Exhibit 1.1
HSBC AUTOMOTIVE TRUST (USA) 20__-__
[$___________ Class A-1 Notes
$___________ Class A-2 Notes
$___________ Class A-3 Notes
$___________ Class A-4 Notes]
UNDERWRITING
AGREEMENT
[_____________________]
|
|
as Representative of the Underwriters
|
[Address]
Dear Sirs:
HSBC Finance Corporation, a
corporation organized and existing under the laws of Delaware,
individually (" HSBC Finance ") and as Servicer (the "
Servicer "), and HSBC Auto Receivables Corporation, a
corporation organized and existing under the laws of Nevada and a
wholly owned subsidiary of HSBC Finance, individually ("
HARC ") and as Seller (the " Depositor "), agree with
you as set forth herein.
The Depositor has authorized the
issuance and sale of [$______________ Class A-1 Notes,
$______________ Class A-2 Notes, $_______________ Class A-3
Notes and $_______________ Class A-4 Notes] (collectively, the
" Notes "). The Notes are to be issued by HSBC Automotive
Trust (USA) 20__-__ (the " Trust ") pursuant to an Indenture
(the " Indenture "), dated as of the date of the Closing
Time (as defined below), among the Trust,
[________________________________], a [____________________], as
indenture trustee (the " Indenture Trustee "), and
[___________________________], a [____________________], as
administrator (the " Administrator "), as supplemented by a
Series Supplement (the " Series Supplement "), dated as
of the date of the Closing Time, by and among the Servicer, the
Trust, the Depositor, the Indenture Trustee, the Administrator and
[___________________________], a [______________________], as Owner
Trustee (the " Owner Trustee "). In addition to the Notes,
the Trust will also issue the Series 20__-__ Certificates (the "
Certificates ") pursuant to a Trust Agreement, dated as of
the date of the Closing Time, among the Depositor and the Owner
Trustee, as amended and restated by an Amended and Restated Trust
Agreement (the " Trust Agreement "), dated as of the date of
the Closing Time, and as supplemented by the Series Supplement. The
Notes and the Certificates are referred to herein collectively as
the " Securities ." The assets of the Trust will include a
pool of non-prime retail installment sales contracts and loan and
security agreements secured by new or used automobiles, light duty
trucks and vans (the " Receivables ") and certain monies due
thereunder after the close of business on [________, 20__] (the "
Cut-Off Date ").
As used herein, the term "
Depositor Agreements " means the Sale and Servicing
Agreement dated as of the date of the Closing Time, among the
Trust, the Depositor, the Servicer, the Indenture Trustee and the
Administrator (the " Sale and Servicing Agreement "), the
Series Supplement, [the Master Receivables Purchase Agreement dated
as of December 18, 2001 (the " HAFI Warehouse Receivables
Purchase Agreement "), between the Depositor and HSBC Auto
Finance Inc., a corporation organized and existing under the laws
of Delaware and a wholly owned subsidiary of HSBC Finance ("
HAFI "), the Master Receivables Purchase Agreement dated as
of June 24, 2002 (the " HACI Warehouse Receivables Purchase
Agreement "), between the Depositor and HSBC Auto Credit Inc.,
a corporation organized and existing under the laws of Delaware and
a wholly owned subsidiary of HAFI (" HACI "), the Master
Receivables Purchase Agreement dated as of November 18, 2002,
between the Depositor and HAFI (the " HAFI Receivables Purchase
Agreement "), and the Master Receivables Purchase Agreement
dated as of August 8, 2002, between the Depositor and HACI (the "
HACI Receivables Purchase Agreement ", and together with the
HAFI Warehouse Receivables Purchase Agreement, the HACI Warehouse
Receivables Purchase Agreement and the HAFI Receivables Purchase
Agreement, the " Master Receivables Purchase Agreements "),]
the Trust Agreement and this Underwriting Agreement (this "
Agreement "); the term " HAFI Agreement[s] " means
the [HAFI Warehouse Receivables Purchase Agreement and the] HAFI
Receivables Purchase Agreement; the term " HACI Agreement[s]
" means the [HACI Warehouse Receivables Purchase Agreement and the]
HACI Receivables Purchase Agreement; the term " HSBC Finance
Agreements " means the Sale and Servicing Agreement, the Series
Supplement and this Agreement.
HSBC Finance and the Depositor are
collectively referred to herein as the " HSBC Parties ."
HSBC Finance, the Depositor, HAFI and HACI are collectively
referred to herein as the " HSBC Entities ."
