TALBOTS INC
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<H1 ALIGN="CENTER"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>[HSBC LETTERHEAD]</FONT></H1>


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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  </FONT></TD>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ref:</FONT></TD>
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<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Corporate, Investment Banking and Markets - Industrials Sector L18 </FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONFIDENTIAL</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Talbots Inc<BR> 175 Beal Street<BR>
Hingham, MA 02043-9982<BR>USA </FONT></P>

<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2 October 2004</FONT></P>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Attention:</FONT></TD>
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<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Edward L. Larsen<BR>Chief Financial Officer and Treasurer </FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Mr. Larsen </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BANKING FACILITY<BR>ACCOUNT XXXXXXXXXX </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are pleased to advise that we have
reviewed your banking facility and offer a renewal within the following limit which will
be made available on the specific terms and conditions outlined below. This facility is
also subject to review at any time and, in any event by 15 September 2005 and subject to
our overriding right of suspension, withdrawal and repayment on demand, including the
right to call for cash cover on demand for prospective and contingent liabilities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Uncommited Import Letter of Credit Facility</U></FONT></P>

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     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LC Issuing Bank:</FONT></TD>
     <TD WIDTH=70% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Hongkong and Shanghai Banking Corporation Limited</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Borrower/</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LC Applicant:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Talbots Inc</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Facility Amount:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>USD100,000,000.-</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Purpose:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the issuance of Letters of Credit (LC) at sight or with usance periods up to 6 months, with validity period
up to 1 year to finance the import of general merchandise.</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pricing:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>For account of LC Applicant:</U></FONT></TD></TR>
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<TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- LC Issuance : Nil<BR>
- Amendment : Nil</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=70% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>For account of LC Beneficiary:</U></FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- Payment of documents under usance LC: 0.5% per annum</FONT></TD></TR>
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     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documentation:</FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
     <TD WIDTH=60% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Facsimile Indemnity Letter</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Continuing Commercial Letter of Credit and Security
Agreement dated 15 May 1996 together with amendment letter dated 19 July 1999</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Letter of Credit Discrepancy Waiver dated 11 December 1996</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certified copy of Corporate Banking Resolution from The
Talbots Inc. dated 31 May 1996</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By-Laws of The Talbots Inc</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reporting<BR>Requirement:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10Q and 10K within 90 days of period end</FONT></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We
may, at our sole and absolute discretion, refuse to allow drawings under the facility if
the transaction in question does not meet our operational requirements in respect of this
facility. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Disclosure of Information </U></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless
expressed in writing from you to the contrary, we may provide any information relating to
any of your accounts with us and any facilities we may provide you from time to time or
their conduct or any other information concerning your relationship with us to any other
company or office which at the relevant time belongs to or is part of the HSBC Group. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Section 83 of the Banking Ordinance</U> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please
note that Section 83 of the Banking Ordinance has imposed on us as a bank certain
limitations on advances to persons related to our directors or employees. In acknowledging
this Facility Letter you should advise us whether you are in any way related to any of our
directors or employees within the meaning of Section 83 and in the absence of such advice
we will assume that you are not so related. We would also ask, should you become so
related subsequent to acknowledging this Facility Letter, that you immediately advise us
in writing. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Acceptance </U></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>These
facilities will remain open for acceptance until the close of business on 25 October 2004
and if not accepted by that date will be deemed to have lapsed. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please
arrange for the authorised signatories of your company, in accordance with the terms of
the mandate given to the bank, to sign and return to us the duplicate copy of this letter
to signify your confirmation as to the correctness and validity of all the documentation
listed above and your continued understanding and acceptance of the terms and conditions
under which this facility is granted. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are pleased to be of continued assistance.</FONT></P>

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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yours faithfully
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<BR>&nbsp;&nbsp;/s/ Louise Lau<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Louise Lau<BR>Regional Relationship Manager</FONT></TD>
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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accepted by:
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<BR>&nbsp;&nbsp;/s/ Edward L. Larsen<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
The Talbots Inc</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Encl.</FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 2 - </FONT></P>

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