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Exhibit 10.134
Tiffany & Co.
(Translation)
Report on Form 10-K
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
Agency Agreement dated September 12, 2003 between the Issuer and
the
Fiscal Agent and Paying Agent (defined in Section 5 hereof). The
Fiscal
Agent shall act only as an agent of the Issuer, shall have no
duties to
Bondholders, or agency or trustee relationship with Bondholders. A
copy
of the Fiscal and Paying Agency Agreement shall be kept at the
main
office of the Fiscal Agent, and shall be available during
normal
business hours for inspection and copying by the Bondholders.
Persons
requesting such copying shall bear all expenses necessary
therefor.
(2) Because
the Bonds satisfy the requirements under the proviso of the
Article 297 of the Commercial Code of Japan (Law No. 48, 1900,
as
amended), a bond management company provided thereunder will not
be
established for the Bonds.
(3) The Issuer
may replace or discharge the Fiscal Agent from time to time,
provided that the Fiscal Agent shall remain in its duty until
its
successor is validly appointed. The Issuer shall make an advance
public
notice to the Bondholders of such change of the Fiscal Agent.
SECTION 4 RECORDING OF THE BONDS
(1) Recording
agent for the Bonds (the "Recording Agent") shall be Mizuho
Corporate Bank, Ltd. The Bondholders shall be able to record
their
Bonds at any time.
(2) The Issuer
shall bear the expenses of the subscribers' recordation of
the Bonds, and persons applying for recordation shall bear expenses
for
other recordation. Expenses necessary for the preparation and
delivery
of the Bond Certificates and Coupons upon cancellation of
recordation
of recorded Bonds shall be borne by persons requesting such
cancellation.
SECTION 5 PLACE OF PAYMENTS
(1) The paying
agent for the Bonds (the "Paying Agent") and the place of
payment of the principal and interest shall be as follows:
Mizuho Corporate Bank, Ltd.
Head Office and Osaka Corporate
Banking Division
(2) The Issuer
may change or discharge the Paying Agent from time to time.
The Issuer shall publicly notify in advance the Bondholders of
such
change or discharge. Notwithstanding the foregoing, Paying Agent
shall
not be appointed by the Issuer in the United States of America
(including each of its States and the District of Columbia) or
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its territories and possessions and other areas which are subject
to
its jurisdiction (the "United States"), and shall not make payments
of
principal of and interest on the Bonds within the United
States.
Payments of the principal of and interest on the Bonds shall not
be
made in branch offices of the Paying Agent or by other payment
agents
outside Japan, and no payment shall be made by remittance to a
bank
account within the United States or check sent to an address in
the
United
States.
SECTION 6 INTEREST
(1) The
interest rate for each of the Bonds shall be 2.02% per annum of
the
principal amount.
(2) 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."
(3) 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 the days during the period from the date
of
payment (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) hereof
that
it has received funds for redemption.
SECTION 7 REDEMPTION AND REPURCHASE
(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 the Guarantor is highly likely to be obliged to pay
an
Additional Amount (defined in Section 9) at the next due date for
the
Bonds as a result of any change or amendment in the laws (or rules
or
decision under such laws) of 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
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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 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
this
Section 7(2) 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 this Section 7(2) 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 this Section 7(2)
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 these Conditions of Bonds, the principal of the Bond
shall
include premiums payable under this Section 7(2), if any.
All reasonable expenses necessary for the procedures under this
Section
7(2) 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 hereunder, the Issuer shall not pay all or
part of the principal of or interest on the Bonds prior to the
due
dates.
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SECTION 8 PAYMENT
(1) Payment of the
principal of or interest on the Bonds represented by the
Bond Certificates or Coupons shall be made upon surrender of
the
relevant Bond Certificates or Coupons, except as provided under
Section
15, at either place of payment set forth in Section 5.
(2) With
respect to recorded Bonds, payment of principal shall be made
upon
surrender of the relevant principal payment voucher, and payment
of
interest shall be made upon surrender of the relevant interest
payment
voucher, at the place of payment designated by the Bondholder at
the
time of the application for recordation. The Paying Agent shall
check
the seal affixed on the principal or interest payment voucher
against
the seal impression submitted to the Recording Agent.
(3) In the
event that the Fiscal Agent has received the principal of and
interest on the Bonds after the relevant due date, the Fiscal
Agent
shall publicly notify the receipt thereof as soon as practicable
but no
later than 14 days from the receipt of such amounts. All expenses
in
connection with the public notice shall be borne by the Issuer.
(4) Redemption
of the Bond shall be made upon the surrender of the Bond
Certificates with all Coupons not yet due, and if such Coupon
is
lacking, the face amount of such missing Coupon shall be deducted
from
the principal of the Bond; provided that such holder of a
missing
Coupon may receive payment for the face amount thereof upon
surrender
of the Coupon within a 5 year period from the redemption date of
the
Bond Certificates to which the missing Coupon was attached.
(5) If a
payment date for the principal of or interest on the Bonds
falls
within a banking holiday in Tokyo, Japan, the Bondholder or
Couponholder shall not be entitled to receive payments due until
the
next banking day, and no interest shall accrue for the delay of
payment.
SECTION 9 TAXES
(1) All
payments of the principal of and interest on the Bonds and
Coupons
by the Issuer or the Guarantor (including payments under the
Payment
Guarantee) will be made without withholding or deduction for, or
on
account of, any present or future taxes, duties, assessments or
governmental charges (the "Taxes") of whatever nature imposed or
levied
by or on behalf of the United States or any of its subdivisions
unless
the withholding or deduction of the Taxes is required by law. In
such
event, the Issuer or Guarantor, as the case may be, will pay
such
additional amounts (the "Additional Amount") as shall be necessary
for
the net amounts received by the Bondholders or the Couponholders
after
such withholding or deduction to equal the respective amounts
of
principal and interest which would have been receivable in respect
of
the Bonds or Coupons, as the case may be, in the absence of
such
withholding or deduction, provided, however, that Additional
Amounts
shall not be payable for the following:
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(i) payments
to a Bondholder or Couponholder, or to a third party
for
