DILLARD'S, INC.
("Company")
Debt Securities
TERMS AGREEMENT
December 1, 1998
Dillard's, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention: Vice President and Treasurer
Dear Sirs:
We offer to purchase, on and subject to the terms and
conditions of the Underwriting Agreement Basic Provisions filed
as an exhibit to the Company's registration statement on Form S-3
(No. 333-59183) ("Underwriting Agreement"), the following
securities ("Securities") to be issued under an indenture, dated
as of May 15, 1988, as supplemented by a First Supplemental
Indenture dated as of December 16, 1988, a Second Supplemental
Indenture dated as of September 14, 1990, and a Third
Supplemental Indenture dated as of August 7, 1998, between the
Company and The Chase Manhattan Bank, as Trustee, on the
following terms:
Title: 7% Notes Due 2028
Aggregate Principal Amount: $150,000,000
Interest: 7% per annum, from December 7, 1998, payable
semiannually on June 1 and December 1 and commencing June 1,
1999, to holders of record on the preceding May 15 or November
15, as the case may be.
Maturity: December 1, 2028
Redemption: No provisions for redemption.
Purchase Price: 99.125% of the principal amount of the
Securities, plus accrued interest from December 7, 1998, if any.
Expected Reoffering Price: 100.000% of the principal amount
of the Securities, plus accrued interest from December 7, 1998,
if any.
Specified Funds for Payment of Purchase Price: Federal (same-
day) funds.
Closing Date: 10:00 a.m. on December 7, 1998 at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York,
New York 10017.
Name and Address of Representatives:
Morgan Stanley & Co. Incorporated
1585 Broadway, Second Floor
New York, New York 10036
It is understood that we may, with your consent, amend this
offer to add additional Underwriters and reduce the aggregate
principal amount to be purchased by us by the aggregate principal
amount to be purchased by such additional Underwriters.
The provisions of the Underwriting Agreement are
incorporated herein by reference; provided, however, the
Underwriting Agreement shall be amended, for purposes of this
Terms Agreement only, as follows:
Section 7(c) is hereby amended by deleting the second
sentence and inserting in lieu thereof the following:
The indemnifying party, upon request of the
indemnified party, shall retain counsel
reasonably satisfactory to the indemnified
party to represent the indemnified party and
any others the indemnifying party may
designate in such proceeding and shall pay
the fees and disbursements of such counsel
related to such proceeding. In any such
proceeding, any indemnified party shall have
the right to retain its own counsel, but the
fees and expenses of such counsel shall be at
the expense of such indemnified party unless
(i) the indemnifying party and the
indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the
named parties to any such proceeding
(including any impleaded parties) include
both the indemnifying party and the
indemnified party and representation of both
parties by the same counsel would be
inappropriate due to actual or potential
differing interests between them. It is
understood that the indemnifying party shall
not, in connection with any proceeding or
related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of
more than one separate firm (in addition to
any local counsel) for the Underwriter and
all persons, if any, who control the
Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the
Exchange Act and (b) the fees and expenses of
more than one separate firm (in addition to
any local counsel) for the Company, its
directors, its officers who sign the
Registration Statement and each person, if
any, who controls the Company within the
meaning of either such Section. In the case
of any such separate firm for the Underwriter
and such control persons of the Underwriter,
such firm shall be designated by Morgan
Stanley & Co. Incorporated. In the case of
any such separate firm for the Company and
such control persons of the Company, such
firm shall be designated by the Company. No
indemnifying party shall, without the prior
written consent of the indemnified party,
effect any settlement of any pending or
threatened proceeding in respect of which any
indemnified party is or could have been a
party and indemnity could have been sought
hereunder by such indemnified party, unless
such settlement includes an unconditional
release of such indemnified party from all
liability on claims that are the subject
matter of such proceeding.
The Securities will be made available for checking and
packaging at the office of Morgan Stanley & Co. Incorporated at
least 24 hours prior to the Closing Date.
Please signify your acceptance of our offer by signing the
enclosed response to us in the space provided and returning it to
us.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Harold J. Hendershot III
Name: Harold J. Hendershot III
Title: Vice President
To: Morgan Stanley & Co. Incorporated
1585 Broadway, Second Floor
New York, New York 10036
We accept the offer contained in your letter dated December
1, 1998, relating to $150,000,000 principal amount of our 7%
Notes due 2028. We also confirm that, to the best of our
knowledge after reasonable investigation, the representations and
warranties of the undersigned in the Underwriting Agreement filed
as an exhibit to the undersigned's registration statement on Form
S-3 (No. 333-59183) ("Underwriting Agreement") are true and
correct, no stop order suspending the effectiveness of the
Registration Statement (as defined in the Underwriting Agreement)
or of any part thereof has been issued and no proceedings for
that purpose have been instituted or, to the knowledge of the
undersigned, are contemplated by the Securities and Exchange
Commission and, subsequent to the respective dates of the most
recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been (or in the case of a form
of prospectus filed pursuant to Rule 424(b)(1) or (4) there will
be, as of the date of such prospectus) no material adverse change
in the financial position or results of operations of the
undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectus.
Very truly yours,
DILLARD'S, INC.
By: /s/ Steven K. Nelson
Name: Steven K. Nelson
Title: Vice President and
Assistant Secretary