of redemption or repayment if a note is redeemed or repurchased prior to maturity.
Principal	The principal amount of the notes is payable on the maturity date at the corporate trust office of the paying agent or at any other place we may designate.
Redemption and Repayment	• Unless stated in the applicable pricing supplement, the notes are not redeemable at our option or repayable at the option of the holder prior to the maturity date; and
	• The notes are not subject to any sinking fund.
Survivor’s option	Specific notes may contain a provision that requires us, upon request, to redeem those notes prior to maturity upon the death of the owner of the notes. This survivor’s option will only be permitted if it is specified in the pricing supplement for the notes and the notes were acquired by the deceased owner at least six months prior to the exercise of the option. The right to exercise the Survivor’s Option is subject to annual dollar amount limits with respect to the exercise of this right by a single owner as well as the total exercises by all owners of notes who have a survivor’s option. Additional details about this option are described under the heading “DESCRIPTION OF INTERNOTES — Survivor’s Option.”
Sale and Clearance	We will sell notes in the United States only. Notes are issued in book-entry only form and clear through The Depository Trust Company, or DTC. We do not intend to issue notes in certificated form.
Trustee	The trustee for the notes is JPMorgan Chase Bank, N.A.

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Selling Group The selling group for the notes is comprised of the agents named on the cover of this prospectus and certain other broker-dealers and securities firms. The Purchasing Agent and the agents have entered into a Selling Agent Agreement with us. Dealers who are members of the selling group have executed a Master Selected Dealer Agreement with the Purchasing Agent. The agents and the dealers have agreed to market and sell the notes in accordance with the terms of those respective agreements. You may contact the Purchasing Agent at info@incapital.com for a list of selling group members.

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ABOUT THIS PROSPECTUS

      This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, utilizing a “shelf” registration process. Under this process, we may sell up to a total amount of $5,000,000,000 in aggregate principal amount of the notes described in this prospectus from time to time. This prospectus also may be used in market-making transactions, as described under the heading “PLAN OF DISTRIBUTION.” This prospectus provides you with a general description of the notes we may offer. Each time we offer to sell notes, we will provide a pricing supplement to this prospectus that will contain specific information about the terms of that offering. The pricing supplement may also add to or update the information contained in this prospectus. Before you agree to purchase any notes, 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 periods prior to December 15, 2004, shall be deemed to refer to Household International, Inc.

      YOU SHOULD RELY ONLY ON THE INFORMATION INCLUDED OR INCORPORATED BY REFERENCE 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.

RISK FACTORS

      Your investment in the notes will involve certain risks. This prospectus does not describe all of those risks. Neither we nor the agents are responsible for advising you of these risks now or as they may change in the future.

      In consultation with your own financial and legal advisors, you should carefully consider, among other matters, the following discussion of risks before deciding whether an investment in the notes is suitable for you. The notes are not an appropriate investment for you if you are not knowledgeable about the significant elements of the notes or financial matters in general. You should not purchase notes unless you understand and know you can bear these investment risks.

      Redemption — We may choose to redeem certain notes when prevailing interest rates are relatively low.

      If your notes are redeemable at our option (as specified in the applicable pricing supplement), we may choose to redeem your notes from time to time. Prevailing interest rates at the time we redeem your notes would likely be lower than the rate borne by the notes. In such a case, you would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the notes being redeemed. Our redemption right also may adversely impact your ability to sell your notes as our redemption date approaches.

      Uncertain Trading Markets — We cannot assure you that a trading market for your notes will ever develop or be maintained.

      Many factors independent of our creditworthiness affect the trading market and market value of

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your notes. Those factors may include, without limitation:

•  the method of calculating the principal and interest for the notes;

•  the time remaining to the maturity of the notes;

•  the outstanding amount of the notes;

•  the redemption or repayment features of the notes;

•  market rates of interest; and

•  the level, direction and volatility of interest rates generally.

      In addition, there may be a limited number of buyers when you decide to sell your notes. This may affect the price you receive for your notes or your ability to sell your notes at all.

      Structure Risks of Notes Indexed to Interest Rates — Floating rate notes bear additional risks.

      If your notes bear interest at a floating rate, there will be significant risks not associated with a conventional fixed rate debt security. These risks include fluctuation of the interest rates and the possibility that you will receive a lower amount of interest. We have no control over a number of matters, including economic, financial and political events, that are important in determining the existence, magnitude and longevity of these risks and their results. In recent years, values of certain interest rates have been volatile, and volatility in those and other interest rates may be expected in the future.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Certain of the matters discussed under the caption “HSBC FINANCE” and elsewhere in this prospectus, any pricing supplement or in the information incorporated by reference in this prospectus 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. You should carefully consider any discussion relating to such risks, uncertainties and other factors included in this prospectus, any pricing supplement or in the information described under the heading “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

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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.

      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.

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

      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.

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MANNER OF OFFERING

      The securities 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 securities that we will not issue until after the date of this prospectus as well as our securities that have been previously issued. The initial aggregate offering price specified on the cover of this prospectus relates to securities that have not yet issued.

      When we issue new securities, we may offer them for sale through underwriters, dealers and agents, including our affiliates, or directly to purchasers. The applicable prospectus supplement will include any required information about the firms we use to distribute these securities 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.

      If you purchase securities 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 security 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.

USE OF PROCEEDS

      Unless otherwise indicated in the pricing supplement for your notes, we will apply the net proceeds from the sale of those 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:

	Nine Months		March 29		January 1
	Ended		through		through			Year Ended December 31,
	September 30,		December 31,		March 28,
	2004		2003		2003			2002			2001		2000		1999
	(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.

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(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.

DESCRIPTION OF INTERNOTES®

General

      We will issue the InterNotes® as a series of debt securities under an indenture between HSBC Finance and JPMorgan Chase Bank, N.A. This prospectus briefly summarizes the indenture provisions. If you would like more information concerning these provisions, you should review the indenture that we filed with the SEC. You may also review the indenture at the office of the trustee.

      The indenture does not limit the amount of notes or other debt securities that we may issue. Each offering of notes may differ as to their terms. Information concerning our outstanding debt is found in the recent filings we have made with the SEC. See “WHERE YOU CAN FIND MORE INFORMATION.”

      The notes will be unsecured, senior debt and will rank equally with all of our other existing and future unsecured, senior indebtedness. The notes will be issued in “book-entry” form, represented by a permanent global certificate registered in the name of DTC, or its nominee. We do not intend to issue notes in individual certificated form registered in the name of each owner.

      Notes issued in accordance with this prospectus and a related pricing supplement will also have the following general characteristics:

•  the notes may be offered from time to time by us through the purchasing agent and the agents and will mature on any day nine months or more from the issue date. Each note will bear interest from the issue date at either a fixed or floating rate of interest;

•  the notes are not subject to any sinking fund;

•  the minimum denomination of the notes will be $1,000 and multiples of $1,000 (unless otherwise stated in the applicable pricing supplement); and

•  the notes will not be listed on any securities exchange (unless otherwise stated in the applicable pricing supplement).

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      In addition, a pricing supplement relating to the particular notes being offered will describe specific terms relating to the offering, including:

•  the total principal amount of the notes offered;

•  the price, which may be expressed as a percentage of the principal amount, at which the notes will be issued to the public, the purchasing agent’s concession and the net proceeds to us;

•  the date on which the notes will be issued to the public;

•  the maturity date of the notes;

•  the interest rate or interest rate formula pursuant to which interest is to be paid on the notes and the dates on which the interest payments will be made;

•  whether the survivor’s option will be applicable;

•  whether the notes may be redeemed at our option or repaid at the option of the owners prior to the maturity date and the provisions relating to such redemption or repayment;

•  any special United States federal income tax implications of the purchase, ownership and disposition of the notes; and

•  any other terms of the notes.

Payment of Principal and Interest

      Principal of, premium, if any, and interest on the notes will be paid to owners of a beneficial interest in the notes in accordance with the arrangements then in place between the paying agent and DTC and its participants as described under “Book-Entry Notes.” Interest on each note will be payable either monthly, quarterly, semi-annually or annually on each interest payment date and at maturity or on the date of redemption or repayment if a note is redeemed or repaid prior to maturity. Interest is payable to the person in whose name a note is registered at the close of business on the regular record date before each interest payment date. Interest payable at maturity, on a date of redemption or repayment or in connection with the exercise of a Survivor’s Option is payable to the person to whom principal is payable.

      We will pay any administrative costs imposed by banks in connection with making payments in immediately available funds, but any tax, assessment or governmental charge imposed upon payments, including, without limitation, any withholding tax, is the responsibility of the holders of beneficial interests in the notes in respect of which such payments are made.

Interest and Interest Rates

      Each note will begin to accrue interest on its issue date. The applicable pricing supplement will specify a fixed interest rate per annum or interest rate formula. Interest will be payable monthly, quarterly, semi-annually or annually. If the maturity date for any note is not a business day (as defined below), principal of, premium, if any, and interest on that note will be paid on the next business day, and no interest will accrue from and after the maturity date.

      Interest rates and or interest rate formulas are subject to change by us from time to time, but no such change will affect any note already issued or as to which an offer to purchase has been accepted by us. 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 in the applicable pricing supplement, the interest rate in effect on each day shall be (1) if such day is an interest reset date (as defined below), the interest rate determined as of

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the interest determination date (as defined below) immediately preceding such interest reset date or (2) 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 fixed rate note will bear interest at a fixed rate and each floating rate note will bear interest at a floating rate determined by reference to an interest rate basis, or base rate, which may be a fixed rate of interest, 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 may also have either or both of the following: (1) a maximum limitation, or ceiling, on the rate of interest that may accrue during any interest period; and (2) a minimum limitation, or floor, on the rate of interest that 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, if the note is a fixed rate note, (b) LIBOR (as defined below), in which case such note will be a LIBOR note, (c) the Treasury rate (as defined below), in which case such note will be a Treasury rate note, (d) the prime rate (as defined below), in which case such note will be a prime rate note, (e) the Federal Funds rate (as defined below), in which case such note will be a Federal Funds rate note, or (f) such other base rate or formula as is set forth in such pricing supplement. The rate of interest on a note may be reset daily, weekly, monthly, quarterly, semi-annually or annually, each an interest reset period, on the interest reset dates (as defined below) 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 that reset: (1) daily, each business day; (2) weekly, the Wednesday of each week (with the exception of weekly reset Treasury rate notes, which will reset the Tuesday of each week); (3) monthly, the third Wednesday of each month, (4) quarterly, the third Wednesday of March, June, September and December of each year, (5) semiannually the third Wednesday of the two months specified in the applicable pricing supplement; and (6) 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 LIBOR note 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 each interest reset period commencing on the related interest reset date will be the rate determined as of the applicable interest determination date (as defined below) on or prior to the calculation date (as defined below). 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 and the interest determination date with respect to LIBOR will be the second London business day (as defined below) 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 defined below) 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 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

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rate note, the interest rate of which is determined by reference to two or more base rates, will be the most recent business day that 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 any spread (as defined below) and/or spread multiplier (as defined below), and any ceiling or floor interest rate limitation applicable to each note. Unless otherwise provided in the applicable pricing supplement, JPMorgan Chase will be the calculation agent with respect to the notes. All determinations made by the calculation agent will 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 will 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 (1) the tenth calendar day after such interest determination date or, if such day is not a business day, the next succeeding business day or (2) the business day preceding the applicable interest payment date or the maturity date or date of redemption or repayment if the notes are repurchased, 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 that 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 floating rate 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.

      The interest rate on each floating rate note will be calculated by reference to the specified base rate or rates, in either case, (1) plus or minus the number of basis points, or spread, specified in the applicable pricing supplement as being applicable to the interest rate for such floating rate notes, and/or (2) multiplied by the percentage, or spread multiplier specified in the applicable pricing supplement as being applicable to the interest rate for such floating rate notes, which rate will be reset as of each Interest Reset Date specified in the applicable pricing supplement. The applicable pricing supplement will also specify the period to maturity, or index maturity, of the instrument or obligation on which the interest rate for such floating rate notes is based.

      Unless otherwise indicated in the applicable pricing supplement, interest payments will 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 maturity date or the date of redemption or repayment, as applicable. Interest on fixed rate notes will be calculated on the basis of a 360-day year of twelve 30-day months. Interest on floating rate notes will be 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 LIBOR notes, Federal Funds rate notes and prime rate notes, or by the actual number of days in the year, in the case of

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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 ceiling 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 at the interest rate specified in such fixed rate note and in the applicable pricing supplement.

Floating Rate Notes

      LIBOR Notes. Each LIBOR note will bear interest at the interest rate (calculated with reference to LIBOR and any spread 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:

      (1) With respect to any interest determination date for a LIBOR note, or a LIBOR interest determination date, LIBOR will be 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 defined below) 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 designated LIBOR page by its terms provides only for a single rate, that single rate will be used, 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. The designated LIBOR page will be either (a) if “LIBOR Reuters” is specified in the applicable pricing supplement, the display on the Reuters Monitor Money Rates Service, or any successor service, for the purpose of displaying the London interbank rates of major banks for U.S. dollars, or (b) if “LIBOR Telerate” is specified in the applicable pricing supplement, the display on Moneyline Telerate, or any successor service, for the purpose of displaying the London interbank rates of major banks for U.S. dollars. If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable pricing supplement, LIBOR will be determined as if LIBOR Telerate and 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 (2) below.

      (2) 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

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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 or, if no LIBOR was in effect on such LIBOR interest determination date, the rate of interest payable on the note will be the initial interest rate specified in the applicable pricing supplement.

      Treasury Rate Notes. Each Treasury rate note will bear interest at the interest rate (calculated with reference to the Treasury rate and any Spread and/or Spread Multiplier) specified in such Treasury rate note and in the applicable pricing supplement.

      Unless otherwise indicated in the pricing supplement, the Treasury rate will be, with respect to any interest determination date relating to a Treasury rate note, or a Treasury rate interest determination date, (1) the rate from the auction held on the applicable interest determination date of direct obligations of the United States, or 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, (2) if the rate in clause (1) is not so published by 3:00 P.M., New York City time, on the related calculation date pertaining to such Treasury rate interest determination date, the bond equivalent yield (as defined below) of the rate for the applicable Treasury bills as published in the H.15 Daily Update (as defined below), 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 (3) if the rate in clause (2) 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 (4) in the event that the rate referred to in clause (3) 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) (as defined below) under the caption “U.S. Government Securities/ Treasury

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Bills/Secondary Market,” or (5) if the rate referred to in clause (4) 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 published in the 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 (6) if the rate referred to in clause (5) 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 purchasing agent, the agents or their 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 (7) if the dealers selected by the calculation agent are not quoting as mentioned in clause (6), the rate in effect on the applicable interest determination date or, if no Treasury rate was in effect on such Treasury rate interest determination date, the rate of interest payable on the note will be the initial interest rate specified in the applicable pricing supplement.

      H.15(519) refers to “Statistical Release H.15(519), Selected Interest Rates,” as published by the Board of Governors of the Federal Reserve System. The H.15 Daily Update is the daily update of H.15(519), available through the Internet site of the Board of Governors of The Federal Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or publication.

      The bond equivalent yield is a yield calculated in accordance with the following formula and expressed as a percentage:

360 -  D × N 
D × M × 100

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.

      Prime Rate Notes. Each prime rate note will bear interest at the interest rate (calculated with reference to the prime rate and any spread and/or spread multiplier) specified in the applicable pricing supplement.

      Unless otherwise indicated in the pricing supplement, the prime rate will be, with respect to any interest determination date relating to a prime rate note, or 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 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 defined below) 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

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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 interest reset period will be the prime rate in effect on such prime rate interest determination date or, if no prime rate was in effect on such prime rate interest determination date, the rate of interest payable on the note will be the initial interest rate specified in the applicable pricing supplement. Reuters Screen USPRIME 1 is 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).

      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 any spread and/or spread multiplier) specified in the applicable pricing supplement.

      Unless otherwise indicated in the pricing supplement, the Federal Funds rate will be, with respect to any interest determination date relating to a Federal Funds rate note, or a Federal Funds rate 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 rate 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 interest reset period will be the Federal Funds rate in effect on such Federal Funds interest determination date or, if no Federal Funds rate was in effect on such Federal Funds rate interest determination date, the rate of interest payable on the note will be the initial interest rate specified in the applicable pricing supplement.

      Consumer Price Index Notes. The monthly rate of interest on consumer price index notes is determined, in part, by the change in the Consumer Price Index published by the Bureau of Labor and Statistics of the U.S. Department of Labor, as specified in the applicable pricing supplement.

Payment of Interest

      Interest on the fixed rate notes will be paid as follows (unless otherwise stated in the applicable pricing supplement):

Interest Payment
Frequency	Interest Payment Dates
Monthly	Fifteenth day of each calendar month, beginning in the first calendar month following the month the note was issued.

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Interest Payment
Frequency	Interest Payment Dates
Quarterly	Fifteenth day of every third month, beginning in the third calendar month following the month the note was issued.
Semi-annual	Fifteenth day of every sixth month, beginning in the sixth calendar month following the month the note was issued.
Annual	Fifteenth day of every twelfth month, beginning in the twelfth calendar month following the month the note was issued.

      Except as provided below or in the applicable pricing supplement, interest will be payable on floating rate notes on their interest payment date, which in the case of floating rate notes that reset: (1) daily, weekly or monthly, will be 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; (2) quarterly, will be the third Wednesday of March, June, September and December of each year, (3) semiannually, will be the third Wednesday of the two months of each year specified in the applicable pricing supplement; and (4) annually, will be the third Wednesday of the month of each year specified in the applicable pricing supplement, and, in each case, on the maturity date or date of redemption or repayment, 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, (1) with respect to a fixed rate note, interest with respect to 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 (2) 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.

      The regular record date for any interest payment date with respect to a fixed rate note is the first day of the calendar month in which the interest payment date occurs, except that the regular record date for the final interest payment date is the final interest payment date. Unless otherwise specified in the applicable pricing supplement, the regular record date with respect to a floating rate note is the 15th calendar day (whether or not a business day) immediately preceding the related interest payment date.

      Interest on a note will be payable beginning on the first interest payment date after its issue date to holders of record on the corresponding regular record date.

      Unless the applicable pricing supplement states otherwise, a business day is any weekday that is (1) not a legal holiday in New York, New York or Chicago, Illinois, (2) not a day on which banking institutions in either of those cities are authorized or required by law or regulation to be closed and (3) with respect to LIBOR notes, a London business day. A London business day is any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

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Redemption and Repayment

      Unless we otherwise provide in the applicable pricing supplement, the notes are not redeemable or repayable prior to the maturity date.

