Document:

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                                                                    Exhibit 10.4

                    SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement ("Agreement") is entered into by and between Gaspare
G. Ruggirello ("Employee") and Insurance Auto Auctions, Inc. (the "Company") to
set forth the terms, conditions, and obligations of each party with respect to
the termination of the employment relationship between Employee and the Company.

Whereas, the parties acknowledge that the Company has requested that the
Employee terminate his employment relationship with the Company;

Whereas, the parties mutually agree that their joint interest would be furthered
by an amicable separation;

Now therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1.       Termination of Employment. Termination of the employment relationship
         between Employee and the Company shall be effective as of March 31,
         2001 (the "Termination Date"). Employee shall resign from his position
         as an officer and employee of the Company and any of its subsidiaries
         effective as of the Termination Date.

2.       Consideration. As consideration for Employee's entering into this
         Agreement, the Company agrees:

         a)       Employee shall receive from the Company a lump sum cash
                  payment equal to the sum of (i), (ii) and (iii) below, payable
                  on the next regular payday following expiration of the
                  revocation period described in paragraph 11 below:

                  (i)      52 weeks of pay, computed at the Employee's regular
                           weekly base salary in effect on the Termination Date
                           (such gross amount equal to $145,000);

                  (ii)     a bonus payment equal to 30% of Employee's annual
                           base salary (such gross amount equal to $43,500);

                  (iii)    an automobile allowance equal to 12.21% of Employee's
                           annual base salary in effect on the Termination Date
                           (such gross amount equal to $17,700); and

         b)       (i)      From the Termination Date until March 31, 2002 (the
                           end of the final month covered by Employee's
                           severance pay (the "Severance Period")), the Company
                           shall continue to provide life, medical, dental and
                           long-term disability benefits (the "Company Plans")
                           as previously selected by Employee, for Employee and
                           such of Employee's dependents for whom the Company
                           provided such benefits on the Termination Date;
                           provided

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                           Employee shall be responsible for the Employee's
                           share of the cost of coverage and benefits on the
                           same basis as prior to the Termination Date. Such
                           benefits will be continued only to the extent
                           permissible under the terms of such Company Plans.
                           Notwithstanding anything contained in this Section
                           2b(i) to the contrary, with respect to long-term
                           disability, the Employee must timely apply for
                           conversion insurance and benefits payable thereunder
                           shall not exceed a maximum monthly benefit of $3,000.

                  (ii)     If any of the Company Plans do not permit continued
                           participation by the Employee and the Employee's
                           family after termination of employment, then, during
                           the Severance Period, the Company will reimburse the
                           Employee for the cost of obtaining comparable
                           coverage from a third-party insurer, provided,
                           however, that the amount of such reimbursement will
                           not exceed the amount that would have been paid by
                           the Company for coverage under the Company Plans
                           during the Severance Period had the Employee's
                           employment not been terminated.

                           If during the Severance Period, and subject to (iii)
                           below, the Employee is reemployed by another
                           employer, the rights of the Employee and the
                           Employee's family to receive benefits under any
                           Company Plan, or reimbursement for any third-party
                           coverage, will terminate on the date the Employee and
                           Employee's family become eligible to receive
                           comparable benefits from such employer.

                  (iii)    If, at the termination of the Severance Period, the
                           Employee is receiving medical and/or dental benefits
                           from a Company Plan, the Company will continue to
                           provide such medical and/or dental benefits to the
                           Employee and/or the Employee's family pursuant to
                           COBRA. For such purpose, the termination of the
                           Severance Period will be considered the date of the
                           "qualifying event" as such term is defined by COBRA
                           and the cost of continued coverage during the COBRA
                           period will be determined pursuant to COBRA and paid
                           entirely by the Employee.

                  (iv)     If the Company's Plans do not provide for continued
                           medical and/or dental benefit coverage during the
                           Severance Period, then the Termination Date will be
                           considered the date of the qualifying event for COBRA
                           purposes. In such case, the Employee may either elect
                           to continue such coverage pursuant to COBRA or obtain
                           comparable third-party coverage as described in
                           Section 2(b)(ii). If the Employee elects COBRA
                           coverage, then during the Severance Period, the
                           Employee will be charged the amount that such
                           Employee would have paid for such coverage had such
                           Employee remained employed by the Company, and after
                           the end of such Severance Period and for the
                           remainder of the COBRA period, the cost of such
                           coverage will be determined pursuant to COBRA and
                           paid entirely by the Employee.

