S-4

As filed with the Securities and Exchange Commission on August 23, 2005

Registration No. 333-        

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Insurance Auto Auctions, Inc.

(Exact name of registrant as specified in its charter)

Illinois	5010	95-3790111
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Two Westbrook Corporate Center,

Suite 500

Westchester, Illinois 60154

(708) 492-7000

(Address and telephone number of registrant’s principal executive offices)

SEE TABLE OF ADDITIONAL REGISTRANTS

Thomas C. O’Brien

Chief Executive Officer

Insurance Auto Auctions, Inc.

Two Westbrook Corporate Center, Suite 500

Westchester, Illinois 60154

(708) 492-7000

(Name, address and telephone number of agent for service)

Copy to:

Maryann A. Waryjas, Esq.

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661-3693

(312) 902-5200

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this registration statement becomes effective.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Notes	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
11% Senior Notes due 2013	$150,000,000	100%	$150,000,000	$17,655
Guarantees of 11% Senior Notes due 2013	—	—	—	(2)

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933.

(2) Pursuant to Rule 457(n), no additional registration fee is payable with respect to the guarantees.

The co-registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the co-registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Insurance Auto Auctions, Inc.

Table of Additional Registrants

Exact Name of Additional Registrant as Specified in its Charter*	Primary Standard Industrial Classification Number	State or Other Jurisdiction of Incorporation	I.R.S. Employer Identification Number
Insurance Auto Auctions Corp.	5010	Delaware	95-4455113
IAA Services, Inc.	7549	Illinois	36-4294285
IAA Acquisition Corp.	5010	Delaware	36-4351076

* The address for each of the additional registrants is c/o Insurance Auto Auctions, Inc., Two Westbrook Corporate Center, Suite 500, Westchester, Illinois 60154, telephone: (708) 492-7000.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion dated August 23, 2005

PRELIMINARY PROSPECTUS

INSURANCE AUTO AUCTIONS, INC.

Offer to Exchange

$150,000,000 Outstanding

11% Senior Notes due 2013

for $150,000,000 Registered

11% Senior Notes due 2013

The Exchange Offer

• We are offering to exchange all of our outstanding 11% Senior Notes due 2013, or the old notes, that are validly tendered and not validly withdrawn for an equal principal amount of new 11% Senior Notes due 2013 that are freely tradable, or the new notes. The old notes and the new notes are sometimes called the notes.

• You may withdraw tenders of old notes at any time prior to the expiration of the exchange offer.

• The exchange offer will expire at 5:00 p.m., New York City time, on                          , 2005, unless we extend it. We do not currently intend to extend the expiration date.

The New Notes

• The terms of the new notes will be substantially identical to those of the old notes, except that the new notes:

• will have been registered under the Securities Act of 1933, as amended;

• will not bear restrictive legends;

• will not contain provisions relating to liquidated damages in connection with the old notes under circumstances related to the timing of the exchange offer;

• will bear a different CUSIP number from the old notes; and

• will not entitle holders to the registration rights that apply to the old notes.

• The new notes will represent the same debt as the old notes, and we will issue the new notes under the same indenture.

• The obligations of the issuer under the new notes will be guaranteed by the issuer’s existing and future domestic subsidiaries with certain exceptions.

Investing in the new notes involves a high degree of risk. See “ Risk Factors” beginning on page 11.

Resales of New Notes

• There is no existing public market for the old notes or the new notes. We do not intend to list the new notes on any securities exchange or seek approval for quotation through any automated trading system.

Each broker-dealer that receives new notes for its own account in exchange for old notes must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. If the broker-dealer acquired the old notes as a result of market-making activities or other trading activities, the broker-dealer may use the prospectus for the exchange offer, as supplemented or amended, in connection with the resale of new securities. A broker-dealer may not participate in this exchange offer with respect to old notes acquired other than as a result of market-making activities or trading activities. See “Plan of Distribution.”

Neither the Securities and Exchange Commission, or the SEC, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is         , 2005.

TABLE OF CONTENTS

	Page
AVAILABLE INFORMATION	i
TERMS USED IN THIS PROSPECTUS	ii
FORWARD-LOOKING INFORMATION	iii
TRADEMARKS AND TRADE NAMES	iii
SUMMARY	1
SUMMARY OF THE EXCHANGE OFFER	5
SUMMARY OF TERMS OF THE NEW NOTES	9
RISK FACTORS	11
THE TRANSACTIONS	20
EXCHANGE OFFER	21
USE OF PROCEEDS	34
CAPITALIZATION	35
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA	36
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION	38
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43
BUSINESS	54
MANAGEMENT	66
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERSHIP	73
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	75
DESCRIPTION OF SENIOR CREDIT FACILITIES	78
DESCRIPTION OF NOTES	80
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS	124
PLAN OF DISTRIBUTION	128
LEGAL MATTERS	129
EXPERTS	129
WHERE YOU CAN FIND MORE INFORMATION	129
INDEX TO FINANCIAL STATEMENTS	F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2
PART II INFORMATION NOT REQUIRED IN PROSPECTUS	II-1

AVAILABLE INFORMATION

In connection with the exchange offer, the issuer and the guarantors have filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933, as amended, or the Securities Act. This prospectus constitutes a part of the registration statement. As permitted under SEC rules, the prospectus does not include all of the information contained in the registration statement. We refer you to the registration statement, including all amendments, supplements, schedules and exhibits thereto, for further information about us and the new notes. References in this prospectus to any of our contracts or other documents are not necessarily complete. If we have filed any documents as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of that document.

We are not currently subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The indenture governing the notes requires that we furnish to the trustee and holders of the notes reports and other information called for by rules under the Exchange Act. In addition, for so long as any notes remain outstanding, if at any time we and the guarantors are not required to file with the SEC the reports described in the preceding sentence, we and the guarantors have agreed that we will furnish to the holders of notes, to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to 144A(d)(4) under the Securities Act. See “Description of Notes—Certain Covenants—Reports.”

i

You may read and copy any materials filed with the SEC at the SEC Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Upon the effectiveness of the registration statement, we will become subject to the information and periodic report requirements of the Exchange Act and, accordingly, will file periodic reports and other information with the SEC. These periodic reports and other information will be available for inspection and copying at the SEC’s Public Reference Room and through the SEC’s Internet site at http//www.sec.gov.

You may also obtain a copy of the exchange offer’s registration statement and other information that we file with the SEC at no cost by calling us or writing to us at the following address:

Insurance Auto Auction, Inc.

Two Westbrook Corporate Center, Suite 500

Westchester, Illinois 60154

Attn: Chief Executive Officer

(708) 492-7000

In order to obtain timely delivery of such materials, you must request documents from us no later than five business days prior to the expiration date. The expiration date is             , 2005.

TERMS USED IN THIS PROSPECTUS

Unless the context indicates otherwise, in this prospectus:

• the term “Axle Holdings” refers to Axle Holdings, Inc., the corporate parent of Axle Merger;

• the term “Axle Merger” refers to Axle Merger Sub, Inc., the entity that merged with and into IAAI as part of the transactions;

• the term “continuing investors” refers to Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley;

• the term “guarantors” refers, collectively, to the domestic subsidiaries of IAAI who have guaranteed or in the future will guarantee the notes;

• the terms “IAAI,” “we,” “us,” “our” and other similar terms refer to Insurance Auto Auctions, Inc. and its subsidiaries;

• the term “IAAI Finance” refers to IAAI Finance Corp., the original issuer of the old notes;

• the term “issuer” refers to Insurance Auto Auctions, Inc.;

• the term “Kelso” refers to Kelso & Company, L.P., a New York based private investment firm;

• the term “LLC” refers to Axle Holdings II, LLC, the limited liability company parent of Axle Holdings and an entity controlled by affiliates of Kelso;

• the term “Magnetite” refers to Magnetite Asset Investors III, L.L.C.;

• the term “merger” refers to the merger of Axle Merger with and into IAAI and the merger of IAAI Finance with and into IAAI on May 25, 2005;

• the term “Parthenon” refers to Parthenon Investors II, L.P.; and

ii

• the term “transactions” refers, collectively, to the merger and the following transactions which occurred in connection with the merger;

• the equity contributions made by Kelso;

• the investment by the continuing investors;

• our entry into senior credit facilities;

• the offering of the old notes and the application of the net proceeds therefrom; and

• the repayment of outstanding principal and accrued interest under our prior credit facility.

You should rely only on the information provided in this prospectus. Information that we file later with the SEC will automatically update the information in this prospectus. Any statement so modified or superseded will not be deemed to constitute a part of this prospectus, except as so modified or superseded. We have not authorized anyone else to provide you with different or additional information. We are not making an offer of these securities in any state or other jurisdiction where such offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front cover of this document.

This prospectus has been prepared by us based on information we have or have obtained from sources we believe to be reliable. Summaries of documents contained in this prospectus may not be complete.

You should consult your own legal, tax and business advisors regarding an investment in the new notes. Information in this prospectus is not legal, tax or business advice.

This prospectus contains information with respect to market share and industry conditions which are based upon estimates of our management, using various third-party sources where available. While management believes that such estimates are reasonable and reliable, we have not independently verified any of the data from third-party sources. Similarly, our internal research is based upon management’s understanding of industry conditions, and such information has not been verified by any independent resources.

FORWARD-LOOKING INFORMATION

This prospectus contains forward-looking statements that are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements. In some cases, you can identify forward looking statements by use of words such as “may,” “will,” “should,” “anticipates,” “believes,” “expects,” “plans,” “future,” “intends,” “could,” “estimate,” “predict,” “projects,” “targeting,” “potential” or “contingent,” the negative of these terms or other similar expressions. Our actual results could differ materially from those discussed or implied herein. Important factors that could cause actual results to differ materially from our expectations include, without limitation, those disclosed under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this prospectus. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publish, update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

TRADEMARKS AND TRADE NAMES

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. Some of our more important service marks and trademarks that appear in this prospectus include CSA Today^SM, I-bid LIVE^SM, www.iaai-bid.com^SM, Run & Drive^®, ServicePartners^TM, BidFast^®, CarCrush^®, FastTow^® and FastTrack^®, which may be registered in the United States and in other jurisdictions.

iii

SUMMARY

The following summary contains basic information about us, the exchange offer and the new notes. It likely does not contain all the information that is important to you in making a decision to exchange the old notes. For a more complete understanding of the exchange offer, we encourage you to read this entire prospectus, including the “Risk Factors,” the financial statements and related notes, and the documents to which we have referred you, before deciding whether to exchange the old notes for new notes.

Our Company

We are the second largest provider of salvage vehicle auction services in the United States. We facilitate an efficient market between suppliers of salvage vehicles, primarily insurance companies, and buyers of salvage vehicles, primarily dismantlers and vehicle rebuilders. We provide salvage auction solutions for the redistribution of damaged vehicles that are designated as total-losses by insurance companies, recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made and other salvage vehicles. We enjoy long-term relationships with all the major automobile insurance companies in the United States, including Allstate, GEICO, Nationwide, Progressive, State Farm, USAA and Zurich. In addition, we currently maintain relationships with over 38,500 registered buyers of salvage vehicles. We serve our customer base through 80 sites in 32 states, with locations in 60 of the top 75 metropolitan markets in the United States.

Through our broad service offering, including our hybrid live/Internet auction capabilities, we seek to increase the net proceeds per vehicle generated on behalf of our salvage suppliers and reduce their administrative costs and claim recovery cycle time. We provide our buyers with the salvage vehicles they need to fulfill their replacement part or vehicle rebuild requirements. We earn fees for our services from both suppliers and buyers of salvage vehicles. Most of our salvage vehicles are sold on a consignment basis, where we do not take ownership of the vehicles sold.

Our Competitive Strengths

Leading market position. We are the second largest provider of salvage vehicle auction services in the United States.

National distribution network. Our national facilities footprint allows us to be a single source solution for our insurance company customers’ salvage disposal needs on a national or regional basis. Our insurance company customers continue to consolidate and we have the scale necessary to service them more efficiently and effectively than our smaller competitors.

Innovative, value-added service offerings. We offer complete service solutions to create the most efficient auction process for suppliers and buyers of salvage vehicles. Our range of service offerings include:

• Live auctions with Internet-bidding capabilities. We offer our buyer customers the ability to (i) participate in person at a live auction at one of our branch facilities; (ii) pre-bid over the Internet; and (iii) bid over the Internet in real time in a live auction through our integrated Web-based bidding platform, I-bid LIVE.

• CSA Today. We offer a data management system to our insurance company suppliers that provides them with the capability to electronically assign salvage vehicles to us and to track and manage their salvage vehicle inventory throughout the salvage process with real-time status reports.

• Vehicle value enhancement services. We offer preservation services, such as custom shrink wrapping, preparation services, such as washing, detailing and key-making and presentation services, such as car-starting and our Run & Drive auction.

1

• National Salvage Network. We offer a single source solution that allows an insurance company customer to assign all of its salvage vehicles to our national service center, which enables us to distribute vehicle consignments throughout the United States.

• Vehicle inspection centers. We maintain vehicle inspection centers at many of our sites where we provide inspection services for suspected total-loss vehicles. These centers minimize vehicle storage charges incurred by our insurance company customers at temporary storage facilities or repair shops and also improve service time for the policyholder.

In addition, we offer electronic data interchange of titling information, salvage returns analyses, vehicle inspection services and FastTow towing services. We also offer our BidFast service that provides salvage valuation solutions for situations such as owner retention and partial loss conversion, and our FastTrack service that combines a comprehensive appraisal service with our salvage service resources so our insurance company customers can make a total-loss decision more quickly.

Proprietary technology platform. We developed our proprietary Web-based information system, Automated Salvage Auction Processing system, or ASAP, to streamline all aspects of our operations and centralize operational data collection. ASAP also provides our salvage vehicle suppliers with 24-hour online access to powerful tools to manage their salvage disposition process, including inventory management, salvage returns analysis and electronic data interchange of titling information. Our technology platform allows us to efficiently manage our business and improve customer returns on salvage, shorten our customers’ claims processing cycle and lower their claims administration costs.

Long-term relationships with vehicle suppliers and buyers. We have long-term relationships with all of the major U.S. automobile insurance companies, many of whom have been our clients for decades. Our largest vehicle suppliers include Allstate, GEICO, Nationwide, Progressive, State Farm, USAA and Zurich. As a national provider of salvage vehicle auction services, we have benefited and expect to continue to benefit from consolidation within the automobile insurance industry, which provides us with most of the salvage vehicles that we process. We maintain one of the nation’s largest databases of registered salvage buyers, with more than 38,500 dismantlers, rebuilders, salvage dealers, body/repair shops and other buyers from across the United States and abroad.

Experienced management team. We have a senior management team consisting of seven individuals with over 80 years of combined experience in the automobile physical damage insurance services industry. Led by Thomas C. O’Brien, our president and chief executive officer, our management team has improved our business processes, systems and facilities network, which has in turn significantly improved our financial results.

Our Business Strategy

Increase auction sales volumes. We seek to continue to grow our unit volumes with our insurance company customers and other vehicle providers by generating better returns on salvage vehicles and offering a broad selection of services to prospective suppliers.

Drive increased profitability. We intend to enhance profitability at our existing sites by leveraging our broad operating platform and integrated systems. Our available capacity, centralized administrative functions and ability to leverage the fixed cost component of our branch costs provides significant profit growth potential as we continue to drive higher volume levels. We plan to increase revenues per vehicle by continuing to improve our service offerings.

Continue to invest in technology. We will continue to invest in and improve our technology infrastructure to expand our service offerings and improve our operating efficiencies. With our comprehensive portfolio of services,

2

we are able to provide our customers with valuable, real-time information regarding their salvage disposition process, including inventory management data, salvage returns analysis and electronic data interchange of titling information.

Expand through selective acquisitions and greenfield sites. We expect to continue pursuing growth through a disciplined acquisition and greenfield expansion strategy in selected markets.

Recent Developments

The Transactions

On February 22, 2005, Axle Holdings, Axle Merger and IAAI entered into a merger agreement that provided for the merger of Axle Merger with and into IAAI, with IAAI continuing as the surviving corporation, which we refer to in this prospectus as the “merger.” Upon completion of the merger and related transactions, IAAI became a direct, wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso).

The following transactions occurred in connection with the merger:

• approximately 11.8 million shares of IAAI’s outstanding common stock converted into the right to receive $28.25 per share in cash;

• all outstanding options to purchase shares of IAAI’s common stock (other than certain options held by the continuing investors, i.e., Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley, which were exchanged into stock options of Axle Holdings) were canceled in exchange for payments in cash of $28.25 per underlying share, less the applicable option exercise price;

• affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors contributed approximately $143.6 million in cash to the LLC, which in turn held all the outstanding shares of common stock of Axle Holdings immediately after the closing of the transactions;

• the continuing investors exchanged stock options of IAAI with an aggregate spread value of approximately $3.3 million into stock options of Axle Holdings with an equivalent aggregate spread value;

• Axle Merger entered into the senior credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon the completion of the merger, IAAI assumed Axle Merger’s obligations under such credit facilities, and all of IAAI’s domestic subsidiaries, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp., guaranteed such credit facilities;

• the LLC contributed to Axle Merger, through Axle Holdings, approximately $143.6 million in cash, representing the cash equity contribution by affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors;

• IAAI Finance, the original issuer of the old notes, merged with and into IAAI, with IAAI, continuing as the surviving corporation; and

3

• IAAI assumed IAAI Finance’s obligations under the old notes and all of IAAI’s domestic subsidiaries guaranteed the old notes on a senior unsecured basis at the time IAAI Finance merged with and into IAAI.

We used the net proceeds from these contributions and financings to: (i) fund the cash consideration payable to our shareholders and option holders under the merger agreement; (ii) repay any outstanding principal and accrued interest under our existing credit facility as of the closing of the merger; and (iii) pay related transaction fees and expenses.

Upon completion of the transactions, the equity of IAAI became privately held and our common stock subsequently was deregistered with the SEC and delisted from the NASDAQ Stock Market.

