TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 53

(c)

(d)

(e)

(1)

(g)

(h)

any loss or alleged loss arising from the price, timing or manner of any sale made pursuant to the authority set out above or otherwise in connection therewith.

In Canada, the Final Offer is being made and the new HSBC Holdings shares and the new HSBC Holdings bonds will be issued pursuant to statutory and discretionary exemptions from takeover bid, prospectus and dealer registration requirements of applicable Canadian securities legislation. HSBC Holdings has received from the securities regulatory authorities in each of the applicable Canadian provinces the required discretionary exemption orders with respect to some or all of these requirements.

In some cases, the applicable Canadian securities legislation also contains resale restrictions which would affect the right of Canadian shareholders of Midland to dispose of new HSBC Holdings shares and new HSBC Holdings bonds acquired under the Final Offer. HSBC Holdings has received from the securities regulatory authorities in each of the applicable Canadian provinces discretionary relief from these resale restrictions on the basis that the first trade in new HSBC Holdings shares and new HSBC Holdings bonds acquired under the Final Offer takes place on, and in compliance with the rules and procedures of, the London Stock Exchange or another stock exchange or organised market located outside Canada. Midland shareholders who are resident in Canada are urged to consult their own professional advisers to determine the exact conditions and requirements applicable to their right to trade in new HSBC Holdings shares and new HSBC Holdings bonds acquired under the Final Offer.

The exchange of Midland shares for new HSBC Holdings shares and new HSBC Holdings bonds pursuant to the Final Offer will be a taxable transaction for Canadian income tax purposes. Canadian resident holders of Midland shares, including such holders that are generally exempt under the Income Tax Act (Canada), should consult their own professional advisers concerning the tax consequences of exchanging their Midland shares for new HSBC Holdings shares and new HSBC Holdings bonds.

The Australian Securities Commission has exempted HSBC Holdings and Schroders, in the case of the Final Offer, from compliance with Divisions 2, 3, 4 and 6 of Part 7.12 of the Corporations Law of Australia on condition that this document and the Supplementary Listing Particulars contain such information regarding the new HSBC Holdings shares and the new HSBC Holdings bonds as would substantially comply with section 1022 of the Corporations Law of Australia.

The attention of Midland shareholders resident in the Republic of Ireland is drawn to the Irish Exchange Control regulations applicable to holders of United Kingdom securities. If such persons wish to accept the Final Offer they should consult an approved agent in the Republic of Ireland (i.e. a stockbroker, a bank or a solicitor) to ensure that they obtain any necessary verification from the Central Bank to enable them to do so.

The Malaysian Companies Act 1965 prohibits the making of the Final Offer in Malaysia unless an appropriate prospectus is registered in accordance with Malaysian law. No such prospectus will be registered and therefore the Final Offer is not being made, directly or indirectly, in Malaysia. Midland shareholders resident in Malaysia should obtain their own professional advice if they wish to participate in the Final Offer outside Malaysia.

The new HSBC Holdings shares and the new HSBC Holdings bonds have not been, and will not be, registered under the Securities and Exchange Law of Japan. Accordingly, the new HSBC Holdings shares and the new HSBC Holdings bonds may not be offered or sold as part of the Final Offer, directly or indirectly, in Japan and copies of this document, the Form of Acceptance, the Supplementary Listing Particulars and any related offering documents may not be distributed or circulated in Japan, except to Midland shareholders who have registered addresses in Japan through Schroder Securities (Japan) Limited, Tokyo Branch, in circumstances which do not constitute an offer to the public within the meaning of the Securities and Exchange Law of Japan.

The provisions of this paragraph 7 and/or any other terms of the Final Offer relating to overseas shareholders may be waived, varied or modified as regards (a) specific Midland shareholder(s) or on a general basis by HSBC Holdings in its absolute discretion. Subject to this, the provisions of this paragraph 7 supersede any terms of the Final Offer inconsistent herewith. References in this paragraph 7 to a Midland shareholder shall include references to the person or persons executing a Form of Acceptance and, in the event of more than one person executing a Form of Acceptance, the provisions of this paragraph 7 shall apply to them jointly and to each of them.";

(vii) paragraph 8 of Part B of Appendix I to the Original Offer Document is not incorporated herein.

Part C: Form of Acceptance

Each Midland shareholder by whom, or on whose behalf, a Form of Acceptance is executed irrevocably undertakes, represents, warrants and agrees to and with HSBC Holdings and Schroders (so as to bind him, his personal representatives, his heirs, successors and assignees) to the following effect:

(a)

(b)

that the execution of a blue Form of Acceptance shall constitute:

(i) an acceptance of the Final Offer, subject to paragraph (vi) of Part B of this Appendix, in respect of the number of

Midland shares inserted or deemed to be inserted in Box 1 of the Form of Acceptance; and

(ii) if “YES” is inserted in Box 2 of the Form of Acceptance, subject to paragraph (vi) of Part B of this Appendix, an

election for the Cash Election and an acceptance of the Final Offer varied as described in paragraph (v) of Part B of this Appendix in respect of the number of Midland shares inserted or deemed to be inserted in Box [1] of the Form of Acceptance;

in each case subject to the terms and conditions set out or referred to in this document and the Form of Acceptance and that, subject to the rights of withdrawal set out in paragraph 3 of Part B of Appendix I to the Original Offer Document, each such acceptance and election shall be irrevocable;

(i) that the Midland shares in respect of which the Final Offer is accepted or deemed to be accepted are sold fully paid free from all liens, charges, encumbrances, equities and other interests and together with all rights attaching thereto on or after 2 June 1992, including the right to receive all dividends and other distributions declared made or paid thereafter;

(ii) that unless “NO” is put in Box [SA] of the Form of Acceptance, such Midland shareholder (1) has not received or sent copies of this document, the Form of Acceptance, the Supplementary Listing Particulars or any related offering documents in, into or from the United States, (2) has not utilised in connection with the Final Offer, directly or indirectly, the mails of, any means or instrumentality (including, without limitation, facsimile transmission, telex and telephone) of interstate or foreign commerce of, or any facilities of a national securities exchange of, the United

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