Exhibit 4.16
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COMMON SECURITIES GUARANTEE AGREEMENT
HSBC USA Inc.
Dated as of [ ]
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TABLE OF CONTENTS
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Page
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DEFINITIONS AND INTERPRETATION.....................................1
Definitions Interpretation......................................1
GUARANTEE..........................................................2
Guarantee.......................................................2
Waiver of Notice and Demand.....................................2
Obligations Not Affected........................................3
Rights of Holders...............................................4
Guarantee of Payment............................................4
Subrogation.....................................................4
Independent Obligations.........................................4
LIMITATION OF TRANSACTIONS; SUBORDINATION..........................4
Limitation of Transactions......................................4
Ranking.........................................................5
Suspension of Guarantor Payments................................5
TERMINATION........................................................5
Termination.....................................................5
MISCELLANEOUS......................................................6
Successors and Assigns..........................................6
Modification....................................................6
Notices.........................................................6
Benefit.........................................................7
Governing Law...................................................7
COMMON SECURITIES GUARANTEE AGREEMENT
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This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as
of [ ], is executed and delivered by HSBC USA Inc., a Maryland
corporation (the "Guarantor"), for the benefit of the Holders (as defined
herein) from time to time of the Common Securities (as defined herein) of HSBC
USA Capital Trust [ ], a Delaware business trust (the "Issuer").
WHEREAS, pursuant to a Declaration of Trust (the "Declaration," which
expression includes Annex I and Exhibits A-1 and A-2 thereto), dated as of
[ ], among the Trustees named therein, the Guarantor, as sponsor, the
Administrators named therein, the Issuer is issuing on the date hereof, [ ]
common securities designated the [ ]% Common Securities (the "Common
Securities"), having an aggregate stated Liquidation Amount of $[ ] to meet
the capital requirements of the Trust; and
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Capital Securities Guarantee") for the benefit of the holders of
the Capital Securities (as defined in the Declaration).
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby acknowledges shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
DEFINITIONS AND INTERPRETATION
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Definitions Interpretation
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In this Common Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this subsection under heading "Definitions and Interpretation";
(b) terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or amended from time to time; and
(e) a reference to the singular includes the plural and vice versa.
"Capital Securities Guarantee Payments" means Guarantee Payments as
defined in the Capital Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions that
are required to be paid on such Common Securities, to the extent the Issuer has
funds on hand legally available therefor, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent that the Issuer has funds on hand legally
available therefor, with respect to any Common Securities called for redemption
by the Issuer, and (iii) upon a voluntary or involuntary termination and
liquidation of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Common Securities as provided in the
Declaration), the lesser of (a) the aggregate of the Liquidation Amount of and
all accumulated and unpaid Distributions on the Common Securities to the date of
payment, to the extent the Issuer has funds on hand legally available therefor,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders upon liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Common Securities.
"Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to common securities (if any) similar to the Common Securities
issued by other trusts to be established by the Guarantor (if any), in each case
similar to the Issuer.
GUARANTEE
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Guarantee
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Subject to the provisions set forth below under "Limitation of
Transactions; Subordination - Ranking" and "- Suspension of Guarantor Payments,"
the Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
Waiver of Notice and Demand
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The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Obligations Not Affected
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The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Common Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Common Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common Securities, or any
action on the part of the Issuer granting indulgence or tension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this subsection under heading "Obligations Not Affected" that the obligations of
the Guarantor with respect to the Guarantee Payments shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Rights of Holders
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The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other Person.
Guarantee of Payment
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This Common Securities Guarantee creates a guarantee of payment and
not of collection.
Subrogation
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The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
Independent Obligations
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The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
the subsection under heading "Obligations Not Affected" above.
LIMITATION OF TRANSACTIONS; SUBORDINATION
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Limitation of Transactions
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So long as any Common Securities remain outstanding, the Guarantor
will not (i) declare or pay any dividends or distribution on, or redeem,
purchase, acquire or make a liquidation payment with respect to any of the
Guarantor's capital stock (which includes common stock and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Guarantor (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including under Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Debentures (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee, (d) as a result of a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans) if at such time (i) there shall have
occurred any event of which the Guarantor has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would be, an Event of
Default and (b) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (ii) if such Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (iii) the Guarantor shall
have given notice of its election of the exercise of its right to extend the
interest payment period pursuant to Section 16.01 of the Indenture and any such
extension shall be continuing.
Ranking
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This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to Senior Indebtedness (as defined in the Indenture), to the same extent
and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture and pari passu with the Debentures, it
being understood that the terms of Article XV of the Indenture shall apply to
the obligations of the Guarantor under this Common Securities Guarantee as if
(x) such Article XV were set forth herein in full and (y) such obligations were
substituted for the term "Securities" appearing in such Article XV.
Suspension of Guarantor Payments
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If an Event of Default has occurred and is continuing, no Guarantee
Payments shall be made to the Holders of the Common Securities under this Common
Securities Guarantee until holders of Capital Securities shall be paid in full
the Capital Securities Guarantee Payments to which they are entitled under the
Capital Securities Guarantee. In such event, the obligations of the Guarantor
under the Capital Securities Guarantee shall constitute "Senior Indebtedness"
for purposes of the immediately preceding paragraph.
TERMINATION
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Termination
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This Common Securities Guarantee shall terminate and be of no further
force and effect (i) upon full payment of the applicable Redemption Price of all
Common Securities, (ii) upon the distribution of the Debentures to the Holders
of all of the Common Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Common Securities Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Common Securities must restore payment of any sums paid under the
Common Securities or under this Common Securities Guarantee.
MISCELLANEOUS
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Successors and Assigns
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All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
Modification
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Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in Liquidation Amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Common Securities apply to the giving of
such approval.
Notices
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All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
if given to the Issuer, in care of the Administrator at the Issuer's
mailing address set forth below (or such other address as the Issuer may give
notice of to the Holders of the Common Securities)
HSBC USA Capital Trust [ ]
c/o HSBC USA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Administrator
Telecopy: [ ]
if given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Common Securities):
HSBC USA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel and Secretary
Telecopy: [ ]
if given to any Holder of Common Securities, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Benefit
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This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
Governing Law
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THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year
first above written.
HSBC USA INC.
By:
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Name:
Title:
