APPLICATION FOR BONDS

 

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                                                                  Exhibit 10.135

                                                                   Tiffany & Co.

                                  (Translation)              Report on Form 10-K

                              APPLICATION FOR BONDS

 

                                                                September , 2003

 

Tiffany & Co. Japan Inc.

 

                                                Address:

 

                                                Name:

 

Consenting to the terms described in the application for the bonds prepared by

your company with respect to the bonds of the following contents and conditions

(the "Bonds") (in which the schedule attached hereto (conditions of bonds with

respect to the Bonds (the "Conditions of Bonds")) constitutes an integral part

thereof) (the "Application for Bonds"), we hereby apply for the Bonds on the

condition that prior to the payment of the issue price, we are entitled to

cancel the application hereunder if any of the representations and warranties

hereunder by the Issuer or Guarantor is false or inaccurate.

 

Tiffany & Co. Japan Inc. First Series Yen Bonds (Qualified Institutional

Investors Only) guaranteed by Tiffany & Co.

 

       Principal Amount               _________________________________ Yen Only

 

       Number of Bonds                _________________________________

 

                                       1

 

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I        Terms of Application for Bonds

 

1.       Trade Name of Company

         Tiffany & Co. Japan Inc.

 

2.       Trade Name of Bond Management Company

         Because the Bonds satisfy the requirements under the proviso of the

         Article 297 of the Commercial Code of Japan, a bond management company

         will not be established for the Bonds.

 

3.       Aggregate Principal Amount of the Bonds

         15,000,000,000 Yen

 

4.       Principal Amount of Each Bond

         100,000,000 Yen

 

5.       Interest Rate on the Bonds

         The interest rate on each of the Bonds shall be 2.02% per annum of the

         principal amount.

 

6.       Place of Payment of Principal and Interest

 

         Mizuho Corporate Bank, Ltd.            Head Office and Osaka Corporate

                                                Banking Division

 

7.       Method of Redemption and Maturity Date

 

(1)      The Bonds shall be redeemed at the principal amount of the Bonds on

         September 30, 2010, unless redeemed or repurchased prior to such date.

 

(2)      If the Issuer or Guarantor is highly likely to be obliged to pay an

         Additional Amount (defined in Section 9 of the Conditions of Bonds) at

         the next due date for the Bonds as a result of any change or amendment

         in the laws (or rules or decisions under such laws) of

 

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         the United States or its subdivision, or its tax authorities, or

         application, authoritative interpretation or change in enforcement of

         such laws, rules or decisions, and, in the judgment of an authorized

         officer of the Issuer or Guarantor, the Issuer or Guarantor is not able

         to avoid payment of the Additional Amount with reasonable measures

         without incurring substantial expenses, the Issuer or Guarantor may

         redeem (without deducting applicable withholding amounts), at any time,

         all of the Bonds (no partial redemption) at 100 % of the principal

         amount with interest thereon until (and including) the redemption date.

 

         Provided, however, that redemption of the Bonds on the grounds that the

         Guarantor has incurred payment obligation of the Additional Amount can

         only be made if both the Guarantor and the Issuer are unable to avoid

         paying the Additional Amount by causing the Issuer to pay the principal

         of and interest on the Bonds.

 

         In such event, the Issuer or Guarantor shall notify the Fiscal Agent in

         writing that: (i) the Issuer or Guarantor is highly likely to bear

         obligation to pay the Additional Amount; (ii) it has elected to redeem

         the Bonds without deducting the withholding amount pursuant to Section

         7(2) of the Conditions of Bonds instead of paying the Additional

         Amount; (iii) scheduled redemption date; and (iv) the payment

         obligation is unavoidable by reasonable measures without incurring

         substantial expenses in the judgment of an authorized officer of the

         company. The notice shall be accompanied by a legal opinion of an

         outside counsel appointed by the Issuer or Guarantor (meaning a legal

         counsel other than an employee of the Issuer, Guarantor or subsidiaries

         thereof, although a legal counsel regularly retained by the Issuer,

         Guarantor or subsidiaries thereof shall qualify as the outside counsel

         hereunder) (hereinafter the "Outside Counsel"), which shall describe

         that the Issuer or Guarantor is or may be obligated to pay the

         Additional Amount due to the facts described in the foregoing

         paragraph. The notice shall be given as soon as practicable upon

         occurrence of such event. Notices by the Issuer or Guarantor under

         Section 7(2) of the Conditions of Bonds to the Fiscal Agent shall be

         given 30 days prior to the scheduled redemption date, and the Issuer

         shall publicly notify the Bondholders 14 days prior to the scheduled

         redemption date.