Our Structure

The chart below illustrates our ownership and corporate structure:

Our Sponsor

Kelso is a New York-based private investment firm founded in 1971 that specializes in acquisition transactions. Since 1980, Kelso has acquired 82 companies requiring total capital at closing of approximately $21.0 billion.

Our principal executive offices are located at Two Westbrook Corporate Center, Suite 500, Westchester, Illinois 60154. Our telephone number is (708) 492-7000.

4

SUMMARY OF THE EXCHANGE OFFER

On April 1, 2005, IAAI Finance completed an offering of $150,000,000 aggregate principal amount of 11% Senior Notes due 2013, the old notes to which the exchange offer applies, to Deutsche Bank Securities Inc. and Bear, Stearns & Co. Inc. or, collectively, the initial purchasers, in reliance on exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. On May 25, 2005, IAAI Finance merged with and into IAAI and IAAI assumed IAAI Finance’s obligations under the old notes. All of IAAI’s domestic subsidiaries guaranteed the old notes at the time IAAI Finance merged with and into IAAI. In connection with the initial purchasers’ purchase of the old notes, IAAI Finance agreed, among other things, to commence the exchange offer after the initial offering of the old notes. IAAI and the guarantors assumed this obligation in connection with the merger. The initial purchasers subsequently resold the old notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States under Regulation S.

The Exchange Offer We are offering to exchange 11% Senior Notes due 2013 fully and unconditionally guaranteed by the guarantors, jointly and severally, for the old notes. The new notes will have been registered under the Securities Act. To exchange your old notes, you must properly tender them, and IAAI must accept them. IAAI will exchange all old notes that you validly tender and do not validly withdraw. We will cancel all old notes accepted for the exchange and issue new notes as soon as practicable after the expiration of the exchange offer. See “Exchange Offer—Terms of the Exchange Offer” and “Exchange Offer—Conditions.”

Resale of the New Notes Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that, if you are not a broker-dealer, the new notes (together with the related guarantees) you receive in this exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, if:

• you are acquiring the new notes in the ordinary course of your business;

• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in a “distribution,” as defined in the Securities Act, of the new notes; and

• you are not an “affiliate,” within the meaning of Rule 405 of the Securities Act, of IAAI or any of the guarantors.

If any of these conditions are not satisfied and you transfer any new notes issued to you in this exchange offer without delivering a resale prospectus meeting the requirements of the Securities Act or without an exemption from registration of your new notes from these requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability.

Each broker-dealer that is issued new notes for its own account in exchange for old notes, where the old notes were acquired by it as a result of market-making activities or other trading activities, may be

5

deemed an “underwriter” within the meaning of the Securities Act and must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. A broker-dealer may use this prospectus for an offer to resell, resale or other transfer of the new notes issued to it in this exchange offer in exchange for old notes that were acquired by that broker-dealer as a result of market-making or other trading activities. For more information, see “Exchange Offer—Resale of the New Notes.”

Any holder of old notes who:

• is an affiliate of IAAI or any guarantor;

• does not acquire new notes in the ordinary course of its business; or

• tenders its old notes in this exchange offer with the intention to participate, or for the purpose of participating, in a distribution of new notes

must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the new notes, in the absence of an exemption from such requirements. See “Exchange Offer—Resale of the New Notes.”

Expiration Date The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2005, unless we decide to extend the expiration date, in which case the term “expiration date” means the latest date and time to which we extend this exchange offer. For more information, see “Exchange Offer—Expiration Date; Extensions; Amendments.”

Conditions to the Exchange Offer The exchange offer is subject to customary conditions, including that the exchange offer not violate applicable law or any applicable interpretation of the staff of the SEC. This exchange offer is not conditioned upon any minimum principal amount of the old notes being tendered. See “Exchange Offer—Conditions.”

Exchange Agent Wells Fargo Bank, National Association, is serving as the exchange agent in connection with the exchange offer. The address and telephone number of the exchange agent are set forth under the section “Exchange Offer—Exchange Agent.”

Procedures for Tendering Old Notes If you wish to tender your old notes for new notes in this exchange offer, then before 5:00 p.m., New York City time, on the expiration date you must either:

• transmit an original or a facsimile of a properly completed and duly executed copy of the letter of transmittal which accompanies this prospectus, together with your old notes and any other documentation required by the letter of transmittal, at the address provided on the cover page of the letter of transmittal;

6

• if the old notes you own are held of record by The Depositary Trust Company, or DTC, in book-entry form and you are making delivery by book-entry transfer, deliver to the exchange agent (1) a timely confirmation of book-entry transfer of your old notes into the account of the exchange agent at DTC, and (2) a computer-generated message transmitted by means of DTC’s Automated Tender Offer Program System, or ATOP, in which you acknowledge and agree to be bound by the terms of the letter of transmittal and which, when received by the exchange agent, will form a part of a confirmation of book-entry transfer. As part of the book-entry transfer, DTC will facilitate the exchange of your old notes and update your account to reflect the issuance of the new notes to you. ATOP allows you to electronically transmit your acceptance of the exchange offer to DTC instead of physically completing and delivering a letter of transmittal to the exchange agent; or

• comply with the procedures described below under “Guaranteed Delivery Procedures.”

For more information, see “Exchange Offer—Procedures for Tendering,” “Exchange Offer—DTC Book-Entry Transfer” and “Exchange Offer—Guaranteed Delivery Procedures.”

Special Procedures for Beneficial Owners If you are the beneficial owner of book-entry interests and your name does not appear on a security position listing of DTC as the holder of the book-entry interests, or if you are a beneficial owner of old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the book-entry interests or old notes in the exchange offer, you should contact the person in whose name your book-entry interests or old notes are registered promptly and instruct that person to tender on your behalf. For more information, see “Exchange Offer—Procedures for Tendering.”

Guaranteed Delivery Procedures If you wish to tender your old notes and:

• time will not permit your old notes or other required documents to reach the exchange agent by the expiration date; or

• the procedure for book-entry transfer cannot be completed on time;

then you may tender your old notes by completing a notice of guaranteed delivery and complying with the guaranteed delivery procedures. For more information, see “Exchange Offer—Guaranteed Delivery Procedures.”

Withdrawal Rights You may withdraw the tender of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw, you must deliver a written or facsimile transmission notice of

7

withdrawal to the exchange agent at its address indicated on the cover page of the letter of transmittal before 5:00 p.m., New York City time, on the expiration date. For more information, see “Exchange Offer—Withdrawal of Tenders.”

Registration Rights Agreement We have undertaken this exchange offer pursuant to the terms of the registration rights agreement we entered into with the initial purchasers of the old notes. We agreed to use our commercially reasonable efforts to cause the registration statement of which this prospectus is a part to become effective within 180 days after the registration statement is filed with the SEC, and to consummate the exchange offer within 30 business days after the effective date of the registration statement.

To the extent that old notes are tendered and accepted in this exchange offer, the trading market for the old notes could be adversely affected.

Consequences of Failure to Exchange If you do not tender your old notes or we reject your tender, your old notes will remain outstanding and will continue to be subject to the indenture and to the provisions in the indenture regarding the transfer and exchange of the old notes and the restrictions on transfer set forth in the legends on the old notes. In general, the old notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with this exchange offer, we do not currently anticipate that we will register the old notes under the Securities Act. For more information, see “Exchange Offer—Consequences of Failure to Exchange.”

Material Federal Income Tax Considerations We believe that the exchange of old notes for new notes will not be a taxable event for United States federal income tax purposes. For more information, see “Certain U.S. Federal Income Tax Considerations.”

Use of Proceeds We will not receive any cash proceeds from the issuance of new notes pursuant to the exchange offer. We will pay all of our expenses incident to the exchange offer.

8

SUMMARY OF TERMS OF THE NEW NOTES

The terms of the new notes are the same as the terms of the old notes, except that the new notes will be registered under the Securities Act. As a result, the new notes will not bear legends restricting their transfer and will not have the benefit of the registration rights and liquidated damages provisions contained in the old notes. The new notes represent the same debt as the old notes. Both the old notes and the new notes are governed by the same indenture; however, the new notes will bear a different CUSIP number from the old notes and will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the old notes.

Issuer IAAI Finance was the issuer of the old notes. Upon consummation of Axle Merger’s merger with and into IAAI, IAAI Finance merged with and into IAAI and at such time IAAI assumed IAAI Finance’s obligations under the notes and the related indenture. Therefore, IAAI will be the issuer of the new notes.

Notes Offered $150,000,000 aggregate principal amount of 11% Senior Notes due 2013

Maturity Date April 1, 2013

Interest 11% per year

Interest Payment Dates April 1 and October 1, beginning on April 1, 2006

Guarantees The old notes are, and the new notes will be, guaranteed by IAAI’s existing domestic subsidiaries on a joint and several basis. In addition, any future domestic subsidiary of IAAI that guarantees any indebtedness of IAAI (other than immaterial indebtedness) will also guarantee the notes.

Ranking The old notes are, and the new notes will be, IAAI’s unsecured senior obligations, ranked equally in right of payment with existing and future senior indebtedness of IAAI and senior in right of payment to future subordinated indebtedness of IAAI. In the event of a bankruptcy or insolvency, IAAI’s secured lenders will have a prior secured claim to any collateral securing the debt owed to them. The guarantees of the notes by IAAI’s domestic subsidiaries are senior unsecured obligations of such subsidiaries and rank equally in right of payment with existing and future senior indebtedness of such subsidiaries and senior in right of payment to future subordinated indebtedness of such subsidiaries. In the event of a bankruptcy or insolvency, such subsidiaries’ secured lenders will have a prior secured claim to any collateral securing the debt owed to them.

As of June 26, 2005, IAAI had total debt on a consolidated basis of $266.1 million, of which $116.1 million was secured, including $115.0 million under our senior credit facilities. There was an additional $47.7 million that was available for additional borrowings under the revolving portion of our senior credit facilities. See “Selected Historical Consolidated Financial Data” and “Risk Factors—Risks Related to the New Notes.”

9

Optional Redemption IAAI may redeem the notes in whole or in part, at any time on or after April 1, 2009 at the redemption prices set forth in the “Optional Redemption—Description of Notes,” plus accrued and unpaid interest. In addition, at any time before April 1, 2008, IAAI can redeem up to 35% of the aggregate original principal amount of the notes with the net cash proceeds of one or more equity offerings at the redemption prices set forth in “Optional Redemption—Description of the Notes,” plus accrued and unpaid interest, as long as at least 65% of the aggregate principal amount of the notes originally issued under the indenture remains outstanding immediately following such redemption. See “Description of Notes—Optional Redemption.”

Change of Control Offer If a change of control of IAAI occurs, IAAI must offer to purchase the notes at 101% of their aggregate principal amount, plus accrued and unpaid interest.

Certain Covenants The indenture governing the notes contains covenants limiting IAAI’s (and most or all of IAAI’s subsidiaries’) ability to:

• borrow money;

• incur liens;

• pay dividends or make certain other restricted payments or investments;

• issue disqualified stock (as defined in the indenture);

• merge, consolidate or sell all or substantially all of our and our restricted subsidiaries’ assets;

• enter into certain transactions with affiliates;

• create restrictions on dividends or other payments by our restricted subsidiaries;

• sell certain assets and use proceeds from asset sales; and

• create guarantees of indebtedness by restricted subsidiaries.

These covenants are subject to a number of important limitations and exceptions. See “Description of Notes—Certain Covenants.”

Absence of a Public Market for the New Notes The new notes generally will be freely transferable, but they will be new securities for which there will be no established market. Accordingly, we cannot assure you as to the development or liquidity of any market for the new notes. We do not intend to apply for a listing of the new notes on any securities exchange or any automated dealer or quotation system.

Use of Proceeds We will not receive any cash proceeds from the exchange offer.

Risk Factors Investing in the new notes involves risks. You should consider carefully all of the information set forth in this prospectus and, in particular, you should evaluate the “Risk Factors” for a discussion of risks that you should consider before deciding whether to invest in the new notes.

10

RISK FACTORS

You should carefully consider the following risk factors, in addition to the other information contained in this prospectus, before you decide whether to exchange your old notes in the exchange offer. Additional risks and uncertainties not currently known to us, or that we currently consider not material, may also materially and adversely affect our business, financial condition, results of operations or our ability to meet our obligations under the notes.

Risks Related to the Notes

You may have difficulty selling the old notes that you do not exchange.

If you do not exchange your old notes for new notes in the exchange offer, the old notes you hold will continue to be subject to the existing transfer restrictions. In general, you may not offer or sell the old notes except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not plan to register the old notes and upon completion of the exchange offer you will not be entitled to any rights to have your old notes registered under the Securities Act. If you continue to hold any old notes after the exchange offer is completed, you may have trouble selling them because of the restrictions on transfer of the old notes.

You must comply with the procedures of the exchange offer in order to receive the new notes.

You are responsible for complying with all exchange offer procedures. You will only receive new notes in exchange for your old notes if, prior to the expiration date, you deliver the following to the exchange agent:

• old notes or a book-entry confirmation of a book-entry transfer of the old notes into the exchange agent’s account at DTC;

• the letter of transmittal (or a facsimile thereof), properly completed and duly executed by you, together with any required signature guarantees; and

• any other documents required by the letter of transmittal.

You should allow sufficient time to ensure that the exchange agent receives all required documents before the expiration date. Neither we nor the exchange agent has any duty to inform you of defects or irregularities with respect to the tender of your old notes for exchange. See “The Exchange Offer.”

Our substantial leverage may impair our financial condition and prevent us from fulfilling our obligations under the notes.

We currently have a substantial amount of debt. As of June 26, 2005, our total debt on a consolidated basis was approximately $266.1 million, and we also had $47.7 million that was available for additional borrowings under the revolving portion of our senior credit facilities. As of June 26, 2005, our earnings were insufficient to cover fixed charges by $5.8 million. See “Selected Historical Consolidated Financial Information” for additional information.

Our substantial debt could have important consequences to you, including:

• making it more difficult for us to satisfy our obligations with respect to the notes;

• increasing our vulnerability to general adverse economic and industry conditions by making it more difficult for us to react quickly to changing conditions;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions and other general corporate requirements;

• requiring a substantial portion of our cash flow from operations for the payments of interest on our debt and reducing our ability to use our cash flow to fund working capital, capital expenditures, acquisitions and general corporate requirements;

11

• exposing us to risks inherent in interest rate fluctuations because some of our borrowings will be at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

• placing us at a competitive disadvantage compared with our competitors that have less debt.

Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage.

Subject to specified limitations, the indenture governing the notes and the credit agreement governing our senior credit facilities permit us and our subsidiaries to incur substantial additional debt. If new debt is added to our and our subsidiaries’ current debt levels, the risks described in the previous risk factor could intensify. See “Description of Senior Credit Facilities” and “Description of Notes—Certain Covenants—Limitation on Indebtedness” for additional information.

Covenant restrictions under our indebtedness may limit our ability to operate our business.

The credit agreement governing our senior credit facilities and the indenture governing the notes will, and our future debt agreements may, contain covenants that may restrict our ability to finance future operations or capital needs or to engage in other business activities. Our senior credit facilities and the indenture restrict, among other things, our ability and the ability of our restricted subsidiaries to:

• borrow money;

• incur liens;

• pay dividends or make certain other restricted payments or investments;

• issue disqualified stock;

• merge, consolidate or sell all or substantially all of our and our restricted subsidiaries’ assets;

• enter into certain transactions with affiliates;

• create restrictions on dividends or other payments by our restricted subsidiaries;

• sell certain assets and use proceeds from asset sales; and

• create guarantees of other indebtedness by restricted subsidiaries.

In addition, our senior credit facilities require us to maintain specified financial ratios and satisfy certain financial condition tests. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet those financial ratios and financial condition tests. We cannot assure you that we will meet those tests or that the lenders will waive any failure to meet those tests. A breach of any of these covenants would result in a default under our senior credit facilities and the indenture. If an event of default under our senior credit facilities occurs, the lenders could terminate all commitments to lend and elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. If we were unable to pay such amounts, the lenders could proceed against the collateral pledged to them. We have pledged substantially all of our assets to the lenders under our senior credit facilities. If the lenders proceeded against the collateral, we cannot assure you that we would have sufficient assets to pay amounts due on the notes. As a result, you may receive less than the full amount you would be otherwise entitled to receive on the notes. See “Description of Senior Credit Facilities,” “Description of Notes—Certain Covenants—Limitation on Indebtedness” and “Description of Notes—Certain Covenants—Limitation on Liens” for additional information.

12

The notes and guarantees are not secured by any of our assets. Our senior credit facilities are secured by, and our bank lenders will have a prior claim on, substantially all of our assets.

The notes and the guarantees of the notes are not secured by any of our assets. However, our senior credit facilities are secured by a pledge of 100% of our stock and the stock of our existing and certain future domestic subsidiaries and substantially all our assets. If we become insolvent or are liquidated, or if payment under any of the instruments governing our secured debt is accelerated, the lenders under those instruments will be entitled to exercise the remedies available to a secured lender under applicable law and pursuant to the instruments governing such debt. Accordingly, the lenders under our senior credit facilities have a prior claim on our assets securing the debt owed to them, and it is possible that our remaining assets might be insufficient to satisfy your claims in full.

As of June 26, 2005, the aggregate amount of our and the guarantors’ secured indebtedness was approximately $116.1 million, and we also had $47.7 million that was available for additional borrowing under the revolving portion of our senior credit facilities. We are permitted to incur substantial additional secured indebtedness under the terms of the indenture. See “Description of Notes—Certain Covenants—Limitation on Indebtedness” and “Description of Notes—Certain Covenants—Limitation on Liens.”

We require a significant amount of cash to operate our business and to service our indebtedness, including the notes, and our ability to generate sufficient cash depends upon many factors, some of which are beyond our control.

