exv10w1






Exhibit 10.1




EXECUTION
COPY




REPURCHASE, REPAYMENT AND SUPPORT AGREEMENT




          This REPURCHASE, REPAYMENT AND SUPPORT AGREEMENT (this “Agreement”), is dated as of
December 8, 2009, by and between The Talbots, Inc., a Delaware corporation (the “Company”),
BPW Acquisition Corp., a Delaware corporation (“BPW”), Aeon (U.S.A.), Inc., a Delaware
corporation (“A (USA)”), and Aeon Co., Ltd., a corporation organized and existing under the
laws of Japan (“A”, and, together with A (USA), “Stockholder”). Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed thereto in the Merger
Agreement (as defined below).




W I
T N E S S E T H




          WHEREAS, concurrently with the execution of this Agreement, BPW, the Company, and Tailor
Acquisition Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“ Merger
Sub ”), are entering into an Agreement and Plan of Merger, dated as of the date hereof (as
amended, supplemented, restated or otherwise modified from time to time, the “Merger
Agreement ”) pursuant to which, among other things, Merger Sub will merge with and into BPW
(the “ Merger ”) and, subject to certain exceptions specified therein, each outstanding
share of the common stock, par value $0.0001 per share, of BPW will be converted into the right
to receive the merger consideration specified therein;




          WHEREAS, as of the date hereof, Stockholder is the record and beneficial owner, in the
aggregate, of 29,921,829 shares of common stock, par value $0.01 per share, of the Company (the
“Common Stock”) (including any shares of Common Stock acquired by Stockholder after the
execution of this Agreement, the “Owned Shares”);




          WHEREAS, as of the date hereof, A or A (USA), as applicable, is lender to the Company under
each of the A Financing Agreements (as defined below); and




          WHEREAS, as a condition and inducement to the Company and BPW entering into the Merger
Agreement, each of the Company and BPW has required that Stockholder agree, and Stockholder has
agreed, to enter into this Agreement and (i) abide by the covenants and obligations with respect to
the Owned Shares and A Financing Agreements set forth herein; (ii) sell to the Company the Owned
Shares on the terms and conditions set forth herein; and (iii) take the other actions described in
this Agreement, including with respect to the Debt Repayment (as defined below), on the terms and
conditions set forth herein.




          NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration
given to each party hereto, including the cash being provided by BPW as a result of the Merger,
the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:




     1. Written Consent. Simultaneously herewith, Stockholder has executed a written
consent voting all of its Owned Shares to approve the Merger Agreement and all transactions
contemplated thereby, including the issuance of Common Stock by the Company to BPW Stockholders
thereunder (such written consent, attached hereto as Exhibit A, the “Written 



 









 




Consent”). Stockholder represents and warrants that the Written Consent is valid and
binding, and Stockholder shall not amend, revoke or withdraw the Written Consent in any respect.




     2. Stock Repurchase.



          2.1 Pursuant to the terms of this Agreement, Stockholder shall sell, convey, assign and
transfer to the Company, and the Company shall purchase and acquire from Stockholder (the
“Stock Repurchase”), all of the Owned Shares for an aggregate of one (1) million warrants
to purchase shares of Common Stock of the Company on terms and conditions substantially the same as
set forth in the Warrant Exchange Term Sheet attached as Exhibit G to the Merger Agreement;
provided, that the exercise price of such warrants shall be the closing price of the Common Stock
on the Closing Date (or, if not available on such date, the closing price on the Business Day
immediately preceding the Closing Date) (the “Owned Shares Purchase Price”).




          2.2 The closing of the Stock Repurchase (the “Owned Shares Closing”) shall take place
substantially contemporaneously with (and in no event later than immediately following) the
Closing, at the offices of Wachtell, Lipton, Rosen & Katz. At the Owned Shares Closing, (a) the
Company shall deliver to Stockholder the Owned Shares Purchase Price, and (b) Stockholder shall
deliver or cause to be delivered to the Company certificates representing the Owned Shares, free
and clear of any Encumbrances, duly endorsed in blank or accompanied by stock powers duly endorsed
in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed.




     3. Debt Related Matters.



          3.1 Each of (i) A, as lender under the Loan Facility Agreement, dated as of February 25, 2009
(as amended, supplemented or otherwise modified from time to time, the “$200M Term Loan
Agreement”), between the Company and A, (ii) A (USA), as lender under the Term Loan Agreement,
dated as of July 15, 2008 (as amended on March 12, 2009, and as otherwise amended, supplemented or
otherwise modified from time to time, the “$50M Term Loan Agreement”), between the Company
and A (USA) and (iii) A, as lender under the Secured Revolving Loan Agreement, dated as of April
10, 2009 (as amended, supplemented or otherwise modified from time to time, the “$150M
Revolving Credit Agreement”, and together with the $200M Term Loan Agreement and the $50M Term
Loan Agreement, the “A Financing Agreements”) hereby acknowledges and agrees, solely in its
capacity as a lender under the A Financing Agreement to which it is a party, that:




          (a) it hereby waives any breach, violation, default or right of termination, modification,
cancellation, foreclosure, imposition of a lien, prepayment or acceleration under any term of the
applicable A Financing Agreements arising from or in connection with the entry by the Company into
the Merger Agreement or any of Ancillary Agreements, and the consummation by the Company of the
transactions contemplated thereby;




          (b) it hereby waives any action or other requirement provided for in the applicable A
Financing Agreement which otherwise would constitute a condition precedent to




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the Merger, including without limitation any requirement to deliver any notice, document,
certificate or opinion; and




          (c) other than any Permitted Refinancing (as defined below), during the term of this
Agreement, it shall not assign, sell, transfer, tender, pledge, hypothecate, or grant, create or
suffer an Encumbrance in or upon, or otherwise dispose of (including by testamentary or intestate
succession or otherwise by operation of law) or convey any participation in any right, title or
interest in or to the applicable A Financing Agreement, including any amounts funded by or payable
to it under the applicable A Financing Agreement, any guarantees in respect of the foregoing or any
proceeds of the foregoing.




          3.2 Subject to the terms and conditions provided therein, Stockholder acknowledges that
between the date of this agreement and the Closing, the Company may make borrowings under the $150M
Revolving Credit Agreement and shall use any such borrowings for, among any other purpose permitted
by the $150M Revolving Credit Agreement, any payments of principal, interest or other amounts due
with respect to any of the Third Party Credit Facilities (as defined below) during such period.
The Company agrees to use the amounts available to it under the $150M Revolving Credit Agreement
and other available cash to make all such required payments.




          3.3 The parties hereto agree and acknowledge that (i) the Support Letter (Financial), dated as
of April 9, 2009, from A to the Company, (ii) the Letter of Support, dated as of April 9, 2009,
from A to the Company (together with the document described in clause (i), as amended, replaced,
supplemented or otherwise modified from time to time, the “Support Letters”), (iii) the
Guaranty, dated as of February 6, 2009, made by A in favor of Mizuho Corporate Bank Ltd. with
respect to a Revolving Credit Agreement dated as of December 29, 2008, (iv) the Guaranty, dated as
of February 27, 2009, made by A in favor of Mizuho Corporate Bank Ltd. with respect to a Revolving
Credit dated as of January 28, 2004, (v) the Guaranty, dated as of February 27, 2009, made by A in
favor of Sumitomo Mitsui Banking Corporation with respect to a Revolving Credit Agreement dated as
of January 25, 1994, (vi) the Guaranty, dated as of February 27, 2009, made by A in favor of
Sumitomo Mitsui Banking Corporation with respect to a Revolving Credit Agreement dated as of
December 30, 2008, (vii) the Guaranty, dated as of February 20, 2009, made by A in favor of The
Norinchukin Bank with respect to a Revolving Credit Agreement dated as of January 25, 1994, (viii)
the Guaranty, dated as of February 20, 2009, made by A in favor of The Norinchukin Bank with
respect to a Revolving Credit Agreement dated as of January 2, 2009, (ix) the Guaranty, dated as of
February 26, 2009, made by A in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. with respect to a
Revolving Credit Agreement dated as of February 26, 2009 and (x) the Guaranty, dated as of February
26, 2009, made by A in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. with respect to a Credit
Agreement dated as of March 28, 2007 (the letters and guaranties described in clauses (i) through
(x), collectively, the “Support Agreements” and the credit facilities described in clauses
(iii) through (x), together with (A) the Revolving Loan Credit Agreement, dated April 17, 2003,
between the Company and Mizuho Bank and (B) the Short Term Loan Agreement, dated April 17, 2009,
between the Company and Norinchukin Bank, which are currently outstanding and under which the
Company is indebted, collectively, the “Third Party Credit Facilities”) are in full force
and effect and shall remain in full force and effect until the earlier to occur of (1) their
expiration in accordance with their terms and (2) the Repayment Closing (as




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defined below) provided, however, that the parties hereto agree that A and the
Company may refinance, replace, or retire the Company’s obligations under $150M Revolving Credit
Agreement, the Support Letters, and any other A Financing Agreement or Third Party Credit Facility
(the “Permitted Refinancing”). A agrees to fulfill all of its commitments and obligations
under the Support Agreements prior to the Repayment Closing.




          3.4 The parties hereto agree that, except as otherwise permitted by this Agreement, the
Support Letters shall terminate and be of no further effect upon (but not prior to) the Repayment
Closing.