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                  (v)      The Employee's active participation in all other
                           employee benefits plans and programs maintained by
                           the Employer, including the Insurance Auto Auctions,
                           Inc. 401(k) Plan and the Insurance Auto Auctions,
                           Inc. Employee Stock Purchase Plan, shall be
                           determined in accordance with the terms of such plans
                           and programs.

         c)       All outstanding stock options granted to Employee as set forth
                  on Attachment A hereto (to the extent not already vested)
                  shall become 100% vested and exercisable on the day after the
                  expiration of the revocation period described in Section 11
                  below. Such vested stock options will continue to be
                  exercisable until the earlier of such stock options'
                  expiration date or June 30, 2002. Stock options not exercised
                  by June 30, 2002, shall expire and be of no further force or
                  effect. The options shall continue to be governed by the terms
                  and conditions of their respective Notices of Grant of Stock
                  Option and Stock Option Agreements, as amended by this
                  subsection 2(c).

         d)       Employee shall receive accrued but unused vacation pay through
                  the Termination Date, to be paid on or before the Company's
                  next regularly scheduled pay date following the Termination
                  Date.

         e)       Amounts paid to Employee pursuant to this Section 2 shall be
                  subject to applicable withholding taxes as may be required
                  pursuant to federal, state or local law, or by agreement with
                  or consent of Employee.

3.       Confidentiality.  Employee  remains  bound by all terms and  conditions
         of the Confidentiality Agreement dated as of July 17, 1997 and attached
         hereto as Attachment B. Employee also agrees that except as may be
         specifically required by law, Employee will not in any manner disclose
         or communicate any part of this Agreement to any other person except
         Employee's current spouse, Employee's accountant or financial advisor
         to the limited extent needed for that person to prepare Employee's tax
         returns, or Employee's attorney. Before any such authorized disclosure,
         Employee will inform each such person to whom disclosure is to be made
         that every term of this Agreement is confidential and obtain such
         person's agreement to maintain the confidentiality of the entire
         Agreement.

4.       Return of Company Property. By signing this Agreement, Employee affirms
         that he has returned to the Company all of its property that was or is
         in his possession, custody or control, including but not limited to all
         keys, company credit cards, access cards, equipment, computers,
         hardware, software, programs diskettes, data, notes, papers, books,
         files, documents, records, policies, client and customer information
         and lists, marketing information, design information, pricing
         information, blueprints, specifications plans, data base information,
         mailing lists, and any other property or information that Employee had
         relating to the Company and/or its customers, employees, plans,
         strategies, inventions, policies, or practices (whether those materials
         are in paper or computer-stored form). Employee affirms that he has not
         retained any such property or information in any form, and that he will
         not give copies of such property information or disclose their

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         contents to any other person. Notwithstanding the above, Employee shall
         be allowed to retain the Palm Pilot organizer (Palm VII) he is
         currently using.

5.       Restricted Activities. Except for the Permitted Activity (defined
         below), for a period commencing on the date hereof and terminating at
         the end of the Severance Period (the "Restricted Period"), the
         Employee, unless acting in accordance with the Company's prior written
         consent (which consent may be given by any duly authorized officer of
         the Company) shall not, anywhere in the United States ("Restricted
         Territory") directly or indirectly, own, manage, operate, control,
         finance or participate in the ownership, management, operation, control
         or financing of, or be connected as an officer, director, employee,
         principal, agent, representative, consultant, investor, owner, partner,
         manager, joint venturer or similar affiliation with, any business or
         enterprise principally engaged in, or with a material portion of its
         business comprised of the Business; provided, however, the Employee may
         own, directly or indirectly, securities of any person having a class of
         securities (a) registered under the Securities Exchange Act of 1934 and
         (b) publicly traded, if the Employee is not a controlling person of, or
         a member of a group which controls, such person and the Employee does
         not, directly or indirectly own more than two percent (2%) of any class
         of securities of such person (the "Permitted Activity"). "Business"
         shall mean the business of towing, processing, appraising, auctioning
         and selling, and processing claims with respect to damaged, abandoned,
         repossessed, total loss, used and recovered theft automobiles, trucks,
         motorcycles, boats, trailers, motor houses and other types of vehicles.

6.       Employees. During the Restricted Period, Employee shall not, directly
         or indirectly, (i) solicit for employment and/or hire or offer
         employment to any individual who is or was an employee of the Company
         within 90 days of the date of this Agreement and who becomes an
         employee of the Company or its subsidiaries at any time during the
         Restricted Period, or (ii) encourage any Company employee to terminate
         his or her relationship with the Company or its subsidiaries.

