[HSBC Letterhead]
CONFIDENTIAL
The Talbots, Inc.
175 Beal Street
Hingham, MA 02043
USA 12 May 2000
Attn: Mr. Edward L. Larsen
Senior Vice President
Dear Sir
BANKING FACILITIES
We refer to our recent discussion and are pleased to advise that we have
reviewed your banking facilities and offer a renewal within the following
revised limits. These facilities are subject to review at any time and, in any
event by 30 April 2001 and also subject to our overriding right of withdrawal
and repayment on demand, including the right to call for cash cover on demand
for prospective and contingent liabilities.
Uncommitted Import Letter of Credit Facility
LC Issuing Bank : The Hongkong and Shanghai Banking Corporation Limited.
(please also see "Other terms and conditions" below)
Borrower /
LC Applicant : The Talbots, Inc.
Facility Amount : USD50,000,000 (previously USD30,000,000)
Purpose : For the issuance of Letters of Credit (LC) at sight
or with usance periods of up to 6 months, with
validity period up to 1 year to finance the import of
general merchandise.
Pricing : On LC Applicant :
- LC Issuance : Nil
- Amendments : Nil
On LC Beneficiary :
- Payment of documents presented via HSBC Branches :
Nil
- Payment of documents presented via third party
bank : 0.125% (minimum : USD65.00)
- Payment of documents under usance LC : 0.5% per
annum
<PAGE>
Collateral : Nil
Documentation : 1. Facsimile Indemnity Letter
2. Continuing Commercial Letter of Credit and
Security Agreement dated 15 May 1996
together with amendment letter dated 19
July 1999.
3. Letter of Credit Discrepancy Waiver dated
11 December 1996.
4. Certified copy of Corporate Banking
Resolution dated 31 May 1996.
5. Board Resolution approving LC facility of
USD30 million (approval dates : 7 February
1996 / 6 February 1997) which were
certified on 21 June 1999.
6. By-Laws of The Talbots, Inc.
Reporting : 10Q and 10K within 90 days of period end
Requirement
Financial : Nil
Covenants
Other Terms : USD10m of the facility is available with HSBC Bank
and Conditions USA until 30 September 2000 when all LC issuance
should be transferred to Hong Kong. (total LC
outstandings in both Hong Kong and the United States
however must not exceed overall facility limit of
USD50 million at all time).
Please arrange for the authorised signatories to sign and return to us the
duplicate copy of this letter to 1) signify your understanding and acceptance of
the terms and conditions under which the above facility is granted, and 2)
confirm the correctness and validity of all the documentation listed above.
This facility will remain open for acceptance until the close of business on 29
May 2000 and if not accepted by that date will be deemed to have lapsed.
We are pleased to be of continued assistance.
Yours sincerely Accepted and Agreed to :
The Talbots, Inc.
PEARLY LAW EDWARD L. LARSEN
----------------
Pearly Law
Relationship Manager
Enc
/jw