The Notes are being purchased by the
Underwriters named in Schedule I to the terms agreement (the
“ Terms Agreement ”) to be executed by the
parties with respect to the Notes, and the Underwriters are
purchasing, severally, only the Notes set forth opposite their
names in Schedule I to the Terms Agreement, except that the
amounts purchased by the Underwriters may change in accordance with
Section 13 of this Agreement. [_________________] is acting as
representative of the Underwriters and, in such capacity, is
hereinafter referred to as the " Representative
."
The offering of the Notes will be
made by the Underwriters, and the HSBC Entities understand that the
Underwriters propose to make a public offering of the Notes for
settlement on the date of the Closing Time.
None of the Certificates are being
purchased by the Underwriters hereby.
The Depositor has filed with the
Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 333-131714) 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"), and has filed all amendments thereto that
are required as of the date hereof pursuant to the 1933 Act and the
rules of the Commission thereunder (the "1933 Act Regulations").
The registration statement, as amended, has been declared effective
by the Commission. Such registration statement, as amended at the
time of effectiveness, including
all material incorporated by
reference therein and including all information (if any) deemed to
be part of the registration statement at the time of effectiveness
pursuant to Rule 430B under the 1933 Act, is referred to in this
Agreement as the " Registration Statement ." The Depositor
has filed or will file with the Commission pursuant to Rule 424(b)
of the 1933 Act Regulations (" Rule 424(b) ") a supplement
(the " Prospectus Supplement ") to the prospectus included
in the Registration Statement (such prospectus, in the form it
appears in the Registration Statement or in the form most recently
revised and filed with the Commission pursuant to Rule 424(b), is
hereinafter referred to as the " Base Prospectus ") relating
to the Notes and the method of distribution thereof. The Base
Prospectus and the Prospectus Supplement, together with any
amendment thereof or supplement thereto, is hereinafter referred to
as the " Prospectus ."
For the purposes of this Agreement,
"Time of Sale" is the date and time specified in the Terms
Agreement and is the time the first "contract of sale" within the
meaning contemplated by Rule 159 of the 1933 Act Regulations (a
"Contract of Sale") for the Notes was entered into. Prior to the
Time of Sale, the Depositor prepared a preliminary Prospectus,
dated as of the date hereof (subject to completion). As used
herein, " Preliminary Prospectus " means, with respect to
any date or time referred to herein, the most recent preliminary
Prospectus (as amended or supplemented, if applicable), which has
been prepared and delivered by the Depositor to the Underwriters in
accordance with the provisions hereof.
For purposes of this Agreement, all
references to the Registration Statement, the Prospectus, the
Preliminary Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to be the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (" EDGAR ").
All references in this Agreement to
financial statements and schedules and other information that is
"contained", "included" or "stated" in the Registration Statement,
the Preliminary Prospectus or the Prospectus (or other references
of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are
incorporated by reference in the Registration Statement, the
Preliminary Prospectus or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to
the Registration Statement, the Preliminary Prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), which is incorporated by reference in the Registration
Statement, the Preliminary Prospectus or the Prospectus, as the
case may be.
Capitalized terms used but not
otherwise defined herein shall have the meanings assigned thereto
in the Sale and Servicing Agreement or the Prospectus or the
Preliminary Prospectus, as applicable.
SECTION 1. Representations and
Warranties .
(a) Each
of HSBC Finance and the Depositor, individually, represents and
warrants to, and agrees with, each Underwriter as set forth in this
Section 1(a):
(i) The
Depositor meets the requirements for use of Form S-3 under the 1933
Act, as set forth in the General Instructions to Form S-3, and the
conditions of Rule 415
of the 1933 Act Regulations have
been satisfied. The Registration Statement was filed with the
Commission and has been declared effective by the Commission and is
effective as of the date hereof. "Effective Date" shall mean the
most recent date as of which the Registration Statement was
declared effective by the Commission, or any later effective date
determined pursuant to Rule 430B(f)(2) under the 1933 Act. The
Commission has not issued any order preventing or suspending the
use of the Preliminary Prospectus or the Prospectus or any "free
writing prospectus" (as defined in Rule 405 of the 1933 Act
Regulations) relating to the Notes (each, a "Free Writing
Prospectus") or suspending the effectiveness of the Registration
Statement, and no proceedings for such purpose are pending or, to
the Depositor's knowledge, threatened by the Commission.
