exv10w1



 




 

 


JEFFERIES GROUP, INC.




(a Delaware corporation)




Senior Debentures due 2036




PURCHASE AGREEMENT




Dated: January 19, 2006




 

 


 









 








JEFFERIES GROUP, INC.




(a Delaware corporation)




$500,000,000




Senior Debentures due 2036




PURCHASE AGREEMENT




January 19, 2006




Jefferies & Company, Inc.

Citigroup Global Markets Inc.

Merrill Lynch, Pierce, Fenner & Smith

      Incorporated

Banc of America Securities LLC

BNY Capital Markets, Inc.

Keefe, Bruyette & Woods, Inc.

Wachovia Capital Markets, LLC

BNP Paribas Securities Corp.

HSBC Securities (USA) Inc.

SG Americas Securities, LLC




c/o Citigroup Global Markets Inc.

      388 Greenwich Street

      New York, New York 10013




c/o Merrill Lynch & Co.

      Merrill Lynch, Pierce, Fenner & Smith

            Incorporated

      4 World Financial Center

      New York, New York 10080




Ladies and Gentlemen:




     Jefferies Group, Inc., a Delaware corporation (the “Company”), confirms its agreement with
Citigroup Global Markets Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“Merrill Lynch”) and each of the other Underwriters named in Schedule A hereto
(collectively, the “Underwriters”, which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Jefferies & Company, Inc., Citigroup Global
Markets Inc. and Merrill Lynch are acting as Representatives (in such capacity, the
“Representatives”), with respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal amounts set forth in
said Schedule A of $500,000,000 aggregate principal amount of the Company’s Senior Debentures due
2036 (the “Securities”). The Securities are to be issued pursuant to an Indenture dated as of
March 12, 2002, as amended by the First Supplemental Indenture dated as of July 15, 2003 (as so
amended, the “Indenture”), between the Company and The Bank of New York, as trustee (the
“Trustee”). The term “Indenture,” as used herein, includes the Officer’s Certificate (as defined
in the Indenture) establishing the form and terms of the Securities pursuant to Section 3.01 of the
Indenture.



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     The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after this Agreement has been executed and
delivered.



     The Company has filed with the Securities and Exchange Commission (the “Commission”) an
automatic shelf registration statement on Form S-3 (No. 333-130325), including the related
preliminary prospectus or prospectuses, which registration statement became effective upon filing
under Rule 462(e) of the rules and regulations of the Commission (the “1933 Act Regulations”) under
the Securities Act of 1933, as amended (the “1933 Act”). Such registration statement covers the
registration of the Securities under the 1933 Act. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule
430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule 424(b)”) of the
1933 Act Regulations. Any information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B is referred to as “Rule 430B
Information.” Each prospectus used in connection with the offering of the Securities that omitted
Rule 430B Information is herein called a “preliminary prospectus.” Such registration statement, at
any given time, including the amendments thereto to such time, the exhibits and any schedules
thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or
included therein by 1933 Act Regulations, is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective is herein called the “Original
Registration Statement.” The final prospectus in the form first furnished to the Underwriters for
use in connection with the offering of the Securities, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution
of this Agreement and any preliminary prospectuses that form a part thereof, is herein called the
“Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (“EDGAR”).



     All references in this Underwriting Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” (or other references of like import) in
the Registration Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the
Registration Statement, Prospectus or preliminary prospectus, as the case may be, prior to the date
hereof; and all references in this Underwriting Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to include the filing
of any document under the 1934 Act which is incorporated by reference in or otherwise deemed by
1933 Act Regulations to be a part of or included in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.



     SECTION 1. Representations and Warranties.



     (a) Representations and Warranties by the Company. The Company represents and warrants to
each Underwriter as of the date hereof, the Applicable Time referred to in Section 1(a)(i) hereof
and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:




     (i) Status as a Well-Known Seasoned Issuer. (A) At the time of filing the
Original Registration Statement, (B) at the time of the most recent amendment thereto for
the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of
the 1934 Act or form of



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prospectus), (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act
Regulations) made any offer relating to the Securities in reliance on the exemption of Rule
163 of the 1933 Act Regulations and (D) at the date hereof, the Company was and is a
“well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule
405”), including not having been and not being an “ineligible issuer” as defined in Rule
405. The Registration Statement is an “automatic shelf registration statement,” as defined
in Rule 405, and the Securities, since their registration on the Registration Statement,
have been and remain eligible for registration by the Company on a Rule 405 “automatic shelf
registration statement”. The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.




     At the time of filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.




     (ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Original Registration Statement became effective upon filing under Rule 462(e) of the 1933
Act Regulations (“Rule 462(e)”) on December 14, 2005, and any post-effective amendment
thereto also became effective upon filing under Rule 462(e). No stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the Commission
for additional information with respect to the Registration Statement has been complied
with.




     Neither the Company, nor any person acting on the Company’s behalf (within the meaning,
for this paragraph only, of Rule 163(c) of the 1933 Act Regulations), has made any offer
that is a written communication relating to the Securities prior to the filing of the
Original Registration Statement.




     At the respective times the Original Registration Statement and each amendment thereto
became effective, at each deemed effective date with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration
Statement complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the “1939 Act Regulations”), and did not 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 the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the 1939 Act of the Trustee or (ii) the information contained
in or omitted from the Registration Statement or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement thereto).




     Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will omit to state a
material



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fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.




     Each preliminary prospectus (including the prospectus or prospectuses filed as part of
the Original Registration Statement or any amendment thereto) complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.




     As of the Applicable Time, neither (x) the Issuer General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time (as defined
below) and the Statutory Prospectus (as defined below), considered together (collectively,
the “General Disclosure Package”), nor (y) any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were
made, not misleading.




     As of the time of the filing of the Final Term Sheet, the General Disclosure Package,
when considered together with the Final Term Sheet (as defined in Section 3(b)), will not
include any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.




     As used in this subsection and elsewhere in this Agreement:




     “Applicable Time” means 4:15 pm (Eastern time) on January 19, 2006 or such other time
as agreed by the Company and Citigroup Global Markets Inc. and Merrill Lynch.




     “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities that (i) is
required to be filed with the Commission by the Company, (ii) is a “road show that is a
written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to
be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the offering that does not reflect
the final terms, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g).




     “Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.




     “Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.




     “Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document incorporated by reference therein and any preliminary or other prospectus deemed to
be a part thereof.



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     Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies Citigroup Global Markets Inc. and Merrill Lynch as
described in Section 3(e), did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, including any document incorporated by reference therein and
any preliminary or other prospectus deemed to be a part thereof that has not been superseded
or modified.




     The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Citigroup Global Markets Inc. and Merrill Lynch expressly
for use therein.




     (iii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), and, when read together with the other
information in the Prospectus, (a) at the time the Original Registration Statement became
effective, (b) at the earlier of the time the Prospectus was first used and the date and
time of the first contract of sale of Securities in this offering and (c) at the Closing
Time, did not 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.




     (iv) No Material Adverse Change. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package and the
Prospectus, except as otherwise stated therein, (A) there has been no material adverse
change in the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and its subsidiaries
taken as a whole, and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock (other than a $0.15 per share
cash dividend on the common stock declared January 18, 2006 and payable March 15, 2006).




     (v) Good Standing of the Company and the Subsidiaries. Each of the Company and
its subsidiaries has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and the Company and
Jefferies & Company, Inc., a Delaware corporation (the “Subsidiary”) are in good standing
and duly qualified to do business as foreign corporations under the laws of each
jurisdiction listed for them on Annex A hereto, such jurisdictions being the only
jurisdictions that require such qualification of the Company or any subsidiary, except where
the failure to be so qualified would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary
course of business.



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     (vi) Capital Stock of the Subsidiaries. All the outstanding shares of capital
stock of each subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Prospectus (or as represented
by minority interests as disclosed in the financial statements incorporated by reference
therein), all outstanding shares of capital stock of the subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or encumbrances (other
than, in the case of certain non-U.S. subsidiaries, director qualifying shares which
individually and in the aggregate represent an immaterial ownership interest in such
subsidiaries). The Subsidiary is the only subsidiary that is a Significant Subsidiary (as
such term is defined by Rule 405) of the Company.




     (vii) Capitalization. The Company’s authorized equity capitalization is as set
forth in the Prospectus and the Securities conform in all material respects to the
description thereof contained or incorporated by reference in the Prospectus; and, except as
set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue (other than equity compensation grants and awards under the
Company’s plans in the ordinary course consistent with past practice), or rights to convert
any obligations into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.




