Exhibit 10.3


 


LIMITED GUARANTEE


OF


PARTHENON INVESTORS II, L.P.


AND


INSURANCE AUTO AUCTIONS, INC.


LIMITED
GUARANTEE, dated as of December 22, 2006 (this “Limited Guarantee”),
by Parthenon Investors II, L.P. (“Parthenon”) and Insurance Auto
Auctions, Inc. (“IAAI” and together with Parthenon, the “Guarantors”),
in favor of ADESA, INC., a
Delaware corporation (the “Company”).  On the date hereof, the Company has entered
into guarantees (the “Other Guarantees”) with (i) ValueAct Capital
Master Fund, L.P., (ii) GS Capital Partners VI, L.P. (together with GS Capital
Partners VI Parallel, L.P., GS Capital Partners VI Offshore, L.P. and GS
Capital Partners VI GmbH & Co. KG) and (iii) Kelso Investment Associates
VII, L.P. and Insurance Auto Auctions, Inc. (collectively, the “Other
Guarantors”) on substantially similar terms, except as otherwise expressly
provided therein.  Any capitalized term
not otherwise defined herein shall be as defined in the Merger Agreement (as
defined below).


1.             LIMITED GUARANTEE.  To induce the Company to enter into that
certain Agreement and Plan of Merger, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, KAR
Holdings II, LLC, a limited liability company (“Buyer”), KAR Holdings,
Inc, a Delaware corporation and wholly-owned subsidiary of Buyer (“Holdings”)
and KAR Acquisition, Inc, a Delaware corporation and wholly-owned subsidiary of
Holdings (“Merger Sub” and together with Buyer and Holdings, the “Buyer Parties”), the Guarantors, jointly and
severally, absolutely, unconditionally and irrevocably guarantees to the
Company, on the terms and conditions set forth herein, the prompt and complete payment,
if and when due of 7.8313% (the “Guaranteed Percentage”) of the
obligations of the Buyer Parties pursuant to and in accordance with: (i)
Section 8.3(d)(i) of the Merger Agreement with respect to the Buyer Termination
Fee; (ii) Section 8.3(d)(ii) of the Merger Agreement with respect to the
reimbursement of the Company Transaction Expenses; and (iii) Section
8.3(d)(iii) of the Merger Agreement with respect to the reimbursement of the
Company Financing Fees and Expenses and the Credit Facility Fees and Expenses (the
Guaranteed Percentage of the payment obligations identified in clauses (i) through
(iii) above, are collectively referred to herein as the “Obligations”); provided,
that, notwithstanding anything herein to the contrary, in the event that the
Guarantors have actually paid the Guaranteed Percentage of the Buyer
Termination Fee pursuant to clause (i) above or the Guaranteed Percentage of
the Company Transaction Expenses pursuant to clause (ii) above, the Guarantors
shall have no payment obligation with respect to the Company Financing Fees and
Expenses or the Credit Facility Fees and Expenses referenced in clause (iii)
above; and provided, further that the maximum aggregate amount payable
by the Guarantors under this Limited Guarantee (exclusive of any amounts
required to be paid by the Guarantors pursuant to and in accordance with
Section 16 hereof (the “Prevailing Party Costs”)) shall not exceed the
aggregate of Three Million One Hundred Thirty Two Thousand and Five Hundred
Thirty U.S. Dollars (U.S.$ 3,132,530) (the “Cap”); it being understood
that this Limited Guarantee may not be enforced without giving effect to the
Cap.  Except for Prevailing Party Costs, the
Company hereby agrees that in no event shall the Guarantors be required to pay
to any Person under, in respect of, or in connection with this Limited
Guarantee or the Merger Agreement, more than the Cap, and that the Guarantors
shall not have any obligation or liability to any Person relating to, arising
out of or in connection with, this Limited Guarantee other than as expressly
set forth 



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herein.  Should either of the
Buyer Parties default in the prompt and complete payment or performance of the
Obligations, the Guarantors’ obligations hereunder shall become immediately due
and payable to the Company.  The Company
shall provide Buyer and the Guarantors with reasonable documentation, as
applicable, of the Company Financing Fees and Expenses and the Company
Transaction Expenses and shall use reasonable best efforts to provide Buyer
with reasonable documentation of the Credit Facility Fees and Expenses.  All sums payable by the Guarantors hereunder
shall be made in immediately available funds. 
The Company may, in its sole discretion, bring and prosecute a separate
action or actions against the Guarantors for the full payment of the
Obligations, subject to the Cap (plus any Prevailing Party Costs), regardless
of whether the action is brought against one or both of the Buyer Parties or
any Other Guarantor or whether one or both of the Buyer Parties or any Other
Guarantor is joined in any such action or actions.  Notwithstanding anything to the contrary
contained in this Limited Guarantee or any other document, the obligations (i) of
the Guarantors under this Limited Guarantee shall be joint and several, and (ii)
of any Other Guarantor under any Other Guarantee shall be several and not
joint.


2.             NATURE OF LIMITED GUARANTEE.


(a)           The
Company shall not be obligated to file any claim relating to the Obligations in
the event that one or both of the Buyer Parties becomes subject to a
bankruptcy, reorganization or similar proceeding, and the failure of the
Company to so file shall not affect the Guarantors’ obligations hereunder.  In the event that any payment to the Company
in respect of the Obligations is rescinded or must otherwise be returned for
any reason whatsoever, the Guarantors shall remain liable hereunder with
respect to the Obligations (plus any Prevailing Party Costs) as if such payment
had not been made (subject to the terms hereof).  This is an unconditional guarantee of payment
and not of collectibility. 
Notwithstanding any other provision of this Limited Guarantee, the
Company hereby agrees that (i) the Guarantors may assert, as a defense to any
payment or performance by the Guarantors under this Limited Guarantee, any
defense to such payment or performance that the Buyer Parties could assert
against the Company under the terms of the Merger Agreement, other than any
such defense arising out of, due to, or as a result of, the insolvency or
bankruptcy of any Buyer Party or any of the Other Guarantors, or any defense
based upon a claim of fraudulent conveyance and similar laws of general
applicability relating to creditors rights; and (ii) to the extent the Buyer
Parties are relieved by the parties to the Merger Agreement (including the
Company) of their obligations under Section 8.3(d) of the Merger Agreement, the
Guarantors shall be similarly relieved of their Obligations under this Limited
Guarantee.


(b)           The
Company hereby acknowledges and agrees that, as of the date hereof, each of the
Buyer Parties’ sole assets are a de minimis amount
of cash and their respective rights under the Merger Agreement, and that no
additional funds or assets are expected to be contributed to the Buyer Parties,
except as contemplated by the Merger Agreement in connection with the Closing.


(c)           Notwithstanding
anything that may be expressed or implied in this Limited Guarantee or any
document or instrument delivered contemporaneously herewith, and
notwithstanding the fact that either of the Guarantors may be a partnership or
limited liability company, by its acceptance of the benefits of this Limited
Guarantee, the Company covenants and agrees that (i) neither the Company nor
any of its Subsidiaries or Affiliates, and the Company agrees to the maximum
extent permitted by Law, none of its officers, directors, 



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security holders
or representatives, has or shall have any right of recovery under the Merger
Agreement or the transactions contemplated thereby, and to the extent that it
has or obtains any such right, it, to the maximum extent permitted by Law,
hereby waives (on its own behalf and on behalf of each of the aforementioned
persons) each and every such right against, and hereby releases, and no
personal liability shall attach to, the Guarantors or any of the Sponsor Affiliates
(as defined below), from and with respect to any claim, known or unknown, now
existing or hereafter arising, relating to the Merger Agreement or the
transactions contemplated thereby, whether by or through attempted piercing of
the corporate (or limited liability company or limited partnership) veil, or by
or through a claim by or on behalf of any Buyer Party (or any other Person)
against any Sponsor Affiliate (including, without limitation, a claim to enforce
the Equity Commitment Letters) (the “Released Claims”), except for its
rights to recover from the Guarantors (but not any Sponsor Affiliate, under and
to the extent provided in this Limited Guarantee (subject to the limitations
described herein)), and its rights against the Other Guarantors pursuant to the
terms of the Other Guarantees; and (ii) recourse against the Guarantors under
this Limited Guarantee (subject to the limitations described herein) and
against the Other Guarantors pursuant to the Other Guarantees shall be the sole
and exclusive remedy of the Company and all of its Subsidiaries and Affiliates
against the Guarantors and each Sponsor Affiliate in respect of any liabilities
or obligations arising under the Merger Agreement or the transactions
contemplated thereby. For purposes of this Limited Guarantee, “Sponsor
Affiliate” means, collectively, any former, current or future director,
officer, employee, agent, general or limited partner, manager, member,
stockholder, Affiliate or assignee of the undersigned or any Sponsor Affiliate
or any former, current or future director, officer, employee, agent, general or
limited partner, manager, member, stockholder, Affiliate or assignee of any of
the foregoing; provided, that, if the Person is an Other Guarantor, such Person
shall also have such obligations to Company as are set forth in the Other
Guarantee of such Person.


(d)           The
Company hereby covenants and agrees that it shall not institute, directly or
indirectly, and shall cause its Subsidiaries and controlled Affiliates not to
institute, in the name of or on behalf of the Company or any other Person, any
proceeding or bring any other claim arising under the Merger Agreement or the
transactions contemplated thereby, against the Guarantors or the Sponsor
Affiliates except for claims against the Guarantors under this Limited
Guarantee (subject to the limitations described herein), any claims against any
Sponsor Affiliate that is an Other Guarantor under an Other Guarantee, any
claims for equitable relief permitted under Section 9.12 of the Merger
Agreement, or any claims permitted under the Confidentiality Agreement.


(e)           The
Company acknowledges that the Guarantors are agreeing to enter into this
Limited Guarantee in reliance on the provisions set forth in Sections 2(b)
through (e). Sections 2(b), 2(c), 2(d) and 2(e) shall survive termination of
this Limited Guarantee.


3.             CHANGES IN OBLIGATIONS; CERTAIN WAIVERS.  The Guarantors agree that the Company may at
any time and from time to time, without notice to or further consent of the Guarantors,
extend the time of payment of any of the Obligations, and also may make any
agreement with one or both of the Buyer Parties or any Other Guarantor for the
extension, renewal, payment, compromise, discharge or release thereof, in whole
or in part, or for any modification of the terms thereof or of any agreement
between the Company, on the one hand, and one or both of the Buyer Parties or
any Other Guarantor, on the other hand, without in any way impairing or
affecting the Guarantors’ obligations under this Limited Guarantee.  The 



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Guarantors agree that the obligations of the Guarantors hereunder shall
not be released or discharged, in whole or in part, or otherwise affected by:
(a) the failure of the Company to assert any claim or demand or to enforce
any right or remedy against one or both of the Buyer Parties or any Other
Guarantor; (b) any change in the time, place or manner of payment of any
of the Obligations or any rescission, waiver, compromise, consolidation or
other amendment or modification of any of the terms or provisions of the Merger
Agreement, any Other Guarantee, or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations (provided that any
such change, rescission, waiver, compromise, consolidation or other amendment
or modification shall be subject to the prior written consent of the Buyer
Parties to the extent expressly required by the Merger Agreement or to the
prior written consent of any of the applicable Other Guarantors, to the extent
expressly required by any of the Other Guarantees); (c) the addition,
substitution or release of any Person interested in the transactions
contemplated by the Merger Agreement (provided, that any such addition,
substitution or release shall be subject to the prior written consent of the
Buyer Parties to the extent expressly required under the Merger Agreement);
(d) any change in the corporate existence, structure or ownership of one
or both of the Buyer Parties or any other Person liable with respect to any of
the Obligations; (e) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting one or both of the Buyer Parties, or any other
Person liable with respect to any of the Obligations; (f) subject to the
last sentence of Section 2(a) hereof, any lack of validity or enforceability of
the Obligations, the Merger Agreement or any agreement or instrument relating
thereto; (g) the existence of any claim, set-off or other rights which the
Guarantors may have at any time against one or both of the Buyer Parties, any
Other Guarantor or the Company, whether in connection with the Obligations or
otherwise; or (h) the adequacy of any other means the Company may have of
obtaining repayment of any of the Obligations. 
To the fullest extent permitted by Law, the Guarantors hereby expressly
waive any and all rights or defenses arising by reason of any Law which would
otherwise require any election of remedies by the Company.  The Guarantors waive promptness, diligence,
notice of the acceptance of this Limited Guarantee and of the Obligations,
presentment, demand for payment, notice of non-performance, default, dishonor
and protest, notice of any Obligations incurred and all other notices of any
kind (except for notices to be provided to the Buyer Parties and Skadden, Arps,
Slate, Meagher & Flom LLP in accordance with Section 9.2 of the Merger
Agreement), all defenses which may be available by virtue of any valuation,
stay, moratorium or other similar Law now or hereafter in effect, any right to
require the marshalling of assets of one or both of the Buyer Parties, or any
other Person liable with respect to any of the Obligations, and all suretyship
defenses generally (other than breach by the Company of this Limited Guarantee).  The Guarantors hereby unconditionally and irrevocably
agree that it shall not institute, and shall cause its Affiliates not to
institute, any proceeding asserting that this Limited Guarantee is illegal,
invalid or unenforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general application relating to or affecting creditors’ rights,
and general equitable principles (whether considered in a proceeding in equity
or at law).  The Guarantors acknowledge
that they will receive substantial direct and indirect benefits from the
transactions contemplated by the Merger Agreement and that the waivers set
forth in this Limited Guarantee are knowingly made in contemplation of such
benefits and after the advice of counsel.


4.             NO SUBROGATION.  The Guarantors hereby unconditionally and
irrevocably agree not to exercise any rights that it may now have or hereafter
acquire against one or both of the Buyer Parties or any other Person liable
with respect to any of the Obligations that arise from the 



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existence, payment, performance, or enforcement of the Guarantors’
obligations under or in respect of this Limited Guarantee or any other
agreement in connection therewith, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Company against one or more
of the Buyer Parties or any other Person interested in the transactions
contemplated by the Merger Agreement liable with respect to any of the
Obligations, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from one or more of the Buyer Parties or any other Person
liable with respect to any of the Obligations, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Obligations
and Prevailing Party Costs, if applicable, shall have been irrevocably paid in
full in cash; provided that, the Guarantors shall have the right to
cause any other Person to satisfy its payment obligations to the Company under
Section 1 hereof; provided, however, that such right in the preceding
proviso shall only relieve the Guarantors of their obligation to make such
payment when such payment is irrevocably paid by such other Person in full in
cash.  If any amount shall be paid to the
Guarantors in violation of the immediately preceding sentence at any time prior
to the payment in full in cash of the Obligations and Prevailing Party Costs,
if applicable, such amount shall be received and held in trust for the benefit
of the Company, shall be segregated from other property and funds of the Guarantors
and shall forthwith be paid or delivered to the Company in the same form as so
received (with any necessary endorsement or assignment) to be credited and
applied to the Obligations and Prevailing Party Costs, if applicable, in
accordance with the terms of the Merger Agreement, whether matured or
unmatured, or to be held as collateral for any Obligations or Prevailing Party
Costs, if applicable, thereafter arising.


5.             NO WAIVER; CUMULATIVE RIGHTS.  No failure on the part of the Company to
exercise, and no delay in exercising, any right, remedy or power hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Company of any right, remedy or power hereunder preclude any other or
future exercise of any right, remedy or power hereunder.  Each and every right, remedy or power hereby
granted to the Company shall be cumulative and not exclusive of any other, and
may be exercised by the Company at any time or from time to time.


6.             REPRESENTATIONS AND WARRANTIES.  Each of the Guarantors hereby represents and
warrants that:


(a)           such Guarantor has full
corporate or limited partnership, as the case may be, power and authority to
execute and deliver this Limited Guarantee and to perform the Obligations, and
the execution, delivery and performance of this Limited Guarantee by such
Guarantor has been duly authorized by all necessary corporate or limited
partnership, as the case may be, action on the part of such Guarantor;


(b)           this Limited Guarantee
is the valid and binding obligation of such Guarantor enforceable in accordance
with its terms, subject to the qualification, however, that enforcement of the
rights and remedies created thereby is subject to the effects of bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general application relating to or affecting creditors’ rights, and to general
equitable principles (whether considered in a proceeding in equity or at law);



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(c)           no further approval of the
board of directors, managers, members, partners, stockholders or other security
holders of such Guarantor is required for the execution, delivery and
performance of this Limited Guarantee by such Guarantor and the execution,
delivery and performance of this Limited Guarantee by such Guarantor does not
contravene any provision of such Guarantors’ organizational documents or any
Law, regulation, rule, decree, order, judgment or contractual restriction
binding on such Guarantor or any of its assets;


(d)           all consents,
approvals, authorizations, permits of, filings with and notifications to, any
governmental authority necessary for the due execution, delivery and
performance of this Limited Guarantee by such Guarantor has been obtained or
made and all conditions thereof have been duly complied with, and no other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required in connection with the execution, delivery and
performance of this Limited Guarantee; and


(e)           such Guarantor has the
financial capacity to pay and perform all of its obligations under this Limited
Guarantee, and all funds necessary for such Guarantor to fulfill its
Obligations under this Limited Guarantee shall be available to such Guarantor
(or its assignee pursuant to Section 12 hereof) for as long as this Limited
Guarantee shall remain in effect in accordance with Section 7 hereof.


7.             CONTINUING GUARANTEE; TERMINATION.  This Limited Guarantee shall remain in full
force and effect and shall be binding on the Guarantors, their successors and
assigns until all of the Obligations and Prevailing Party Costs, if applicable,
payable under this Limited Guarantee have been irrevocably paid in full.  Notwithstanding the foregoing and subject to
the proviso below, this Limited Guarantee shall terminate and the Guarantors
shall have no further obligations under this Limited Guarantee upon the
earliest to occur of (i) the Effective Time or (ii) the termination of the
Merger Agreement in circumstances not giving rise to a claim for payment of any
Obligation; provided, that if the Company commences an action with
respect to this Limited Guarantee in a court of competent jurisdiction, this
Limited Guarantee shall remain in full force and effect until the final resolution
of such action.  Notwithstanding the
foregoing, in the event that the Company, any of its Subsidiaries or Affiliates
asserts in any litigation or other proceeding (1) that the provisions of
Section 1 hereof limiting the maximum aggregate liability of the Guarantors to
the Cap plus the Prevailing Party Costs, or the provisions of Sections 2(a),
2(c), 2(d), 7, 9, 10, 11, 16, 17 and the third to last sentence of Section 3 of
this Limited Guarantee, are illegal, invalid or unenforceable in whole or in part,
or that the Guarantors are liable, jointly and severally, for amounts in excess
of their Obligations hereunder (plus Prevailing Party Costs) as a result of the
Merger Agreement or this Limited Guarantee (which shall include, without
limitation, any losses, damages, obligations or liabilities suffered as a
result of the Merger Agreement and the transactions contemplated thereby
(including the termination of the Merger Agreement or the breach of the Merger
Agreement by the Buyer Parties)) or (2) that the Guarantors, any Sponsor
Affiliate, or any Buyer Party is liable for any losses, damages, obligations or
liabilities suffered as a result of this Limited Guarantee or the Merger
Agreement and the transactions contemplated thereby (including as a result of the
termination of the Merger Agreement, any breach of the Merger Agreement by the
Buyer Parties or the failure of the transactions contemplated by the Merger
Agreement to be consummated) other than liability of the Guarantors under this
Limited Guarantee and the Other Guarantors under the Other Guarantees (as
limited by the provisions hereof and thereof), then (x) the Obligations of the Guarantors
under this Limited Guarantee shall terminate ab
initio and shall 



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thereupon be null and void, (y) if the Guarantors have previously made
any payment under this Limited Guarantee, it shall be entitled to recover such
payments from the Company and (z) neither of the Guarantors nor any Sponsor
Affiliate shall have any liability to the Company or any of its Affiliates with
respect to the transactions contemplated by the Merger Agreement or under this
Limited Guarantee.


8.             NOTICES.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address which shall be
effective upon receipt) or sent by electronic transmission, with confirmation
received, to the facsimile number specified below:


	
  (a)

  	
  If to Parthenon:

  
	
   

  	
   

  
	
   

  	
  Parthenon
  Investors II, L.P.

  
	
   

  	
  c/o Parthenon
  Capital

  
	
   

  	
  75 State Street,
  26th Floor

  
	
   

  	
  Boston, MA 02109

  
	
   

  	
  Attn: David
  Ament

  
	
   

  	
  Tel: (617)
  960-4088

  
	
   

  	
  Fax: (617)
  960-4010

  
	
   

  	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
   

  	
  Kirkland & Ellis LLP

  
	
   

  	
  200 East Randolph Drive

  
	
   

  	
  Chicago, IL 60601

  
	
   

  	
  Attn: Jeffrey Seifman, P.C.

  
	
   

  	
  Tel: 312-861-2201

  
	
   

  	
  Fax: 312-660-0351

  
	
   

  	
   

  
	
  (b)

  	
  If to IAAI:

  
	
   

  	
   

  
	
   

  	
  Insurance Auto Auctions, Inc.

  
	
   

  	
  Two Westbrook Corporate Center, Suite 500

  
	
   

  	
  Westchester, Illinois 60154

  
	
   

  	
  Attention:
  Sidney L. Kerley, Esq.

  
	
   

  	
  Facsimile No.:
  (708) 492-7369

  
	
   

  	
  Telephone No.:
  (708) 492-7558

  
	
   

  	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
   

  	
  Kelso &
  Company

  
	
   

  	
  320 Park Ave.,
  24th Floor

  
	
   

  	
  New York, NY
  10022

  
	
   

  	
  Attention: James
  J. Connors, II, Esq.

  
	
   

  	
  Facsimile No.:
  (212) 223-2379

  



 



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  Telephone No.:
  (212) 751-3939

  
	
   

  	
   

  
	
  (b)

  	
  If to the Company:

  
	
   

  	
   

  
	
   

  	
  ADESA, Inc.

  
	
   

  	
  13085 Hamilton
  Crossing Blvd.

  
	
   

  	
  Carmel, IN 46032

  
	
   

  	
  Attention: George J. Lawrence

  
	
   

  	
  Facsimile No.: (317) 249-4505

  
	
   

  	
  Telephone No.: (317) 249-4255

  
	
   

  	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
  425 Market
  Street

  
	
   

  	
  San Francisco,
  CA 94105

  
	
   

  	
  Attention:
  Robert S. Townsend

  
	
   

  	
  Facsimile No.:
  (415) 268-7522

  
	
   

  	
  Telephone No.:
  (415) 268-7080

  



 


9.             AMENDMENT.  This Limited
Guarantee may not be amended except by an instrument in writing signed by the
parties hereto.


10.          SEVERABILITY.  If any term or
other provision of this Limited Guarantee is invalid, illegal or incapable of
being enforced by rule of law, or public policy, all other conditions and provisions
of this Limited Guarantee shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner adverse to any party; provided, however,
that this Limited Guarantee may not be enforced without giving effect to the
Cap provided in Section 1 hereof (plus any Prevailing Party Costs) and the
provisions of Sections 2(b) through 2(e), 7 and 10.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Limited Guarantee so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible; provided,
however, that this Limited Guarantee may not be enforced without giving effect
to the Cap provided in Section 1 hereof (plus any Prevailing Party Costs) and
the provisions of Sections 2(b) through 2(e), 7 and 10.


11.          ENTIRE AGREEMENT.  This Limited Guarantee constitutes the entire
agreement and supersedes all prior agreements and undertakings, both written
and oral, between the parties with respect to the subject matter hereof.


12.          ASSIGNMENT.  Neither the Company
nor the Guarantors may assign their rights, interests or obligations under this
Limited Guarantee to any other Person (except by operation of Law or otherwise)
without the prior written consent of the Company (in the case of an assignment
by the Guarantors) or the Guarantors (in the case of an assignment by the
Company); provided, that (i) each of the Guarantors may assign all or a
portion of its rights or obligations hereunder to an Affiliate or to an entity
managed or advised by an Affiliate of such Guarantor, as applicable, and (ii)
if a portion of Parthenon’s commitment under its Equity Commitment Letter 



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is assigned in accordance with the terms thereof, then a corresponding
portion of its Obligations hereunder may be assigned to the same assignee; provided,
however, that no such assignment shall relieve the Guarantors of its
Obligations hereunder, unless otherwise agreed in writing by the Company.


13.          PARTIES IN INTEREST.  This
Limited Guarantee shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Limited Guarantee, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Limited Guarantee, except
with respect to an assignee permitted by Section 12 hereof.


14.          GOVERNING LAW; JURISDICTION.  This Limited Guarantee shall be governed by,
and construed in accordance with, the Laws of the State of New York applicable
to contracts to be performed entirely within such state, including all matters
of construction, validity and performance, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof,
except for mandatorily applicable provisions of the Delaware General
Corporation Law.  Each party to this
Limited Guarantee hereby irrevocably agrees that any legal action, suit or
proceeding arising out of or relating to this Limited Guarantee shall be
brought in the United States District Court for the Southern District of New
York or the Supreme Court of the State of New York and each party hereto agrees
not to assert, by way of motion, as a defense or otherwise, in any such action,
suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that the action, suit or proceeding is brought in
an inconvenient forum, that the venue of the action, suit or proceeding is
improper or that this Limited Guarantee, or the subject matter hereof or
thereof may not be enforced in or by such court.  Each party hereto further and irrevocably
submits to the jurisdiction of such court in any action, suit or
proceeding.  The parties agree that any
or all of them may file a copy of this Section 14 with any court as written
evidence of the knowing, voluntary and bargained agreement between the parties
irrevocably to waive any objections to venue or to convenience of forum.


15.          COUNTERPARTS; FACSIMILE DELIVERY.  This Limited Guarantee may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, and delivered by facsimile, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.


16.          COSTS AND EXPENSES.  In any action at law or suit in equity to
enforce this Limited Guarantee or the rights of any of the parties hereunder,
the prevailing party in such action or suit shall be entitled to receive a
reasonable sum for its attorneys’ fees and all other reasonable costs and
expenses incurred in such action or suit. Any payment by the Guarantors under
this Section 16 shall not reduce, limit or otherwise affect the other
obligations of the Guarantors hereunder or be counted towards the Cap.


17.          WAIVER OF JURY TRIAL.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS LIMITED GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.



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IN
WITNESS WHEREOF, the Guarantors and the Company have caused this Limited
Guarantee to be executed and delivered as of the date first written above by
its officer thereunto duly authorized.


	
   

  	
  PARTHENON INVESTORS II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: PCap
  Partners II, LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
  By: PCap II,
  LLC, its Managing Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C.
  Rutherford

  	
   

  
	
   

  	
  Name:

  	
  John C. Rutherford

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INSURANCE AUTO
  AUCTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sidley L.
  Kerley

  	
   

  
	
   

  	
  Name:

  	
  Sidley L. Kerley

  
	
   

  	
  Title:

  	
  Vice President and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and
  Agreed to:

  	
   

  
	
   

  	
   

  
	
  ADESA, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ George J.
  Lawrence

  	
   

  
	
   

  	
  Name:

  	
  George J.
  Lawrence

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President, General Counsel and Secretary

  	
   

  
									



 



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