TERM NOTE
$__________ Portland, Oregon
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FOR VALUE RECEIVED, the undersigned, _________ (the "Executive"),
hereby unconditionally promises to pay to the order of KINDERCARE LEARNING
CENTERS, INC., a Delaware corporation (the "Company") at its offices, in lawful
money of the United States of America, the principal amount of
_____________________ DOLLARS ($______.00), or, if less, the unpaid principal
amount of the loan made by the Company pursuant to the Management Stockholder's
Agreement (as hereinafter defined). The principal amount shall be paid on the
earliest to occur of (i) the Executive's termination of employment by the
Company for Cause or without Good Reason by the Executive, (ii) one year after
the Executive's termination of employment without Cause by the Company or with
Good Reason by the Executive, (iii) the disposition of the Purchase Stock by the
Executive and (iv) [10 years from the date of the Note] ____________ __, ____
(the "Maturity Date"). The Executive further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at an interest rate equal to ___% per annum on June 30 and December
31 of each year, the Maturity Date and with respect to the amount of any
optional repayment, on the date of any such optional repayment. "Cause" shall
mean (i) the Executive's willful and continued failure to perform Executive's
duties with respect to the Company or its subsidiaries which continues beyond
ten days after a written demand for substantial performance is delivered to
Executive by the Company and which could reasonably result in demonstrable
injury to the Company or (ii) misconduct by Executive (x) involving dishonesty
or breach of trust in connection with Executive's employment, (y) which would be
a reasonable basis for an indictment of Executive for a felony or for a
misdemeanor involving moral turpitude, or (z) which results in demonstrable
injury to the Company; and "Good Reason" shall mean, without the Executive's
consent, (i) a reduction in Executive's base salary, other than a reduction
which is part of a general salary reduction program affecting all salaried
employees of the Company, (ii) a substantial reduction in Executive's duties and
responsibilities or change in the Executive's title, (iii) the elimination or
reduction of Executive's eligibility to participate in the Company's benefit
programs that is inconsistent with the eligibility of similarly situated
employees of the Company to participate therein or (iv) a transfer of the
Executive's primary workplace by more than fifty (50) miles from the workplace
as of the date hereof. Notwithstanding the immediately preceding sentence, the
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definitions in any employment agreement in effect on the date hereof between the
Company and Executive of "Cause" and "Good Reason" shall supersede and replace
the definitions of "Cause" and "Good Reason" in the immediately preceding
sentence and shall be deemed incorporated by reference in this Note in their
entirety.
The following shall constitute "Events of Default" under the terms of
this Note:
i) default for thirty (30) days or more in payment when due and
payable, upon acceleration or otherwise, of principal of this
Note;
ii) default for thirty (30) days or more in the payment when due
of interest on the Note.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
This Note is subject to optional prepayment in whole or in part at any
time. Reference is hereby made to the Pledge Agreement for a description of the
properties and assets in which a security interest has been granted
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable by the Company.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Management Stockholder's Agreement dated as of
________ __, ____ between the Company and the Executive (as amended,
supplemented or otherwise modified from time to time, the "Management
Stockholder's Agreement").
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE.
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