(ii) On
the Effective Date, the Registration Statement complied in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations and the 1934 Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the Closing
Time, the Registration Statement and any amendments and supplements
thereto, and the Prospectus, including documents incorporated or
deemed to be incorporated by reference in the Registration
Statement or the Prospectus, will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations
and the 1934 Act and 1934 Act Regulations, and neither of such
documents will include an untrue statement of a material fact or
will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided , however ,
that the Depositor makes no representations or warranties as to any
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with the
Underwriter Information (as defined in Subsection 9(b)
below).
(iii) The
Preliminary Prospectus at the Time of Sale did not contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (it being understood that no representation or warranty
is made with respect to the omission of pricing and price-dependent
information, which information shall of necessity appear only in
the final Prospectus); provided , however , that the
Depositor makes no representations or warranties as to any
statements in, or omissions from, the Preliminary Prospectus made
in reliance upon and in conformity with the Underwriter
Information.
(iv) Each
Issuer Free Writing Prospectus, at the time of filing thereof and
at the Time of Sale, did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to the statements therein, in the light of the circumstances under
which they were made, not misleading, and each Issuer Free Writing
Prospectus does not conflict with the information contained in the
Registration Statement, the Preliminary Prospectus or the
Prospectus; provided, however , that the Depositor makes no
representations or warranties as to any statements in, or omissions
from, any Issuer Free Writing Prospectus made in reliance upon and
in conformity with the Underwriter Information. "Issuer Free
Writing Prospectus" means a "written communication" (as
defined in Rule 405 under the 1933
Act Regulations) that constitutes an "issuer free writing
prospectus" within the meaning contemplated by Rule 433(h)(1) of
the 1933 Act Regulations. Other than the Preliminary Prospectus,
the Prospectus and any Issuer Free Writing Prospectus, the
Depositor (including its agents and representatives other than the
Underwriters in their capacity as such) has not made, used,
prepared, authorized, approved or referred to and will not make,
use, prepare, authorize, approve or refer to any "written
communication" (as defined in Rule 405 of the 1933 Act Regulations)
that constitutes an offer to sell or solicitation of any offer to
buy the Notes.
(v) Since
the respective dates as of which information is given in the
Preliminary Prospectus and the Prospectus, there has not been any
material adverse change in the general affairs, management,
financial condition, or results of operations of the Depositor or
of its subsidiaries, other than as disclosed in the Preliminary
Prospectus and the Prospectus or in reports filed by HSBC Finance
with the Commission pursuant to the 1934 Act and the 1934 Act
Regulations.
(vi) The
Depositor is a corporation duly organized and validly existing and
in good standing under the laws of its jurisdiction of
incorporation. The Depositor has all requisite power and authority
to own its properties and conduct its business as presently
conducted and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
which requires such qualification, except where failure to have
such requisite power and authority or to be so qualified would not
have a material adverse effect on the business or consolidated
financial condition of the Depositor.
(vii) The
Depositor is not in violation of its certificate of incorporation
or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it may be bound, or
to which any of the property or assets of the Depositor is subject,
except where any such violation or default would not have a
material adverse effect on the transactions contemplated by this
Agreement.
(viii) The
execution, delivery and performance by the Depositor of each
Depositor Agreement, the issuance of the Securities and the
consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of,
or default under, or, other than as contemplated in the Preliminary
Prospectus and Prospectus, result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Depositor pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor
is a party or by which it may be bound, or to which any of the
property or assets of the Depositor is subject, nor will such
action result in any violation of the provisions of the certificate
of incorporation or by-laws of the Depositor or any applicable law,
administrative regulation or administrative or court decree, except
where any such conflict, breach, default, encumbrance or violation
would not have a material adverse effect on the transactions
contemplated by this Agreement.
(ix) Each
Depositor Agreement has been, or when executed and delivered, will
have been, duly executed and delivered by the Depositor; and each
Depositor Agreement constitutes, or, when executed and delivered,
will constitute, legal, valid and binding instruments enforceable
against the Depositor in accordance with their respective terms,
subject as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally, (B) to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (C) with respect to
rights of indemnity under this Agreement, to limitations of public
policy under applicable securities laws.
(x) The
Depositor has authorized the conveyance of the Receivables to the
Trust; and the Depositor has directed the Trust to issue and sell
the Securities.
