Document:

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                                                                   Exhibit 10.9

                      AMENDED AND RESTATED PROMISSORY NOTE

$4,336,445                                                   New York, New York
                                                                January 1, 2000
                                           amended and restated August 15, 2001

         FOR VALUE RECEIVED, the undersigned, Frederick J. Rowan II (the
"Payor"), hereby promises to pay to the order of The William Carter Company,
or its successor or assign (the "Holder"), at the office of The William
Carter Company, 1170 Peachtree Street, Suite 900, Atlanta, Georgia 30309,
Attn: Mr. Michael Casey, in lawful money of the United States of America in
immediately available funds, the principal sum of FOUR MILLION THREE HUNDRED
THIRTY-SIX THOUSAND FOUR HUNDRED FORTY-FIVE DOLLARS ($4,336,445), together
with any accrued and unpaid interest on such principal amount from time to
time outstanding, which sum shall be due and payable in installments of
$600,000 (or such lesser amount as remains outstanding) commencing on March
31, 2003 and thereafter on each anniversary thereof until such principal
amount and all accrued and unpaid interest thereon has been repaid.

         This Amended and Restated Promissory Note restates in its entirety
the Promissory Note dated as of January 1, 2000, issued by the Payor to the
Holder in the original principal amount of $4,336,445.

         From the date hereof, interest (i) shall accrue on the outstanding
principal amount thereof at a rate which shall be calculated for each quarter
or part thereof of the Holder's fiscal year, and (ii) shall equal the average
rate paid by The William Carter Company under the revolving portion of its
senior credit facility during such period (or if there are no borrowings
outstanding during such period, the average rate that would have been paid
thereunder), and (iii) shall be calculated on the basis of the actual number
of days elapsed over 365, from the date hereof to the date of payment. For
the avoidance of doubt, the total amount payable under this Note shall
include any accrued but unpaid interest on the principal amount for the
period beginning January 1, 2000 and ending August 15, 2001.

         The Payor hereby promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, on any overdue interest, and
on any overdue amount under any instrument now or hereafter evidencing or
securing the indebtedness evidenced hereby, at a rate equal to the rate of
interest set forth above, plus 2%, calculated on the basis of the actual
number of days elapsed over 365, from the date such principal or interest was
due to the date of payment.

         The Payor shall have the right at any time and from time to time on
any business day to prepay the principal amount of this Note, together with
accrued and unpaid interest thereon, in whole or in part, without penalty or
premium, upon at least two business days' prior written notice to the Holder
hereof, such notice to specify the prepayment date and the principal amount
hereof to be prepaid. In the event the Payor decides not to so prepay this
Note in accordance with any such notice delivered to the Holder hereof, the
Payor shall so notify the Holder hereof, not less than one business day
before such prepayment would otherwise have been made.

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         All amounts paid or prepaid by Payor hereunder shall be applied
first to the accrued and unpaid interest, and then to reduce the outstanding
principal amount under this Note.

         All payment and prepayment of the principal hereof and interest
hereon and the respective dates thereof shall be endorsed by the Holder
hereof on the schedule attached hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part hereof;
PROVIDED, HOWEVER, that the failure of the Holder hereof to make such a
notation or any error in such a notation shall not affect the obligations of
the Payor under this Note.

         The Promissory Note is secured by that certain Amended and Restated
Stock Pledge Agreement, dated as of even date herewith, between the Holder
and the Payor (the "Stock Pledge Agreement").

         Notwithstanding anything to the contrary contained herein, in case
of the happening of any of the following events ("Events of Default"):

                  (i) default shall be made in the payment of the principal of
         or interest on this Note when and as the same shall become due and
         payable, whether at the due date thereof or at a date fixed for
         prepayment thereof or otherwise;

                  (ii) a breach of any covenant contained in this Note, other
         than the covenant to pay the principal of and interest on this Note,
         which breach shall continue unremedied for thirty days after written
         notice by the Holder;

                  (iii) the Payor shall (a) voluntarily commence any proceedings
         or file any petition seeking relief under Title 11 of the United States
         Code or any other Federal or state bankruptcy, insolvency, liquidation
         or similar law, (b) consent to the institution of, or fail to
         controvert in a timely and appropriate manner, any such proceeding or
         the filing of any such petition, (c) apply for or consent to the
         appointment of a receiver, trustee, custodian sequestrator or similar
         official for him or for a substantial part of his property, (d) file an
         answer admitting the material allegations of a petition filed against
         him in any such proceeding, (e) make a general assignment for the
         benefit of creditors or (f) become unable, admit in writing his
         inability or fail generally to pay his debts as they become due;