     (viii) (A) Accuracy of Exhibits. There is no franchise, contract or other
document of a character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in (I) the Prospectus under the headings “ERISA
Considerations”, “Description of Debentures” and “Description of Securities We May Offer”
and (II) the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 under
the headings “Part I — Item 1. Business — Regulation” and “ Part I — Item 3. — Legal
Proceedings”, insofar as such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.




          (B) The statements set forth in the Prospectus under the heading “Material United
States Federal Tax Considerations”, insofar as such statements purport to describe certain
federal tax laws of the United States, are accurate and complete in all material respects.




     (ix) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding obligation of the
Company.




     (x) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an “investment company” as defined in the Investment Company
Act of 1940, as amended.




     (xi) Absence of Further Requirements. No consent, approval, authorization,
filing with or order of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been obtained under the 1933
Act and the 1939 Act and such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Prospectus.




     (xii) Absence of Conflicts. Neither the issue and sale of the Securities nor
the consummation of any other of the transactions herein contemplated nor the fulfillment of
the



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terms hereof will conflict with, result in a breach or violation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a party or bound or to which
its or their property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of its or their
properties, which violation or default would, in the case of clauses (ii) and (iii) above,
either individually or in the aggregate with all other violations and defaults referred to
in this paragraph (xii) (if any), have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto filed after the date hereof).




(xiii) Absence of Registration Rights. No holders of securities of the Company
have rights to the registration of such securities under the Registration Statement.




(xiv) Financial Statements. The consolidated historical financial statements
and schedules of the Company and its consolidated subsidiaries included in the Prospectus,
the Registration Statement and the General Disclosure Package present fairly in all material
respects the financial condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated, comply as to form with the applicable accounting
requirements of the 1933 Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein). The selected financial data set forth under the caption
“Summary Consolidated Financial Information” in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the Registration Statement, the
information included therein.




(xv) Absence of Proceedings. No action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries or its or their property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a material adverse effect
on the performance of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof).




(xvi) Possession of Properties. Each of the Company and each of its
subsidiaries owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.




(xvii) Absence of Defaults. Neither the Company nor any subsidiary is in
violation or default of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a party or bound or
to which its property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having



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jurisdiction over the Company or such subsidiary or any
of its properties, as applicable, which violation or default would, in the case of clauses
(ii) and (iii) above, either individually or in the aggregate with all other violations and
defaults referred to in this paragraph (xvii) (if any), have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof).




(xviii) Independent Accountants. KPMG LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included in the
Prospectus, is an independent registered public accounting firm with respect to the Company
as required by the 1933 Act and the applicable published rules and regulations of the Public
Company Accounting Oversight Board.




(xix) Tax Laws. The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof) and has paid all taxes
shown by such returns to be payable and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or as would not
have a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement thereto filed after
the date hereof).




(xx) Absence of Labor Dispute. No labor problem or dispute with the employees
of the Company or any of its subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or its subsidiaries’ principal suppliers, contractors or customers, that could have a
material adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto filed after the date
hereof).




(xxi) Insurance. The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are engaged; all
policies of insurance and fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its subsidiaries are in compliance with the terms
of such policies and instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of rights clause,
except for claims that in the aggregate are not significant in amount; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a



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cost that would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto filed after the date hereof).




     (xxii) Dividends. No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s
property or assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectus.




     (xxiii) Possession of Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary and material to the
conduct of their respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto filed after the date hereof).




     (xxiv) Accounting Controls and Disclosure Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with management’s
general or specific authorizations; (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (c) access to assets is permitted only in
accordance with management’s general or specific authorization; and (d) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as described in the
Prospectus, since the end of the Company’s most recent audited fiscal year, there has been
(I) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (II) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.




     The Company and its consolidated subsidiaries employ disclosure controls and procedures
that are designed to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms, and is
accumulated and communicated to the Company’s management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate, to allow
timely decisions regarding disclosure.




     (xxv) Absence of Manipulation. The Company has not taken, directly or
indirectly, any action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the 1934 Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Securities.