 

         The notice and legal opinion delivered under Section 7(2) of the

         Conditions of Bonds shall be kept at the main office of the Fiscal

         Agent, shall be available during normal business hours for inspection

         and copying by the Bondholders, and persons requesting such copying

         shall bear all expenses necessary therefor.

 

         Under the Conditions of Bonds, the principal of the Bond shall include

         premiums payable under Section 7(2) of the Conditions of Bonds, if any.

 

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         All reasonable expenses necessary for the procedures under Section 7(2)

         of the Conditions of Bonds shall be borne by the Issuer or Guarantor.

 

(3)      The Issuer, the Guarantor or any of their respective subsidiaries may,

         at any time after the issue date, purchase the Bonds in the market or

         otherwise at any price and retain, resell or cancel them.

 

(4)      Unless otherwise provided under the Conditions of Bonds, the Issuer may

         not pay all or part of the principal of or interest on the Bonds prior

         to the due dates.

 

8.       Method and Due Date of Interest Payment

 

(1)      The Bonds shall accrue interest from October 1, 2003, and the interest

         shall first be payable on March 30, 2004 for the interest accumulated

         to such date, and thereafter, be payable in arrears on March 30 and

         September 30 of each year for the six-month period ending on and

         including each such date. Interests for a period other than six months

         shall be payable for the actual number of days during that period

         (calculated on daily pro rata basis of 365 days per year, rounded off

         at the first decimal place). The interest payment dates provided in

         this subsection shall be hereinafter referred to as the "Interest

         Payment Date."

 

(2)      Interest on the Bonds shall not accrue after the redemption date;

         provided, however, that if the Issuer or Guarantor fails to redeem the

         Bonds on the redemption date, delinquency interest shall be payable for

         the actual number of days during the period from the due date

         (exclusive) to the date of actual redemption (inclusive) at the rate

         provided in this Section 6 (calculated on daily pro rata basis of 365

         days per year, rounded off at the first decimal place); provided,

         further, that the period shall not extend beyond 14 days after the

         public notice by the Fiscal Agent pursuant to Section 8(3) of the

         Conditions of Bonds that it has received funds for redemption.

 

9.       Issue Price of the Bonds

         100% of the principal amount of the Bonds

 

10.      Conversion of Bearer Bonds to and from Nonbearer Bonds

         The form of the bond certificate of the Bonds (the "Bond Certificate")

         shall be limited to bearer bonds with coupons attached (such coupons

         attached to the Bond Certificate shall be hereinafter referred to as

         the "Coupons") and shall not be converted to nonbearer

 

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         bonds, split into the Bond Certificates with par value less than

         100,000,000 Yen, or consolidated with other Bond Certificates.

 

11.      Agreement on Underwriting of Residual Amounts Not applicable.

 

12.      Regulations on Private Placement

 

(1)      No registration statement has been filed with respect to the Bonds

         under Article 4 Paragraph 1 of the Securities and Exchange Law of Japan

         (Law No. 25 of 1948, as amended).

 

(2)      Any person who intends to acquire the Bonds shall request the recording

         of the aggregate acquired amount of the bonds pursuant to the

         provisions of Article 37 of Ordinance Concerning Enforcement of the Law

         on Recording of Bonds, Etc. of Japan (Imperial Ordinance No. 409 of

         1942, as amended).

 

(3)      Any person who intends to acquire the Bonds shall undertake not to

         transfer the Bonds to any person other than the Qualified Institutional

         Investors (as defined in Cabinet Office Ordinance Concerning

         Definitions Provided in Article 2 of Securities and Exchange Law,

         hereinafter the same).

 

(4)      When transferring any Bonds to any Qualified Institutional Investor,

         the transferor shall notify the transferee in writing, in advance or at

         the same time of transfer, that no registration statement has been

         filed with respect to the Bonds pursuant to the provisions of Article

         4, paragraph 1 of the Securities and Exchange Law and as to the

         conditions in respect of the Bonds set out in this Section 12.