(xi) The
Depositor is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Agreement and the
Master Receivables Purchase Agreements, the Sale and Servicing
Agreement, the Trust Agreement, the Series Supplement or the
Indenture. The Depositor has no indebtedness to any Person other
than pursuant to this Agreement and other than pursuant to
transactions in which the Depositor transfers assets to a trust
which issues securities. The Depositor, after giving effect to the
transactions contemplated by the Master Receivables Purchase
Agreements, the Sale and Servicing Agreement, the Trust Agreement,
the Series Supplement or the Indenture, will have an adequate
amount of capital to conduct its business in the foreseeable
future.
(xii) Any
taxes, fees and other governmental charges in connection with the
execution, delivery and performance of any Depositor Agreement, the
Indenture and the Securities shall have been paid or will be paid
by the Depositor at or prior to the Closing Time.
(xiii) The
Notes have been duly and validly authorized, and, when validly
executed, authenticated, issued and delivered in accordance with
the Indenture and as provided herein will conform in all material
respects to the description thereof contained in the Preliminary
Prospectus and Prospectus and will be validly issued and
outstanding and entitled to the benefits of the
Indenture.
(xiv) There
are no legal or governmental proceedings pending, or to the
knowledge of the Depositor threatened, to which the Depositor is a
party or of which any of its property is the subject, other than
proceedings which are not reasonably expected, individually or in
the aggregate, to have a material adverse effect on the
shareholder's equity or consolidated financial position of such
person and its subsidiaries taken as a whole, or which would have a
material adverse effect on the transactions contemplated by this
Agreement.
(xv) KPMG
LLP is an independent registered public accounting firm with
respect to the Depositor as required by the 1933 Act and 1933 Act
Regulations.
(xvi) No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or
governmental agency or body of the United States is required for
the issue and sale of the Notes, or the consummation by the
Depositor of the other transactions contemplated by this Agreement,
the Master Receivables Purchase Agreements, the Sale and Servicing
Agreement, the Trust Agreement, the Series Supplement or the
Indenture, except for (A) the registration under the 1933 Act
of the Notes, (B) such consents, approvals, authorizations,
orders, registrations, qualifications, licenses or permits as have
been obtained or as may be required under state securities or Blue
Sky laws in connection with the purchase of the Notes and the
subsequent distribution of the Notes by the Underwriters or
(C) where the failure to obtain such consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits would not have a material adverse effect on the
business or consolidated financial condition of the Depositor or
the transactions contemplated by such agreements.
(xvii) (A) The
Depositor has the power and authority to sell the Receivables to
the Trust, and (B) following the conveyance of the Receivables
to the Trust pursuant to the Sale and Servicing Agreement, the
Trust will own the Receivables free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other
security interest (collectively, " Liens ") other than Liens
in favor of the Indenture Trustee created by the
Indenture.
(xviii) As of
the Cut-Off Date, each of the Receivables will meet the eligibility
criteria described in the Prospectus.
(xix) The
Depositor will not conduct its operations while any of the
Securities are outstanding in a manner that would require the
Depositor or the Trust to be registered as an "investment company"
under the Investment Company Act of 1940, as amended (the " 1940
Act "), as in effect on the date hereof.
(xx) The
Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the
business now conducted by it and as described in the Preliminary
Prospectus and the Prospectus and the Depositor has not received
notice of any proceedings relating to the revocation or
modification of such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, is likely to materially and adversely
affect the conduct of its business, operations, financial condition
or income.
(xxi) At the
Closing Time, each of the representations and warranties of the
Depositor set forth in the Depositor Agreements will be true and
correct in all material respects.
(xxii) The
Depositor is not, and on the date on which the first bona fide
offer of the Notes is made will not be, an "ineligible issuer" as
defined in Rule 405 under the 1933 Act.
(b) HSBC
Finance represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 1(b):
(i) Each
of HSBC Finance, HAFI and HACI is a corporation duly organized and
validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of HSBC Finance, HAFI and HACI
has all requisite power and authority to own its properties and
conduct its business as presently conducted and is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction which requires such qualification,
except where the failure to have such power and authority or to be
so qualified would not have a material adverse effect on the
business or consolidated financial condition of HSBC Finance, HAFI
and HACI and their respective subsidiaries, in each case taken as a
whole, or on the transactions contemplated by this
Agreement.
(ii) None
of HSBC Finance, HAFI or HACI is in violation of its certificate of
incorporation or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument material to the business of HSBC Finance, HAFI and HACI
and their respective subsidiaries, in each case taken as a whole,
to which it is a party or by which it may be bound, or to which any
of the property or assets of HSBC Finance, HAFI or HACI is subject,
except where any such violation would not have a material adverse
effect on the business or consolidated financial condition of HSBC
Finance or the transactions contemplated by this
Agreement.
