The noteholders will not have the right to request the trustee to declare the principal amount and accrued but unpaid payments with
respect to the Notes to be due and payable or to accelerate the Notes in the case of non-payment of principal and/or interest on the Notes. Payment of the principal amount of the Notes may be accelerated only upon certain events of a winding-up.
An Event of Default with respect to the Notes means any one of the following
events:
(i) an order is made by an English court which is not successfully appealed
within 30 days after the date such order was made for HSBC Holdings winding up other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency; or
(ii) an effective resolution is validly adopted by HSBC Holdings shareholders for
its winding up other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency.
In addition to Events of Default, the Indenture also will provide separately for Defaults. A Default with respect to the Notes means any one of the
following events:
(i) failure to pay principal or premium, if any, on the Notes at
maturity, and such default continues for a period of 30 days; or (ii) failure to pay any interest on the Notes when due and payable, which failure continues for 30 days.
If a Default occurs, the trustee may institute proceedings in England (but not elsewhere) for HSBC Holdings winding-up; provided that the trustee
may not, upon the occurrence of a Default, accelerate the maturity of any outstanding Notes, unless an Event of Default has occurred and is continuing.
Notwithstanding the foregoing, failure to make any payment in respect of the Notes will not be a Default in respect of the Notes if such payment is withheld or
refused:
(i) in order to comply with
any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment; or
(ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in
accordance with advice given as to such validity or applicability at any time during the said grace period of 30 days by independent legal advisers acceptable to the trustee;
provided, however, that the trustee may, by notice to HSBC Holdings, require HSBC Holdings to take such action (including but not limited to proceedings
for a declaration by a court of competent jurisdiction) as the trustee may be advised in an opinion of counsel, upon which opinion the trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which
case HSBC Holdings will forthwith take and expeditiously proceed with such action and will be bound by any final resolution of the doubt resulting therefrom. If any such resolution determines that the relevant payment can be made without violating
any applicable law, regulation or order then the preceding sentence will cease to have effect and the payment will become due and payable on the expiration of the relevant grace period of 30 days after the trustee gives written notice to HSBC
Holdings informing it of such resolution.
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