7.       Customers. During the Restricted Period, the Employee shall not solicit
         any person who is or was a customer or client of the Company, or its
         subsidiaries and who becomes a customer or client of the Company or its
         subsidiaries at any time during the Restricted Period, for the purpose
         of (i) engaging in, or assisting any person or entity in engaging in,
         the Business, or (ii) soliciting or encouraging any customer, client of
         the Company, or its subsidiaries to terminate or otherwise alter his,
         hers or its relationship or prospective relationship with the Company
         or its subsidiaries.

8.       Release of Claims And Agreement Not To Sue. (a) As consideration for
         the obligations undertaken by the Company pursuant to this Agreement,
         Employee, for himself, his successors, administrators, heirs or
         assigns, hereby fully releases, waives and fully discharges the
         Released Parties (defined to include the Company, its subsidiaries and
         affiliates, predecessors, successors, and assigns, and their respective
         officers, directors, agents and employees, whether past, present or
         future) from any and all claims, causes of action, suits, demands,
         damages, judgements or liabilities, of any nature, including attorney's
         fees and costs, known or unknown, absolute or contingent, arising from
         or relating to Employee's employment or separation from employment.
         This release

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         includes, without limitation, any and all claims for breach of contract
         (including the Change in Control and Employment Agreement between the
         Company and Employee dated February 23, 1998), wrongful discharge or
         impairment of economic opportunity, any claims under common law or at
         equity, claims of defamation or intentional infliction of emotional
         harm, claims of any tort, claims for reimbursements or commissions, and
         any and all rights and discrimination claims Employee may have arising
         under the Age Discrimination in Employment Act, Title VII of the Civil
         Rights Act of 1964, the Americans with Disabilities Act, and any and
         all other federal, state or local laws or regulations. Employee agrees
         not to sue or to file any claims or actions against the Released
         Parties with respect to claims covered by this release and affirms that
         no such claims or actions are currently pending. Notwithstanding the
         above, this waiver and release shall not apply to claims for
         indemnification and/or the advancement of expenses pursuant to Article
         7 of the Company's Articles of Incorporation, Article 5 of the
         Company's Bylaws and any indemnification agreement with the Company.

         (b) As consideration for the obligations undertaken by the Employee
         pursuant to this Agreement, the Company, for itself, its successors and
         assigns, hereby fully releases, waives and fully discharges the
         Employee from any and all claims, causes of action, suits, demands,
         damages, judgements or liabilities, of any nature, including attorney's
         fees and costs, known or unknown, absolute or contingent, arising from
         or relating to Employee's employment or separation from employment
         unless such claims, causes of action, suits, demands, damages,
         judgments or liabilities resulted from Employee's acts or omissions
         which were (i) grossly negligent, (ii) fraudulent or (iii)
         intentionally harmful.

9.       No Disparagement or Encouragement. Each party agrees not to do
         anything, and not to make any oral, electronic or written statement to
         any person (including without limitation any employee, client,
         customer, supplier, vendor of the Company or the press), that
         disparages or places in a false or negative light the other party (and
         in the case of the Company, any of its past or present officers,
         employees, business, products, services or its relationships);
         provided, however, that nothing herein shall limit or prohibit either
         party from cooperating in any truthful manner with any governmental
         authority or agency or responding truthfully under oath in a legal
         proceeding. Employee will not encourage any person to file a lawsuit,
         charge, claim, or complaint against any of the Released Parties.
         Employee will not assist any person who has filed a lawsuit, charge,
         claim, or complaint against any of the Released Parties unless Employee
         is required to render such assistance pursuant to a lawful subpoena or
         other legal obligation. If Employee is served with any such legal
         subpoena or becomes subject to any such legal obligation, Employee will
         provide prompt written notice to the General Counsel of the Company in
         which Employee shall enclose a copy of the subpoena and any other
         documents describing the legal obligation.

10.      No Reinstatement or Reemployment. Employee agrees not to apply for
         employment or otherwise seek to be hired, rehired, employed,
         reemployed, or reinstated by the Company, its affiliates and
         subsidiaries.

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11.      Revocation Period. Employee has the right to revoke this Agreement for
         up to seven (7) days after Employee signs it. In order to revoke this
         Agreement, Employee must sign and send a written notice of the decision
         to do so, addressed to Chief Executive Officer, Insurance Auto
         Auctions, 850 East Algonquin Road, Suite 100, Schaumburg, IL 60173, and
         that written notice must be received by Employer no later than the
         eighth day after Employee signs this Agreement. If Employee revokes
         this Agreement, the Employee will not be entitled to any of the
         consideration from the Company described in Sections 2(a), 2(b), and
         2(c) above.