      If the pricing supplement states that the notes are redeemable at our option prior to their maturity date, then, we may redeem any of those notes either in whole or from time to time in part, upon not less than 30 nor more than 60 days notice to DTC as the holder of the notes on such date or dates specified in the supplement.

      If the pricing supplement states that the notes are repayable at the option of the holder prior to their maturity date, we will require receipt of notice of the request for prepayment at least 30 but not more than 60 days prior to the date or dates specified in the supplement. We also must receive the completed form entitled “Option to Elect Repayment” from the holder of the notes.

      Exercise of the repayment option by the holder of a note is irrevocable. DTC’s nominee is considered the holder of the notes and therefore will be the only entity that can exercise that right to repayment, as described under the heading “— Book-Entry Notes.”

      To ensure that DTC’s nominee will timely exercise a right to repayment with respect to a particular beneficial interest in a note, the beneficial owner of such interest must instruct the broker or other direct or indirect participant through which it holds a beneficial interest in the note to notify DTC of its desire to exercise a right to repayment. Because different firms have different cut-off times for accepting instructions from their customers, each beneficial owner should consult the broker or other direct or indirect participant through which it holds an interest in a note to determine the cut-off times by which the instruction must be given for timely notice to be delivered to DTC. Conveyance of notices and other communications by DTC to participants, by participants to indirect participants and by participants and indirect participants to beneficial owners of the notes will be governed by agreements among them and any applicable statutory or regulatory requirements.

      The actual redemption or repayment normally will occur on the interest payment date or dates following receipt of a valid notice. Unless otherwise specified in the pricing supplement, the redemption or repayment price will equal 100% of the principal amount of the note plus accrued interest to, but excluding, the date or dates of redemption or repayment.

      We may at any time purchase notes at any price or prices in the open market or otherwise. If we purchase the notes in this manner, we have the discretion to either hold, resell or surrender the notes to the trustee for cancellation.

Survivor’s Option

      The survivor’s option is our agreement with the purchaser of a note to repurchase that note, if requested, upon the death of the purchaser. The pricing supplement relating to any note will state whether the estate of the deceased holder of a beneficial interest in the note will have the survivor’s option. To be eligible for repurchase by exercise of the survivor’s option, a note must have been acquired by the deceased owner at least six months prior to exercise.

      If the survivor’s option is exercised, we will, at our option, either repay or purchase any note in whole or in part, that is properly tendered for repayment by or on behalf of the person that has authority to act on behalf of the deceased owner of the note, at a price equal to 100% of the principal amount of the beneficial interest of the deceased owner in the note plus accrued interest to the date of repayment.

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      We have the discretionary right to limit the aggregate principal amount of notes as to which exercises of the survivor’s option shall be accepted from all holders in any calendar year to an amount equal to the greater of $2,000,000 or 2% of the outstanding principal amount of all notes of the series outstanding as of the end of the most recent calendar year. We also have the discretionary right to limit to $250,000 in any calendar year the aggregate principal amount of acceptances of exercise of the survivor’s option in such calendar year for any individual deceased holder. In addition, we will not permit the exercise of the survivor’s option for an amount less than $1,000, or other than in integral multiples of $1,000.

      An otherwise valid election to exercise the survivor’s option may not be withdrawn. Each election to exercise the survivor’s option will be accepted in the order received by the trustee, except for any note the acceptance of which would contravene the restrictions described above. Notes accepted for repayment pursuant to exercise of the survivor’s option normally will be repaid on the first interest payment date that occurs 20 or more calendar days after the date of the acceptance. Each note submitted for repayment that is not accepted in any calendar year due to the application of the limitations described in the preceding paragraph will be deemed to be tendered in the following calendar year in the order in which all such notes were originally tendered.

      Since the notes are represented by a global note, DTC or its nominee is treated as the holder of the notes and will be the only entity that can exercise the survivor’s option for such notes. To obtain repayment pursuant to exercise of the survivor’s option for a note, the deceased holder’s authorized representative must provide the following to the broker or other entity through which the beneficial interest in the note is held by the deceased owner:

•  appropriate evidence satisfactory to the trustee and the Company that (a) the deceased was the owner of a beneficial interest in the note at the time of death and acquired the note at least six months prior to exercise of the Survivor’s Option, (b) the death of the beneficial owner has occurred and (c) the representative has authority to act on behalf of the deceased beneficial owner;

•  if the beneficial interest in the note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the trustee and the Company from the nominee attesting to the deceased’s ownership of a beneficial interest in such note;

•  a written request for repayment signed by the representative of the decedent with signature guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States;

•  if applicable, a properly executed assignment or endorsement;

•  tax waivers and any other instruments or documents that the trustee or the Company reasonably requires in order to establish the validity of the ownership of the notes and the claimant’s entitlement to payment; and

•  any additional information the trustee or the Company requires to document ownership or authority to make the election and to cause the redemption of the notes.

      In turn, the broker or other entity will deliver each of these items to the trustee from the broker or

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other entity stating that it represents the deceased beneficial owner.

      We retain the right to limit the aggregate principal amount of notes as to which exercises of the Survivor’s Option will be accepted in any one calendar year as described above. All other questions regarding the eligibility or validity of any exercise of the Survivor’s Option will be determined by the Company, in its sole discretion, which determination will be final and binding on all parties. If a note submitted for repayment pursuant to a valid exercise of the Survivor’s Option is not accepted, the trustee will deliver a notice by first-class mail to the deceased beneficial owner’s authorized representative, that states the reason the note has not been accepted for payment.

      The death of a person owning a note in “joint tenancy” or “tenancy by the entirety” will be deemed the death of the owner of the note, and the entire principal amount of the note so held will be subject to repayment.

      The death of a person owning a note in “tenancy in common” will be deemed the death of an owner of a note only with respect to the deceased holder’s interest in the note so held by tenancy in common. However, if a note is held by husband and wife as tenants in common, the death of either will be deemed the death of the owner of the note, and the entire principal amount of the note so held will be subject to repayment.

      The death of a person who during his or her lifetime was entitled to substantially all of the beneficial interest of ownership of a note, will be deemed the death of the holder of the note for purposes of this provision, if the beneficial interest can be established to the satisfaction of the trustee and the Company. The beneficial interest will be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Transfers to Minors Act, community property or other joint ownership arrangements between a husband and wife and custodial and trust arrangements where one person has substantially all of the beneficial ownership interest in the note during his or her lifetime.

      The broker or other entity will be responsible for disbursing payments received from the trustee to the representative. See “Book-Entry Notes.”

Book-Entry Notes

      All of the notes we offer will be issued only in book-entry form. This means that we will not issue actual notes or certificates. Instead, we will issue global notes in registered form, each of which is held through DTC, as depositary, and is registered in the name of Cede & Co., as nominee of DTC. Accordingly, Cede & Co. will be the holder of record of the notes. Each note represents a beneficial interest in a global note.

      Beneficial interests in a global note are shown on, and transfers are effected through, records maintained by DTC or its participants. In order to own a beneficial interest in a note, you must be an institution that has an account with DTC or have a direct or indirect account with such an institution. Transfers of ownership interests in the notes will be accomplished by making entries on the books of DTC participants acting on behalf of beneficial owners. Beneficial owners of these notes will not receive certificates representing their ownership interest, unless the use of the book-entry system is discontinued. So long as DTC or its nominee is the registered owner of a global note, DTC or its nominee, as the case may be, will be the sole holder of the notes represented thereby for all purposes, including payment of principal and interest, under the indenture. Except as otherwise provided below, the beneficial owners of the notes are not entitled to receive physical delivery of certificated notes and will not be considered the holders for any purpose under the indenture. Accordingly, each beneficial

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owner must rely on the procedures of DTC and, if such beneficial owner is not a DTC participant, on the procedures of the DTC participant through which such beneficial owner owns its interest in order to exercise any rights of a holder of a note under the indenture. The laws of some jurisdictions require that certain purchasers of notes take physical delivery of such notes in certificated form. Those limits and laws may impair the ability to transfer beneficial interests in the notes.

      Each global note representing notes will be exchangeable for certificated notes of like tenor and terms and of differing authorized denominations in a like aggregate principal amount, only if (1) DTC notifies us that it is unwilling or unable to continue as depositary for the global notes or we become aware that DTC has ceased to be a clearing agency registered under the Securities Exchange Act of 1934 and, in any such case, we fail to appoint a successor to DTC within 60 calendar days, (2) we, in our sole discretion, determine that the global notes shall be exchangeable for certificated notes or (3) an event of default has occurred and is continuing with respect to the notes under the indenture. Upon any such exchange, the certificated notes shall be registered in the names of the beneficial owners of the global notes representing the notes.

      The following is based on information furnished by DTC:

      DTC is a limited-purpose trust company organized under the New York Banking Law, 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. DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among direct participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in direct participants’ accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its direct and indirect participants are on file with the SEC.

      Purchases of the notes under the DTC system must be made by or through direct participants, which will receive a credit for the notes on DTC’s records. The beneficial interest of each actual purchaser of each note is in turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which the beneficial owner entered into the transaction. Transfers of beneficial interests in the notes are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their beneficial interest in notes, except in the event that use of the book-entry system for the notes is discontinued.

      To facilitate subsequent transfers, all notes deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee,

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Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of the notes with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes; DTC’s records reflect only the identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

      Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participant’s to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of the notes may wish to take certain steps to augment transmission to them of notices of significant events with respect to the notes, such as redemption, tenders, defaults, and proposed amendments to the security documents. Beneficial owners of the notes may wish to ascertain that the nominee holding the notes for their benefit has agreed to obtain and transmit notices to beneficial owners, or in the alternative, beneficial owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

      Neither DTC nor Cede & Co. will consent or vote with respect to the notes. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the regular record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts the notes are credited on the regular record date (identified in a listing attached to the omnibus proxy).

      We will pay principal and any premium or interest payments on the notes in immediately available funds directly to DTC. DTC’s practice is to credit direct participants’ accounts on the applicable payment date in accordance with their respective holdings shown on DTC’s records unless DTC has reason to believe that it will not receive payment on such date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name.” These payments will be the responsibility of these participants and not of DTC or any other party, subject to any statutory or regulatory requirements that may be in effect form time to time. Payment of principal and any premium or interest to DTC is our responsibility, disbursement of such payments to direct participants is the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of the direct or indirect participant.

      We will send any redemption notices to Cede & Co. If less than all of the notes are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in such issue to be redeemed.

      DTC may discontinue providing its services as securities depository for the notes at any time by giving us reasonable notice. Under such circumstances, if a successor securities depository is not obtained, we will print and deliver certificated notes.

      The information in this section concerning DTC and DTC’s system has been obtained from sources that we believe to be reliable, but we take no responsibility for its accuracy.

Limitation on Liens

      Each note will be unsecured senior debt of HSBC Finance. In the indenture, we agree that we

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will not issue, assume or guarantee any debt for borrowed money that is secured by a mortgage, pledge or other lien on our property unless any notes then outstanding are secured to the same extent.

      This obligation does not apply to:

•  liens that secure the payment of any portion of the purchase price of property or debt acquired by us or the construction or improvement of property or any other lien existing at the time we acquired the property or debt;

•  liens on property of another company that exist at the time we acquire substantially all the assets or stock of the company;

•  liens securing debts we have with a subsidiary;

•  liens of any government or agency securing payments required under any contract, law, or debt owed or guaranteed relating to the purchase or construction of property subject to the lien;

•  liens on properties financed through tax-exempt municipal transactions;

•  liens existing prior to March 1, 2001 (the original date of the indenture for the notes);

•  any renewal or extension of any lien referred to in any of the items listed above; and

•  guarantees, cash deposits or other liabilities in connection with sales, securitizations or discounting of receivables in the ordinary course of our business.

      Our obligation to secure the notes equally with other debts for borrowed money also does not apply if the total amount of the other debt is 10% or less of our consolidated net worth, which is the difference between our assets and liabilities as shown on our most recent audited consolidated financial statements. The obligation also does not apply if we sold property and then leased it from the purchaser and under accounting rules the lease is not included as a liability on our balance sheet.

Defeasance

      If we deposit with the trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the maturity date or a redemption or repayment date for particular notes, we will not have any further obligations with respect to those notes. Holders of notes would be able to look only to the trust funds for payment of principal, premium, if any, and interest on the notes. If this happens, the holders of the notes will not be entitled to the benefits of the indenture except for registration of transfer and exchange of notes.

      Under United States Federal income tax law as of the date of this prospectus, a discharge of our obligations related to the notes may cause holders to be treated as if they had exchanged the notes. Each holder might be required to recognize gain or loss equal to the difference between the holder’s cost or other tax basis for the notes and the value of the holder’s interest in the trust. Holders might be required to include as income a different amount than would be included without the discharge. Prospective investors are urged to consult their own tax advisors as to the consequences of a discharge, including the applicability and effect of tax laws other than the United States Federal income tax law.

Modification of the Indenture

      Under the indenture, our rights and obligations and the rights of the holders of any notes may be changed. Any change requires the consent of a majority (by principal amount) of the holders of the outstanding notes to be affected, voting as one class.

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However, changes can be made without the consent of any holder if the changes do not affect the rights of a holder in any negative way. No changes to the timing of when payments are due, terms of payment of principal or interest, or reducing the percentage required for changes, is effective against any holder without its consent.

Consolidation, Merger or Sale

      Under the indenture, we are permitted to consolidate or merge with another company. We are also permitted to sell all or substantially all of our assets. However, we may not merge or consolidate with any corporation or sell substantially all of our assets as an entirety unless:

•  we are the surviving corporation or the successor corporation is a United States company that expressly assumes the obligation to make all required payments on the notes and to perform and observe all the covenants and conditions of the indenture binding on us; and

•  immediately after the merger, consolidation, or sale, we, or the successor corporation, are not in default in the performance of a covenant or condition in the indenture.

Event of Default

      “Event of Default” means any of the following:

•  failure to pay the principal (or premium, if any), on any notes when due and payable;

•  failure for 30 days to pay interest due and payable on any notes;

•  failure to perform any other requirements in the notes, or in the indenture, for 60 days after notice;

•  certain events of insolvency; and

•  certain defaults relating to money borrowed by us under another indenture for which the trustee acts as trustee which results in that debt becoming immediately due.

      An event of default for a particular series of our debt securities does not necessarily mean that an event of default has occurred for the notes. If an event of default occurs and continues, the trustee or the holders of at least 25% of the principal amount of the notes affected by that event of default may require us to immediately repay the entire principal of the notes. Subject to certain conditions, the holders of at least a majority in aggregate principal amount of the notes can vote to waive such requirement to immediately repay the notes.

      Within 90 days after a default occurs, the trustee must notify the holders of the notes of the default if we have not remedied it (default is defined to include the events specified above without the grace periods or notice). The trustee may withhold notice to the holders of any default (except in the payment of principal or interest) if the trustee in good faith believes not sending such notice to be in the interest of the holders.

      Subject to the provisions of the indenture relating to its duties in case of default, the trustee shall be under no obligation to exercise any of its rights or powers under the indenture at the request, order or direction of any holders unless such holders offer the trustee reasonable indemnity. Subject to the provisions for indemnification, the holders of a majority in principal amount of a series of notes may direct the time, method and place of conducting any proceedings for any remedy available to, or exercising any trust or power conferred on, the trustee with respect to such series of notes.

Concerning the Trustee

      We maintain a banking relationship with JPMorgan Chase Bank or affiliates thereof.

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JPMorgan Chase Bank or affiliates thereof also act as trustee under other indentures of HSBC Finance under which senior unsecured debt securities of HSBC Finance have been issued, and may have other financial relations with us and other corporations affiliated with us.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

      The following is a general discussion of certain U.S. federal income tax considerations relating to the purchase, ownership and disposition of the notes by initial purchasers of the notes who are U.S. holders (as defined below), purchase the notes at their stated principal amount and hold the notes as capital assets within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended, or the tax code. This discussion does not address all of the tax considerations that may be relevant to prospective purchasers in light of their particular circumstances or to persons subject to special rules under U.S. federal tax laws, such as non-U.S. holders, certain financial institutions, insurance companies, dealers in securities, tax-exempt entities, persons who hold the notes as part of a “straddle,” “hedging,” “conversion” or other integrated transaction, persons who mark their securities to market for U.S. federal income tax purposes or persons whose functional currency is not the U.S. dollar.

      This discussion is based on the tax code, the Treasury regulations promulgated thereunder and administrative and judicial pronouncements, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect.

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

•  a 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;

•  an estate or trust treated as a United States person under section 7701(a)(30) of the tax code.

      If a partnership holds a note, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership.

      PROSPECTIVE PURCHASERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISERS AS TO THE U.S. FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.

Interest

      It is not anticipated that notes will be issued with original issue discount, or OID, and the remainder of this discussion assumes that the notes will not be issued with OID, except as provided under the heading “Short-Term Notes.”

      Interest on the notes will be taxed to a U.S. holder as ordinary income at the time it accrues or is received, in accordance with such U.S. holder’s method of accounting for federal income tax purposes.

Short-Term Notes

      Short-term notes, which are notes that have a fixed maturity of one year or less, will be treated as

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issued with OID. In general, an individual or other U.S. holder that uses the cash method of accounting is not required to accrue such OID prior to receipt unless the U.S. holder elects to do so. If such an election is not made, any gain recognized by such U.S. holder on the sale, exchange, retirement 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 upon election under the constant yield method (based on daily compounding), through the date of sale, exchange, retirement or other disposition, and a portion of the deduction otherwise allowable to such U.S. holder for interest on borrowings allocable to the short-term note will be deferred until a corresponding amount of income is realized. U.S. holders who report income for U.S. federal income tax purposes under the accrual method of accounting and certain other holders are required to accrue OID related to a short-term note as ordinary income on a straight-line basis unless an election is made to accrue the OID under a constant yield method (based on daily compounding).

Market Discount

      If a U.S. holder purchases a note for an amount that is less than the principal amount of the note by 0.25% or more of the principal amount of the note multiplied by the number of remaining whole years to maturity, such holder will be considered to have purchased such note with “market discount.” In such case, any gain realized by a U.S. holder on the sale, exchange or redemption of the note generally will be treated as ordinary interest income to the extent of the market discount that accrued on the note during such holder’s holding period. In addition, a U.S. holder may be required to defer the deduction of a portion of the interest paid on any indebtedness incurred or maintained to purchase or carry the note. In general, market discount is treated as accruing ratably over the term of the note unless an irrevocable election is made to accrue that market discount under a constant yield method.