Our ability to make payments on and refinance our debt and to fund working capital needs and planned capital expenditures depends on our ability to generate cash flow in the future. To some extent, this is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We cannot assure you that our business will continue to generate cash flow from operations at levels sufficient to permit us to pay principal, premium, if any, and interest on our indebtedness or that our cash needs will not increase. If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other needs, we may have to refinance all or a portion of our debt, obtain additional financing or reduce expenditures or sell assets that we deem necessary to our business. We cannot assure you that any of these measures would be possible or that any additional financing could be obtained. The inability to obtain additional financing could have a material adverse effect on our financial condition and on our ability to meet our obligations to you under the notes.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

Any default under the agreements governing our indebtedness, including a default under our senior credit facilities that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including our senior credit facilities), we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, and institute foreclosure proceedings against our assets, the lenders under our revolving credit facility could elect to terminate their commitments and cease making further loans, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to seek to obtain waivers from the required lenders under our senior credit facilities to avoid being in default. If we breach our covenants under our senior credit facilities and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under our senior credit facilities, the lenders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. See “Description of Senior Credit Facilities” and “Description of Notes.”

13

We may not be able to make the change of control offer required by the indenture.

Upon a change of control, as defined in the indenture, subject to certain conditions, we are required to offer to repurchase all outstanding notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. The source of funds for that purchase of notes will be our available cash or cash generated from our subsidiaries’ operations or other potential sources, including borrowings, sales of assets or sales of equity. We cannot assure you that sufficient funds from such sources will be available at the time of any change of control to make required repurchases of notes tendered. In addition, the terms of our senior credit facilities limit our ability to repurchase the notes and provide that certain change of control events will constitute an event of default under our senior credit facilities. Our future debt agreements may contain similar restrictions and provisions. If the holders of the notes exercise their right to require us to repurchase all the notes upon a change of control, the financial effect of this repurchase could cause a default under our other debt, even if the change of control itself would not cause a default. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of our other debt and the notes or that restrictions in our senior credit facilities and the indenture will not allow such repurchases. In addition, certain corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a change of control under the indenture. See “Description of Notes—Change of Control” and “Description of Senior Credit Facilities” for additional information.

Fraudulent transfer statutes may limit your rights as a holder of the notes.

Federal and state fraudulent transfer laws permit a court, if it makes certain findings, to:

• avoid all or a portion of our obligations to holders of the notes;

• subordinate our obligations to holders of the notes to our other existing and future indebtedness, entitling other creditors to be paid in full before any payment is made on the notes; and

• take other action detrimental to holders of the notes, including invalidating the notes.

• In that event, we cannot assure you that you would ever be repaid.

Under federal and state fraudulent transfer laws, in order to take any of those actions, courts will typically need to find that, at the time the notes were issued, we:

(1) issued the notes with the intent of hindering, delaying or defrauding current or future creditors; or

(2) received less than fair consideration or reasonably equivalent value for incurring the indebtedness represented by the notes; and

(a) were insolvent or were rendered insolvent by reason of the issuance of the notes;

(b) were engaged, or were about to engage, in a business or transaction for which our assets were unreasonably small; or

(c) intended to incur, or believed or should have believed we would incur, debts beyond our ability to pay as such debts mature.

Many of the foregoing terms are defined in or interpreted under those fraudulent transfer statutes. To the extent that proceeds of the offering of the old notes were used to make payments to our former shareholders, a court could find that we did not receive fair consideration or reasonably equivalent value for the incurrence of the debt represented by the notes.

The measure of insolvency for purposes of the foregoing considerations will vary depending on the law of the jurisdiction that is being applied in any such proceeding. Generally, a company would be considered insolvent if, at the time it incurred the debt:

• the sum of its debts (including contingent liabilities) is greater than its assets, at fair valuation;

14

• the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; or

• it could not pay its debts as they become due.

We cannot assure you what standard a court would apply in determining our solvency and whether it would conclude that we were solvent when we incurred our obligations under the notes.

Our obligations under the new notes will be guaranteed by all of our direct and indirect present and future domestic subsidiaries that guarantee material indebtedness. The guarantees may be subject to review under various laws for the protection of creditors. It is possible that creditors of the guarantors may challenge the guarantees as a fraudulent transfer or conveyance. The analysis set forth above generally would apply, except that the guarantees also could be subject to the claim that, because the guarantees were incurred for the benefit of IAAI, and only indirectly for the benefit of the guarantors, the obligations of the guarantors thereunder were incurred for less than reasonably equivalent value or fair consideration. A court could void a guarantor’s obligation under its guarantee, subordinate the guarantee to the other indebtedness of a guarantor, direct that holders of the notes return any amounts paid under a guarantee to the relevant guarantor or to a fund for the benefit of its creditors, or take other action detrimental to the holders of the notes. In addition, the liability of each guarantor under the indenture will be limited to the amount that will result in its guarantee not constituting a fraudulent conveyance or improper corporate distribution, and there can be no assurance as to what standard a court would apply in making a determination as to what would be the maximum liability of each guarantor.

You cannot be sure that an active trading market will develop for the new notes.

The new notes are a new issue of securities with no established trading market. We do not intend to apply for listing of the new notes on any national securities exchange or for quotation of the new notes on any automated dealer quotation system. A liquid or active trading market for the new notes may not develop. If an active trading market for the new notes does not develop, the market price and liquidity of the new notes may be adversely affected. If the new notes are traded, they may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar securities, our performance and other factors.

The market price for the notes may be volatile.

Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. The market for the notes, if any, may be subject to similar disruptions. Any such disruptions may materially and adversely affect the value of the notes.

Risks Associated with the Exchange Offer

Any outstanding old notes after the consummation of the exchange offer will continue to be subject to existing transfer restrictions, and the holders of old notes after the consummation of the exchange offer may not be able to sell their old notes.

We did not register the old notes under the Securities Act or any state securities laws, nor do we intend to register the old notes after the exchange offer. As a result, the old notes may only be transferred in limited circumstances under the securities laws. If you do not exchange your old notes in the exchange offer, you will lose your right to have the old notes registered under the Securities Act, subject to limitations. If you continue to hold old notes after the exchange offer, you may be unable to sell the old notes. Old notes that are not tendered or are tendered but not accepted will, following the exchange offer, continue to be subject to existing transfer restrictions.

15

If you fail to comply with the procedures for tendering old notes, your old notes may remain outstanding after the consummation of the exchange offer.

The new notes will be issued in exchange for the old notes only after timely receipt by the exchange agent of the old notes or a book-entry confirmation related thereto, or compliance with requirements for guaranteed delivery, a properly completed and executed letter of transmittal or an agent’s message, and all other required documentation. If you want to tender your old notes in exchange for new notes, you should allow sufficient time to ensure timely delivery. Neither we nor the exchange agent are under any duty to give you notification of defects or irregularities with respect to tenders of old notes for exchange. Old notes that are not tendered or are tendered but not accepted will, following the exchange offer, continue to be subject to the existing transfer restrictions. In addition, if you tender the old notes in the exchange offer to participate in a distribution of the new notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. See “The Exchange Offer” and “Plan of Distribution.”

Risks Related to Our Company

Our operating results may fluctuate significantly.

Our operating results have in the past and may in the future fluctuate significantly depending on a number of factors. These factors include, but are not limited to, the actual cash value, or ACV, of salvage vehicles, changes in the market value of salvage vehicles, delays or changes in state title processing, mild weather conditions that cause fewer traffic accidents, changes in regulations governing the processing of salvage vehicles, the availability and quality of salvage vehicles and buyer attendance at salvage auctions. We are also dependent upon receiving a sufficient number of total-loss vehicles as well as recovered theft vehicles to sustain our profit margins. Factors that can affect the number of vehicles received include, but are not limited to, driving patterns, weather conditions, reduction of policy writing by insurance providers, which would affect the number of claims over a period of time, and changes in direct repair procedures that would reduce the number of newer, less damaged total-loss vehicles, which tend to have higher salvage values. Future decreases in the quality and quantity of vehicle inventory, and in particular the availability of newer and less damaged vehicles, could have a material adverse effect on our operating results and financial condition. Additionally, in the last few years there has been a declining trend in theft occurrences which reduces the number of stolen vehicles covered by insurance companies for which a claim settlement has been made. As a result of all the foregoing factors, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance. Furthermore, revenues for any future quarter are not predictable with any significant degree of accuracy, and our operating results may vary significantly due to our relatively fixed expense levels. Due to all of the foregoing factors, it is likely that in some future quarters our operating results will fall below the expectations of public market analysts and investors.

Competition in our industry is intense and, if we are unable to compete effectively, our financial results may be negatively affected.

We face intense competition for the supply of salvage vehicles as well as competition from processors of vehicles from other national and regional salvage pools. We may encounter further competition from existing competitors and new market entrants that are significantly larger and have greater financial and marketing resources. Other potential competitors include used car auction companies, providers of claims software to insurance companies, certain salvage buyer groups and insurance companies, some of which presently supply auto salvage to us. While most insurance companies have abandoned or reduced efforts to sell salvage vehicles without the use of service providers such as us, they may in the future decide to dispose of their salvage directly to end users. We may not be able to compete successfully against current or future competitors, which could impair our ability to grow and achieve or sustain profitability.

16

We depend on a limited number of key insurance companies to supply the salvage vehicles we sell at auction. A significant loss of or significant reduction in business with any of these suppliers could have a material adverse effect on our operating results and financial condition.

Historically, a limited number of insurance companies have supplied a substantial portion of our salvage units. For example, in 2004, the aggregate number of vehicles supplied by our three largest suppliers, State Farm, Zurich and GEICO, accounted for approximately 16%, 11% and 10%, respectively, of our total unit sales. Our agreements with our insurance company suppliers are generally subject to cancellation by either party upon 30 to 90 days’ notice. There can be no assurance that our existing agreements will not be cancelled or that we will be able to enter into future agreements with these suppliers. A loss or reduction in the number of vehicles from any of these suppliers, or adverse changes in the agreements or termination of these agreements, could have a material adverse effect on our operating results and financial condition.

In order to maintain our national presence, we incur a significant amount of fixed costs to provide our services to a small number of insurance company suppliers. We may not be able to realize sufficient revenues from these services to cover our costs, which could materially adversely affect our results of operations.

The provision of our services to insurance company suppliers on a national or regional basis through our nationwide network of facilities results in a significant amount of fixed costs, such as occupancy and labor costs. We may not realize sufficient revenue from these services to cover our expenses, in which case, our operating results and financial condition may be materially adversely affected.

Our business is dependent on information and technology systems. Failure to effectively maintain these systems could materially adversely affect our operating results and financial condition.

Our ability to provide cost-effective salvage vehicle processing solutions to our customers depends in part on our ability to effectively utilize technology to provide value-added services to our customers. We have implemented a new web-based operating system, which allows us to offer hybrid live/Internet auctions and to provide vehicle tracking systems and real-time status reports for our insurance company customers’ benefit, and to support and streamline vehicle registration and tracking, financial reporting, transaction settlement, vehicle title transfer and branch/headquarters communications. Our ability to provide the foregoing services depends on our capacity to store, retrieve and process data, manage significant databases, and expand and periodically upgrade our information processing capabilities. As we continue to grow, we will need to continue to make investments in new and enhanced information and technology systems. Interruption or loss of our information processing capabilities or adverse consequences from implementing new or enhanced systems could have a material adverse effect on our operating results and financial condition. As our information system providers revise and upgrade their hardware, software and equipment technology, we may encounter difficulties in integrating these new technologies into our business. Although we have experienced no significant breaches of our network security by unauthorized persons, our systems may be subject to infiltration by unauthorized persons. If our systems or facilities were infiltrated and damaged by unauthorized persons, there could be a significant interruption to our ability to provide many of our electronic and web-based services to our customers. If that were to occur, it could have a material adverse effect on our operating results and financial condition.

We are subject to extensive governmental regulation. Failure to comply with laws or regulations could have a material adverse effect on our operating results and financial condition.

Our operations are subject to regulation, supervision and licensing under various federal, state and local agencies, statutes and ordinances. The acquisition and sale of totaled and recovered theft vehicles is regulated by state motor vehicle departments in each of the locations in which we operate. Changes in law or governmental regulations or interpretations of existing law or regulations could result in increased costs, reduced salvage vehicle prices and decreased profitability for us. In addition to the regulation of sales and acquisitions of vehicles, we are also subject to various local zoning requirements with regard to the location of our auction and

17

storage facilities. These zoning requirements vary from location to location. Failure to comply with present or future regulations or changes in existing regulations could have a material adverse effect on our operating results and financial condition.

We may be unsuccessful in pursuing our growth strategy of increasing vehicle sales at existing facilities, making acquisitions or completing greenfield expansions and may face significant challenges in integrating any acquisitions we do make, which could have a material adverse effect on our operating results and financial condition.

We may not be able to continue to grow revenues and profitability of our existing facilities or acquire new salvage auction facilities or build additional salvage auction facilities on terms economically favorable to us, or at all. In addition, we may be unsuccessful in expanding existing sites. Our ability to achieve these objectives is dependent on, among other things, the integration of new facilities and their information systems into our existing operations, the identification and lease of suitable premises and the availability of capital. There can be no assurance that this integration will occur, that suitable premises will be identified or that additional capital will be available to fund the expansion and integration of our business. Any delays or obstacles in this integration process could have a material adverse effect on our operating results and financial condition. Furthermore, we have limited sources of additional capital available for acquisitions, expansions and start-ups. Our ability to integrate and expand our facilities will depend on our ability to identify and obtain additional sources of capital. In the future, we will also be required to continue to improve our financial and management controls, reporting systems and procedures on a timely basis and expand, train and manage our employee work force. The failure to improve these systems on a timely basis and to successfully expand, train and manage our work force could have a material adverse effect on our operating results and financial condition.

We may not successfully implement our business strategies.

We may not be able to fully implement our business strategies or realize our expected cost savings, in whole or in part or within the time frames anticipated. In addition, there can be no assurance that we will be able to correlate our higher levels of service with the payments we receive from our customers. Our cost savings, efficiency improvements and pricing strategies are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. Additionally, our business strategy may change from time to time. As a result, we may not be able to achieve our expected results of operations and our actual income and operating cash flow may be negatively affected.

The operation of our auction facilities poses certain environmental risks, which could adversely affect our operating results and financial condition.

Our operations are subject to federal, state and local environmental laws and regulations. In the salvage vehicle auction industry, large numbers of wrecked vehicles are stored at auction facilities for short periods of time. Minor spills of gasoline, motor oils and other fluids may occur from time to time at our facilities and may result in soil, surface water or groundwater contamination. Petroleum products and other hazardous materials are contained in aboveground or underground storage tanks located at certain of our facilities. Waste materials, such as waste solvents or used oils, are generated at some of our facilities and are disposed of as non-hazardous or hazardous wastes. We believe that we are in compliance in all material respects with applicable environmental regulations and do not anticipate any material capital expenditure for environmental compliance or remediation. While we have not incurred significant expenditures for preventive or remedial action with respect to contamination or the use of hazardous materials, environmental laws and regulation could become more stringent over time and we may be subject to significant compliance costs in the future. Future contamination at one or more of our facilities, or the potential contamination by previous users of certain acquired facilities, however, creates the risk that we could incur significant expenditures for preventive or remedial action, as well as potential liability arising as a consequence of hazardous material contamination, which could have a material adverse effect on our operating results and financial condition.

18

Our ability to operate our company successfully could be impaired if we fail to attract and retain key personnel.

Our success depends in large part on the performance of our executive management team and other key employees. If we lose one or more of our executive officers or key employees, our ability to operate our business and implement our business strategies successfully could be impaired. Even though we have employment agreements with certain of our executive officers, there can be no assurance that they will serve the term of their employment agreements or renew their employment agreements upon expiration. In addition, if we fail to attract other qualified personnel, our business prospects could be materially adversely affected.

Risks Relating to Our Relationship with Kelso

We are controlled by affiliates of Kelso, and their interests as equity holders may conflict with your interests as a holder of the notes.

Certain private equity funds affiliated with Kelso own substantially all of our equity. The Kelso affiliates are able to elect all of our directors, appoint new management and approve any action requiring the vote of our outstanding common stock, including amendments of our articles of incorporation, mergers, or sales of substantially all of our assets. The directors elected by the Kelso affiliates will be able to make decisions affecting our capital structure, including decisions to issue additional capital stock and incur additional debt. The interests of our equity holders may not in all cases be aligned with your interests as a holder of the notes. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of our equity holders might conflict with your interests as a noteholder. In addition, our equity holders may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though such transactions might involve risks to you as a holder of the notes.

19

THE TRANSACTIONS

On May 25, 2005, Axle Merger merged with and into IAAI, with IAAI continuing as the surviving corporation, and IAAI became a direct wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso). The following transactions occurred in connection with the merger:

• Approximately 11.8 million shares of IAAI’s outstanding common stock were converted into the right to receive $28.25 per share in cash.

• All outstanding options to purchase shares of IAAI’s common stock (other than certain options held by the continuing investors, which were exchanged into stock options of Axle Holdings) were canceled in exchange for payments in cash of $28.25 per underlying share, less the applicable option exercise price.

• Affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors contributed approximately $143.6 million in cash to the LLC, which now holds all the outstanding shares of Axle Holdings.

• The continuing investors exchanged stock options of IAAI with an aggregate spread value of approximately $3.3 million into stock options of Axle Holdings with an equivalent aggregate spread value. Each continuing investor sold or “cashed out” the remainder of its equity interest in IAAI in the merger. In addition, each continuing investor was awarded certain profit interests in the LLC that entitle the continuing investor to a portion of the future appreciation in the value of the assets of the LLC. As a result of these transactions, affiliates of Kelso (together with third party investors) hold, through the LLC, shares of common stock of Axle Holdings representing approximately 99.9% of the common stock of Axle Holdings on a primary basis and approximately 95.3% of the common stock of Axle Holdings on a fully diluted basis. Also, as a result of the transactions, the continuing investors hold fully vested options to purchase common stock of Axle Holdings representing in the aggregate approximately 4.7% of the common stock of Axle Holdings on a fully diluted basis. The continuing investors also control, through their ownership interests in the LLC, common stock of Axle Holdings representing, in the aggregate, less than 0.1% of the common stock of Axle Holdings.