(iii) The
execution, delivery and performance by HSBC Finance of the HSBC
Finance Agreements, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of HSBC Finance pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which HSBC Finance is a party or by which it
may be bound, or to which any of the property or assets of HSBC
Finance is subject, nor will such action result in any violation of
the provisions of the restated articles of incorporation or by-laws
of HSBC Finance or any applicable law, administrative regulation or
administrative or court decree, except where any such conflict,
breach, default, encumbrance or violation would not have a material
adverse effect on the business or consolidated financial condition
of HSBC Finance or the transactions contemplated by this
Agreement.
(iv) The
execution, delivery and performance by HAFI of each HAFI Agreement,
the issuance of the Securities and the consummation of the
transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary action or proceedings and will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or, other than as contemplated by the
Preliminary Prospectus and Prospectus, assets of HAFI pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which HAFI is a party or by which it may be
bound, or to which any of the property or assets of HAFI is
subject, nor will such action result in any
violation of the provisions of the
charter or by-laws of HAFI or any applicable law, administrative
regulation or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not have
a material adverse effect on the transactions contemplated by this
Agreement.
(v) The
execution, delivery and performance by HACI of each HACI Agreement
has been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or, other than as
contemplated by the Preliminary Prospectus and Prospectus, assets
of HACI pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which HACI is a party
or by which it may be bound, or to which any of the property or
assets of HACI is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of HACI or
any applicable law, administrative regulation or administrative or
court decree, except where any such conflict, breach, default,
encumbrance or violation would not have a material adverse effect
on the transactions contemplated by this Agreement.
(vi) Each
HSBC Finance Agreement has been, or, when executed and delivered,
will have been, duly executed and delivered by HSBC Finance; and
each HSBC Finance Agreement constitutes, or, when executed and
delivered, will constitute, legal, valid and binding instruments
enforceable against HSBC Finance in accordance with their
respective terms, subject as to enforceability (A) to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (B) to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (C) with respect to rights
of indemnity under this Agreement to limitations of public policy
under applicable securities laws.
(vii) Each
HAFI Agreement has been, or, when executed and delivered, will have
been duly executed and delivered by HAFI; and each HAFI Agreement
constitutes, or, when executed and delivered, will constitute,
legal, valid and binding instruments enforceable against HAFI in
accordance with their respective terms, subject as to the
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (B) to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and (C) with respect to rights of indemnity
under this Agreement, to limitations of public policy under
applicable securities law.
(viii) Each
HACI Agreement has been, or, when executed and delivered, will have
been duly executed and delivered by HACI; and each HACI Agreement
constitutes, or, when executed and delivered, will constitute, a
legal, valid and binding instrument enforceable against HACI in
accordance with their respective terms, subject as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (B) to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and (C) with respect to rights of indemnity
under this Agreement, to limitations of public policy under
applicable securities law.
(ix) HAFI
and HACI have each authorized the conveyance of the respective
Receivables to be conveyed by such Person to the
Depositor.
(x) Since
the respective dates as of which information is given in the
Preliminary Prospectus and the Prospectus, (A) there has not been
any material adverse change in the general affairs, management,
financial condition, shareholder's equity or results of operations
of any of HSBC Finance, HAFI and HACI and the Depositor and their
respective subsidiaries, taken as a whole, other than as disclosed
in the Preliminary Prospectus and the Prospectus or in reports
filed by HSBC Finance with the Commission pursuant to the 1934 Act
and the 1934 Act Regulations and (B) HAFI has not entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to HAFI that, in either case, would reasonably
be expected to materially adversely affect the interests of the
holders of the Notes, other than as disclosed in the Preliminary
Prospectus and the Prospectus.
(xi) Each
of HSBC Finance, HAFI and HACI is solvent and will not become
insolvent after giving effect to the transactions contemplated by
this Agreement and the Master Receivables Purchase Agreements, the
Sale and Servicing Agreement, the Trust Agreement, the Series
Supplement or the Indenture. Each of HSBC Finance, HAFI and HACI,
after giving effect to the transactions contemplated by this
Agreement and the Master Receivables Purchase Agreements, the Sale
and Servicing Agreement, the Trust Agreement, the Series Supplement
or the Indenture, will have an adequate amount of capital to
conduct its business in the foreseeable future.