          3.5 (a) Immediately prior to the Owned Shares Closing, the Company shall (i) repay in full all
then outstanding amounts owed by the Company to A or A (USA), as applicable, under the $200M Term
Loan Agreement, the $50M Term Loan Agreement, the $150M Revolving Credit Agreement and, if
applicable, the Support Letters, and any agreement refinancing the foregoing (collectively, the
“Debt Repayment”), in the aggregate, in immediately available funds to an account specified
by Stockholder in writing; provided that A and A (USA), as applicable, shall, simultaneously with
and conditioned solely upon payment of such Debt Repayment, provide the Company with a customary
(in form and substance) Payoff Letter with respect to each A Financing Agreement and any amount
then outstanding under any Support Agreement (collectively, the “Payoff Letters”), and such
other certificates or instruments as the Company may reasonably request or as may be otherwise
necessary or desirable to evidence the Debt Repayment, (ii) repay in full all then outstanding
amounts owed by the Company to each applicable lender under each of the Third Party Credit
Facilities (and either cause the termination or replacement of any letter of credit outstanding
thereunder or enter into mutually acceptable provisions with respect to each such letter of credit
(such as, by way of example, the Company providing cash collateralization or an acceptable backup
letter of credit or other credit enhancement to such lender, in each case on terms and conditions
acceptable to such lender and the Company) and (iii) terminate each commitment (if any) to extend
credit provided for under any of the foregoing agreements (each of the foregoing repayments and
terminations in this Section 3.5(a), collectively, “Repayment in Full”).




          (b) In furtherance and not in limitation of the foregoing, upon consummation of the Repayment
in Full, all liens, security interests and any other similar interests, of any kind, nature, or
description, whenever and however arising, which A or A (USA), as applicable, may then have in any
of the assets and property, real or personal, tangible or intangible, of the Company or any of its
Subsidiaries, including Encumbrances created by, arising under, or granted to A or A (USA) pursuant
to any security agreement, shall terminate and be satisfied and released. Stockholder hereby
agrees that upon Repayment in Full, the Company and its Representatives shall be authorized to file
and/or record such Uniform Commercial Code termination statements, releases of mortgages and other
release, satisfaction or discharge documents as the Company may reasonably determine to be
necessary or advisable to give effect to or evidence such satisfaction and release, and Stockholder
shall, where applicable, deliver, execute and/or endorse, such releases, satisfactions, discharges,
terminations and other documents and instruments evidencing or effecting such satisfaction and
release as may be reasonably requested from time to time by the Company.




          (c) The closing of the Repayment in Full (the “Repayment Closing”) shall
take place immediately prior to the Owned Shares Closing, at the offices of Wachtell, Lipton,
Rosen & Katz.





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     4. Representations and Warranties. A (USA) and A, jointly and severally, hereby
represent and warrant to each of BPW and the Company as follows:



          4.1 Title. A (USA) has good and valid title to the Owned Shares, free and clear of
any Encumbrance, and upon the Owned Shares Closing, A (USA) will deliver good and valid title to
the Owned Shares, free and clear of any Encumbrance. A or A (USA), as applicable, is the lawful
owner (and will maintain at all times up to immediately prior to the Repayment Closing lawful
ownership), beneficially and of record, of the loans under each of the A Financing Agreements and
all other rights, title or interest in or to each of the A Financing Agreements, including any
amounts funded by or payable to it under such A Financing Agreements, any guarantees in respect of
the foregoing or any proceeds of the foregoing. Such loans and other rights, title and interests
are (and, immediately prior to the Repayment Closing, will be) free and clear of all Encumbrances
and are not (and will not be) subject to any right of setoff or recoupment, defense or
counterclaim, or any adverse claim or right.




          4.2 Power; Due Authorization; Binding Agreement. Each of A (USA) and A is a
corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware and Japan, respectively. Each of A (USA) and A has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations under this Agreement, and to
consummate the transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation by each of A (USA) and A of the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate action on the part of A
(USA) and A, respectively. This Agreement has been duly and validly executed and delivered by each
of A (USA) and A and assuming due execution by the other parties hereto constitutes a valid and
binding obligation of each of A (USA) and A, enforceable against each of A (USA) and A in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of creditors generally, or
by principles governing the availability of equitable remedies.




          4.3 Ownership of Shares. The Owned Shares are owned beneficially by Stockholder, free
and clear of any Encumbrances, and include all of the shares of Common Stock owned beneficially by
Stockholder. As of the date of this Agreement, Stockholder has, and will maintain at all times up
to immediately prior to the Owned Shares Closing, sole voting and dispositive power with respect to
the Owned Shares and will be entitled to dispose of the Owned Shares.




          4.4 No Consents. The execution and delivery of this Agreement by each of A (USA) and A
does not, and the performance of the terms of this Agreement by each of A (USA) and A will not,
require either A (USA) or A to obtain any consent, approval, order, permit, license or
authorization (collectively, “Consents”) under any law or any contract to which either A
(USA) or A is a party or by which any of the assets or properties of either A (USA) or A is bound
or make or file any requisite registration, qualification, declaration or other statement,
including the pre-merger notification requirements of the HSR Act (collectively,
“Filings”), with




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any federal, state, local or foreign government or any court of competent jurisdiction,
regulatory or administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign or supranational (each, a “Governmental Authority”).
The Owned Shares are not subject to any agreement, including any voting agreement, stockholders
agreement, irrevocable proxy or voting trust (other than the Stockholders Agreement, dated as of
November 18, 1993, by and between the Company and JUSCO (U.S.A.), Inc. (the “Stockholders
Agreement”)).