12.      No Admission. This Agreement does not constitute an admission by any of
         the Released Parties, and the Company specifically denies that any
         action or failure to act by any of the Released Parties was wrongful,
         unlawful, or susceptible of causing any damages or injury to Employee.
         This Agreement does not constitute an admission by the Employee, and
         the Employee specifically denies that any action or failure to act by
         the Employee was wrongful, unlawful, or susceptible of causing any
         damages or injury to the Company.

13.      Severability. The Employee acknowledges and agrees that the Restrictive
         Covenants (as defined below) are reasonable, necessary and valid in
         duration and geographical scope and in all other respects. If any court
         determines that any of the Restrictive Covenants, or any part thereof,
         is invalid or unenforceable, the remainder of the Restrictive Covenants
         shall not be affected thereby and shall be given full effect without
         regard to the invalid portions. Provided, however, that if Employee
         brings a lawsuit, claim, charge, or complaint against the Company, and
         a court of competent jurisdiction finds that a release or waiver of
         claims or rights by Employee in Section 8 above is illegal, void or
         unenforceable, Employee agrees that upon request by the Company,
         Employee will promptly sign a release or waiver that is legal and
         enforceable.

14.      Rights and Remedies Upon Breach. If the Employee breaches, or threatens
         to commit a breach of, any of the covenants set forth in Sections 5, 6
         or 7 of this Agreement (the "Restrictive Covenants"), the Company shall
         have the right and remedy to have the Restrictive Covenants
         specifically enforced by any court of competent jurisdiction, including
         immediate temporary injunctive relief without bond and without the
         necessity of showing actual monetary damages, it being agreed that any
         breach or threatened breach of the Restrictive Covenants would cause
         irreparable injury to the Company and that money damages would not
         provide an adequate remedy to the Company, which right and remedy is in
         addition to, and not in lieu of, any other rights and remedies
         available to the Company under law or in equity. The Restricted Period
         shall be extended by any period that the Employee is in breach of the
         Restrictive Covenants, unless such breach is not willful and does not
         materially damage the Company.

15.      Agreement Inadmissible as Evidence. This Agreement, its execution, and
         its implementation may not be used as evidence, and shall not be
         admissible in any proceeding except one claiming a violation of this
         Agreement.

16.      Entire Agreement. This Agreement sets forth the full understanding and
         agreement of the parties and supersedes any and all other
         understandings or agreements, written or oral;

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         provided, however, that Employee shall continue to be bound by the
         Confidentiality Agreement described in Section 3.

17.      Governing Law and Jurisdiction. This Agreement shall be governed by and
         construed in accordance with laws and judicial decisions of the State
         of Illinois, without regard to its principles of conflicts of laws.

18.      Knowing and Voluntary Waiver.  Employee specifically agrees as follows:

         a) Employee is knowingly and voluntarily entering into this Agreement;

         b) Employee acknowledges that the Company is providing benefits in the
            form of payments and compensation, to which Employee would not
            otherwise be entitled, as part of the consideration for Employee's
            entering into this Agreement;

         c) Employee acknowledges receiving from the Company the informational
            disclosures attached to this Agreement as Exhibit A at the same time
            Employee received this Agreement;

         d) Employee is hereby advised by the Company to consult with an
            attorney before signing this Agreement;

         e) Employee understands that he has a period of forty-five (45) days
            from the date a copy of this Agreement is provided to Employee in
            which to consider and sign the Agreement (during which the offer
            will remain open), and that the Employee has an additional seven (7)
            days after signing this Agreement within which to revoke acceptance
            of the Agreement; and,

         f) If during the seven (7) day revocation period Employee should revoke
            acceptance of the Agreement, then this Agreement shall be void.

19.      Counterparts. This Agreement may be executed in counterparts, each of
         which shall be deemed to be an original, but all of which together
         shall constitute one and the same instrument.

INSURANCE AUTO AUCTIONS, INC.                GASPARE G. RUGGIRELLO

By:      /s/ Thomas C. O'Brien                    /s/ Gaspare G. Ruggirello
   --------------------------------          ----------------------------------

Its:     CEO
    -------------------------------
                                             Dated:   2-23-01
                                                   ----------------------------
Dated:            2-23-01
      -----------------------------

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                                  Attachment A
                            Stock Options of Employee

 Number          Grant Date              Number              Exercise Price
 ------          ----------              ------              --------------
 IA0313            8/5/97                 5,000                 $9.4375
 IA0323            1/2/98                12,500                  11.688
 IA0449           12/15/98               10,000                  11.125
 IA0450           12/15/98               15,000                  11.125

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                                   Exhibit A

                           INFORMATIONAL DISCLOSURES

         The following disclosures are intended to inform you about which job
positions at Insurance Auto Auctions, Inc. were selected to participate in the
employment termination program, which job positions were not selected to
participate in the employment termination program, and the ages of the employees
holding those positions. You are being given this information to assist you in
making an informed decision about signing the accompanying Separation Agreement
and General Release.