(xii) There
are no legal or governmental proceedings pending, or to the
knowledge of HSBC Finance, HAFI or HACI threatened, to which HSBC
Finance, HAFI or HACI is a party or of which any of its property is
the subject, other than proceedings which are not reasonably
expected, individually or in the aggregate, to have a material
adverse effect on the shareholder's equity or consolidated
financial position of such person and its subsidiaries taken as a
whole or which would have a material adverse effect upon the
transactions contemplated by this Agreement.
(xiii) No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or
governmental agency or body of the United States is required for
the consummation by HSBC Finance, HAFI or HACI of the transactions
contemplated by this Agreement, and the Master Receivables Purchase
Agreements, the Sale and Servicing Agreement, the Trust Agreement,
the Series Supplement or the Indenture, except for (A) the
registration under the 1933 Act of the Notes, (B) such
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses or permits as have been obtained
or as may be required under State securities or Blue Sky laws in
connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the
failure to obtain such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses or permits would
not have a material adverse effect on the business or consolidated
financial condition of HSBC Finance and its subsidiaries taken as a
whole or the transactions contemplated by such
agreements.
(xiv) Neither
of HAFI or HACI will conduct its operations while any of the
Securities are outstanding in a manner that would require the
Depositor or the Trust to be registered as an "investment company"
under the 1940 Act, as in effect on the date hereof.
(xv) Each
of HAFI and HACI possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the
business now conducted by it and as described in the Preliminary
Prospectus and the Prospectus and neither of HAFI or HACI has
received notice of any proceedings relating to the revocation or
modification of such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, is likely to materially and adversely
affect the conduct of its business, operations, financial condition
or income.
(xvi) At the
Closing Time, each of the representations and warranties of HSBC
Finance in the HSBC Finance Agreements, or HAFI set forth in the
HAFI Agreement[s] and of HACI set forth in the HACI Agreement[s]
will be true and correct in all material respects.
(xvii) KPMG LLP is
an independent registered public accounting firm with respect to
HSBC Finance, HAFI and HACI.
SECTION 2. Purchase and Sale
. Subject to the terms and conditions and in reliance upon the
covenants, representations and warranties herein set forth, the
Depositor agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase
from the Depositor the principal amount of each class of Notes at
the purchase price set forth opposite such Underwriter's name in
Schedule I to the Terms Agreement pursuant to the terms of this
Agreement and the Terms Agreement.
SECTION 3. Delivery and
Payment . Payment of the purchase price for, and delivery of,
the Notes to be purchased by the Underwriters shall be made at the
offices of Dewey Ballantine, LLP, or at such other place as shall
be agreed upon by you, the Depositor and HSBC Finance, at the time
on or about the date and time of delivery and payment for the Notes
set forth in the Terms Agreement, such date and time of delivery
and payment for the Notes being herein referred to as the "
Closing Time ," which date, time or place may be postponed
or changed by agreement between you, the Depositor and HSBC
Finance. Delivery of one or more global certificates representing
the Notes shall be made to the accounts of the several Underwriters
against payment by them of the purchase price therefor, to or upon
the order of the Depositor by one or more wire transfers in
immediately available funds. The global certificates to be so
delivered shall be registered in the name of Cede & Co.,
as nominee for The Depository Trust Company (" DTC "). The
interests of beneficial owners of the Notes will be represented by
book entries on the records of DTC and participating members
thereof. Definitive Notes representing the Notes will be available
only under limited circumstances as described in the
Indenture.
SECTION 4. Offering by the
Underwriters . Each Underwriter severally represents, warrants
and covenants as follows:
(a) Such
Underwriter shall offer and/or solicit offers for the Notes for
sale to the public as set forth in the Preliminary Prospectus and
the Prospectus and agrees that all offers, solicitations and sales
shall be made in compliance with all applicable laws and
regulations. Furthermore, such Underwriter shall comply with all
applicable laws and regulations in connection with the use of Free
Writing Prospectuses, including but not limited to Rules 164 and
433 of the 1933 Act Regulations.
(b) Unless
preceded or accompanied by the Prospectus, no Underwriter may
convey or deliver any "written communication" within the meaning of
Rule 405 of the 1933 Act Regulations to any person in connection
with the offering of the Notes, unless such written communication
is: (i) the Prospectus; (ii) the Preliminary Prospectus; (iii) an
Underwriter Free Writing Prospectus that contains only subscription
information regarding the Notes, Approved Issuer Information or ABS
ICM (which, to the extent it constitutes Issuer Information, must
also be Approved Issuer Information); (iv) an Underwriter Free
Writing Prospectus that constitutes Bloomberg Information; (v) an
Issuer Free Writing Prospectus; or (vi) a written confirmation of
sale or a notice of allocation of securities sold or to be sold
made in reliance on Rule 172 of the 1933 Act Regulations.