      A U.S. holder may make a separate election to include market discount in gross income currently as it accrues (on either a ratable or constant yield basis), in lieu of treating a portion of any gain realized on a sale, exchange or redemption of the notes as ordinary income. If an election is made to include market discount on a current basis, the interest deduction deferral rule described above will not apply. If a U.S. holder makes such an election, it will apply to all market discount debt instruments acquired by such holder on or after the first day of the first taxable year to which the election applies. The election may not be revoked without the consent of the United States Internal Revenue Service, or “IRS.”

Bond Premium

      If a U.S. holder purchases a note for an amount that is greater than the principal amount of the note, such holder will be considered to have purchased such note with “amortizable bond premium” equal in amount to such excess. A U.S. holder may elect (in accordance with applicable Code provisions) to amortize such premium over the remaining term of the note (where such note is not redeemable prior to its maturity date), based on the U.S. holder’s yield to maturity with respect to the note.

      A U.S. holder generally may use the amortizable bond premium allocable to an accrual period to offset interest required to be included in the U.S. holder’s income with respect to the note in that accrual period. If the amortizable bond premium allocable to an accrual period exceeds the amount of interest allocable to such accrual period, such excess would be allowed as a deduction for such accrual period, but only to the extent of the

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U.S. holder’s prior interest inclusions on the note that have not been offset previously by bond premium. Any excess is generally carried forward and allocable to the next accrual period.

      If such note may be redeemed by us prior to its maturity date, the amount of amortizable bond premium is determined with reference to either the amount payable on maturity or, if it results in a smaller premium, the amount payable on the earlier redemption date. A U.S. holder who elects to amortize bond premium must reduce his tax basis in the note as described under “Sale, Exchange, Retirement or Other Disposition of Notes” below. An election to amortize bond premium applies to all taxable debt obligations held by the U.S. holder at the beginning of the first taxable year to which the election applies and thereafter acquired by the U.S. 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 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.

Sale, Exchange, Retirement or Other Disposition of Notes

      In general, a U.S. holder of a note will have a tax basis in such note equal to the cost of the note to such U.S. holder, increased by any amount includible in income by such U.S. holder as OID (and accrued market discount, if any, if the U.S. holder has included such market discount in income) and reduced by any principal payments and by any amortizable bond premium taken with respect to such note. Upon a sale, exchange, retirement or other disposition of a note, a U.S. holder will generally recognize gain or loss equal to the difference between the amount realized on the sale, exchange, retirement or other disposition (less any accrued but unpaid interest, which will constitute ordinary income if not previously included in income) and the U.S. holder’s tax basis in such note. Subject to the market discount sales discussed above, such gain or loss will be long-term capital gain or loss if the U.S. holder held the note for more than one year at the time of disposition. A U.S. holder that is an individual is entitled to preferential treatment for net long-term capital gains; however, the ability of a U.S. holder to offset capital losses against ordinary income is limited.

      If a U.S. holder disposes of only a portion of a note pursuant to a redemption or repayment (including the Survivor’s Option, if applicable), such disposition will be treated as a pro rata prepayment in retirement of a portion of a debt instrument. Generally, the resulting gain or loss would be calculated by assuming that the original note being tendered consists of two instruments, one that is retired (or repaid), and one that remains outstanding. The adjusted issue price and the U.S. holder’s adjusted basis, determined immediately before the disposition, would be allocated between these two instruments based on the portion of the instrument that is treated as retired by the pro rata prepayment.

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Backup Withholding and Information Reporting

      Backup withholding and information reporting requirements generally apply to interest (including OID) and principal payments made to, and to the proceeds of sales by, certain non-corporate U.S. holders. A U.S. holder not otherwise exempt from backup withholding generally can avoid backup withholding by providing a properly-executed IRS Form W-9 (or successor form). Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the beneficial owner’s U.S. federal income tax liability provided the required information is furnished to the IRS.

ERISA CONSIDERATIONS

      The discussion herein of ERISA is general in nature and is not intended to be all-inclusive. Any fiduciary of an ERISA plan, governmental plan or church plan considering an investment in the notes should consult with its legal advisors regarding the consequences of such investment.

General

      A fiduciary of an employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended, or ERISA, should consider fiduciary standards under ERISA in the context of the particular circumstances of such plan before authorizing an investment in the notes. Such fiduciary should consider whether the investment satisfies ERISA’s diversification and prudence requirements and whether the investment is in accordance with the documents and instruments governing the plan. In addition, ERISA and the tax code prohibit a wide range of prohibited transactions involving the assets of a plan subject to ERISA or the assets of an individual retirement account or plan subject to section 4975 of the tax code or any entity in which such plan invests whose assets are deemed plan assets under ERISA, referred to as an ERISA plan, and persons who have certain specified relationships to the ERISA plan (“parties in interest,” within the meaning of ERISA, and “disqualified person,” within the meaning of the tax code). Such transactions may require “correction” and may cause the ERISA plan fiduciary to incur certain liabilities and the parties in interest or disqualified persons to be subject to excise taxes.

      Governmental plans and certain church plans (each as defined under ERISA) are not subject to the prohibited transaction rules. Such plans may, however, be subject to federal, state or local laws or regulations that may affect their investment in the notes. Any fiduciary of such a governmental or church plan considering an investment in the notes should determine the need for, and the availability, if necessary, of any exemptive relief under such laws or regulations.

Prohibited Transactions

      We may be a party in interest or disqualified person with respect to an ERISA plan investing in the notes. Therefore, such investment by an ERISA plan may give rise to a prohibited transaction in the form of a sale of property by us to the investing ERISA plan or an extension of credit by the investing ERISA plan to us. Consequently, before investing in the notes, any person who is, or who is acquiring such securities for, or on behalf of, an ERISA plan should determine either that we are not a party in interest or disqualified person with respect to the ERISA plan or that a statutory or an administrative exemption from the prohibited transaction rules discussed below or otherwise available is applicable to such investment in the notes or that such investment in, or acquisition of, such securities will not result in a prohibited transaction.

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      The statutory or administrative prohibited transaction class exemptions, each a PTCE, from the prohibited transaction rules under ERISA and the tax code that may be available to an ERISA plan that is investing in the notes, include the following ERISA investor exemptions:

•  PTCE 90-1, regarding investments by insurance company pooled separate accounts;

•  PTCE 91-38, regarding investments by bank collective investment funds;

•  PTCE84-14, regarding transactions effected by qualified professional asset managers;

•  PTCE84-14, regarding transactions effected by qualified professional asset managers;

•  PTCE 96-23, regarding transactions effected by in-house managers; and

•  PTCE 95-60, regarding investments by insurance company general accounts.

      The notes may not be acquired by any person or entity who is, or who in acquiring such notes is using the assets of, an ERISA plan unless one of the ERISA investor exemptions or another applicable exemption is available to the ERISA plan. The acquisition of the notes by any person or entity who is, or who in acquiring such notes is using the assets of, an ERISA plan will be deemed to constitute a representation by such person or entity to us either that we are not a disqualified person or party in interest with respect to the ERISA plan or that such person or entity is eligible for exemptive relief available pursuant to either the ERISA investor exemptions or another applicable exemption with respect to the acquisition and holding of such notes.

PLAN OF DISTRIBUTION

Initial Offering and Sale

      Under the terms of a Selling Agent Agreement dated as of December 21, 2004, the notes are offered from time to time by us to the purchasing agent for subsequent resale to the agents and other dealers. The purchasing agent and the agents are parties to that agreement. The notes will be offered for sale in the United States only. Dealers who are members of the selling group have executed a Master Selected Dealer Agreement with the purchasing agent. The agents have agreed to use their reasonable best efforts to solicit offers from investors to purchase the notes. HSBC Securities (USA) Inc. is an affiliate of HSBC Finance, as described below. We also may appoint additional agents to solicit offers to purchase the notes. Any solicitation and sale of the notes through those additional agents, however, will be on the same terms and conditions to which the original agents have agreed. We will pay the purchasing agent a gross selling concession to be divided among the purchasing agent and the other agents as they agree. The concession is payable to the purchasing agent in the form of a discount ranging from 0.2% to 3.15% of the non-discounted price for each note sold. The purchasing agent also may sell notes to dealers at a discount not in excess of the concession it received from us.

      Following the solicitation of orders, each of the agents, severally and not jointly, may purchase notes as principal for its own account from the purchasing agent. Unless otherwise set forth in the applicable pricing supplement, these notes will be purchased by the agents and resold by them to one or more investors at a fixed public offering price. After the initial public offering of notes to be resold by an agent to investors, the public offering price (in the case of notes to be resold at a fixed public offering

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price), concession and any discount may be changed.

      We have the sole right to accept offers to purchase notes and may reject any proposed offer to purchase notes in whole or in part. The purchasing agent and each agent also has the right, in its discretion reasonably exercised, to reject any proposed offer to purchase notes in whole or in part. We reserve the right to withdraw, cancel, or modify any offer without notice. We also may change the terms, including the interest rate we will pay on the notes, at any time prior to our acceptance of an offer to purchase.

      The purchasing agent and each of the agents may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933. We have agreed to indemnify the Purchasing Agent and each of the agents against certain liabilities, including liabilities under the Securities Act of 1933. We have also agreed to reimburse the purchasing agent and the agents for certain expenses.

      No note will have an established trading market when issued. We do not intend to apply for the listing of the notes on any securities exchange, but we have been advised by the agents that the agents may purchase and sell notes in the secondary market as permitted by applicable laws and regulations. The agents are not obligated to make a market in the notes, and they may discontinue making a market at any time without notice. Neither the agents nor we can provide any assurance regarding the liquidity of any trading market for any notes. All secondary trading in the notes will settle in immediately available funds.

      In connection with certain offerings of notes, the rules of the SEC permit the purchasing agent to engage in transactions that may stabilize the price of the notes. The purchasing agent will conduct these activities for the agents. These transactions may consist of short sales, stabilizing transactions and purchases to cover positions created by short sales. A short sale is the sale by the purchasing agent of a greater amount of notes than the amount the purchasing agent has agreed to purchase in connection with an offering of notes. Stabilizing transactions consist of certain bids or purchases made by the purchasing agent to prevent or retard a decline in the price of the notes while an offering of notes is in process. In general, these purchases or bids for the notes for the purpose of stabilization or to reduce a syndicate short position could cause the price of the notes to be higher than it might otherwise be in the absence of those purchases or bids. The purchasing agent makes no representation or prediction as to the direction or magnitude of any effect that these transactions may have on the price of any notes. In addition, the purchasing agent is not required to engage in these activities and may end any of these activities at any time.

      The agents or dealers to or through which we may sell notes may engage in transactions with us and perform services for us in the ordinary course of business.

      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. Accordingly, offerings of the notes 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 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.

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      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, 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 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 notes to be sold in market-making transactions. The latter include the notes to be issued after the date of this prospectus, as well as the 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.

WHERE YOU CAN FIND MORE INFORMATION

      We file 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 Internet web site 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

32

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 notes: 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, 2004, June 30, 2004 and September 30, 2004; and Current Reports on Form 8-K dated March 1, 2004, May 17, 2004, August 2, 2004, November 15, 2004 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, Telephone (847) 564-5000, email: darcie.j.oakes@us.hsbc.com. These filings are also available on the website our company maintains at www.household.com.

LEGAL OPINIONS

      Patrick D. Schwartz, Vice President, Deputy General Counsel — Corporate and Assistant Secretary of HSBC Finance will issue a legal opinion concerning the legality of the notes. Certain legal matters will be passed upon for the Purchasing Agent and 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.

33

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
	SEC Filing Fee			633,500	*
	NASD Filing Fee			30,500
	Rating Agency Fees			1,000,000
	Legal Fees and Expenses			25,000
	Miscellaneous			16,000
		Total	$	2,050,000

*  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 will enter into with the Purchasing Agent and the 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 Purchasing Agent or agents.

II-1

Item 16.  Exhibits.

1	Form of Selling Agent 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 as of 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., amending and restating the Indenture for Senior Debt Securities dated as of March 1, 2001 and amended and restated on April 30, 2003, between Household Finance Corporation and JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank).
5	Opinion and Consent of Mr. P. D. Schwartz, Vice President, Deputy General Counsel — Corporate and Assistant Secretary of HSBC Finance Corporation.
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. P. D. Schwartz, Vice President, Deputy General Counsel — Corporate and Assistant Secretary of HSBC Finance Corporation, is contained in his opinion (Exhibit 5).
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.

      (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.

II-2

      (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
* (J. D. Fishburn)	Director
* (C. F. Freidheim, Jr.)	Director

II-4

Signature		Title
* (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 Selling Agent 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 as of 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., amending and restating the Indenture for Senior Debt Securities dated as of March 1, 2001 and amended and restated on April 30, 2003, between Household Finance Corporation and JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank).
	5	Opinion and Consent of Mr. P. D. Schwartz, Vice President, Deputy General Counsel — Corporate and Assistant Secretary of HSBC Finance Corporation.
	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. P. D. Schwartz, Vice President, Deputy General Counsel — Corporate and Assistant Secretary of HSBC Finance Corporation, is contained in his opinion (Exhibit 5).
	24	Power of Attorney (included on page II-4).
	25	Statement of eligibility of JPMorgan Chase Bank, N.A.

EX-1

EXHIBIT 1

SELLING AGENT AGREEMENT

by and among

HSBC Finance Corporation,

Incapital LLC (as Purchasing Agent)

and the

Agents named herein

December _____, 2004

December    , 2004
To Incapital LLC and the Agents listed on
the signature page hereto.

          HSBC Finance Corporation, a Delaware corporation (the “Company”), proposes to issue and sell up to $5,000,000,000 aggregate principal amount of its HSBC Finance InterNotes® due nine months or more from date of issue (the “Notes”). The Notes constitute a part of a series of senior debt securities, unlimited as to aggregate principal amount, to be issued pursuant to the Amended and Restated Indenture for Senior Debt Securities (the “Indenture”) dated as of December    , 2004, between the Company and JPMorgan Chase Bank, N.A. as trustee (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    , 2004. The terms of the Notes are described in the Prospectus referred to below.

          Subject to the terms and conditions contained in this Selling Agent Agreement (the “Agreement”), the Company hereby (1) appoints Incapital LLC, as purchasing agent (the “Purchasing Agent”), (2) appoints each of the other parties listed on the signature page as agent of the Company (each an “Agent” and together, the “Agents”) for the purpose of soliciting offers to purchase the Notes and each of the Agents hereby agrees to use reasonable best efforts to solicit offers to purchase Notes upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify and in accordance with the terms hereof, and, after consultation with the Purchasing Agent and (3) agrees that whenever the Company determines to sell Notes pursuant to this Agreement, such Notes shall be sold pursuant to a Terms Agreement (as defined herein) relating to such sale in accordance with the provisions of Section V hereof between the Company and the Purchasing Agent, with the Purchasing Agent purchasing such Notes as principal for resale to the Agents or dealers (the “Selected Dealers”), each of whom will purchase such notes as principal. The Company reserves the right to enter into agreements substantially identical hereto with other agents, subject to prior notification to the Purchasing Agent of any such agreements.

I.

          The Company has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-3 (Registration No. 333-120496) relating to the Notes and the offering thereof, from time to time, in accordance with Rule 415 under the Securities Act of 1933, as amended (the “1933 Act”) (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”). Such Registration Statement has been declared effective by the SEC, and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The prospectus relating to the Notes constituting part of the Registration Statement, including the documents incorporated by reference therein as of the effective date of the Registration Statement, and as from time to time amended or supplemented (including by the filing of documents incorporated therein by reference and by any Pricing Supplement (as herein defined)) shall hereinafter be referred to as the “Prospectus.”

II.

          The obligations hereunder of the Purchasing Agent and the Agents are subject to the following conditions:

          (a) On the date hereof, the Purchasing Agent and the Agents shall have received the following legal opinions, dated as of the date hereof and in form and substance satisfactory to them:

               (1) The opinion of Patrick D. Schwartz, Deputy General Counsel - Corporate and Assistant Secretary of the Company, or other counsel to the Company satisfactory to the Purchasing Agent and the Agents 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, as defined in Rule 1-02 of Regultion S-X of the SEC (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 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;

                    (vi) This Agreement has been duly authorized, executed and delivered by the Company;

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                    (vii) The Indenture has been duly authorized, executed and delivered by the Company, and constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms except as enforcement of the provisions thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors’ rights 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 in accordance with the provisions of the Indenture, the applicable board resolutions and this Agreement, 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;

                    (ix) The issue and sale of the Notes, and the compliance by the Company with all of the provisions of the Notes, the Indenture, 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 charter 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 or the consummation of the other transactions contemplated in this Agreement and any Terms Agreement, except the registration under the 1933 Act of the Notes, 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 by the Agents;

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                    (x) The documents incorporated by reference in the Prospectus (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the SEC, as the case may be, complied as to form in all material respects with the requirements of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”), as applicable, and the General Rules and Regulations of the 1933 Act (the “1933 Act Regulations”) or the General Rules and Regulations of the 1934 Act (the “1934 Act Regulations”), as applicable; 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 1933 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 1934 Act with the SEC, 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 1933 Act and no proceedings for a stop order in respect of the Registration Statement are pending or, to the best of such counsel’s knowledge, threatened under Section 8(d) or 8(e) of the 1933 Act; and

                    (xii) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company prior to the date hereof (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 1933 Act and the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations thereunder.

                    Such counsel shall also state that 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 of its date and at the date hereof contained or 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 or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required;

               (2) The opinion of McDermott Will & Emery LLP, counsel to the Purchasing Agent and the Agents, with respect to this Agreement, the validity of the Indenture, the Notes, the Registration Statement, the Prospectus and other related matters

- 4 -

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.

          (b) On the date hereof, the Purchasing Agent and the Agents shall have received a certificate of the President or any Vice President or any other authorized officer of the Company satisfactory to them (each, an “Authorized Officer”), dated as of the date hereof, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus and this Agreement and that to the best of their knowledge (i) since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any material adverse change in the condition, financial or otherwise, earnings or business affairs of the Company and its subsidiaries considered as one enterprise, whether or not arising from transactions in the ordinary course of business, except as set forth or contemplated in the Prospectus, (ii) the other representations and warranties of the Company contained in this Agreement are true and correct in all material respects with the same force and effect as though expressly made at and as of the date of such certificate, (iii) the Company has performed or complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the date of such certificate, (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened by the SEC and (v) no litigation or proceeding shall be threatened or pending to restrain or enjoin the issuance or delivery of the Notes, or which in any way affects the validity of the Notes.

          (c) On the date hereof, the Purchasing Agent and the Agents shall have received a letter from KPMG LLP (“KPMG”) dated as of the date hereof and in form and substance satisfactory to them, to the effect that:

               (1) They are an independent registered public accounting firm with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations.