 

13.      Private Placement Arrangers

 

         Lehman Brothers Japan Inc., Tokyo Branch, Mizuho Securities Co., Ltd.,

         JP Morgan Securities Asia Private Limited, Tokyo Branch

 

14.      Start Date of Solicitation and Acceptance of Application September 12,

         2003

 

15.      Application Period

 

 

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         September 12-17, 2003

 

16.      Applicants for the Bonds shall pay the issue price for the Bonds on the

         issue date to the Head Office of Mizuho Corporate Bank, Ltd.

 

17.      Issue Date

 

         September 30, 2003

 

18.      Limitation of Application for Recordation of Transfer as of Payment

         Date

 

         Application for recordation of transfer of the Bonds as of the payment

date may not be made through the network operated by Japan Bond Settlement

Network Co., Ltd.

 

19.      Terms other than above shall be as described in the schedule attached

         hereto (Conditions of Bonds), which shall constitute an integral part

         of this Application for Bonds.

 

II.      Representations and Warranties by the Issuer

 

         (1)      The Issuer is duly organized and validly existing as a limited

                  liability company under the laws of the State of Delaware and

                  has all requisite corporate power and authority to own its

                  property, to execute and deliver related agreements, to issue

                  the Bonds, and, to perform its obligations set forth in the

                  Fiscal and Paying Agency Agreement, the Recording Agency

                  Agreement and an agreement with arrangers of the private

                  placement (collectively, the "Related Agreements") and the

                  Conditions of Bonds pursuant to the provisions thereunder.

 

         (2)      The issuance of the Bonds and execution and delivery of each

                  of the Related Agreements and the performance of its

                  obligations thereunder and the Conditions of Bonds by the

                  Issuer have been duly authorized by the Issuer's Board of

                  Directors and the aggregated principal amount of the Bonds is

                  within the amount so authorized. The Related Agreements

                  constitute the legal, valid and binding

 

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                  obligation of the Issuer, enforceable against the Issuer in

                  accordance with its terms, except as enforcement may be

                  limited by bankruptcy, insolvency, reorganization or other

                  laws affecting the enforcement of creditors' rights in

                  general.

 

         (3)      All necessary consents, authorizations and approvals of, and

                  registrations and filings with any court, government agency or

                  other regulatory body or agency required of the Issuer for or

                  in connection with the execution and delivery of the Related

                  Agreements, issuance of the Bonds and compliance with the

                  terms of the Conditions of Bonds and Related Agreements have

                  been obtained or made and remain in full force and effect.

 

         (4)      The authorization for the issuance of the Bonds, the issuance

                  of the Bonds, the issuance and delivery of the Bond

                  Certificate (including Coupons), the performance of its

                  obligations under the Bonds pursuant to the Conditions of

                  Bonds, and execution of each of the Related Agreements or the

                  performance of its obligations thereunder by the Issuer will

                  not conflict with, or result in a breach of any applicable

                  statute, rule or regulation, any of the certificate of

                  incorporation or other constitutive documents of the Issuer,

                  any material agreement by which it is bound, judgment,

                  injunction, order, decision, or other instruments, or will

                  result in creating any lien on material assets of the Issuer

                  or its subsidiaries.

 

         (5)      All payments of principal, interest and all other moneys

                  payable by the Issuer in respect of the Bonds shall be free of

                  any present taxes imposed by or on behalf of the United States

                  or any political subdivision (other than U.S. back-up

                  withholding taxes, if any).

 

         (6)      The Bonds will be legal, valid and binding upon the Issuer as

                  direct, unconditional obligations of the Issuer ranking pari

                  passu with all other unsecured and unsubordinated obligations

                  of the Issuer.

 

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         (7)      When the entire amount of the Issue Price has been paid in

                  full and when the signature of the Board Chairman of the

                  Issuer in facsimile has been put on the Bond Certificates and

                  the Coupons, and the Bond Certificates accompanied by the

                  Coupons have been delivered to or to the order of the

                  purchaser, the Bond Certificates accompanied by the Coupons so

                  delivered will have been duly and validly issued and will

                  represent legally valid and binding obligations of the Issuer

                  enforceable against it in accordance with their respective

                  terms, except that enforceability may be limited by the laws

                  of bankruptcy, insolvency, reorganization or other similar

                  laws relating to creditors' rights in general.

 

         (8)      No circumstances exist which, had the Bonds already been

                  issued, would, or would with the giving of notice or lapse of

                  time or both, constitute an Event of Default as defined in the

                  Conditions of Bonds.