          4.5 No Conflicts. The execution, delivery and performance by each of A (USA) and A of
this Agreement will not (a) contravene, conflict with, or result in any violation or breach of any
provision of the Organizational Documents of A (USA) or A, or (b) contravene, conflict with, or
result in a violation or breach of any provision of any applicable law or any contract to which
either A (USA) or A is a party or by which any of the assets or properties of either A (USA) or A
is bound, except, in the case of this clause (b), any such contraventions, conflicts, violations or
breaches, that, individually or in the aggregate, would not reasonably be expected to impair the
ability of Stockholder to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.




     5. Representations and Warranties of the Company. The Company hereby represents and
warrants to Stockholder as follows:



          5.1 Power; Due Authorization; Binding Agreement. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. The
Company has full corporate power and authority to execute and deliver this Agreement, to perform
its obligations under this Agreement, and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation by the Company of the
transactions contemplated by this Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and validly executed and
delivered by the Company and assuming due execution by the other parties hereto constitutes a valid
and binding obligation of the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors generally, or by principles
governing the availability of equitable remedies.




          5.2 No Consents. Except as otherwise set forth in the Merger Agreement or the Company
Disclosure Schedule, the execution and delivery of this Agreement by the Company does not, and the
performance of the terms of this Agreement by the Company will not, require the Company to obtain
any Consent under any law or any contract to which the Company is a party or by which any of its
assets or properties is bound or make or file any Filings with any Governmental Authority except
for any such Consents the failure of which to have been obtained, and such other Filings the
failure of which to have been made, individually or in the aggregate, have not had and would not
reasonably be expected to have a material adverse effect on the ability of the Company to
consummate the transactions contemplated by this Agreement.




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          5.3 No Conflicts. Except as otherwise set forth in the Merger Agreement or the
Company Disclosure Schedule, the execution, delivery and performance by the Company of this
Agreement will not (a) contravene, conflict with, or result in any violation or breach of any
provision of the Organizational Documents of the Company, or (b) contravene, conflict with, or
result in a violation or breach of any provision of any applicable law or any contract to which the
Company is a party or by which any of its assets or properties is bound, except, in the case of
this clause (b), as has not had and would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the ability of the Company to consummate the
transactions contemplated by this Agreement.




     6. Representations and Warranties of BPW. BPW hereby represents and warrants to
Stockholder as follows:



          6.1 Power; Due Authorization; Binding Agreement. BPW is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. BPW
has full corporate power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement, and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation by BPW of the
transactions contemplated by this Agreement have been duly and validly authorized by all necessary
corporate action on the part of BPW. This Agreement has been duly and validly executed and
delivered by BPW and assuming due execution by the other parties hereto constitutes a valid and
binding obligation of BPW, enforceable against BPW in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally, or by principles governing the
availability of equitable remedies.




          6.2 No Consents. Except as otherwise set forth in the Merger Agreement or the BPW
Disclosure Schedule, the execution and delivery of this Agreement by BPW does not, and the
performance of the terms of this Agreement by BPW will not, require BPW to obtain any Consent
under any law or any contract to which BPW is a party or by which any of its assets or
properties is bound or make or file any Filings with any Governmental Authority except for any such
Consents the failure of which to have been obtained, and such other Filings the failure of which to
have been made, individually or in the aggregate, have not had and would not reasonably be expected
to have a material adverse effect on the ability of BPW to consummate the transactions
contemplated by this Agreement.




          6.3 No Conflicts. Except as otherwise set forth in the Merger Agreement or the BPW
Disclosure Schedule, the execution, delivery and performance by BPW of this Agreement will not
(a) contravene, conflict with, or result in any violation or breach of any provision of the
Organizational Documents of BPW, or (b) contravene, conflict with, or result in a violation or
breach of any provision of any applicable law or any contract to which BPW is a party or by
which any of its assets or properties is bound, except, in the case of this clause (b), as has not
had and would not reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the ability of BPW to consummate the transactions contemplated by this
Agreement.




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     7. Certain Covenants of Stockholder. The Stockholder hereby covenants and agrees with
the Company and BPW as follows:



          7.1 Committee Authority. Stockholder hereby agrees that until the Expiration Date,
Stockholder shall not, directly or indirectly, and shall cause its Subsidiaries and agents
(including, subject to the requirements of applicable law, its representatives and designees on the
Company Board) not to, take, or permit to be taken, any action with the purpose or effect of
revoking, rescinding or limiting in any manner the Audit Committee authority referred to in Section
3.2(b) of the Merger Agreement.




