Exhibit 10.1


 


[BERKSHIRE
LETTERHEAD]


 


PERSONAL
AND CONFIDENTIAL


 


May 10,
2005


 


Carter’s, Inc.


The
Proscenium


1170
Peachtree Street, NE


Suite 900


Atlanta,
GA 30309


 


	
  Attention:

  	
  Mr. Michael
  D. Casey

  
	
   

  	
  Chief
  Financial Officer

  



 


We
are pleased to confirm the arrangements under which Berkshire Partners, LLC (“Berkshire”)
is engaged by Carters, Inc. (the “Company”) as financial advisor in
connection with the possible acquisition of all or a portion of the stock or
assets of OshKosh B’Gosh, Inc. (“Oshkosh”).


 


During
the term of our engagement, we will provide you with financial advice and
assistance in connection with this potential transaction, which may include
assisting you in negotiating the financial aspects of the transaction.


 


If
50% or more of the outstanding common stock of OshKosh or 50% or more of the
assets (based on the book value thereof) of OshKosh is acquired by the Company
or any of its affiliates in one or more transactions, we will charge a
transaction fee of $1,500,000.  If less
than 50% of the outstanding common stock or assets (based on the book value
thereof) of OshKosh is acquired by the Company or any of its affiliates, we
will charge a mutually acceptable transaction fee. The Company agrees to pay
the transaction fee to us in cash upon consummation of such acquisition.


 


You
also agree to reimburse us periodically, upon request, and upon consummation of
the transaction or transactions contemplated hereby or upon termination of our
services pursuant to this letter, for our reasonable and documented expenses,
including the reasonable fees and disbursements of our outside attorneys, plus
any sales, use or similar taxes (including additions to such taxes, if any)
arising in connection with any matter referred to in this letter.


 





















 


Please
note that any written or oral advice provided by Berkshire in connection with
our engagement is exclusively for the benefit of the Company in considering the
transaction, and such advice and the terms of this letter may not be disclosed
to any third party or circulated or referred to publicly without our prior
written consent, except as may be required pursuant to a subpoena or order
issued by a court of competent jurisdiction or by a judicial or administrative
or legislative body or committee, provided that the Company shall have (a) promptly
notified Berkshire of the receipt of any such subpoena or order, (b) consulted
with Berkshire as to the advisability of taking steps to resist or narrow the
scope of the disclosure contemplated thereby and (c) cooperated with Berkshire
in any efforts it may make to obtain an order or other reliable assurance that
confidential treatment will be accorded to such advice and the terms of this
letter.


 


In
connection with engagements such as this, it is our firm policy to receive indemnification.  The Company agrees to the provisions with
respect to our indemnity and other matters set forth in Annex A, which is
incorporated by reference into this letter.


 


Our
services may be terminated by you or us at any time with or without cause effective
upon receipt of written notice to that effect; provided, however, that our
services will automatically terminate on the date one year after the date of
this letter unless we shall agree in writing to extend them for a specified
period.  We will be entitled to the
applicable transaction fees set forth above in the event that at any time prior
to the expiration of six months after such termination (i) an agreement is
entered into with respect to an acquisition of all or a portion of the stock or
assets of OshKosh which is eventually consummated by the Company or any of its
affiliates or (ii) an agreement is entered into pursuant to which a
Payment is eventually made.


 


The
Company recognizes that, in providing our services pursuant to this letter, we
will rely upon and assume the accuracy and completeness of all of the
financial, accounting, tax and other information furnished by the Company or
OshKosh to us for such purposes, and we do not assume responsibility for the
accuracy or completeness thereof.  Berkshire
will have no obligation to conduct any independent evaluation or appraisal of
the assets or liabilities of the Company, OshKosh, or any other party or to
advise or opine on any related solvency issues. 
It is understood and agreed that Berkshire will act under this letter as
an independent contractor with duties solely to the Company and nothing in this
letter or the nature of our services shall be deemed to create a fiduciary or
agency relationship between us and the Company or its stockholders, employees
or creditors.  Except as set forth in
Annex A hereto, nothing in this letter is intended to confer upon any other
person (including stockholders, employees or creditors of the Company) any
rights or remedies hereunder or by reason hereof.


 


Berkshire agrees, except as
otherwise required by law, judicial process or regulatory request or demand or
as contemplated by its engagement hereunder, to hold all non-public information
furnished to Berkshire in the strictest confidence and not to use such non-public
information for any purpose unrelated to the performance of its role as
financial advisor under this letter agreement.


 





















 


Berkshire
does not provide accounting, tax or legal advice.  The Company is authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without Berkshire imposing any limitation of any kind.