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     (xxvi) Compliance with the Sarbanes-Oxley Act. There is and has been no
failure on the part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith
(the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906
related to certifications.




     (xxvii) Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto filed after the date hereof). Except as set forth in the Prospectus,
neither the Company nor any of the subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.




     (xxviii) ERISA. Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the United
States Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations and
published interpretations thereunder with respect to each “plan” (as defined in Section 3(3)
of ERISA and such regulations and published interpretations) in which employees of the
Company and its subsidiaries are eligible to participate and each such plan is in compliance
in all material respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other than for
the payment of premiums in the ordinary course) or to any such plan under Title IV of ERISA.




     (xxix) Pending Proceedings and Examinations. The Registration Statement is not
the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933
Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933
Act in connection with the offering of the Securities




     (xxx) Redemption. The Company has determined that there is no more than a
remote likelihood that it will exercise its right to redeem the Securities in circumstances
where the amount that the Company would have to pay in redemption is based on the sum of the
present values of the remaining scheduled payments of interest and principal on the
Securities. The Company makes this representation only in connection with the discussion in
the Prospectus under the heading “Material United States Federal Tax Considerations”.



     (b) Officer’s Certificates. Any certificate signed by any officer of the Company or
any of its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each Underwriter as to the matters
covered thereby.



10









 





     SECTION 2. Sale and Delivery to Underwriters; Closing.



     (a) Securities. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.



     (b) Payment. Payment of the purchase price for, and delivery of certificates for, the
Securities shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New
York, New York 10019, or at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (Eastern time) on the fifth business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and the Company (such
time and date of payment and delivery being herein called “Closing Time”).



     Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Securities which it has
agreed to purchase. Citigroup Global Markets Inc. and Merrill Lynch, individually and not as
representatives of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Securities to be purchased by any Underwriter whose funds have not been
received by the Closing Time, but such payment shall not relieve such Underwriter from its
obligations hereunder.



     (c) Denominations; Registration. Certificates for the Securities shall be in such
denominations ($5,000 or integral multiples of $1,000 in excess thereof) and registered in such
names as the Representatives may request in writing at least one full business day before the
Closing Time. The Securities will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time.



     SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as
follows:



     (a) Compliance with Securities Regulations and Commission Requests; Payment of Filing Fees.
The Company, subject to Section 3(b), will comply with the requirements of Rule 430B and will
notify the Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement or new registration statement relating to
the Securities shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or the filing of a
new registration statement or any amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part thereof or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding
under



11









 




Section 8A of the 1933 Act in connection with the offering of the Securities. The Company
will effect the filings required under Rule 424(b), in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus supplement transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. 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. The Company shall pay the required Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) (i) of the 1933 Act Regulations without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933
Act Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table
in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).




     (b) Filing of Amendments and Exchange Act Documents; Preparation of Final Term Sheet. For so
long as the Company is required by the 1933 Act to deliver a prospectus in connection with
transactions contemplated hereby, the Company will give the Representatives notice of its intention
to file or prepare any amendment to the Registration Statement or new registration statement
relating to the Securities or any amendment, supplement or revision to either any preliminary
prospectus (including any prospectus included in the Original Registration Statement or amendment
thereto at the time it became effective) or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, and the Company will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel for the Underwriters
shall object. The Company has given the Representatives notice of any filings made pursuant to the
1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will
give the Representatives notice of its intention to make any such filing from the Applicable Time
to the Closing Time and will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing and will not file or use any such document
to which the Representatives or counsel for the Underwriters shall object. The Company will
prepare a final term sheet (the “Final Term Sheet”) reflecting the final terms of the Securities,
in form and substance satisfactory to the Representatives, and shall file such Final Term Sheet as
an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of business two
business days after the date hereof; provided that the Company shall furnish the Representatives
with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing
and will not use or file any such document to which the Representatives or counsel to the
Underwriters shall object.



     (c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed or photo copies of the
Original Registration Statement and of each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents incorporated or deemed to be incorporated by
reference therein or otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives, without charge, a conformed
copy of the Original Registration Statement and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Original Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.



     (d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or



12









 




supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.