               (2) In their opinion, the consolidated financial statements of the Company and its subsidiaries audited by them and included or incorporated by reference in the Registration Statement and Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations with respect to registration statements on Form S 3 and the 1934 Act and the 1934 Act Regulations.

               (3) On the basis of procedures (but not an audit in accordance with generally accepted auditing standards) consisting of:

                    (i) Reading the minutes of the meetings of the board of directors and committees of the board of directors of the Company as set forth in the minute books through a specified date not more than five business days prior to the date of delivery of such letter;

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                    (ii) Performing the procedures specified by the standards of the Public Company Accounting Oversight Board (United States) for a review of interim financial information as described in SAS 100, Interim Financial Information, on the unaudited condensed consolidated interim financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement and Prospectus and reading the unaudited interim financial data, if any, for the period from the date of the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus to the date of the latest available interim financial data; and

                       (iii) Making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding the specific items for which representations are requested below;

                              nothing has come to their attention as a result of the foregoing procedures that caused them to believe that:

                    (i) the unaudited condensed consolidated interim financial statements, included or incorporated by reference in the Registration Statement and Prospectus, do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act and the 1934 Act Regulations thereunder;

                    (ii) any material modifications should be made to the unaudited condensed consolidated interim financial statements, included or incorporated by reference in the Registration Statement and Prospectus, for them to be in conformity with generally accepted accounting principles;

                    (iii) (a) at the date of the latest available interim financial statements, there was any change in net charge-offs of finance receivables owned, any change in revenue, or any change in net income as compared to the corresponding period in the prior year, or (b) there was any change in senior and senior subordinated debt (with original maturities over one year), or any change in commercial paper, bank or other borrowings, as compared with the corresponding amounts included in the most recent audited financial statements of the Company incorporated by reference in the Registration Statement and Prospectus, except in all instances for changes or decreases which the Registration Statement and Prospectus disclose have occurred or may occur, or KPMG shall state any specific changes.

               (4) The letter shall also state that KPMG has carried out certain other specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included or incorporated by reference in the Registration Statement and Prospectus and which are specified by the Purchasing Agent and the Agents and agreed to by KPMG, and has found such amounts, percentages

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and financial information to be in agreement with the relevant accounting, financial and other records of the Company and its subsidiaries identified in such letter.

          (d) On the date hereof, counsel to the Purchasing Agent and the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, contained herein; and all proceedings taken by the Company in connection with the issuance and sale of Notes as herein contemplated shall be satisfactory in form and substance to such counsel and to the Purchasing Agent and the Agents.

          The obligations of the Purchasing Agent and any Agent to purchase Notes in connection with any Terms Agreement are subject to the conditions that (i) no litigation or proceeding shall be threatened or pending to restrain or enjoin the issuance or delivery of the Notes, or which in any way questions or affects the validity of the Notes, (ii) no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the SEC, (iii) the ratings assigned by any nationally recognized statistical rating organization, as that term is defined by the SEC for purpose of Rule 436(g) promulgated under the 1933 Act, to any senior debt securities of the Company as of the date of such Terms Agreement shall have been lowered since that date, and (iv) there shall not have come to the Purchasing Agent’s or any Agent’s attention any facts that would cause the Purchasing Agent to believe that the Prospectus as amended or supplemented at the time it was required to be delivered to a purchaser of Notes, 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. Each of such conditions shall be met on the date of the Terms Agreement and on the corresponding Settlement Date (as defined herein). Further, if specifically called for by any Terms Agreement, the Purchasing Agent’s obligations hereunder and under such Terms Agreement shall be subject to such additional conditions, including those set forth in clauses (a), (b) and (c) above, as agreed to by the parties, each of which such agreed conditions shall be met on the corresponding Settlement Date.

III.

          In further consideration of your agreements herein contained, the Company covenants as follows:

          (a) The Company will notify the Purchasing Agent and the Agents immediately of (i) the effectiveness of any amendment to the Registration Statement, (ii) the filing of any amendment or supplement to the Prospectus (other than a Pricing Supplement), (iii) the receipt of any comments from the SEC with respect to the Registration Statement or the Prospectus or any document filed with the SEC pursuant to the 1934 Act which is or will be incorporated by reference in the Registration Statement and the Prospectus, (iv) any request by the SEC for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information relating thereto or with respect to a document filed with the SEC pursuant to the 1934 Act which is or will be incorporated by reference in the

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Registration Statement and the Prospectus, and (v) the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

          (b) The Company will give the Purchasing Agent and the Agents notice of its intention to file or prepare any additional registration statement with respect to the registration of additional Notes or any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than an amendment or supplement effected by the filing of a document with the SEC pursuant to the 1934 Act) and, upon request, will furnish the Purchasing Agent and the Agents with copies of any such registration statement or amendment or supplement proposed to be filed or prepared a reasonable time in advance of such proposed filing or preparation, as the case may be, and will not file any such registration statement or amendment or supplement in a form as to which the Purchasing Agent or the Agents or your counsel reasonably object.

          (c) The Company will deliver to the Purchasing Agent and the Agents without charge, a copy of (i) the Indenture, (ii) the Registration Statement (as originally filed) and of each amendment thereto (including exhibits filed therewith and documents incorporated by reference in the Prospectus) and (iii) a certified copy of the corporate authorization of the issuance and sale of the Notes. The Company will furnish to the Purchasing Agent and the Agents as many copies of the Prospectus (as amended or supplemented) as they shall reasonably request so long as the Agents are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes under the 1933 Act.

          (d) The Company will prepare, with respect to any Notes to be sold pursuant to this Agreement, a pricing supplement with respect to such Notes in substantially the forms attached as Exhibits D-1 and D-2 (each a “Pricing Supplement”) and will file such Pricing Supplement with the SEC pursuant to Rule 424(b) under the 1933 Act not later than the close of business on the second business day after the date on which such Pricing Supplement is first used.

          (e) Except as otherwise provided in subsection (k) of this Section, if at any time during the term of this Agreement any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of your counsel or counsel for the Company, to further amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed in writing, to the Agents to cease the solicitation of offers to purchase the Notes and to cease sales of any Notes by the Purchasing Agent, and the Company will promptly prepare and file with the SEC such amendment or supplement, whether by filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct

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such untrue statement or omission or to make the Registration Statement and Prospectus comply with such requirements.

          (f) Except as otherwise provided in subsection (k) of this Section, on or prior to the date on which there shall be released to the general public interim financial statement information related to the Company with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company shall furnish promptly such information to the Purchasing Agent and the Agents, confirmed in writing, and thereafter shall cause promptly the Prospectus to be amended or supplemented to include or incorporate by reference financial information with respect thereto, as well as such other information and explanations as shall be necessary for an understanding thereof, as may be required by the 1933 Act or the 1934 Act or otherwise.

          (g) Except as otherwise provided in subsection (k) of this Section, 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 financial statements of the Company for the preceding fiscal year, the Company shall furnish promptly such information to the Purchasing Agent and the Agents and thereafter shall cause promptly the Registration Statement and the Prospectus to be amended 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 accountants with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements, as may be required by the 1933 Act or the 1934 Act or otherwise.

          (h) The Company will make generally available to its security holders as soon as practicable, but not later than 90 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Section 11(a) and of Rule 158 under the 1933 Act) covering each twelve-month period beginning, in each case, not later than the first day of the Company’s fiscal quarter next following the “effective date” (as defined in such Rule 158) of the Registration Statement with respect to each sale of Notes.

          (i) The Company will endeavor to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Purchasing Agent and the Agents may designate and will maintain such qualifications in effect for as long as may be required for the distribution of the Notes; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Notes have been qualified as above provided. The Company will promptly advise the Purchasing Agent and the Agents of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any such state or jurisdiction or the initiating or threatening of any proceeding for such purpose.

          (j) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file promptly all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act.

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          (k) The Company shall not be required to comply with the provisions of subsections (e), (f) or (g) of this Section or the provisions of Sections VII(b), (c) and (d) during any period from the time (i) the Agents have suspended solicitation of purchases of the Notes pursuant to a direction from the Company and (ii) the Agents shall not then hold any Notes as principal purchased from the Purchasing Agent to the time the Company shall determine that solicitation of purchases of the Notes should be resumed or shall subsequently agree for the Purchasing Agent to purchase Notes as principal.

IV.

          (a) The Agents propose to solicit offers to purchase the Notes upon the terms and conditions set forth herein and in the Prospectus and upon the terms communicated to the Agents from time to time by the Purchasing Agent. For the purpose of such solicitation the Agents will use the Prospectus as then amended or supplemented which has been most recently distributed to the Agents by the Company, and the Agents will solicit offers to purchase only as permitted or contemplated thereby and herein and will solicit offers to purchase the Notes only as permitted by the 1933 Act and the applicable securities laws or regulations of any jurisdiction. The Company reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Notes commencing at any time for any period of time or permanently. Upon receipt of instructions (which may be given orally) from the Company to the Purchasing Agent, the Agents will suspend promptly solicitation of offers to purchase until such time as the Company has advised the Purchasing Agent that such solicitation may be resumed.

Unless otherwise instructed by the Company, the Agents are authorized to solicit offers to purchase the Notes only in denominations of $1,000 or more (in integral multiples of $1,000). The Agents are not authorized to appoint subagents or to engage the services of any other broker or dealer in connection with the offer or sale of the Notes without the consent of the Company. Unless otherwise instructed by the Company, the Purchasing Agent shall communicate to the Company, orally or in writing, each offer to purchase Notes. The Company shall have the sole right to accept offers to purchase Notes and may reject any proposed offers to purchase Notes as a whole or in part. The Purchasing Agent and each Agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed a breach of its agreements contained herein. The Company agrees to pay the Purchasing Agent, as consideration for soliciting offers to purchase Notes pursuant to a Terms Agreement, a concession in the form of a discount equal to the percentages of the initial offering price of each Note actually sold as set forth in Exhibit A hereto (the “Concession”). The Purchasing Agent and the Agents will share the above-mentioned Concession with Agents and the Selected Dealers, as applicable, in such proportions as they may agree.

Unless otherwise authorized by the Company, all Notes shall be sold to the public at a purchase price not to exceed 100% of the principal amount thereof, plus accrued interest, if any. Such purchase price shall be set forth in the confirmation statement of the Agent or Selected Dealer responsible for such sale and delivered to the purchaser along with a copy of the Prospectus (if not previously delivered) and Pricing Supplement.

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          (b) Procedural details relating to the issue and delivery of, and the solicitation of purchases and payment for, the Notes are set forth in the Administrative Procedures attached hereto as Exhibit B (the “Procedures”), as amended from time to time. The provisions of the Procedures shall apply to all transactions contemplated hereunder unless otherwise provided in a Terms Agreement. The Company, the Purchasing Agent and the Agents each agree to perform the respective duties and obligations specifically provided to be performed by each in the Procedures as amended from time to time. The Procedures may only be amended by written agreement of the Company, the Purchasing Agent and the Agents.

          (c) The Company, the Purchasing Agent and each Agent acknowledges and agrees, and each Selected Dealer will be required to acknowledge and agree, that the Notes are being offered for sale in the United States only.

V.

          Each sale of Notes shall be made in accordance with the terms of this Agreement and a separate agreement in substantially the form attached as Exhibit C (a “Terms Agreement”) to be entered into which will provide for the sale of such Notes to, and the purchase and reoffering thereof, by the Purchasing Agent as principal. A Terms Agreement may also specify certain provisions relating to the reoffering of such Notes by the Purchasing Agent. The offering of Notes by the Company hereunder and the Purchasing Agent’s agreement to purchase Notes pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations, warranties and agreements of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall describe the Notes to be purchased pursuant thereto by the Purchasing Agent as principal, and may specify, among other things, the principal amount of Notes to be purchased, the interest rate or interest rate formula, the stated maturity date or dates of such Notes, the interest payment dates, if any, the net proceeds to the Company, the initial public offering price at which the Notes are proposed to be reoffered, and the time and place of delivery of and payment for such Notes (the “Settlement Date”), whether the Notes provide for a Survivor’s Option, whether the Notes are redeemable or repayable and on what terms and conditions, and any other relevant terms. In connection with the resale of the Notes purchased, without the consent of the Company, the Agents are not authorized to appoint subagents or to engage the service of any other broker or dealer, nor may the Agents reallow any portion of the Concession paid to them. Terms Agreements, each of which shall be substantially in the form of Exhibit C hereto, or as otherwise agreed to between the Company and the Purchasing Agent, may take the form of an exchange of any standard form of written telecommunication between the Purchasing Agent and the Company.

VI.

          The Company represents and warrants to the Purchasing Agent and the Agents as of the date hereof, as of the date of each Terms Agreement, as of each Settlement Date, and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented or there is filed with the SEC any document incorporated by reference into the Prospectus (each of the times referenced above being referred to herein as a “Representation Date”) as follows:

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          (a) The Registration Statement has been filed with the SEC in the form heretofore delivered to you and such Registration Statement in such form has been declared effective by the SEC 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 SEC;

          (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the SEC, as the case may be, conformed in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the 1933 Act Regulations and 1934 Act Regulations, 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 SEC, as the case may be, will conform in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the SEC 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 the Purchasing Agent or any Agent expressly for use in the Prospectus as amended or supplemented to relate to a particular issuance of Notes;

          (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 SEC, as the case may be, and as of each subsequent Representation Date will conform, in all material respects to the requirements of the 1933 Act, the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations of the SEC 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 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;

          (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 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

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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; the Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Company and the Trustee and constitutes 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 SEC, and the Notes will conform to the description thereof in the Prospectus as amended or supplemented;

          (h) The issue and sale of the Notes and the compliance by the Company with all of the provisions of the Notes, the Indenture, 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 or the consummation of the other transactions contemplated in this Agreement or any Terms Agreement except the registration under the 1933 Act of the Notes, the qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may

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be required under State securities or Blue Sky laws in connection with the purchase and distribution of the Notes 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

          (j) KPMG is an independent registered public accounting firm as required by the 1933 Act and the 1933 Regulations.

Any certificate signed by any Authorized Officer of the Company and delivered to the Purchasing Agent or to counsel for the Purchasing Agent in connection with an offering of Notes or the sale of Notes to the Purchasing Agent as principal shall be deemed a representation and warranty by the Company to the Agents as to the matters covered thereby on the date of such certificate and at each Representation Date subsequent thereto.

All representations, warranties, covenants and agreements of the Company contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Purchasing Agent or any Agent or any controlling person of the Purchasing Agent or any Agent, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Notes.

VII.

          (a) Each acceptance by the Company of an offer for the purchase of Notes, and each delivery of Notes to the Purchasing Agent pursuant to a sale of Notes to the Purchasing Agent, shall be deemed to be an affirmation that the representations and warranties of the Company made to the Purchasing Agent and the Agents in this Agreement and in any certificate theretofore delivered 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 Purchasing Agent of the Notes 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 Prospectus as amended and supplemented to each such time).

          (b) Each time:

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               (1) the Company accepts a Terms Agreement requiring such updating provisions;

               (2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q with the SEC that is incorporated by reference into the Prospectus;

               (3) the Company files a Current Report on Form 8-K required by Item 2.01 of Form 8-K with the SEC that is incorporated by reference into the Prospectus; or

               (4) if required by the Purchasing Agent or the Agents after the Registration Statement or Prospectus has been amended or supplemented (other than by an amendment or supplement providing solely for interest rates, maturity dates or other terms of Notes or similar changes),

          the Company shall furnish or cause to be furnished to the Purchasing Agent and the Agents a certificate of an Authorized Officer dated the date specified in the applicable Terms Agreement or dated the date of filing with the SEC of such supplement or document or the date of effectiveness of such amendment, as the case may be, in form satisfactory to the Purchasing Agent and the Agents to the effect that the statements contained in the certificate referred to in Section II(b) hereof which was last furnished to the Purchasing Agent and the Agents are true and correct as of the date specified in the applicable Terms Agreement or at the time of such filing, amendment or supplement, 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, a certificate of the same tenor as the certificate referred to in said Section II(b), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate.

          (c) Each time:

               (1) the Company accepts a Terms Agreement requiring such updating provisions;

               (2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q with the SEC that is incorporated by reference into the Prospectus; or

               (3) if required by the Purchasing Agent or the Agents after:

                    (i) the Company files a Current Report on Form 8-K required by Item 2.01 of Form 8-K with the SEC that is incorporated by reference into the Prospectus; or

                    (ii) the Registration Statement or Prospectus has been amended or supplemented (other than by an amendment or supplement providing solely for interest rates, maturity dates or other terms of the Notes or similar changes),

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                    the Company shall furnish or cause to be furnished forthwith to the Purchasing Agent and the Agents and your counsel the written opinions of counsel to the Company, dated the date specified in the applicable Terms Agreement or dated the date of filing with the SEC of such supplement or document or the date of effectiveness of such amendment, as the case may be, in form and substance satisfactory to the Purchasing Agent and the Agents, of the same tenor as the opinions referred to in Section II(a)(1) 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 opinions; or, in lieu of such opinions, counsel last furnishing such opinions to the Purchasing Agent and the Agents shall furnish the Purchasing Agent and the Agents with a letter substantially to the effect that the Purchasing Agent and the Agents may rely on such last opinion to the same extent as though it was 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).

          (d) Each time:

               (1) the Company accepts a Terms Agreement requiring such updating provisions;

               (2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q with the SEC that is incorporated by reference into the Prospectus; or

               (3) if required by the Purchasing Agent or the Agents after:

                    (i) the Company files a Current Report on Form 8-K required by Item 2.01 of Form 8-K with the SEC that is incorporated by reference into the Prospectus; or

                    (ii) the Registration Statement or Prospectus has been amended or supplemented to include additional financial information required to be set forth or incorporated by reference into the Prospectus under the terms of Item 11 of Form S-3 under the 1933 Act,

                    the Company shall cause KPMG to furnish the Purchasing Agent and the Agents a letter, dated the date specified in the applicable Terms Agreement or dated the date of effectiveness of such amendment, supplement or document filed with the SEC, as the case may be, in form satisfactory to the Purchasing Agent and the Agents, of the same tenor as the portions of the letter referred to in clauses (i) and (ii) of Section II(c) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, and of the same general tenor as the portions of the letter referred to in clauses (iii) and (iv) of said Section II(c) with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to

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include financial information as of and for a fiscal quarter, KPMG may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement. If any other information included therein is of an accounting, financial or statistical nature, the Purchasing Agent and the Agents may request procedures be performed with respect to such other information. If KPMG is willing to perform and report on the requested procedures, such letter should cover such other information. Any letter required to be provided by KPMG hereunder shall be provided within 10 business days of the filing of the Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, within a reasonable time of a request made pursuant to subparagraph (iii) hereof or on the date specified in an applicable Terms Agreement.