• Axle Merger entered into new senior secured credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon completion of the merger, IAAI assumed Axle Merger’s obligations under such credit facilities and all of IAAI’s domestic subsidiaries guaranteed these credit facilities.

• IAAI Finance issued the old notes and, upon completion of the merger, IAAI assumed IAAI Finance’s obligations under the old notes and all of IAAI’s domestic subsidiaries guaranteed the old notes on a senior unsecured basis. Upon completion of the merger of Axle Merger with and into IAAI, IAAI Finance merged with and into IAAI, with IAAI continuing as the surviving corporation.

• The LLC contributed to Axle Merger, through Axle Holdings, approximately $143.6 million in cash, representing the cash equity contribution by affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon, the continuing investors and certain third-party investors.

• IAAI used the net proceeds from these contributions and financings to:

• fund the cash consideration payable to its shareholders and option holders under the merger agreement;

• repay the outstanding principal and accrued interest under its then existing credit facility; and

• pay related transaction fees and expenses.

Upon completion of the transactions, the equity of IAAI became privately held and its common stock subsequently was deregistered with the SEC and delisted from the NASDAQ Stock Market.

20

EXCHANGE OFFER

General

We hereby offer, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal (which together constitute this exchange offer), to exchange up to $150 million aggregate principal amount of our 11% Senior Notes due 2013, which are referred to in this prospectus as the old notes, for a like aggregate principal amount of our 11% Senior Notes due 2013, which are referred to in this prospectus as the new notes. In order to qualify for the exchange, old notes must be properly tendered on or prior to the expiration date and not withdrawn as permitted pursuant to the procedures described below. This exchange offer is being made with respect to all of the old notes.

As of the date of this prospectus, $150.0 million aggregate principal amount of the old notes is outstanding. This prospectus, together with the letter of transmittal, is first being sent on or about August 23, 2005 to all holders of old notes known to us. Our obligation to accept old notes for exchange pursuant to this exchange offer is subject to certain conditions set forth under “Purchasers Conditions” below. We currently expect that each of the conditions will be satisfied and that no waivers will be necessary.

Reasons for the Exchange Offer

We entered into a registration rights agreement with the initial purchasers in connection with the issuance of the old notes. The registration rights agreement provides that we will take the following actions at our expense, for the benefit of the holders of the old notes:

• we will use our reasonable best efforts to file the exchange offer registration statement, of which this prospectus is a part. The new notes will have terms substantially identical in all material respects to the old notes except that the new notes will not contain transfer restrictions;

• we will use our best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 180 days after the date the registration is filed with the SEC, which will be February 19, 2006; and

• we will keep the exchange offer open for at least 30 days, or longer if required by applicable law, after the date on which notice of the exchange offer is mailed to the holders.

The holder of each old note surrendered in the exchange offer will receive a new note having a principal amount equal to that of the surrendered note. Interest on each new note will accrue from the later of (1) the last interest payment date on which interest was paid on the old note surrendered or (2) if no interest has been paid on the old note, from April 1, 2005.

If we do not file the registration statement with the SEC by August 23, 2005, or the registration statement does not become effective within 180 days after the date the registration statement is filed with the SEC, or this exchange offer is not consummated within 30 business days after the registration statement becomes effective, we agreed to pay additional interest on the old notes.

Under some circumstances, we and the guarantors may be required to use our commercially reasonable efforts to file and cause to be declared effective, in addition to or in lieu of the exchange offer registration statement, a shelf registration statement covering resales of the old notes. If we and the guarantors fail to meet specified deadlines under the registration rights agreement, then we will be obligated to pay liquidated damages to holders of the old notes. See “—Registration Rights; Liquidated Damages.”

Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the new notes.

21

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes accepted in the exchange offer. Any holder may tender some or all of its old notes pursuant to the exchange offer. However, old notes may be tendered only in a minimum denomination of $1,000 and integral multiples of $1,000 above that.

The terms of the new notes will be the same as the terms of the old notes except that:

(1) the new notes will have been registered under the Securities Act and hence will not bear legends restricting their transfer; and

(2) the holders of the new notes will not be entitled to certain rights under the registration rights agreement, including the provisions providing for an increase in the interest rate on the old notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated.

The new notes will evidence the same debt as the old notes and will be entitled to the benefits of the indenture. Consequently, both series will be treated as a single class of debt securities under the indenture; however, the new notes will bear a different CUSIP number from the old notes and will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the old notes. For a description of the indenture, see “Description of Notes.”

The exchange offer is not conditioned on any minimum aggregate principal amount of old notes being tendered for exchange.

As of the date of this prospectus, $150.0 million aggregate principal amount of the old notes is outstanding and registered in the name of Cede & Co., as nominee for DTC. Only registered holders of the old notes, or their legal representatives or attorneys-in-fact, as reflected on the records of the trustee under the indenture, may participate in the exchange offer. There will be no fixed record date for determining holders of the old notes entitled to participate in this exchange offer.

Holders of old notes do not have any appraisal or dissenters’ rights under the Illinois Business Corporation Act or the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Old notes that are not tendered for exchange in this exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to the old notes and the registration rights agreement.

We will be deemed to have accepted validly tendered old notes when, as and if we have given oral or written notice of our acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving and delivering the new notes to the tendering holders.

If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of specified other events set forth in this prospectus or otherwise, the certificates for such unaccepted old notes will be returned, without expense, to the tendering holder as soon as practicable after the expiration date of the exchange offer.

Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See “—Fees and Expenses” and “—Transfer Taxes.”

22

Expiration Date; Extensions; Amendments

The term “expiration date” means 5:00 p.m., New York City time, on                     , 2005, unless we, in our sole discretion, extend the exchange offer, in which case the term will mean the latest date and time to which the exchange offer is extended.

In order to extend the exchange offer, we will notify the exchange agent orally, confirmed in writing, or in writing, of any extension. We will notify the registered holders of old notes by public announcement of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

We reserve the right, in our sole discretion:

• to delay accepting for exchange any old notes;

• to extend this exchange offer or to terminate this exchange offer and to refuse to accept old notes not previously accepted if any of the conditions set forth below under “—Conditions” have not been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent; or

• subject to the terms of the registration rights agreement, to amend the terms of this exchange offer in any manner.

We will provide oral or written notice of any delay in acceptance, extension, termination or amendment of this exchange offer as soon as practicable to the registered holders of old notes. If we amend this exchange offer in a manner that we determine to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holders of old notes of the amendment.

Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.

Conditions

Notwithstanding any other term of this exchange offer, we will not be required to accept for exchange, or cause the exchange of any new notes for, any old notes, and may terminate or amend this exchange offer as provided in this prospectus before the acceptance of the old notes, if in our reasonable judgment:

• the new notes to be received will not be tradeable by the holder without restriction under the Securities Act, the Exchange Act, or without material restriction under the blue sky or securities laws of substantially all of the states of the United States; or

• any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to this exchange offer which, in our sole judgment, might materially impair our ability to proceed with this exchange offer, or any material adverse development has occurred in any such existing action or proceeding with respect to us or any of our subsidiaries; or

• any law, statute, rule, regulation or interpretation by the staff of the SEC is proposed, adopted or enacted, which, in our sole judgment, might materially impair our ability to proceed with this exchange offer or materially impair the contemplated benefits of this exchange offer to us; or

• any governmental approval has not been obtained, which approval we, in our sole discretion, deem necessary for the consummation of this exchange offer as contemplated by this prospectus.

23

In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us:

• the representations described under “—Procedures for Tendering” and “Plan of Distribution”; and

• such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available an appropriate form for registration of the new notes under the Securities Act.

We expressly reserve the right, at any time or at various times, to extend the period of time during which this exchange offer is open. Consequently, we may delay acceptance of any old notes by giving oral or written notice of such extension to the holders. During any such extensions, all old notes previously tendered will remain subject to this exchange offer, and we may accept them for exchange. We will return any old notes that we do not accept for exchange for any reason without expense to the tendering holder as soon as practicable after the expiration or termination of this exchange offer.

We expressly reserve the right to amend or terminate this exchange offer, and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions of this exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the old notes as soon as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any old notes tendered, and will not issue new notes in exchange for any such old notes, if at such time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus forms a part or the qualification of the indenture under the Trust Indenture Act of 1939.

If we determine in our sole discretion that any of the conditions are not satisfied, we may (l) refuse to accept any old notes and return all tendered old notes to the tendering holders, (2) to the extent permitted by applicable law, extend this exchange offer and retain all old notes tendered prior to the expiration date, subject, however, to the rights of holders to withdraw the old notes (see “—Withdrawal of Tenders”), or (3) waive the unsatisfied conditions with respect to this exchange offer and accept all properly tendered old notes which have not been withdrawn.

If we and the guarantors are not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy, the registration rights agreement requires that we and the guarantors use commercially reasonable efforts to file a shelf registration statement to cover resales of the old notes by the holders thereof who satisfy specified conditions relating to the provision of information in connection with the shelf registration statement. See “—Registration Rights; Liquidated Damages.”

Interest on the New Notes

The new notes will bear interest from their date of issuance. Holders of old notes that are accepted for exchange will receive, in cash, accrued interest thereon to, but not including, the date of issuance of the new notes. All such interest will be paid with the first interest payment on the new notes on April 1, 2006. Interest on the old notes accepted for exchange will cease to accrue upon issuance of the new notes.

Interest on the new notes will be payable semi-annually on each April 1 and October 1, commencing on April 1, 2006. For more information regarding the terms of the new notes, see “Description of the Notes.”

24

Procedures for Tendering

We have forwarded to you, along with this prospectus, a letter of transmittal relating to the exchange offer. Because all of the old notes are held in book-entry accounts maintained by the exchange agent at DTC, a holder need not submit a letter of transmittal if the holder tenders old notes in accordance with the procedures mandated by DTC’s Automated Tender Offer Program, or ATOP. To tender old notes without submitting a letter of transmittal, the electronic instructions sent to DTC and transmitted to the exchange agent must contain the holder’s acknowledgment of receipt of, and the holder’s agreement to be bound by and to make all of the representations contained in, the letter of transmittal. In all other cases, a letter of transmittal must be manually executed and delivered as described in this prospectus.

Only a holder of record may tender old notes in the exchange offer. To tender in the exchange offer, a holder must comply with the procedures of DTC and either:

• complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or

• in lieu of delivering a letter of transmittal, instruct DTC to transmit on behalf of the holder a computer-generated message to the exchange agent in which the holder of the old notes acknowledges and agrees to be bound by the terms of the letter of transmittal, which computer-generated message must be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date.

In addition, either:

• the exchange agent must receive the old notes along with the letter of transmittal; or

• with respect to the old notes, the exchange agent must receive, before expiration of the exchange offer, timely confirmation of book-entry transfer of the old notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below; or

• the holder of old notes must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under the caption “—Exchange Agent” before expiration of the exchange offer. To receive confirmation of valid tender of old notes, a holder should contact the exchange agent at the telephone number listed under the caption “—Exchange Agent.”

The tender by a holder that is not withdrawn before expiration of the exchange offer will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. If a holder completing a letter of transmittal tenders less than all of its old notes, the tendering holder should fill in the applicable box of the letter of transmittal. The amount of old notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated.

If the old notes, the letter of transmittal or any other required documents are physically delivered to the exchange agent, the method of delivery is at the holder’s election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before expiration of the exchange offer. Holders should not send the letter of transmittal or old notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner’s behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its old notes, either:

• make appropriate arrangements to register ownership of the old notes in the owner’s name; or

• obtain a properly completed bond power from the registered holder of old notes.

25

The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

If the letter of transmittal is signed by the record holder(s) of the old notes tendered, the signature must correspond with the name(s) written on the face of the old notes without alteration, enlargement or any change whatsoever. If the applicable letter of transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the old notes.

A signature on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible institution. Eligible institutions include banks, brokers, dealers, municipal securities dealers, municipal securities brokers, government securities dealers, government securities brokers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. The signature need not be guaranteed by an eligible institution if the old notes are tendered:

• by a registered holder who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

• for the account of an eligible institution.

If the letter of transmittal is signed by a person other than the registered holder of any old notes, the old notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the old notes and an eligible institution must guarantee the signature on the bond power.

If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless we waive this requirement, they should also submit evidence satisfactory to us of their authority to delivery the letter of transmittal.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use ATOP to tender. Participants in the program may, instead of physically completing and signing the accompanying letter of transmittal and delivering it to the exchange agent, transmit their acceptance of this exchange offer electronically. They may do so by causing DTC to transfer the old notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that:

• DTC has received an express acknowledgment from a participant in its ATOP that is tendering old notes that are the subject of the book-entry confirmation;

• the participant has received and agrees to be bound by the terms of the accompanying letter of transmittal, or, in the case of an agent’s message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

• the agreement may be enforced against that participant.

We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.

Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within the time that we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of

26

old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give notification. Tenders of old notes will not be deemed made until those defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

In all cases, we will issue new notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

• old notes or a timely book-entry confirmation that old notes have been transferred in the exchange agent’s account at DTC; and

• a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

Holders should receive copies of the applicable letter of transmittal with the prospectus. A holder may obtain additional copies of the applicable letter of transmittal for the old notes from the exchange agent at its offices listed under the caption “—Exchange Agent.” By signing the letter of transmittal, or causing DTC to transmit an agent’s message to the exchange agent, each tendering holder of old notes will represent to us that, among other things:

• any new notes that the holder receives will be acquired in the ordinary course of its business;

• the holder has no arrangement or understanding with any person or entity to participate in the distribution of the new notes;

• if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the new notes;

• if the holder is a broker-dealer that will receive new notes for its own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities, that it will deliver a prospectus, as required by law, in connection with any resale of those new notes (see the caption “Plan of Distribution”); and

• the holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of us or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

DTC Book-Entry Transfer

The exchange agent has established an account with respect to the old notes at DTC for purposes of the exchange offer.

With respect to the old notes, any participant in DTC may make book-entry delivery of old notes by causing DTC to transfer the old notes into the exchange agent’s account in accordance with DTC’s ATOP procedures for transfer.

However, the exchange for the old notes so tendered will only be made after a book-entry confirmation of such book-entry transfer of the old notes into the exchange agent’s account, and timely receipt by the exchange agent of an agent’s message and any other documents required by the letter of transmittal. For this purpose, “agent’s message” means a message, transmitted by DTC and received by the exchange agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgment from a participant tendering old notes that are the subject of the book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce that agreement against the participant.

27

Guaranteed Delivery Procedures

Holders wishing to tender their old notes but whose old notes are not immediately available or who cannot deliver their old notes, the letter of transmittal or any other required documents to the exchange agent or cannot comply with the applicable procedures described above before expiration of the exchange offer may tender if:

• the tender is made through an eligible institution;

• before 5:00 p.m., New York City time on the expiration date, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent’s message and notice of guaranteed delivery:

• setting forth the name and address of the holder and the registered number(s) and the principal amount of old notes tendered:

• stating that the tender is being made by guaranteed delivery;

• guaranteeing that, within three New York Stock Exchange trading days after expiration of the exchange offer, the letter of transmittal, or facsimile thereof, together with the old notes or a book-entry transfer confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and

• the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered old notes in proper form for transfer or a book-entry transfer confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their old notes according to the guaranteed delivery procedures set forth above.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, holders of old notes may withdraw their tenders at any time before expiration of the exchange offer.

For a withdrawal to be effective, the exchange agent must receive a computer-generated notice of withdrawal transmitted by DTC on behalf of the holder in accordance with the standard operating procedures of DTC or a written notice of withdrawal, which may be by telegram, telex, facsimile transmission or letter, at one of the addresses set forth below under the caption “—Exchange Agent.”

Any notice of withdrawal must:

• specify the name of the person who tendered the old notes to be withdrawn;

• identify the old notes to be withdrawn, including the principal amount of the old notes to be withdrawn; and

• where certificates for old notes have been transmitted, specify the name in which the old notes were registered, if different from that of the withdrawing holder.

If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of those certificates, the withdrawing holder must also submit:

• the serial numbers of the particular certificates to be withdrawn; and

• a signed notice of withdrawal with signatures guaranteed by an eligible institution, unless the withdrawing holder is an eligible institution.

28

If old notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of the facility.

We will determine all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal, and our determination shall be final and binding on all parties. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. We will return any old notes that have been tendered for exchange but that are not exchanged for any reason to their holder without cost to the holder. In the case of old notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described above, those old notes will be credited to an account maintained with DTC for old notes, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Holders may retender properly withdrawn old notes by following one of the procedures described under the caption “—Procedures for Tendering” above at any time on or before expiration of the exchange offer.

A holder may obtain a form of the notice of withdrawal from the exchange agent at its offices listed under the caption “—Exchange Agent.”

Exchange Agent

Wells Fargo Bank, National Association, has been appointed as exchange agent for the exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notice of guaranteed delivery should be directed to the exchange agent addressed as follows:

By Overnight Courier or Mail:	By Registered or Certified Mail:	By Hand:
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.
Corporate Trust Operations	Corporate Trust Operations	Corporate Trust Services
MAC N9303-121	MAC N9303-121	Northstar East Bldg.—12th Floor
6th & Marquette Avenue	P.O. Box 1517	608 2nd Avenue South
Minneapolis, Minnesota 55479	Minneapolis, Minnesota 55479	Minneapolis, Minnesota 55402
Attn: Reorg	Attn: Reorg	Attn: Reorg
(if by mail, registered or certified recommended)

By Facsimile:	To Confirm by Telephone:
(612) 667-6282	(800) 34-5128; or
Attn: Bondholder Communications	(612) 667-9764
	Attn: Bondholder Communications

Delivery of the letter of transmittal to an address other than as shown above or transmission via facsimile other than as set forth above will not constitute a valid delivery of the letter of transmittal.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

• certificates representing old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of old notes tendered;

29

• new notes are to be delivered to, or issued in the name of, any person other than the registered holder of the old notes;

• tendered old notes are registered in the name of any person other than the person signing the letter of transmittal; or

• a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer.