          7.2 Restriction on Transfer. Except as contemplated by this Agreement, from the date
of this Agreement and until the Expiration Date, Stockholder shall not, directly or indirectly,
Transfer any of the Owned Shares. Stockholder hereby further represents, covenants and agrees
that, except for this Agreement, Stockholder (a) has not entered into, and shall not enter into at
any time while this Agreement remains in effect, any voting agreement or voting trust with respect
to the Owned Shares other than the Stockholders Agreement, (b) except as contemplated by this
Agreement, has not granted, and shall not grant at any time while this Agreement remains in effect,
a proxy, consent or power of attorney with respect to the Owned Shares, (c) has not taken and shall
not take any action that would make any representation or warranty of Stockholder contained herein
untrue or incorrect or have the effect of preventing or disabling Stockholder from performing any
of its obligations under this Agreement, and (d) has not committed or agreed, and shall not commit
or agree, to take any of the foregoing actions. As used in this Agreement, the term
“Transfer” means, with respect to any security, the direct or indirect assignment, sale,
transfer, tender, pledge, hypothecation, or the grant, creation or sufferage of a lien or
Encumbrance in or upon, or the gift, placement in trust, or the constructive sale or other
disposition of such security (including transfers by testamentary or intestate succession or
otherwise by operation of law) or any right, title or interest therein (including any right or
power to vote to which the holder thereof may be entitled, whether such right or power is granted
by proxy or otherwise), or the record or beneficial ownership thereof, the offer to make such a
sale, transfer, constructive sale or other disposition, and each agreement, arrangement or
understanding, whether or not in writing, to effect any of the foregoing. The term
“constructive sale” means a short sale with respect to such security, entering into or
acquiring an offsetting derivative contract with respect to such security, entering into or
acquiring a futures or forward contract to deliver such security or entering into any other hedging
or other derivative transaction that has the effect of materially changing the economic benefits
and risks of ownership.




          7.3 Additional Shares.  If, after the date hereof, Stockholder acquires beneficial or
record ownership of any additional shares of Common Stock (any such shares, “Additional
Shares”), including upon exercise of any option, warrant or right to acquire shares of Common
Stock or through any stock dividend or stock split, the provisions of this Agreement applicable to
the Owned Shares shall thereafter be applicable to such Additional Shares as if such Additional
Shares had been Owned Shares as of the date hereof. The provisions of the immediately preceding
sentence shall be effective with respect to Additional Shares without action by any person or
entity immediately upon the acquisition by Stockholder of beneficial or record ownership of such
Additional Shares.




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          7.4 Documentation and Information. Stockholder consents to and authorizes the
publication and disclosure by the Company and BPW of its identity and the nature of
Stockholder’s commitments, arrangements and understandings under this Agreement, in any press
release or any other disclosure document required in connection with the Merger, the Warrant
Exchange Offer or any of the other transactions contemplated by the Merger Agreement and the
Ancillary Agreements. Subject to the terms and conditions hereof, to the extent reasonably
requested by the Company or BPW, Stockholder shall cooperate in the preparation of such
disclosure documents and in providing such information regarding Stockholder and its affiliates as
may be required to be included in such disclosure documents.




          7.5 Further Assurances. From time to time at the request of BPW or the Company,
Stockholder and Affiliates shall execute and deliver such additional documents and take all such
further action as may be reasonably necessary to consummate and make effective the transactions
contemplated by this Agreement.




          7.6 Stockholders Agreement. Stockholder and the Company each agree that, effective
upon the Owned Shares Closing, the Stockholders Agreement shall terminate and shall cease to be of
any further force and effect and no party thereto will thereafter have any rights or obligations
thereunder.




          7.7 Company Board. At or prior to the Owned Shares Closing, Stockholder will deliver
to the Company letters of resignation from each of Tsutomu Kajita, Motoya Okada, Yoshihiro Sano and
Isao Tsuruta, resigning from the Company Board.




          7.8 Waiver of Appraisal Rights. Stockholder hereby waives any rights of appraisal or
rights to dissent from the Merger that it may have under applicable law.




          7.9 Trust Waiver. Stockholder hereby acknowledges that BPW is a recently organized
blank check company formed for the purpose of engaging in a acquiring one or more businesses or
assets (a “Transaction”). Stockholder further acknowledges that BPW’s sole assets
consist of the cash proceeds of the initial public offering of BPW (the “IPO”) and
private placements of its securities, and that substantially all of those proceeds have been
deposited in a trust account with a third party (the “Trust Account”) for the benefit of
BPW, certain of its stockholders and the underwriters of its IPO. The monies in the Trust
Account may be disbursed only (i) to BPW in limited amounts from time to time (and in no event
more than $4,500,000 in total) in order to permit BPW to pay its operating expenses; (ii) if
BPW completes a Transaction, to certain dissenting public stockholders, to the underwriters in
the amount of underwriting discounts and commissions they earned in the IPO but whose payment they
have deferred, and then to BPW; and (iii) if BPW fails to complete a Transaction within the
allotted time period and liquidates, subject to the terms of the agreement governing the Trust
Account, to BPW in limited amounts to permit BPW to pay the costs and expenses of its
liquidation and dissolution, and then to BPW’s public stockholders (as such term is defined in
the agreement governing the Trust Account). For and in consideration of BPW’s agreement to
enter into this Agreement, the Merger Agreement and the other Ancillary Agreements, A (USA), A and
each of their respective stockholders hereby waive any right, title, interest or claim of any kind
it has or may have in the future in or to any monies in the Trust Account and agree not to seek
recourse (whether directly or indirectly) against the Trust Account or any funds distributed
therefrom (except amounts released to BPW as described in clause (i) above) as a result of, or
arising out of, any claims against BPW or otherwise arising under this Agreement or otherwise.