     (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939
Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend the Registration
Statement or to file a new registration statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment, supplement or new
registration statement as may be necessary to correct such statement or omission or to comply with
such requirements, the Company will use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable (if it is not an automatic shelf registration
statement with respect to the Securities) and the Company will furnish to the Underwriters such
number of copies of such amendment, supplement or new registration statement as the Underwriters
may reasonably request. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement (or any other registration statement relating to the Securities) or the Statutory
Prospectus or any preliminary prospectus or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time, not
misleading, the Company will promptly notify Citigroup Global Markets Inc. and Merrill Lynch and
will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.



     (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from date hereof; 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 or as a dealer in securities in any jurisdiction in which it
is not so qualified or so subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will also supply the Underwriters
with such information as is necessary for the determination of the legality of the Securities for
investment under the laws of such jurisdictions as the Underwriters may request.



     (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.



     (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”



13









 





     (i) Restriction on Sale of Securities. During a period of 30 days from the date of the
Prospectus, the Company will not, without the prior written consent of Citigroup Global Markets
Inc. and Merrill Lynch, directly or indirectly, with respect to any debt securities of the Company
or any securities convertible into or exercisable or exchangeable for such debt securities:




	 	•	 	offer, pledge, sell or contract to sell any such securities;
	 
	 	•	 	sell any option or contract to purchase any such securities;
	 
	 	•	 	purchase any option or contract to sell any such securities;
	 
	 	•	 	grant any option, right or warrant for the sale of any such securities;
	 
	 	•	 	file a registration statement for any such securities; or
	 
	 	•	 	lend or otherwise dispose of or transfer any such securities.





     (j) Reporting Requirements. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.



     (k) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Representative, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Securities that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however,
that prior to the preparation of the Final Term Sheet in accordance with Section 3(b), the
Underwriters are authorized to use the information with respect to the final terms of the
Securities in communications conveying information relating to the offering to investors. Any such
free writing prospectus consented to by the Company and the Representative is hereinafter referred
to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.



     SECTION 4. Payment of Expenses.



     (a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as originally filed and of
each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters
of copies of each preliminary prospectus, any Permitted Free Writing Prospectus and of the



14









 




Prospectus and any amendments or supplements thereto and any cost associated with electronic
delivery of any of the foregoing by the Underwriters to investors, (vii) the preparation, printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture and the Securities, (ix) the costs and expenses of
the Company relating to investor presentations on any “road show” undertaken in connection with the
marketing of the Securities, including without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel and lodging expenses of the Representatives and officers of the
Company and any such consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x) any fees payable in connection with the rating of the Securities
and (xi) the filing fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of Securities Dealers, Inc.
(the “NASD”) of the terms of the sale of the Securities.




     (b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.



     SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following further conditions:



     (a) Effectiveness of Registration Statement; Filing of Prospectus; Payment of Filing Fee. The
Registration Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the reasonable satisfaction
of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been
filed with the Commission in the manner and within the time period required by Rule 424(b) without
reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have
been filed and become effective in accordance with the requirements of Rule 430B). The Company
shall have paid the required Commission filing fees relating to the Securities within the time
period required by Rule 456(1)(i) of the 1933 Act Regulations without regard to the proviso therein
and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations and, if
applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule
456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover
page of a prospectus filed pursuant to Rule 424(b).



     (b) Opinion of Counsel for Company. At Closing Time, the Representatives shall have received
the favorable opinion, dated as of Closing Time, of Morgan, Lewis & Bockius LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request.



     (c) Opinion of Counsel for Underwriters.
At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time,
of Dewey Ballantine LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters with respect to the matters set forth in clauses (i),
(iii), (iv), (vi) and (vii) and the last paragraph of Exhibit A hereto.
In giving such opinion such counsel may rely, as to all matters governed by the laws of




15










 





jurisdictions other than the law of the State of New York, the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public officials.




     (d) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Prospectus or the General
Disclosure Package, any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and the Representatives
shall have received a certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to their knowledge, contemplated by the
Commission.



     (e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representatives shall have received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement, the preliminary
prospectus and the Prospectus.



     (f) Bring-down Comfort Letter. At Closing Time, the Representatives shall have received from
KPMG LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than five business days prior to Closing Time.