If satisfactory evidence of payment of transfer taxes is not submitted with the letter of transmittal, the amount of any transfer taxes will be billed to the tendering holder.

Fees and Expenses

We will bear the expense of soliciting tenders of the old notes. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone, electronically or in person by our and our affiliates’ officers and employees.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses incurred in connection with these services.

We will pay the cash expenses to be incurred in connection with the exchange offer. Such expenses include fees and expenses of the exchange agent and trustee, accounting and legal fees and printing costs, among others.

Accounting Treatment

The new notes will be recorded at the same carrying value as the old notes, which is face value, as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. Expenses incurred in connection with the exchange offer will be deferred and charged to expense over the term of the new notes.

Consequences of Failure to Exchange

Participation in this exchange offer is voluntary. Holders of the old notes are urged to consult their financial and tax advisors in making their own decisions on what action to take.

Holders of old notes who do not exchange their old notes for new notes under this exchange offer will remain subject to the restrictions on transfer of such old notes:

• as set forth in the legend printed on the notes as a consequence of the issuance of the old notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

• otherwise set forth in the offering circular distributed in connection with the private offering of the old notes.

In general, holders may not offer or sell the old notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the old notes under the Securities Act. Based on interpretations of the SEC staff, new notes issued pursuant to this exchange offer may be offered for resale, resold or otherwise transferred by their holders, other than any such holder that is our “affiliate” within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the new notes in the

30

ordinary course of the holders’ business and the holders have no arrangement or understanding with respect to the distribution of the new notes to be acquired in this exchange offer. Any holder who tenders in this exchange offer for the purpose of participating in a distribution of the new notes:

• may not rely on the applicable interpretations of the SEC; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Upon completion of this exchange offer, holders of the notes will not be entitled to any further registration rights agreements, except under limited circumstances. See “—Registration Rights; Liquidated Damages”

Registration Rights; Liquidated Damages

If:

(1) we and the guarantors are not

(A) required to file the exchange offer registration statement; or

(B) permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or

(2) any holder of old notes:

(A) other than an initial purchaser, is prohibited by law or SEC policy from participating in the exchange offer;

(B) may not resell the new notes acquired by it in the exchange offer to the public without delivering a prospectus and this prospectus is not available for such resales by such holder (other than, in either case, due solely to the status of such holder as an affiliate of us or any guarantor or due to such holder’s inability to make the representations referred to above); or

(C) is an initial purchaser and so requests with respect to notes that have the status of unsold allotments in an initial distribution, and notification thereof is given by such holder to us prior to the 20th business day following the consummation of the exchange offer,

we and the guarantors will use all commercially reasonable efforts to file with the SEC a shelf registration statement (as defined in the registration rights agreement) to cover resales of the notes by the holders of the notes who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement.

If a shelf registration statement is required, the issuer and the guarantors must use all commercially reasonable efforts to file the shelf registration statement with the SEC on or prior to 60 days after such filing obligation arises and cause the shelf registration statement to be declared effective by the SEC on or prior to 120 days after such obligation arises.

If:

(1) we and the guarantors fail to file any of the registration statements required by the registration rights agreement on or before the date specified for such filing;

(2) any such registration statement is not declared effective by the SEC on or prior to the date specified for such effectiveness, referred to as the effectiveness target date;

(3) we and the guarantors fail to consummate the exchange offer within 30 business days of the effectiveness target date with respect to the exchange offer registration statement; or

(4) the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of the old notes during the periods

31

specified in the registration rights agreement (each such event specified in clauses (1) through (4) above, a “registration default”),

then we and the guarantors will pay liquidated damages to each holder of old notes; provided, however, that (i) liquidated damages on the notes may not accrue under more than one of the foregoing clauses (1) through (4) at any one time; and (ii) such liquidated damages shall cease to accrue on the notes (a) upon the filing of the exchange offer registration statement or a shelf registration statement, in the case of clause (1) above, (b) upon the effectiveness of the exchange offer registration statement or a shelf registration statement, in the case of clause (2) above, (c) upon the exchange of new notes for all notes tendered, in the case of clause (3) above, or (d) upon the effectiveness of a shelf registration statement or the exchange offer registration statement that has ceased to be effective or usable, in the case of clause (4) above. Without limiting the foregoing, liquidated damages with respect to a failure to file, failure to cause to become effective or failure to maintain the effectiveness of a shelf registration statement shall cease to accrue upon the consummation of the exchange offer in the case of a shelf registration statement required to be filed due to failure to consummate the exchange offer within the required period of time.

With respect to the first 12-week period immediately following the occurrence of the first registration default, liquidated damages will be paid in an amount equal to 0.25% per annum of the principal amount of the old notes. The amount of the liquidated damages will increase by an additional 0.25% per annum with respect to each subsequent 12-week period until all registration defaults have been cured, up to a maximum amount of liquidated damages for all registration defaults of 1.0% per annum of the principal amount of the old notes.

All accrued liquidated damages will be paid by us and the guarantors on the next scheduled interest payment date to DTC or its nominee by wire transfer of immediately available funds or by federal funds check and to holders of certificated notes by wire transfer to the accounts specified by them or, if no such accounts have been specified, at any office of ours or any agency designated by us. We have designated the corporate trust office of the Wells Fargo Bank, National Association to act as our agent in such matters. The location of the corporate trust office is MAC N9303-110, Sixth and Marquette Avenue, Minneapolis, Minnesota 55479. We, however, reserve the right to pay liquidated damages to holders by check mailed directly to holders at their registered addresses.

Following the cure of all registration defaults, the accrual of liquidated damages will cease.

Holders of notes will be required to make certain representations to us (as described in the registration rights agreement) in order to participate in the exchange offer and will be required to deliver certain information to be used in connection with the shelf registration statement and to provide comments on the shelf registration statement within the time periods set forth in the registration rights agreement in order to have their notes included in the shelf registration statement and benefit from the provisions regarding liquidated damages set forth above. By acquiring notes, a holder will be deemed to have agreed to indemnify us and the guarantors against certain losses arising out of information furnished by such holder in writing for inclusion in any shelf registration statement. Holders of notes will also be required to suspend their use of the prospectus included in the shelf registration statement under certain circumstances upon receipt of written notice to that effect from us.

Resale of the New Notes

Based on interpretations of the SEC staff set forth in no action letters issued to unrelated third parties, we believe that the new notes issued under this exchange offer in exchange for old notes may be offered for resale, resold and otherwise transferred by any new note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

• such holder is not an “affiliate” of ours within the meaning of Rule 405 under the Securities Act;

• such new notes are acquired in the ordinary course of the holder’s business; and

• the holder does not intend to participate in the distribution of such new notes.

32

Any holder who tenders in this exchange offer with the intention of participating in any manner in a distribution of the new notes:

• cannot rely on the position of the staff of the SEC enunciated in “Exxon Capital Holdings Corporation” (available May 13, 1989), “Morgan Stanley & Co. Incorporated” (available June 5, 1991), “Shearman & Sterling” (available July 2, 1993) or similar interpretive letters; and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

This prospectus may be used for an offer to resell, resale or other retransfer of new notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the old notes as a result of market-making activities or other trading activities may participate in this exchange offer. Each broker-dealer that receives new notes for its own account in exchange for old notes pursuant to this exchange offer, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. Please read the section captioned “Plan of Distribution” for more details regarding the transfer of new notes.

Other

We may in the future seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any old notes that are not tendered in this exchange offer or to file a registration statement to permit resales of any untendered old notes.

33

USE OF PROCEEDS

We will receive no cash proceeds from the exchange of old notes pursuant to this exchange offer. In consideration for issuing the new notes as contemplated in this prospectus, we will receive in exchange a like principal amount of old notes. The old notes surrendered in exchange for the new notes will be retired and cancelled and cannot be reissued. Accordingly, issuance of the new notes will not result in any change in our capitalization. We have agreed to bear the expenses of the exchange offer. No underwriter is being used in connection with the exchange offer.

Our net proceeds from the sale of the old notes (after deducting the initial purchasers’ discounts and commissions and after any expenses payable by us) were approximately $144.5 million. We used the net proceeds from the offering of the old notes, together with the borrowings under our senior credit facilities and the proceeds of the sale of interests in the LLC:

• to fund the cash consideration payable in connection with the merger to old shareholders and optionholders of IAAI;

• to repay certain indebtedness and pay accrued interest and related prepayment premiums;

• to pay fees and expenses related to the transactions; and

• for working capital purposes.

34

CAPITALIZATION

The following table sets forth our unaudited consolidated cash and cash equivalents and capitalization as of June 26, 2005. You should read this information in conjunction with the “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and IAAI’s audited and unaudited consolidated financial statements and accompanying notes thereto, in each case appearing elsewhere in this prospectus.

	As of June 26, 2005
	(in thousands)
Cash and cash equivalents	$	20,185
Debt:
Senior credit facilities:
Revolving credit facility (1)		—
Term loan facility		115,000
Other debt (2)		1,062
11% Senior Notes due 2013		150,000
Total debt		266,062
Total shareholders’ equity		145,430
Total capitalization	$	411,492

(1) Our senior credit facilities provide for up to $50.0 million of revolving borrowings. As of June 26, 2005, we had $47.7 million available for borrowing under the revolving portion of our senior credit facilities.

(2) As of June 26, 2005, our other debt consisted of capital lease obligations.

35

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The selected historical consolidated financial data as of December 28, 2003 and December 26, 2004 and for the fiscal years ended December 29, 2002, December 28, 2003 and December 26, 2004 have been derived from our audited consolidated financial statements and related notes included elsewhere in this prospectus. The selected historical consolidated financial data as of December 31, 2000, December 30, 2001 and December 29, 2002 and for the fiscal years ended December 31, 2000 and December 30, 2001 have been derived from our audited consolidated financial statements and related notes not included in this prospectus. The selected historical consolidated financial data as of and for the six months ended June 27, 2004 (predecessor), the period December 27, 2004 through May 25, 2005 (predecessor) and the period May 26, 2005 through June 26, 2005 (successor) have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our historical results included below and elsewhere in this prospectus are not necessarily indicative of our future performance, and results of operations for the six month periods ended June 27, 2004 (predecessor), the period December 27, 2004 through May 25, 2005 (predecessor) and the period May 26, 2005 through June 26, 2005 (successor) are not necessarily indicative of our results of operations for the full years. The unaudited selected historical consolidated financial data reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows at the end of and for the periods presented.

The merger transactions resulted in a new basis of accounting under SFAS 141. This change creates many differences between reporting for IAAI post-merger, as successor, and IAAI pre-merger, as predecessor. The predecessor financial data for periods ending on or prior to May 25, 2005, generally will not be comparable to the successor financial data for periods after that date. The merger resulted in IAAI having an entirely new capital structure, which results in significant differences between predecessor and successor in the equity sections of the statements. In addition, the successor incurred debt issuance costs and $265.0 million of debt in connection with the merger. As a result, interest expense and debt will not be comparable. We have made certain adjustments to increase or decrease the carrying amount of assets and liabilities to their fair value as of the merger date as a result of preliminary estimates and certain assumptions we believe are reasonable, which, in a number of instances, has resulted in changes to amortization and depreciation expense amounts. The final appraisals are not yet complete, and thus we have not yet completed our allocation of purchase price and may make further adjustments to the preliminary allocations in subsequent periods.

You should read the selected historical consolidated financial data set forth below in conjunction with “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes and other financial information included elsewhere in this prospectus.

36

	Predecessor																					Successor
	Year ended															Six Months Ended June 27, 2004			Dec. 27, 2004 May 25, 2005			May 26 - June 26, 2005
	December 31, 2000			December 30, 2001			December 29, 2002			December 28, 2003			December 26, 2004
																(unaudited)			(unaudited)			(unaudited)
Statement of Operations Data:
Revenues:
Fee income	$	132,318		$	154,563		$	162,845		$	169,687		$	208,743		$	101,841		$	103,203		$	19,242
Vehicle sales		200,858			138,427			71,352			39,963			31,436			15,352			17,242			3,119
Total revenues		333,176			292,990			234,197			209,650			240,179			117,193			120,445			22,361
Cost of sales:
Branch cost		102,791			122,867			125,530			135,157			157,297			77,993			72,554			14,481
Vehicle cost		183,404			131,683			65,463			35,301			26,694			13,171			14,640			2,652
Total cost of sales		286,195			254,550			190,993			170,458			183,991			91,164			87,194			17,133
Gross profit		46,981			38,440			43,204			39,192			56,188			26,029			33,251			5,228
Operating (income) expense:
Selling, general and administrative		24,315			32,182			27,711			30,225			34,978			16,837			15,822			3,400
Loss (gain) on sale of property and equipment		—			—			(104	)		54			301			(19	)		(896	)		17
Business transformation costs		—			3,451			8,067			3,902			—			—			—			—
Merger costs		—			—			—			—			—			—			15,741			5,021
Special charges		4,772			8,016			—			—			—			—			—			—
Earnings (loss) from operations		17,894			(5,209	)		7,530			5,011			20,909			9,211			2,584			(3,210	)
Other (income) expense:
Interest expense		1,833			1,788			678			1,505			1,572			887			567			2,642
Other income		(1,717	)		(1,025	)		(171	)		(130	)		(67	)		(22	)		(2,442	)		(41	)
Earnings (loss) before income tax		17,778			(5,972	)		7,023			3,636			19,404			8,346			4,459			(5,811	)
Income taxes		7,289			(1,612	)		3,015			1,304			7,139			3,390			4,899			(1,311	)
Net earnings (loss)	$	10,489		$	(4,360	)	$	4,008		$	2,332		$	12,265		$	4,956		$	(440	)	$	(4,500	)
Other Financial Data:
Depreciation and amortization	$	9,641		$	10,649		$	9,901		$	10,661		$	12,985			6,522			5,464			1,859
Capital expenditures		12,246			20,765			15,241			16,343			28,717			11,105			8,221			1,612
Ratio of earnings to fixed charges(1)		4.3	x		—			1.9	x		1.4	x		3.0	x		2.7	x		2.1	x		—
Balance Sheet Data (at period end):
Cash and cash equivalents	$	30,938		$	24,467		$	10,027		$	15,486		$	13,325		$	17,628		$	—		$	20,185
Total assets		265,707			278,204			259,650			287,793			305,460			292,591			—			530,309
Total debt (including current portion of long-term debt)		20,178			20,143			4,009			29,147			24,642			23,981			—			266,062
Total shareholders’ equity		187,741			188,994			194,102			189,086			202,651			194,807			—			145,430

(1) For purposes of calculating the ratio of earnings to fixed charges, earnings represent earnings (loss) before income taxes plus fixed charges. Fixed charges include interest expense, including amortization of debt issuance costs, and the portion of operating rental expense which management believes is representative of the interest component of rental expense. Earnings were insufficient to cover fixed charges by $5,972 for the year ended December 30, 2001. Earnings were insufficient to cover fixed charges by $5,811 for the period May 26, 2005 through June 26, 2005 (successor).

37

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma consolidated financial information has been derived by the application of pro forma adjustments to our historical consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 26, 2005 and the year ended December 26, 2004 give effect to the transactions as if the transactions had occurred as of December 28, 2003. The pro forma adjustments are based upon available information, preliminary estimates and certain assumptions that we believe are reasonable, and are described in the accompanying notes. The pro forma statements should not be considered indicative of actual results that would have been achieved had the transactions been consummated on the dates indicated and do not purport to indicate results of operations as of any future date or for any future period. The unaudited pro forma financial information should be read in conjunction with “Exchange Offer,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and the notes thereto included elsewhere in this prospectus.

On May 25, 2005, Axle Merger merged with and into IAAI, with IAAI continuing as the surviving corporation. Upon completion of the merger and related transactions, IAAI became a direct wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso).

The following transactions occurred in connection with the merger:

• approximately 11.8 million shares of IAAI’s outstanding common stock converted into the right to receive $28.25 per share in cash;

• all outstanding options to purchase shares of IAAI’s common stock (other than certain options held by the continuing investors, i.e., Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley, which were exchanged into stock options of Axle Holdings) were canceled in exchange for payments in cash of $28.25 per underlying share, less the applicable option exercise price;

• affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors contributed approximately $143.6 million in cash to the LLC, which in turn held all the outstanding shares of common stock of Axle Holdings immediately after the closing of the transactions;

• the continuing investors exchanged stock options of IAAI with an aggregate spread value of approximately $3.3 million into stock options of Axle Holdings with an equivalent aggregate spread value;

• Axle Merger entered into senior credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon the completion of the merger, IAAI assumed Axle Merger’s obligations under such credit facilities, and all of IAAI’s domestic subsidiaries, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp., guaranteed such credit facilities;

• the LLC contributed to Axle Merger, through Axle Holdings, approximately $143.6 million in cash, representing the cash equity contribution by affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors;

• IAAI Finance, the issuer of the old notes, merged with and into IAAI with IAAI continuing as the surviving corporation; and

• IAAI assumed IAAI Finance’s obligations under the notes and all of IAAI’s domestic subsidiaries guaranteed the notes on a senior unsecured basis at the time IAAI Finance merged with and into IAAI.

We used the net proceeds from these contributions and financings to: (i) fund the cash consideration payable to our shareholders and option holders under the merger agreement; (ii) repay outstanding principal and accrued interest under our then-existing credit facility as of the closing of the merger; and (iii) pay related transaction fees and expenses.

38

The acquisition was accounted for as a purchase in conformity with Statement of Financial Accounting Standards, or SFAS, No. 141, “Business Combinations.” The pro forma adjustments and allocation of purchase price are preliminary and are based on management’s estimates of the fair value of the assets we acquired and the liabilities that we assumed. These adjustments and purchase price allocations may change upon finalization of appraisals and other valuation studies.