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          7.10 Indemnification and Insurance.




          (a) From and after the Effective Time, the Company shall provide exculpation and
indemnification for each Person who is now or has been at any time prior to the date hereof or who
becomes prior to the Effective Time, an officer, or director of the Company, (the “Indemnified
Parties”) which is at least as favorable to such persons as the exculpation and indemnification
provided to the Indemnified Parties by the Company immediately prior to the Effective Time in their
respective Organizational Documents, as in effect on the date hereof; provided, that such
exculpation and indemnification covers actions on or prior to the Effective Time, including all
transactions contemplated by this Agreement, the Merger Agreement, and the Ancillary Agreement.




          (b) In addition to the rights provided in Section 7.10(a), in the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether civil, criminal or administrative,
including any action by or on behalf of any or all security holders of the Company or BPW, or
any Subsidiary of the Company, or by or in the right of the Company or BPW, or any Subsidiary of
the Company, or any claim, action, suit, proceeding or investigation (collectively, for this
Section 7.10, “Claims”) in which any Indemnified Party is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was an officer or director of the Company or any action or omission or alleged
action or omission by such Person in his capacity as an officer or director, or (ii) this
Agreement, the Merger Agreement, and the Ancillary Agreements and the transactions contemplated
hereby, whether in any case asserted or arising before or after the Effective Time, the Company and
the Surviving Company (the “Indemnifying Parties”) shall from and after the Effective Time
jointly and severally indemnify and hold harmless the Indemnified Parties from and against any
losses, claims, liabilities, expenses (including reasonable attorneys’ fees and expenses),
judgments, fines or amounts paid in settlement arising out of or relating to any such Claims. The
Company, the Surviving Company and the Indemnified Parties hereby agree to use their reasonable
best efforts to cooperate in the defense of such Claims. In connection with any such Claim, the
Indemnified Parties shall have the right to select and retain one counsel, at the cost of the
Indemnifying Parties, subject to the consent of the Indemnifying Parties (which consent shall not
be unreasonably withheld or delayed) and more than one counsel if, in the opinion of such counsel,
the interests of such Indemnified Parties with respect to such Claim diverge or could be reasonably
expected to diverge. In addition, after the Effective Time, in the event of any such threatened or
actual Claim, the Indemnifying Parties shall promptly pay and advance reasonable expenses and costs
incurred by each Indemnified Person as they become due and payable in advance of the final
disposition of the Claim to the fullest extent and in the manner permitted by law. Notwithstanding
the foregoing, the Indemnifying Parties shall not be obligated to advance any expenses or costs
prior to receipt of an undertaking by or on behalf of the Indemnified Party, such undertaking to be
accepted without regard to the creditworthiness of the Indemnified Party, to repay any expenses
advanced if it shall ultimately be determined that the Indemnified Party is not entitled to be
indemnified against such expense. Notwithstanding anything to the contrary set forth in this
Agreement, the Indemnifying Parties (i) shall not be liable for any settlement effected without
their prior written consent (which consent shall not be




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unreasonably withheld or delayed), and (ii) shall not have any obligation hereunder to any
Indemnified Party to the extent that a court of competent jurisdiction shall determine in a final
and non-appealable order that such indemnification is prohibited by applicable law. In the event
of a final and non-appealable determination by a court that any payment of expenses is prohibited
by applicable law, the Indemnified Party shall promptly refund to the Indemnifying Parties the
amount of all such expenses theretofore advanced pursuant hereto. Any Indemnified Party wishing to
claim indemnification under this Section 7.10, upon learning of any such Claim, shall promptly
notify the Indemnifying Parties of such Claim and the relevant facts and circumstances with respect
thereto; provided, however, that the failure to provide such notice shall not
affect the obligations of the Indemnifying Parties except to the extent such failure to notify
actually prejudices the Indemnifying Parties’ ability to defend such Claim.




          (c) For six (6) years after the Effective Time, the Company shall, or shall cause the
Surviving Company to, maintain in effect the Company’s current directors’ and officers’ liability
insurance covering acts or omissions occurring prior to the Effective Time with respect to those
persons who are currently covered by the Company’s directors’ and officers’ liability insurance
policy, on terms with respect to such coverage and amount no less favorable in the aggregate to the
Company’s directors and officers, as the case may be, currently covered by such insurance than
those of such policy in effect on the date of this Agreement (provided, that the Company may
substitute therefor policies of at least the same coverage containing terms and conditions which
are no less advantageous); provided that, in satisfying such obligation, none of the
Company or any of its Subsidiaries shall be obligated to pay premiums per annum in excess of 300%
of the aggregate amount per annum that the Company paid for such coverage in its last full fiscal
year prior to the date hereof; provided, further that, in the event that the
aggregate premiums for maintaining such insurance for the benefit of the persons currently covered
by the Company’s officers and directors insurance policy under this Section 7.10(c) are in excess
of 300% of the aggregate amount per annum, then the Company shall only be obligated to maintain
such insurance coverage as is reasonably available for such amount.