     (g) Maintenance of Rating. At Closing Time, the Securities shall be rated at least Baa2 by
Moody’s Investor’s Service Inc. and BBB by Standard & Poor’s Ratings Group, a division of
McGraw-Hill, Inc. Since the date of this Agreement, there shall not have occurred a downgrading in
the rating assigned to the Securities or any of the Company’s other debt securities by any
“nationally recognized statistical rating agency”, as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of the Securities or any of the
Company’s other debt securities.



     (h) No Objection. The NASD has confirmed that it has not raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.



     (i) Additional Documents. At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.



16









 





     (j) Termination of Agreement. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in
full force and effect.



     SECTION 6. Indemnification.



     (a) Indemnification of Underwriters. (1) The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each,
an “Affiliate”), its selling agents and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:




     (i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including the Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;




     (ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;




     (iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by Citigroup Global Markets Inc. and Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i) or
(ii) above;


provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Citigroup Global Markets Inc. and
Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto), including
the Rule 430B Information or any preliminary prospectus any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto).




     (2) Insofar as this indemnity agreement may permit indemnification for liabilities under the
1933 Act of any person who is a partner of an Underwriter or who controls an underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who, at the date of this
Agreement, is a director or officer of the Company or controls the Company within the meaning of
Section 15 of the 1933



17









 







Act or Section 20 of the 1934 Act, such indemnity agreement is subject to the undertaking of
the Company in the Registration Statement under Item 17 “Undertakings.”



     (b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)(1) of this
Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment thereto), including
the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Citigroup Global Markets Inc. and
Merrill Lynch expressly for use therein.



     (c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a)(1) above, counsel to the indemnified parties shall be selected
by Citigroup Global Markets Inc. and Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified
party.



     (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(1) (ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.



     SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute



18









 







to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.



     The relative benefits received by the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus bear to the aggregate initial public offering price of the Securities as set forth
on the cover of the Prospectus.



     The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.



     The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.



     Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.



     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 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s
Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.



19









 





     SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company, and (ii) delivery of and payment for
the Securities.



     SECTION 9. Termination of Agreement.



     (a) Termination; General. The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto filed after the date hereof) or the General Disclosure
Package, any material adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement, or (iv) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United States, or (v) if a
banking moratorium has been declared by either Federal or New York authorities.



     (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.



     SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Representatives shall not have completed such arrangements within such 24-hour period, then:



          (a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal
amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or



20









 





          (b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the
Securities to be purchased hereunder, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.



     No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.



     In the event of any such default which does not result in a termination of this Agreement,
either the Representatives or the Company shall have the right to postpone Closing Time for a
period not exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used herein, the term
“Underwriter” includes any person substituted for an Underwriter under this Section 10.



     SECTION 11. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal income tax treatment of the transactions contemplated hereby, and the term “tax structure”
includes any fact that may be relevant to understanding the purported or claimed federal income tax
treatment of the transactions contemplated hereby.



     SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representatives through
Citigroup Global Markets Inc. at 388 Greenwich Street, New York, New York, 10013, attention:
General Counsel, and Merrill Lynch at 4 World Financial Center, New York, New York 10080, attention
of Financial Institution Group, Debt Capital Markets; and notices to the Company shall be directed
to it at 520 Madison Avenue, 12th Floor, New York, New York 10022, attention of the Legal
Department.



     SECTION 13. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely
as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Company, and (e) the
Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.



21









 





     SECTION 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Underwriters, or any of them,
with respect to the subject matter hereof.



     SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and
legal Representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and directors and their
heirs and legal Representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.



     SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.



     SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.



     SECTION 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.



     SECTION 19. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.



22









 





     If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Company in accordance with its
terms.



	 	 	 	 	 	 	 
	 	 	Very truly yours,  
	 
	 	 	 	 	 	 
	 	 	JEFFERIES GROUP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Joseph A. Schenk	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Joseph A. Schenk	 	 
	 

	 	 	 	Title:   Chief Financial Officer	 	 






CONFIRMED AND ACCEPTED,

     as of the date first above written:




JEFFERIES & COMPANY, INC.

CITIGROUP GLOBAL MARKETS INC.

MERRILL LYNCH, PIERCE, FENNER & SMITH

              
               INCORPORATED

BANC OF AMERICA SECURITIES LLC

BNY CAPITAL MARKETS, INC.

KEEFE, BRUYETTE & WOODS, INC.