39

Unaudited Pro Forma Statement of Operations Data

For the Year Ended December 26, 2004

(in thousands)

	Historical			Adjustments			Pro Forma
Revenues:
Fee income	$	208,743		$	—		$	208,743
Vehicle sales		31,436			—			31,436
Total revenues		240,179			—			240,179
Cost of sales:
Branch cost		157,297			—			157,297
Vehicle cost		26,694			—			26,694
Total cost of sales		183,991			—			183,991
Gross profit		56,188			—			56,188
Operating expense:
Selling, general and administrative		34,978			9,180	(a)(b)(c)		44,158
Loss (gain) on sale of property and equipment		301			—			301
Business transformation costs		—			—			—
Earnings from operations		20,909			(9,180	)		11,729
Other (income) expense:
Interest expense		1,572			23,773	(d)		25,345
Other income		(67	)		—			(67	)
Earnings (loss) before income taxes		19,404			(32,953	)		(13,549	)
Provision (benefit) for income taxes		7,139			(12,193	)(e)		(5,054	)
Net earnings (loss)	$	12,265		$	(20,760	)	$	(8,495	)

See accompanying Notes to Unaudited Pro Forma Statement of Operations Data

40

Unaudited Pro Forma Statement of Operations Data

For the Six Months Ended June 26, 2005

(in thousands)

	Predecessor Historical			Successor Historical			Adjustments			Pro Forma
Revenues:
Fee income	$	103,203		$	19,242		$	—		$	122,445
Vehicle sales		17,242			3,119			—			20,361
Total revenues		120,445			22,361			—			142,806
Cost of sales:
Branch cost		72,554			14,481			—			87,035
Vehicle cost		14,640			2,652			—			17,292
Total cost of sales		87,194			17,133			—			104,327
Gross profit		33,251			5,228			—			38,479
Operating expense:
Selling, general and administrative		15,823			3,400			3,616	(b)(c)		22,838
Loss (gain) on sale of property and equipment		(896	)		17			—			(879	)
Merger costs		15,741			5,021			—			20,762
Earnings from operations		2,583			(3,210	)		(3,616	)		(4,242	)
Other (income) expense:
Interest expense		567			2,642			8,880	(d)		12,009
Other income		(2,443	)		(41	)		—			(2,483	)
Earnings (loss) before income taxes		4,459			(5,811	)		(12,496	)		(13,768	)
Provision (benefit) for income taxes		4,899			(1,311	)		(4,624	)(e)		(1,036	)
Net earnings (loss)	$	(440	)	$	(4,500	)	$	(7,872	)	$	(12,732	)

See accompanying Notes to Unaudited Pro Forma Statement of Operations Data

41

Notes to Unaudited Pro Forma Statements of Operations Data

(dollars in thousands)

(a) Reflects the elimination of the amortized gain on the post-retirement benefit plan of $224.

(b) Reflects the adjustment to selling, general and administrative expense for the annual monitoring fee of $500 that we are required to pay to Kelso following the closing of the transactions.

(c) Reflects the adjustment to amortization of intangible expense for purchase accounting adjustments to finite-lived identified intangible assets. We expect to amortize the fair value of the finite-lived identified intangible assets of approximately $134.8 million on a straight-line basis over the following estimated useful lives: supplier relationships—20 years; trade names—15 years; software—6 years; covenants not to compete—12 to 18 months.

(d) Represents pro forma interest expense resulting from our new capital structure using, in the case of revolving and term loan borrowings, an assumed LIBOR rate of 3.45% as follows:

	Year ended December 26, 2004			Six Months ended June 26, 2005
Cash interest expense:
Revolver (1)	$	—		$	—
Term loan (2)		7,130			3,565
Senior notes (3)		16,500			8,250
Commitment fee (4)		250			125
Existing debt (5)		232			116
Total cash interest expense		24,112			12,056
Amortization of discount on notes offered hereby		—			—
Amortization of capitalized debt issuance costs (6)		1,233			617
Pro forma interest expense		25,345			12,673
Less historical interest expense, net		(1,572	)		(3,793	)
Total pro forma interest expense adjustment	$	23,773		$	8,880

(1) Reflects pro forma interest expense on our new revolving credit facility at an assumed interest rate of LIBOR plus 2.50% on an average outstanding balance of $0.0 million.

(2) Reflects pro forma interest expense on the term loan facility at an assumed interest rate of LIBOR plus 2.75%.

(3) Reflects pro form interest expense on the senior notes at an assumed fixed interest rate of 11.00%.

(4) Reflects commitment fees of 0.50% on the average available balance under the revolving credit facility.

(5) Reflects historical cash interest expense on existing debt that is not being refinanced (capital leases).

(6) Reflects non-cash amortization of capitalized debt issuance costs. These costs are amortized over the term of the related debt. A 0.125% change in the interest rates on the amount of outstanding indebtedness under the senior credit facility would change the pro forma interest by:

	Year ended December 26, 2004	Six Months ended June 26, 2005
Revolver	—	—
Term Loan	144	72
Total	144	72

(e) Reflects the tax effect of the pro forma adjustments, based on the effective tax rate in 2004 of 37%.

	Year ended December 26, 2004			Six Months ended June 26, 2005
Earnings before income taxes	$	(32,963	)	$	(12,496	)
Tax effective rate of 37%		(12,193	)		(4,624	)

42

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Selected Historical Consolidated Financial Data,” the “Unaudited Pro Forma Consolidated Financial Information,” the consolidated financial statements and notes thereto, and the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, management. Our actual results could differ materially from those discussed in or implied by forward-looking statements for various reasons including those discussed in “Risk Factors” and “Forward-Looking Information.”

Overview

We provide insurance companies and other vehicle suppliers cost-effective salvage processing solutions principally on a consignment basis. The consignment method includes both a percentage of sale and fixed fee basis. Under the percentage of sale and fixed fee consignment methods, the vehicle is not owned by us and only the fees associated with processing the vehicle are recorded as revenue. The percentage of sale consignment method offers potentially increased profits over fixed fee consignment by providing incentives to both ourselves and the salvage provider to invest in vehicle enhancements, thereby maximizing vehicle selling prices. The proceeds from the sale of the vehicle itself are not included in revenue. We also, on a very limited basis, sometimes acquire vehicles via purchase. Under the purchase method, the vehicle is owned by us, and the proceeds from the sale of the vehicle are recorded as revenue.

Our operating results are subject to fluctuations, including quarterly fluctuations, that can result from a number of factors, some of which are more significant for sales under the purchase method. The discussion in this section contains forward-looking statements that are based on beliefs of our management, as well as assumptions made by, and information currently available to, management. Our actual results could differ materially from those discussed or implied herein. Refer to the section “Risk Factors” for a further discussion of some of the factors that affect or could affect our business, operating results and financial condition.

On February 22, 2005, IAAI entered into a merger agreement with Axle Merger and Axle Holdings. On May 25, 2005, Axle Merger merged with and into IAAI, with IAAI continuing as the surviving corporation, and IAAI became a direct wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso). The following transactions occurred in connection with the merger:

• Approximately 11.8 million shares of IAAI’s outstanding common stock were converted into the right to receive $28.25 per share in cash.

• All outstanding options to purchase shares of IAAI’s common stock (other than certain options held by the continuing investors, which were exchanged into stock options of Axle Holdings) were canceled in exchange for payments in cash of $28.25 per underlying share, less the applicable option exercise price.

• Affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors contributed approximately $143.6 million in cash to the LLC, which now holds all the outstanding shares of Axle Holdings.

• The continuing investors exchanged stock options of IAAI with an aggregate spread value of approximately $3.3 million into stock options of Axle Holdings with an equivalent aggregate spread value.

• Axle Merger entered into new senior secured credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon completion of the merger, IAAI assumed Axle Merger’s obligations under such credit facilities and all of IAAI’s domestic subsidiaries guaranteed these credit facilities.

43

• IAAI Finance issued the old notes and, upon completion of the merger, IAAI assumed IAAI Finance’s obligations under the old notes and all of IAAI’s domestic subsidiaries guaranteed the old notes on a senior unsecured basis. Upon completion of the merger of Axle Merger with and into IAAI, IAAI Finance merged with and into IAAI, with IAAI continuing as the surviving corporation.

• The LLC contributed to Axle Merger, through Axle Holdings, approximately $143.6 million in cash, representing the cash equity contribution by affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, the continuing investors and certain third-party investors.

• IAAI used the net proceeds from these contributions and financings to:

• fund the cash consideration payable to its shareholders and option holders under the merger agreement;

• repay the outstanding principal and accrued interest under its then existing credit facility; and

• pay related transaction fees and expenses.

We accounted for the transactions using the purchase method of accounting and, accordingly, our financial data in respect of reporting periods subsequent to May 25, 2005, or successor periods, reflect the purchase method of accounting.

Significant Items Affecting Comparability

The merger transactions resulted in a new basis of accounting under SFAS 141. This change creates many differences between reporting for IAAI post-merger, as successor, and IAAI pre-merger, as predecessor. The predecessor financial data for periods ending on or prior to May 25, 2005, generally will not be comparable to the successor financial data for periods after that date. The merger resulted in IAAI having an entirely new capital structure, which results in significant differences between predecessor and successor in the equity sections of the financial statements. In addition, the successor incurred debt issuance costs and $265.0 million of debt in connection with the merger. As a result, interest expense and debt will not be comparable between the predecessor and the successor. We have made certain adjustments to increase or decrease the carrying amount of assets and liabilities to their fair values as of the merger date as a result of preliminary estimates and certain assumptions we believe are reasonable, which, in a number of instances, has resulted in changes to amortization and depreciation expense amounts. The final appraisals are not yet complete, and thus we have not yet completed our allocation of purchase price and may make further adjustments to the preliminary allocations in subsequent periods.

Acquisitions and New Operations

Since 1991, we have grown through a series of acquisitions and opening of new sites and currently we have a total of 80 sites. In 2005, we acquired branches in Altoona, Pennsylvania and Charleston, South Carolina and opened new operations in Jacksonville, Florida.

44

Results of Operations

The following table sets forth our results of operations for (1) the quarter ended June 26, 2005 and the quarter ended June 27, 2004, and (2) the six months ended June 26, 2005 and the six months ended June 27, 2004. The results for the quarter and for the six months ended June 26, 2005 set forth the combined successor and predecessor revenues, cost of sales, operating expense, other (income) expense and income taxes for the three months and six months ended June 26, 2005.

	Three Months ended						Six Months ended
	June 26, 2005			June 27, 2004			June 26, 2005			June 27, 2004
	(unaudited) (dollars in thousands)
Revenues:
Fee income	$	61,344		$	51,777		$	122,445		$	101,841
Vehicle sales		10,518			8,225			20,361			15,352
		71,862			60,002			142,806			117,193
Cost of sales:
Branch cost		44,358			39,598			87,035			77,993
Vehicle cost		8,827			7,187			17,292			13,171
		53,185			46,785			104,327			91,164
Gross profit		18,677			13,217			38,479			26,029
Operating expense:
Selling, general and administrative		9,173			8,357			19,222			16,837
Loss (gain) on sale of property and equipment		(847	)		(18	)		(879	)		(19	)
Merger costs		19,529			—			20,762			—
		27,855			8,339			39,105			16,818
Earnings (loss) from operations	$	(9,178	)	$	4,878		$	(626	)	$	9,211
Other (income) expense:
Interest expense		2,790			410			3,209			887
Other income		(2,452	)		(11	)		(2,483	)		(22	)
Earnings (loss) before taxes		(9,516	)		4,479			(1,352	)		8,346
Income taxes		445			1,824			3,588			3,390
Net earnings (loss)	$	(9,961	)	$	2,655		$	(4,940	)	$	4,956

Three Months Ended June 26, 2005 Compared to the Three Months Ended June 27, 2004

Revenues were $71.9 million for the three months ended June 26, 2005, up from $60.0 million for the same three month period in 2004. Fee income in the second quarter increased 18% to $61.3 million, versus $51.8 million in the second quarter of last year due to more favorable pricing and an increase in volumes sold.

Cost of sales increased $6.4 million to $53.2 million for the three months ended June 26, 2005, versus $46.8 million for the same period last year. Vehicle cost of $8.8 million was $1.6 million more than the $7.2 million incurred in the second quarter of 2004. Branch cost including depreciation of $44.4 million increased $4.8 million from $39.6 million for the same period last year. This increase was primarily the result of higher volumes of vehicles processed for the quarter and higher per unit tow costs.

Gross profit increased 42% to $18.7 million for the three months ended June 26, 2005, from $13.2 million for the same period in 2004.

Selling, general and administrative expense, including depreciation and amortization, of $9.2 million increased $0.8 million, or 10%, from the $8.4 million of expense incurred during the second quarter of last year. This increase is related to the additional $0.8 million of amortization related to the intangibles arising from the merger.

Merger costs for the three months ended June 26, 2005 of $19.5 million are primarily related to $7.7 million in legal and advisory fees, $5.0 million in management fees, $4.1 million in stock compensation and other compensation triggered by the transaction, $0.8 million of insurance costs and $1.9 million net interest on bond indebtedness incurred in connection with the merger transactions.

45

Interest expense for the three months ended June 26, 2005 increased to $2.8 million from $0.4 million in the second quarter of 2004. This increase is primarily attributable to $2.7 million of interest incurred on $150.0 million of 11% Senior Notes due 2013 and a new $115.0 million term loan with a seven year maturity and $0.1 million attributable to the prior senior credit facility. The senior notes and our new senior credit facilities, including the term loan, are described in “—Financial Condition and Liquidity” below.

Income taxes for the three months ended June 26, 2005 of $0.4 million are based on an effective rate for the period of (4.7)%. This quarterly rate is based on effective rate calculations made for the predecessor and successor periods. The difference from the statutory rate was attributable to expenses incurred in connection with the merger that are not deductible for tax purposes. Income taxes for the three months ended June 27, 2004 of $1.8 million were based on the Company’s expected effective rate of 40.7% for the fiscal year ended December 26, 2004.

Six Months Ended June 26, 2005 Compared to the Six Months Ended June 27, 2004

Revenues were $142.8 million for the six months ended June 26, 2005, up from $117.2 million for the six month period ended June 27, 2004. Fee income increased to $122.4 million versus $101.8 million for the six month period ended June 27, 2004 due to more favorable pricing and an increase in volume sold.

Cost of sales increased $13.1 million to $104.3 million for the six months ended June 26, 2005, versus $91.2 million for the same period last year. Vehicle cost of $17.3 million was $4.1 million more than the $13.2 million incurred in the six months ending June 27, 2004. Branch cost including depreciation of $87.0 million increased $9.0 million from $78.0 million for the same period last year. This increase was primarily the result of increased volumes and higher per unit tow costs.

Gross profit increased 48% to $38.5 million for the six months ended June 26, 2005, from $26.0 million for the comparable period in 2004.

Selling, general and administrative expense, including depreciation and amortization, of $19.2 million increased 14.3% from last year’s amount of $16.8 million. This increase is primarily due to performance based bonus accruals and $1.2 million of amortization related to the intangibles recorded as part of the merger transaction.

Merger costs for the six months ended June 26, 2005 of $20.8 million are primarily related to $9.0 million in legal and advisory fees, $5.0 million in management fees, $4.1 million in change of control payments, $0.8 million of insurance costs and $1.9 million net interest on bond indebtedness incurred in connection with the merger transactions.

Interest expense of $3.2 million for the six months ended June 26, 2005, increased $2.3 million from $0.9 million for the comparable period in 2004. This increase is primarily attributable to $2.7 million of interest incurred on $150.0 million of 11% Senior Notes due 2013 and a new $115.0 million term loan with a seven year maturity, and $0.5 million attributable to the prior senior credit facility. The senior notes and our new senior credit facilities, including the term loan, are described in “—Financial Condition and Liquidity” below. Interest expense for the six months ended June 27, 2004 was attributable to the prior credit facility.

Income taxes for the six months ended June 26, 2005 of $3.6 million are based on an effective tax rate of (265.4)%. This rate is based on effective rate calculations made for the predecessor and successor periods. The difference from the statutory rate was attributable to expenses incurred in connection with the merger that are not deductible for tax purposes. Income taxes for the six months ended June 27, 2004 of $3.4 million were based on the Company’s expected effective rate of 40.7% for the fiscal year ended December 26, 2004.

46

Year Ended December 26, 2004 Compared with the Year Ended December 28, 2003

Revenues increased 15% to $240.2 million for the year ended December 26, 2004, from $209.7 million in 2003. The increase in revenues was primarily due to a higher volume of vehicles sold and a higher average selling price for vehicles sold at auction. The $8.5 million or 21% decline in vehicle sales was primarily related to our shift away from vehicles sold under the purchase method. Vehicles sold under the purchase method accounted for less than 4% of the total vehicles sold in 2004, versus approximately 6% in 2003. Fee income for 2004 increased 23% to $208.7 million versus $169.7 million in 2003. Fee income increased primarily due to higher unit volumes.

Cost of sales increased $13.5 million to $184.0 million for the year ended December 26, 2004, versus $170.5 million for last year. Vehicle cost of $26.7 million decreased $8.6 million in 2004 from $35.3 million in 2003. This decrease was primarily related to our shift away from vehicles sold under the purchase method. Branch cost of $157.3 million increased $22.1 million in 2004 from $135.2 million in 2003. Branch cost includes tow, office and yard labor, occupancy, depreciation and other costs inherent in operating the branches. New branches opened in 2004 account for approximately $1.7 million of additional branch costs. Excluding the impact of new branches, branch costs increased $20.4 million primarily due to increased volumes and increases in towing, performance-based bonus and insurance expense.

Gross profit of $56.2 million for the year ended December 26, 2004 increased $17.0 million, or 43%, from $39.2 million for 2003.

Selling, general and administrative expense of $35.0 million in 2004 was $4.8 million more than the expense of $30.2 million in 2003. This increase was primarily due to performance-based bonus expense, costs related to compliance with the requirements of the Sarbanes-Oxley Act of 2002, and higher depreciation expense associated with the implementation of our new information technology system. Professional services expenses related to the audit and compliance with Sarbanes-Oxley were $1.9 million in 2004. Amortization of intangible assets is now included within this category of expense and amounted to $0.6 million in 2004 and $0.5 million in 2003.