 

         (9)      The Issuer is not involved in, any litigation, arbitration or

                  administrative proceedings which would have a material adverse

                  effect, if determined adversely, on the Issuer's ability to

                  perform and comply with its obligations under the Related

                  Agreements and/or the Conditions of Bonds, nor, to the best of

                  the knowledge and belief of the Issuer, are any such

                  proceedings pending or threatened against the Issuer, nor, so

                  far as the Issuer is aware, do circumstances exist which are

                  likely to lead to such proceedings.

 

         (10)     Neither the Issuer, nor any of its affiliates (as defined in

                  Rule 405 under the U.S. Securities Act of 1933 (the "U.S.

                  Securities Act")), has engaged or will engage in any directed

                  selling efforts to the United States (as defined in Regulation

                  S under the U.S. Securities Act) with respect to the Bonds,

                  and each of the foregoing persons has complied and will comply

                  with the offering restriction requirements of Regulation S

                  under the U.S. Securities Act.

 

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III.     Representations and Warranties by the Guarantor

 

         (1)      The Guarantor is a company duly incorporated and validly

                  existing as a limited liability company under the laws of

                  State of Delaware.

 

         (2)      The execution and delivery of the Guarantee by the Guarantor

                  have been duly authorized by the Guarantor's Board of

                  Directors, and the Guarantee constitutes legal, valid and

                  binding obligations of the Guarantor enforceable against it in

                  accordance with its respective terms, except that

                  enforceability may be limited by the laws of bankruptcy,

                  insolvency, reorganization or other laws relating to

                  creditors' rights in general.

 

         (3)      The delivery of the Guarantee by the Guarantor will not

                  conflict with, or result in a breach of, any of the terms or

                  provisions of laws or constitutive documents of the Guarantor

                  or any agreement or undertaking whatever by which it is bound.

 

         (4)      Neither the Guarantor nor any of the Guarantor's Principal

                  Subsidiaries is involved in any litigation, arbitration or

                  administrative proceedings which would have a material adverse

                  effect, if determined adversely, on the Guarantor's ability to

                  perform and comply with its obligations under the Guarantee,

                  nor, to the Guarantor's knowledge, are any such proceedings

                  pending or threatened against the Guarantor or any of its

                  Principal Subsidiaries; nor, so far as the Guarantor is aware,

                  do circumstances exist which are likely to lead to such

                  proceedings.

 

         (5)      All necessary consents, authorizations and approvals of, and

                  registrations and filings with any court, government agency or

                  other regulatory body or agency required of the Guarantor for

                  or in connection with the execution and delivery of, and

                  compliance with the terms of the Guarantee have been obtained

                  or made and remain in full force and effect.

 

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         (6)      Neither the Guarantor, nor any of its affiliates (as defined

                  in Rule 405 under the U.S. Securities Act) has engaged or will

                  engage in any directed selling efforts (as defined in

                  Regulation S under the U.S. Securities Act) with respect to

                  the Bonds, and each of the foregoing persons has compiled and

                  will comply with the offering restriction requirements of

                  Regulation S under the U.S. Securities Act.

 

September 12, 2003

 

727 Fifth Avenue

New York, New York 10022

The United States of America

Director

Katsuhiko Nitta

 

                                                                 End of document

 

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                                                                      Schedule 1

 

                               CONDITIONS OF BONDS

 

These Conditions of Bonds shall be applied to the issue of Tiffany & Co. Japan

Inc. First Series Yen Bonds guaranteed by Tiffany & Co. (For Qualified

Institutional Investors Only) (the "Bonds") which Tiffany & Co. Japan Inc. (the

"Issuer") is duly authorized to issue.

 

SECTION 1. AMOUNT, PRINCIPAL AMOUNT AND FORM

 

(1)      Aggregate principal amount of the Bonds shall be 15,000,000,000 Yen.

 

(2)      Principal amount per Bond shall be 100,000,000 Yen.

 

(3)      The form of the bond certificate of the Bonds (the "Bond Certificates")

         shall be limited to bearer bonds with coupons attached (such coupons

         attached to the Bond Certificates shall be hereinafter referred to as

         the "Coupons") and shall not be converted to nonbearer bonds, split

         into the Bond Certificates with par value less than 100,000,000 Yen, or

         consolidated with other Bond Certificates.

 

(4)      The Bond Certificates and Coupons shall bear the signature (including

         the signature in facsimile) of the Executive Vice President and Chief

         Financial Officer of the Issuer and Tiffany & Co. (the "Guarantor").

