DILLARD'S, INC.
$100,000,000 OF 6.17% RESET PUT SECURITIES DUE 2011
TERMS AGREEMENT
July 30, 1998
Morgan Stanley & Co. Incorporated
As Representatives of the Several
Underwriters,
c/o Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, New York 10036
Ladies and Gentlemen:
Dillard's, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Morgan Stanley & Co. Incorporated
(the "Representative"), on behalf of the several Underwriters
named in Schedule A hereto and for their respective accounts,
subject in all respects to the terms and conditions of the
Underwriting Agreement Basic Provisions (the "Agreement"), U.S.
$100,000,000 aggregate principal amount of its 6.17% REset Put
Securities Due 2011 described in the Prospectus Supplement (as
defined below). This agreement (this "Terms Agreement") is
supplemental to the Agreement. The notes to be issued pursuant
to this Terms Agreement are referred to herein as the "Notes".
All terms used herein have the meanings given to them in the
Agreement except as otherwise indicated.
The following terms and conditions of the Notes are more
extensively described in the Company's Prospectus Supplement,
dated July 30, 1998, relating to the Notes (the "Prospectus
Supplement"):
Title: 6.17% REset Put Securities
Due 2011 ("REPSSM")*
Trade Date: July 30, 1998
Original Issue Date: August 7, 1998
Principal Amount: $100,000,000
Price to Public: 99.980% of Principal Amount,
plus accrued interest, if
any, from and including
August 7, 1998
Purchase Price: 99.630% of Principal Amount,
plus accrued interest, if
any, from and including
August 7, 1998
Consideration for Remarketing: The Representative will pay
the Company $2,330,000 for
the right to serve as
Remarketing Dealer under the
Remarketing Agreement
Interest Rate: 6.17%
Form: Book-Entry Only
Interest Payment Dates: February 1 and August 1 of
each year, commencing
February 1, 1999
Maturity Date: August 1, 2011, subject to
the purchase and repurchase
rights referred to below
Remarketing: The Notes may be purchased
by the Remarketing Dealer
prior to the Maturity Date,
as described in the
Prospectus Supplement under
"Description of the Offered
Securities-The Reps-Purchase
by the Remarketing Dealer;
Remarketing"
Remarketing Dealer: Morgan Stanley & Co.
Incorporated
Repurchase by the Company: The Notes are subject to
repurchase by the Company
prior to the Maturity Date
if the Notes are not
purchased by the Remarketing
Dealer, as described in the
Prospectus Supplement under
"Description of the Offered
Securities-The
Reps-Mandatory Repurchase by
the Company" and "-Optional
Repurchase by the Company"
Purchase Date and Time: 10:00 a.m., New York time,
on August 7, 1998
Place for Delivery of Notes and Simpson Thacher & Bartlett
Payment Therefor: 425 Lexington Avenue
New York, New York
Method of Payment: Wire transfer of immediately
available funds
Name and Address of Morgan Stanley & Co.
Representatives: Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
The respective principal
amounts of the Securities to
be purchased by each of the
Underwriters are set forth
opposite their names in
Schedule A hereto
1. On the terms and subject to the conditions of the
Agreement and this Terms Agreement, the Company hereby agrees to
issue the Notes, and the Representative agrees, on behalf of the
several Underwriters named in Schedule A hereto and for their
respective accounts, to purchase from the Company, at a purchase
price of 99.630% of principal amount of the Notes, plus accrued
interest, if any, from and including August 7, 1998 (the
"Purchase Price"), the entire principal amount of Notes.
2. As a condition precedent to the Representative's
obligation to consummate the transaction referred to above, the
Representative shall have received the following: (1) a letter
from Friday Eldredge & Clark, counsel for the Company, to the
effect set forth in Section 6(c) of the Agreement and such other
legal matters as the Representative shall reasonably request;
(2) a letter from counsel for the Representative, to the effect
set forth in Section 4(b) of the Agreement, and such other legal
matters as the Representative shall reasonably request; (3) a
letter from Deloitte & Touche LLP to the effect set forth in
Section 4(d) of the Agreement; and (4) a certificate of the
Company dated as of August 7, 1998 to the effect set forth in
Section 4(h) of the Agreement.
3. This Terms Agreement is subject to termination by the
Representative as set forth in Section 10 of the Agreement. In
the event of such termination, no party shall have any liability
to any other party hereto, except as provided in Sections 5 and 7
of the Agreement and except for any direct liability arising
before or in relation to such termination.
4. If at any time when a Prospectus is required by the Act
to be delivered in connection with sales of the Notes (including
any sale of the Notes by the Remarketing Dealer or the
Representative or any of their affiliates in connection with
remarketing), any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of
counsel for the Representative or for the Company, to amend any
Registration Statement or amend or supplement any Prospectus or
Prospectus Supplement in order that such Prospectus or Prospectus
Supplement 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 any Registration Statement or
file a new registration statement or amend or supplement any
Prospectus or issue a new prospectus, prospectus supplement or
pricing supplement in order to comply with the requirements of
the Act or the Commission's interpretations of the Act, the
Company shall prepare and file with the Commission such amendment
or supplement as may be necessary to correct such statement or
omission or to make any such Registration Statement or any such
Prospectus or Prospectus Supplement comply with such
requirements, or prepare and file any such new registration
statement and prospectus as may be necessary for such purpose,
and furnish to such Representative such number of copies of such
amendment, supplement, prospectus or other document as they may
reasonably request. In addition, the Company shall, in
connection with any such sale of the applicable principal amount
of Notes by the Representative or any of its affiliates in
connection with remarketing, (i) execute and deliver or cause to
be executed and delivered legal documentation (including a
purchase agreement or underwriting agreement and registration
rights agreement with customary indemnities, covenants,
representations and warranties, comfort letters and legal
opinions) in form and substance reasonably satisfactory to the
Representative, (ii) provide promptly upon request updated
consolidated financial statements to the date of its latest
report filed with the Commission, and (iii) to the extent the
Company and the Representative deem reasonably necessary for
successful completion of the Coupon Reset Process, make available
senior management of the Company for road show and one-on-one
presentations.
5. All notices to the Representative pursuant to Section 11
of the Agreement shall be sent to Morgan Stanley & Co.
Incorporated, 1585 Broadway, 3rd Floor, New York, New York 10036,
Attention: DPG, Telephone: 212-761-2566, Telecopy: 212-761-0580.
6. This agreement is a Terms Agreement referred to in the
Agreement and shall be governed by and construed in accordance
with the laws of the State of New York and shall be binding upon
the parties hereto and their respective successors.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement between the Company and the
Representative.
Very truly yours,
DILLARD'S, INC.
By: /s/ James I. Freeman
Name: James I. Freeman
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
MORGAN STANLEY & CO.
INCORPORATED
On behalf of themselves and as
Representatives of the Several
Underwriters
By Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershott III
Name: Harold J. Hendershott III
Title: Vice President
SCHEDULE A
Principal
Underwriter Amount
Morgan Stanley & Co. Incorporated $50,000,000
Chase Securities Inc. $50,000,000
Total. . . . . . . . . . . . . . . . . . . $100,000,000
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* REPS is a service mark of Morgan Stanley Dean Witter & Co.