Loss on sale of property and equipment increased to $0.3 million in 2004. The loss primarily relates to a $0.8 million loss on the exit of the Woodinville facility which was partially offset by a $0.5 million gain on the sale of the South Boston facility.

There were no business transformation costs for the year ended December 26, 2004, versus $3.9 million for last year. Business transformation costs included expenses related to data base conversions, training, and other activity related to the rollout of our new information technology system.

Interest expense of $1.6 million for the year ended December 26, 2004 increased $0.1 million from $1.5 million for 2003. On March 19, 2004, we entered into a second amended and restated credit agreement with our lenders, which is described in “—Financial Condition and Liquidity” below. At December 26, 2004, the outstanding balance related to the term loan with our lenders was $16.9 million and $6.0 million related to the revolver. At December 26, 2004, the interest rate on the term loan was 5.4%.

Income tax expense for the year 2004 was $7.1 million, an increase of $5.8 million from the income tax expense of $1.3 million for 2003. Our effective tax rates for the years 2004 and 2003 was 37% and 36%, respectively.

Our net earnings for fiscal year 2004 was $12.3 million, an increase of $10.0 million from our net earnings of $2.3 million for fiscal year 2003.

Year Ended December 28, 2003 Compared with the Year Ended December 29, 2002

Revenues decreased 10% to $209.7 million for the year ended December 28, 2003, from $234.2 million in 2002. The decline in revenues was primarily due to our continued shift away from vehicles sold under the purchase method. Under the purchase method, the entire purchase price of the vehicle is recorded as revenue compared to only recording the fees collected on the sale of a vehicle under the lower risk consignment fee based

47

arrangements. Vehicles sold under the purchase method accounted for less than 6% of the total vehicles sold in 2003, versus approximately 10% in 2002. Fee income for 2003 increased 4% to $169.7 million versus $162.8 million in 2002. Fee income increased primarily due to higher unit volumes.

Cost of sales decreased $20.5 million to $170.5 million for the year ended December 28, 2003, versus $191.0 million for 2002. Vehicle cost of $35.3 million in 2003 was $30.2 million less than the $65.5 million reported in 2002. This decrease is primarily related to our shift away from vehicles sold under the purchase method. Branch cost of $135.2 million increased $9.7 million in 2003 from $125.5 million in 2002. New branches opened in 2003 account for approximately $7.0 million of additional branch costs. Excluding the impact of new branches, branch costs increased $2.7 million primarily in tow and depreciation expense.

Gross profit of $39.2 million for the year ended December 28, 2003 decreased $4.0 million, or 9%, from $43.2 million for 2002.

Selling, general and administrative expense of $30.2 million in 2003 was $2.5 million more than the expense of $27.7 million in 2002. This increase was primarily due to expenses associated with the implementation of our new automated salvage auction processing system. Amortization of intangible assets is now included within this category of expense and amounted to $0.5 million in 2003 and $0.3 million in 2002.

Business transformation costs for the year ended December 28, 2003 were $3.9 million, versus $8.1 million for 2002. Business transformation costs include expenses related to our systems redesign project, the business process re-engineering project, severance costs and accelerated depreciation associated with our former computer infrastructure. We began recording business transformation costs during the second quarter of 2001. As part of our substantial business transformation, we are providing visibility to several significant components of our cost structure. Business transformation costs and other unusual charges are discussed in detail in “—Significant Items Affecting Comparability” below.

Interest expense of $1.5 million for the year ended December 28, 2003 increased $0.8 million from $0.7 million for 2002. Included in interest expense for 2002 was a non-cash charge of $0.3 million to recognize the ongoing cost of the interest rate swap on the unused portion of our credit facility. In February 2002, we used excess cash and proceeds from the sale of investments to repay $20.0 million of our 8.6% senior notes that matured on February 15, 2002, and entered into a new $30.0 million five-year unsecured credit facility. At December 29, 2002, there was no outstanding balance related to this credit facility. The credit facility was a one-year revolver that converted on February 15, 2003 into a four-year term loan. On February 15, 2003, we borrowed the entire $30.0 million under the unsecured credit facility. At December 28, 2003, the outstanding balance related to the term loan with our lenders was $24.4 million. At December 28, 2003, the interest rate on the term loan was 5.7%. On March 19, 2004, we entered into a second amended and restated credit agreement with our lenders, which is described in “—Financial Condition and Liquidity” below.

Income tax expense for the year 2003 was $1.3 million, a decrease of $1.7 million from the income tax expense of $3.0 million for 2002. Our effective tax rate for the years 2003 and 2002 was 36% and 43%, respectively.

Our net earnings for the year 2003 was $2.3 million, a decrease of $1.7 million from our net earnings of $4.0 million for the fiscal year 2002.

Financial Condition and Liquidity

Historically, IAAI has relied on cash flows from operations and revolving credit borrowings to finance its working capital requirements and capital expenditures. During the quarter ended June 26, 2005, we funded the payment of the cash consideration payable in connection with the merger to old shareholders and optionholders of IAAI, the retirement of pre-merger debt, and the payment of fees and expenses related to the transactions, primarily from (i) borrowings under our new $165.0 million senior credit facilities, (ii) the issuance of the old notes, and (iii) proceeds of the sale of interests in the LLC that were contributed to IAAI. We expect to fund our capital expenditures for the remainder of 2005 from a combination of cash generated from operations and revolving credit borrowings.

48

Net cash used in operating activities during the six months ended June 26, 2005 was $37.0 million, a $19.1 million increase from the same period last year, primarily as a result of the merger transaction costs and the settlement of the Emery Air Freight dispute.

Net cash used in investing activities during the six months ended June 26, 2005 was $416.1 million, consisting primarily of funds used for the payment of the cash consideration payable in connection with the merger to old shareholders and optionholders of IAAI, the purchase of the Altoona facility, capital expenditures and earn out payments made in connection with prior acquisitions.

Net cash provided by financing activities during the six months ended June 26, 2005 was $386.4 million compared to $4.8 million used during the six months ended June 27, 2004. This increase resulted primarily from (i) the issuance of the 11% Senior Notes due 2013, (ii) proceeds of the sale of the interests in the LLC that were contributed to IAAI, and (iii) borrowings under the new credit facilities. These increases were partially offset by the repayment of our old senior credit facilities and the incurred issuance costs related to the new debt.

At June 26, 2005, we had current assets of $97.5 million, including $20.2 million in cash, current liabilities of $45.4 million and working capital of $64.8 million, which represents a $47.9 million increase from December 26, 2004.

Our accounts receivable decreased $8.4 million to $42.0 million as of June 26, 2005, from $50.4 million as of December 26, 2004. Accounts receivable consists of balances due from our salvage providers, typically large insurance companies. Accounts receivable include advance charges paid by us on behalf of salvage providers. These charges typically include storage and tow fees incurred at a temporary storage or repair shop prior to our moving the vehicle to one of our facilities. Inventory increased $0.3 million to $14.8 million as of June 26, 2005, from $14.5 million as of December 26, 2004. Inventory consists of capitalized tow charges on vehicles on hand and the cost of purchased vehicles once title is received. Inventory increased due to higher per unit costs due primarily to higher tow charges.

Capital expenditures were approximately $9.8 million for the six months ended June 26, 2005. These capital expenditures consisted of several growth projects and elective spending, including various branch improvements, upgrades to existing branches, the development of new facilities and continued enhancements to our information technology system.

On May 19, 2005, we entered into new senior credit facilities comprised of a $50.0 million revolving credit facility maturing in 2011 and a $115.0 million term loan facility maturing in 2012. The revolver is principally used for working capital purposes, and the term loan was used to finance the merger and related transactions, including the repayment of our old senior credit facilities. For purposes of calculating interest, loans under the senior credit facilities are designated as eurodollar rate loans or, in certain circumstances, base rate loans, plus applicable borrowing margins. Eurodollar loans bear interest at the rate for deposits in dollars appearing on page 3570 of the Telerate screen as of 11:00 a.m., London time, two business days prior to the beginning of the applicable interest period, plus a borrowing margin as described below. Interest on eurodollar rate loans is payable (i) as to any eurodollar loan having an interest period of three months or less, on the last day of such interest period, and (ii) as to any eurodollar loan having an interest period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such interest period and the last day of such interest period. Base rate loans bear interest at (a) the greater of (i) the rate most recently announced by the Bank of New York as its “prime rate” in effect at its principal office in New York City and (ii) the Federal Funds Effective Rate (as defined in our senior credit agreement) plus 0.50% per annum, plus (b) a borrowing margin as described below. The margin varies from 2.25% to 2.75% on eurodollar revolving loans and from 2.50% to 2.75% on eurodollar term loans. The margin varies from 1.25% to 1.75% on base rate revolving loans and from 1.50% to 1.75% on base rate term loans. The amount of the margin is based on our leverage ratio. As of June 26, 2005, the weighted average annual interest rate applicable to eurodollar rate loans was 6.16%. There were no base rate loans outstanding at June 26, 2005. During the successor period May 26, 2005 to June 26, 2005, the weighted average annual interest rate for the new senior credit facilities was 6.19%. A commitment fee of 0.50% on the unused portion of the senior credit facilities is payable on a quarterly basis. As of June 26, 2005, $47.7 million was available for borrowing under the senior credit facilities.

49

Our obligations under the senior credit facilities are guaranteed by each existing direct and indirect subsidiary of IAAI. In addition, each future significant domestic subsidiary of IAAI is required to guaranty those obligations. The senior credit facilities are secured by (1) all existing and future property and assets, real and personal, of IAAI and each guarantor, subject to certain exceptions; (2) a pledge of 100% of the stock of each of IAAI’s existing and future direct and indirect domestic subsidiaries; (3) a pledge of 65% of the stock of each of IAAI’s future direct and indirect foreign subsidiaries; (4) all present and future intercompany debt of IAAI and each guarantor; and (5) all proceeds of the assets described in clauses (1), (2), (3) and (4) of this sentence. Under the senior credit facilities, we are required to meet specified restrictive financial covenants, including a maximum consolidated leverage ratio and minimum consolidated interest coverage ratio. The credit facilities also contain various other covenants that limit our ability to, among other things:

• incur additional indebtedness, including guarantees;

• create, incur, assume or permit to exist liens on property or assets;

• engage in sales, transfers and other dispositions of our property or assets;

• declare or pay dividends to, make distributions to, or make redemptions and repurchases from, equity holders;

• make or commit to make capital expenditures over certain thresholds;

• make loans and investments and enter into acquisitions and joint ventures;

• prepay, redeem or repurchase our debt, or amend or modify the terms of certain material debt or certain other agreements; and

• restrict our ability and the ability of our subsidiaries to pay dividends and make distributions.

We are currently in compliance with our obligations under the senior credit facilities.

The covenants contained within the senior credit facility agreement are critical to an investor’s understanding of our financial liquidity, as the violation could cause a default and lenders could elect to declare all amounts borrowed due and payable. The coverage ratio covenants are based on consolidated EBITDA. Consolidated EBITDA is defined as net earnings (loss) plus income tax provision (benefit), interest (net), depreciation, and amortization with further adjustments including non-cash items, nonrecurring items, and sponsor advisory fees. While consolidated EBITDA is not a defined term under generally accepted accounting principles in the United States, we believe that the inclusion of consolidated EBITDA is appropriate, as it provides additional information to demonstrate compliance with the financial covenants. Below is a table detailing consolidated EBITDA (in thousands):

	Three Months Ended											Twelve Months Ended
	September 26, 2004			December 26, 2004		March 27, 2005			June 26, 2005			June 26, 2005			December 26, 2004
Net earnings (loss)	$	3,354		$	3,955	$	5,021		$	(9,961	)	$	2,369		$	12,265
Income taxes		2,036			1,713		3,143			445			7,337			7,139
Interest expense (net)		362			323		419			2,790			3,894			1,572
Depreciation and amortization		3,202			3,261		3,203			4,120			13,786			12,985
EBITDA		8,954			9,252		11,786			(2,606	)		27,386			33,961
Non-cash charges		172			73		695			388			1,328			360
Non-recurring expense (income)		(606	)		1,222		(32	)		(3,197	)		(2,613	)		597
Merger costs		—			—		1,233			19,529			20,762			—
Estimated cost savings		1,461			353		1,218			—			3,032			4,263
Estimated incremental revenue		519			—		—			—			519			7,759
Allowance per credit agreement (1)		—			—		—			1,000			1,000			—
Advisory service fees		—			—		—			49			49			—
Consolidated EBITDA	$	10,500		$	10,900	$	14,900		$	15,163		$	51,963		$	46,940

(1) Per the credit agreement, EBITDA is to be increased by $1.0 million for the three month period ended June 26, 2005 for covenant purposes only.

50

The term loan under the senior credit facilities is amortized quarterly from December 31, 2005 through the date of maturity. The scheduled quarterly amortization payments are $287,500 per quarter, with a balloon payment of $107.5 million due on May 19, 2012.

With respect to fiscal years beginning 2006 and later, we are required to make a mandatory annual prepayment of the term loan and the revolving loan in an amount equal to 75% of excess cash flow, as defined in the senior credit agreement, when the consolidated leverage ratio is 4.0x or greater, or 50% of excess cash flow when the consolidated leverage ratio is at least 3.0x but less than 4.0x. In addition, we are required to make a mandatory prepayment of the term loans with, among other things:

• 100% of the net cash proceeds of certain debt issuances, and sales and leasebacks of real property, subject to certain exceptions;

• 50% of the net cash proceeds from the issuance of additional equity interests; and

• 100% of the net cash proceeds from any property or asset sale or recovery event in an amount exceeding $2.5 million in any fiscal year, subject to certain exceptions and reinvestment requirements.

Mandatory prepayments will be applied first to the base rate term loans and then to eurodollar term loans.

As of June 26, 2005, there were no borrowings under the revolving credit facility, although we did have outstanding letters of credit in the aggregate amount of $2.3 million, and $115.0 million outstanding under the term loan facility. At June 26, 2005, the interest rate on borrowings under the term loan was 6.2%.

On April 1, 2005, IAAI Finance issued $150.0 million of 11% Senior Notes due 2013. The obligations under the notes were assumed by IAAI on May 25, 2005, as a result of the merger. The notes mature on April 1, 2013, with interest paid semi-annually every April 1 and October 1. Under the indenture governing the notes, subject to exceptions, we must meet a minimum consolidated interest coverage ratio to incur additional indebtedness. Prior to April 1, 2008, on any one or more occasions, the issuer may use the net proceeds of one or more equity offerings to redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 111.00% of the principal amount, plus accrued and unpaid interest. Otherwise, the notes are not redeemable until April 1, 2009. Starting on April 1, 2009, we have the option to redeem all or a portion of the notes at a redemption price equal to a percentage of the principal amount, plus accrued and unpaid interest. In the event of this kind of an optional redemption, the redemption price would be 105.50% for the 12-month period beginning April 1, 2009; 102.75% for the 12-month period beginning April 1, 2010; and 100.00% thereafter. If we experience specific kinds of changes of control, we must offer to purchase the notes at a price of 101% of their principal amount, plus accrued and unpaid interest. The indenture governing the notes contains various covenants which, subject to exceptions, limit the ability of the issuer and its restricted subsidiaries to, among other things:

• borrow money;

• incur liens;

• pay dividends or make certain other restricted payments or investments;

• issue disqualified stock;

• merge, consolidate or sell all or substantially all of their assets;

• enter into transactions with affiliates;

• create restrictions on dividends or other payments by the restricted subsidiaries;

• sell certain assets and use proceeds from asset sales; and

• create guarantees of indebtedness by restricted subsidiaries.

On May 25, 2005, we prepaid the outstanding principal amount of approximately $22.1 million on our prior credit facility, together with approximately $0.2 million of accrued interest, thereby paying off our prior credit facility in full.

51

We have capital leases of approximately $1.1 million of which approximately $0.5 million is classified as short term. Other long-term liabilities included our post-retirement benefits liability that relates to a prior acquisition. The amount recorded at June 26, 2005 for the post-retirement benefits liability was approximately $0.7 million.

We believe that existing cash , as well as cash generated from operations, together with available borrowings under our new senior credit facility, will be sufficient to fund capital expenditures and provide adequate working capital for operations for the next 12 months.

Summary Disclosure about Contractual Obligations

The following table sets forth our long-term contractual cash obligations as of June 26, 2005, and the effect such obligations are expected to have on our liquidity and cash flows in future periods:

	2005		2006		2007		2008		2009		Thereafter		Total
	(dollars in thousands)
Long-term debt:
Term loan	$	288	$	1,150	$	1,150	$	1,150	$	1,150	$	110,112	$	115,000
Senior notes		—		—		—		—		—		150,000		150,000
Capital leases(1)		1,062		387		316		33		—		—		1,798
Operating leases		12,501		23,854		21,141		19,144		16,633		93,667		186,940
Other long-term obligations:
Non-compete agreements		133		273		243		183		20		20		872
Total	$	13,984	$	25,664	$	22,850	$	20,510	$	17,803	$	353,799	$	454,610

(1) Includes related interest expense.

Critical Accounting Policies

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosures. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. As such, we continuously evaluate our estimates. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Goodwill

As of June 26, 2005, we had $213.9 million of net goodwill recorded in our consolidated financial statements. In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets,” we assess goodwill for possible impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Important factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results; significant negative industry or economic trends; significant decline in our stock price for a sustained period; and our market capitalization relative to net book value. If we determine that the carrying value of goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, we would measure any impairment based on the excess of carrying amount over fair value measured using a projected discounted cash flow model or other valuation techniques.

52

Deferred Income Taxes

As of June 26, 2005, we had $12.5 million of deferred tax assets recorded. The deferred tax assets relate to temporary differences in depreciation, inventory, accrued liabilities and net operating losses incurred in several of the states where we operate. We have determined that we may not realize the full tax benefit related to certain deferred tax assets. As such, a valuation allowance to reduce the carrying value of the deferred tax assets has been recorded.