VIII.

          (a) The Company agrees to indemnify and hold harmless the Purchasing Agent and each Agent and each person who controls the Purchasing Agent or any Agent within the meaning of either the 1933 Act or the 1934 Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the 1933 Act, the 1934 Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, or any amendment or supplement thereof, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that (i) the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Purchasing Agent or Agent specifically for use in connection with the preparation thereof, or arises out of or is based upon statements in or omissions from that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification of the Trustee (Form T-1) under the Trust Indenture Act of either of the Trustees, and (ii) such indemnity with respect to the Prospectus shall not inure to the benefit of any Agent (or any person controlling such Agent) from whom the person asserting any such loss, claim, damage or liability purchased the Notes which are the subject thereof if the Agent failed to deliver a copy of the Prospectus as amended or supplemented to such person in connection with the sale of such Notes excluding documents incorporated therein by reference at or prior to the written confirmation of the sale of such Notes to such person in any case where such delivery is required by the 1933 Act and the untrue statement or omission of a material fact contained in the Prospectus was corrected in the Prospectus as amended or supplemented. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

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          (b) The Purchasing Agent and each Agent severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement and each person who controls the Company within the meaning of either the 1933 Act or the 1934 Act, to the same extent as the foregoing indemnity from the Company to the Purchasing Agent and each Agent, but only with reference to written information relating to the Purchasing Agent or such Agent furnished to the Company by or on behalf of the Purchasing Agent or such Agent specifically for use in the preparation of the documents referred to in the foregoing indemnity, provided such information is acknowledged in writing as having been provided by the Purchasing Agent or such Agent for such purpose. This indemnity agreement will be in addition to any liability which any Agent may otherwise have.

          (c) Promptly after receipt by an indemnified party under this Section VIII of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section VIII, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party except to the extent, if any, that such failure materially prejudices the indemnifying party. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section VIII for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Purchasing Agent and the Agents in the case of subparagraph (a), representing the indemnified parties under subparagraph (a) who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii).

          (d) To provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraph (a) of this Section VIII is due in accordance with its terms but is for any reason held by a court to be insufficient or unavailable from the Company

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on the grounds of policy or otherwise, the Company, on the one hand, and the Purchasing Agent and the Agents on the other hand, shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) to which the Company and one or more of the Purchasing Agent and the Agents may be subject in such proportion so that the Purchasing Agent and each Agent is responsible for that portion represented by the percentage that the total commissions and underwriting discounts received by the Purchasing Agent and such Agents bears to the total sales price from the sale of Notes sold to or through the Purchasing Agent and the Agents to the date of such liability, and the Company is responsible for the balance. However, if the allocation provided by the foregoing sentence is not permitted by applicable law, the Company, on the one hand, and the Purchasing Agent and the Agents on the other hand, shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) to which the Company and one or more of the Purchasing Agent and the Agents may be subject in such proportion to reflect the relative fault of the Company on the one hand and the Purchasing Agent and the Agents on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Purchasing Agent or such Agents on the other hand, the parties’ relative intents, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Company, on the one hand, and the Purchasing Agent and the Agents on the other, agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Purchasing Agent and the Agents were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to above in this paragraph (d). Notwithstanding anything to the contrary contained herein, (i) in no case shall the Purchasing Agent or an Agent be responsible for any amount in excess of the commissions and underwriting discounts received by the Purchasing Agent or such Agent in connection with the Notes from which such losses, liabilities, claims, damages and expenses arise and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section VIII, each person who controls the Purchasing Agent or any Agent within the meaning of the 1933 Act shall have the same rights to contribution as the Purchasing Agent or such Agent, and each person who controls the Company within the meaning of either the 1933 Act or the 1934 Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the provisions of this paragraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this paragraph (d).

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IX.

          The Company may elect to suspend or terminate the offering of Notes under this Agreement at any time; the Company also (as to the Purchasing Agent or any one or more of the Agents) or any Agent (as to itself) may terminate the appointment and arrangements described in this Agreement. Upon receipt of instructions from the Company, the Purchasing Agent shall suspend or terminate the participation of any Selected Dealer under the Master Selected Dealer Agreement. Such actions may be taken, in the case of the Company, by giving prompt written notice of suspension to the Purchasing Agent and all of the Agents and by giving not less than 5 days’ written notice of termination to the affected party and the other parties to this Agreement, or in the case of an Agent, by giving not less than 5 days’ written notice of termination to the Company and except that, if at the time of termination an offer for the purchase of Notes shall have been accepted by the Company but the time of delivery to the purchaser or his agent of the Note or Notes relating thereto shall not yet have occurred, the Company shall have the obligations provided herein with respect to such Note or Notes. The Company shall promptly notify the other parties in writing of any such termination.

          The Purchasing Agent may, and, upon the request of an Agent with respect to any Notes being purchased by such Agent shall, terminate any Terms Agreement hereunder by the Purchasing Agent to purchase such Notes, 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 the Purchasing Agent’s or any such Agent’s judgment, impracticable to market the Notes or enforce contracts for the sale of the Notes, or (iii) if trading in any debt securities of the Company has been suspended by the SEC or a national securities exchange, or if trading generally on either the American Stock Exchange or the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said exchanges or by order of the SEC or any other governmental authority, or if a banking moratorium has been declared by either Federal or New York authorities.

          Any Terms Agreement shall be subject to termination in the Purchasing Agent’s absolute discretion on the terms set forth or incorporated by reference therein. The termination of this Agreement shall not require termination of any agreement by the Purchasing Agent to purchase Notes as principal, and the termination of any such agreement shall not require termination of this Agreement.

          If this Agreement is terminated, Section III(c), (d) and (e), Section VIII and Section XII hereof shall survive and shall remain in effect; provided that if at the time of termination of this Agreement an offer to purchase Notes has been accepted by the Company but the time of delivery to the Purchasing Agent of such Notes has not occurred, the provisions of all of Section III, Section IV(b) and Section V shall also survive until time of delivery.

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          In the event an offering pursuant to a Terms Agreement is not completed according to the terms of this Agreement, an Agent will be reimbursed by the Company only for out-of-pocket accountable expenses actually incurred.

X.

          Except as otherwise specifically provided herein, all statements, requests, notices and advices hereunder shall be in writing, or by telephone if promptly confirmed in writing, and if to the Purchasing Agent or an Agent shall be sufficient in all respects if delivered in person or sent by telex, facsimile transmission (confirmed in writing), or registered mail to the Purchasing Agent or such Agent at its address, telex or telecopier number set forth on Annex A hereto and if to the Company shall be sufficient in all respects if delivered or sent by telex, telecopier or registered mail to the Company at the address specified below. All such notices shall be effective on receipt.

If to the Company:

HSBC Finance Corporation

2700 Sanders Road

Prospect Heights, Illinois 60070

Attention: Secretary

Telecopy: (847) 205-7536

or at such other address as such party may designate from time to time by notice duly given in accordance with the terms of this Section.

XI.

          This Agreement shall be binding upon the Purchasing Agent, the Agents and the Company, and inure solely to the benefit of the Purchasing Agent, the Agents and the Company and any other person expressly entitled to indemnification hereunder and the respective personal representatives, successors and assigns of each, and no other person shall acquire or have any rights under or by virtue of this Agreement.

XII.

          This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New York.

XIII.

          If this Agreement is executed by or on behalf of any party, such person hereby states that at the time of the execution of this Agreement he has no notice of revocation of the power of attorney by which he has executed this Agreement as such attorney.

          The Company will pay the following expenses incident to the performance of its obligations under this Agreement, including: (i) the preparation and filing of the Registration Statement; (ii) the preparation, issuance and delivery of the Notes; (iii) the fees and

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disbursements of the Company’s auditors, of the Trustee and its counsel and of any paying or other agents appointed by the Company; (iv) the printing and delivery to the Purchasing Agent and Agents in quantities as hereinabove stated of copies of the Registration Statement and the Prospectus; (v) if the Company lists Notes on a securities exchange, the costs and fees of such listing; (vi) the fees and expenses, if any, including the reasonable fees and disbursements of McDermott Will & Emery LLP, incurred with respect to any filing with the National Association of Securities Dealers, Inc.; (vii) the cost of providing CUSIP or other identification numbers for the Notes, (viii) all reasonable expenses (including fees and disbursements of McDermott Will & Emery LLP) in connection with “Blue Sky” qualifications; and, (ix) any fees charged by rating agencies for the rating of the Notes.

           This Agreement may be executed by each of the parties hereto in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Facsimile signatures shall be deemed original signatures.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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

Very truly yours,
HSBC FINANCE CORPORATION
By:
	Name:
	Title:

Confirmed and accepted
as of the date first above written:

BANC OF AMERICA SECURITIES LLC
By:
	Name:
	Title:
HSBC SECURITIES (USA) INC.
By:
	Name:
	Title:
INCAPITAL LLC
By:
	Name:
	Title:
CHARLES SCHWAB & COMPANY, INCORPORATED
By:
	Name:
	Title:
CITIGROUP GLOBAL MARKETS INC.
By:
	Name:
	Title:

EDWARD D. JONES & CO., L.P.
By:
	Name:
	Title:
FIDELITY CAPITAL MARKETS,
a division of National Financial Services, LLC
By:
	Name:
	Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
	Name:
	Title:
MORGAN STANLEY & CO. INCORPORATED
By:
	Name:
	Title:
RBC DAIN RAUSCHER INC.
By:
	Name:
	Title:
UBS FINANCIAL SERVICES INC.
By:
	Name:
	Title:
WACHOVIA CAPITAL MARKETS, LLC
By:
	Name:
	Title:

ANNEX A

AGENT CONTACT INFORMATION

Banc of America Securities LLC
Bank of America Corporate Center
NC1-007-07-01
100 North Tryon Street
Charlotte, North Carolina 28255-0065
Attention: Ileana Chu
Fax: (704) 388-9982
email: ileana.i.chu@bankofamerica.com

HSBC Securities (USA) Inc.
HSBC Tower 10
452 5^th Avenue
New York, NY 10018
Attention: Andrew Lazerus
Fax: (212) 525-0238

Incapital, LLC
1 N. LaSalle
Suite 3500
Chicago, Illinois 60602
Attention: Joe Novak
Fax: (312) 379-3701

Charles Schwab & Co., Incorporated
101 Montgomery Street
San Francisco, CA 94104
Attention: Peter Campfield SF345CAL-19-113
Fax: (415) 667-5090

Citigroup Global Markets Inc.
390 Greenwich Street, 4th Floor
New York, NY 10013
Attention: Staci Sunshine Smyth
Fax: (212) 723-8670

Edward D. Jones & Co., L.P.
Corporate Bond Department
12555 Manchester Road.
St. Louis, Missouri 63131
Attention: Karen Liebsch
Fax: (314) 515-3502
e-mail address: karen.liebsch@edwardjones.com

Fidelity Capital Markets
World Trade Center
200 Seaport Blvd; MZ: Z2H
Boston, MA 02210
Attention: Jamee Smith
Fax: (617) 692-4933
email: jamee.smith@fmr.com

Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch Production Technologies
4 World Financial Center, Floor 15
New York NY 10080
Attention: Transaction Management Group
email: sprimrose@exchange.ml.com
Fax: (212) 449 2234

Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, New York 10036
Attention: Manager - Continuously Offered Products
Fax: (212) 761-0780
w/copy to:
1585 Broadway
29th Floor
New York, New York 10036
Attention: Peter Cooper, Investment Banking Information Center
Fax: (212) 761-0260

RBC Dain Rauscher Inc.

Attention: 

Fax: 

UBS Financial Services Inc.
Taxable Fixed Income Department
Attention: Corporate Desk
800 Harbor Blvd.
Weehawken, New Jersey 07087
Fax: (201) 352-6900
With a copy to:
Karen Rockey, Transaction Management Group
Fax: 201-902-9282
email: krockey@ubspw.com

Wachovia Capital Markets, LLC

Attention: 

Fax: 

EXHIBIT A

Concessions Schedule

The following Concessions are payable as a percentage of the non-discounted Price to Public of each Note sold through the Purchasing Agent.

9 months to less than 18 months	0.200	%
18 months to less than 23 months	0.300	%
23 months to less than 35 months	0.400	%
35 months to less than 47 months	0.625	%
47 months to less than 59 months	0.750	%
59 months to less than 71 months	1.000	%
71 months to less than 83 months	1.100	%
83 months to less than 95 months	1.200	%
95 months to less than 107 months	1.300	%
107 months to less than 119 months	1.400	%
119 months to less than 131 months	1.500	%
131 months to less than 143 months	1.600	%
143 months to less than 179 months	1.750	%
179 months to less than 239 months	2.000	%
239 months to 360 months	2.500	%
361 months or greater	3.150	%

A-1

EXHIBIT B

HSBC Finance Corporation

$5,000,000,000

HSBC FINANCE INTERNOTES®

DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

ADMINISTRATIVE PROCEDURES

HSBC Finance InterNotes®, due nine months or more from date of issue are offered on a continuing basis by HSBC Finance Corporation (the “Company”). The Notes will be offered by Incapital LLC (the “Purchasing Agent”) and Banc of America Securities LLC, HSBC Securities (USA) Inc., Charles Schwab & Co., Incorporated, Citigroup Global Markets Inc., Edward D. Jones & Co., L.P., Fidelity Capital Markets, a division of National Financial Services, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, RBC Dain Rauscher Inc., UBS Financial Services Inc. and Wachovia Capital Markets, LLC (collectively, the “Agents”) pursuant to a Selling Agent Agreement among the Company, the Purchasing Agent and the Agents (the “Selling Agreement”) and one or more terms agreements substantially in the form attached to the Selling Agreement as Exhibit C (each a “Terms Agreement”). The Notes are being sold by the Company to the Purchasing Agent as principal for resale to (i) the Agents and (ii) to selected broker-dealers (the “Selected Dealers”) pursuant to a Master Selected Dealers Agreement (a “Dealers Agreement”) attached to the Selling Agreement as Exhibit E, in each case for distribution to their customers. The Agents have agreed to use their reasonable best efforts to solicit purchases of the Notes. The Notes will constitute a part of a series of senior debt securities and have been registered with the Securities and Exchange Commission (the “SEC”). JPMorgan Chase Bank, N.A. is the trustee (the “Trustee”) for the Notes under the Amended and Restated Indenture dated as of December 15, 2004, as amended from time to time, between the Company and the Trustee (the “Indenture”) covering the Notes. Pursuant to the terms of the Indenture, the Trustee also will serve as authenticating agent, issuing agent and paying agent.

Each tranche of Notes will be issued in book-entry only form (“Notes”) and represented by one or more fully registered global notes without coupons (each, a “Global Note”) held by the Trustee, as agent for The Depository Trust Corporation (“DTC”) and recorded in the book-entry system maintained by DTC. Each Global Note will have the interest rate (which may be fixed or floating), maturity and other terms set forth in the relevant Pricing Supplement (as defined in the Selling Agreement). Owners of beneficial interests in a Global Note will be entitled to physical delivery of Notes issued in certificated form equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Indenture.

Administrative procedures and specific terms of the offering are explained below. Administrative and record-keeping responsibilities will be handled for the Company by its Treasury Department. The Company will advise the Purchasing Agent, the Agents and the Trustee in writing of those persons handling administrative responsibilities with whom the Purchasing Agent, the Agents

B-1

and the Trustee are to communicate regarding offers to purchase Notes and the details of their delivery.

Notes will be issued in accordance with the administrative procedures set forth herein. To the extent the procedures set forth below conflict with or omit certain of the provisions of the Notes, the Indenture, the Selling Agreement or the Prospectus and the Pricing Supplement (together, the “Prospectus”), the relevant provisions of the Notes, the Indenture, the Selling Agreement and the Prospectus shall control. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Selling Agent Agreement, the Prospectus in the form most recently filed with the SEC pursuant to Rule 424 of the 1933 Act, or in the Indenture.

Administrative Procedures for Notes

In connection with the qualification of Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its obligations under a Letter of Representations from the Company and the Trustee to DTC and a Medium-Term Note Certificate Agreement between the Trustee and DTC (the “Certificate Agreement”) and its obligations as a participant in DTC, including DTC’s Same-Day Funds Settlement System (“SDFS”). The procedures set forth below may be modified in compliance with DTC’s then-applicable procedures and upon agreement by the Company, the Trustee and the Purchasing Agent.