WACHOVIA CAPITAL MARKETS, LLC

BNP PARIBAS SECURITIES CORP.

HSBC SECURITIES (USA) INC.

SG AMERICAS SECURITIES, LLC




By: Citigroup Global Markets Inc.




	 	 	 	 	 
	By:
	 	/s/ Simon C.W. Hewett	 	 
	 

	 	 	 	 
	 

	 	Name: Simon C.W. Hewett
	 	 
	 

	 	Title:   Managing Director	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	By:

	 	Merrill Lynch, Pierce, Fenner & Smith	 	 
	 

	 	                      Incorporated	 	 
	 
	 	 	 	 
	By:
	 	/s/ Kaivan Michael Shakib	 	 
	 

	 	 	 	 
	 

	 	Name: Kaivan Michael Shakib	 	 
	 

	 	Title:   Managing Director	 	 
	 

	 	Authorized Signatory	 	 






23









 






SCHEDULE A




	 	 	 	 	 
	 	 	Principal	 
	 	 	Amount of	 
	Name of Underwriter	 	Securities	 
	Jefferies & Company, Inc.
	 	$	25,000,000	 
	 
	 	 	 	 
	Citigroup Global Markets Inc.
	 	 	175,000,000	 
	 
	 	 	 	 
	Merrill Lynch, Pierce, Fenner & Smith
Incorporated
	 	 	175,000,000	 
	 
	 	 	 	 
	Banc of America Securities LLC
	 	 	25,000,000	 
	 
	 	 	 	 
	BNY Capital Markets, Inc.
	 	 	25,000,000	 
	 
	 	 	 	 
	Keefe, Bruyette & Woods, Inc.
	 	 	25,000,000	 
	 
	 	 	 	 
	Wachovia Capital Markets, LLC
	 	 	25,000,000	 
	 
	 	 	 	 
	BNP Paribas Securities Corp.
	 	 	8,334,000	 
	 
	 	 	 	 
	HSBC Securities (USA) Inc.
	 	 	8,333,000	 
	 
	 	 	 	 
	SG Americas Securities, LLC
	 	 	8,333,000	 
	 
	 	 	 
	 
	 	 	 	 
	Total
	 	$	500,000,000	 
	 
	 	 	 





Sch A-1









 






SCHEDULE B




JEFFERIES GROUP, INC.




$500,000,000 Senior Debentures due 2036




     1. The initial public offering price of the Securities shall be 99.306% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.



     2. The purchase price to be paid by the Underwriters for the Securities shall be 98.431% of
the principal amount thereof.



     3. The interest rate on the Securities shall be 6.25% per annum.



     4. The Company may redeem the Securities in whole or in part at any time, at its option, on at
least 30 but not more than 60 days prior notice, at a redemption price to be calculated as
described in the Prospectus.



Sch B-1









 





SCHEDULE C




     1. Electronic Roadshow Presentation through Bloomberg, dated January 18, 2006



     2. Final Term Sheet, dated January 19, 2006



Sch B-2









 





Exhibit A




FORM OF OPINION OF COMPANY’S COUNSEL

TO BE DELIVERED PURSUANT TO

SECTION 5(b)





     (i) Each of the Company and the Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each of the jurisdictions set forth on Annex A attached hereto.




     (ii) All the outstanding shares of capital stock of the Subsidiary have been duly and
validly authorized and issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital stock of the Subsidiary are
owned by the Company either directly or through wholly owned subsidiaries free and clear of
any perfected security interest and, to the knowledge of such counsel, after due inquiry,
any other security interest, claim, lien or encumbrance.




     (iii) The Securities and the Indenture conform in all material respects to the
description thereof contained in the Prospectus.




     (iv) The Indenture has been duly authorized, executed and delivered, has been duly
qualified under the 1939 Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws affecting creditors’ rights generally from time to time in effect
and to general principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in a
proceeding in equity or at law); and the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to this Agreement, will constitute legal, valid
and binding obligations of the Company entitled to the benefits of the Indenture.




     (v) (A) To the knowledge of such counsel, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or its or their property, of a
character required to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or other document required
to be filed as an exhibit thereto that is not filed as required.