         You have 45 days from the date of receiving these disclosures to sign
the Separation Agreement and General Release, if you so chose. If you sign the
Agreement, you have 7 days from the date of signature to revoke the Agreement.
If you revoke, you will not be entitled to any consideration under the
Agreement.

         The following employees were selected to participate in the employment
termination program:

TITLE                                                          AGE(S)
-----                                                          ------
Vice President, Chief Financial Officer and Assistant          45
Secretary
Vice President, General Counsel and Secretary                  43

         The following employees were not selected to participate in the
employment termination program:

TITLE                                                          AGE(S)
-----                                                          ------
Vice President, Eastern Division                               42
Vice President, Industry and Customer Relations                52
Vice-President, Western Division                               41
Vice-President, Business Development                           38
Senior Vice-President, Sales & Marketing                       52
Vice-President, Information Technology & CIO                   42
Vice-President, Public Affairs                                 49<PAGE>   1
                                                                    Exhibit 10.5

                    SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement ("Agreement") is entered into by and between Donald J.
Comis ("Employee") and Insurance Auto Auctions, Inc. (the "Company") to set
forth the terms, conditions, and obligations of each party with respect to the
termination of the employment relationship between Employee and the Company.

Whereas, the parties acknowledge that the Company has requested that the
Employee terminate his employment relationship with the Company;

Whereas, the parties mutually agree that their joint interest would be furthered
by an amicable separation;

Now therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1.   Termination of Employment. Termination of the employment relationship
     between Employee and the Company shall be effective as of April 9, 2001
     (the "Termination Date"). Employee shall resign from his position as an
     officer and employee of the Company and any of its subsidiaries effective
     as of the Termination Date.

2.   Consideration. As consideration for Employee's entering into this
     Agreement, the Company agrees:

     a)   Employee shall receive from the Company a lump sum cash payment equal
          to the sum of (i), (ii) and (iii) below, payable on the next regular
          payday following expiration of the revocation period described in
          paragraph 11 below:

          (i)   52 weeks of pay, computed at the Employee's regular weekly base
                salary in effect on the Termination Date (such gross amount
                equal to $145,000.00);

          (ii)  a bonus payment equal to Employee's target bonus for the
                Company's fiscal year during which Employee's employment is
                terminated (such gross amount equal to $43,500.00);

          (iii) Employee's auto allowance for the Company's fiscal year during
                which the Employee's employment is terminated (such gross amount
                equal to $1,466.99 per month or $17,603.88); and

     b)   (i)   From the Termination Date until April 9, 2002 (the end of the
                final month covered by Employee's severance pay (the "Severance
                Period")), the Company shall continue to provide life, medical,
                dental and long-term disability benefits (the "Company Plans")
                as previously selected by

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                Employee, for Employee and such of Employee's dependents for
                whom the Company provided such benefits on the Termination Date;
                provided Employee shall be responsible for the Employee's share
                of the cost of coverage and benefits on the same basis as prior
                to the Termination Date. Such benefits will be continued only to
                the extent permissible under the terms of such Company Plans.
                Notwithstanding anything contained in this Section 2b(i) to the
                contrary, with respect to long-term disability, the Employee
                must timely apply for conversion insurance and benefits payable
                thereunder shall not exceed a maximum monthly benefit of $3,000.

          (ii)  If any of the Company Plans do not permit continued
                participation by the Employee and the Employee's family after
                termination of employment, then, during the Severance Period,
                the Company will reimburse the Employee for the cost of
                obtaining comparable coverage from a third-party insurer,
                provided, however, that the amount of such reimbursement will
                not exceed the amount that would have been paid by the Company
                for coverage under the Company Plans during the Severance Period
                had the Employee's employment not been terminated.

                If during the Severance Period, and subject to (iii) below, the
                Employee is reemployed by another employer, the rights of the
                Employee and the Employee's family to receive benefits under any
                Company Plan, or reimbursement for any third-party coverage,
                will terminate on the date the Employee and Employee's family
                become eligible to receive comparable benefits from such
                employer.

          (iii) If, at the termination of the Severance Period, the Employee is
                receiving medical and/or dental benefits from a Company Plan,
                the Company will continue to provide such medical and/or dental
                benefits to the Employee and/or the Employee's family pursuant
                to COBRA. For such purpose, the termination of the Severance
                Period will be considered the date of the "qualifying event" as
                such term is defined by COBRA and the cost of continued coverage
                during the COBRA period will be determined pursuant to COBRA and
                paid entirely by the Employee.