Maturities:	Each Note will mature on a date (the “Stated Maturity Date”) not less than nine months after the date of delivery by the Company of such Note. Notes will mature on any date selected by the initial purchaser and agreed to by the Company. “Maturity Date” when used with respect to any Note, means the date on which the outstanding principal amount of such Note becomes due and payable in full in accordance with its terms, whether at its Stated Maturity Date or by declaration of acceleration, call for redemption, repayment or otherwise.
Issuance:	All Notes having the same terms will be represented initially by a single Global Note. Each Global Note will be dated and issued as of the date of its authentication by the Trustee.
	Each Global Note will bear an original issue date (the “Original Issue Date”). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original Note regardless of their dates of authentication.
Identification Numbers:	The Company has received from the CUSIP Service Bureau (the CUSIP Service Bureau”) of Standard & Poor’s Corporation (“Standard & Poor’s”) one series of CUSIP numbers consisting of approximately 900 CUSIP numbers for future assignment to Global Notes. The Company will provide the Purchasing Agent, DTC and the Trustee with a list of such CUSIP numbers. On behalf of the Company, the Purchasing Agent will assign CUSIP numbers as described below

B-2

	under Settlement Procedure “B”. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Global Notes. The Company will reserve additional CUSIP numbers when necessary for assignment to Global Notes and will provide the Purchasing Agent, the Trustee and DTC with the list of additional CUSIP numbers so obtained.
Registration:	Unless otherwise specified by DTC, Global Notes will be issued only in fully registered form without coupons. Each Global Note will be registered in the name of Cede & Co., as nominee for DTC, on the Note Register maintained under the Indenture by the Trustee. The beneficial owner of a Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note, the “Participants”) to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such beneficial owner of such Note in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC.
Transfers:	Transfers of interests in a Global Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such interests.
Exchanges:	The Trustee, at the Company’s request, may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation specifying (a) the CUSIP numbers of two or more Global Notes outstanding on such date that represent Notes having the same terms or (except that Original Issue Dates need not be the same) and for which interest, if any, has been paid to the same date and which otherwise constitute Notes of the same series and tenor under the Indenture, (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date, if any, for the related Notes, on which such Global Notes shall be exchanged for a single replacement Global Note; and (c) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Note. Upon receipt of such a notice, DTC will send to its participants (including the Issuing Agent) and the Trustee a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Notes to be exchanged will no longer be

B-3

	valid. On the specified exchange date, the Trustee will exchange such Global Notes for a single Global Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Global Notes will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Notes to be exchanged exceed $500,000,000 in aggregate principal or face amount, one replacement Global Note will be authenticated and issued to represent each $500,000,000 of principal or face amount of the exchanged Global Notes and an additional Global Note will be authenticated and issued to represent any remaining principal amount of such Global Notes (See “Denominations” below).
Denominations:	Unless otherwise agreed by the Company, Notes will be issued in denominations of $1,000 or more (in integral multiples of $1,000). Global Notes will be denominated in principal or face amounts not in excess of $500,000,000 or any other limit set by the DTC (the “Permitted Amount”). If one or more Notes having an aggregate principal or face amount in excess of the Permitted Amount would, but for the preceding sentence, be represented by a single Global Note, then one Global Note will be issued to represent each Permitted Amount principal or face amount of such Note or Notes and an additional Global Note will be issued to represent any remaining principal amount of such Note or Notes. In such case, each of the Global Notes representing such Note or Notes shall be assigned the same CUSIP number.
Issue Price:	Unless otherwise specified in an applicable Pricing Supplement, each Note will be issued at the percentage of principal amount specified in the Prospectus relating to such Note.
Interest:	General. Each Note will bear interest at either a fixed or floating rate, as specified therein and in the applicable pricing supplement. Interest on each Note will accrue from the Original Issue Date of such Note for the first interest period and from the most recent Interest Payment Date to which interest has been paid for all subsequent interest periods. Except as set forth hereafter, each payment of interest on a Note will include interest accrued to, but excluding, as the case may be, the Interest Payment Date or the date of Maturity. Any payment of principal, premium or interest required to be made on a day that is not a Business Day (as defined below) may be made on the next succeeding Business Day and no interest shall accrue as a result of any such delayed payment.
	Each pending deposit message described under Settlement Procedure “C” below will be routed to Standard & Poor’s, which will use the message to include certain information regarding the related Notes in the appropriate daily bond report published by Standard & Poor’s

B-4

	Corporation.
	Each Note will bear interest from, and including, its Original Issue Date at the fixed rate per annum, or pursuant to the interest rate formula, set forth thereon and in the applicable Pricing Supplement until the principal amount thereof is paid, or made available for payment, in full. Unless otherwise specified in the applicable Pricing Supplement, interest on each Note will be payable either monthly, quarterly, semi-annually or annually on each Interest Payment Date and at the Maturity Date. 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 the Maturity Date will be payable to the person to whom principal shall be payable.
	Any payment of principal, and premium, if any, or interest required to be made on a Note on a day which is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such day, and no additional interest shall accrue as a result of such delayed payment (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 preceding day that is a London Business Day). The interest rates the Company will agree to pay on newly-issued Notes are subject to change without notice by the Company from time to time, but no such change will affect any Notes already issued or as to which an offer to purchase has been accepted by the Company.
	The Interest Payment Dates and the Regular Record Dates with respect to any Interest Payment Date shall be as specified in the Prospectus and the applicable Pricing Supplement.
Payments of Principal and Interest:	Payments of Principal and Interest. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest, if any, to be paid on each Global Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with a Maturity Date) and the total of such amounts. DTC will confirm the amount payable on each Global Note on such Interest Payment Date by reference to the daily bond reports published by Standard & Poor’s. On such Interest Payment Date, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, such total amount of interest due (other than on the Maturity Date), at the times and in the manner set forth below under “Manner of Payment.” If any Interest Payment Date for any Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Interest

B-5

Payment Date.

Payments on the Maturity Date. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal, premium, if any, and interest to be paid on each Global Note representing Notes maturing or subject to redemption or repayment in the following month. The Trustee, the Company and DTC will confirm the amounts of such principal, premium, if any, and interest payments with respect to each Global Note on or about the fifth Business Day preceding the Maturity Date of such Global Note. On the Maturity Date, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, the principal amount of such Global Note, together with interest and premium, if any, due on such Maturity Date, at the times and in the manner set forth below under “Manner of Payment.” If the Maturity Date of any Global Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity Date. Promptly after payment to DTC of the principal and interest due on the Maturity Date of such Global Note and all other Notes represented by such Global Note, the Trustee will cancel and destroy such Global Note in accordance with the Indenture and so advise the Company.

Manner of Payment. The total amount of any principal, premium, if any, and interest due on Global Notes on any Interest Payment Date or at the Maturity Date shall be paid by the Company to the Trustee in immediately available funds on such date. The Company will make such payment on such Global Notes to an account specified by the Trustee. Prior to 10:00 a.m., New York City time, on the date of Maturity or as soon as possible thereafter, the Trustee will make payment to DTC in accordance with existing arrangements between DTC and the Trustee, in funds available for immediate use by DTC, each payment of interest, principal and premium, if any, due on a Global Note on such date. On each Interest Payment Date (other than on the Maturity Date) the Trustee will pay DTC such interest payments in same-day funds in accordance with existing arrangements between the Trustee and DTC. Thereafter, on each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants with payments in amounts proportionate to their respective holdings in principal amount of beneficial interest in such Global Note as are recorded in the book-entry system maintained by DTC. Neither the Company nor the Trustee shall have any direct responsibility or liability for the payment by DTC of the principal of, or premium, if any, or interest on, the Notes to such Participants.

B-6

	Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Note will be determined and withheld by the Participant, indirect participant in DTC or other person responsible for forwarding payments and materials directly to the beneficial owner of such Note.
Procedure for Rate Setting and Posting:	The Company and the Purchasing Agent will discuss, from time to time, the aggregate principal amounts of, the Maturities, the Issue Price and the interest rates to be borne by Notes that may be sold as a result of the solicitation of orders by the Agents. If the Company decides to set interest rates borne by any Notes in respect of which the Agents are to solicit orders (the setting of such interest rates to be referred to herein as “Posting”) or if the Company decides to change interest rates previously posted by it, it will promptly advise the Purchasing Agent of the prices and interest rates to be posted.
	The Purchasing Agent will assign a separate CUSIP number for each tranche of Notes to be posted, and will so advise and notify the Company and the Trustee of said assignment by telephone and/or by telecopier or other form of electronic transmission. The Purchasing Agent will include the assigned CUSIP number on all Posting notices communicated to the Agents and Selected Dealers.
Offering of Notes:	In the event that there is a Posting, the Purchasing Agent will communicate to each of the Agents and Selected Dealers the aggregate principal amount and maturities of, along with the interest rates to be borne by, each tranche of Notes that is the subject of the Posting. Thereafter, the Agents and the Selected Dealers will solicit offers to purchase the Notes accordingly.
Purchase of Notes by the Purchasing Agent:	The Purchasing Agent will, as soon as practicable after 2:00 p.m. (New York City time) on the seventh day subsequent to the day on which such Posting occurs, or if such seventh day is not a Business Day on the succeeding Business Day, or on such other Business Day and time as shall be mutually agreed upon by the Company and the Purchasing Agent (any such day, a “Trade Day”), (i) complete, execute and deliver to the Company a Terms Agreement that sets forth, among other things, the amount of each tranche that the Purchasing Agent is offering to purchase or (ii) inform the Company that none of the Notes of a particular tranche will be purchased by the Purchasing Agent.
Acceptance and Rejection of Orders:	Unless otherwise agreed by the Company and the Purchasing Agent, the Company has the sole right to accept orders to purchase Notes and may reject any such order in whole or in part. Unless otherwise instructed by the Company, the Purchasing Agent will promptly advise the Company by telephone of all offers to purchase Notes received by it, other than those rejected by it in whole or in part in the reasonable

B-7

	exercise of its discretion. No order for less than $1,000 principal amount of Notes will be accepted.
	Upon receipt of a completed and executed Terms Agreement from the Purchasing Agent, the Company will (i) promptly execute and return such Terms Agreement to the Purchasing Agent or (ii) inform the Purchasing Agent that its offer to purchase the Notes of a particular tranche has been rejected, in whole or in part. The Purchasing Agent will thereafter promptly inform the Agents and participating Selected Dealers of the action taken by the Company.
Preparation of Pricing Supplement:	If any offer to purchase a Note is accepted by or on behalf of the Company, the Company will provide a Pricing Supplement to the Purchasing Agent and Trustee (substantially in the forms attached to the Selling Agreement as Exhibits D-1 and D-2) reflecting the terms of such Note and will file such Pricing Supplement with the SEC in accordance with the applicable paragraph of Rule 424(b) under the Act. The Company shall use its reasonable best efforts to send such Pricing Supplement by email or telecopy to the Purchasing Agent and the Trustee by 3:00 p.m. (New York City Time) on the applicable Trade Day. The Purchasing Agent shall use its reasonable best efforts to send such Pricing Supplement and the Prospectus by email or telecopy or overnight express (for delivery by the close of business on the applicable Trade Day, but in no event later than 11:00 a.m. New York City time, on the Business Day following the applicable Trade Date) to each
	Agent and each Selected Dealer which made or presented the offer to purchase the applicable Note and the Trustee at the following applicable address:
	if to Banc of America Securities LLC, to:
	100 North Tryon Street
	NC1-007-07-01
	Charlotte, North Carolina 28255-0065
	Attention: Ileana Chu
	Fax: (704) 388-9982
	email: ileana.i.chu@bankofamerica.com
	If to HSBC Securities (USA) Inc., to:

B-8

if to Incapital LLC, to:

1 North LaSalle

Suite 3500

Chicago, Illinois 60602

Attention: Joe Novak

Telephone: (312) 379-3710

Fax: (312) 379-3711

email: joe.novak@incapital.com

if to the Agents:

Charles Schwab & Co., Incorporated

101 Montgomery Street

San Francisco, CA 94104

Attention: Peter Campfield SF345CAL-19-113

Fax: (415) 667-5090

Citigroup Global Markets Inc.

390 Greenwich Street, 4th Floor

New York, NY 10013

Attention: Staci Sunshine Smyth

Fax: (212) 723-8670

Edward D. Jones & Co., L.P.

Corporate Bond Department

12555 Manchester Road.

St. Louis, Missouri 63131

Attention: Karen Liebsch

Fax: (314) 515-3502

e-mail address: karen.liebsch@edwardjones.com

Fidelity Capital Markets

World Trade Center

200 Seaport Blvd; MZ: Z2H

Boston, MA 02210

Attention: Jamee Smith

Fax: (617) 692-4933

email: jamee.smith@fmr.com

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Merrill Lynch Production Technologies

4 Corporate Place

Piscataway, NJ 08854

Attention: Diane Walker

email: mtnsuppl@na2.us.ml.com

B-9

Fax: (732) 878-6481

Morgan Stanley & Co. Incorporated

c/o ADP-IDS

1155 Long Island Avenue

Englewood, NJ 11717

Attn: Nicole Fratangelo

Phone: 631-254-7129,

Fax: 631-254-7140

RBC Dain Rauscher Inc.

Attention:    

Fax:    

UBS Financial Services Inc.

Taxable Fixed Income Department

Attention: Corporate Desk

800 Harbor Blvd.

Weehawken, New Jersey 07087

Fax: (201) 352-6900

With a copy to:

Karen Rockey, Transaction Management Group

Fax: 201-902-9282

email: krockey@ubspw.com

Wachovia Capital Markets, LLC

Attention:    

Fax:    

For record keeping purposes, one copy of each Pricing Supplement, as so filed, shall also be mailed or telecopied to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, Illinois 60606

Attention: Scott N. Gierke, Esq.

Telephone: (312) 984-7521

Telecopier (312) 984-7700

and to:

B-10

	Banc of America Securities LLC
	Bank of America Corporate Center
	100 North Tryon Street
	NC1-007-08-17
	Charlotte, North Carolina 28255-0001
	Attention: Transaction Management
	Fax: (704) 388-9939
	Each such Agent or Selected Dealer, in turn, pursuant to the terms of the Selling Agreement and the Master Selected Dealer Agreement, will cause to be delivered a copy of the Prospectus and the applicable Pricing Supplement to each purchaser of Notes from such Agent or Selected Dealer.
	Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files) will be destroyed.
Delivery of Confirmation and Prospectus to Purchaser by Presenting Agent:	Subject to “Suspension of Solicitation; Amendment or Supplement” below, the Agents will deliver a Prospectus and Pricing Supplement as herein described with respect to each Note sold by it.
	For each offer to purchase a Note accepted by or on behalf of the Company, the Purchasing Agent will confirm in writing with each Agent and Selected Dealer the terms of such Note, the amount being purchased by such Agent or Selected Dealer and other applicable details described above and delivery and payment instructions, with a copy to the Company.
	In addition, each Agent or Selected Dealer, as the case may be, will deliver to investors purchasing the Notes the Prospectus (including the Pricing Supplement) in relation to such Notes prior to or simultaneously with delivery of the confirmation of sale or delivery of the Note.
Settlement:	The receipt of immediately available funds by the Company in payment for Notes and the authentication and issuance of the Global Note representing such Notes shall constitute “Settlement” with respect to such Note. All orders accepted by the Company will be settled within one to three Business Days pursuant to the timetable for Settlement set forth below, unless the Company and the purchaser agree to Settlement on a later date, and shall be specified upon acceptance of such offer; provided, however, in all cases the Company will notify the Trustee on the date issuance instructions are given.
Settlement	In connection with a purchase of Notes by the Purchasing Agent,

B-11

Procedures:

appropriate Settlement details will be set forth in the applicable Terms Agreement to be entered into between the Purchasing Agent and the Company pursuant to the Selling Agreement. Settlement Procedures with regard to each Note sold to the Purchasing Agent by the Company, shall be as follows:

A. After the oral acceptance of an offer by the Company with respect to a Note, the Purchasing Agent will prepare and deliver to the Company for execution the Terms Agreement containing the following details of the terms of the Notes to be purchased by the Purchasing Agent:

1.	Principal amount of the purchase;
2.	Interest;

(a) Fixed Rate Notes:

(i) interest rate.

(b) Floating Rate Notes:

(i)	interest rate basis;
(ii)	initial interest rate;
(iii)	spread or spread multiplier, if any;
(iv)	interest reset dates;
(v)	interest reset period;
(vi)	interest payment dates;
(vii)	interest payment period;
(viii)	index maturity;
(ix)	maximum or minimum interest rate, if any;
(x)	calculation date; and
(xi)	interest determination date.

3.	Interest Payment Frequency;
4.	Settlement Date;

B-12

5.	Stated Maturity Date;
6.	Price to Public;
7.	Purchasing Agent’s commission determined pursuant to Section IV(a) of the Selling Agreement;
8.	Net proceeds to the Company;
9.	Trade Date;
10.	If a Note is redeemable by the Company or repayable by the Noteholder, such of the following as are applicable:

(a)	The date on and after which such Note may be redeemed/repaid (the “Redemption/Repayment Commencement Date”),
(b)	Initial redemption/repayment price (% of par), and
(c)	Amount (% of par) that the initial redemption/repayment price shall decline (but not below par) on each anniversary of the Redemption/Repayment Commencement Date;

11.	Whether the Note has a Survivor’s Option;
12.	If a Discount Note, the total amount of original issue discount, the yield to maturity and the initial accrual period of original issue discount;
13.	The CUSIP Number; and
14.	Such other terms as are necessary to complete the applicable form of Note.

B. The Company will confirm the acceptance of the offer to purchase Notes by executing the Terms Agreement and forwarding it to the Purchasing Agent and the Trustee by telecopier or other form of electronic transmission. Each such acceptance by the Company will be deemed to constitute a representation and warranty by the Company to the Trustee, the Purchasing Agent and the Agents that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company; (ii) such Note, and the Global Note representing such Note, will conform with the terms of the Indenture; and (iii) upon authentication and

B-13

	delivery of the Global Note representing such Note, the aggregate principal amount of all Notes issued under the Indenture will not exceed the aggregate principal amount of Notes authorized for issuance at such time by the Company.
C.	The Trustee will communicate to DTC and the Purchasing Agent through DTC’s Participant Terminal System, a pending deposit message specifying the following Settlement information:

1.	The information received in accordance with Settlement Procedure “A”.
2.	The numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Purchasing Agent.
3.	Identification as a Fixed Rate Note or a Floating Rate Note.
4.	The initial Interest Payment Date for such Note, number of days by which such date succeeds the related DTC record date (which term means the Regular Record Date), and if then calculated, the amount of interest payable on such Initial Interest Payment Date (which amount shall have been confirmed by the Trustee).
5.	The CUSIP number of the Global Note representing such Notes.
6.	Whether such Global Note represents any other Notes issued or to be issued (to the extent then known).

D.	DTC will credit such Note to the participant account of the Trustee maintained by DTC.
E.	The Trustee will complete and deliver a Global Note representing such Note in a form that has been approved by the Company, the Purchasing Agent, the Agents and the Trustee.
F.	The Trustee will authenticate the Global Note representing such Note and maintain possession of such Global Note.
G.	The Trustee will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Trustee’s participant account and credit such Note to the participant account of the Purchasing Agent maintained by DTC and (ii) debit the settlement account of the Purchasing Agent and credit the settlement account of the Trustee

B-14

	maintained by DTC, in an amount equal to the price of such Note less the Purchasing Agent’s commission. The entry of such a deliver order shall be deemed to constitute a representation and warranty by the Trustee to DTC that (a) the Global Note representing such Note has been issued and authenticated and (b) the Trustee is holding such Global Note pursuant to the Certificate Agreement.
H.	The Purchasing Agent will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Purchasing Agent’s participant account and credit such Note to the participant accounts of the Participants to whom such Note is to be credited maintained by DTC and (ii) debit the settlement accounts of such Participants and credit the settlement account of the Purchasing Agent maintained by DTC, in an amount equal to the price of the Note less the agreed upon commission so credited to their accounts.
I.	Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures “G” and “H” will be settled in accordance with SDFS operating procedures in effect on the Settlement Date.
J.	The Trustee will credit or wire transfer to an account of the Company specified from time to time by the Company funds available for immediate use in an amount equal to the amount credited to the Trustee’s DTC participant account in accordance with Settlement Procedure “G”.
K.	The Trustee will send a copy of the Global Note representing such Note by first-class mail to the Company.
L.	Each Agent and Selected Dealer will confirm the purchase of each Note to the purchaser thereof either by transmitting to the Participant to whose account such Note has been credited a confirmation order through DTC’s Participant Terminal System or by mailing a written confirmation to such purchaser. In all cases the Prospectus as most recently amended or supplemented must accompany or precede such confirmation.
M.	At the request of the Company, the Trustee will send to the Company a statement setting forth the principal amount of Notes outstanding as of that date under the Indenture and setting forth the CUSIP number(s) assigned to, and a brief description of, any orders which the Company has advised the Trustee but which have not yet been settled.

