Document:

Exhibit 10.16

Exhibit 10.16

EXECUTION COPY

SECOND AMENDMENT TO LOAN AGREEMENT

THIS SECOND AMENDMENT TO LOAN AGREEMENT, dated as of September 28, 2009 (this “Amendment”), is
among KELLY SERVICES, INC., a Delaware corporation (the “Borrower”), KELLY PROPERTIES, LLC, a
Delaware limited liability company, KELLY RECEIVABLES SERVICES, LLC, a Delaware limited liability
company, KELLY SERVICES (IRELAND), LTD., a Delaware corporation, KELLY SERVICES OF DENMARK, INC., a
Delaware corporation, KELLY SERVICES CIS, INC., a Delaware corporation, KELLY SERVICES (AUSTRALIA),
LTD., a Delaware corporation, KELLY SERVICES (NEW ZEALAND), LTD., a Delaware corporation, KELLY
STAFF LEASING, INC., a California corporation, KHCS, INC., a Delaware corporation, and KSI
ACQUISITION CORPORATION, a Delaware corporation (each a “Guarantor”, and collectively, the
“Guarantors”), the lenders set forth on the signature pages hereof (collectively, the “Lenders”)
and JPMORGAN CHASE BANK, N.A. a national banking association, as administrative agent for the
Lenders (in such capacity, the “Agent”).

RECITALS

A. The Borrower, the Agent and the Lenders are parties to a Loan Agreement, dated as of
October 3, 2008, as amended by a First Amendment to Loan Agreement dated as of April 24, 2009 and a
waiver letter dated as of July 29, 2009 (as amended, the “Waiver”) (as now and hereafter amended,
the “Loan Agreement”), pursuant to which the Lenders agreed, subject to the terms and conditions
thereof, to extend credit to the Borrower.

B. The Borrower desires to amend the Loan Agreement and the Agent and the Lenders are willing
to do so strictly in accordance with the terms hereof.

TERMS

In consideration of the premises and of the mutual agreements herein contained, the parties
agree as follows:

ARTICLE 1.

WAIVER

1.1 The Borrower informed the Lenders and the Agent that (i) a Default occurred as of June 30,
2009 due to a breach of the covenant under Section 6.18 of the 2005 Loan Agreement for the twelve
month period ending June 30, 2009 (the “6/30 EBITDA Default”) and (ii) a Default also occurred
under Section 7.5 of the Loan Agreement due to the default of a substantially similar EBITDA
covenant for the twelve month period ending June 30, 2009 (the “Cross-Default”) contained in a
credit facility between The Bank of Tokyo – Mitsubishi UFJ, Ltd. and the Borrower with outstanding
principal amount of 5,451,052,623 Japanese Yen (the “Yen Facility”). Pursuant to the terms of the
Waiver, the Lenders agreed to temporarily waive the 6/30 EBITDA Default and the Cross-Default until
September 30, 2009. The Borrower has now requested that the Lenders waive the 6/30 EBITDA Default
and the Cross-Default.

1.2 All of the covenants and agreements of the Borrower set forth in Article VI of the 2005 Loan
Agreement (including without limitation Section 6.18 of the 2005 Loan Agreement) are incorporated
into the Loan Agreement by reference pursuant to Section 6.1 of the Loan Agreement. Section 6.1 of
the Loan Agreement provides that any supplement, amendment, modification or waiver of such
provisions of said Article VI shall be deemed a supplement, amendment, modification or waiver, as
the case may be, of such provisions as incorporated in the Loan Agreement only if the Lenders or
Required Lenders, as determined in accordance with the Loan Agreement, shall have consented to such
supplement, amendment, modification or waiver, in accordance with the terms of the Loan Agreement.

 

 

 

1.3 Pursuant to such request and in accordance with Section 6.1 of the Loan Agreement, subject
to (a) the accuracy of the representations of the Borrower hereunder, and (b) the satisfaction of
the conditions to the effectiveness of this Amendment specified in Article 4, the Lenders hereby
waive the 6/30 EBITDA Default and the Cross-Default. The Borrower acknowledges and agrees that the
waiver contained herein is a limited, specific, and one-time waiver as described above. Such
limited waiver shall not modify or waive any other term, covenant or agreement contained in any of
the Loan Documents or apply for any other time, and shall not be deemed to have prejudiced any
present or future right or rights which the Agent or the Lenders now have or may have under the
Loan Agreement or the other Loan Documents and, in addition, shall not entitle the Borrower to a
waiver, amendment, modification or other change to, of or in respect of any provision of any of the
Loan Documents in the future in similar or dissimilar circumstances.

ARTICLE 2.

AMENDMENTS

Upon fulfillment of the conditions set forth in Article 3 hereof, the Loan Agreement shall be
amended as follows:

2.1 The following definitions are added to Article I of the Loan Agreement in appropriate
alphabetical order:

“Banking Services” shall mean all treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts
and interstate depository network services and international treasury management services),
commercial credit cards and stored value cards, provided to the Borrower or any of its Subsidiaries
by any Lender or any Lender’s Affiliates.

“Banking Services Obligations” shall mean any and all obligations of the Borrower or
any of its Subsidiaries, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.

“Collateral” shall mean all assets of the Borrower and each of its Subsidiaries in
which a Lien is required to be granted to secure the Secured Obligations. As provided in the
Collateral Documents, the Collateral shall not include the Qualified Receivables Transaction
Assets.

“Collateral Agent” means JPMCB in its capacity as collateral agent under the
Collateral Documents.

“Collateral Documents” means, collectively, the Intercreditor Agreement, the Security
Agreements, and all other agreements or documents granting or perfecting a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties under the Intercreditor Agreement or
otherwise providing support for the Secured Obligations at any time, as any of the foregoing may be
amended or modified from time to time.

“Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person,
and any warrants, options or other rights entitling the holder thereof to purchase or acquire any
such equity interest.

 

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“Foreign Subsidiary” means each Subsidiary organized under the laws of a jurisdiction
outside of the United States.

“Guarantor” means, with respect to the Obligations and Rate Management Obligations
owing by the Borrower, each present and future Domestic Subsidiary and their respective successors
and assigns; provided that (i) no Inactive Subsidiary shall be required to be a Guarantor, but
shall be required to have 100% of their Equity Interests pledged to the Collateral Agent under the
Collateral Documents, (ii) upon the closing of any Qualified Receivables Transaction, (A) any
Guarantor which will be a Securitization Entity in connection with any Qualified Receivables
Transaction shall be released from its obligations as a Guarantor and any lien on its assets under
any Collateral Document shall be released, and (B) no newly formed Subsidiary which will be
Securitization Entity in connection with any Qualified Receivables Transaction shall be required to
be a Guarantor so long as no assets are transferred to such newly formed Subsidiary until
simultaneously with the closing of any Qualified Receivables Transaction; provided,
that, each Securitization Entity will be required to have 100% of their Equity Interests
pledged to the Collateral Agent under the Intercreditor Agreement, and (iii) neither The Kelly
Services, Inc. Foundation, a non-profit Michigan corporation nor The Kelly Relief Fund, a Michigan
non-profit corporation, shall be required to be a Guarantor.

“Guaranty” means the guarantee contained in Article IX, including any amendment,
modification, renewal or replacement of such guaranty agreement, and any separate guaranty, in form
and substance satisfactory to the Agent delivered by any Guarantor, as it may be amended or
modified from time to time.

“Inactive Subsidiary” means a Subsidiary which has no assets and conducts no business.
Schedule 1.1(c) is a list of all Inactive Subsidiaries as of the Second Amendment Effective Date.

“Intercreditor Agreement” shall mean the Collateral Agency and Intercreditor Agreement
among the Secured Parties of the Borrower and JPMCB, as Collateral Agent, dated as of the date
hereof, as amended or modified from time to time, provided that such Intercreditor Agreement, and
any amendments or modifications thereto, shall be in form and substance acceptable to the Required
Lenders and the Agent.

“Qualified Receivables Transaction” means any asset securitization transaction (i) by
a Securitization Entity, (ii) which is a sale or other transfer of an interest in Qualified
Receivables Transaction Assets to such Securitization Entity, which Securitization Entity will in
turn sell certain of those Qualified Receivables Transaction Assets to a special purpose entity or
a commercial paper issuance vehicle or conduit on terms and in a manner acceptable to the Agent,
(iii) which is otherwise permitted by the terms of this Agreement and any other agreement binding
on the Borrower or any of its Subsidiaries, (iv) under which 100% of the Equity Interests of such
Securitization Entity have been pledged on a first priority basis to the Collateral Agent under the
Collateral Documents, and (v) which asset securitization transaction is otherwise in form and
substance reasonably acceptable to the Agent.

“Qualified Receivables Transaction Assets” means all Receivables and Related Rights
that are sold, purportedly sold, contributed, transferred, conveyed or assigned by the Borrower or
any Subsidiary of the Borrower to the Securitization Entity (regardless of whether such transfer is
characterized as a sale, a secured loan or contribution). For the purposes hereof (i)
“Receivables” means accounts or notes receivable and (ii) “Related Rights” means (a) the rights
but not the obligations of, the Borrower or such Subsidiary under all related security with respect
to such Receivables, (b) all monies due or to become
due to the Borrower or such Subsidiary with respect to such Receivables, (c) all books and records
related to such Receivables, (d) all collections and other proceeds and products of any of such
Receivables, (e) and all right title and interest (but not obligations) in and to the lockbox
accounts, into which collections or other proceeds with respect to such Receivables may deposited,
and any related investment property acquired with any such collections or other proceeds.

 

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“Revolving Credit Agreement” means the Credit Agreement dated as of September 28, 2009
among the Borrower, any foreign subsidiary borrowers party thereto, the lenders party thereto and
JPMorgan Chase Bank, N.A., as agent for such lenders, as amended, modified or restated from time to
time in accordance with the terms hereof.

“Revolving Credit Debt” means the indebtedness and other liabilities owing pursuant to
any Revolving Credit Loan Documents at any time.

“Revolving Credit Lenders” means the holders of the Revolving Credit Debt.

“Revolving Credit Loan Documents” means the Revolving Credit Agreement and all
agreements and documents executed in connection therewith at any time and as amended, modified or
restated from time to time in accordance with the terms hereof.

“Second Amendment” means the Second Amendment to this Agreement dated as of the Second
Amendment Effective Date.

“Second Amendment Effective Date” means September 28, 2009.

“Secured Obligations” means, collectively, all (i) Obligations, (ii) the Revolving
Credit Debt, (iii) the Yen Loan Debt, (iv) Banking Services Obligations, and (v) other indebtedness
and obligations defined as “Secured Obligations” in the Intercreditor Agreement.

“Secured Parties” means the Collateral Agent, the Agent, the Lenders, the Revolving
Credit Lenders, the Yen Loan Lender and the other holders of the Secured Obligations.

“Securitization Entity” means a wholly-owned Subsidiary of the Borrower that engages
in no activities other than Qualified Receivables Transactions and any necessary related activities
and owns no assets other than as required for Qualified Receivables Transactions and no portion of
the Indebtedness (contingent or otherwise) of which is guaranteed by the Borrower or any Subsidiary
of the Borrower or is recourse to or obligates the Borrower or any Subsidiary of the Borrower in
any way, other than pursuant to customary representations, warranties, covenants, indemnities,
performance guaranties and other obligations entered into in connection with a Qualified
Receivables Transaction.

“Security Agreements” means each security agreement, pledge agreement, pledge and
security agreement and similar agreement and any other agreement from the Borrower or any Guarantor
granting a Lien on any of its personal property (including without limitation any Equity Interests
owned by the Borrower or such Guarantor), each in form and substance acceptable to the Agent and as
amended or modified from time to time, entered into by the Borrower or any Guarantor at any time
for the benefit of the Collateral Agent and the Secured Parties pursuant to this Agreement or the
Intercreditor Agreement.

“Yen Loan Agreement” means the Credit Facility Letter dated November 7, 2007 between
the Borrower and the Yen Loan Lender, as amended, modified or restated from time to time in
accordance with the terms hereof.

 

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“Yen Loan” means the term loan made under the Yen Agreement in the original principal
amount of 5,451,052,623 Japanese Yen.

“Yen Loan Debt” means the indebtedness and other liabilities owing pursuant to any Yen
Loan Documents at any time.

“Yen Loan Documents” means the Yen Loan Agreement and all agreements and documents
executed in connection therewith at any time and as amended, modified or restated from time to time
in accordance with the terms hereof.

“Yen Loan Lender” means The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2.2 The following definitions in Article I of the Loan Agreement are restated as follows:

“Defaulting Lender” means any Lender, as determined by the Agent, that has (a) failed
to fund any portion of its Loans within three Business Days of the date required to be funded by it
hereunder, (b) notified the Borrower, the Agent or any Lender in writing that it does not intend to
comply with any of its funding obligations under this Agreement or has made a public statement to
the effect that it does not intend to comply with its funding obligations under this Agreement or
under other agreements in which it commits to extend credit, (c) failed, within three Business Days
after request by the Agent, to confirm that it will comply with the terms of this Agreement
relating to its obligations to fund prospective Loans, (d) otherwise failed to pay over to the
Agent or any other Lender any other amount required to be paid by it hereunder within three
Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become
or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject
of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment or has a parent company that has become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee
or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent
to, approval of or acquiescence in any such proceeding or appointment.

“Designated Financial Officer” means, with respect to the Borrower, its chief
financial officer, treasurer or controller.

“Indebtedness” of a Person means, without duplication, such Person’s (a) obligations
for borrowed money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable and/or accrued expenses arising in the ordinary course of
such Person’s business payable in accordance with customary practices), (c) obligations, whether or
not assumed, secured by Liens on property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments (other than Financial
Contracts), (e) Capitalized Lease Obligations, (f) all reimbursement and similar obligations under
outstanding letters of credit, bankers acceptances, surety bonds or similar instruments in respect
of drafts or other claims which may be presented or have been presented and have not yet been paid,
(g) the aggregate outstanding amount of all Off Balance Sheet Liabilities, based on the aggregate
outstanding amounts sold, signed, discounted or otherwise transferred or financed, whether or not
shown as a liability on a consolidated balance sheet of the Borrower and its Subsidiaries,
including without limitation, all Receivables Transaction Attributed Indebtedness, and (h) all
Contingent Liabilities of such Person with respect to or relating to Indebtedness of others the
same as those described in clauses (a) through (g) of this definition. For purposes of this
definition, there shall be excluded from “Indebtedness” all standby letters of credit, bank
guaranties, surety bonds and similar instruments which are issued in connection with workers
compensation obligations or other statutory or governmental obligations up to an aggregate amount
of $100,000,000.
All such other instruments shall be included in the calculation of “Indebtedness”. For the
avoidance of doubt, Operating Leases are not Indebtedness.

 

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“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association (including its
branches and affiliates).

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, fixed or
floating charge, assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or
other title retention agreement); provided that the filing of financing statements solely with
respect to, or other lien or claim solely on, any interest in Qualified Receivables Transaction
Assets shall not be considered a Lien.

“Loan Documents” means this Agreement, the Guaranties, the Collateral Documents and
the other agreements, certificates and other documents contemplated hereby or executed or delivered
pursuant hereto by the Borrower or any Guarantor at any time on or after the date of execution of
this Agreement with or in favor of the Agent or any Lender.

“Obligations” means the unpaid principal of and interest on the Loans, all Rate
Management Obligations to any Lender and all other obligations and liabilities of the Borrower
under this Agreement and the other Loan Documents (including, without limitation, interest accruing
at the then applicable rate provided in this Agreement or any other applicable Loan Document after
the maturity of the Loans and interest accruing at the then applicable rate provided in this
Agreement or any other applicable Loan Document after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this Agreement, the other
Loan Documents or any other document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all reasonable fees and disbursements of
counsel to the Agent or to the Lenders that are required to be paid by the Borrower pursuant to the
terms of this Agreement or any other Loan Document). Obligations of the Guarantors shall include
collectively the Obligations of all of the Borrower and the obligations of all of the Guarantors
under the Guaranty as provided in this Agreement.

2.3 The definition of “Rate Hedging Agreement” in Article I of the Loan Agreement is
replaced with the definition of “Rate Management Transaction” set forth below and any and
all references in the Loan Agreement to the defined term “Rate Hedging Agreement” are
replaced with a reference to the defined term “Rate Management Transaction”:

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered by the Borrower or any of its Subsidiaries which
is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these transactions) or any
combination thereof, whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures, in each case entered into to hedge a bona fide
risk and not for purposes of speculation.

 

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2.4 The definition of “Rate Hedging Obligations” in Article I of the Loan Agreement is
replaced with the definition of “Rate Management Obligations” set forth below and any and
all references in the Loan Agreement to the defined term “Rate Hedging Obligations” are
replaced with a reference to the defined term “Rate Management Obligations”:

“Rate Management Obligations” means any and all obligations of the Borrower or any of
its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all Rate Management Transactions, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Rate Management
Transactions.

2.5 Section 2.14 is restated as follows:

2.14 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for
so long as such Lender is a Defaulting Lender:

(i) Outstanding Credit Exposure of such Defaulting Lender shall not be included in determining
whether all Lenders or the Required Lenders have taken or may take any action hereunder (including
any consent to any amendment or waiver pursuant to Section 8.2), provided that any waiver,
amendment or modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall require the consent of
such Defaulting Lender; and

(ii) any amount payable to such Defaulting Lender hereunder (whether on account of principal,
interest, fees or otherwise and including any amount that would otherwise be payable to such
Defaulting Lender pursuant to Section 2.14 but excluding Section 3.7) shall, in lieu of being
distributed to such Defaulting Lender, be retained by the Agent in a segregated account and,
subject to any applicable requirements of law, be applied at such time or times as may be
determined by the Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to
the Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing to the Borrower or
the Lenders as a result of any judgment of a court of competent jurisdiction obtained by the
Borrower or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement and (iii) third, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if such payment is (x) a
prepayment of the principal amount of any Loans and (y) made at a time when the conditions set
forth in Section 4.2 are satisfied, such payment shall be applied solely to prepay the Loans of all
non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans owed to, any
Defaulting Lender.

 

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2.6 A new Section 2.15 is added at the end of Article II to read as follows:

2.15 Collateral Security; Further Assurances. To secure the payment when due of the
Secured Obligations (subject to the Intercreditor Agreement), the Borrower shall execute and
deliver, or cause to be executed and delivered, to the Collateral Agent, Collateral Documents
granting or providing for the following:

(i) Security Agreements granting a first priority, enforceable Lien and security interest,
subject to the Liens permitted by this Agreement and subject to the sharing provisions to be
contained in the Intercreditor Agreement, on all present and future accounts, chattel paper,
commercial tort claims, deposit accounts, documents, farm products, fixtures, chattel paper,
equipment, general intangibles, goods, instruments, inventory, investment property,
letter-of-credit rights (as those terms are defined in
the Michigan Uniform Commercial Code) and all other personal property of the Borrower and of
each Guarantor, subject to any exclusions described in the Intercreditor Agreement or approved by
the Required Lenders and it being understood and agreed that such first priority, enforceable Lien
and security interest shall not include any Lien or security interest in the Qualified Receivables
Transaction Assets. Notwithstanding the foregoing, with respect to Liens granted by the Borrower
or any Guarantor on the Equity Interests in any Foreign Subsidiary such Lien shall not exceed 65%
(or such greater percentage that, due to a change in an applicable law after the date hereof, (1)
could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as
determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign
Subsidiary directly owned by the Borrower or any Guarantor. Notwithstanding the foregoing, if the
Agent reasonably determines in good faith that the Borrower will not incur a material tax liability
as result of such greater pledge, the Borrower shall, upon the request of the Agent, have the
balance of its Equity Interests pledged to the Collateral Agent to secure, subject to the
Intercreditor Agreement, the Secured Obligations.

(ii) On or before the Effective Date, the Borrower shall cause all Collateral Documents as
reasonably requested by the Agent, in each case duly executed on behalf of the Borrower and the
Guarantors, as the case may be, granting to the Secured Parties and the Collateral Agent the
Collateral and support specified in Section 2.15 hereof, together with: (v) such resolutions,
certificates and opinions of counsel as reasonably requested by the Agent; (w) the recordation,
filing and other action (including payment of any applicable taxes or fees) in such jurisdictions
as the Lenders or the Agent may deem necessary or appropriate with respect to the Collateral
Documents, including the filing of financing statements and other filings which the Lenders or the
Agent may deem necessary or appropriate to create, preserve or perfect the liens, security
interests and other rights intended to be granted to the Lenders or the Agent thereunder, together
with Uniform Commercial Code record searches and other Lien searches in such offices as the Lenders
or the Agent may request; (x) evidence that the casualty and other insurance required pursuant to
the Loan Documents is in full force and effect; (y) originals of all instruments and certificates
representing all of the outstanding shares of Equity Interests and other securities and instruments
to be pledged thereunder, with appropriate stock powers, endorsements and other powers duly
executed in blank; and (z) such other evidence that Liens creating a first priority security
interest, subject to the Intercreditor Agreement, in the Collateral shall have been created and
perfected as requested by the Agent and the satisfaction of all other conditions in connection with
the Collateral and the Collateral Documents as reasonably requested by the Agent, including without
limitation all opinions of counsel, and other documents and requirements requested by the Agent.

(iii) The Borrower agrees that it will promptly notify the Agent of the formation, acquisition
or existence of any Subsidiary that is a Guarantor (per the definition of Guarantor) that has not
executed a Guaranty and Collateral Documents or the acquisition of any assets on which a Lien is
required to be granted and that is not covered by existing Collateral Documents. The Borrower
agrees that it will promptly execute and deliver, and cause each Guarantor to execute and deliver,
promptly upon the request of the Agent, such additional Collateral Documents, Guaranties and other
agreements, documents and instruments, each in form and substance satisfactory to the Agent,
sufficient to grant the Guaranties and Liens contemplated by this Agreement and the Collateral
Documents. The Borrower shall deliver, and cause each Guarantor to deliver, to the Agent all
original instruments payable to it with any endorsements thereto required by the Agent.
Additionally, the Borrower shall execute and deliver, and cause each Guarantor to execute and
deliver, promptly upon the request of the Agent, such certificates, legal opinions, lien searches,
organizational and other charter documents, resolutions and other documents and agreements as the
Agent may reasonably request in connection therewith. The Borrower
shall use its best efforts to cause each lessor of real property to it or any Subsidiary where
any material Collateral is located to execute and deliver to the Agent an agreement in form and
substance reasonably acceptable to the Agent duly executed on behalf of such lessor waiving any
distraint, lien and similar rights with respect to any property subject to the Collateral Documents
and agreeing to permit the Collateral Agent to enter such premises in connection therewith. The
Borrower shall execute and deliver, and cause each Guarantor to execute and deliver, promptly upon
the reasonable request of the Agent, such agreements and instruments evidencing any intercompany
loans or other advances among the Borrower and its Subsidiaries, or any of them, and all such
intercompany loans or other advances shall be, and are hereby made, subordinate and junior to the
Secured Obligations and no payments may be made on such intercompany loans or other advances upon
and during the continuance of a Default unless otherwise agreed to by the Required Lenders.

 

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2.7 Section 3.7 is amended by adding a new clause (d) immediately after clause (c) therein to
read as follows:

“or (d) any Lender has failed to consent to a proposed amendment, waiver, discharge or termination
which pursuant to the terms of Section 8.2 or any other provision of any Loan Document requires the
consent of all affected Lenders and with respect to which the Required Lenders shall have granted
their consent”

2.8 A new Section 5.18 is added at the end of Article V to read as follows:

5.18 Revolving Credit Debt and Yen Loans. As of the Second Amendment Effective Date,
the outstanding principal balances of the Revolving Credit Debt, exclusive of any outstanding
letters of credit, is $0, and all Revolving Credit Loan Documents have been delivered to the
Lenders prior to the Effective Date. As of the Effective Date, the outstanding principal balance
of the Yen Loan is 5,451,052,623 Japanese Yen and all Yen Loan Documents (including the waiver or
amendment and other agreements and documents executed on or about the date hereof) have been
delivered to the Lenders prior to the Second Amendment Effective Date. After giving effect to the
Revolving Credit Loan Documents and amendments to the Yen Loan Documents being delivered pursuant
to Article IV of the Second Amendment, there is no event of default or event or condition which
would become an event of default with notice or lapse of time or both, under the Revolving Credit
Loan Documents or Yen Loan Documents.

2.9 Article VI is restated as follows:

6.1 Incorporation of Covenants.  Until the expiration of this Agreement, and
thereafter until payment in full of all indebtedness and other liabilities of the Borrower to the
Lenders pursuant hereto and the performance of all other obligations of the Borrower pursuant
hereto, the Borrower shall observe and perform, as incorporated herein, the covenants and
agreements set forth in Article VI of the Revolving Credit Agreement. All such provisions of said
Article VI, including definitions of defined terms used therein and exhibits referred to therein,
are hereby incorporated by reference and made a part of this Agreement to the same extent as if set
forth fully herein except that (i) all cross references shall be deemed to refer to the relevant
provision or provisions as incorporated herein, (ii) references therein to “hereof” and “hereto”
and “herein” or “this Agreement” shall be deemed to refer to this Agreement, and (iii) references
in such sections as incorporated herein to the defined terms “Lenders”, “Lender”, “Required
Lenders” and “Agent” shall be deemed references to the defined terms “Lenders”, “Lender”, “Required
Lenders” and “Agent” as defined in this Agreement. Together with the financial statements required
under Section 6.1(a) of the Revolving Credit Agreement, the Borrower shall deliver a compliance
certificate in substantially the form of Exhibit D hereto signed by a Designated Financial Officer
of the Borrower showing the calculations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists or, if any Default or Unmatured Default
exists, stating the nature and status thereof.

 

9

 

Any supplement, amendment, modification, waiver or consent made or granted by the Lenders or
the Required Lenders (as defined in the Revolving Credit Agreement) in connection with such
provisions of the Revolving Credit Agreement and definitions from the Revolving Credit Agreement
incorporated herein at any time after the date hereof shall be deemed a supplement, amendment,
modification, waiver or consent, as the case may be, with respect to such provisions as
incorporated herein, but only if the Lenders or Required Lenders hereunder, as determined in
accordance with this Agreement, have consented to such supplement, amendment, modification, waiver
or consent pursuant to the terms of this Agreement. Notwithstanding anything in this Agreement to
the contrary, no termination, cancellation or expiry of the Revolving Credit Agreement shall have
any effect whatsoever upon the provisions and definitions thereof as such provisions and
definitions are incorporated herein, and such provisions and definitions of the Revolving Credit
Agreement incorporated herein shall be deemed to survive any such termination, cancellation or
expiry of the Revolving Credit Agreement and shall thereafter continue to be binding upon the
Borrower under this Agreement.

2.10 Article VII is amended by restating Sections 7.3, 7.4 and 7.12 as follows:

7.3 The breach by the Borrower or any Guarantor of any of the terms or provisions of Sections
6.2, 6.3, 6.4, 6.5, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18 and 6.19 of the Revolving
Credit Agreement, as incorporated herein by reference, which is not remedied within three Business
Days after written notice from the Agent.

7.4 The breach by the Borrower or any Guarantor (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement
(including any other terms and provisions of the Revolving Credit Agreement incorporated herein by
reference) or any other Loan Document which is not remedied within 15 days after written notice
from the Agent.

7.12 Any Default (as defined in the Revolving Credit Agreement) shall have occurred under the
Revolving Credit Agreement.

2.11 Article VII is further amended by adding new Sections 7.13 and 7.14 at the end thereof as
follows:

7.13 Any Guaranty shall fail to remain in full force or effect or any action shall be taken to
discontinue or assert the invalidity or unenforceability of any Guaranty or any Guarantor denies
that it has any further liability under any Guaranty to which it is a party, or gives notice to
such effect.

7.14 Any Collateral Document shall for any reason (other than solely as the result of an act
or omission of the Agent or a Lender) fail to create a valid and perfected first priority security
interest, subject to the Intercreditor Agreement, in any Collateral purported to be covered
thereby, except as permitted by the terms of this Agreement or any Collateral Document, or, due to
any action by the Borrower or any of its Subsidiaries not consented to by the Required Lenders, any
Collateral Document shall fail to remain in full force or effect or any action shall be taken by
the Borrower or any of its Subsidiaries not consented to by the Required Lenders to discontinue or
to assert the invalidity or unenforceability of any Collateral Document, or the Borrower or any
Guarantor shall fail to comply with any of the terms or provisions of any Collateral Document if
the failure continues beyond any period of grace provided for in the applicable Collateral
Document.

 

10

 

2.12 Section 8.2(e) is restated as follows:

(e) Release the Borrower or any Guarantor or release all or any material portion of the
Collateral, other than in connection with any sale or other transfer of any of the foregoing
permitted hereunder (including without limitation the release of any Securitization Entity which is
a Guarantor from its obligations under this Agreement simultaneously with the closing of any
Qualified Receivables Transaction to which any such Securitization Entity is a party).

2.13 Article IX is restated as set forth on Exhibit B attached hereto.

2.14 Article XI is amended by adding new Sections 11.15, 11.16 and 11.17 at the end thereof as
follows:

11.15 Execution of Collateral Documents. The Lenders hereby empower and authorize the
Agent (in its capacity as Agent or as Collateral Agent) to execute and deliver the Collateral
Documents and all related documents or instruments as shall be necessary or appropriate to effect
the purposes of the Collateral Documents. The Lenders further empower and authorize the Agent (in
its capacity as Agent or as Collateral Agent) to execute and deliver on their behalf the
Intercreditor Agreement and all related documents or instruments as shall be necessary or
appropriate to effect the purposes of the Intercreditor Agreement, provided that the form of the
Intercreditor Agreement has been approved by the Required Lenders, and each Lender shall be bound
by the terms and provisions of the Intercreditor Agreement so executed by the Agent.

11.16 Collateral Releases. The Lenders hereby irrevocably empower and authorize
JPMCB, in its capacity as Agent or as Collateral Agent, to execute and deliver on their behalf any
agreements, documents or instruments as shall be necessary or appropriate to effect any releases or
subordinations of Liens on any Collateral (i) which being sold or disposed of if the Borrower
certifies to the Agent that the sale or disposition is made in compliance with the terms of this
Agreement (and the Agent may rely conclusively on any such certificate, without further inquiry),
(ii) owned by or leased to the Borrower or any of its Subsidiaries which is subject to a purchase
money security interest or which is the subject of a Capitalized Lease, (iii) as required to effect
any sale or other disposition of such Collateral in connection with any exercise of remedies of the
Collateral Agent or the Agent or (iv) which shall otherwise be permitted by the terms hereof or any
other Loan Document. Except as provided in the preceding sentence, JPMCB, in its capacity as Agent
or as Collateral Agent, will not release any Liens on Collateral without the prior written
authorization of the Required Lenders; provided that, JPMCB, in its capacity as Agent or as
Collateral Agent, may in its discretion, release Liens on Collateral valued in the aggregate not in
excess of $1,000,000 during any calendar year without the prior written authorization of the
Lenders. In addition to the foregoing, the Lenders, the Agent and the Collateral Agent hereby
agree that the Qualified Receivables Transaction Assets shall not be subject to the Liens in favor
of the Collateral Agent.

 

11

 

11.17 Collateral; Reports. The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower or any Subsidiary or
is cared for, protected, or insured or has been encumbered, or that any Liens have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers
granted or available to the Agent pursuant to any of the Loan Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Agent
may act in any manner it may deem appropriate, in its sole discretion given the Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that the Agent shall have no
other duty or liability whatsoever to any Lender as to any of the foregoing. Each Lender hereby
agrees as follows: (a) such Lender is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each report prepared by the Agent or another
Person showing the results of appraisals, field examinations, audits or other reports pertaining to
the Borrower’s and its Subsidiaries’ assets from information furnished by or on behalf of the
Borrower or its Subsidiaries prepared by or on behalf of the Agent (the “Supplemental Reports”);
(b) such Lender expressly agrees and acknowledges that JPMCB, either individually, as Agent, as
Collateral Agent or in any other capacity, (i) makes no representation or warranty, express or
implied, as to the completeness or accuracy of any Supplemental Report or any of the information
contained therein, or (ii) shall not be liable for any information contained in any Supplemental
Report; (c) such Lender expressly agrees and acknowledges that the Supplemental Reports are not
comprehensive audits or examinations, that the Collateral Agent, the Agent, JPMCB, or any other
party performing any audit or examination will inspect only specific information regarding the
Borrower and its Subsidiaries and will rely significantly upon the books and records of the
Borrower and is Subsidiaries, as well as on representations of the personnel of the Borrower and
its Subsidiaries and that JPMCB, either individually, as Agent, as Collateral Agent or in any other
capacity, undertakes no obligation to update, correct or supplement the Supplemental Reports; (d)
such Lender agrees to keep all Supplemental Reports confidential and strictly for its internal use,
not share any Supplemental Report with the Borrower or any of its Subsidiaries and not to
distribute any Supplemental Report to any other Person except as otherwise permitted pursuant to
this Agreement; and (e) without limiting the generality of any other indemnification provision
contained in this Agreement, such Lender agrees (i) that JPMCB, either individually, as Agent, as
Collateral Agent or in any other capacity, shall not be liable to such Lender or any other Person
receiving a copy of any Supplemental Report for any inaccuracy or omission contained in or relating
to a Supplemental Report, (ii) to conduct its own due diligence investigation and make credit
decisions with respect to the Borrower and its Subsidiaries based on such documents as such Lender
deems appropriate without any reliance on the Supplemental Reports or on JPMCB, either
individually, as Agent, as Collateral Agent or in any other capacity, (iii) to hold JPMCB, either
individually, as Agent, as Collateral Agent or in any other capacity, and any such other Person
preparing a Supplemental Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Supplemental Report in connection
with any Credit Extensions that the indemnifying Lender has made or may make to the Borrower, or
the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, any
Obligations and (iv) to pay and protect, and indemnify, defend, and hold JPMCB, either
individually, as Agent, as Collateral Agent or in any other capacity, and any such other Person
preparing a Supplemental Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by JPMCB,
either individually, as Agent, as Collateral Agent or in any other capacity, and any such other
Person preparing a Supplemental Report as the direct or indirect result of any third parties who
might obtain all or part of any Supplemental Report through the indemnifying Lender.

2.15 The Pricing Schedule attached as Exhibit A to the Loan Agreement shall be replaced with
the Pricing Schedule attached to this Amendment as Exhibit A.

2.16 Schedule 1.1(c) shall be added to the Loan Agreement in the form of Schedule 1.1(c)
attached hereto.

 

12

 

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES

The Borrower and each Guarantor represents and warrants to the Agent and the Lenders that,
after giving effect to this Amendment:

3.1 The execution, delivery and performance of this Amendment is within its powers, has been
duly authorized and is not in contravention with any law, of the terms of its Certificate of
Incorporation or By-laws or Certificate of Formation or Operating Agreement, as applicable, or
any undertaking to which it is a party or by which it is bound.

3.2 This Amendment is the legal, valid and binding obligation of the Borrower and each
Guarantor enforceable against it in accordance with the terms hereof, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by equitable principles affecting the availability of specific performance or other
remedies.

3.3 After giving effect to the amendments herein contained, the representations and warranties
contained in Article V of the Loan Agreement are true in all material respects on and as of the
date hereof with the same force and effect as if made on and as of the date hereof.

3.4 No Default or Unmatured Default exists or has occurred and is continuing on the date
hereof.

ARTICLE 4.

CONDITIONS OF EFFECTIVENESS

This Amendment shall become effective upon the first date (the “Effective Date”) on which each
of the following conditions to effectiveness have been satisfied:

4.1 This Amendment shall be signed by the Borrower, the Guarantors, the Agent and the Lenders
and delivered to the Agent.

4.2 The Lenders shall have received copies of the Revolving Credit Agreement, an amendment and
waiver to the Yen Loan Documents and all agreements and documents executed in connection therewith,
and all such amendments and waivers and other agreements and documents shall be executed
simultaneously herewith and shall be satisfactory to the Required Lenders.

4.3 The Intercreditor Agreement shall be signed by all parties thereto.

4.4 Other than such Collateral Documents permitted to be delivered on a post-closing basis as
agreed to by the Agent, Collateral Documents required by the Agent or the Required Lenders shall
have been duly executed by the Borrower and each applicable Subsidiary, together with any
documents, agreements, instruments, filings and other items related thereto as reasonably required
by the Agent or the Required Lenders to create a valid, attached, perfected, first priority Lien in
favor of the Collateral Agent with respect to the Collateral covered by the Loan Documents.

4.5 A written opinion of the counsel for the Borrower and the Guarantors, addressed to the
Lenders in form and substance satisfactory to the Agent.

4.6 The Borrower shall have provided all other due diligence materials requested by the Agent
or the Required Lenders.

4.7 The Borrower shall have delivered or caused to be delivered to the Agent such other
documents and instruments as the Agent may request in connection therewith.

 

13

 

ARTICLE 5.

MISCELLANEOUS

5.1 Each of the undersigned Guarantors hereby acknowledges and agrees that it has received,
reviewed and approved complete copies of the Loan Agreement, the other Loan Documents (including
the Guaranty) and all other agreements, instruments, certificates and other documents furnished by
or on behalf of the Borrower in connection therewith (all of the foregoing, as amended or modified
from time to time, including any agreements or instruments entered into in substitution therefor,
being herein collectively referred to as the “Loan Documents”), and that it has received
and reviewed all other financial statements, and agreements and documents that it has deemed
appropriate and necessary in order to decide to execute this Amendment, and each Guarantor has
determined that it is in its interest and to its financial benefit to enter into the transactions
contemplated thereby. Each Guarantor hereby unconditionally: (a) joins the Loan Agreement and the
other Loan Documents as a “Guarantor” thereunder, (b) agrees to be bound by, and hereby ratifies
and confirms, all covenants, agreements, consents, submissions, appointments, acknowledgments and
other terms and provisions attributable to a “Guarantor” in the Loan Agreement and the other Loan
Documents; and (c) agrees to perform all obligations required of it as a “Guarantor” by the Loan
Agreement and the other Loan Documents.

5.2 This Amendment shall be governed by and construed in accordance with the laws of the State
of Michigan.

5.3 References in the Loan Agreement or in any note, certificate, instrument or other document
to the “Loan Agreement” shall be deemed to be references to the Loan Agreement as amended hereby
and as further amended from time to time.

5.4 The Borrower agrees to pay and to save the Agent harmless for the payment of all costs and
expenses arising in connection with this Amendment, including the reasonable fees of counsel to the
Agent in connection with preparing this Amendment and the related documents.

5.5 The Borrower acknowledges and agrees that the Agent and the Lenders have fully performed
all of their obligations under all documents executed in connection with the Loan Agreement and all
actions taken by the Agent and the Lenders are reasonable and appropriate under the circumstances
and within their rights under the Loan Agreement and all other documents executed in connection
therewith and otherwise available. The Borrower represents and warrants that it is not aware of
any claims or causes of action against the Agent or any Lenders, any participant lender or any of
their successors or assigns.

5.6 Except as expressly amended hereby, the Borrower agrees that the Loan Agreement and all
other documents and agreements executed by the Borrower in connection with the Loan Agreement in
favor of the Agent or any Lenders are ratified and confirmed and shall remain in full force and
effect and that it has no set off, counterclaim or defense with respect to any of the foregoing.
Terms used but not defined herein shall have the respective meanings ascribed thereto in the Loan
Agreement.

5.7 This Amendment may be signed upon any number of counterparts with the same effect as if
the signatures thereto and hereto were upon the same instrument and signatures sent by facsimile or
electronic mail message shall be enforceable as originals.

 

14

 

IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be
executed and delivered as of September
28, 2009.

	 	 	 	 	 
	 	Borrower:

KELLY SERVICES, INC. 

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	Guarantors:

KELLY PROPERTIES, LLC

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084

 	 
	 	
Attention: Treasurer 	 
	 
	 	KELLY RECEIVABLES SERVICES, LLC

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084

 	 
	 	Attention: Treasurer 	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

	 	 	 	 	 
	 	KELLY SERVICES (IRELAND), LTD.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 
	 
	 	KELLY SERVICES OF DENMARK, INC.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 
	 
	 	KELLY SERVICES CIS, INC.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

	 	 	 	 	 
	 	KELLY SERVICES (AUSTRALIA), LTD.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 
	 
	 	KELLY SERVICES (NEW ZEALAND), LTD.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 
	 
	 	KELLY STAFF LEASING, INC.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

	 	 	 	 	 
	 	KHCS, INC.

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name:  	 Joel Starr 	 
	 	 	Title:  	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 
	 
	 	KSI ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Joel Starr
 	 
	 	 	Print Name: 	Joel Starr 	 
	 	 	Title: 	Treasurer 	 
	 
	 	999 West Big Beaver Road

Troy, Michigan 48084
 	 
	 
	 	Attention: Treasurer 	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as
Agent and as a Lender

 	 
	 	By:  	 /s/
Suzanne Ergastolo	 
	 	 	Print Name: 	 Suzanne
Ergastolo	 
	 	 	Title:  	 Vice
President	 
	 
	 	PNC BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	 /s/
Louis K. McLinden	 
	 	 	Print Name:  	 Louis
K. McLinden	 
	 	 	Title:  	 Managing Director	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	 /s/
Mary Ann Klemm	 
	 	 	Print Name:  	 Mary
Ann Klemm	 
	 	 	Title:  	 Vice
President	 
	 
	 	ROYAL BANK OF CANADA EUROPE LIMITED

 	 
	 	By:  	 /s/
R.J.
Bell	 
	 	 	Print Name: 	
 R.J. Bell	 
	 	 	Title:  	 Director	 
	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	 /s/
Joseph Giampetroni	 
	 	 	Print Name:  	Joseph Giampetroni 	 
	 	 	Title:  	Senior
Vice President 	 
	 
	 	BANK OF AMERICA, N.A.
 	 
	 
	 	By:  	 /s/
Michael Makaitis	 
	 	 	Print Name: 	 Michael
Makaitis	 
	 	 	Title:  	 Vice
President	 

[Signature Page to Second Amendment to Loan Agreement]

 

 

 

EXHIBIT A

PRICING SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I 	 	 	Level II 	 	 	Level III	 
	Applicable Margin	 	Status	 	 	Status	 	 	Status	 
	Eurocurrency Rate
	 	350.0 bps	 	375.0 bps	 	425.0 bps

For the purposes of this Schedule, the following terms have the following meanings, subject to the
final paragraph of this Schedule:

“Financials” means the annual or quarterly financial statements of the Borrower delivered pursuant
to Sections 6.1(a) or (b).

“Level I Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower
referred to in the most recent Financials, the Total Indebtedness to Total Capitalization Ratio is
less than 0.20 to 1.00.

“Level II Status” exists at any date if, as of the last day of the fiscal quarter of the Borrower
referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status
and (ii) the Total Indebtedness to Total Capitalization Ratio is less than 0.30 to 1.00.

“Level III Status” exists at any date if the Borrower has not qualified for Level I Status or Level
II Status.

“Status” means Level I Status, Level II Status or Level III Status.

The Applicable Margin shall be determined in accordance with the foregoing table based on the
Borrower’s Status as reflected in the then most recent Financials. Adjustments, if any, to the
Applicable Margin shall be effective five Business Days after the Agent has received the applicable
Financials. If the Borrower fails to deliver the Financials to the Agent at the time required
pursuant to the Credit Agreement, then the Applicable Margin shall be the highest Applicable Margin
set forth in the foregoing table until five days after such Financials are so delivered.

 

 

 

Schedule 1.1(c)

Inactive Subsidiaries

Kelly Management Services, Inc., a Delaware corporation

KellySelect, Inc., a Delaware corporation

KellyGuard Security Services, Inc., a Michigan corporation

September 28, 2009

 

 

 

Exhibit A

ARTICLE IX.

GUARANTEE

9.1 Guaranty. Each Guarantor hereby agrees that it is jointly and severally liable
for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to
the Lenders the prompt payment when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, of the Obligations and all costs and expenses including,
without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs
of in-house counsel and paralegals) and expenses paid or incurred by the Agent and the Lenders in
endeavoring to collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrower, any Guarantor or any other guarantor of all or any part of the Obligations
(such costs and expenses, together with the Obligations, collectively the “Guaranteed
Obligations”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and that it remains bound
upon its guarantee notwithstanding any such extension or renewal. All terms of this Guaranty apply
to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender
that extended any portion of the Guaranteed Obligations.

9.2 Guaranty of Payment. This Guaranty is a guaranty of payment and not of
collection. Each Guarantor waives any right to require the Agent or any Lender to sue the Borrower,
any Guarantor, any other guarantor, or any other person obligated for all or any part of the
Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against
any collateral securing all or any part of the Guaranteed Obligations.

9.3 No Discharge or Diminishment of Guaranty. (a) Except as otherwise provided for
herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject
to any reduction, limitation, impairment or termination for any reason (other than the indefeasible
payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver,
release, extension, renewal, settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate
existence, structure or ownership of any Borrower or any other guarantor of or other person liable
for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any Obligated Party, or their assets or any resulting release or
discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or
other rights which any Guarantor may have at any time against any Obligated Party, the Agent, any
Lender, or any other person, whether in connection herewith or in any unrelated transactions.

(b) The obligations of each Guarantor hereunder are not subject to any defense or setoff,
counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or
unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable
law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

(c) Further, the obligations of any Guarantor hereunder are not discharged or impaired or
otherwise affected by: (i) the failure of the Agent or any Lender to assert any claim or demand or
to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any
waiver or modification of or supplement to any provision of any agreement relating to the
Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct
security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other guarantor of or
other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act
by the Agent or any Lender with respect to any collateral securing any part of the Guaranteed
Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or
performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of the Guaranteed Obligations).

 

 

 

9.4 Defenses Waived. To the fullest extent permitted by applicable law, each
Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any
Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause,
or the cessation from any cause of the liability of any Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality
of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and, to the fullest extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any Obligated Party, or any
other person. The Agent may, at its election, foreclose on any Collateral held by it by one or
more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part
of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make
any other accommodation with any Obligated Party or exercise any other right or remedy available to
it against any Obligated Party, without affecting or impairing in any way the liability of such
Guarantor under this Guaranty except to the extent the Guaranteed Obligations have been fully and
indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election even though that election may operate, pursuant
to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of any Guarantor against any Obligated Party or any security.

9.5 Rights of Subrogation. No Guarantor will assert any right, claim or cause of
action, including, without limitation, a claim of subrogation, contribution or indemnification that
it has against any Obligated Party, or any collateral, until the Borrowers and the Guarantors have
fully performed all their obligations to the Agent and the Lenders.

9.6 Reinstatement; Stay of Acceleration. If at any time any payment of any portion of
the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, or reorganization of the Borrower or otherwise, each Guarantor’s
obligations under this Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Agent and the Lenders are in possession
of this Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand by the Lender.

9.7 Information. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent
of the risks that each Guarantor assumes and incurs under this Guaranty, and agrees that neither
the Agent nor any Lender shall have any duty to advise any Guarantor of information known to it
regarding those circumstances or risks.

9.8 Termination. The Lenders may continue to make loans or extend credit to the
Borrower based on this Guaranty until five days after it receives written notice of termination
from any Guarantor. Notwithstanding receipt of any such notice, each Guarantor will continue to be
liable to the Lenders for
any Guaranteed Obligations created, assumed or committed to prior to the fifth day after
receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with
respect to, or substitutions for, all or any part of that Guaranteed Obligations.

 

 

 

9.10 Taxes. All payments of the Guaranteed Obligations will be made by each Guarantor
free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if
any Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this Section) the,
Lender or LC Issuer (as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Guarantor shall make such deductions and (iii) such
Guarantor shall pay the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

9.11 Maximum Liability. The provisions of this Guaranty are severable, and in any
action or proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if
the obligations of any Guarantor under this Guaranty would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Guarantor’s liability under
this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the Guarantors or the Lenders, be
automatically limited and reduced to the highest amount that is valid and enforceable as determined
in such action or proceeding (such highest amount determined hereunder being the relevant
Guarantor’s “Maximum Liability”. This Section with respect to the Maximum Liability of each
Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not
subject to avoidance under applicable law, and no Guarantor nor any other person or entity shall
have any right or claim under this Section with respect to such Maximum Liability, except to the
extent necessary so that the obligations of any Guarantor hereunder shall not be rendered voidable
under applicable law. Each Guarantor agrees that the Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of each Guarantor without impairing this Guaranty or
affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence
shall be construed to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.

9.12 Contribution. In the event any Guarantor (a “Paying Guarantor”) shall make any
payment or payments under this Guaranty or shall suffer any loss as a result of any realization
upon any collateral granted by it to secure its obligations under this Guaranty, each other
Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal
to such Non-Paying Guarantor’s “Pro Rata Share” of such payment or payments made, or losses
suffered, by such Paying Guarantor. For purposes of this Article IX, each Non-Paying Guarantor’s
“Pro Rata Share” with respect to any such payment or loss by a Paying Guarantor shall be determined
as of the date on which such payment or loss was made by reference to the ratio of (i) such
Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s
Maximum Liability has not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or
by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Guarantor, the aggregate amount of all monies received by such Guarantors from
the Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing
in this provision shall affect any Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Guarantor’s Maximum Liability). Each of the Guarantors
covenants and agrees that its right to receive any contribution under this Guaranty from a
Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in
cash of the Guaranteed Obligations. This provision is for the benefit of both the Agent, the LC Issuer,
the Lenders and the Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.exv10w9

Exhibit 10.9

 

INSURANCE SERVICES OFFICE, INC.

1996 INCENTVE PLAN

(Effective as of January 1, 1997)

(As amended through September 18,2002)

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. PURPOSE OF PLAN

	 	 	1	 
	 
	 	 	 	 
	2. DEFINITIONS

	 	 	1	 
	 
	 	 	 	 
	3. ADMINISTRATION OF PLAN

	 	 	4	 
	 
	 	 	 	 
	4. AWARDS, OFFERS AND PARTICIPANT LOANS

	 	 	4	 
	 
	 	 	 	 
	5. AWARDS OF OPTIONS

	 	 	5	 
	 
	 	 	 	 
	6. AWARDS OF RESTRICTED STOCK

	 	 	8	 
	 
	 	 	 	 
	7. STOCK PURCHASE OFFERS

	 	 	10	 
	 
	 	 	 	 
	8. LOAN PROGRAM

	 	 	13	 
	 
	 	 	 	 
	9. LIMITATIONS AND CONDITIONS

	 	 	15	 
	 
	 	 	 	 
	10. STOCK ADJUSTMENTS; PUBLIC OFFERING

	 	 	17	 
	 
	 	 	 	 
	11. AMENDMENT AND TERMINATION

	 	 	18	 
	 
	 	 	 	 
	12. WITHHOLDING TAXES

	 	 	18	 
	 
	 	 	 	 
	13. LEGENDS

	 	 	19	 
	 
	 	 	 	 
	14. EFFECTIVE DATE

	 	 	19	 

 

 

INSURANCE SERVICES OFFICE, INC.

1996 INCENTIVE PLAN

(Effective as of January 1, 1997)

(As amended through September 18, 2002)

1. Purpose of Plan 

          The purpose of this 1996 incentive Plan is to aid the Company in securing and retaining Key
Employees of outstanding ability by making it possible to offer them increased incentives, which
may include a proprietary interest in the Company, to join or continue in the service of the
Company and to increase their efforts for its welfare.

2. Definitions

          As used in the Plan, the following words shall have the following meanings:

          (a) “Award” means an award or grant made to a Participant pursuant to the Plan, including,
without limitation, an award or grant of an Option, an award or grant of Restricted Stock, or any
combination thereof;

          (b) “Award Agreement” means an agreement between the Company and a Participant that sets forth
the terms, conditions and limitations applicable to an Award;

          (c) “Board of Directors” means the Board of Directors of the Company;

          (d) “Cause” means (i) a material failure by the Participant to perform his or her duties which
shall persist uncured for a ninety (90) day period after written notice is given to the Participant
setting forth in detail the duties which the Company alleges the Participant failed to perform;
(ii) the commission by the Participant of a felony, a crime involving moral turpitude or the
perpetration by Participant of a common law fraud; or (iii) any other willful act or

 

 

omission by the Participant, which is materially injurious to the financial condition or business reputation of
the Company.

          (e) “Committee” means a committee of the Board of Directors having authority delegated by the
Board of Directors to establish compensation arrangements relating to the Company;

          (f) “Common Stock” means Class A common stock of the Company;

          (g) “Company” means Insurance Services Office, Inc.;

          (h) “Disability” means the Participant ceases his or her employment with the Company because
he or she is unable, as a result of a mental or physical illness, to perform the essential duties
of his or her position with the Company with reasonable accommodation.

          (i) “Exercise Price” means the price at which a Participant may purchase Common Stock pursuant
to an Option;

          (j) “Fair Market Value” means the value per share of Common Stock determined by the most
recent appraisal conducted pursuant to the Insurance Services Office, Inc. Employee Stock Ownership
Plan;

          (k) “Good Reason” means (i) the Company’s diminution of the Participant’s duties,
responsibilities, position, title with the Company, authority, annual base salary, or aggregate
level of employee benefits; or (ii) the relocation without consent of the Participant to a location
more than thirty (30) miles from Participant’s work location.

          (l) “Key Employee” means any person in the regular full-time employment of the Company who, in
the opinion of the Committee, is or is expected to be primarily responsible for the management,
growth or protection of some part or all of the business of the Company;

2

 

          (m) “Non-Employee Director” means a director on the Board of Directors of the Company who is
not employed by the Company;

          (n) “Offer” or “Stock Purchase Offer” means an offer made to a Participant to purchase Common
Stock pursuant to Section 7;

          (o) “Offer Agreement” means the written instrument setting forth the terms and conditions
pursuant to which a Participant may purchase shares of Common Stock under the Plan in connection
with an Offer;

          (p) “Option” or “Nonqualified Stock Option” means a stock option granted pursuant to Section 5
to purchase shares of Common Stock which is intended not to qualify as an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”);

          (q) “Participant” means a person to whom one or more Awards or Offers have been granted that
have not all been forfeited or terminated under the Plan;

          (r) “Participant Loan” shall mean a loan financed by the Company and issued to a Participant
pursuant to Section 8 for the purchase of Common Stock pursuant to an Offer Agreement;

          (s) “Plan” means this 1996 Incentive Plan;

          (t) “Promissory Note” means the written instrument evidencing a Participant Loan made by the
Company to a Participant for the purpose of purchasing stock under Section 7;

          (u) “Purchase Date” means the last day of a period of three months commencing on the effective
date of an Offer Agreement;

3

 

          (v) “Restricted Stock” means shares of Common Stock granted pursuant to Section 6; and

          (w) “Restriction Period” means the period specified in Section 6(b)(i).

          (x) “Retirement” means the Participant has ceased employment with the Company (but not as a
result of being terminated for Cause) and has terminated his or her career.

3. Administration of Plan 

          The Plan shall be administered by the Committee whose members shall be appointed by the Board
of Directors. The Committee shall consist of no less than three members of the Board of Directors.
The Committee may adopt its own rules of procedure, and the action of a majority of the Committee,
taken at a meeting, or taken without a meeting by unanimous written consent of the members of the
Committee, shall constitute action by the Committee. The Committee shall have the power and
authority to administer the Plan, and shall make recommendations to the Board of Directors
regarding Awards, Offers and Participant Loans. All Awards, Offers and Participant Loans under the
Plan shall be approved by the Board of Directors.

4. Awards, Offers and Participant Loans 

          The Committee may from time to time make such Awards and/or Offers under the Plan in such form
and having such terms, conditions and limitations as the Committee may determine consistent with
the terms of the Plan. Awards and/or Offers may be granted singly, in combination or in tandem. The
terms, conditions and limitations of each Award and/or Offer under the Plan shall be set forth in
an Award Agreement and/or Offer Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan. Any Award to a Non-Employee Director must also be approved in
writing by the Board of Directors.

4

 

          The Committee shall offer Participant Loans to certain Participants as provided hereunder. The
Committee shall determine the terms, conditions and limitations of such Participant Loans in a
manner consistent with the Plan. The terms, conditions and limitations of
each Participant Loan shall be set forth in a Promissory Note, in a form approved of by the
Committee, consistent, however, with the terms of the Plan.

5. Awards of Options

          (a) The Board of Directors may grant from time to time to Key Employees and Non-Employee
Directors Nonqualified Stock Options to purchase shares of Common Stock. The terms and conditions
with respect to each grant of Options under the Plan shall be consistent with the following unless
otherwise specified in the Award Agreement or Option:

          (i) The Exercise Price per share of Common Stock issuable upon the exercise of an Option shall
be determined byte Board of Directors at the time of grant of such Option.

          (ii) Exercise of the Option shall be conditioned upon the Participant named therein having met
the exercise requirements as stated in the Award Agreement. An Option may be exercisable in whole
or in part upon the completion of a required employment period, achievement of certain performance
criteria, or a combination thereof, as determined by the Committee. If a Participant’s employment
with the Company terminates on account of the Participant’s death, Disability or Retirement, all
Options held by the Participant which have not yet become exercisable, but would become exercisable
solely upon the completion of a required employment period with the Company, shall immediately
become exercisable and shall remain exercisable for a period of twelve months following the date of
such termination. If within two years following a Change of Control (as defined in the Award
Agreement or Option) the

5

 

Participant terminates his or her employment with the Company for Good
Reason or the Company terminates the Participant’s employment without Cause, all outstanding
Options held by the Participant which have not yet become exercisable shall immediately become
exercisable and shall remain exercisable for a period of twelve months following the date of such
termination. An Option that becomes exercisable shall remain exercisable until the expiration
of ten years from the date of grant of the Option, unless an earlier expiration date is stated in
the Award Agreement or the Option ceases to be exercisable pursuant to Section 5(a)(iv) below. The
Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber an
unexercised Option.

          (iii) Payment in full of the Exercise Price shall be made upon exercise of the related Option
and may be made in cash, by the delivery of shares of Common Stock with an aggregate Fair Market
Value as of the date of exercise equal to the Exercise Price, or by a combination of cash and such
shares whose Fair Market Value as of the date of exercise together with such cash shall equal such
Exercise Price.

          (iv) If a Participant’s employment with the Company terminates for any reason other than (A)
the Participant’s death, Disability or Retirement (but only with respect to Options that become
exercisable solely upon the completion of a required employment period) or (B) within two years
following a Change of Control (as defined in the Award Agreement or Option) termination by the
Participant for Good Reason or termination by the Company without Cause, any Options held by such
Participant which have not yet become exercisable shall terminate and any Options held by such
Participant which have become exercisable shall terminate and cease to

6

 

be exercisable at 5:00 p.m.
on the 90th day following the date of such termination or the first day thereafter not a Saturday,
Sunday or Holiday except as otherwise provided in Section 10.

          (b) The holder of an Option who decides to exercise the Option in whole or in part shall give
notice to the Secretary of the Company of such exercise in writing on a form approved by the
Committee. Any exercise shall be effective as of the date specified in the notice of exercise, but
not earlier than the date the notice of the exercise, together with payment in full
of the Exercise Price and any required withholding taxes, is actually received by the
Secretary of the Company.

          (c) Except as otherwise provided in Section 10, at any time after exercise of an Option, the
Participant shall have the right to require the Company to purchase Common Stock that the
Participant acquired through exercise of an Option. The purchase price of such stock shall be the
Fair Market Value on the date the Company receives notice from the Participant of the Participant’s
intent to sell such stock to the Company.

          (d) If the Participant’s employment terminates for any reason, including death, Disability or
Retirement, upon expiration of the 12-month period immediately following the date of termination,
the Company may thereafter require the Participant to sell all shares of Common Stock that the
Participant purchased through exercise of an Option to the Company. The sale price of such stock
shall be the Fair Market Value on the date the Participant receives notice from the Company that it
is exercising the right to require the Participant to sell such shares to the Company.

          (e) Upon expiration of the 5 year period immediately following the date of expiration oaf
Non-Employee Director’s term, the Company may thereafter require the Non-

7

 

Employee Director to sell
all shares of Common Stock that the Non-Employee Director purchased through exercise of an Option
or otherwise to the Company. The sale price of such stock shall be the Fair Market Value on the
date the Non-Employee Director receives notice from the Company that it is exercising the right to
require the Non-Employee Director to sell such shares to the Company.

          (f) The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise
encumber shares of Common Stock purchased through exercise of an Option except as provided in
subsection 5(c) or 5(d).

6. Awards of Restricted Stock

          The Board of Directors may grant Restricted Stock from time to time to Key Employees and
Non-Employee Directors. The terms and conditions with respect to each grant of Restricted Stock
under the Plan shall be consistent with the following unless otherwise specified in the Award of
Restricted Stock:

          (a) The terms and conditions of each Award of Restricted Stock need not be the same with
respect to each Participant. Each Award of Restricted Stock shall be subject to forfeiture as set
forth in the Plan and may be otherwise subject to forfeiture as set forth in the provisions of such
Award.

          (b) All Awards of Restricted Stock shall be subject to the restrictions set forth in this
Section 6(b).

          (i) Subject to the provisions of the Plan and the applicable Award Agreement, the Committee
shall establish for each Award of Restricted Stock a period commencing on the date of such Award
(the “Restriction Period”). The Committee shall determine the nature, length

8

 

and/or termination
date of such Restriction Period for each Award of Restricted Stock. In the Committee’s discretion,
the Restriction Period may terminate after a period of years of continuous employment. The
Restriction Period may also be based on the achievement of performance objectives. Such performance
objectives, as well as the determination as to when such performance objectives have been achieved
shall be determined by the Committee for each Award of Restricted Stock. Performance objectives may
vary from Participant to Participant and
between groups of Participants and shall be based upon revenues, operating income, operating
company contribution, cash flow, income before income taxes, net income, earnings per share, return
on equity or assets or total return to stockholders, whether applicable to the Company or any
relevant business unit or any combination thereof, as the Committee may deem appropriate. The
Restriction Period for any Award issued pursuant to this Section 6 must be scheduled in the
applicable Award Agreement such that it terminates within 30 days following the scheduled release
of an appraisal of Common Stock pursuant to the ISO Employee Stock Ownership Plan.

          (ii) Shares of Restricted Stock granted to a Participant shall have all the attributes of
outstanding shares of Common Stock, including the right to receive dividends and distributions,
except certificates for such shares shall be delivered to and held by the Company until the
expiration of the Restriction Period with respect to such shares without a prior forfeiture
thereof. The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise
encumber shares of Restricted Stock during the Restriction Period.

          (iii) Except to the extent otherwise provided in Section 10, upon termination of a
Participant’s employment with the Company for any reason, including death, Disability or

9

 

Retirement, during the Restriction Period, all shares still subject to restriction shall be
forfeited by the Participant.

          (iv) Upon expiration of the Restriction Period with respect to any shares of Restricted Stock
without prior forfeiture thereof, certificates therefor held by the Company shall be delivered to
the Participant.

          (v) Except as otherwise provided in Section 10, upon the expiration of the Restriction Period
with respect to any shares of Restricted Stock without prior forfeiture thereof, or any time
thereafter, the Participant shall have the right to require the Company to purchase
such shares. The purchase price shall be the Fair Market Value on the date the Company
receives notice from the Participant of the Participant’s intent to sell such stock to the Company.

          (vi) Except as otherwise provided in Section 10, upon expiration of the Restriction Period
with respect to any shares of Restricted Stock without prior forfeiture thereof, and/or any time
thereafter, if the Participant’s employment terminates for any reason, including death, Disability
or Retirement, the Company may require the Participant to sell all such shares to the Company. The
sale price of such shares shall be the Fair Market Value on the effective date of termination of
the Participant’s employment.

          (vii) The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise
encumber shares of Restricted Stock after expiration of the Restriction Period except as provided
in Subsection 6(c)(v) or 6(c)(vi).

7. Stock Purchase Offers 

          The Board of Directors may make from time to time to Key Employees and Non-Employee Directors
Offers to purchase Common Stock. The terms and conditions with respect to

10

 

each Stock Purchase Offer
under the Plan shall be consistent with the following unless otherwise specified in the Offer
Agreement:

          (a) The Board of Directors shall determine the number of shares of Common Stock offered for
purchase or a formula for determination of the number of shares of Common Stock to be offered for
purchase. The number of shares of Common Stock offered to each Participant for purchase under this
Section need not be the same.

          (b) The purchase price shall be the Fair Market Value on the effective date of the Offer
Agreement.

          (c) The stated term of each Offer Agreement shall be three months.

          (d) Each Offer Agreement shall provide that the Participant on the Purchase Date shall
purchase all of the shares covered thereby unless the Participant shall have, in the manner
provided for in the Offer Agreement, notified the person specified in the Offer Agreement, on or
before the Purchase Date, that he or she does not desire to purchase any of such shares or that he
or she desires to purchase fewer than all of such shares. Failure to notify as aforesaid shall be
deemed an election by the Participant to purchase all of the shares covered by the Offer Agreement
on the Purchase Date.

          (e) Each Offer Agreement shall provide that the Participant who has entered into it may at any
time on or before the Purchase Date terminate the Offer Agreement in its entirety by delivering
written notice in the form and to the person specified in the Offer Agreement.

          (f) Each Offer Agreement shall provide that the Participant, from time to time prior to the
Purchase Date, on written notice received by the person specified in the Offer

11

 

Agreement at least
five business days prior to the end of any calendar month, may elect to purchase on the last day of
such month or of any subsequent month (unless the Purchase Date shall first occur) all or fewer
than all of the shares covered by the Offer Agreement.

          (g) The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise
encumber a Stock Purchase Offer.

          (h) If a Participant’s employment with the Company terminates for any reason, including the
Participant’s death, Disability or Retirement, the Participant’s Offer shall terminate, except as
otherwise provided in Section 10.

          (i) Except as otherwise provided in Section 10, if the Participant’s employment terminates for
any reason, including the Participant’s death, Disability or
Retirement, the Company may require the Participant to sell all shares of Common Stock that
the Participant purchased through a Stock Purchase Offer to the Company. The sale price of such
shares shall be the Fair Market Value on the effective date of termination of the Participant’s
employment.

          (j) Except as otherwise provided in Section 10, at any time after a Participant has purchased
Common Stock pursuant to an Offer Agreement, the Participant shall have the right to require the
Company to purchase such shares. The purchase price shall be the Fair Market Value on the date the
Company receives notice from the Participant of the Participant’s intent to sell such stock to the
Company.

          (k) The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise
encumber shares of Common Stock purchased through a Stock Purchase Offer other than as provided in
subsection 7(i) and 7(j).

12

 

8. Loan Program 

          The Board of Directors shall offer to each Participant who receives a Stock Purchase Offer
under Section 7 hereof, a Participant Loan to purchase stock pursuant to the Participant’s Offer
Agreement. The terms and conditions of each Participant Loan under the Plan shall be consistent
with the following unless otherwise specified in the terms of the Participant Loan:

          (a) Participant Loans made pursuant to the Plan shall be used by the Participant solely in
connection with the purchase of Common Stock through a Stock Purchase Offer.

          (b) Each share of Common Stock purchased with a Participant Loan shall be collateralized as
follows: (1) the Participant Loan amount representing 50% of the purchase price
of each share of Common Stock shall be collateralized only with the Common Stock purchased
with the proceeds of the Participant Loan amount; and (2) the Participant Loan amount representing
the remaining 50% of the purchase price shall be collateralized with the Common Stock purchased
with the proceeds of the Participant Loan amount and, to the extent that such collateral does not
equal the value of the Participant Loan amount, the Committee shall have recourse against the
Participant’s personal assets.

          (c) The amount of any Participant Loan offered under the Plan shall not exceed the price of
the Common Stock purchased with the proceeds of the Participant Loan. A Participant may elect to
borrow less than the foregoing sum, in the Participant’s sole discretion. A Participant shall be
eligible for more than one Participant Loan.

13

 

          (d) Each Participant Loan made hereunder shall be evidenced by a Promissory Note, in such form
and containing such provisions, not inconsistent herewith, as the Committee shall determine.

          (e) Any Promissory Note issued hereunder shall bear interest at a rate to be determined by the
Committee, but in no case shall such interest rate be lower than the applicable federal rate as
published monthly in Internal Revenue Service Revenue Rulings. The Committee may, in its
discretion, determine that interest shall be capitalized.

          (f) The term of the Participant Loan shall be determined by the Committee, but in no case
shall the term exceed ten years.

          (g) Each Participant Loan shall require periodic payments of interest accrued on the
Participant Loan. The unpaid principal amount and any unpaid interest thereon shall become due and
payable on the last day of the term of the Participant Loan. The Company shall have the right to
withhold such payments from the Participant’s paycheck.

          (h) Notwithstanding the foregoing, if a Participant sells Common Stock, and such Common Stock
was purchased entirely or in part with the proceeds of a Participant Loan, the price paid for such
Common Stock shall first be applied to any unpaid principal amount and any unpaid interest thereon.
The Participant shall be entitled to the remainder of the price paid by the Company after such
amounts have been paid.

          (i) Notwithstanding the foregoing, any dividend issued on Common Stock purchased through a
Stock Purchase Offer with the proceeds of a Participant Loan shall, at the discretion of the
Committee, be applied to any unpaid principal amount and any unpaid interest thereon.

14

 

          (j) Notwithstanding any other provision of the Plan, a Participant who has received a
Participant Loan shall have the option to repay in cash or in shares of Common Stock acquired other
than through a Stock Purchase Offer (valued at the Fair Market Value on the date of delivery), or
in a combination of both, all or any portion of the outstanding balance of the Participant Loan at
any time before the Participant Loan becomes due and payable.

          (k) The Participant shall not be permitted to assign a Participant Loan.

9. Limitations and Conditions

          (a) The total number of shares of Common Stock that maybe offered to Key Employees through
Awards and Offers under this Plan may not exceed 15% of the total number of issued and outstanding
shares of all classes of stock of the Company as of the effective date of the Award Agreement or
Offer Agreement, except that the foregoing number of shares may be increased or decreased by the
events set forth in Section 10. In the event that the Company makes an acquisition or is party to a
merger or consolidation, and the Company assumes awards and/or offers of the company acquired,
merged or consolidated which are consistent with and
administered pursuant to the provisions of this Plan, shares of Common Stock subject to such
awards and/or offers shall not count as part of the total number of shares of Common Stock that may
be offered to Key Employees through Awards and Offers under this Plan.

          (b) The total number of shares of Common Stock that may be offered to Non-Employee Directors
through Offers under this Plan may not exceed 25% of the total number of shares of Common Stock
offered to Key Employees through Offers and the total number of shares of Common Stock that may be
offered to Non-Employee Directors under the Plan through Awards may not exceed 25% of the total
number of shares of Common Stock offered to Key

15

 

Employees through Awards under this Plan, except
that the foregoing number of shares may be increased or decreased by the events set forth in
Section 10. In the event the Company makes an acquisition or is party to a merger or consolidation,
and the Company assumes awards and/or offers of the company acquired, merged or consolidated which
are consistent with and administered pursuant to the provisions of this Plan, shares of Common
Stock subject to such awards and/or offers shall not count as part of the total number of shares of
Common Stock that maybe offered through Awards and Offers under this Plan.

          (c) Any shares that have been made subject to an Award or an Offer that cease to be subject to
the Award or the Offer (other than by reason of exercise or payment of the Award or Offer to the
extent it is settled in shares) shall again be available for Award or Offer.

          (d) The terms of Awards and Offers granted on or before termination of the Plan may extend
beyond termination of the Plan in accordance with the provisions of the Award or the Offer.

          (e) No person who receives an Award or Offer under the Plan which includes shares of Common
Stock (which may include shares of Restricted Stock) or the right to acquire shares of Common Stock shall have any rights oaf stockholder (i) as to shares under Awards of
an Option until, after proper exercise of the Option, such shares have been recorded on the
Company’s official stockholder records as having been issued or transferred, or (ii) as to shares
included in Awards of Restricted Stock or purchased pursuant to a Stock Purchase Offer, until such
shares shall have been recorded on the Company’s official stockholder records as having been issued
or transferred.

16

 

          (f) Nothing contained herein shall affect the right of the Company to terminate any
Participant’s employment at any time or for any reason.

          (g) Restrictions on Certain Transactions Involving Common Stock. Notwithstanding any
other provision of the Plan to the contrary, and unless the Committee otherwise determines,
whenever blackout period restrictions are placed on participants in the ISO 401(k) Savings and
Employee Stock Ownership Plan, similar restrictions with respect to transactions involving Common
Stock under the Plan shall be placed on the Participants over the same period of time. These
restrictions can include, but are not limited to, restrictions on (a) award grants under the Plan,
(b) exercise of stock options under the Plan, (c) stock redemptions under the Plan, (d) put and
call rights under the Plan, and (e) distributions under the Plan. The Company will communicate such
restrictions to the Participants and other interested parties within a reasonable period of time in
advance of the implementation of such restrictions.

10. Stock Adjustments; Public Offering

          (a) In the event of any merger, consolidation, stock or other non-cash dividend, extraordinary
cash dividend, split-up, spin-off, combination or exchange of shares, reorganization or
recapitalization or change in capitalization, or any other similar corporate event, the Committee
may make such adjustments in (i) the aggregate number of shares subject to the
Plan and the number of shares that may be made subject to Awards to any individual Participant
(ii) the number and kind of shares that are subject to any Option and the Exercise Price per share
without any change in the aggregate Exercise Price to be paid therefor upon exercise of the Option,
and (iii) the number and kind of shares of outstanding Restricted Stock, as the

17

 

Committee shall
deem appropriate in the circumstances. The determination by the Committee as to the terms of any of
the foregoing adjustments shall be conclusive and binding.

          (b) Notwithstanding any provision contained in the Plan, if the Company shall list shares of
its capital stock on a United States securities exchange or nationally recognized stock quotation
system, no Participant shall thereafter be entitled to require the Company to purchase shares of
Common Stock and the Company will not be entitled to require a Participant to sell to the Company
shares of Common Stock pursuant to the terms of this Plan.

11. Amendment and Termination

          (a) The Board of Directors shall have the power to amend the Plan. The Board of Directors may,
at its discretion, amend Award Agreement(s), Offer Agreement(s) and/or Promissory Notes, provided
however, that such amendment(s) may not impair the rights oaf Participant without the consent of
such Participant, except to the extent, if any, provided in the Plan, the Award Agreement, the
Offer Agreement and/or Promissory Note.

          (b) The Board of Directors may suspend or terminate the Plan at any time. No such suspension
or termination shall affect Awards or Offers then in effect.

12. Withholding Taxes 

          The Company shall have the right to deduct from any cash payment made under the Plan any
federal, state or local income or other taxes required by law to be withheld with respect to such
payment. Upon a Participant’s exercise of an Option, or upon delivery of
Restricted Stock at the expiration of the Restriction Period, the Participant shall be
obligated to pay to the Company such amount as may be requested by the Company for the purpose of
satisfying any liability for such withholding taxes. All Restricted Stock Award Agreements shall

18

 

provide, and any other Award Agreement may provide, that the Participant may elect, in accordance
with any conditions set forth in such Award Agreement, to pay any withholding taxes in shares of
Common Stock.

13. Legends 

          Each certificate issued with respect to a share of Common Stock purchased pursuant to an
Option or an Offer or granted pursuant to an Award of Restricted Stock shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such share of Common
Stock.

14. Effective Date

          The Plan shall be effective on and as of January 1, 1997 subject to approval thereof by the
stockholders of the Company.

          IN WITNESS WHEREOF, this Plan has been executed pursuant to action of its Board of Directors
on the 19th day of September, 1996, and amended effective February 26, 1997 pursuant to action of
its Board of Directors taken on the 27th day of March, 1997, and further amended December 18, 1997,
March 25, 1998, September 16, 1998, and September 18, 2002 pursuant to actions of its Board of
Directors taken on such dates.

	 	 	 	 	 
	 	INSURANCE SERVICES OFFICE, INC.

 	 
	 	By:  	/s/ Frank J. Coyne 	 
	 	 	Frank J. Coyne 	 
	 	 	Chairman, President and

Chief Executive Officer 	 

19

 

2008 Amendment

to the

Insurance Services Office, Inc. 1996 Incentive Plan

(as Amended through September 18, 2002)

     WHEREAS, Insurance Services Office, Inc. (the “Company”) maintains the Insurance Services Office,
Inc. 1996 Incentive Plan, as amended (the “Plan”) in order to attract, retain and provide
incentives to key employees and non-employee Directors; and

     WHEREAS, Section 11(a) of the Plan provides that the Board of Directors of the Company (the
“Board”) may amend the Plan and any Award Agreements between the Company and any Participant (as
defined in the Plan) entered into pursuant to the Plan; and

     WHEREAS, the Board has determined that it is in the best interest of the Company to amend the Plan
to permit the use of Awards under the Plan as collateral security for third party loans to
Participants

     NOW, THEREFORE, THE PLAN IS HEREBY AMENDED IN THE FOLLOWING RESPECT:

1. New Section 15 is hereby added to the Plan which shall read entirely as follows:

          Section 15. Collateral Assignment.

	 	(a)	 	Notwithstanding anything to the contrary contained in Section
5(f), 6(b)(vii), 7(k) or any other provision of this Plan or in any Award
Agreement, a Participant shall be permitted to pledge or otherwise grant a
security interest in such Participant’s shares of Common Stock
to a lender to secure a loan or other extension of credit made to such
Participant. If requested by the lender, the Company shall acknowledge
in writing such pledge or security interest. Such pledge or other security interest shall be subject to all
other provisions of the Plan, including, without limitation the right of the
Company to repurchase shares of Common Stock set forth in Sections 5(e), 5(f),
6(b)(vi), and 7(i).

 

 

	 	(b)	 	Notwithstanding anything to the contrary contained in this Plan
or in any Award Agreement, a Participant shall be permitted to collaterally
assign such Participant’s right to require the Company to repurchase shares of
Common Stock contained in Sections 5(c), 6(b)(v) or 7(j) of the Plan (or any
repurchase provisions of any Award Agreement) to a lender to secure a loan or
other extension of credit made to such Participant including, but not
limited to, the collateral assignment to such lender by such
Participant of his right to receive all proceeds of any repurchase by
the Company of his shares of Common Stock of the Company. If
requested by the lender, the Company shall acknowledge in writing
such collateral assignment. Such pledge or other
security interest shall be subject to all other provisions of the Plan and/or
Award Agreement, including, without limitation, Section 10 of the Plan.
Notwithstanding the first sentence of this Section 15(b), a Participant shall
not be permitted to assign any such rights to the extent such assignment is
prohibited by applicable law.

     2. Except
as expressly amended herein, all the terms and provisions of the
Plan, as previously amended, remain in full force and effect.

     IN
WITNESS WHEREOF, the Board has caused this Amendment to be executed effective this ___ day of
July, 2008.

	 	 	 	 	 
	 	INSURANCE SERVICES OFFICE, INC.

 	 
	 	By:  	/s/ Frank J. Coyne
 	 
	 	 	Frank J. Coyne 	 
	 	 	Chairman, President and Chief Executive Officer 	 

2

 

	 	 	 	 	 

STOCK OPTION AGREEMENT

FOR

«Full_Name»

(Revised
April 2009)

 

 

INSURANCE SERVICES OFFICE, INC.

1996 INCENTIVE PLAN

STOCK OPTION AGREEMENT FOR EMPLOYEES

          THIS AGREEMENT, made effective as of «date» (the “Grant Date”), amends and restates all prior
Stock Option Agreements between Insurance Services Office, Inc. (the “Company”) and «Full_Name»
(the “Optionee”).

          WHEREAS, the Company has adopted the Insurance Services Office, Inc. 1996 Incentive Plan (the
“Plan”) to provide incentives to key employees and directors of the Company;

          WHEREAS, unless otherwise defined herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan; and

          WHEREAS, the Board of Directors has determined to grant the Option (as defined below) to the
Optionee as provided herein.

          NOW, THEREFORE, the parties hereto agree as follows:

          1. Definitions. For purposes of this Agreement, the following terms have the
following meanings:

               “Business Day” – a day on which banks in the City of New York are generally open for
business.

               “Change of Control” – as defined in Section 5.2.

               “Company” – as defined in the Recitals to this Agreement.

               “Competes” – as defined in Section 10.1.

               “Exercise Term” – as defined in Section 4.

               “Final Closing Date” – as defined in Section 9.2.

               “Grant Date” – as defined in the Recitals to this Agreement.

               “Option” – as defined in Section 2.1.

               “Optionee” – as defined in the Recitals to this Agreement.

               “Option Price” – as defined in Section 3.

 

 

               “Plan” – as defined in the Recitals to this Agreement.

               “Proposed Closing Date” – as defined in Section 9.1.

               “Prudential Agreement” – the Uncommitted Master Shelf Agreement, dated as of June 13, 2003
(as amended from time to time), among the Company, Prudential Investment Management, Inc., the
purchasers and each Prudential affiliate that becomes a party thereto.

               “Retirement” – termination by the Optionee of his or her employment with the Company after he
or she (i) has reached age sixty-two (62) and (ii) has been employed by the Company for at least
five (5) consecutive years immediately prior to such termination of employment.

               “Section 9.1 Notice” – as defined in Section 9.1.

          2. Grant and Acceptance of Option.

               2.1 The Company hereby grants to the Optionee, effective as of the Grant Date, the right and
option (the “Option”) to purchase all or any part of an aggregate number of whole shares of Common
Stock specified in Schedule I attached hereto, as amended or supplemented from time to time,
subject to, and in accordance with, the terms and conditions set forth in this Agreement.

               2.2 This Agreement shall be construed in accordance with, and shall be subject to, the
provisions of the Plan (the provisions of which are incorporated herein by reference).

               2.3 Optionee’s signature and delivery of a copy of this Agreement will not commit the Optionee
to purchase any Common Stock that is subject to the Option but will evidence the Optionee’s
acceptance of the Option upon the terms and conditions herein stated.

               2.4 The Option is not intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.

          3. Purchase Price. The price per share of Common Stock at which the Optionee shall be
entitled to purchase Common Stock upon the exercise of the Option (the “Option Price”) is set forth
on Schedule I hereto.

          4. Duration of Option. Upon becoming exercisable, the Option shall remain exercisable
to the extent and in the manner provided herein for a period of 10
years from the Grant Date (the “Exercise Term”), unless the Option earlier ceases to be
exercisable pursuant to Section 5(a)(iv) of the Plan or Section 5 hereof.

2

 

          5. Exercisability of Option.

               5.1 Unless otherwise provided in this Agreement, the Plan or the rules that may be adopted by
the Committee from time to time under the Plan, the Option shall entitle the Optionee to purchase,
in whole at any time or in part from time to time, the total number of shares of Common Stock
covered by the Option after the expiration of the period(s) of time set forth in the vesting
schedule in Schedule I; provided, however, that if,

	 	(i)	 	the Optionee ceases to be an employee of the Company on
account of the Optionee’s death, Disability or Retirement or,
	 
	 	(ii)	 	within two years following a Change of Control, the Optionee
ceases to be an employee of the Company because the Optionee terminates his or
her employment for Good Reason or the Company terminates the Optionee’s
employment without Cause,

the Option shall immediately be exercisable with respect to the total number of unexercised shares
covered by the Option (whether or not the period(s) of time set forth in the vesting schedule in
Schedule I shall have expired), and shall remain exercisable for a period of twelve months
following the date the Optionee ceased to be an employee of the Company.

               5.2 A “Change of Control” shall occur if the Company, in a single transaction or series of
related transactions, is merged with, consolidated into, or acquired by, another corporation,
and after such transaction or series of transactions, (a) any person or group (within the
meaning of Rule 13d-5 promulgated under the Securities Act of 1934), other than (i) the Optionee,
acting alone or in concert with others; (ii) one or more ISO employee benefit plans; or (iii) a
combination of (i) and (ii), shall beneficially own or control more than 25% of any class of voting
securities entitled to vote for Class A directors, or (b) any person or group, other than the Board
acting independently of any security holder and other than as set forth in (ii) and (iii), shall
possess the power, contractual or otherwise to elect a majority of the Board of Directors.

               5.3 For purposes of this Agreement, any transfer of the Optionee’s employment from the Company
to any subsidiary, related entity, or affiliate of the Company, with or without the Optionee’s
consent, shall not constitute termination of the Optionee’s employment with the Company. Upon any
such transfer of the Optionee’s employment, the definition of “Company” shall thereafter include
any subsidiary, related entity or affiliate as appropriate to the context in which such term is
used.

3

 

               5.4 If the Optionee’s employment is terminated by the Company for Cause, the Option shall
immediately terminate with respect to all shares covered by the Option whether or not previously
exercisable.

               5.5 If the Optionee’s employment with the Company terminates for any reason other than those
set forth in Sections 5.1 and 5.4 of this Agreement, the Option (i) shall immediately terminate
with respect to any shares which have not yet become exercisable and (ii) shall terminate and cease
to be exercisable with respect to any previously exercisable shares at 5:00 p.m. on the 90th day
following the date of such termination or, if such day is not a Business Day, on the first day
thereafter that is a Business Day.

          6. Manner of Exercise and Payment.

               6.1 Subject to the terms and conditions of this Agreement, the Award Agreement (if any) and
the Plan, the Option may be exercised by delivery of written notice to the Secretary of the Company
or his designee, at its principal executive office. Such notice shall state that the Optionee is
electing to exercise the Option, the number of shares of Common Stock in respect of which the
Option is being exercised and whether the Optionee wishes to sell any shares of Common Stock to the
Company in respect of payment of the minimum amount of withholding taxes. The notice shall be
signed by the person or persons exercising the Option and shall be an irrevocable election to
exercise such Option. If requested by the Committee, such person or persons shall (i) deliver this
Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise;
and (ii) provide satisfactory proof as to the right of such person or persons to exercise the
Option.

               6.2 The notice of exercise described in Section 6.1 hereof shall be accompanied by the full
purchase price for the Common Stock in respect of which the Option is being exercised, together
with payment of any applicable withholding taxes. The purchase price shall be payable in cash, by
delivery of shares of Common Stock previously purchased by the Optionee and held for more than six
months and one day prior to such delivery, or by a combination of such forms of payment. Any
applicable withholding taxes shall be payable in cash, by delivery of shares of Common Stock
previously purchased by Optionee and held for more than six months and one day prior to such
delivery, or by direction to the Company to withhold that number of shares of Common Stock
sufficient to satisfy the minimum required statutory withholding obligation, or by a combination of
such forms of payment. The determination of the minimum statutory withholding requirement will be
based on the applicable minimum statutory withholding rates required by the relevant tax
authorities (federal, state and local), including the employee’s share of payroll taxes that are
applicable to the supplemental taxable income arising from the exercise of options. Any exercise
shall be effective as of the date specified in the notice of exercise, provided that such
date is not

4

 

later than 10 days following the date of notice of exercise and not earlier than the
date that the Company actually receives the full purchase price for the Common Stock in respect of
which the Option is being exercised and the amount of any applicable withholding taxes to be paid.

               If the Optionee shall elect to pay all or a portion of the purchase price of the Option by
delivery of shares of Common Stock previously purchased by the Optionee, (i) the shares of Common
Stock being delivered by Optionee to the Company shall be valued at Fair Market Value on the date
of delivery; (ii) Optionee shall execute and deliver a certificate as stated in Section 9.7; and
(iii) Optionee shall deliver to the Company certificates evidencing the shares of Common Stock,
duly endorsed in blank, and, if the Company so requests, with signatures guaranteed to the Company.

               6.3 Upon receipt of notice of exercise as set forth in Section 6.1, full payment as specified
in Section 6.2 and any other documentation which may be reasonably required by the Committee, the
Company shall, subject to the Plan, any Award Agreement and this Agreement, take such action as may
be necessary to effect the transfer to the Optionee of the number of shares of Common Stock as to
which such exercise was effective.

               6.4 The Optionee shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to any Common Stock subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the Optionee shall have paid the full
purchase price for the number of shares of Common Stock in respect of which the Option was
exercised and any applicable withholding taxes; (ii) the Company shall have issued and delivered
one or more certificates evidencing the Common Stock to the Optionee; and (iii) the Optionee’s name
shall have been entered as a stockholder of record on the books of the Company, whereupon the
Optionee shall have full voting and other ownership rights with respect to such Common Stock.

          7. Representations and Warranties of the Company. The Company hereby represents and
warrants to Optionee as follows:

               7.1 This Agreement has been duly executed and delivered by the Company and is valid and
binding upon the Company.

               7.2 The Company has taken all necessary corporate action to authorize and reserve for issuance
sufficient authorized and unissued shares of Common Stock to effect the issuance of all of the
shares of Common Stock upon exercise of the Option.

5

 

               7.3 The shares of Common Stock to be issued upon due exercise, in whole or in part, of the
Option, when paid for and delivered as provided herein, will be duly authorized, validly issued,
fully paid and non-assessable.

               7.4 The Company is not subject to or obligated under any provision of its Certificate of
Incorporation or Bylaws (both as amended and restated on the date of this Agreement) or subject to
any order, decree, agreement, indenture, instrument, law, rule or regulation which would be
breached or violated by its executing and carrying out this Agreement.

          8. Representations and Warranties of Optionee. Optionee hereby represents and
warrants to the Company as follows:

               8.1 This Agreement has been duly executed and delivered by Optionee and is valid and binding
upon Optionee.

               8.2 If Optionee exercises the Option, Optionee will not acquire any shares of Common Stock
upon such exercise with a view to any public distribution thereof within the meaning of the
Securities Act of 1933, as amended.

          9. Repurchase Provisions.

               9.1 Except as otherwise provided in paragraph (b) of Section 10 of the Plan, entitled “Stock
Adjustments; Public Offering,” and subject to any restrictions that may be placed from time to time
on transactions of Common Stock as provided in Section 9(g) of the Plan, at any time commencing
with the date that is six months and one day after exercise of an Option, except as provided in
Section 6.2 with respect to withholding of shares at exercise sufficient to satisfy the minimum
required withholding obligation, the Optionee shall have the right to require the Company to
purchase Common Stock that the Optionee acquired through exercise of an Option. The purchase price
of such stock shall be the Fair Market Value on the date the Company receives written notice from
the Optionee of the Optionee’s intent to sell such Common Stock to the Company (the “Section 9.1
Notice”). Except as provided in Section 9.5 hereof, the Section 9.1 Notice shall be irrevocable.
The Optionee shall set forth in such notice the proposed date of closing of the purchase by the
Company of the Common Stock (the “Proposed Closing Date”), which date shall be no earlier than
eight (8) Business Days following the date of receipt by the Company of the notice, and not later
than thirty (30) days following receipt of such notice. The Optionee may give such notice prior to
the date that is six months and one day following the exercise of the Option. Except as provided
in Section 9.2 of this Agreement, the Company shall pay the purchase price in cash by check or wire
transfer to an account designated by the Optionee five (5) Business Days prior to Closing against
delivery by the Optionee of certificates evidencing the Common Stock, duly endorsed in blank, with
signatures guaranteed.

6

 

               9.2 For Options granted by the Company after December 31, 2001, where the Company has received
a Section 9.1 Notice from the Optionee, the Company may elect to defer the Proposed Closing Date by
delivering written notice of such deferral to the Optionee. Such written notice shall be delivered
on or before the Proposed Closing Date and shall set forth the new closing date selected by the
Company (the “Final Closing Date”), which shall be (i) no later than one year following the
Proposed Closing Date for Options granted before January 1, 2005 and (ii) no later than two years
following the Proposed Closing Date for Options granted after December 31, 2004. The Company shall
have the right, but not the obligation, to close the transaction prior to the Final Closing Date by
delivering notice to the Optionee that it is exercising such right, and proposing a date of closing
of the purchase, which date shall be no earlier than eight (8) Business Days and no later than
thirty (30) days following the date the Company delivers notice. On the Final Closing Date, or such earlier closing date as to which the
Company has given due notice, the Company shall pay the purchase price and any unpaid interest
pursuant to Section 9.3 in cash by check or wire transfer to an account designated by the Optionee
five (5) Business Days prior to the closing against delivery of certificates evidencing the Common
Stock, duly endorsed in blank, with signatures guaranteed.

               9.3 Notwithstanding the Company’s election to defer the closing date in accordance with
Section 9.2, the purchase price for the stock shall remain the Fair Market Value on the date the
Company received the Section 9.1 Notice. In full consideration of such deferral, the Optionee
shall be entitled to receive from the Company and the Company shall be obligated to pay to the
Optionee interest on the unpaid purchase price from the date the Company received the Section 9.1
Notice to the actual date of closing. Such interest shall be payable monthly in arrears. The rate
of such interest shall be the Prime Rate as published in The Wall Street Journal in effect on the
date the Company delivers its notice of deferral to the Optionee.

               9.4 Until the Optionee receives payment of the purchase price for the shares of Common Stock
that are the subject of the Section 9.1 Notice, the Optionee shall continue to have full rights as
a shareholder of the Company with respect to such shares.

               9.5 Within thirty (30) days following receipt of a notice from the Company electing to defer
the closing date in accordance with Section 9.2, the Optionee may rescind the Section 9.1 Notice
previously given by the Optionee by giving written notice of such rescission to the Company. Upon
the Optionee’s giving of such notice of rescission, the Section 9.1 Notice shall be deemed null and
void, ab initio.

               9.6 Except as otherwise provided in paragraph (b) of Section 10 of the Plan, entitled “Stock
Adjustments; Public Offering,” upon expiration of the twelve-month period immediately following the
date Optionee shall cease to be an

7

 

employee of the Company, the Company may thereafter require the Optionee to sell all shares of Common Stock that the Optionee purchased through exercise of an
Option or otherwise to the Company. The sale price of such Common Stock shall be the Fair Market
Value on the date the Company delivers notice to the Optionee that it is exercising the right to
require the Optionee to sell such shares to the Company. The Company shall set forth in such
notice the proposed date of closing of the purchase by the Company of the Common Stock, which date
shall be no earlier than eight (8) Business Days following the date the Company delivers notice and
no later than thirty (30) days following delivery of such notice. The Company shall pay the
purchase price in cash by check or wire transfer to an account designated by the Optionee five (5)
Business Days prior to closing against delivery of certificates evidencing the Common Stock, duly
endorsed in blank, with signatures guaranteed.

               9.7 At the closings relating to the purchase and sale of Common Stock specified in the second
paragraph of Section 6.2, Sections 9.1, 9.2 and 9.6, Optionee shall deliver a certificate to the
Company certifying as follows:

               (a) The shares of Common Stock being delivered to the Company are free and clear of
all liens and encumbrances other than those created by this Agreement; and

               (b) The Optionee is not subject to or obligated under any order, decree, agreement,
law, rule or regulation which would be breached or violated by the sale of the shares of
Common Stock to the Company.

               9.8 Notwithstanding anything to the contrary contained in this Agreement, the Optionee shall
have no right to require the Company (or any of its subsidiaries) to purchase shares of Common
Stock that the Optionee acquired through exercise of an Option granted on or after the date of this
Agreement if, after giving effect to the Optionee’s Section 9.1 Notice with respect to such shares
either on the date of such notice, on the Proposed Closing Date set forth in such notice or on the
Final Closing Date, (i) a Default or Event of Default (each defined in the Prudential Agreement)
shall have occurred and be continuing under the Prudential Agreement or (ii) a similar default or
event of default shall have occurred and be continuing under any other borrowing agreement of the
Company. This Section 9.8 shall be binding on any assignee or transferee of the Optionee. The
Optionee and the Company agree not to amend the provisions of this Section 9.8 without the prior
written consent of the Required Holders (as defined in the Prudential Agreement).

          10. Rescission of Grant or Exercise by the Company

               10.1 If, within one (1) year following the date of Optionee’s Retirement, Optionee Competes
with the Company, the Company may elect to rescind

8

 

any grant of options which vested solely by reason of Optionee’s Retirement. Such rescission shall become effective when written notice of the
Company’s election to rescind is sent to the Optionee. Any grant as to which the Company has sent
a notice of rescission shall be null and void. For purposes of this Agreement, “Competes” shall
mean that the Optionee, for himself or for any third party, directly or indirectly: (i) diverts or
attempts to divert from the Company any business of any kind in which the Company is engaged,
including without limitation, the solicitation or interference with any of the Company’s suppliers
or customers that have used or provided, as the case may be, products or services of the Company
within the twenty-four (24) month period prior to the date the Optionee solicits or interferes with
such supplier or customer; (ii) employs or solicits for employment, any person employed by the
Company during the period of such person’s employment and for a period of one (1) year thereafter;
(iii) engages in any business activity that is competitive with the activities of the Company prior
to the Optionee’s Retirement; or (iv) directly or indirectly invests in any entity whose business
activity is competitive with the activities engaged in by the Company; except that in each case the
foregoing provisions will not be deemed breached merely because the Optionee owns not more than 1%
of the outstanding common stock of any competitor, if, at the time of its acquisition by the
Optionee, such stock is listed on a national securities exchange, is reported on NASDAQ, or is
regularly traded in the over-the-counter market by a member of a national securities exchange. For
purposes of this Agreement, “Competes” shall include, by way of example and not by way of
limitation, the disclosure by the Optionee to any third party, whether or not a competitor of the
Company, of any trade secret or other confidential or proprietary information of the Company.

               10.2 If, following his or her Retirement, the Optionee exercises any options as to which the
Company would have had, but for such exercise, a right of rescission pursuant to Section 10.1, the
Company may elect to rescind any such exercise by (i) providing written notice of such rescission
to the Optionee, (ii) returning to the Optionee the purchase price received by the Company from the
Optionee in respect of such exercise, and (iii) canceling on the Company’s share register the
shares issued in respect of such rescinded exercise. If the Optionee has sold the Common Stock
issued in respect of such rescinded exercise, the Optionee shall pay to the Company within five (5)
days of receiving such written notice an amount equal to the purchase price received by the
Optionee for such Common Stock.

          11. Nontransferability. The Optionee shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber all or any portion of an unexercised Option. During the
life of the Optionee, the Option shall be exercisable only by the Optionee or the Optionee’s
guardian or legal representative.

          12. No Right to Continued Employment. Nothing in this Agreement, any Award Agreement
or the Plan shall be interpreted or construed to confer upon the

9

 

Optionee any right with respect to continuation of employment by the Company, nor shall this Agreement, any Award Agreement or the
Plan interfere in any way with the right of the Company to remove the Optionee as an officer or
employee of the Company.

          13. Adjustments. If any of the corporate capital transactions described in Section 10
of the Plan, entitled “Stock Adjustments; Public Offering,” occurs, the Committee shall make
appropriate adjustments to the number and kind of securities subject to the Option and any
previously granted option and the purchase price for such securities as the Committee shall deem
appropriate in the circumstances. The determination by the Committee as to the terms of any
adjustment shall be conclusive and binding.

          14. Withholding of Taxes. The Company shall have the right to deduct from cash
payments to Optionee hereunder any federal, state and local income taxes and other amounts as may
be required by law to be withheld with respect to such payment.

          15. Optionee Bound by the Plan. The Optionee hereby acknowledges receipt of a copy of
the Plan, as amended, and agrees to be bound by all terms and provisions thereof. The Optionee
acknowledges he or she has been afforded access to such financial and other information relating to
the Company, its business, operations, and prospects as the Participant shall have requested.

          16. Modification of Agreement. This Agreement may be modified, amended, suspended, or
terminated, and any terms or conditions may be waived, but only by a written instrument executed by
each of the parties hereto.

          17. Severability. Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of
this Agreement shall not be affected by such holding and shall continue in full force in accordance
with their terms.

          18. Governing Law. The validity, interpretation, construction, and performance of
this Agreement shall be governed by the laws of the State of New York without regard to principles
of conflicts of law.

          19. Successors in Interest. This Agreement shall inure to the benefit of and be
binding upon each successor to the Company. This Agreement shall inure to the benefit of the
Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights granted
to the Company under this Agreement shall be final, binding, and conclusive upon the Optionee’s
heirs, executors, administrators, and successors.

10

 

          20. Resolution of Disputes. Any dispute or disagreement which may arise under, or as
a result of, or in any way relate to, the interpretation, construction, or application of this
Agreement shall be determined by the Committee. Any determination made by the Committee hereunder
shall be final, binding, and conclusive on the Optionee and the Company for all purposes.

          21. Confidentiality. The Optionee shall keep in strict confidence and shall not
disclose any of the terms and conditions of this Agreement to any other party, except to Optionee’s
legal or financial advisors or family members who have a need to know the terms and conditions of
the Agreement or except to the extent required by law.

          22. Legend.

          Each certificate representing Shares and any subsequent certificate deriving from such
certificate shall bear the following legend:

          “The shares evidenced by this Certificate have been issued
pursuant to the Company’s 1996 Incentive Plan and are subject to
restrictions as set forth in such plan, the Stock Option Agreement
dated as of [the Grant Date] between the Company and the
registered holder of such shares, and the Company’s Restated
Certificate of Incorporation and Bylaws.

          The shares evidenced by this Certificate have not been
registered under the Securities Act of 1933 with the Securities
and Exchange Commission or under any state securities law with any
state securities commission and may not be sold, transferred or
assigned in the absence of an effective registration statement or
an exemption from registration.”

          23. Notices. Any notice, request, consent, waiver or other communication required or
permitted to be delivered hereunder shall be effectively delivered only if it is in writing and
personally delivered or sent by Express Mail, Federal Express or similar overnight delivery
service, addressed as set forth below, or sent by facsimile to the number set forth below with
confirmation received and followed by a writing personally delivered or sent by Express Mail,
Federal Express or similar overnight delivery service.

          If
to Optionee:

          The address specified in Schedule I.

11

 

	 	 	 
	 

	 	If to ISO:
	 
	 	 
	 

	 	INSURANCE SERVICES OFFICE, INC.
	 

	 	545 Washington Boulevard
	 

	 	Jersey City, New Jersey 07310-1686
	 

	 	Attention: Secretary
	 

	 	Facsimile: (201) 748-1429

or such other person or address or to such other facsimile number as the addressee may have
specified in a notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been delivered as of the date of acknowledged receipt.

[Remainder of page intentionally left blank]

12

 

	 	 	 	 	 
	 	INSURANCE SERVICES OFFICE, INC.

 	 
	 	By:  	 	 
	 	 	Mark V. Anquillare 	 
	 	 	Senior Vice President
and Chief Financial Officer	 
	 
	 	OPTIONEE:
	 
	 
	 	
I hereby (i) acknowledge that the Insurance Services
Office, Inc. 1996 Incentive Plan was amended on September
18, 2002 to place restrictions on transactions of ISO
common stock when similar restrictions are placed on
transactions of common stock in the ISO 401(k) and
Employee Stock Ownership Plan; (ii) agree, acknowledge and
consent that any and all Awards granted to me under the
Plan (and any and all securities received in respect of
such Awards), whether past, present or future, shall be
bound by the terms and conditions as set forth in the
Plan, as so amended, including, but not limited to, the
restrictions described above; and (iii) acknowledge
receipt of the Plan, as so amended.

 	 
	 	 	 
	 	«Full_Name» 	 

13

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