"Underwriter Free Writing Prospectus" means a Free Writing
Prospectus prepared by or on behalf of an Underwriter with respect
to the Notes that is not an Issuer Free Writing Prospectus. "ABS
ICM" means "ABS informational and computational materials" with the
meaning of Item 1101(a) of Regulation AB. "Issuer Information"
means "issuer information" within the meaning set forth in Rule
433(h)(2) of the 1933 Act Regulations with respect to the Notes and
includes, without limitation, the information with respect to the
Notes specified in footnote 271 of Commission Release No. 33-8591
(Securities Offering Reform) other than Underwriter Derived
Information. "Approved Issuer Information" has the meaning set
forth in Subsection 4(c) below. "Bloomberg Information" means
information provided by an Underwriter to Bloomberg, Intex or a
similar entity, for use by investors and prospective investors
together with or after the delivery of the Preliminary Prospectus
that does not contain information other than identifying
information relating to the Trust and the Notes or any class of
Notes; the asset type supporting the Notes; expected ratings; the
expected pricing date, expected closing date and first payment date
for the Notes or any class of Notes; expected principal amount and
class amounts; principal payment windows; pricing speeds/prepayment
assumptions; duration/modified duration; expected weighted average
life, expected final payment date, expected legal final payment
date and clean-up call or other redemption features; expected
interest rate index; preliminary guidance as to the interest rate
and/or yield for any class of Notes (but not final interest rate or
yield information); names of lead managers and co-managers;
information about the principal amount of the Notes of each class
offered by each Underwriter; average lives; ratings and ratings
agencies; credit enhancement provider, if any; 100% pot vs.
retention status; percent interest only; geographic concentration;
public, 144A or Reg S offering; 2a-7 eligibility; other similar or
related information such as expected pricing parameters and
benchmarks; pricing guidance; status of subscriptions and
Underwriters’ retentions and ERISA eligibility. References to
"expected" in the foregoing includes ranges, windows or references
to benchmarks. "Underwriter Derived Information" means information
of the type described in clause (5) of footnote 271 of Commission
Release No. 33-8591 (Securities Offering Reform) when prepared by
an Underwriter, including traditional computational and analytical
materials prepared by an Underwriter.
(c) Such
Underwriter will not include any Issuer Information in any
Underwriter Free Writing Prospectus with respect to the Notes
unless the Issuer Information was accurately extracted from the
Preliminary Prospectus or the Prospectus or was provided by the
Depositor or HSBC Finance expressly for inclusion therein, or such
Underwriter or the Representative has obtained the prior written
consent of the Depositor to the use of that Issuer Information in
such Underwriter Free Writing Prospectus (any such Issuer
Information, "Approved Issuer Information").
(d) Such
Underwriter will not enter into a Contract of Sale with a
prospective investor for any Notes until the Preliminary Prospectus
has been delivered to such investor.
(e) After
the final Prospectus is available, such Underwriter will not
distribute any written information concerning the Notes to a
prospective investor unless such information is preceded or
accompanied by the final Prospectus.
(f) If
such Underwriter distributes any "written communication" within the
meaning of Rule 405 of the 1933 Act Regulations "in a manner
reasonably designed to lead to its broad unrestricted
dissemination" within the meaning contemplated by Rule 433(d)(ii)
of the 1933 Act Regulations, such Underwriter will provide a copy
of such written communication to the Depositor at a time reasonably
in advance of the time for filing with the Commission specified by
Rule 433(d) of the 1933 Act Regulations.
(g) Each
Underwriter Free Writing Prospectus prepared by it will not, as of
the date such Underwriter Free Writing Prospectus was conveyed or
delivered to any prospective purchaser of Notes, include any untrue
statement of a material fact or omit any material fact necessary to
make the statements contained therein, in light of the
circumstances under which they were made, not misleading;
provided, however , that no Underwriter makes such
representation, warranty or agreement to the extent such
misstatements or omissions were the result of any inaccurate
information that was included in the Preliminary Prospectus, the
Prospectus, Approved Issuer Information or any written information
furnished to the related Underwriter by the Depositor or HSBC
Finance expressly for use therein, which information was not
corrected by information subsequently provided by the Depositor or
HSBC Finance to the related Underwriter prior to the time of first
use of such Underwriter Free Writing Prospectus.
