The Merger Agreement

On May 30, 2012, The Talbots, Inc., a Delaware corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with TLB Holdings LLC, a Delaware limited liability company ("Parent"), and TLB Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub").

The Offer and the Merger

Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Sub will, among other things, commence a tender offer (the "Offer") within 10 business days of the execution of the Merger Agreement to purchase all of the outstanding shares of common stock, par value $0.01 per share, of the Company ("Company Common Stock") at a price per share of $2.75, without interest (the "Offer Price"), net to the seller thereof in cash, on the terms and subject to the conditions set forth in the Merger Agreement; and upon successful completion of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation in the Merger and becoming a wholly owned subsidiary of Parent. The Merger Agreement also provides that the Merger may be consummated regardless of whether the Offer is completed, but if the Offer is not completed, the Merger will only be able to be consummated after the stockholders of the Company have adopted the Merger Agreement at a meeting of stockholders and subject to the satisfaction or waiver of other conditions to the consummation of the Merger as set forth in the Merger Agreement. In the Merger, each outstanding share of Company Common Stock, other than shares of Company Common Stock owned by Parent or Sub, by the Company as treasury stock or by stockholders who have validly exercised their appraisal rights under Delaware law, will be cancelled and converted into the right to receive cash in an amount equal to the Offer Price.

Offer Conditions and Closing Conditions

The obligation of Sub to purchase shares tendered in the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement, including the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, that the Office of the Comptroller of the Currency has determined not to disapprove, or has not disapproved, under the Change in Bank Control Act, the acquisition of control of Talbots Classic National Bank by Parent and its affiliates, as applicable, the receipt of a letter from the Pension Benefit Guaranty Corporation stating that it has concluded its investigation regarding The Talbots, Inc. Pension Plan and the transactions contemplated by the Merger Agreement, a minimum level of availability being maintained by the Company under the Amended and Restated Credit Agreement, dated as of February 16, 2012, among the Company, as the borrower representative, and The Talbots Group, Limited Partnership, Talbots Classics Finance Company, Inc. and the Company, as the borrowers, and General Electric Capital Corporation, as the agent, and the lenders party thereto, receipt of proceeds by Parent (either directly or indirectly through Sub or the Company) of the debt financings pursuant to the debt commitment letters from General Electric Capital Corporation and Wells Fargo Bank National Association (or alternative debt financing pursuant to the terms and subject to the conditions set forth in the Merger Agreement) and/or the lenders party to such debt commitment letters (or new debt commitment letters for any such alternative debt financing) have confirmed to Parent and Sub that such debt financing (or such alternative debt financing) in an amount sufficient to

Top-Up Option

The Company has also granted to Parent an irrevocable right (the "Top-Up"), which Sub will be deemed to have exercised following the consummation of the Offer, if necessary, to purchase at a price per share equal to the Offer Price from the Company up to a number of newly issued, fully paid and nonassessable shares of Company Common Stock (the "Top-Up Shares") that, when added to the number shares of Company Common Stock already directly or indirectly owned by Parent and Sub at the closing of the purchase of the Top-Up Shares (after giving effect to the consummation of the Offer, but excluding for this purpose, at the election of Parent or Sub, any shares tendered in the Offer pursuant to guaranteed delivery procedures), constitutes one share more than 90% (determined on a fully diluted basis) of the shares of Company Common Stock outstanding immediately after the issuance of the Top-Up Shares. If Parent and its affiliates acquire at least one share more than 90% of the outstanding shares of Company Common Stock (determined on a fully diluted basis), including through exercise of the Top-Up, the parties have agreed to take all necessary and appropriate action to complete the Merger through the "short form" procedures available under Delaware law (pursuant to which no vote of the stockholders at a stockholder meeting is required to approve the Merger).

Representations and Warranties; Covenants

The Merger Agreement contains representations and warranties of the parties that are, in general, customary for a transaction of this type. The Company has agreed to certain covenants,

Termination; Termination Fees and Parent Expenses

The Merger Agreement contains certain termination rights for both the Company . . .

In connection with entering into the Merger Agreement, the board of directors of the Company adopted and approved Amendment No. 1 (the "Rights Amendment") to the Rights Agreement, dated August 1, 2011, by and between the Company and Computershare Trust Company, N.A., as Rights Agent (the "Rights Agreement"). The effect of the Rights Amendment is to permit execution of the Merger Agreement and performance and consummation of the transactions pursuant to the Merger

(d) Exhibits

Exhibit No.

2.1               Agreement and Plan of Merger, dated as of May 30, 2012 by and
                  among The Talbots, Inc., TLB Holdings LLC and TLB Merger Sub Inc.

4.1               Amendment No. 1 to Rights Agreement, dated as of May 30, 2012, by
                  and between The Talbots, Inc. and Computershare Trust Company,
                  N.A.