                  (iv) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed in a court of competent
         jurisdiction seeking (a) relief in respect of the Payor, or of a
         substantial part of the property of the Payor, under Title 11 of the
         United States Code or any other Federal or state bankruptcy,
         insolvency, receivership or similar law or (b) the appointment of a
         receiver, trustee, Custodian, sequestrator or similar official for the
         Payor or for a substantial part of the property of the Payor; and such
         proceeding or petition shall continue undismissed for 60

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         days or an order or decree approving or ordering any of the foregoing
         shall continue unstayed and in effect for 60 days;

                  (v) a Change in Control or an Initial Public Offering (each as
         defined in the Stockholders Agreement, dated as of August 15, 2001
         among Carter Holdings, Inc., the Payor and the other stockholders named
         therein (the "Stockholders Agreement")) of Carter Holdings, Inc., a
         Massachusetts corporation, or The William Carter Company, a
         Massachusetts corporation, shall be consummated;

                  (vi) an Event of Default (as defined in the Stock Pledge
         Agreement) shall have occurred under the Stock Pledge Agreement;

                  (vii) Payor shall, for any reason, cease to be an employee of
         Holder and the Company shall not have issued a Call Notice (as defined
         in the Stockholders Agreement) for repurchase of the New Pledged Shares
         (as defined in the Stock Pledge Agreement) pursuant to Section 2.2 of
         the Stockholders Agreement, within 90 days after termination; PROVIDED,
         HOWEVER, that in the event Payor shall cease to be an employee of
         Holder by reason of death or Disability (as defined in the Stockholders
         Agreement), and the Company shall not have issued a Call Notice (as
         defined in the Stockholders Agreement), the Holder may only accelerate
         this Note if an Event of Default set forth in paragraphs (i)-(vi)
         occurs.

then, in any such event (other than an event described in paragraph (iii) or
(iv) above), the Holder hereof may declare the principal amount of this Note
then outstanding to be forthwith due and payable, whereupon the principal
hereof, together with accrued and unpaid interest thereon, shall become
forthwith due and payable both as to principal and interest, without
presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived by the Payor (to the extent permitted by law),
anything contained herein to the contrary notwithstanding; and, in any event
described in paragraph (iii) or (iv) above, the principal amount of this
Note, together with accrued and unpaid interest hereon, shall automatically
become due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Payor.

         In the event the Company repurchases the new Pledged Shares (as
defined in the Stock Pledge Agreement) pursuant to Section 2.2 of the
Stockholders Agreement, all proceeds to the Payor from such sale up to and
including the amount equal to the outstanding principal and accrued but
unpaid interest on this Note, shall be offset against and used to pay this
Note.

         If any payment under this Note is not made when due, whether at
maturity or by acceleration, Payor shall pay all costs of collection whether
or not suit is filed hereon, on the Stock Pledge Agreement or otherwise,
including, but not limited to, reasonable attorneys' fees and expenses
incurred in connection with the protection or realization of any collateral.

         Payor hereby certifies and declares that all acts, conditions and
things required to be done and performed and to have happened precedent to
the creation and issuance of this Note, and to

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constitute this Note the legal, valid and binding obligation to Payor,
enforceable in accordance with the terms hereof, have been done and performed
and happened in due and strict compliance with all applicable laws.

         The Payor hereby waives (to the extent permitted by law) diligence,
presentment, demand, protest and notice of any kind whatsoever except as
expressly required herein. The nonexercise by the Holder of any of its rights
hereunder or under the Stock Pledge Agreement in any particular instance
shall not constitute a waiver thereof in that or any subsequent instance. The
Holder shall at all times have the right to proceed against any portion of
the security held herefor in such order and in such manner as the Holder may
select, without waiving any rights with respect to any other security. No
delay or omission on the part of the Holder in exercising any right hereunder
or under the Stock Pledge Agreement or other agreement shall operate as a
waiver of such right or of any other right under this Note.

         This Note may be assigned, pledge, hypothecated or otherwise
transferred by the Holder hereof.

         Any notice to be given hereunder shall be in writing and shall be
deemed to have been given (i) when presented personally or (ii) three
business days after being deposited in a regularly maintained receptacle for
the United States Postal Service, postage prepaid, registered or certified,
return receipt requested addressed to the respective party at the address
specified herein or such other address as any party may from time to time
designate by written notice to the other as herein required.

         The Payor irrevocably submits to the jurisdiction of (a) the Supreme
Court of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of or relating to this Note.
Pledgor expressly waives any objection which he may have now or hereafter to
the laying of the venue or to the jurisdiction of any such suit, action or
proceedings.