(h) Such
Underwriter has in place, and covenants that it shall maintain,
internal controls and procedures that it reasonably believes to be
sufficient to ensure full compliance with all applicable legal
requirements of the 1933 Act Regulations with respect to the
generation and use of Free Writing Prospectuses in connection with
the offering of the Notes. In addition, such Underwriter will
maintain written and/or electronic records of the following for a
period of at least three years after the date thereof:
(i) a
copy of any Underwriter Free Writing Prospectus used by such
Underwriter to solicit offers to purchase the Notes to the extent
not filed with the Commission;
(ii) regarding
each Free Writing Prospectus delivered by such Underwriter to a
prospective investor, the date of such delivery and identity of
such investor; and
(iii) regarding
each Contract of Sale entered into by such Underwriter, the date,
identity of the investor and the terms of such Contract of Sale, as
set forth in the related confirmation of trade.
(i) In
relation to each Member State of the European Economic Area which
has implemented the Prospectus Directive (each, a "Relevant Member
State"), with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State
(the "Relevant Implementation Date"), such Underwriter has not made
and will not make an offer of Notes to the public in that Relevant
Member State prior to the publication of a prospectus in relation
to the Notes that has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and
including the Relevant Implementation Date, make an offer of Notes
to the public in that Relevant Member State at any time:
(i) to
legal entities that are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
(ii) to
any legal entity that has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance
sheet of more than €43,000,000 and (3) an annual net turnover
of more than €50,000,000, as shown in its last annual or
consolidated accounts; or
(iii) in
any other circumstances which do not require the publication by the
issuer of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For the purposes of this provision,
(A) the expression an "offer of Notes to the public" in relation to
any Notes in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms of
the offer and the Notes to be offered so as to enable an investor
to decide to purchase or subscribe the Notes, as the same may be
varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and (B) the expression
"Prospectus Directive" means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member
State.
The countries comprising the
“European Economic Area” are Austria, Belgium, Cyprus,
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Poland, Portugal, Slovak Republic, Slovenia, Spain,
Sweden, United Kingdom, Iceland, Liechtenstein and
Norway.
(i) has
only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or
inducement to engage in
investment activity, within the
meaning of section 21 of the Financial Services and Markets Act
2000 (the "FSMA"), received by it in connection with the issue or
sale of any Notes in circumstances in which section 21(1) of the
FSMA does not apply to the Depositor; and
(ii) has
complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom.
(k) Such
Underwriter and each of its affiliates (i) has anti-money
laundering policies and procedures in place in accordance with the
requirements imposed by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, as amended, and any rules and
regulations promulgated thereunder, and the Foreign Assets Control
Regulations issued by the Office of Foreign Assets Control of the
United States Department of the Treasury, in each case to the
extent applicable to them; and (ii) has implemented an anti-money
laundering compliance program pursuant to NASD Rule 3011, to the
extent applicable to them.
(l) Such
Underwriter shall deliver to the Depositor, at a time reasonably in
advance of the time for filing with the Commission specified in
Section 5(o) below, each Underwriter Free Writing Prospectus that
includes Issuer Information and each Underwriter Free Writing
Prospectus that constitutes Bloomberg Information and that sets
forth the final terms and pricing for the Notes. To facilitate
filing with the Commission to the extent required by Section 5(o)
below, all Issuer Information included in any Underwriter Free
Writing Prospectus shall be set forth in a document separate from
any Underwriter Derived Information included in such Underwriter
Free Writing Prospectus.
SECTION 5. Covenants of the
Depositor . The Depositor covenants with each of the
Underwriters, and HSBC Finance agrees with each of the Underwriters
to cause the Depositor to perform such obligations, as
follows:
(a) The
Depositor agrees to prepare the Preliminary Prospectus and the
Prospectus and to file the Preliminary Prospectus and the
Prospectus with the Commission pursuant to Rule 424(b) of the 1933
Act Regulations, in each case no later than the time specified by
such Rule. The Depositor will notify the Underwriters immediately,
and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement becomes effective, or any
supplement to the Prospectus or any amended Prospectus has been
filed, (ii) of the receipt of any comments from the Commission
with respect to the Prospectus, (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information, (iv) when any Issuer Free Writing Prospectus is
used by the Depositor and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement, or of the suspension of the qualification of any Notes
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The
Depositor will use all reasonable efforts 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
Depositor agrees