          (iv)  If the Company's Plans do not provide for continued medical
                and/or dental benefit coverage during the Severance Period, then
                the Termination Date will be considered the date of the
                qualifying event for COBRA purposes. In such case, the Employee
                may either elect to continue such coverage pursuant to COBRA or
                obtain comparable third-party coverage as described in Section
                2(b)(ii). If the Employee elects COBRA coverage, then during the
                Severance Period, the Employee will be charged the amount that
                such Employee would have paid for such coverage had such
                Employee remained employed by the Company, and after the end of
                such Severance Period and for the remainder of the COBRA period,
                the cost of

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                such coverage will be determined pursuant to COBRA and paid
                entirely by the Employee.

          (v)   The Employee's active participation in all other employee
                benefits plans and programs maintained by the Employer,
                including the Insurance Auto Auctions, Inc. 401(k) Plan and the
                Insurance Auto Auctions, Inc. Employee Stock Purchase Plan,
                shall be determined in accordance with the terms of such plans
                and programs.

     c)   All outstanding stock options granted to Employee as set forth on
          Attachment A hereto (to the extent not already vested) shall become
          100% vested and exercisable on the day after the expiration of the
          revocation period described in Section 11 below. Such vested stock
          options will continue to be exercisable until the earlier of such
          stock options' expiration date or July 9, 2002. Stock options not
          exercised by July 9, 2002, shall expire and be of no further force or
          effect. The options shall continue to be governed by the terms and
          conditions of their respective Notices of Grant of Stock Option and
          Stock Option Agreements, as amended by this subsection 2(c).

     d)   Employee shall receive accrued but unused vacation pay through the
          Termination Date, to be paid on or before the Company's next regularly
          scheduled pay date following the Termination Date.

     e)   Amounts paid to Employee pursuant to this Section 2 shall be subject
          to applicable withholding taxes as may be required pursuant to
          federal, state or local law, or by agreement with or consent of
          Employee.

3.   Confidentiality. Employee remains bound by all terms and conditions of the
     Confidentiality Agreement dated as of March 25, 1994 and attached hereto as
     Attachment B. Employee also agrees that except as may be specifically
     required by law, Employee will not in any manner disclose or communicate
     any part of this Agreement to any other person except Employee's current
     spouse, Employee's accountant or financial advisor to the limited extent
     needed for that person to prepare Employee's tax returns, or Employee's
     attorney. Before any such authorized disclosure, Employee will inform each
     such person to whom disclosure is to be made that every term of this
     Agreement is confidential and obtain such person's agreement to maintain
     the confidentiality of the entire Agreement.

4.   Return of Company Property. By signing this Agreement, Employee affirms
     that he has returned to the Company all of its property that was or is in
     his possession, custody or control, including but not limited to all keys,
     company credit cards, access cards, equipment, computers, hardware,
     software, programs diskettes, data, notes, papers, books, files, documents,
     records, policies, client and customer information and lists, marketing
     information, design information, pricing information, blueprints,
     specifications plans, data base information, mailing lists, and any other
     property or information that Employee had relating to the Company and/or
     its customers, employees, plans, strategies, inventions, policies, or
     practices (whether those materials are in paper or computer-stored

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     form). Employee affirms that he has not retained any such property or
     information in any form, and that he will not give copies of such property
     information or disclose their contents to any other person. Notwithstanding
     the above, if Employee was provided with a Palm Pilot organizer, Employee
     shall be allowed to retain the Palm Pilot organizer (Palm VII) he is
     currently using.

5.   Omitted.

6.   Omitted.

7.   Omitted.

8.   Release of Claims And Agreement Not To Sue. (a) As consideration for the
     obligations undertaken by the Company pursuant to this Agreement, Employee,
     for himself, his successors, administrators, heirs or assigns, hereby fully
     releases, waives and fully discharges the Released Parties (defined to
     include the Company, its subsidiaries and affiliates, predecessors,
     successors, and assigns, and their respective officers, directors, agents
     and employees, whether past, present or future) from any and all claims,
     causes of action, suits, demands, damages, judgements or liabilities, of
     any nature, including attorney's fees and costs, known or unknown, absolute
     or contingent, arising from or relating to Employee's employment or
     separation from employment. This release includes, without limitation, any
     and all claims for breach of contract (including the Change in Control and
     Employment Agreement between the Company and Employee dated February 23,
     1998), wrongful discharge or impairment of economic opportunity, any claims
     under common law or at equity, claims of defamation or intentional
     infliction of emotional harm, claims of any tort, claims for reimbursements
     or commissions, and any and all rights and discrimination claims Employee
     may have arising under the Age Discrimination in Employment Act, Title VII
     of the Civil Rights Act of 1964, the Americans with Disabilities Act, and
     any and all other federal, state or local laws or regulations. Employee
     agrees not to sue or to file any claims or actions against the Released
     Parties with respect to claims covered by this release and affirms that no
     such claims or actions are currently pending. Notwithstanding the above,
     this waiver and release shall not apply to claims for indemnification
     and/or the advancement of expenses pursuant to Article 7 of the Company's
     Articles of Incorporation, Article 5 of the Company's Bylaws and any
     indemnification agreement with the Company.