         All agreements between Payor and the Holder hereof are expressly
limited so that in no contingency or event whatsoever, whether by reason of
advancement of the proceeds of the loan evidenced hereby, acceleration of
maturity of the unpaid principal balance hereof, or otherwise, shall the
interest contracted for, charged or received by the Holder exceed the maximum
amount permissible under applicable law. If, from any circumstances
whatsoever, interest would otherwise be payable to the Holder hereof in
excess of the maximum lawful amount, then IPSO FACTO, the interest payable to
the Holder shall be reduced to the maximum amount permitted under applicable
law, and the amount of interest for any subsequent period, to the extent less
than that permitted by applicable law, shall to that extent be increased by
the amount of such reduction. If from any circumstance the Holder hereof
shall ever receive anything of value deemed interest by applicable law in
excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the unpaid principal a balance
due hereunder and not to the payment of interest, or if such excessive
interest exceeds the unpaid principal balance due hereunder, such excess
shall be refunded to Payor. All interest paid or agreed to be paid to the
Holder hereof shall, to the extent permitted by applicable law, be amortized,
prorated, allocated or spread throughout the full period until payment in
full of the principal balance due hereunder (including the period of any
renewal or extension) so that

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interest hereon for such period shall not exceed the maximum amount permitted
by applicable law. The provisions of this paragraph shall control all
agreements between the Payor and the Holder hereof.

         Any provision of this Note that is declared invalid, illegal or
unenforceable in any jurisdiction shall not affect in any way the remaining
provisions hereof in such jurisdiction or render that or any other provision
of this Note invalid, illegal or unenforceable in any other jurisdiction.

         This Note has been executed and delivered in the State of New York
and shall be governed and construed, and all rights and obligation hereunder
shall be determined, in accordance with the laws of the State of New York.

         Executed and delivered by the undersigned as of this 15th day of
August, 2001 in the County, City and State of New York.

Addresses for notices to the Payor:          Frederick J. Rowan, II
                                             4280 Olde Mill Lane
                                             Atlanta, Georgia  30342

                                                 /s/  David A. Brown
                                             --------------------------------
                                             Frederick J. Rowan, II

                                             By:  David A. Brown, his
                                                  attorney-in-fact

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                      SCHEDULE OF PAYMENTS AND PREPAYMENTS<Page>

                                                                  Exhibit 10.10

                   AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

         This Amended and Restated Stock Pledge Agreement (the "Agreement"),
is entered into as of August 15, 2001 by and between Frederick J. Rowan, II
("Pledgor") and The William Carter Company, a Massachusetts corporation (the
"Secured Party").

                               W I T N E S S E T H

         WHEREAS, the Secured Party made a loan to Pledgor in the aggregate
amount of $4,336,445.00, and, as evidence thereof, Pledgor executed and
delivered to the Secured Party a Promissory Note dated as of January 1, 2001
(the "Original Note");

         WHEREAS, Pledgor held an aggregate of 56,649.455 shares (the
"Original Pledged Shares") of the Class C Stock, par value $0.01 per share,
of Carter Holdings, Inc., a Massachusetts corporation ("Carter Holdings");

         WHEREAS, as a condition to the making of the loan evidenced by the
Original Note, the parties contemplated that the Original Pledged Shares
would be pledged and delivered by Pledgor to the Secured Party, with duly
endorsed instruments of transfer, as security for such loan and the Original
Pledged Shares were so delivered;

         WHEREAS, in connection with the transactions contemplated by the
Stock Purchase Agreement, dated as of July 12, 2001 as amended by Amendment
No. 1 thereto dated as of August 15, 2001, by and among Carter Holdings, the
Selling Stockholders named therein and CH Acquisitions LLC (the "Stock
Purchase Agreement"), Pledgor and the Secured Party have agreed to (i) the
exchange of the Original Pledged Shares for 16,652.19 shares of Common Stock,
par value $0.01 per share, of Carter Holdings (the "New Pledged Shares") and
(ii) the retention of 251,954.25 options which shall vest in accordance with
the transactions contemplated by the Stock Purchase Agreement (the "Vested
Options") and Carter Holdings expects to issue to Pledgor certain Time
Options and Performance Options, each as defined in the Stockholders
Agreement dated as of August 15, 2001 among Carter Holdings the Payor and the
other stockholders named therein (the "Stockholders Agreement");

         WHEREAS, the Secured Party has agreed to continue to make the loan
to Pledgor in the same amount and on substantially the same terms as set
forth the Original Note, and as evidence thereof, Pledgor shall execute and
deliver to the Secured Party an amended and restated promissory note dated as
of even date herewith (the "Amended Note"); and

         WHEREAS, as a condition to the continued existence of the loan
evidenced by the Amended Note, the parties contemplate that (i) the New
Pledged Shares, (ii) the Performance Options, the Time Options and the Vested
Options whether held on the date hereof or acquired hereafter (collectively,
the "Pledged Options"), and (iii) any stock received upon the exercise of (A)
any vested and earned Performance Options and any vested Time Options, when
received by Pledgor, and (B) any Vested Options, will be pledged and
delivered by Pledgor to the Secured Party, with duly endorsed instruments of
transfer, as security for such loan.