 


This
letter may not be amended or modified except in writing executed by the Company and Berkshire, and
shall be governed by and construed in accordance with the internal laws of The
Commonwealth of Massachusetts without reference to principles of conflicts of
law.  This letter may be executed in
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.


 


Please
confirm that the foregoing is in accordance with your understanding by signing
and returning to us the enclosed copy of this letter, which shall become a
binding agreement upon our receipt.  We
look forward to working with you on this assignment.


 


 


	
  Very truly yours,

  	
  Confirmed:

  
	
   

  	
   

  	
   

  
	
  Berkshire Partners, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ross M. Jones

  	
   

  	
   

  	
  CARTER’S, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Casey

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  May 10, 2005

  	
   

  
						



 





















 


Annex A


 


The Company agrees to indemnify Berkshire,
any controlling person of Berkshire and each of its respective directors,
officers, employees, agents, affiliates and representatives (each, an “Indemnified
Party”) and hold each of them harmless against any and all losses, claims,
damages, expenses, liabilities, joint or several (collectively, “Liabilities”)
to which the Indemnified Parties may become liable, directly or indirectly,
arising out of, or relating to, the letter agreement to which this Appendix A
is attached (the “Letter Agreement”) or Berkshire’s services thereunder, unless
it is finally judicially determined that the Liabilities resulted from the
gross negligence, willful misconduct or bad faith of such Indemnified
Party.  The Company further agrees to
reimburse each Indemnified Party immediately upon request for all expenses
(including reasonable attorneys’ fees and expenses) as they are incurred in
connection with the investigation of, preparation for, defense of, or providing
evidence in, any action, claim, suit, proceeding or investigation (each and collectively,
an “Action”), directly or indirectly, arising out of, or relating to, the
Letter Agreement or Berkshire’s services thereunder, whether or not pending or
threatened and whether or not any Indemnified Party is a party to such Action;
provided, however, that if it is finally judicially determined that some or all
of the Liabilities resulted from the gross negligence, willful misconduct or
bad faith of any Indemnified Party, the Indemnified Parties shall remit to the
Company any amounts reimbursed pursuant to this sentence that relate to such
Liabilities.  The Company also agrees
that no Indemnified Party shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company or any person asserting claims
on behalf of or in right of the Company, directly or indirectly, arising out
of, or relating to, the Letter Agreement or Berkshire’s services thereunder,
unless it is finally judicially determined that such
liability resulted from the gross negligence, willful misconduct or bad faith
of such Indemnified Party.  Moreover, in
no event, regardless of the legal theory advanced, shall any Indemnified Party
be liable to the Company or any person asserting claims on behalf of or in the
right of the Company for any consequential, indirect, incidental or special
damages of any nature.


 


The Company agrees that, without Berkshire’s
prior written consent (which consent will not be unreasonably withheld), it
will not agree to any settlement of, compromise or consent to the entry of any
judgment in or other termination of (each and collectively, a “Settlement”) any
Action in respect of which indemnification could be sought hereunder (whether
or not Berkshire or any other Indemnified Party is an actual or potential party
to such Action), unless (a) such Settlement includes an unconditional
release of each Indemnified Party from any liabilities arising out of such
Action and (b) the parties agree that the terms of such Settlement shall
not include any statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of, any Indemnified Party.


 


The Company and Berkshire agree that if any
indemnification or reimbursement sought pursuant to the first paragraph of this
Appendix A is for any reason unavailable or insufficient to hold any
Indemnified Party harmless for Liabilities identified in the first paragraph of
this Appendix A (except by reason of the gross negligence, willful misconduct
or bad faith of an Indemnified Party) then, whether or not Berkshire is the person
entitled to indemnification or reimbursement, the Company and Berkshire shall
contribute to the Liabilities for which such indemnification or reimbursement
is held unavailable in such proportion as is appropriate to reflect (a) the
relative benefits to the Company on the one hand and Berkshire on the other
hand, in connection with the transaction to which such indemnification or
reimbursement relates or (b) if the allocation provided by clause (a) above
is not available, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (a), but also the relative fault
of the parties as well as any other relevant equitable considerations;
provided, however, that in no event shall the amount to be contributed by Berkshire
exceed the fees actually received by Berkshire under the Letter Agreement.  The Company agrees that, for the purposes of
this paragraph, the relative benefits to the Company and Berkshire of the
contemplated transaction (whether or not such transaction is consummated) shall
be deemed to be in the same proportion that the aggregate consideration
payable, exchangeable or transferable (or contemplated to be payable,
exchangeable or transferable) in such transaction bears to the fees paid or
payable to Berkshire as financial advisor under the Letter Agreement.


The rights of the Indemnified Parties
referred to above shall be in addition to any rights that any Indemnified Party
may otherwise have.