     (b)  As consideration for the obligations undertaken by the Employee
          pursuant to this Agreement, the Company, for itself, its successors
          and assigns, hereby fully releases, waives and fully discharges the
          Employee from any and all claims, causes of action, suits, demands,
          damages, judgements or liabilities, of any nature, including
          attorney's fees and costs, known or unknown, absolute or contingent,
          arising from or relating to Employee's employment or separation from
          employment unless such claims, causes of action, suits, demands,
          damages, judgments or liabilities resulted from Employee's acts or
          omissions which were (i) grossly negligent, (ii) fraudulent or (iii)
          intentionally harmful.

                                       4
<PAGE>   5

9.   No Disparagement or Encouragement. Each party agrees not to do anything,
     and not to make any oral, electronic or written statement to any person
     (including without limitation any employee, client, customer, supplier,
     vendor of the Company or the press), that disparages or places in a false
     or negative light the other party (and in the case of the Company, any of
     its past or present officers, employees, business, products, services or
     its relationships); provided, however, that nothing herein shall limit or
     prohibit either party from cooperating in any truthful manner with any
     governmental authority or agency or responding truthfully under oath in a
     legal proceeding. Employee will not encourage any person to file a lawsuit,
     charge, claim, or complaint against any of the Released Parties. Employee
     will not assist any person who has filed a lawsuit, charge, claim, or
     complaint against any of the Released Parties unless Employee is required
     to render such assistance pursuant to a lawful subpoena or other legal
     obligation. If Employee is served with any such legal subpoena or becomes
     subject to any such legal obligation, Employee will provide prompt written
     notice to the General Counsel of the Company in which Employee shall
     enclose a copy of the subpoena and any other documents describing the legal
     obligation.

10.  No Reinstatement or Reemployment. Employee agrees not to apply for
     employment or otherwise seek to be hired, rehired, employed, reemployed, or
     reinstated by the Company, its affiliates and subsidiaries.

11.  Revocation Period. Employee has the right to revoke this Agreement for up
     to seven (7) days after Employee signs it. In order to revoke this
     Agreement, Employee must sign and send a written notice of the decision to
     do so, addressed to Chief Executive Officer, Insurance Auto Auctions, 850
     East Algonquin Road, Suite 100, Schaumburg, IL 60173, and that written
     notice must be received by Employer no later than the eighth day after
     Employee signs this Agreement. If Employee revokes this Agreement, the
     Employee will not be entitled to any of the consideration from the Company
     described in Sections 2(a), 2(b), and 2(c) above.

12.  No Admission. This Agreement does not constitute an admission by any of the
     Released Parties, and the Company specifically denies that any action or
     failure to act by any of the Released Parties was wrongful, unlawful, or
     susceptible of causing any damages or injury to Employee. This Agreement
     does not constitute an admission by the Employee, and the Employee
     specifically denies that any action or failure to act by the Employee was
     wrongful, unlawful, or susceptible of causing any damages or injury to the
     Company.

13.  Severability. The Employee acknowledges and agrees that the Restrictive
     Covenants (as defined below) are reasonable, necessary and valid in
     duration and geographical scope and in all other respects. If any court
     determines that any of the Restrictive Covenants, or any part thereof, is
     invalid or unenforceable, the remainder of the Restrictive Covenants shall
     not be affected thereby and shall be given full effect without regard to
     the invalid portions. Provided, however, that if Employee brings a lawsuit,
     claim, charge, or complaint against the Company, and a court of competent
     jurisdiction finds that a release or waiver of claims or rights by Employee
     in Section 8 above is illegal, void or unenforceable, Employee agrees that
     upon request by the Company, Employee will promptly sign a release or
     waiver that is legal and enforceable.