          (d) This Section 7.10 is intended for the irrevocable benefit of, and to grant third-party
rights to, the Indemnified Parties and their successors, assigns and heirs and shall be binding on
all successors and assigns of the Company, including the Surviving Company. Each of the
Indemnified Parties shall be entitled to enforce the covenants contained in this Section 7.10 and
the Company acknowledges and agrees that each Indemnified Party would suffer irreparable harm and
that no adequate remedy at law exists for a breach of such covenants and such Indemnified Party
shall be entitled to injunctive relief and specific performance in the event of any breach of any
provision in this Section 7.10.




     8. Conditions Precedent to the Stock Repurchase and Debt Repayment.  



          8.1 The obligations of the Company to consummate the Stock Repurchase and the Debt Repayment
shall be subject to the satisfaction of the following conditions:




          (a) the representations and warranties of Stockholder in this Agreement shall be true and
correct in all material respects as of the date hereof and on and as of the date of the Owned
Shares Closing;




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          (b) Stockholder shall have complied in all material respects with the agreements on its part
to be performed under this Agreement at or prior to the date of the Owned Shares Closing;




          (c) the Company and/or its Subsidiaries shall obtained the Financing;




          (d) the Company shall have received (or is receiving substantially simultaneously with the
consummation of the Debt Repayment) the Payoff Letters.




          (e) the Closing shall have been consummated (or is being consummated substantially
simultaneously with the consummation of the date of the Owned Shares Closing and the Repayment
Closing) in accordance with the terms and conditions of the Merger Agreement.




          8.2 The obligations of Stockholder to consummate the Stock Repurchase and the Debt Repayment
shall be subject to the satisfaction of the following condition:




          (a)  the representations and warranties of the Company and BPW in this Agreement shall be
true and correct in all material respects as of the date hereof and on and as of the date of the
Owned Shares Closing.




          8.3 The obligations of Stockholder to consummate the Stock Repurchase is further subject to
consummation of the Repayment in Full.




     9. Miscellaneous.



          9.1 Termination of this Agreement. This Agreement shall remain in effect until the
earliest to occur of (a) the amendment or waiver of any provision of the Merger Agreement in a
manner that is adverse in any material respect to Stockholder, or the amendment of the Exchange
Ratio, in each case taken without the prior consent of Stockholder, (b) the consummation of each of
the Owned Shares Closing and the Repayment Closing and, (c) the termination of the Merger Agreement
in accordance with its terms and (d) April 17, 2010 (such earliest date, the “Expiration
Date”); provided that the provisions of Sections 7.9, 7.10 and this Article IX of this
Agreement shall survive any termination of this Agreement indefinitely. Nothing in this
Section 9.1 and no termination of this Agreement shall relieve any party hereto from any liability
or damages incurred or suffered by a party, to the extent such liabilities or damages were the
result of fraud or willful breach by another party of any of its representations, warranties,
covenants or other agreements set forth in this Agreement.




          9.2 Entire Agreement; No Third Party Beneficiaries. This Agreement and, to the extent
referenced herein, the Merger Agreement, together with the several agreements and other documents
and instruments referred to herein or therein or annexed hereto or thereto, embody the complete
agreement and understanding among the parties hereto with respect to the subject matter hereof and
supersede and preempt any prior understandings, agreements or representations by or among the
parties, written and oral, that may have related to the subject matter hereof in any way. Other
than the Indemnified Parties, this Agreement is not intended to confer upon any person not a party
to this Agreement any rights or remedies hereunder; provided however, that BPW may rely upon
Section 7.9.




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          9.3 Amendments. This Agreement may not be modified, amended, altered or supplemented,
except upon the execution and delivery of a written agreement executed by each of the parties to
this Agreement.




          9.4 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):



If to BPW:



BPW Acquisition Corp.

767 Fifth Avenue

New York, New York 10153

Attention: Arjay Jensen

Fax No.: (212) 287-3201



with a copy to (which copy shall not constitute notice):



Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention: Matthew M. Guest, Esq.

Fax No.: (212) 403-2000



Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, New York 10036

Attention: Bruce S. Mendelsohn, Esq.

                 Mark Zvonkovic, Esq.

Fax No.: (212) 872-1002



If to the Company:



The Talbots, Inc.

One Talbots Drive

Hingham, Massachusetts 02043

Attention: General Counsel

Fax No.: (914) 934-9136



with a copy to (which copy shall not constitute notice):



Dewey & LeBoeuf LLP

1301 Avenue of the Americas

New York, New York 10019

Attention: Morton A. Pierce, Esq.

                  Ivan Presant, Esq.

Fax No.: (212) 259-6333




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If to Stockholder:



AEON CO., LTD.