B-15

Settlement Procedures Timetable:	Settlement Procedures “A” through “M” shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:
	Settlement
	Procedure	Time
	A	2:00 p.m. on the Trade Day
	B	5:00 p.m. on the Trade Day
	C	2:00 p.m. on the Business Day before the Settlement Date.
	D	10:00 a.m. on the Settlement Date
	E	12:00 p.m. on the Settlement Date.
	F	12:30 p.m. on the Settlement Date.
	G-H	2:00 p.m. on the Settlement Date.
	I	4:45 p.m. on the Settlement Date.
	J-L	5:00 p.m. on the Settlement Date.
	M	At the request of the Company.
	NOTE: The Prospectus as most recently amended or supplemented must accompany or precede any written confirmation given to the customer (Settlement Procedure “L”). Settlement Procedure “I” is subject to extension in accordance with any extension Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date.
	If Settlement of a Note is rescheduled or cancelled, the Trustee will deliver to DTC, through DTC’s Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m., New York City time, on the Business Day immediately preceding the scheduled Settlement Date.
Failure to Settle:	If the Trustee fails to enter an SDFS deliver order with respect to a Note pursuant to Settlement Procedure “G”, the Trustee may deliver to DTC, through DTC’s Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to the participant account of the Trustee maintained at DTC. DTC will process the withdrawal message, provided that such participant account contains Notes having the same terms and having a principal amount that is at least equal to the principal amount of such Note to be debited. If withdrawal messages are processed with respect to all the Notes issued or to be issued represented by a Global Note, the Trustee will cancel such Global Note in accordance with the Indenture, make appropriate entries in its records and so advise the Company. The CUSIP number assigned to such Global Note shall, in accordance with

B-16

	CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If withdrawal messages are processed with respect to one or more, but not all, of the Notes represented by a Global Note, the Trustee will exchange such Global Note for two Global Notes, one of which shall represent such Notes and shall be cancelled immediately after issuance, and the other of which shall represent the remaining Notes previously represented by the surrendered Global Note and shall bear the CUSIP number of the surrendered Global Note. If the purchase price for any Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Purchasing Agent may enter SDFS deliver orders through DTC’s participant Terminal System reversing the orders entered pursuant to Settlement Procedures “G” and “H”, respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the Purchasing Agent or any Agent in the performance of its obligations hereunder or under the Selling Agreement, the Company will reimburse the Purchasing Agent or any Agent on an equitable basis for its reasonable out-of-pocket accountable expenses actually incurred and loss of the use of funds during the period when they were credited to the account of the Company.
	Notwithstanding the foregoing, upon any failure to settle with respect to a Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of Notes that were to have been represented by a Global Note, the Trustee will provide, in accordance with Settlement Procedures “E” and “F”, for the authentication and issuance of a Global Note representing the other Notes to have been represented by such Global Note and will make appropriate entries in its records.
Suspension of Solicitation Amendment or Supplement:	Subject to the Company’s representations, warranties and covenants contained in the Selling Agreement, the Company may instruct the Purchasing Agent to instruct the Agents to suspend at any time for any period of time or permanently, the solicitation of orders to purchase Notes. Upon receipt of such instructions (which may be given orally), each Agent will forthwith suspend solicitation until such time as the Company has advised it that solicitation of purchases may be resumed.
	In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Purchasing Agent, the Agents and

B-17

	the Trustee whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered.
	If the Company decides to amend or supplement the Registration Statement or the Prospectus, it will promptly advise the Purchasing Agent and the Agents and furnish the Purchasing Agent and the Trustee with the proposed amendment or supplement and with such certificates and opinions as are required, all to the extent required by and in accordance with the terms of the Selling Agreement. Subject to the provisions of the Selling Agreement, the Company may file with the Commission any supplement to the Prospectus relating to the Notes. The Company will provide the Purchasing Agent and the Trustee with copies of any such supplement, and confirm to the Purchasing Agent that such supplement has been filed with the SEC.
Trustee Not to Risk Funds:	Nothing herein shall be deemed to require the Trustee to risk or expend its own funds in connection with any payment to the Company, or the Purchasing Agent, the Agents or the purchasers, it being understood by all parties that payments made by the Trustee to either the Company, the Purchasing Agent or the Agents shall be made only to the extent that funds are provided to the Trustee for such purpose.
Advertising Costs:	The Company shall have the sole right to approve the form and substance of any advertising the Purchasing Agent or an Agent may initiate in connection with the solicitation of offers to purchase the Notes. The expense of such advertising will be solely the responsibility of the Purchasing Agent or such Agent, unless otherwise agreed to by the Company.

B-18

EXHIBIT C

TERMS AGREEMENT

, 200_

HSBC Finance Corporation
2700 Sanders Road
Prospect Heights, Illinois 60070
Attention: Secretary

               The undersigned agrees to purchase the following HSBC Finance InterNotes®:

               The terms of such Notes shall be as follows:

CUSIP Number                   
Principal Amount:
Interest Rate Provisions:

               If Fixed Rate:

(a) interest rate:                                                      

               If Floating Rate:

(a)	interest rate basis:
(b)	initial interest rate:
(c)	spread or spread multiplier, if any:
(d)	interest reset dates:
(e)	interest reset period:
(f)	interest payment dates:
(g)	interest payment period:
(h)	index maturity:
(i)	maximum or minimum interest rate,

                      if any:

(j)	calculation date:
(k)	interest determination date:

Original Issue Date:                   
Maturity Date:                   
Price to Public:                   %
Commission:          %
Proceeds to Issuer:                   
Settlement Date, Time and Place:                   
Survivor’s Option:                   
Interest Payment Frequency:                   
Optional Redemption/Repayment provisions, if any:                    

C-1

[Any other terms and conditions agreed
to by the Purchasing Agent and the Company]

INCAPITAL LLC

By:

Title:

ACCEPTED

HSBC FINANCE CORPORATION

By:

Title:

C-2

Exhibit D-1

Form of Pricing Supplement- Fixed Rate Note

Pricing Supplement Dated:	Rule 424(b)(3)
(To Prospectus Dated                    , 200_)	File No. 333-
Pricing Supplement No.

U.S. $_______________
HSBC FINANCE CORPORATION
HSBC FINANCE
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

Trade Date:

Issue Date:

Agent:

	AGGREGATE	PRICE		NET		INTEREST
	PRINCIPAL	TO		PROCEEDS	INTEREST	PAYMENT
CUSIP	AMOUNT	PUBLIC	CONCESSION	TO ISSUER	RATE	FREQUENCY

MATURITY	SURVIVOR’S	REDEMPTION	REPAYMENT	REDEMPTION/
DATE	OPTIONS	YES/NO	YES/NO	REPAYMENT TERMS

Other Terms:                                                                                                                                                                           

D-1

Exhibit D-2
Form of Pricing Supplement- Fixed Rate Note

Pricing Supplement Dated:	Rule 424(b)(3)
(To Prospectus Dated                    , 200_)	File No. 333-
Pricing Supplement No.

U.S. $_______________
HSBC FINANCE CORPORATION
HSBC FINANCE
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

Trade Date:

Issue Date:

Agent:

	AGGREGATE	PRICE		NET		INTEREST
	PRINCIPAL	TO		PROCEEDS	INTEREST	PAYMENT
CUSIP	AMOUNT	PUBLIC	CONCESSION	TO ISSUER	BASE RATE	FREQUENCY

MATURITY	SURVIVOR’S		REPAYMENT	REDEMPTION/
DATE	OPTIONS	SPREAD	YES/NO	REPAYMENT TERMS

Other Terms:                                                                                                                                                                           

D-2

EXHIBIT E

Master Selected Dealer Agreement

«FirstName»
«Company»
«Address1»
«Address2»
«City», «State» «Postal»

Dear Selected Dealer:

          In connection with public offerings of securities after the date hereof for which we are acting as manager of an underwriting syndicate or are otherwise responsible for the distribution of securities to the public by means of an offering of securities for sale to selected dealers, you may be offered the right as such a selected dealer to purchase as principal a portion of such securities. This will confirm our mutual agreement as to the general terms and conditions applicable to your participation in any such selected dealer group organized by us as follows.

          1. Applicability of this Agreement. The terms and conditions of this Agreement shall be applicable to any public offering of securities (“Securities”), pursuant to a registration statement filed under the Securities Act of 1933 (the “Securities Act”), or exempt from registration thereunder (other than a public offering of Securities effected wholly outside the United States of America), wherein Incapital LLC clearing through Pershing, LLC (the “Account”) (acting for its own Account or for the account of any underwriting or similar group or syndicate) is responsible for managing or otherwise implementing the sale of the Securities to selected dealers (“Selected Dealers”) and has expressly informed you that such terms and conditions shall be applicable. Any such offering of Securities to you as a Selected Dealer is hereinafter called an “Offering”. In the case of any Offering where we are acting for the account of any underwriting or similar group or syndicate (“Underwriters”), the terms and conditions of this Agreement shall be for the benefit of, and binding upon, such Underwriters, including, in the case of any Offering where we are acting with others as representatives of Underwriters, such other representatives.

          2. Conditions of Offering; Acceptance and Purchases. Any Offering: (i) will be subject to delivery of the Securities and their acceptance by us and any other Underwriters; (ii) may be subject to the approval of all legal matters by counsel and the satisfaction of other conditions, and (iii) may be made on the basis of reservation of Securities or an allotment against subscription. We will advise you by electronic mail, facsimile or other form of written communication (“Written Communication”, which term, in the case of any Offering described in Section 3(a) or 3(b) hereof, may include a prospectus or offering circular) of the particular method and supplementary terms and conditions (including, without limitation, the information as to prices and offering date referred to in Section 3(c) hereof) of any Offering in which you are invited to participate. To the extent such supplementary terms and conditions are inconsistent with any provision herein, such terms and conditions shall supersede any such provision. Unless otherwise indicated in any such Written Communication, acceptances and other communications

E-1

by you with respect to an Offering should be sent to Incapital LLC, 1 North LaSalle, Suite 3500, Chicago, Illinois 60602 (Fax: (312) 379-3701). We reserve the right to reject any acceptance in whole or in part. Unless notified otherwise by us, Securities purchased by you shall be paid for on such date as we shall determine, on one day’s prior notice to you, by certified or official bank check, in an amount equal to the Public Offering Prices (as hereinafter defined) or, if we shall so advise you, at such Public Offering Price less the Concession (as hereinafter defined), payable in New York Clearing House funds to the order of Pershing, LLC clearing for the account of Incapital LLC, against delivery of the Securities. If Securities are purchased and paid for at such Public Offering Price, such Concession will be paid after the termination of the provisions of Section 3(c) hereof with respect to such Securities. Notwithstanding the foregoing, unless notified otherwise by us, payment for and delivery of Securities purchased by you shall be made through the facilities of The Depository Trust Company, if you are a member, unless you have otherwise notified us prior to the date specified in a Written Communication to you from us or, if you are not a member, settlement may be made through a correspondent who is a member pursuant to instructions which you will send to us prior to such specified date.

          3. Representations, Warranties and Agreements.

          (a) Registered Offerings. In the case of any Offering of Securities that are registered under the Securities Act (“Registered Offering”), we shall provide you with such number of copies of each preliminary prospectus and of the final prospectus relating thereto as you may reasonably request for the purposes contemplated by the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”) and the applicable rules and regulations of the Securities and Exchange Commission thereunder. You represent and warrant that you are familiar with Rule 15c2-8 under the Exchange Act relating to the distribution of preliminary and final prospectuses and agree that you will comply therewith. You agree to make a record of your distribution of each preliminary prospectus and, when furnished with copies of any revised preliminary prospectus, you will, upon our request, promptly forward copies thereof to each person to whom you have theretofore distributed a preliminary prospectus. You agree that in purchasing Securities in a Registered Offering you will rely upon no statement whatsoever, written or oral, other than the statements in the final prospectus delivered to you by us. You will not be authorized by the issuer or other seller of Securities offered pursuant to a prospectus or by any Underwriter to give any information or to make any representation not contained in the prospectus in connection with the sale of such Securities.

          (b) Offerings Pursuant to Offering Circular. In the case of any Offering of Securities, other than a Registered Offering, which is made pursuant to an offering circular or other document comparable to a prospectus in a Registered Offering, we shall provide you with such number of copies of each preliminary offering circular and of the final offering circular relating thereto as you may reasonably request. You agree that you will comply with the applicable Federal and state laws, and the applicable rules and regulations of any regulatory body promulgated thereunder, governing the use and distribution of offering circulars by brokers or dealers. You agree that in purchasing Securities pursuant to an offering circular you will rely upon no statements whatsoever, written or oral, other than the statements in the final offering circular delivered to you by us. You will not be authorized by the issuer or other seller of Securities offered pursuant to an offering circular or by any Underwriter to give any information

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or to make any representation not contained in the offering circular in connection with the sale of such Securities.

          (c) Offer and Sale to the Public. With respect to any Offering of Securities, we will inform you by a Written Communication of the public offering price, the selling concession, the reallowance (if any) to dealers and the time when you may commence selling Securities to the public. After such public offering has commenced, we may change the public offering price, the selling concession and the reallowance to dealers. The offering price, selling concession and reallowance (if any) to dealers at any time in effect with respect to an Offering are hereinafter referred to, respectively, as the “Public Offering Price”, the “Concession” and the “Reallowance”. With respect to each Offering of Securities, until the provisions of this Section 3(c) shall be terminated pursuant to Section 4 hereof, you agree to offer Securities to the public at no more than the Public Offering Price. If so notified by us, you may sell Securities to the public at a lesser negotiated price than the Public Offering Price, but in an amount not to exceed the “Concession.” If a Reallowance is in effect, a reallowance from the Public Offering Price not in excess of such Reallowance may be allowed as consideration for services rendered in distribution to dealers who are actually engaged in the investment banking or securities business, who execute the written agreement prescribed by Rule 2740 of the Conduct Rules of the National Association of Securities Dealers, Inc. (the “NASD”) and who are either members in good standing of the NASD or foreign banks, dealers or institutions not eligible for membership in the NASD who represent to you that they will promptly reoffer such Securities at the Public Offering Price and will abide by the conditions with respect to foreign banks, dealers and institutions set forth in Section 3(e) hereof.

          (d) Over-allotment; Stabilization; Unsold Allotments. We may, with respect to any Offering, be authorized to over-allot in arranging sales to Selected Dealers, to purchase and sell Securities for long or short account and to stabilize or maintain the market price of the Securities. You agree that, upon our request at any time and from time to time prior to the termination of the provisions of Section 3(c) hereof with respect to any Offering, you will report to us the amount of Securities purchased by you pursuant to such Offering which then remain unsold by you and will, upon our request at any such time, sell to us for our account or the account of one or more Underwriters such amount of such unsold Securities as we may designate at the Public Offering Price less an amount to be determined by us not in excess of the Concession. If, prior to the later of (i) the termination of the provisions of Section 3(c) hereof with respect to any Offering or (ii) the covering by us of any short position created by us in connection with such Offering for our account or the account of one or more Underwriters, we purchase or contract to purchase for our account or the account of one or more Underwriters in the open market or otherwise any Securities purchased by you under this Agreement as part of such Offering, you agree to pay us on demand an amount equal to the Concession with respect to such Securities (unless you shall have purchased such Securities pursuant to Section 2 hereof at the Public Offering Price in which case we shall not be obligated to pay such Concession to you pursuant to Section 2) plus transfer taxes and broker’s commissions or dealer’s mark-up, if any, paid in connection with such purchase or contract to purchase.

          NASD. You represent and warrant that you are actually engaged in the investment banking or securities business and either a member in good standing of the NASD or, if you are not such a member, you are a foreign bank, dealer or institution not eligible for

E-3

membership in the NASD which agrees to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein, and in making other sales to comply with the NASD’s interpretation with respect to free riding and withholding. You further represent, by your participation in an Offering, that you have provided to us all documents and other information required to be filed with respect to you, any related person or any person associated with you or any such related person pursuant to the supplementary requirements of the NASD’s interpretation with respect to review of corporate financing as such requirements relate to such Offering.

          You agree that, in connection with any purchase or sale of the Securities wherein a Concession, discount or other allowance is received or granted, (1) you will comply with the provisions of Rule 2740 of the Conduct Rules of the NASD and (2) if you are a non-NASD member broker or dealer in a foreign country, you will also comply (a), as though you were an NASD member, with the provisions of Rule 2730, 2740, 2750 and 2790 thereof and (b) with Rule 2420 thereof as that section applies to a non-NASD member broker or dealer in a foreign country.

          You further agree that, in connection with any purchase of securities from us that is not otherwise covered by the terms of this Agreement (whether we are acting as manager, as a member of an underwriting syndicate or a selling group or otherwise), if a selling Concession, discount or other allowance is granted to you, clauses (1) and (2) of the preceding paragraph will be applicable.

          (f) Relationship among Underwriters and Selected Dealers. We may buy Securities from or sell Securities to any Underwriter or Selected Dealer and, without consent, the Underwriters (if any) and the Selected Dealers may purchase Securities from and sell Securities to each other at the Public Offering Price less all or any part of the Concession. Unless otherwise specified in a separate agreement between you and us, this agreement does not authorize you to act as agent for: (i) us; (ii) any Underwriter; (iii) the issuer; or (iv) other seller of any Securities in offering Securities to the public or otherwise. Neither we nor any Underwriter shall be under any obligation to you except for obligations assumed hereby or in any Written Communication from us in connection with any Offering. Nothing contained herein or in any Written Communication from us shall constitute the Selected Dealers an association or partners with us or any Underwriter or with one another. If the Selected Dealers, among themselves or with the Underwriters, should be deemed to constitute a partnership for Federal income tax purposes, then you elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and agree not to take any position inconsistent with that election. You authorize us, in our discretion, to execute and file on your behalf such evidence of that election as may be required by the Internal Revenue Service. In connection with any Offering, you shall be liable for your proportionate amount of any tax, claim, demand or liability that may be asserted against you alone or against one or more Selected Dealers participating in such Offering, or against us or the Underwriters, based upon the claim that the Selected Dealers, or any of them, constitute an association, an unincorporated business or other entity, including, in each case, your proportionate amount of any expense incurred in defending against any such tax, claim, demand or liability.

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          (g) Blue Sky Laws. Upon application to us, we shall inform you as to any advice we have received from counsel concerning the jurisdictions in which Securities have been qualified for sale or are exempt under the securities or blue sky laws of such jurisdictions, but we do not assume any obligation or responsibility as to your right to sell Securities in any such jurisdiction.

          (h) Compliance with Law. You agree that in selling Securities pursuant to any Offering (which agreement shall also be for the benefit of the issuer or other seller of such Securities) you will comply with all applicable laws, rules and regulations, including the applicable provisions of the Securities Act and the Exchange Act, the applicable rules and regulations of the Securities and Exchange Commission thereunder, the applicable rules and regulations of the NASD, the applicable rules and regulations of any securities exchange having jurisdiction over the Offering and the applicable laws, rules and regulations specified in Section 3(b) hereof.

          4. Termination, Supplements and Amendments. This Agreement shall continue in full force and effect until terminated by a written instrument executed by each of the parties hereto. This Agreement may be supplemented or amended by us by written notice thereof to you, and any such supplement or amendment to this Agreement shall be effective with respect to any Offering to which this Agreement applies after the date of such supplement or amendment. Each reference to “this Agreement” herein shall, as appropriate, be to this Agreement as so amended and supplemented. The terms and conditions set forth in Section 3(c) hereof with regard to any Offering will terminate at the close of business on the 30th day after the commencement of the public offering of the Securities to which such Offering relates, but in our discretion may be extended by us for a further period not exceeding 30 days and in our discretion, whether or not extended, may be terminated at any earlier time.

          5. Successors and Assigns. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and other persons specified in Section 1 hereof, and the respective successors and assigns of each of them.

          6. Governing Law. This Agreement and the terms and conditions set forth herein with respect to any Offering together with such supplementary terms and conditions with respect to such Offering as may be contained in any Written Communication from us to you in connection therewith shall be governed by, and construed in accordance with, the laws of the State of Illinois.

          Please confirm by signing and returning to us the enclosed copy of this Agreement that your subscription to, or your acceptance of any reservation of, any Securities pursuant to an Offering shall constitute (i) acceptance of and agreement to the terms and conditions of this Agreement (as supplemented and amended pursuant to Section 4 hereof) together with and subject to any supplementary terms and conditions contained in any Written Communication from us in connection with such Offering, all of which shall constitute a binding agreement between you and us, individually or as representative of any Underwriters, (ii) confirmation that your representations and warranties set forth in Section 3 hereof are true and correct at that time, (iii) confirmation that your agreements set forth in Sections 2 and 3 hereof have been and will be fully performed by you to the extent and at the times required thereby and

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(iv) in the case of any Offering described in Section 3(a) and 3(b) hereof, acknowledgment that you will request and have received from us sufficient copies of the final prospectus or offering circular, as the case may be, with respect to such Offering in order to comply with your undertakings in Section 3(a) or 3(b) hereof.

Very truly yours,

INCAPITAL LLC

By:

CONFIRMED:                                                          , 20___
«Company»
By:
Name:
	(Print name)
Title:

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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;

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          (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

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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.

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     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

47

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, 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. (formerly known as The Chase Manhattan Bank), 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 in The City of New York, New York, which office, at the date hereof, is located at 4 New York Plaza, New York, New York 10004.

WITNESSETH:

     Whereas, Household Finance Corporation (“HFC”) and the Trustee have heretofore entered into an Indenture for Senior Debt Securities dated as of March 1, 2001 and amended and restated as of April 30, 2003 (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 InterNotes® (hereinafter the “InterNotes”), due nine months or more from date of issue; 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 InterNotes 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 InterNotes 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 the 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 InterNotes 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 InterNotes 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 of the Notes or of series thereof, as follows:

     Article 1. Standard Provisions. Except as specifically set 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, except as specifically noted herein, shall be deemed to be a part hereof to the same extent 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 Indenture, are deemed to be the “Indenture.”

     Article 2. Conflicts. As provided in Section 8.08(b) of the Provisions, the following indentures are excluded:

The Indenture dated as of October 1, 1992 and the Amended and Restated Indenture for Senior Debt Securities dated as of December 15, 2004 (providing for the issuance of the Company’s Medium Term Notes) between the Company and the Trustee

- 2 -

     Article 3. Designation and Terms of the InterNotes. A series of Notes created pursuant to this Indenture shall be known and designated as the “HSBC Finance InterNotes” of the Company.

     Each InterNote will be dated and issued as of the date of its authentication by the Trustee. Each InterNote shall also bear an Original Issue Date (as hereinafter defined) which, with respect to any InterNote (or any portion thereof), shall mean the date of its original issue, as specified in such InterNote (the “Original Issue Date”), and such Original Issue Date shall remain the same if such InterNote is subsequently issued upon transfer, exchange, or substitution of such InterNote regardless of its date of authentication. Principal of any InterNote 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 InterNote theretofore issued. Interest shall be computed on the basis specified in each InterNote.

     Each InterNote 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 specified, therein until the principal thereof is paid or made available for payment. Interest will be payable either monthly, quarterly, semi-annually or annually 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 Interest Payment Dates for an InterNote that provides for monthly interest payments at a fixed rate of interest per annum shall be the fifteenth day of each calendar month beginning in the first calendar month following the month the InterNote was issued. In the case of an InterNote that provides for quarterly interest payments at a fixed rate of interest per annum, the Interest Payment Dates shall be the fifteenth day of every third month, beginning in the third calendar month following the month the InterNote was issued. In the case of an InterNote that provides for semi-annual interest payments at a fixed rate of interest per annum, the Interest Payment Dates shall be the fifteenth day of every sixth month, beginning in the sixth calendar month following the month the InterNote was issued. In the case of an InterNote that provides for annual interest payments at a fixed rate of interest per annum, the Interest Payment Dates shall be the fifteenth day of every twelfth month, beginning in the twelfth calendar month following the month the InterNote was issued. The Regular Record Date referred to in Section 2.07 of the Provisions with respect to any Interest Payment Date for an InterNote that provides for interest at a fixed rate of interest per annum will be the first day of the calendar month (whether or not a Business Day) in which such Interest Payment Date occurs, except that the Regular Record Date with respect to the final Interest Payment Date will be the final Interest Payment Date.

     Unless otherwise provided with respect to a particular InterNote, the Interest Payment Dates for an InterNote that provides for monthly interest payments pursuant to an interest rate formula shall be the third Wednesday of each calendar month beginning in the first calendar month following the month the InterNote was issued. Unless otherwise provided with respect to a particular InterNote, the Interest Payment Dates for an InterNote that provides for quarterly

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interest payments pursuant to an interest rate formula shall be the third Wednesday of March, June, September and December of each year, beginning in the first such month following the month the InterNote was issued. Unless otherwise provided with respect to a particular InterNote, the Interest Payment Dates for an InterNote that provides for semi-annual interest payments pursuant to an interest rate formula shall be the third Wednesday of the two months of each year specified in such InterNote. Unless otherwise provided with respect to a particular InterNote, the Interest Payment Dates for an InterNote that provides for annual interest payments pursuant to an interest rate formula shall be the third Wednesday of the month of each year specified in such InterNote. Unless otherwise provided with respect to a particular InterNote, the Regular Record Date referred to in Section 2.07 of the Provisions with respect to any Interest Payment Date for an InterNote that provides for interest pursuant to an interest rate formula will be the fifteenth calendar day (whether or not a Business Day) immediately preceding such Interest Payment Date.

     Payment of principal of the InterNotes and, unless otherwise paid as hereinafter provided, the interest thereon will be made at the office or agency of the Company in New York, 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 to the Paying Agent not later than ten days prior to the date of such payment.

     Unless otherwise specified in an InterNote, the cities of New York, New York and Chicago, Illinois shall be the reference cities for determining a Business Day.

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

     Upon the execution of this Indenture, or from time to time thereafter, InterNotes, 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 InterNotes to or upon a Company Order.

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

     Article 5. Repayment of InterNotes at Option of Holders. Each InterNote shall be subject to repayment by the Company at the option of the Holder prior to its Stated Maturity if so provided pursuant to the terms of such InterNote issued by the Company, on such terms as set forth in such InterNote.

     Article 6. Survivor’s Option. If so specified in any InterNote, the representative of a deceased beneficial owner of the InterNote or a beneficial interest in the InterNote shall have the option to elect repayment of such InterNote or interest following the death of the owner (a

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“Survivor’s Option”). Unless otherwise specifically provided for on the face of the InterNote, no Survivor’s Option may be exercised if the deceased owner of the InterNote or a beneficial interest in the InterNote acquired such InterNote or interest less than six months prior to exercise of the Survivor’s Option.

     Pursuant to exercise of the Survivor’s Option, the Company shall repay any InterNote (or portion thereof) properly tendered for repayment by or on behalf of the person (the “Representative”) that has authority to act on behalf of the deceased beneficial owner of such InterNote under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner) at a price equal to 100 % of the principal amount of the beneficial interest of the deceased owner in such InterNote plus accrued interest to the date of such repayment, subject to the following limitations:

     (a) The Company may, in its sole discretion, limit the aggregate principal amount of InterNotes as to which exercises of the Survivor’s Option shall be accepted in any calendar year (the “Annual Put Limitation”) to the greater of 2% of the Outstanding principal amount of the InterNotes as of the end of the most recent calendar year or $2,000,000. The Company in its sole discretion may also limit to $250,000 for any calendar year, the aggregate principal amount of InterNotes (or portions thereof) as to which exercise of the Survivor’s Option will be accepted with respect to any individual deceased owner of beneficial interests in such InterNotes (the “Individual Put Limitation”).

     (b) The Company shall not make principal repayments pursuant to exercise of the Survivor’s Option in amounts that are less than $1,000, or other than in integral multiples of $1,000.

     (c) Any InterNote (or portion thereof) tendered pursuant to a valid exercise of the Survivor’s Option may not be withdrawn.

     Each InterNote (or portion thereof) that is tendered pursuant to valid exercise of the Survivor’s Option shall be accepted promptly in the order all such InterNotes are tendered, except for any InterNote (or portion thereof) the acceptance of which would contravene (i) the Annual Put Limitation, if applied, or (ii) the Individual Put Limitation, if applied, with respect to the relevant individual deceased owner of beneficial interests therein. If, as of the end of any calendar year, the aggregate principal amount of InterNotes (or portions thereof) that have been accepted pursuant to exercise of the Survivor’s Option during such year has exceeded either the Annual Put Limitation, if applied, or the Individual Put Limitation, if applied, for such year, any exercise(s) of the Survivor’s Option with respect to InterNotes (or portions thereof) not accepted during such calendar year because such acceptance would have contravened either such limitation, if applied, shall be deemed to be tendered in the following calendar year in the order all such InterNotes (or portions thereof) were tendered. Unless otherwise specified in such InterNote, any InterNote (or portion thereof) accepted for repayment pursuant to exercise of the Survivor’s Option shall be repaid on the first Interest Payment Date that occurs 20 or more calendar days after the date of such acceptance.

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     In order for a Survivor’s Option to be validly exercised with respect to any InterNote (or portion thereof), the Trustee must receive from the Representative of the deceased owner (i) a written request for repayment signed by the Representative, and such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. (the “NASD”) or a commercial bank or trust company having an office or correspondent in the United States, (ii) tender of an InterNote (or portion thereof) to be repaid, (iii) appropriate evidence satisfactory to the Trustee and the Company that (A) the deceased acquired a beneficial interest in such InterNote at least six months prior to exercise, (B) the death of such beneficial owner has occurred and (C) the Representative has authority to act on behalf of the deceased beneficial owner, (iv) if applicable, a properly executed assignment or endorsement, and (v) if the beneficial interest in such InterNote is held by a nominee of the deceased beneficial owner, a certificate or letter satisfactory to the Trustee and the Company from such nominee attesting to the deceased’s ownership of a beneficial interest in such InterNote, and (vi) tax waivers and such other instruments or documents that the Trustee or the Company reasonably requires in order to establish the validity of ownership of the InterNotes and the claimant’s entitlement to payment. Notwithstanding the foregoing, the eligibility or validity of any exercise of the Survivor’s Option, shall be subject to the final approval of the Company, in its sole discretion, which final approval shall be final and binding on all parties. In the event that an InterNote (or any portion thereof) tendered for repayment pursuant to valid exercise of the Survivor’s Option is not accepted, the Trustee shall deliver a notice by first-class mail to the Representative, that states the reason such InterNote (or portion thereof) has not been accepted for payment.

     The death of a person owning an InterNote in joint tenancy or tenancy by the entirety with another or others shall be deemed the death of the owner of the InterNote, and the entire principal amount of the InterNote so held shall be subject to repayment, together with interest accrued thereon to the repayment date. The death of a person owning an InterNote by tenancy in common shall be deemed the death of an owner of an InterNote only with respect to the deceased owner’s interest in the InterNote so held by tenancy in common; except that in the event an InterNote is held by husband and wife as tenants in common, the death of either shall be deemed the death of the owner of the InterNote, and the entire principal amount of the InterNote so held shall be subject to repayment. The death of a person who, during his or her lifetime, was entitled to substantially all of the beneficial interests of ownership of an InterNote, shall be deemed the death of the owner thereof for purposes of this provision, regardless of the registered holder, if such beneficial interest can be established to the satisfaction of the Trustee and the Company. Such beneficial interest shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Transfers to Minors Act, community property or other joint ownership arrangements between a husband and wife and custodial and trust arrangements where one person has substantially all of the beneficial ownership interest in the InterNote during his or her lifetime.

     For InterNotes represented by a Global Note, the Depository or its nominee shall be the holder of such InterNote and therefore shall be the only entity that can exercise the Survivor’s Option for such InterNote. To obtain repayment pursuant to exercise of the Survivor’s Option with respect to such InterNote, the Representative must provide to the broker or other entity through which the beneficial interest in such InterNote is held by the deceased owner (i) the documents described in clauses (i), (iii) and (vi) of the second preceding paragraph and (ii)

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instructions to such broker or other entity to notify the Depository of such Representative’s desire to obtain repayment pursuant to exercise of the Survivor’s Option. Such broker or other entity shall provide to the Trustee (i) the documents received from the Representative referred to in clause (i) of the preceding sentence and (ii) a certificate satisfactory to the Trustee from such broker or other entity stating that it represents the deceased beneficial owner. Such broker or other entity shall be responsible for disbursing any payments it receives pursuant to exercise of the Survivor’s Option to the appropriate Representative.

     Article 7. Global Notes. The InterNotes will be issued initially in the form of Global Notes. “Global Note” means a registered Note evidencing one or more InterNotes, issued to the Depository for such InterNotes in accordance with this Article and bearing the legend prescribed in this Article. A single Global Note will represent all Notes issued on the same day and having the same terms, including, but not limited to, the same Interest Payment Dates, rate of interest, Stated Maturity, and redemption or repayment provisions (if any), including any Survivor’s Option. The Company shall execute and the Trustee shall, in accordance with this Article and the Company Order with respect to the InterNotes, 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 InterNotes 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 instructions and (iv) shall bear a legend substantially to the following effect in addition to the legend required by Section 2.11(a) of the Provisions: “Unless this Global Note is presented by an authorized representative of the Depository to the Issuer or its agent for registration of transfer, exchange or payment, and any InterNote issued is registered in the name of the Depository or in such other name as is requested by the Depository, any transfer, pledge or other use hereof for value or otherwise by or to any person shall be wrongful inasmuch as the registered owner hereof, the Depository, has an interest herein.”

     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 one or more InterNotes may not be transferred except as a whole by the Depository, to a nominee of such Depository or by a 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 the InterNotes or a nominee of such successor Depository.

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

     If at any time the Depository for the InterNotes notifies the Company that it is unwilling or unable to continue as Depository for the InterNotes or if at any time the Depository for the InterNotes shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depository with respect to the InterNotes. If a successor Depository for the InterNotes 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 InterNotes, will authenticate

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and deliver InterNotes in definitive form in an aggregate principal amount equal to the principal amount of the Global Note or Notes representing such InterNotes in exchange for such Global Note or Notes.

     The Company may at any time and in its sole discretion determine that the InterNotes issued in the form of one or more Global Notes shall no longer by 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 InterNotes will authenticate and deliver InterNotes in definitive form in an aggregate principal amount equal to the principal amount of the Global Note or Notes representing such InterNotes in exchange for such Global Note or Notes.

     The Depository for such InterNotes may surrender a Global Note or Notes for such InterNotes in exchange in whole or in part for InterNotes 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 InterNote or Notes, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person’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 InterNotes delivered to Holders thereof.

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

     Upon the exchange of a Global Note for InterNotes in definitive form, such Global Note shall be cancelled by the Trustee. InterNotes 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 InterNotes to the persons in whose names such InterNotes are so registered.

     Article 8. Amendments. Notwithstanding Articles II and XI of the Provisions, the Company may, by Board Resolution or by Supplemental Indenture, amend this Indenture to provide for additional definitions, terms and provisions relating to InterNotes. Any such Board Resolution or Supplemental Indenture will not adversely affect the rights and privileges of Holders of InterNotes issued prior to such Board Resolution or Supplemental Indenture and shall not affect the Trustee’s own rights, duties or immunities under this Indenture or otherwise without its prior written consent.

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     Article 9. Effective Time. This Amended and Restated Indenture shall become effective on the date and at the time of consummation of the Merger.

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-5

EXHIBITS 5 AND 23.2

December 16, 2004

HSBC Finance Corporation
2700 Sanders Road
Prospect Heights, IL 60070

RE:  REGISTRATION STATEMENT ON FORM S-3 FOR $5 BILLION OF SENIOR DEBT SECURITIES.

Ladies and 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 the Registration Statement on Form S-3 of HSBC Finance as amended by Amendment No. 1 filed with the Securities and Exchange Commission (the “Commission”) on December 16, 2004, (“Registration Statement”), relating to the registration under the Securities Act of 1933, as amended (the “Securities Act”), of debt securities (the “InterNotes”). The InterNotes, which constitute senior debt of HSBC Finance, 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 Indenture, or the form thereof, have been included as exhibits to the Registration Statement as filed with the Commission.

     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 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 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 of at law).

3. When (i) the Registration Statement filed by HSBC Finance with respect to the InterNotes becomes effective under the Securities Act, (ii) the issuance of the InterNotes have been duly authorized by the appropriate corporate action, and (iii) such InterNotes have been duly executed, authenticated, issued and delivered against payment of the agreed consideration therefor in accordance with the Indenture as described in the Registration Statement, including the Prospectus relating to the offering of the debt securities, such InterNotes 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 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, 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-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 Senior Debt Securities (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 incorporation or organization)	(I.R.S. employer identification No.)

2700 Sanders Road
Prospect Heights, Illinois	60070
(Address of principal executive offices)	(Zip Code)

SENIOR DEBT SECURITIES
(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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