          (B) The statements included or incorporated by reference in (I) the Prospectus under
the headings “ERISA Considerations”, “Description of Debentures” and “Description of
Securities We May Offer” and (II) the Company’s Annual Report on Form 10-K for the year
ended December 31, 2004 under the headings “Part I — Item 1. Business — Regulation” and “
Part I — Item 3. — Legal Proceedings” insofar as such statements summarize legal matters,
agreements,



A-1









 







documents or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.




          (C) The statements set forth in the Prospectus under the heading “Material United
States Federal Tax Considerations”, insofar as such statements purport to describe certain
federal tax laws of the United States, are accurate and complete in all material respects.



IRS CIRCULAR 230 DISCLOSURE




To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any
U.S. federal tax advice contained herein does not deal with a taxpayer’s particular circumstances. Further,
it was written in support of the promotion, marketing or recommending of the transaction or matter described herein.
This opinion was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under
the Internal Revenue Code. Taxpayers should consult their own tax advisors regarding the tax consequences to them in their
own particular circumstances.




     (vi) The Registration Statement has become effective under the 1933 Act; any required
filing of each prospectus relating to the Securities (including the Prospectus, any
preliminary prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b) (without reference to Rule
424(b)(8)); any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433
has been made in the manner and within the time period required by Rule 433(d); to the
knowledge of such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus (including without limitation
each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) or
the 1933 Act Regulations) (other than the financial statements and other financial or
statistical information contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable requirements of the 1933 Act,
the 1934 Act and the 1939 Act and the respective rules thereunder.




     (vii) This Agreement has been duly authorized, executed and delivered by the Company.




     (viii) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Prospectus, will
not be an “investment company” as defined in the Investment Company Act of 1940, as amended.




     (ix) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions contemplated
herein, except such as have been obtained under the 1933 Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner contemplated in this Agreement and in
the Prospectus and such other approvals (specified in such opinion) as have been obtained.




     (x) Neither the execution and delivery of the Indenture, the issue and sale of the
Securities, nor the consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a breach or violation of
or imposition of any lien, charge or encumbrance upon any property or assets of the Company
or its subsidiaries pursuant to, (i) the charter or by-laws of the Company or the
Subsidiary, (ii) the terms of any



A-2









 







indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument, known to such counsel, to
which the Company or its subsidiaries is a party or bound or to which its or their property
is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties, which violation or default
would, in the case of clauses (ii) and (iii) above, either individually or in the aggregate
with all other violations and defaults referred to in this paragraph (x) (if any), have a
material adverse effect on the condition, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Prospectus.



     In rendering such opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of New York, the General Corporation Law of the
State of Delaware or the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the Company and public
officials.



     In addition, such counsel shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the contents of the
Original Registration Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Original Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (iii) and (v) above), such counsel has no reason to believe that the
Original Registration Statement or any amendment thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein or omitted
therefrom and the Form T-1, as to which such counsel need make no statement), at the time such
Original Registration Statement or any such amendment 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; that the Registration Statement, including
the Rule 430B Information (except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom and the Form T-1, as to which
such counsel need make no statement), at each deemed effective date with respect to the
Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, 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 or any amendment or
supplement thereto (except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom and the Form T-1, as to which such
counsel need make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading. In addition, nothing has come to such counsel’s attention that would lead such counsel
to believe that the General Disclosure Package, other than the financial statements and schedules
and other financial data included or incorporated by reference therein or omitted therefrom, as to
which such counsel need make no statement, as of the Applicable Time, contained any untrue
statement of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made, not misleading. With
respect to statements contained in the General Disclosure Package, any statement contained in any
of the constituent



A-3









 







documents shall be deemed to be modified or superseded to the extent that any information
contained in subsequent constituent documents modifies or replaces such statement.




A-4









 








ANNEX A




	 	 	 
	Jefferies & Company, Inc.	 	Jefferies Group, Inc.
	California

	 	California
	Connecticut
	 	 
	Georgia

	 	Georgia
	Indiana

	 	Massachusetts
	Louisiana

	 	Texas
	Massachusetts

	 	New York
	Minnesota

	 	New Jersey
	Mississippi
	 	 
	New Jersey
	 	 
	New York
	 	 
	South Dakota
	 	 
	Tennessee
	 	 
	Texas
	 	 
	Vermont
	 	 
	Virginia
	 	 
	Wyoming
	 	 






Annex-1