 

SECTION 2. STATUS OF THE BONDS, GUARANTEE AND NEGATIVE PLEDGE

 

(1)      The Bonds and Coupons shall be direct, unconditional (subject to

         limitations under Section 4(2) hereof), unsecured and unsubordinated

         obligations of the Issuer, ranking pari passu among each other without

         being preferred or subordinated and (subject to limitations under

         Section 4(2) hereof) with all other present and future unsecured and

         unsubordinated obligations of the Issuer (except for preferred

         obligations by operation of forcible laws); provided, however, that in

         the event of insolvency, the Bonds and Coupons shall rank in pari passu

         to the extent permitted under the laws generally affecting creditors'

         rights.

 

(2)      The due and punctual payment by the Issuer of the principal of and

         interest on the Bonds and all other amounts payable under these

         Conditions of Bonds is unconditionally and irrevocably guaranteed by

         the Guarantor in accordance with the payment guarantee (the "Payment

         Guarantee") governed by the laws of the State of New York which is

         separately issued and delivered to the Fiscal Agent by the Guarantor.

 

(3)      The Bond Certificates shall provide that the Guarantor unconditionally

         and irrevocably guaranty the due and punctual payment to the holders of

         the Bonds (the "Bondholders")

 

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         and holders of the Coupons (the "Couponholders") by the Issuer of the

         principal of and interest on the Bonds and all other amounts payable at

         the maturity date or other due dates under these Conditions of Bonds.

 

(4)      The Issuer and the Guarantor respectively undertake that, so long as

         any of the Bonds remains outstanding, each of the Issuer and the

         Guarantor will procure that no External Indebtedness (as defined below)

         of itself or of any of its Principal Subsidiaries (as defined below)

         shall be secured by any mortgage, lien, pledge or other charges, unless

         the Issuer or the Guarantor, as the case may be, shall forthwith take

         any and all action necessary to procure that all amounts payable by it

         under the Bonds and Coupons are secured equally and ratably with such

         mortgage, lien, pledge or other charge. This Section 2(4), however,

         shall not apply to External Indebtedness that: (i) is incurred by the

         Issuer, Guarantor or any Principal Subsidiary in connection with the

         acquisition of fixed assets (or any improvement thereon); (ii) is

         assumed by the Issuer, Guarantor or any Principal Subsidiary in

         connection with the acquisition of any business; or (iii) does not

         exceed 20% of the Guarantor's consolidated net worth.

 

         "External Indebtedness" means all items which constitute, without

         duplication, indebtedness for borrowings, on or after the issue date of

         the Bonds, of the Issuer, Guarantor or Principal Subsidiaries (whether

         in the form of or represented by any bonds, notes or other securities),

         other than Existing Indebtedness and Intercompany Debt.

 

         "Principal Subsidiaries" means Tiffany and Company and Tiffany & Co.

         International, which are subsidiaries of the Guarantor.

 

         "Existing Indebtedness" means indebtedness in existence as of the Issue

         Date and listed in a schedule attached to the Conditions of Bonds and

         any refinancing thereof that does not entail the Issuer's or the

         Guarantor's incurring new liens that are greater than any liens that

         existed with respect to such indebtedness before its refinancing.

 

         "Intercompany Debt" means (i) indebtedness of the Guarantor to one or

         more of its subsidiaries and (ii) indebtedness of one or more of the

         subsidiaries of the Guarantor to the Guarantor or any one or more of

         the other subsidiaries of the Guarantor.

 

         In the event that a security interest is created for the Bond in

         accordance with this Section 2(4), the Issuer shall take all steps and

         procedures (including without limitation, perfection of such security

         interest) necessary for the purpose of these Conditions of Bonds. The

         Issuer shall bear any and all expenses in connection with the creation

         of such security interests, perfection thereof, exercise of powers and

         performance of duties.

 

         This Section 2(4) shall not apply where the full amount of the Bonds is

         unable to be redeemed due to the Bondholder's failure to claim for

         payment on the due date of the Bonds.

 

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SECTION 3 FISCAL AGENT AND NO ESTABLISHMENT OF BOND MANAGEMENT COMPANY

 

(1)      Mizuho Corporate Bank shall act as the fiscal agent of the Issuer in

         connection with the Bonds (the "Fiscal Agent"). The Fiscal Agent shall

         perform duties provided hereunder and under the Fiscal and Paying