5-1, 1-chome, Nakase

Mihama-ku, Chiba-shi

Chiba, 261-8515 Japan

Telephone: +81 4 3212-6089

FAX: +81 4 3212-6813

EMAIL:  h_wakabaya@aeon.biz

Attention:  International Division



with a copy (which shall not constitute notice) to:



Skadden, Arps, Slate, Meagher & Flom LLP

Tokyo-to Minato-ku Roppongi 1-6-1

Japan 106-6021

Telephone: +81 3 3658-2600

FAX: +81 3 3658-2626

EMAIL: mitsuhiro.kamiya@skadden.com

Attention: Mitsuhiro Kamiya, Esq.




          9.5 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.




          (a) This Agreement shall be governed by and construed in accordance with, the laws of the
State of Delaware without regard, to the fullest extent permitted by law, to the conflicts of laws
provisions thereof which might result in the application of the laws of any other jurisdiction.




          (b) Each party irrevocably submits to the exclusive jurisdiction of (i) the state courts of
the State of Delaware and (ii) the United States District Court for the State of Delaware for the
purposes of any suit, action or other proceeding arising out of or relating to this Agreement, any
documents referred to in this Agreement or any transaction contemplated hereby or thereby. Each
party agrees to commence any action, suit or proceeding relating hereto only in either such court.
Each party irrevocably and unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement, any documents referred to in this
Agreement or any transaction contemplated hereby or thereby in (A) the state court of the State of
Delaware, or (B) the United States District Court for the State of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an inconvenient
forum. Each party further irrevocably consents to the service of process out of any of the
aforementioned courts in any such suit, action or other proceeding by the mailing of copies thereof
by mail to such party at its address set forth in this Agreement, such service of process to be
effective upon acknowledgment of receipt of such registered mail; provided that nothing in this
Section 9.5 shall affect the right of any party to serve legal process in any other manner
permitted by law. The consent to jurisdiction set forth in this Section 9.5 shall not constitute a
general consent to service of process in the State of Delaware and shall have no



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effect for any purpose except as provided in this Section 9.5. The parties agree that a final
judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.




          (c) Each of the parties hereto hereby irrevocably and unconditionally waives any right it may
have to trial by jury in connection with any litigation arising out of or relating to this
Agreement, any documents referred to in this Agreement or any transaction contemplated hereby or
thereby.




          9.6 Specific Performance. Each of the parties hereto acknowledges and agrees that the
other parties would be irreparably damaged in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached.
Accordingly, each of the parties agrees that they each shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and conditions hereof in any Action instituted in any court of the
United States or any state having competent jurisdiction, in addition to any other remedy to which
such party may be entitled, at law or in equity.




          9.7 No Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by any of the parties without the
prior written consent of the other party. Subject to the preceding sentence, this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. Any purported assignment not permitted under this
Section 9.7 shall be null and void.




          9.8 Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.




          9.9 Interpretation.




          (a) Unless the context of this Agreement clearly requires otherwise, (a) references to the
plural include the singular, the singular the plural, the part the whole, (b) references to any
gender include all genders, (c) “including” has the inclusive meaning frequently identified with
the phrase “but not limited to” and “without limitation” and (d) references to “hereunder” or
“herein” relate to this Agreement. Section, subsection, Schedule, Appendix and Exhibit references
are to this Agreement unless otherwise specified. Capitalized terms set forth in the Exhibits,
Appendices and Schedules attached hereto shall have the same meanings as set forth in this
Agreement, unless defined otherwise in such Exhibit, Appendix or Schedule.




          (b) This Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing this Agreement to be drafted.




          9.10 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and




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provisions of this Agreement shall nevertheless remain in full force and effect so long as the
major economic or legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.




          9.11 Stockholder Capacity. Stockholder is entering into this Agreement only in its
capacity as a stockholder of the Company, and nothing herein shall prevent any Representative of
Stockholder from discharging his or her fiduciary duties as a member of the Company Board.




          9.12 Expenses. Except as otherwise provided in the Merger Agreement, all Expenses
incurred in connection with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such Expenses.




          9.13 Several Liability. The Company shall not be responsible to BPW for a breach
by Stockholder hereunder and Stockholder shall not be responsible to BPW for a breach by the
Company hereunder.




[REST OF PAGE INTENTIONALLY LEFT BLANK]




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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.




	 	 	 	 	 
	 	THE TALBOTS, INC.

 	 
	 	By:  	/s/ Michael Scarpa
 	 
	 	 	Michael Scarpa 	 
	 	 	Chief Operating Officer, Chief Financial

Officer and Treasurer 	 
	 
	 	BPW ACQUISITION CORP.

 	 
	 	By:  	/s/ Gary S. Barancik
 	 
	 	 	Gary S. Barancik 	 
	 	 	Chief Executive Officer 	 
	 
	 	AEON (U.S.A.), INC.

 	 
	 	By:  	/s/ Tsutomu Kajita
 	 
	 	 	Tsutomu Kajita 	 
	 	 	President 	 
	 
	 	AEON CO., LTD.

 	 
	 	By: