Document:

Exhibit 10.1

  

  

  TRANSITION SERVICES AGREEMENT

  

  

  This TRANSITION SERVICES AGREEMENT, dated as of [●], 2019 (this “Agreement”), is made and entered into by and between KAR Auction Services, Inc., a Delaware corporation (“KAR”), and IAA, Inc.,
      a Delaware corporation and wholly owned subsidiary of KAR (“SpinCo”, and together with KAR, the “Parties”).  For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to such terms in the Separation and Distribution Agreement.

  

  

  RECITALS:

  

  

  WHEREAS, the board of directors of KAR (the “KAR

          Board”) has determined that it is advisable and in the best interests of KAR to separate KAR’s salvage auction businesses from its whole car auction businesses, creating two independent publicly traded companies;

  

  

  WHEREAS, in furtherance of the foregoing, (a) KAR will cause the applicable members of the KAR Group to assign, transfer,
      convey and deliver to SpinCo or the applicable SpinCo Designee all right, title and interest of the KAR Group in and to the SpinCo Assets, (b) SpinCo and the applicable SpinCo Designees will accept, assume and agree faithfully to perform, discharge
      and fulfill the SpinCo Liabilities (the transactions described in clauses (a) and (b) herein being referred to collectively as the “SpinCo Contribution”), (c)
      SpinCo will cause the applicable members of the SpinCo Group to assign, transfer, convey and deliver to KAR or the applicable KAR Designee all right, title and interest of the SpinCo Group in and to the KAR Assets, and (d) KAR and the applicable KAR
      Designees will accept, assume and agree faithfully to perform, discharge and fulfill the KAR Liabilities (the transactions described in this recital, including the assignment, transfer, conveyance and delivery of the SpinCo Assets and KAR Assets, and
      the acceptance, assumption and agreement to perform the SpinCo Liabilities and the KAR Liabilities, being referred to collectively as the “Separation”);

  

  

  WHEREAS, to effectuate the Separation and the Distribution, KAR and SpinCo have entered into a Separation and Distribution
      Agreement, dated as of [●], 2019 (the “Separation and Distribution Agreement”); and

  

  

  WHEREAS, to facilitate and provide for an orderly transition in connection with the Separation, the Parties desire to enter
      into this Agreement to set forth the terms pursuant to which each of the Parties shall provide Services to the other Party for a transitional period.

  

  
    
      

  

  NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

   

    

  ARTICLE I

  

  

  SERVICES

  

  

  Section 1.01          Services.

  

  

  (a)          With respect to each
      applicable service set forth on Schedule 1 hereto (the “Services”),
      the Party identified on Schedule 1  hereto as the “Provider” of
      such Service agrees to provide, or to cause one or more members of its Group to provide, such Service to the other Party (the “Recipient”), or any members of
      the Recipient’s Group, in each case for the period commencing on the Effective Date and ending on the earlier of (i) the date that a Party terminates the provision of such Service pursuant to Section 4.02 and (ii) the date set forth on Schedule 1 with respect to such Service (the “Service Period”).

  

  

  (b)          At any time during the term of
      this Agreement, either Party may request that the other Party provide or cause its Group to provide additional services hereunder (the “Additional Services”)
      by providing written notice of such request, it being understood that the Party that receives such request may in its sole discretion decline to provide such requested Additional Services. If a Provider agrees to undertake to provide the Additional
      Services, upon the mutual written agreement as to the nature, cost, duration and scope of such Additional Services, KAR and SpinCo shall supplement in writing the Services set forth on Schedule 1 to include such Additional Services. Except where the context otherwise indicates or requires, any such Additional Services specified on Schedule 1 or so agreed upon in writing by the Parties shall be deemed to be “Services” under this Agreement.

  

  

  Section 1.02          Performance of Services.

  

  

  (a)          Except for Services identified
      as a “New Service” in Schedule 1 hereto (“New Services”), which New Services the Provider shall use commercially reasonable efforts to provide, the Provider shall perform, or shall cause one or more members of its Group to
      perform, all Services to be provided by the Provider in a manner that is based on its past practice and that is substantially similar in all material respects to such Services (or analogous services) provided by or on behalf of KAR or any of its
      Subsidiaries with respect to the SpinCo Business or KAR Business, as applicable, during the twelve (12) months prior to the Effective Date (collectively referred to as the “Level

          of Service”).

  

  

  (b)          Nothing in this Agreement
      shall require the Provider to perform or cause to be performed any Service to the extent that the manner of such performance would constitute a violation of any applicable Law or any existing contract or agreement with a Third Party. As between the
      Parties, the Provider shall be the party that determines, in its sole discretion,  whether to communicate with and shall be the party that communicates with Third Parties in connection with any necessary Third Party consents required under any
      existing contract or agreement with a Third Party to allow the Provider to perform, or cause to be performed, Services to be provided to the Recipient hereunder, with any such communications to be in the sole discretion of Provider. Unless otherwise
      agreed in writing by the Parties, all reasonable and documented out-of-pocket costs and expenses (if any) incurred by any Party or any member of its Group in connection with obtaining any Third Party consent that is required to allow the Provider to
      perform or cause to be performed any Services hereunder shall be paid for by the Recipient. If, with respect to a Service, a required Third Party consent has not been obtained, or the performance of a Service by or on behalf of the Provider would
      constitute a violation of any applicable Law, the Provider shall have no obligation to perform or cause to be performed such Service.

  
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  (c)          Except for New Services, which
      New Services the Provider shall not be required to perform or cause to be performed other than in a manner that is commercially reasonable to Provider, the Provider shall not be obligated to perform or to cause to be performed any Service in a manner
      that is materially more burdensome (with respect to service quality, service quantity, or allocation of personnel or resources) than such services (or analogous services) provided by or on behalf of KAR or any of its Subsidiaries with respect to the
      SpinCo Business or KAR Business, as applicable, during the 12-month period prior to the Effective Date. Without limiting the generality of the foregoing, the Provider shall not be required to maintain the employment of any specific employee(s), hire
      additional employees or third-party service providers or purchase, or purchase, lease or license any additional equipment, software or other assets or properties in order the provide the Services hereunder. If the Recipient requests that the Provider
      perform or cause to be performed any Service in a manner that exceeds the Level of Service, then the Parties shall reasonably cooperate and act in good faith to determine whether the Provider will be required to provide such requested higher Level of
      Service. If the Parties determine that the Provider shall provide the requested higher Level of Service, then such higher Level of Service shall be documented in a written agreement signed by the Parties, which may be an amendment or addendum to this
      Agreement.

  

  

  (d)          i)   Neither the Provider nor
      any member of its Group shall be required to perform or to cause to be performed any of the Services for the benefit of any Third Party or any other Person other than the Recipient and the members of its Group, and (ii) EXCEPT AS EXPRESSLY PROVIDED
      IN THIS Section 1.02 OR Section 6.04, EACH PARTY ACKNOWLEDGES AND
      AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS-IS” BASIS, THAT THE RECIPIENT ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT THE PROVIDER MAKES NO OTHER REPRESENTATIONS OR GRANTS ANY
      WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE SERVICES. EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY
      WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

  
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  (e)          Each Party shall be
      responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law.

  

  

      Section 1.03          Charges for Services. The Recipient shall pay the Provider of the Services a fee for such Services (or category of Services, as applicable) (each fee constituting a “Charge” and, collectively, “Charges”), which Charges are set forth in Schedule 2 hereto. During the term of this Agreement, the amount of a Charge for any Service may be (a) decreased as determined in writing by the Provider in its
      sole discretion, and (b) increased to reflect any increase in the rates or charges imposed by any Third Party provider that is providing Services (proportional to the respective use of such Services by each Party) (“Additional Charges”). Together with any invoice for Charges, the Provider shall provide the Recipient with reasonable documentation, including any additional documentation reasonably
      requested by the Recipient to the extent that such documentation is in the Provider’s or its Group’s possession or control, to confirm the calculation of any applicable Additional Charges.

  

  

      Section 1.04          Changes in the Performance of Services.
      Subject to the performance Level of Service, the Provider may make changes from time to time in the manner of performing the Services if the Provider is making similar changes in performing analogous services for itself or its Group and if the
      Provider furnishes to the Recipient reasonable prior written notice of such changes. No such change shall materially adversely affect the timeliness or quality of the applicable Service.

  

  

      Section 1.05          Transitional Nature of Services.
      The Parties acknowledge the transitional nature of the Services and agree to reasonably cooperate and to use commercially reasonable efforts to effectuate a smooth transition of the Services from the Provider to the Recipient (or its designee).

  

  

      Section 1.05          Subcontracting. A Provider may
      hire or engage one or more Third Parties to perform any or all of its obligations under this Agreement; provided, however, that (a) such Provider shall use the same degree of care (but at least reasonable care) in selecting each such Third Party as it would if such Third Party was being retained to provide
      similar services to the Provider or its Group and (b) such Provider shall in all cases remain primarily responsible for all of its obligations under this Agreement with respect to the Services.

  
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  ARTICLE II

  

  

  OTHER ARRANGEMENTS

  

  

  Section 2.01          Access.  The Recipient shall, and shall cause the members of its Group to, allow the Provider and the members of its Group and their respective Representatives
      reasonable access to the facilities of the Recipient and the members of its Group that is necessary for the Provider to fulfill its obligations under this Agreement. In addition to the foregoing right of access, the Recipient shall, and shall cause
      the members of its Group to, afford the Provider and the members of its Group and their respective Representatives, upon reasonable advance written notice, reasonable access during normal business hours to the facilities, Information, systems,
      infrastructure and personnel of the Recipient and the members of its Group as reasonably necessary for the Provider to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in
      connection with the Services being provided by the Provider or the members of the Provider Group, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of the Recipient or any member of its Group and (ii) in the event that the Recipient determines that
      providing such access could be commercially detrimental, violate any applicable Law or agreement or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access in a manner that avoids such
      harm and consequence. The Provider agrees that all of its and its Group’s employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of the Recipient or a member of the
      Recipient’s Group, or when given access to any facilities, Information, systems, infrastructure or personnel of the Recipient or a member of the Recipient’s Group, conform to the policies and procedures of the Recipient and the members of the
      Recipient’s Group, as applicable, concerning health, safety, conduct and security which are made known or provided to the Provider from time to time.

  

  

  Section 2.02          Audit Assistance.  Each of the Parties and the members of their respective Groups are or may be subject to regulation and audit by a Governmental Authority (including a Taxing Authority)  or
      parties to contracts with such Parties or the members of their Groups. If such a Third Party exercises its right to examine or audit such Party’s or a member of its Group’s books, records, documents or accounting practices and procedures pursuant to
      such applicable Law or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the sole cost and expense of the requesting Party (except if related to the Recipient's receipt of Services, in
      which case such cost and expense shall be the Recipient's responsibility), all assistance reasonably requested by the Party that is subject to the examination or audit in responding to such examination or audits or requests for Information, to the
      extent that such assistance or Information is within the reasonable control of the cooperating Party and is related to the Services.  The requesting Party shall consult and cooperate with the cooperating Party to limit the scope of any such
      examination or audit to the extent reasonably possible.

  
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  Section 2.04          Title to
        Intellectual Property.  Except as otherwise expressly provided for under this Agreement, the Separation and Distribution Agreement, or another Ancillary
      Agreement, the Recipient acknowledges that it shall acquire no right, title or interest (including any license rights or rights of use) in any intellectual property which is owned or licensed by the Provider, by reason of the provision of the
      Services hereunder (other than the receipt and use of the Services by the Recipient during the term of this Agreement as contemplated hereunder). The Recipient shall not remove or alter any copyright, trademark, confidentiality or other proprietary
      notices that appear on any intellectual property owned or licensed by the Provider, and the Recipient shall reproduce any such notices on any and all copies thereof. The Recipient shall not attempt to decompile, translate, reverse engineer or make
      excessive copies of any intellectual property owned or licensed by the Provider, and the Recipient shall promptly notify the Provider of any such attempt, regardless of whether by the Recipient or any Third Party, of which the Recipient becomes
      aware.

  

  

  ARTICLE III

  

  

  BILLING; TAXES

  

  

      Section 3.01          Procedure. Charges for the Services as well as any
      Covered Taxes due and owing in accordance with Section 3.03 hereof, shall be charged to and payable by the Recipient. Amounts payable pursuant to this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between
      the Parties from time to time) to the Provider (as directed by the Provider), on a monthly basis, which amounts shall be due within thirty (30) days after the Recipient’s receipt of each such invoice, including reasonable documentation pursuant to Section 1.03. All amounts due and payable hereunder shall be invoiced and paid in U.S. dollars.

  

  

      Section 3.02          Late Payments.  Charges not paid when due pursuant to
      this Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty (30) days of the receipt of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime
      Rate plus one percent (1%) or the maximum rate under applicable Law, whichever is lower (the “Interest Payment”).

  

  

      Section 3.03          Taxes.

  

  

  (a)          Without limiting any
      provisions of this Agreement, the Charges shall be exclusive of all sales, use, value-added, goods and services, services, excise, consumption, transfer or similar taxes, and any related penalties and interest, arising from the payment of such
      Charges to the Provider under this Agreement (other than any taxes measured by or imposed on the Provider’s gross or net income, or franchise or other similar taxes of the Provider) (“Covered Taxes”).

  
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  (b)          The Recipient shall pay, or
      reimburse the Provider for, any and all Covered Taxes.

  

  

  (c)          Where required by applicable
      Law, the Recipient shall pay any Covered Taxes directly to the relevant Governmental Authority in compliance with applicable Law. If any Covered Taxes are assessed on the receipt of Charges by the  Provider under this Agreement, the Provider shall
      notify the Recipient, pay such Covered Taxes directly to the applicable Governmental Authority and promptly provide the Recipient with an official receipt showing such payment, and the Recipient shall (without duplication) reimburse the Provider for
      such Covered Taxes.

  

  

  (d)          In the event that applicable
      Law requires any Covered Taxes to be withheld from a payment of Charges by a Recipient to a Provider under this Agreement, the Recipient shall make such required withholding, pay such withheld amounts over to the applicable Governmental Authority in
      compliance with applicable Law, and increase the amount payable to the Provider as necessary so that, after the Recipient has withheld such amounts, the Provider receives an amount equal to the amount the Provider would have received had no such
      withholding been required.

  

  

  (e)          The Recipient and the Provider
      shall use reasonable efforts, and shall cooperate with each other in good faith, to secure (and to enable the Recipient to claim) any exemption from, or otherwise to minimize, any Covered Taxes or to claim a tax refund therefor or tax credit in
      respect thereof, and the Recipient shall not be responsible for any Covered Taxes to the extent that such Covered Taxes would not have been imposed if (i) the Provider was eligible to claim an exemption from or reduction of such Covered Taxes, (ii)
      the Recipient used commercially reasonable efforts to notify the Provider of such eligibility reasonably in advance and (iii) the Provider failed to claim such exemption or reduction. If the Provider receives a refund with respect to any Covered
      Taxes paid or borne by the Recipient under this Agreement, the Provider shall promptly pay such refund to the Recipient net of costs and expenses (including any additional taxes) incurred by the Provider in connection with the receipt of such refund
      or the payment of such refund to the Recipient net of costs and expenses (including any additional taxes) incurred by the Provider in connection with the receipt of such refund or the payment of such refund to the Recipient.

  

  

      Section 3.04          No Set-Off.  Except as mutually agreed to in writing by
      KAR and SpinCo, no Party or any member of its Group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or (b) any other amounts claimed to be owed to the other Party or any of
      member of its Group arising out of this Agreement.

  
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  ARTICLE IV

  

  

  TERM AND TERMINATION

  

  

      Section 4.01          Term. This Agreement shall commence upon the Effective
      Date and shall terminate upon the earlier to occur of: (a) the last date on which either Party is obligated to provide any Service to the other Party in accordance with the terms of this Agreement; (b) the mutual written agreement of the Parties to
      terminate this Agreement in its entirety; and (c) 11:59 p.m., New York City time on [●]. Unless otherwise terminated pursuant to Section 4.02, this Agreement
      shall terminate with respect to each Service as of the close of business on the last day of the Service Period for such Service.

  

  

  Section 4.02          Early Termination.

  

  

  (a)          Without prejudice to the
      Recipient’s rights with respect to Force Majeure, the Recipient may from time to time terminate this Agreement with respect to the entirety of any individual Service:

  

  

  (i)          for any
      reason or no reason, at least thirty (30) days following written request to the Provider to terminate such Service, if the Provider agrees in writing to such termination; provided,
      however, that any such termination (x) may only be effective as of the date agreed to in writing by the Parties, (y) shall not result in a reduction of Charges
      with respect to calendar year 2019, and (z) shall result in a reduction of Charges following calendar year 2019 only if and to the extent expressly set forth in Schedule
          2; or

  

  

  (ii)          if the
      Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure shall continue to be uncured for a period of  thirty (30) days (or ninety (90) days if Provider is
      using good-faith efforts to so cure during such thirty (30) day period and thereafter) after receipt by the Provider of written notice of such failure from the Recipient; provided,
      however, that any such termination may only be effective as of the last day of a month; provided, further, that the Recipient shall not be entitled to terminate this Agreement with respect to the applicable Service if, as
      of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Section 7.12) as to whether the
      Provider has cured the applicable breach.

  

  

  (b)          The Provider may terminate
      this Agreement with respect to any individual Service, but not a portion thereof, at any time upon prior written notice to the Recipient if the Recipient has failed to perform any of its material obligations under this Agreement relating to such
      Service, including making payment of Charges for such Service when due, and such failure shall continue to be uncured for a period of thirty (30) days (or ninety (90) days if Recipient is using good-faith efforts to so cure during such thirty (30)
      day period and thereafter) after receipt by the Recipient of a written notice of such failure from the Provider; provided, however, that any such termination may only be effective as of the last day of a month; provided,
      further, that the Provider shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such period, there
      remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Section 7.12) as to whether the Recipient has cured the
      applicable breach.

  
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      Section 4.03          Interdependencies.  The Parties acknowledge and agree
      that: (a) there may be interdependencies among the Services being provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with
      respect to the particular Service that a Party is seeking to terminate pursuant to Section 4.02 and (ii) in the case of such termination, the Provider’s
      ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination of another Service; and (c) in the event that the Parties have determined that such interdependencies exist (and,
      in the case of such termination that the Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination), the Parties shall negotiate in good faith to amend Schedule 1 with respect to such termination of such impacted Service, which amendment shall be consistent with the terms of comparable Services.  To the extent
      that the Provider’s ability to provide a Service is dependent on the continuation of a specified Service, the Provider’s obligation to provide such dependent Service shall terminate automatically with the termination of such supporting Service.

  

  

      Section 4.04          Effect of Termination.  Upon the termination of any
      Service pursuant to this Agreement, the Provider of the terminated Service shall have no further obligation to provide the terminated Service.

  

  

      Section 4.05          Information Transmission.  The Provider, on behalf of
      itself and the members of its Group, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the Recipient, in accordance with Section 6.1 of the Separation and Distribution Agreement, any
      Information received or computed by the Provider for the benefit of the Recipient concerning the relevant Service during the Service Period; provided, however, that, except as otherwise agreed to in writing by the Parties (a) the Provider shall not have any obligation to provide, or cause to be provided,
      Information in any nonstandard format, (b) the Provider and the members of its Group shall be reimbursed for their reasonable costs in accordance with Section 6.3 of the Separation and Distribution Agreement for creating, gathering, copying,
      transporting and otherwise providing such Information, and (c) the Provider shall use commercially reasonable efforts to maintain any such Information in accordance with Section 6.4 of the Separation and Distribution Agreement.

  
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  ARTICLE V

  

  

  CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

  

  

      Section 5.01          KAR and SpinCo Obligations. Subject to Section 5.04, until the five (5)-year anniversary of the Effective Date, each of KAR and SpinCo, on behalf of itself and each member of its Group, agrees to hold,
      and to cause its respective Representatives to hold, in confidence, with at least the same degree of care that applies to KAR’s proprietary and confidential Information pursuant to policies in effect as of the Effective Date, all proprietary or
      confidential Information concerning the other Party or the members of its Group or their respective businesses (“Confidential Information”) that is either in its possession (including Confidential Information in its possession prior to the Effective Date) or furnished by such other Party or such other Party’s Group members or their
      respective Representatives at any time pursuant to this Agreement, and shall not use any such Confidential Information other than for such purposes as may be expressly permitted hereunder, except, in each case, to the extent that such Confidential
      Information has been (a) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of its Group or any of their respective Representatives in violation of this Agreement; (b) later
      lawfully acquired from other sources by such Party or any of member of its Group, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such
      Confidential Information; or (c) independently developed or generated without reference to or use of the Confidential Information of the other Party or any member of its Group. If any Confidential Information of a Party or any member of its Group is
      disclosed to the other Party or any member of its Group in connection with providing the Services, then such disclosed Confidential Information shall be used only as required to perform such Services.

  

  

      Section 5.02          No Release; Return or Destruction.  Each Party agrees (a)
      not to release or disclose, or permit to be released or disclosed, any Confidential Information of the other Party addressed in Section 5.01 to any other
      Person, except its Representatives who need to know such Confidential Information in their capacities as such (whom shall be advised of their obligations hereunder with respect to such Confidential Information) and except in compliance with Section 5.04, and (b) to use commercially reasonable efforts to maintain such Confidential Information in accordance with Section 6.4 of the Separation and
      Distribution Agreement. Without limiting the foregoing, when any such Confidential Information is no longer needed for the purposes contemplated by the Separation and Distribution Agreement, this Agreement or any other Ancillary Agreements, each
      Party will promptly after request of the other Party either return to the other Party all such Confidential Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in
      writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon).

  
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      Section 5.03          Privacy and Data Protection Laws.  Each Party shall
      comply with all applicable state, federal and foreign privacy and data protection Laws that are or that may in the future be applicable to the provision of the Services under this Agreement.

  

  

      Section 5.04          Protective Arrangements. In the event that a Party or any
      member of its Group either determines on the advice of its counsel that it is required to disclose any Confidential Information of the other Party pursuant to applicable Law or receives any request or demand under lawful process or from any
      Governmental Authority to disclose or provide Confidential Information of the other Party (or any member of its Group) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted)
      as promptly as practicable under the circumstances prior to disclosing or providing such Information and shall reasonably cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the
      event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice
      the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide such Information to the extent required by such Law (as so advised by its counsel) or by lawful process or such
      Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the Information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such Information was disclosed,
      in each case to the extent legally permitted.

  

  

  ARTICLE VI

  

  

  LIMITED LIABILITY AND INDEMNIFICATION

  

  

  Section 6.01          Limitations on Liability.

  

  

  (a)          THE LIABILITIES OF THE
      PROVIDER AND ITS GROUP MEMBERS AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS AGREEMENT FOR ANY AND ALL ACTS OR FAILURES TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE,
      DELIVERY, PROVISION OR USE OF ANY AND ALL SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT IN THE AGGREGATE EXCEED FIFTY (50%) PERCENT OF THE
      CHARGES PAID AND PAYABLE TO PROVIDER BY THE RECIPIENT PURSUANT TO THIS AGREEMENT.

  

  

  (b)          IN NO EVENT SHALL EITHER
      PARTY, THE MEMBERS OF ITS GROUP OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY IN CONNECTION WITH THE
      PERFORMANCE OF THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY TO THE EXTENT PAYABLE BY A PARTY OR A MEMBER OF ITS GROUP TO A THIRD PARTY WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, THE MEMBERS OF ITS GROUP
      AND ITS REPRESENTATIVES ANY CLAIM FOR SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.

  
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  (c)          The limitations in Section 6.01(a) and Section 6.01(b) shall not apply in respect of any
      Liability to the extent arising out of or in connection with the gross negligence, willful misconduct or fraud of or by the Party (or a member of its Group) to be charged.

  

  

      Section 6.02          Obligation to Re-Perform.  In the event of any breach of
      this Agreement by the Provider with respect to the provision of any Services which the Provider can reasonably be expected to re-perform in a commercially reasonable manner, the Provider shall promptly correct in all material respects such error,
      defect or breach or re-perform in all material respects such Services at the request of the Recipient and at the sole cost and expense of the Provider. Any request for re-performance in accordance with this Section 6.02 by the Recipient must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than one month from the later of (x) the
      date on which such breach occurred and (y) the date on which such breach was reasonably discovered by the Recipient.

  

  

      Section 6.03          Recipient Indemnity. In addition to (but not in
      duplication of) its other indemnification obligations (if any) under the Separation and Distribution Agreement, this Agreement or any other Ancillary Agreement, but subject to the limitations set forth in Section 6.01 of this Agreement, the Recipient shall indemnify, defend and hold harmless the Provider, the members of the Provider’s Group and each of their respective Representatives, and each of the
      successors and assigns of any of the foregoing (collectively, the “Provider Indemnitees”), from and against any and all claims of Third Parties to the extent
      relating to, arising out of or resulting from the Provider’s furnishing or failing to furnish the Services provided for in this Agreement, other than Third Party Claims to the extent arising out of the gross negligence, willful misconduct or fraud of
      Provider or a member of Provider’s Group.

  

  

      Section 6.04          Provider Indemnity.  In addition to (but not in
      duplication of) its other indemnification obligations (if any) under the Separation and Distribution Agreement, this Agreement or any other Ancillary Agreement, but subject to the limitations set forth in Section 6.01 of this Agreement, the Provider shall indemnify, defend and hold harmless the Recipient, the members of the Recipient’s Group and each of their respective Representatives, and each of the
      successors and assigns of any of the foregoing (collectively, the “Recipient Indemnitees”), from and against any and all Liabilities to the extent relating to,
      arising out of or resulting from the sale, delivery, provision or use of any Services provided by such Provider hereunder, but only to the extent that such Liability relates to, arises out of or results from the gross negligence, willful misconduct
      or fraud of Provider or a member of Provider’s Group.

  
    12

    
      

  

      Section 6.05          Indemnification Procedures.  The procedures for
      indemnification set forth in Sections 4.4, 4.5 and 4.6 of the Separation and Distribution Agreement shall govern claims for indemnification under this Agreement, mutatis mutandis.

  

  

  ARTICLE VII

  

  

  MISCELLANEOUS

  

  

      Section 7.01          Independent Contractors.  The Parties each acknowledge
      and agree that they are separate entities, each of which has entered into this Agreement for independent business reasons. The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to
      create a joint venture, partnership or any other relationship between the Parties or the respective members of its Group. Employees performing Services hereunder do so on behalf of, under the direction of, and as employees of, the Provider, and the
      Recipient shall have no right, power or authority to direct such employees.

  

  

  Section 7.02          Counterparts; Entire Agreement; Corporate Power.

  

  

  (a)          This Agreement may be executed
      in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

  

  

  (b)          This Agreement, the Separation
      and Distribution Agreement and the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements,
      negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein.

  

  

  (c)          KAR represents on behalf of
      itself and, to the extent applicable, each of the members of the KAR Group, and SpinCo represents on behalf of itself and, to the extent applicable, each of the members of the SpinCo Group, as follows:

  

  

  (i)          each such
      Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and

  
    13

    
      

  

  (ii)          this
      Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.

  

  

  (d)          Each Party acknowledges and
      agrees that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by email in portable document format (PDF) shall be effective as delivery of such executed counterpart
      of this Agreement. Each Party expressly adopts and confirms each such stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective
      name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that,
      at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by
      mail or by courier.

  

  

      Section 7.03          Governing Law.  This Agreement (and any claims or
      disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or
      otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, irrespective of the choice of Laws principles of the State of Delaware, including all matters of validity, construction, effect,
      enforceability, performance and remedies.

  

  

      Section 7.04          Assignability.  This Agreement shall be binding upon and
      inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that SpinCo may not assign its rights or obligations under this Agreement without the express prior written consent of KAR, which consent shall not be unreasonably withheld, conditioned or delayed.

  

  

      Section 7.05          Third-Party Beneficiaries.  Except as provided in Article VI with respect to the Provider Indemnitees and Recipient Indemnitees in their capacities as such, (a) the provisions of this Agreement are solely for the
      benefit of the Parties and are not intended to confer upon any other Person except the Parties any rights or remedies hereunder; and (b) there are no other third-party beneficiaries of this Agreement and this Agreement shall not provide any other
      Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.

  

  

      Section 7.06          Notices.  All notices, requests, claims, demands or other
      communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, , by electronic mail (for which a confirmation email is obtained), or sent by
      overnight courier (providing proof of delivery) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section):

  
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            If to KAR, to:

          
	 	 	 
	 	 	
            KAR Auction Services, Inc.

          
	 	 	
            13085 Hamilton Crossing Boulevard

          
	 	 	
            Carmel, Indiana 46032

          
	 	 	
            Email:

          	
            
              
                 becca.polak@karauctionservices.com

                  

              

            

          
	 	 	
            Attention:

          	  Chief Legal Officer 

          
	 	 	 	 
	 	
            If to SpinCo, to:

          
	 	 	 
	 	 	
            Insurance Auto Auctions, Inc.

          
	 	 	
            Two Westbrook Corporate Center, Suite 500

          
	 	 	
            Westchester, Illinois 60154

          
	 	 	
            Email:

          	 jkett@iaai.com 

          
	 	 	 	 skerley@iaai.com 

          
	 	 	
            Attention:

          	 John Kett 

          
	 	 	 	 Sidney Peryar

             

  

  

  A Party may, by notice to the other Party, change the address to which such notices are to be given.

  

  

      Section 7.07          Severability.  If any provision of this Agreement or the
      application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in
      jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good
      faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

  

  

      Section 7.08          Force Majeure.  No Party shall be deemed in default of
      this Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or
      delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance (other than a payment obligation hereunder) shall be extended for a period equal to the time lost by reason of the delay
      unless this Agreement has previously been terminated under Article IV or under this Section 7.08. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such
      Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable (and in no event later than the date that the affected Party resumes
      providing analogous services to, or otherwise resumes analogous performance under any other agreement for, itself, its Affiliates or any Third Party) unless this Agreement has previously been terminated under Article IV or this Section 7.08.

  
    15

    
      

  

      Section 7.09          Headings.  The Article, Section and Paragraph headings
      contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

  

  

      Section 7.10          Survival of Covenants.  Except as expressly set forth in
      this Agreement, the covenants, representations and warranties contained in this Agreement, and Liability for the breach of any obligations contained herein, shall survive the Effective Date and shall remain in full force and effect thereafter.

  

  

      Section 7.11          Waivers of Default. Waiver by a Party of any default by
      the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right,
      power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

  

  

      Section 7.12          Dispute Resolution.  In the event of any controversy,
      dispute or claim (a “Dispute”) arising out of or relating to any Party’s rights or obligations under this Agreement (whether arising in contract, tort or
      otherwise), calculation or allocation of the costs of any Service or otherwise arising out of or relating in any way to this Agreement (including the interpretation or validity of this Agreement), such Dispute shall be resolved in accordance with the
      dispute resolution process referred to in Article VII of the Separation and Distribution Agreement.

  

  

      Section 7.13          Amendments. No provisions of this Agreement or any
      Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to
      enforce such waiver, amendment, supplement or modification.

  

  

      Section 7.14          Interpretation.  In this Agreement, (a) words in the
      singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless
      otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules, Annexes and Exhibits hereto) and not to any particular provision of this Agreement; (c) Article, Section, Exhibit, Annex and Schedule references are
      to the Articles, Sections, Exhibits, Annexes and Schedules to this Agreement unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement;
      (e) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) unless otherwise specified in a particular case,
      the word “days” refers to calendar days; (h) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or New York,
      New York; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented
      thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references
      to [●], 2019.

  
    16

    
      

  

      Section 7.15          Mutual Drafting.  This Agreement shall be deemed to be
      the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable to this Agreement.

  

  

  [Signature page follows]

  
    17

    
      

  

  IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

  

  

  	
                 

          

        	
          KAR AUCTION SERVICES, INC.

        
	
                

          

        	
          

                       

        	
                    

          

        
	
               

          

        	
          By:

        	
                 

          

        
	
                 

          

        	
                  

          

        	
          Name:

        
	
                 

          

        	
                  

          

        	
          Title:

        
	
                   

          

        	
                   

          

        	
                   

          

        
	
                  

          

        	
          IAA, INC.

        
	
                   

          

        	
                  

          

        	
                  

          

        
	
                  

          

        	
          By:

        	
                   

          

        
	
                   

          

        	
                  

          

        	
          Name:

        
	
                 

          

        	
                   

          

        	
          Title:

        
	
                 

          

        	
                   

          

        	
                    

          

        

  

  

  
    [Signature Page to Transition Services Agreement]Exhibit 10.5

  

  

  EMPLOYMENT AGREEMENT

  

  

  This Employment Agreement (this “Agreement”), dated and effective May 1, 2014 (“Effective Date”), is entered into by and between KAR Auction Services, Inc. (“Employer”) and John Kett (“Employee”).

  

  

  RECITALS

  

  

  A.          Employer desires to employ
      Employee as Chief Executive Officer and President of Insurance Auto Auctions, Inc. pursuant to the terms and conditions set forth in this Agreement.

  

  

  B.          Employee desires to accept such
      employment.

  

  

  AGREEMENT

  

  

  NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

  

  

  1.          Employment Period. The period of employment of Employee by Employer hereunder shall commence on the Effective Date and continue thereafter until terminated pursuant to Section 4 of this Agreement (the “Employment Period”).

  

  

  2.          Title and Duties. During the Employment Period, Employee shall serve as the Chief Executive Officer and President of Insurance Auto Auctions, Inc., a position reporting to the Chief
      Operating Officer of Employer. Employee shall perform the duties and responsibilities inherent in such position and any other duties consistent with such position as may be reasonably assigned to Employee from time to time by Employer’s Chief
      Executive Officer, Chief Operating Officer or Board of Directors of Employer (“Board”).

  

  

  3.          Compensation and Benefits.

  

  

  (a)          Base Salary. During the Employment Period, Employee shall be paid an annual base salary of $450,000 (“Base Salary”), less withholdings and deductions required by law or requested by Employee. Employee’s Base Salary may be adjusted but may not be adjusted downward except in connection with across-the-board
      base salary reductions, by the Board from time to time.

  

  

  (b)          Business Expenses. Employer shall reimburse Employee for all reasonable business expenses incurred in performing services pursuant to this Agreement upon
      Employee’s presentation to Employer, on a timely basis, of satisfactory documentation of such expenditures. Such expenses shall be reimbursed as soon as administratively feasible, but in no event later than the end of the calendar year following the
      calendar year in which the applicable expense was incurred. Notwithstanding the foregoing, all such expenses shall be reimbursed upon any termination of Employee’s employment under this Agreement, including without limitation a termination for Cause.

  
    
      

  

  
  (c)          Annual Bonuses. In addition to Base Salary, Employee shall be eligible to participate in the KAR Auction Services, Inc. Annual Incentive Plan (the “Bonus Plan”) (as in effect from time to time). Except as provided in Section

          4 and Section 5 below, payment to Employee of any amounts under the Bonus Plan shall be subject to Employee’s continued employment with
      Employer through December 31 of the calendar year to which such bonus relates. Payment of any bonus pursuant to the Bonus Plan shall be made as soon as practicable but in no event later than March 15 of the year following the calendar year to which
      such bonus relates.

  

  

  (d)          Equity. Employee shall be eligible to participate in all Employer incentive programs extended to executive-level employees of Employer generally at levels
      commensurate with Employee’s position, including without limitation the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan.

  

  

  (e)          Employee Benefits. Employee shall be eligible to participate in Employer’s health and welfare benefit programs, 401(k) benefit program, life and disability
      insurance programs, and any other employee benefits, benefit plans, policies or programs Employer provides to its executive-level employees, in each case, as they may exist from time to time and subject to the terms and conditions thereof. Nothing in
      this Agreement shall require Employer to maintain any benefit plan, or shall preclude Employer from terminating or amending any benefit plan from time to time.

  

  

  (f)          Vacation and Holidays. During the Employment Period, Employee shall be entitled to annual paid vacation in accordance with Employer’s policy applicable to
      executive-level employees, but in no event less than four (4) weeks of paid vacation during each full calendar year of employment. Employee shall receive a pro-rated portion of such vacation during Employee’s initial and final partial calendar years
      of employment under this Agreement. Unused, earned vacation shall not carry over from one calendar year to the next, unless Employer’s written policies otherwise provide for such carry over. Upon termination of Employee’s employment for any reason,
      Employer shall pay Employee for any unused, earned vacation days based upon Employee’s then current Base Salary. Employee shall also be entitled to all of the paid holidays recognized by Employer generally.

  

  

  (g)          Automobile Allowance. During the Employment Period, Employer shall pay Employee an annual automobile allowance of at least Eighteen Thousand Dollars ($18,000).
      Such allowance shall be paid in accordance with Employer’s regular payroll practices, as may be in effect from time to time, but in no event less frequently than monthly.

  
    2

    
      

  

  
    4.          Termination.

  

  

  (a)          Termination by Employer for Cause. Employer may terminate Employee’s employment under this Agreement at any time for Cause after the Board, by the majority vote of
      its members (excluding, for this purpose, any employee member of the Board, if applicable) determines that the actions or inactions of Employee constitute Cause, and Employee’s employment should accordingly be terminated for Cause. In the event of a
      termination of Employee by Employer for Cause, Employee or Employee’s estate, if applicable, shall be entitled to receive: (i) Employee’s accrued Base Salary through the termination date, paid within 30 days of the termination date; (ii) an amount
      for reimbursement, paid within 30 days following submission by Employee to Employer of appropriate supporting documentation for any unreimbursed business expenses properly incurred prior to the termination date by Employee pursuant to Section 3(b) and in accordance with Employer’s policy; (iii) any accrued and unpaid vacation pay, paid within 30 days of the termination date; and (iv) such
      employee benefits, if any, to which Employee or Employee’s dependents may be entitled under the employee benefit plans or programs of Employer, paid in accordance with the terms of the applicable plans or programs (the amounts described in clauses
      (i) through (iv) hereof being referred to as “Employee’s Accrued Obligations”).

  

  

  For purposes of this Agreement, “Cause” means (A) Employee’s willful, continued and uncured failure to perform substantially Employee’s duties under this Agreement (other than any such failure resulting from incapacity due to medically documented
      illness or injury) for a period of fourteen (14) days following written notice by Employer to Employee of such failure, (B) Employee engaging in illegal conduct or gross misconduct that is demonstrably likely to lead to material injury to Employer,
      monetarily or otherwise, (C) Employee’s indictment or conviction of, or plea of nolo contendere to, a crime constituting a felony or any other
      crime involving moral turpitude, or (D) Employee’s violation of Section 7 of this Agreement or any other covenants owed to Employer by Employee.

  

  

  (b)          Termination by Employer without Cause. Employer may terminate Employee’s employment under this Agreement without Cause at any time upon thirty (30) days’ prior
      written notice to Employee. In addition to the severance benefits provided in Section 5, in the event of Employee’s termination by Employer without Cause, Employer shall pay to Employee all of Employee’s Accrued Obligations.

  

  

  (c)          Termination by Employee for Good Reason. Employee may terminate Employee’s employment under this Agreement for Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following:

  

  

  (i)          Any
      material reduction of Employee’s authority, duties and responsibilities;

  

  

  (ii)          Any
      material failure by Employer to comply with any of the terms and conditions of this Agreement;

  

  

  (iii)          Any
      failure to timely pay or provide Employee’s Base Salary, or any reduction in Employee’s Base Salary, excluding any Base Salary reduction made in connection with across the board salary reductions;

  

  

  (iv)          The
      requirement by Employer that Employee relocate Employee’s principal business location to a location more than fifty (50) miles from Employee’s principal base of operation as of the Effective Date; or

  
    3

    
      

  

  

  

  (v)          A Change of
      Control occurs and, if applicable, Employer fails to cause its successor (whether by purchase, merger, consolidation or otherwise) to assume or reaffirm Employer’s obligations under this Agreement without change. For purposes of this Agreement, “Change of Control” shall have the meaning assigned to such term under the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan.

  

  

  Within ninety (90) days of the occurrence of a Good Reason event, Employee may provide Employer with written notice of
      Employee’s termination of employment to be effective thirty (30) days after delivery of such notice, during which Employer shall have the opportunity to cure such Good Reason event. In the event of a termination for Good Reason, in addition to the
      severance benefits provided in Section 5, Employer shall pay to Employee all of Employee’s Accrued Obligations.

  

  

  (d)          Termination by Employee without Good Reason. Employee may terminate Employee’s employment under this Agreement at any time without Good Reason, upon thirty (30)
      days’ prior written notice to Employer. In the event of a termination described in this Section 4(d), Employer shall pay to Employee all of Employee’s Accrued
      Obligations.

  

  

  (e)          Termination due to Employee’s death or Disability. Employee’s employment under this Agreement shall terminate upon Employee’s (i) death, or (ii) “Disability,” which for purposes of this Agreement means a “Total Disability” (or equivalent) as defined under Employer’s Long Term Disability Plan in
      effect at the time of the Disability. In the event of a termination described in this Section 4(e), Employer shall pay to Employee all of Employee’s Accrued
      Obligations. In addition, (i) if Employee is participating in the health plans of Employer at the time of termination, Employer shall pay to Employee the premiums attributable to maintaining Employee’s (and Employee’s qualified beneficiaries’)
      insurance coverage under the Consolidated Omnibus Budget Reconciliation Act until the earlier of (A) the date that is twelve (12) months following the date of termination and (B) the date Employee is or becomes eligible for comparable coverage under
      health plans of another employer (the “Continued Benefits”), (ii) Employer shall pay to Employee (or Employee’s estate and/or beneficiaries), in a
      lump sum following effectiveness of the release described in Section 6 and at the same time Employer pays annual bonuses for such calendar year to its other
      executives, an amount equal to (x) the actual bonus Employee would have received under the Bonus Plan had Employee remained employed by Employer through the remainder of the calendar year in which termination occurred, multiplied by (y) a fraction,
      the numerator of which is the number of days Employee was employed in the calendar year in which termination occurred and the denominator of which is 365 and (iii) Employer shall pay to Employee (or Employee’s estate and/or beneficiaries) an amount
      equal to any annual bonus for a prior completed calendar year that is yet to be calculated and/or paid  to Employee, paid as soon as practicable following effectiveness of the release described in Section 6 but in no event later than March 15 of the year following the calendar year to which such bonus relates (the “Earned But Unpaid Bonus”).

  
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  5.          Severance Benefits. In the event of a termination of Employee’s employment under Section 4(b)
      or 4(c) of this Agreement, Employer shall provide Employee with the following severance benefits:

  

  

  (a)          Employer
      shall pay to Employee an amount equal to the sum of (i) Employee’s annual Base Salary and (ii) Employee’s bonus at target for the year in which termination occurs, which shall be paid by Employer to Employee in a lump sum as soon as practicable
      following (and subject to) effectiveness of the release described in Section 6 but in no event later than sixty (60) days following the date of termination,
      provided that if such sixty (60) day period covers two taxable years, payment shall be made in the second taxable year.

  

  

  (b)          The
      Continued Benefits; and

  

  

  (c)          The Earned
      But Unpaid Bonus.

  

  

  6.          Release of Claims. As a condition to the receipt of any payments or benefits described in Section 5
      of this Agreement, subsequent to the termination of the employment of Employee (other than any Accrued Benefits or any payment or benefits payable on account of Employee’s death), Employee shall be required to execute, and not subsequently revoke,
      within fifty (50) days following the termination of Employee’s employment a release, in a form reasonably satisfactory to Employer, of all claims arising out of or related to Employee’s employment or the termination thereof.

  

  

  7.          Restricted Activities.

  

  

  (a)          Acknowledgements. Employee understands and acknowledges that Employer has invested, and continues to invest, substantial time, money and specialized knowledge into
      developing its resources, creating a customer base, generating customer and potential customer lists, training its employees, and improving its offerings in the field of wholesale, retail or consumer vehicle remarketing, including but not limited to
      vehicle auctions (whole car and salvage), online services, or dealer floor-plan financing. Employee understands and acknowledges that as a result of these efforts, Employer has created, and continues to use and create, Confidential Information (as
      defined below) and that such Confidential Information is integral to providing Employer with a competitive advantage over others in the marketplace. Employee further understands and acknowledges that the nature of Employee’s position gives him access
      to and knowledge of Confidential Information and places him in a position of trust and confidence with Employer.

  

  

  (b)          Confidential Information. Employee acknowledges and agrees that Confidential Information is the property of Employer, and that Employee shall not acquire any
      ownership rights in Confidential Information. Employee (i) shall use Confidential Information solely in connection with Employee’s employment with Employer; (ii) shall not directly or indirectly disclose, use or exploit any Confidential Information
      for Employee’s own benefit or for the benefit of any person or entity, other than Employer, both during and after Employee’s employment with Employer; and (iii) shall hold Confidential Information in trust and confidence, and use all reasonable means
      to assure that it is not directly or indirectly disclosed to or copied by unauthorized persons or used in an unauthorized manner, both during and after Employee’s employment with Employer. To the extent that Employee creates or develops any
      Confidential Information during the course of Employee’s employment with Employer, it shall be the sole and exclusive property of Employer. For purposes of this Agreement, “Confidential Information” shall mean any proprietary, confidential and competitively-sensitive information and materials which are the property of Employer, excluding information and materials generally known or
      available to the public, other than as a result of Employee’s breach of this Section 7, and including without limitation (A) trade secrets, (B) business and
      technical information that gives Employer a competitive advantage, and (C) information concerning Employer’s customers, suppliers, vendors, licensors, affiliates, financing sources, profits, revenues, financial condition, pricing, training programs,
      service techniques, service processes, marketing plans, and business strategies.

  
    5

    
      

  

  (c)          Intellectual Property. Employee agrees to promptly disclose to Employer and hereby assigns and agrees to assign, without further compensation, to Employer,
      Employee’s entire right, title and interest in each and every invention (whether or not patentable), technological innovation, and copyrightable work, in which Employee participates during Employee’s employment with Employer whether or not during
      working hours, that pertains to Employer’s business or is aided by the use of time, material, or facilities of Employer. Employee further agrees to perform all reasonable acts, including executing necessary documents, requested by Employer to assist
      it, without further compensation, in obtaining and enforcing its property rights in the above.

  

  

  (d)          Non-Competition. During Employee’s employment with Employer and for a period of one (1) year immediately following the termination of Employee’s employment for any
      reason, Employee shall not within the United States or Canada perform for or on behalf of any Competitor (as defined below), the same or similar services as those that the Employee performed for Employer during Employee’s employment with Employer. In
      addition, Employee shall not, during Employee’s employment with Employer and for a period of one (1) year immediately following the termination of Employee’s employment for any reason, within the United States or Canada, engage in, own, operate, or
      control any Competitor. For purposes of this Agreement, “Competitor” means any person or entity engaged in the business of wholesale, retail or
      consumer vehicle remarketing activities, including but not limited to vehicle auctions (whole car or salvage), online services, or dealer floor plan financing within the United States or Canada, provided that Employer (either directly or indirectly
      through its controlled subsidiaries) is engaged in such businesses.

  

  

  (e)          Non-Solicitation/Non-Interference. During Employee’s employment with Employer and for a period of one (1) year immediately following the termination of Employee’s
      employment for any reason, Employee shall not (i) induce or attempt to induce any employee of Employer to leave the employ of Employer, or in any way interfere with the relationship between Employer and any of its employees, or (ii) induce or attempt
      to induce any customer, client, member, supplier, licensee, licensor or other business relation of Employer to cease doing business with Employer, or otherwise interfere with the business relationship between Employer and any such customer, client,
      member, supplier, licensee, licensor or business relation of Employer.

  
    6

    
      

  

  8.          Section 409A. The payments and benefits under this Agreement and the terms of any release agreement are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as
      amended (“Code”), and the regulations promulgated thereunder (“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement and any release agreement shall be interpreted and administered consistent with such intent. If under this Agreement, an amount is to be
      paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment. Without limiting the foregoing, solely to the extent required to avoid the imposition of any additional tax or interest to the
      Employee under Section 409A, any payments, benefits and other obligations under this Agreement that arise in connection with Employee’s “termination of employment,” “termination” or similar reference in this Agreement shall be triggered only if such
      termination of employment qualifies as a “separation from service” within the meaning under Section 409A. Notwithstanding any other provision of this Agreement, if at the time of the termination of Employee’s employment, Employee is a “specified
      employee,” for purposes of Section 409A, and any payments or benefits upon such termination including but not limited to payments or benefits under this Agreement would otherwise result in additional tax or interest to the employee under Section
      409A, Employee will not be entitled to receive such payments or benefits until the date that is six (6) months after the termination of the Employee’s employment for any reason, subject to earlier immediate payment if the employee dies during such
      six (6) month period. To the extent required to avoid the imposition of any additional tax or interest under Section 409A, amounts reimbursable to under this Agreement shall be paid to Employee on or before the last day of the year following the year
      in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursable or provided in any subsequent year. If any provision of this
      Agreement would subject Employee to any additional tax or interest under Section 409A, then Employer shall use its best efforts to amend such provision; provided that Employer shall not incur any additional expense as a result of such amendment.
      Notwithstanding any other provision hereof, in no event shall Employer be liable for, or be required to indemnify Employee for, any liability of Employee for taxes or penalties under Section 409A.

  

  

  9.          Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement, the breach, termination, enforcement, interpretation, or validity thereof (including the
      determination of the scope or applicability of this arbitration agreement), or its subject matter shall be subject and resolved by binding arbitration administered by a single arbitrator from the American Arbitration Association. The parties
      acknowledge and agree that Employer is involved in transactions involving interstate commerce and that the Federal Arbitration Act shall govern any arbitration pursuant to this Agreement. Such arbitration shall be conducted in accordance with the
      commercial rules and regulations promulgated by the American Arbitration Association applying the laws of the State of Indiana. The arbitration shall be conducted in Indianapolis, Indiana. Discovery shall be completed within ninety (90) days of the
      filing of the complaint and the arbitration shall be held no later than one hundred twenty (120) days after the filing of the complaint. A record of the proceedings shall be kept by a qualified court reporter. The decision of the arbitrator shall
      contain findings of fact and conclusions of law, and shall be made within thirty (30) days of the arbitration and shall be final and binding on the parties, and shall be unappealable. The decision may be enforced in any court having jurisdiction over
      the parties and the subject matter. Costs of the arbitrator shall be split equally between Employer and Employee.

  
    7

    
      

  

  10.          Miscellaneous Provisions.

  

  

  (a)          Notices. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have
      been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

  

  

  	 	
          To Employer:

        	
          KAR Auction Services, Inc.

        
	 	 	
          13085 Hamilton Crossing Blvd.

        
	 	 	
          Carmel, IN 46032

        
	 	 	
          Attention: Rebecca C. Polak, Esq.

        
	 	 	
          Email: becca.polak@karauctionservices.com

        
	 	 	 
	 	
          To Employee:

        	
          At Employee’s address on file with Employer

        

  

  

  (b)          Entire Agreement. This Agreement sets forth the entire agreement between Employer and Employee with respect to the subject matter of this Agreement and fully
      supersedes all prior negotiations, representations and agreements, whether written or oral, between Employer and Employee with respect to the subject matter of this Agreement, including, but not limited to, that certain Employment Agreement, dated as
      of July 23, 2004, as amended on December 1, 2008, by and between Insurance Auto Auctions, Inc. and John Kett.

  

  

  (c)          Severability. The provisions of this Agreement are severable and shall be separately construed. If any of them is determined to be unenforceable by any court, that
      determination shall not invalidate any other provision of this Agreement.

  

  

  (d)          Amendment and Waiver. This Agreement may not be modified, amended or waived in any manner except by a written document executed by Employer and Employee. The
      waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement (whether or not similar), or a continuing waiver or a waiver of any
      subsequent breach by such party of a provision of this Agreement.

  

  

  (e)          No Mitigation. In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Employee
      under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Employee obtains other employment.

  

  

  (f)          Successors and Assigns. This Agreement and the covenants herein shall extend to and inure to the benefit of the successors and assigns of Employer. Employer shall
      require any successor (whether by purchase, merger, consolidation or otherwise) to assume or reaffirm, as applicable, Employer’s obligations under this Agreement without change. Failure of Employer to obtain such an assumption shall entitle Employee
      to terminate Employee’s employment under this Agreement for Good Reason.

  
    8

    
      

  

  (g)          Headings. Numbers and titles to Sections hereof are for information purposes only and, where inconsistent with the text, are to be disregarded.

  

  

  (h)          Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together, shall
      be and constitute one and the same instrument.

  

  

  (i)          Governing Law and Forum. This Agreement shall be governed by and construed according to the internal laws of the State of Indiana, without regard to conflict of
      law principles.

  

  

  [SIGNATURE PAGE FOLLOWS]

  
    9

    
      

  

  IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set forth above.

   

    

   

    

   

    

  
    	
            “Employer”

          	 	
            “Employee”

          
	 	 	 	 
	
            KAR AUCTION SERVICES, INC.

          	 	 
	 	 	 	 
	
            By:

          	 /s/ Don Gottwald

          	 	/s/ John Kett 

          
	 	 	 	 
	
            Printed:

          	 Don Gottwald

          	 	 
	 	 	 	 
	
            Title:

          	 Chief Operating Officer

          	 	 

     

   

    

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