                                       5
<PAGE>   6

14.  Rights and Remedies Upon Breach. If the Employee breaches, or threatens to
     commit a breach of, any of the covenants set forth in Sections 5, 6 or 7 of
     this Agreement (the "Restrictive Covenants"), the Company shall have the
     right and remedy to have the Restrictive Covenants specifically enforced by
     any court of competent jurisdiction, including immediate temporary
     injunctive relief without bond and without the necessity of showing actual
     monetary damages, it being agreed that any breach or threatened breach of
     the Restrictive Covenants would cause irreparable injury to the Company and
     that money damages would not provide an adequate remedy to the Company,
     which right and remedy is in addition to, and not in lieu of, any other
     rights and remedies available to the Company under law or in equity. The
     Restricted Period shall be extended by any period that the Employee is in
     breach of the Restrictive Covenants, unless such breach is not willful and
     does not materially damage the Company.

15.  Agreement Inadmissible as Evidence. This Agreement, its execution, and its
     implementation may not be used as evidence, and shall not be admissible in
     any proceeding except one claiming a violation of this Agreement.

16.  Entire Agreement. This Agreement sets forth the full understanding and
     agreement of the parties and supersedes any and all other understandings or
     agreements, written or oral; provided, however, that Employee shall
     continue to be bound by the Confidentiality Agreement described in Section
     3.

17.  Governing Law and Jurisdiction. This Agreement shall be governed by and
     construed in accordance with laws and judicial decisions of the State of
     Illinois, without regard to its principles of conflicts of laws.

18.  Knowing and Voluntary Waiver. Employee specifically agrees as follows:

     a)   Employee is knowingly and voluntarily entering into this Agreement;

     b)   Employee acknowledges that the Company is providing benefits in the
          form of payments and compensation, to which Employee would not
          otherwise be entitled, as part of the consideration for Employee's
          entering into this Agreement;

     c)   Employee acknowledges receiving from the Company the informational
          disclosures attached to this Agreement as Exhibit A at the same time
          Employee received this Agreement;

     d)   Employee is hereby advised by the Company to consult with an attorney
          before signing this Agreement;

     e)   Employee understands that he has a period of forty-five (45) days from
          the date a copy of this Agreement is provided to Employee in which to
          consider and sign the Agreement (during which the offer will remain
          open), and that the Employee has an additional seven (7) days after
          signing this Agreement within which to revoke acceptance of the
          Agreement; and,

                                       6
<PAGE>   7

     f)   If during the seven (7) day revocation period Employee should revoke
          acceptance of the Agreement, then this Agreement shall be void.

19.  Counterparts. This Agreement may be executed in counterparts, each of which
     shall be deemed to be an original, but all of which together shall
     constitute one and the same instrument.

INSURANCE AUTO AUCTIONS, INC.                       DONALD J. COMIS
By:      /s/ Thomas C. O'Brien                      /s/ Donald J. Comis
   -------------------------------------            ----------------------------

Name:    Thomas C. O'Brien
                                                    Dated:   4-12-01
                                                          ----------------------
Its:     President and CEO

Dated:   4-12-01
      ----------------------------------

                                       7
<PAGE>   8

                                  Attachment A
                            Stock Options of Employee

Number         Grant Date               Amount          Exercise Price
------         ----------               ------          --------------
IA0129          06/21/94                 4,000              $31.50
IA0196          11/08/95                 2,500              $ 7.00
IA0317          01/02/98                12,500              $11.688
IA0455          12/15/98                10,000              $11.125
IA0456          12/15/98                15,000              $11.125

<PAGE>   9

                                    Exhibit A

                            INFORMATIONAL DISCLOSURES

     The following disclosures are intended to inform you about which job
positions at Insurance Auto Auctions, Inc. were selected to participate in the
employment termination program, which job positions were not selected to
participate in the employment termination program, and the ages of the employees
holding those positions. You are being given this information to assist you in
making an informed decision about signing the accompanying Separation Agreement
and General Release.

     You have 45 days from the date of receiving these disclosures to sign the
Separation Agreement and General Release, if you so chose. If you sign the
Agreement, you have 7 days from the date of signature to revoke the Agreement.
If you revoke, you will not be entitled to any consideration under the
Agreement.

     The following employees were selected to be terminated:

TITLE                                                          AGE(S)
-----                                                          ------
Vice President, Eastern Division                               42
Vice President, Business Development                           38
Vice President, Chief Financial Officer and Assistant          45
Secretary
Vice President, General Counsel and Secretary                  43

         The following employees were not selected to be terminated:

TITLE                                                          AGE(S)
-----                                                          ------
Vice President, Industry and Customer Relations                52
Vice President, Western Division                               41
Senior Vice President, Sales & Marketing                       52
Vice President, Information Technology & CIO                   42
Vice President, Public Affairs                                 49

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