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         NOW, THEREFORE, in consideration of the mutual covenants, conditions
and provisions contained herein and in the Amended Note and for other good
and valuable consideration, the parties hereto agree as follows:

         AMENDMENT AND RESTATEMENT. Effective as of the date hereof, this
Agreement amends and restates in its entirety the Stock Pledge Agreement
dated as of January 1, 2000 by and between Pledgor and the Secured Party, as
amended and in effect on the date hereof, between Pledgor and the Secured
Party.

         Section 1. DEFINITIONS. Capitalized terms used herein without
definition, which are defined in or by reference in the Amended Note, shall
have the respective meanings specified therein.

         Section 2. PLEDGE. Pledgor hereby conveys, pledges, assigns and
transfers to the Secured Party, and hereby grants to the Secured Party, a
valid, first priority security interest (the "Security Interest") in
Pledgor's right, title, interest in and to the following (the "Pledged
Collateral"):

                  (a) the New Pledged Shares, and the certificates representing
         the New Pledged Shares, all dividends, cash, securities, instruments
         and other property from time to time paid, payable or otherwise
         distributed in respect of or in exchange for all or any part of the New
         Pledged Shares and all proceeds thereof;

                  (b) the Pledged Options, and the certificates representing the
         Pledged Options, all dividends, cash, securities, instruments and other
         property from time to time paid, payable or otherwise distributed in
         respect of or in exchange for all or any part of the Pledged Options
         and all proceeds thereof;

                  (c) all securities issued by Carter Holdings, or any successor
         thereto, from time to time acquired by Pledgor in substitution for or
         in addition to any of the foregoing, whenever and however acquired,
         including without limitation all stock of Carter Holdings, all
         securities convertible into or exchangeable for such stock and all
         options, warrants and other rights to purchase such stock, all
         certificates and instruments representing such securities, together
         with the interest coupons (if any) attached thereto, and all dividends,
         cash, securities, instruments and other property from time to time
         paid, payable or otherwise distributed in respect of or in exchange for
         any or all of such securities and all proceeds thereof; and

                  (d) any stock issued to Pledgor upon the exercise of any
         vested and earned Performance Options, any vested Time Options and any
         Vested Options (collectively, the "Exercised Options").

         Section 3. SECURED OBLIGATIONS. The Security Interest shall secure
for the benefit of the Secured Party the following (collectively, the
"Secured Obligations"):

                  (a) payment and performance of each and every obligation,
         covenant and agreement of Pledgor now, or hereafter existing contained
         herein or in the Amended

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         Note, whether for principal, interest, fees, expenses or otherwise,
         and any amendments or supplements thereto, extensions or renewals
         thereof or replacements therefor; and

                  (b) payment of all sums advanced upon an Event of Default or
         in accordance herewith by the Secured Party to protect the Pledged
         Collateral, with interest thereon at the rate equal to the highest
         interest rate under the Amended Note as in effect from time to time;

in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, renewed or
restructured, whether or not from time to time decreased or extinguished
(except as provided in Section 17 hereof) and later increased, created or
incurred, and including all indebtedness, obligations and liabilities of
Pledgor under any instrument now or hereafter evidencing or securing any of
the foregoing.

         Section 4.  DELIVERY OF COLLATERAL; ISSUANCE OF ADDITIONAL SHARES.

                  (a) All certificates or instruments representing or evidencing
         the New Pledged Shares, the Pledged Options and the Exercised Options
         shall be delivered to the Secured Party on the date hereof, and shall
         be held by the Secured Party pursuant hereto at all times hereafter,
         and all certificates and instruments representing or evidencing stock
         or other securities acquired by Pledgor after the date hereof and
         constituting Pledged Collateral hereunder shall be delivered to the
         Secured Party immediately upon, and held by the Secured Party at all
         times after, acquisition thereof by Pledgor. All such certificates or
         instruments shall be in suitable form for transfer by delivery, or
         shall be accompanied by duly executed instruments of transfer or
         assignment in blank, all in form and substance satisfactory to the
         Secured Party.

                  (b) Upon the occurrence and during the continuance of an Event
         of Default hereunder, the Secured Party shall have the right, at any
         time in its discretion, to transfer to or to cause to be registered on
         the books of Carter Holdings in the name of the Secured Party or any of
         its nominees any or all of the Pledged Collateral (with, in the
         discretion of the Secured Party, such transfer or registration
         expressly empowering the Secured Party to vote shares of stock included
         in the Pledged Collateral), subject only to the revocable rights
         specified in Section 7(a). In addition, the Secured Party shall have
         the right at any time to exchange certificates or instruments
         representing or evidencing Pledged Collateral for certificates or
         instruments of smaller or larger denominations.

         Section 5. WAIVER OF EVENT OF DEFAULT UPON APPROVED SALE. The
undersigned hereby agree that any Event of Default arising under the Original
Note upon the occurrence of an Approved Sale, as therein defined, as a result
of the transactions contemplated by the Stock Purchase Agreement, shall be,
and hereby is, expressly waived, together with any rights and obligations of
either party hereto upon such Event of Default. Such waiver shall in no way
be deemed to affect any rights or obligations of either party upon the
occurrence of an Event of Default as defined in Section 13 of this Agreement
or as set forth in the Amended Note.

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         Section 6.  REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS.

                  (a) Pledgor hereby represents and warrants that Pledgor is the
         legal and equitable owner of the Pledged Collateral free and clear of
         all liens, charges, encumbrances and security interests of every kind
         and nature, other than Permitted Encumbrances (as defined below).

                  (b)  Pledgor covenants that:

                           (i) except for the Security Interest granted hereby
                  and the security interests permitted under or otherwise
                  contemplated hereby ("Permitted Encumbrances"), Pledgor will
                  not create, assume, incur or permit to exist or to be created,
                  assumed or incurred, directly, or indirectly, any lien of any
                  kind on, or any repurchase agreement with respect to, the
                  Pledged Collateral, and will defend the Pledged Collateral
                  against, and take such action as is necessary to remove, any
                  such lien, and will defend the Security Interest against the
                  claims and demands of all persons; and

                           (ii) Pledgor shall advise the Secured Party promptly,
                  in reasonable detail, of any lien or claim made or asserted
                  against any of the Pledged Collateral; and of the occurrence
                  of any other event which would have a material adverse effect
                  on the enforceability of the Security Interest created
                  hereunder.

                  (c) Pledgor may, upon thirty (30) days prior notice to Secured
         Party, transfer a part of the Pledged Collateral to one or more persons
         if: (i) the person(s) acquiring such Pledged Collateral grant(s) to the
         Secured Party a pledge of such Pledged Collateral, on terms and
         conditions reasonably acceptable to the Secured Party; (ii) the
         ownership of such Pledged Collateral by such person(s) would not cause
         Pledgor to breach any of his covenants set forth herein or cause any
         Event of Default (or event that with giving of notice, lapse of time or
         both could constitute an Event of Default); and (iii) each such person
         is otherwise reasonably acceptable to the Secured Party. Pledgor shall
         not otherwise transfer, or consent to the transfer of, any of the
         Pledged Collateral.

         Section 7. FURTHER ASSURANCES. Pledgor agrees that at any time and
from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver all further instruments and documents, and take all further
action that the Secured Party may reasonably request, in order to perfect and
protect the Security Interest granted or intended to be granted hereby or to
enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.

         Section 8.  VOTING RIGHTS; DIVIDENDS; ETC.

                  (a)  So long as no Event of Default hereunder shall have
         occurred and be continuing:

                           (i) Pledgor shall be entitled to exercise any and all
                  voting and other consensual rights (if any) pertaining to the
                  Pledged Collateral or any part thereof for any purpose not
                  prohibited by the terms of this Agreement; and

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                           (ii) except as otherwise provided in Sections 4(b)
                  and 7(c) hereof, Pledgor shall be entitled to receive and
                  retain any dividends, cash and other property from time to
                  time paid, payable or otherwise distributed in respect of the
                  Pledged Collateral.

                  (b) Pledgor hereby irrevocably appoints the Secured Party as
         Pledgor's proxyholder with respect to the New Pledged Shares, Pledged
         Options, and Exercised Options and any other voting securities forming
         a part of the Pledged Collateral with full power and authority to vote
         such New Pledged Shares, Pledged Options and any Exercised Options and
         other voting securities and to otherwise act with respect to such New
         Pledged Shares, Pledged Options and Exercised Options or other voting
         securities on behalf of such Pledgor, PROVIDED, that this proxy shall
         only be operative upon the occurrence of an Event of Default and so
         long as such Event of Default continues. Such proxy shall be
         irrevocable for so long as any of the Secured Obligations remain in
         existence. Pledgor shall execute and deliver (or cause to be executed
         and delivered) to the Secured Party all proxies and other instruments
         as the Secured Party may reasonably request for the purpose of enabling
         the Secured Party to exercise the voting and other rights which it is
         entitled to exercise pursuant to this Section 7(b); and

                  (c) Upon the occurrence and during the continuance of an Event
         of Default hereunder, all rights of Pledgor to receive and retain
         dividends, cash and other property, which they would otherwise be
         authorized to receive and retain pursuant to Section 7(a)(ii), shall
         cease and all such rights shall thereupon be vested in the Secured
         Party, who shall thereupon have the sole right to receive and hold as
         Pledged Collateral such dividends, cash and other property. All cash
         and other property received by Pledgor contrary to the provisions of
         this Section 7(c) shall be received in trust for the benefit of the
         Secured Party, shall be segregated from other property or funds of
         Pledgor and shall be forthwith delivered to the Secured Party as
         Pledged Collateral in the same form as so received (with any necessary
         transfer documents or endorsements).

         Section 9. DISPOSITIONS AND RELEASE OF COLLATERAL. Pledgor covenants
that Pledgor shall not enter into or perform any agreement to sell, lease,
transfer or otherwise dispose of all or any part of the Pledged Collateral
unless the Security Interest in such Pledged Collateral shall have been
released prior to the time such agreement is entered into.

         Section 10. REASONABLE CARE. The Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Secured Party accords its own property,
it being understood that the Secured Party shall have no responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Secured Party has or is deemed to have
knowledge of such matters, unless reasonably requested in writing to do so by
Pledgor, or (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession
of the Pledged Collateral) to preserve rights against any parties with
respect to any Pledged Collateral.

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         Section 11. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor hereby
irrevocably appoints the Secured Party Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in Pledgor's name or
otherwise, if the Secured Party elects, upon an Event of Default, to take any
action and to execute any instrument which the Secured Party may deem
reasonably necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend, interest
payment or other distribution in respect of the Pledged Collateral or any
part thereof and to give full discharge for the same, when and to the extent
permitted by this Agreement.

         Section 12. SECURED PARTY MAY PERFORM. Upon the occurrence and
during the continuance of an Event of Default hereunder (including an Event
of Default resulting from a failure to perform any agreement contained
herein), if Pledgor fails to perform any agreement contained herein, the
Secured Party may itself perform, or cause performance of, such agreement,
and the expenses of the Secured Party incurred in connection therewith shall
be payable by Pledgor.

         Section 13.  EVENTS OF DEFAULT; REMEDIES.

                  (a) The occurrence of any of the following events shall
         constitute an event of default ("Event of Default") hereunder:

                           (i) Any Event of Default (as defined in the Amended
                  Note) shall have occurred, which Event of Default shall not be
                  waived or, if capable of being cured, shall not be cured
                  within the respective periods provided in such Amended Note;

                           (ii)  Pledgor fails, breaches or defaults in the
                  payment or performance of any of the obligations, covenants or
                  conditions contained in this Agreement; or

                           (iii) Any statement, representation or warranty made
                  or furnished by Pledgor in connection with this Agreement or
                  any other writing delivered to the Secured Party in connection
                  with this Agreement and the transactions contemplated herein
                  is false, misleading or erroneous in any material respect when
                  made.

                  (b)  Upon or after the occurrence of an Event of Default:

                           (i) The Secured Party may exercise (in compliance
                  with all applicable securities laws) in respect of the Pledged
                  Collateral, in addition to other rights, powers and remedies
                  provided for herein or otherwise available to it, all the
                  rights, powers and remedies of a secured party after default
                  under the Uniform Commercial Code in force and effect in each
                  state in which such rights, powers and remedies are asserted,
                  all of which rights, powers and remedies shall be cumulative
                  and not exclusive, to the extent permitted by applicable law.

                           (ii) The Secured Party may also, without notice
                  except as specified below, sell the Pledged Collateral or any
                  part thereof in one or more parcels at public or

                                      -6-
<Page>

                  private sale, at any exchange, over the counter or at any
                  of the Secured Party's offices or elsewhere, for cash, on
                  credit or for future delivery, and at such price or prices
                  and upon such other terms as may be commercially reasonable
                  or otherwise in such manner as necessary to comply with
                  applicable federal and state securities laws. Pledgor
                  agrees that the Secured Party shall not be required to
                  register or qualify any of the Pledged Collateral under
                  applicable state or federal securities laws in connection
                  with any such sale if the sale is effected in a manner that
                  complies with all applicable federal and state securities
                  laws. The Secured Party shall be authorized at any such
                  sale (if it deems it advisable to do so) to restrict the
                  prospective bidders or purchasers to persons who will
                  represent and agree that they are purchasing the Pledged
                  Collateral for their own account, for investment and not
                  with a view to the distribution thereof. Upon consummation
                  of any such sale the Secured Party shall have the right to
                  assign, transfer and deliver to the purchaser or purchasers
                  at any such sale, and such purchasers shall hold, the
                  property sold absolutely free from any claim or right on
                  the part of Pledgor, and Pledgor hereby waives (to the extent
                  permitted by law) all rights of redemption, stay or appraisal
                  which he now has or may have at any time in the future under
                  applicable law now existing or hereafter enacted.

                           (iii) The Secured Party shall give Pledgor at least
                  ten (10) days' (or such longer period as shall be specified by
                  applicable law) notice of the time and place of any public
                  sale or the time after which any private sale is to be made,
                  which Pledgor agrees shall constitute commercially reasonable
                  notification. At any such public sale and (to the extent
                  permitted by law) at any such private sale, the Secured Party
                  may bid, in whole or in part, in the form of cancellation of
                  Secured Obligations, and the Secured Party may purchase the
                  whole or any part of the Pledged Collateral. The Secured Party
                  shall not be obligated to make any sale of Pledged Collateral
                  regardless of notice of sale having been given. The Secured
                  Party may adjourn any public or private sale from time to time
                  by announcement at the time and place fixed therefor, and such
                  sale may, without further notice, be made at the time and
                  place to which it was so adjourned.

                           (iv) If a sale of all or any part of the Pledged
                  Collateral is made on credit or for future delivery, the
                  Pledged Collateral so sold may be retained by the Secured
                  Party until the sale price is paid by the purchaser or
                  purchasers thereof, but the Secured Party shall not incur any
                  liability in case any such purchaser or purchasers shall fail
                  to take up and pay for the Pledged Collateral so sold and, in
                  case of any such failure, such Pledged Collateral may be sold
                  again upon like notice. Pledgor agrees to the maximum extent
                  permitted by applicable law that any sale of the Pledged
                  Collateral conducted by the Secured Party in accordance with
                  the foregoing provisions of this Section shall be deemed to be
                  a commercially reasonable sale under applicable law.

                           (v) As an alternative to exercising the power of sale
                  herein conferred upon it, the Secured Party may proceed by a
                  suit or suits at law or in equity to foreclose the Security
                  Interest and to sell the Pledged Collateral, or any portion

                                      -7-
<Page>

                  thereof, pursuant to a judgment or decree of a court or courts
                  of competent jurisdiction.

                           (vi) Any cash held by the Secured Party as Pledged
                  Collateral and all cash proceeds received by the Secured Party
                  in respect of any sale of, collection from, or other
                  realization upon all or any part of the Pledged Collateral
                  shall be applied as follows: (a) first, to the payment to the
                  Secured Party of the costs and expenses of retaking, holding
                  and preparing for sale of the Pledged Collateral and any other
                  fees, expenses, claims, demands, losses, judgments, damages
                  and liabilities payable to the Secured Party pursuant to any
                  provision hereof; and (b) second, in accordance with the
                  provisions of the Amended Note.

                           (vii) Any surplus of such cash or cash proceeds held
                  by the Secured Party and remaining after payment in full of
                  all the Secured Obligations shall be reassigned and
                  redelivered as provided in Section 17 hereof.

         Section 14. SECURITY INTEREST ABSOLUTE. All rights of the Secured Party
hereunder, the Security Interest, and all obligations of Pledgor hereunder,
shall be absolute and unconditional irrespective of:

                  (a) any lack of validity or enforceability of the Amended
         Note, any agreement with respect to any of the Secured Obligations, or
         any other agreement or instrument relating to any of the foregoing;

                  (b) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Secured Obligations, or any
         other amendment or waiver of or any consent to and departure from the
         Amended Note or any other agreement or instrument;

                  (c) any exchange, release or non-perfection of any other
         collateral, or any release of, amendment to, waiver of, consent to or
         departure from any guaranty, for all or any of the Secured Obligations;
         and

                  (d) any other circumstance which might otherwise constitute a
         defense available to, or a discharge of, Pledgor in respect of the
         Secured Obligations or in respect of this Agreement.

         Section 15. NOTICES. All notices, demands, requests, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been given (i) when presented personally or (ii) three (3)
business days after being deposited in a regularly maintained receptacle for the
United States Postal Service, postage prepaid, registered or certified, return
receipt requested, addressed to the respective party, as the case may be, at the
following address, or such other address as any party may from time to time
designate by written notice to the others as herein required.

         If to the Secured Party:           The William Carter Company
                                            1170 Peachtree Street, Suite 900
                                            Atlanta, Georgia 30309
                                            Attn: David A. Brown

                                      -8-
<Page>

         If to Pledgor:                     Frederick J. Rowan, II
                                            4280 Olde Mill Lane
                                            Atlanta, Georgia 30342

         Section 16. AMENDMENTS AND WAIVERS. This Agreement may only be
amended by a document signed by the Secured Party and Pledgor. No waiver of
any provision of this Agreement nor consent by the Secured Party to any
departure by Pledgor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Secured Party. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof (except as provided above) nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.

         Section 17. ELECTION OF REMEDIES. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. The Secured
Party shall have all of the rights and remedies granted herein and available
at law or in equity, and these same rights and remedies may be pursued
separately, successively or concurrently against Pledgor, at the sole
discretion of the Secured Party. In the event of a breach by any party to
this Agreement of its obligations under this Agreement, any party injured by
such breach, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, shall be entitled to specific performance
of its rights under this Agreement. The parties agree that the provisions of
this Agreement shall be specifically enforceable, it being agreed by the
parties that the remedy at law, including monetary damages, for breach of any
such provision will be inadequate compensation for any loss and that any
defense in any action for specific performance that a remedy at law would be
adequate is hereby waived.

         Section 18. RELEASE OF PLEDGED COLLATERAL AND TERMINATION. Unless an
Event of Default shall have occurred and be continuing, the Pledged
Collateral shall be released from the pledge of this Agreement, and the
Secured Party shall reassign and redeliver (or cause to be reassigned and
redelivered) to Pledgor, or, subject to compliance with applicable law, to
each person or persons as Pledgor shall designate or to whoever may be
lawfully entitled to receive such surplus, against receipt, certificates
representing the New Pledged Shares (if any), the Pledged Options (if any),
the Exercised Options (if any) or such Pledged Collateral other than any such
New Pledged Shares, Pledged Options or Exercised Options as shall not have
been sold or otherwise applied by the Secured Party pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate
instruments of reassignment and release as follows: promptly after payment of
any optional prepayment of principal in respect of the Amended Note, that
number of New Pledged Shares (to the nearest whole share), any Pledged
Options (to the nearest whole share), any Exercised Options (to the nearest
whole share) and that amount of Pledged Collateral other than New Pledged
Shares, Pledged Options and Exercised Options (to the nearest whole unit)
determined by multiplying (i) the fraction equaling the amount of such
optional prepayment divided by the unpaid principal amount of the Amended
Note immediately prior to such optional prepayment, by (ii) the number of New
Pledged Shares, Pledged Options, Exercised Options or the amount of such
other Pledged Collateral, as the case may be, then subject to this Agreement.
Upon payment in full of the principal of and interest on the Amended Note,
the Secured Party shall transfer or reassign and redeliver all remaining
Pledged Collateral

                                      -9-
<Page>

in such manner and to such persons as provided for above in respect of
partial prepayments. Any transfer, redelivery or reassignment provided for
above shall be without recourse upon or warranty by the Secured Party (other
than a warranty that the Secured Party has not assigned its rights and
interests hereunder to any other person) and at the expense of Pledgor.

         Section 19. CONTINUING SECURITY INTEREST; ASSIGNMENTS. This
Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until termination as
provided in Section 17, (b) be binding upon Pledgor, the Secured Party and
their respective successors and assigns, and (c) inure, together with the
rights, powers and remedies of Pledgor and the Secured Party hereunder, to
the benefit of Pledgor and the Secured Party and their respective successors,
transferees and assigns, as the case may be. Notwithstanding the foregoing
clause (b), Pledgor shall not be permitted to assign this Agreement or any
interest herein.

         Section 20.  APPLICABLE LAW AND JURISDICTION.

                  (a) The parties hereto expressly acknowledge and agree that
         this Agreement shall be governed by and construed in accordance with
         the laws of the State of New York. Pledgor hereby expressly and
         irrevocably agrees and consents that any suit, action or proceeding
         arising out of or relating to this Agreement and the transactions
         contemplated herein may be instituted by the Secured Party in any State
         or Federal court sitting in the County of New York, State of New York,
         United States of America and, by the execution and delivery of this
         Agreement, Pledgor expressly waives any objection which he may have now
         or hereafter to the laying of the venue or to the jurisdiction of any
         such suit, action or proceeding, and irrevocably submits generally and
         unconditionally to the jurisdiction of any such court in any such suit,
         action or proceeding.

                  (b) Nothing contained in subsection (a) hereof shall preclude
         the Secured Party from bringing any suit, action or proceeding arising
         out of or relating to this Agreement or the Amended Note in the courts
         of any place where Pledgor or any of Pledgor's property or assets may
         be found or located. To the extent permitted by the applicable laws of
         any such jurisdiction, Pledgor hereby irrevocably submits to the
         jurisdiction of any such court and expressly waives, in respect of any
         such suit, action or proceeding, the jurisdiction of any court or
         courts which now or hereafter, by reason of his present or future
         domicile, or otherwise, may be available to him. PLEDGOR AND THE
         SECURED PARTY HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.

         Section 21. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.

         Section 22. NUMBER AND GENDER. Whenever used herein, the singular
number shall include the plural and the plural the singular, and the use of
any gender shall be applicable to all genders.

                                      -10-
<Page>

         Section 23. CAPTIONS. The captions, headings, and arrangements used
in this Agreement are for convenience only and do not and shall not be deemed
to affect, limit, amplify or modify the terms and provisions hereof.

         Section 24. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same instrument.

           [THE REST OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]

                                      -11-
<Page>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.

                                     PLEDGOR

                                         /s/  Frederick J. Rowan, II
                                     ---------------------------------------
                                     Frederick J. Rowan, II

                                     SECURED PARTY

                                     THE WILLIAM CARTER COMPANY

                                         /s/  David A. Brown
                                     ---------------------------------------
                                     Name:  David A. Brown
                                     Title: Executive Vice President and
                                            Secretary

                                      -12-

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