As of June 26, 2005, we had $68.3 million of deferred tax liabilities recorded. The deferred tax liabilities relate primarily to intangible assets related to the merger transactions.

Long-Lived Assets and Certain Identifiable Intangibles

As of June 26, 2005, we had $68.0 million of net property and equipment along with net intangible assets of $134.0 million. We evaluate long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the asset’s carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset. If the estimated undiscounted future cash flows change in the future, we may be required to reduce the carrying amount of an asset to its fair value.

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151 (SFAS 151), “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS 151 discusses the general principles applicable to the pricing of inventory. Paragraph 5 of ARB 43, Chapter 4 provides guidance on allocating certain costs to inventory. This Statement amends ARB 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. As required by SFAS 151, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins after June 15, 2005. We are currently evaluating the impact of the adoption of SFAS 151 on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (SFAS 153), “Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29.” SFAS 153 addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29 “Accounting for Nonmonetary Transactions” and replaces it with an exception for exchanges that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. As required by SFAS 153, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins after June 15, 2005. The adoption of SFAS 153 is not expected to have a material impact on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R (SFAS 123R) “Share-Based Payment.” SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R establishes fair value as the measurement method in accounting for share-based payments to employees and eliminates the alternative use of the intrinsic value method of accounting under APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement is effective for public entities as of the beginning of the first interim or annual reporting period of their first fiscal year that begins on or after June 15, 2005. We are currently evaluating the impact of adopting SFAS 123R on our financial statements.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate fluctuations on our floating rate credit facility, under which we have outstanding a $115.0 million term loan at June 26, 2005. We have $150.0 million of senior notes at a fixed rate of 11%.

53

BUSINESS

Overview

We are the second largest provider of salvage vehicle auction services in the United States. We facilitate an efficient market between suppliers of salvage vehicles, primarily insurance companies, and buyers of salvage vehicles, primarily dismantlers and vehicle rebuilders. We provide salvage auction solutions for the redistribution of damaged vehicles that are designated as total-losses by insurance companies, recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made and other salvage vehicles. We enjoy long-term relationships with all the major automobile insurance companies in the United States, including Allstate, GEICO, Nationwide, Progressive, State Farm, USAA and Zurich. In addition, we currently maintain relationships with over 38,500 registered buyers of salvage vehicles. We serve our customer base through 80 sites in 32 states, with locations in 60 of the top 75 metropolitan markets in the United States.

Through our broad service offering, including our hybrid live/Internet auction capabilities, we seek to increase the net proceeds per vehicle generated on behalf of our salvage suppliers and reduce their administrative costs and claim recovery cycle time. We provide our buyers with the salvage vehicles they need to fulfill their replacement part or vehicle rebuild requirements. We earn fees for our services from both suppliers and buyers of salvage vehicles. Most of our salvage vehicles are sold on a consignment basis, where we do not take ownership of the vehicles sold.

Under the leadership of our current management team, we recently completed an investment program begun in 2001 and totaling over $50.0 million that improved our business processes, management information systems and facilities. We believe our streamlined business processes, new Web-based operating system and expanded and improved facility network and geographic presence have greatly improved the quality of our services. We have developed the capability to offer hybrid live/Internet auctions, which enable buyers to participate at our live auctions in person or through Internet bidding. In addition, we developed our CSA Today software product for our insurance company suppliers, which allows them to electronically assign vehicles to us, and provides them with real-time vehicle tracking systems and status reports to manage their inventory through the salvage process. During the last four years, we added 28 salvage auction sites through 14 acquisitions and 14 greenfield expansions and improved our existing facility network. These enhancements have enabled us to provide a more efficient market for the redistribution of total-loss vehicles for both salvage vehicle suppliers and buyers.

Our Competitive Strengths

Leading market position. We are the second largest provider of salvage vehicle auction services in the United States. We recently increased our unit volumes by obtaining incremental business from several major insurance companies. We believe that our leading market position is protected by significant barriers to entry, including (i) difficulty in obtaining zoning and use permits to store and sell total-loss vehicles, (ii) the cost of purchasing or leasing large tracts of land in key metropolitan markets, (iii) the substantial costs to replicate our comprehensive service offering, including our advanced information technology infrastructure and (iv) the time and service levels required to establish long-term relationships with both the suppliers and buyers of salvage vehicles.

National distribution network. Our national facilities footprint allows us to be a single source solution for our insurance company customers’ salvage disposal needs on a national or regional basis. We are able to reduce our insurance company customers’ administrative, towing and third-party storage costs, positioning us to win incremental volumes. Our insurance company customers continue to consolidate and we have the scale necessary to service them more efficiently and effectively than our smaller competitors. We have 80 sites in 32 states, including locations in 60 of the top 75 metropolitan markets in the United States, and an additional 50 selected service partners, which together provide comprehensive geographic coverage to our customers.

Innovative, value-added service offerings. We offer complete service solutions to create the most efficient auction process for suppliers and buyers of salvage vehicles. Our range of service offerings include:

• Live auctions with Internet-bidding capabilities. We offer our buyer customers the ability to (i) participate in person at a live auction at one of our branch facilities; (ii) pre-bid over the Internet; and

54

(iii) bid over the Internet in real time in a live auction through our integrated Web-based bidding platform, I-bid LIVE.

• CSA Today. We offer a data management system to our insurance company suppliers that provides them with the capability to electronically assign salvage vehicles to us and to track and manage their salvage vehicle inventory throughout the salvage process with real-time status reports.

• Vehicle value enhancement services. We offer preservation services, such as custom shrink wrapping, preparation services, such as washing, detailing and key-making and presentation services, such as car-starting and our Run & Drive auction.

• National Salvage Network. We offer a single source solution that allows an insurance company customer to assign all of its salvage vehicles to our national service center, which enables us to distribute vehicle consignments throughout the United States.

• Vehicle inspection centers. We maintain vehicle inspection centers at many of our sites where we provide inspection services for suspected total-loss vehicles. These centers minimize vehicle storage charges incurred by our insurance company customers at temporary storage facilities or repair shops and also improve service time for the policyholder.

In addition, we offer electronic data interchange of titling information, salvage returns analyses, vehicle inspection services and FastTow towing services. We also offer our BidFast service that provides salvage valuation solutions for situations such as owner retention and partial loss conversion, and our FastTrack service that combines a comprehensive appraisal service with our salvage service resources so our insurance company customers can make a total-loss decision more quickly. We believe our value-added service offerings and our unique hybrid live/Internet auction capabilities drive higher returns for our suppliers.

Proprietary technology platform. We developed our proprietary Web-based information system, Automated Salvage Auction Processing system, or ASAP, to streamline all aspects of our operations and centralize operational data collection. ASAP also provides our salvage vehicle suppliers with 24-hour online access to powerful tools to manage their salvage disposition process, including inventory management, salvage returns analysis and electronic data interchange of titling information. Our technology platform allows us to efficiently manage our business and improve customer returns on salvage, shorten our customers’ claims processing cycle and lower their claims administration costs.

Long-term relationships with vehicle suppliers and buyers. We have long-term relationships with all of the major U.S. automobile insurance companies, many of whom have been our clients for decades. Our largest vehicle suppliers include Allstate, GEICO, Nationwide, Progressive, State Farm, USAA and Zurich. As a national provider of salvage vehicle auction services, we have benefited and expect to continue to benefit from consolidation within the automobile insurance industry, which provides us with most of the salvage vehicles that we process. We maintain one of the nation’s largest databases of registered salvage buyers, with more than 38,500 dismantlers, rebuilders, salvage dealers, body/repair shops and other buyers from across the United States and abroad. In 2004, no single supplier represented more than 16% of our unit sales and no single buyer represented more than 5% of our unit sales.

Experienced management team. We have a senior management team consisting of seven individuals with over 80 years of combined experience in the automobile physical damage insurance services industry. Led by Thomas C. O’Brien, our president and chief executive officer, our management team has improved our business processes, systems and facilities network, which has in turn significantly improved our financial results.

Our Business Strategy

Increase auction sales volumes. We seek to continue to grow our unit volumes with our insurance company customers and other vehicle providers by generating better returns on salvage vehicles and offering a broad

55

selection of services to prospective suppliers. We have recently obtained incremental business volumes from several major insurance companies based, in large part, on our ability to provide comprehensive salvage solutions on a national and regional level. Given our strong and growing penetration among top insurance salvage providers, we believe that we will continue to benefit as automobile insurance companies further consolidate. Our hybrid live/Internet auction capabilities, comprehensive service offerings and the increase in the number of vehicles processed at our existing sites typically make our auctions more attractive, resulting in greater buyer participation and increased competitive bidding. We believe these factors enhance our ability to deliver strong and improving returns on vehicles to our insurance company suppliers.

Drive increased profitability. We intend to enhance profitability at our existing sites by leveraging our broad operating platform and integrated systems. Our available capacity, centralized administrative functions and ability to leverage the fixed cost component of our branch costs provides significant profit growth potential as we continue to drive higher volume levels. We plan to increase revenues per vehicle by continuing to improve our service offerings.

Continue to invest in technology. We will continue to invest in and improve our technology infrastructure to expand our service offerings and improve our operating efficiencies. With our comprehensive portfolio of services, we are able to provide our customers with valuable, real-time information regarding their salvage disposition process, including inventory management data, salvage returns analysis and electronic data interchange of titling information. We will continue to leverage our technology platform to develop additional service offerings that will continue to improve our customers’ returns on salvage, shorten the claims processing cycle and lower the cost of administering claims. In addition, we will continue to invest in our front-end technology systems, including our Auction Center Internet portal, to further improve the buyer experience and buyer loyalty.

Expand through selective acquisitions and greenfield sites. We expect to continue pursuing growth through a disciplined acquisition and greenfield expansion strategy in selected markets. The salvage vehicle market in the United States remains fragmented. The large majority of our competitors operate in a single market or lack a national presence. As demand for single source solutions increases as a result of the continued consolidation of our insurance company suppliers, we believe that we may be able to acquire smaller, less geographically diversified competitors who are less competitive at the regional and national level. In addition, we will continue to evaluate opportunities to open new greenfield sites in markets adjacent to where we already have a presence where we can effectively leverage our sales and marketing capabilities. We will also continue to selectively expand our presence in existing markets where we already have relationships with vehicle providers and have processing facilities.

Auctions

We generally conduct auctions either weekly or bi-weekly at each of our locations. These auctions are either live or sealed bid. Vehicles are marketed at each respective auction site as well as via an online auction list that allows prospective bidders to preview vehicles prior to the actual auction event. Using our Auction Center feature at www.iaai-bid.com, prospective buyers can either review all vehicles at each of our locations or search for specific vehicles across our inventory. Our Auction Center feature provides buyers with an open, competitive bidding environment that reflects the dynamics of the live salvage vehicle auction. The Auction Center includes such services as comprehensive auction lists featuring links to digital images of vehicles available for sale, an “Auto Locator” function that promotes the search for specific vehicles within the auction system, and special “Flood” or other catastrophe auction notifications. Higher returns are generally driven by broader market exposure and increased competitive bidding.

Shortly after sale of the vehicle and the collection of gross proceeds from the buyer, we remit payment to the supplier of the vehicle. Most insurance company suppliers receive monthly summary reports of all vehicles processed by us. The reports track the insurance companies’ gross return on salvage, net return on salvage, the exact origin of the vehicle, details of storage charges and other useful management data. We also provide many of our suppliers with a quarterly Comprehensive Salvage Analysis of salvage trends.

56

Value-Added Services

We offer an innovative portfolio of value-added service offerings. Our management has strategically developed and continues to extend our service offerings to maximize salvage returns, lower administrative costs, shorten the claims process and increase the predictability of returns to vehicle suppliers, while simultaneously expanding our ability to handle an increasing proportion of the total salvage and claims-processing function as a “one-stop shop” for insurers.

I-bid LIVE

I-bid LIVE is our live auction Internet bidding solution. I-bid LIVE operates in concert with our live auctions and provides registered buyers with the opportunity to participate in live auctions that they cannot physically attend. Through an Internet-enabled computer, the buyer bids in real time along with the live local bidders and other Internet bidders via a simple, Web-based interface. I-bid LIVE provides real-time streaming audio from the IAAI live auction and images of salvage vehicles and other data. Buyers inspect and evaluate the salvage vehicle and listen to the live call of the auctioneer—just as the auction is happening. I-bid LIVE helps our buyers use time more efficiently by allowing them to “virtually” attend many auctions over a broad region without having to leave their office.

In the first half of 2005, Internet bidders participated in the majority of our vehicle auctions. Our Internet bidding capabilities have allowed us to create a broader, more anonymous buyer pool. I-bid LIVE increases overall buyer participation by allowing a given buyer to participate in more auctions than if physical attendance was required. Additionally, lower and more certain acquisition costs enable buyers to pay more while maintaining or improving net margins. Online inventory browsing and e-mail-based inventory alerts reduce the time required to acquire vehicles. Remote buyers can rapidly view the auctioneer’s inventory to determine which parts they want to bid on. With its unique, “voice feed” features, I-bid LIVE provides live communication direct from the auctioneer to the Internet buyer in real-time. The buyer can also engage a third party to obtain accurate transportation quotes over the Internet. The combination of these services enables remote buyers to participate against local bidders with limited risk. By enabling full price discovery with anonymity and scale, Internet auctions have the potential to improve auction prices.

CSA Today

The process of salvage disposition through our system begins at the first report of loss, or when a stolen vehicle has been subsequently recovered. An insurance company representative consigns the vehicle to us, either by phone, facsimile or electronically through our online CSA Today system.

CSA Today is our proprietary data management system. The system enables insurance company suppliers to enter vehicle data electronically, and then track and manage the progress of salvage vehicles throughout the disposition process in terms of both time and salvage recovery dollars. With this tool, vehicle providers have 24-hour access to their total-loss data. The information provided through this system ranges from the details associated with a specific total-loss vehicle, to comprehensive management reports for an entire claims center or geographic region. Additional features of this system include inventory management tools and a powerful new “Average Salvage Calculator” that helps customers determine the approximate salvage value of a potential total-loss vehicle. This tool is helpful to adjusters when evaluating the “repair” vs. “total” decision. The management tools provided by CSA Today enable claims personnel to monitor and manage total-loss salvage more effectively. Insurance company suppliers can also use CSA Today to view original garage receipts, verify ignition key availability, view settlement documents and images of the vehicles, and receive updates of other current and meaningful data.

Vehicle Inspection Centers

In order to further minimize vehicle storage charges incurred by insurance company suppliers at the temporary storage facility or repair shop, and also to improve service time for the policyholder, we maintain

57

vehicle inspection centers, or VICs, at many of our facilities. Some of the VICs are formalized through temporary license agreements with the insurance companies that supply the vehicles. A VIC is a temporary storage and inspection facility located at one of our sites that is operated by the insurance company. Suspected total-loss vehicles are brought directly to the VIC from the temporary storage facility or repair shop. The insurance company typically has appraisers stationed on the VIC site in order to expedite the appraisal process and minimize storage charges at outside sites. If the insurance company determines that a vehicle is a total loss, it can easily be moved to one of our vehicle storage areas. If the vehicle is not totaled, it is promptly delivered to the insurer’s selected repair facility. We also have the ability to provide digital images as a service to our customers, electronically displaying pictures of the damaged cars to insurance adjusters in their offices.

After a totaled vehicle is received at one of our facilities, it remains in storage but cannot be auctioned until transferable title has been submitted to and processed by us. For most vehicles stored at our facilities, no storage charges accrue for a contractually specified period of time. We provide management reports to the insurance company suppliers, including an aging report of vehicles for which title documents have not been provided. In addition, we customarily offer the insurance companies’ staff training for each state’s Department of Motor Vehicles, or DMV, document processing procedures. We utilize our title services to expedite the processing of titles, thereby reducing the time in which suppliers receive their salvage proceeds, in addition to decreasing their administrative costs and expenses. We then process the title documents in order to comply with DMV requirements for these vehicles.

National Salvage Network

We offer our vehicle suppliers a National Salvage Network that allows an insurance company supplier to consign all of its salvage vehicles to a call center. This call center enables us to distribute vehicle consignments throughout most of the United States, even in markets where we do not currently have a facility, and is designed to minimize the administrative workload for insurance companies. In certain areas where we do not have a facility, such vehicles are distributed to our selected ServicePartners.

BidFast

Our BidFast service provides insurers with binding bids for salvage vehicles that historically may have been owner-retained. The return on such vehicles (owner-retained salvage vehicles) is, in many cases, measurably improved for the supplier using this service and enables compliance with many states’ Department of Insurance Regulations. Vehicles purchased under BidFast are accounted for under the purchase method of sale.

FastTrack

We also offer a total-loss appraisal service, FastTrack. FastTrack utilizes an early total-loss recognition system to identify, appraise and move probable total-loss vehicles sooner than the conventional claims process. FastTrack cuts through many of the delays typically associated with traditional claims handling by combining a comprehensive appraisal service with our salvage service resources. Completed appraisals, including a condition report and an array of digital images, are electronically transmitted to a secure, password-protected Web site, providing adjusters with same-day access to the information via the Internet. The result is faster completion of total-loss appraisals, significant savings on accrued shop storage and car rental expenses, and exceptional customer satisfaction.

Other Services

We provide towing services for salvage vehicle buyers and suppliers. Live auction and I-bid LIVE bidders can use our in-house or subcontracted towing services for delivery of vehicles. For vehicle supplies, we offer our FastTow service. Our FastTow service provides towing services that guarantee vehicles will be delivered to one of our branch storage facilities, usually within one to two business days of consignment in a designated service

58

area. When retrieving a vehicle, we will also advance, on behalf of the supplier, any storage and towing charges incurred when towing the vehicle from the accident scene or recovered theft site to the temporary storage facility or repair shop. Once these advance towing and storage charges have been reviewed and verified by us, the towing subcontractor generally will pay the charges on our behalf at time of vehicle pick up and deliver the vehicle to a predetermined auction and storage facility of ours. The rapid retrieval time and review of advance charges are also intended to increase the insurance company’s net return on salvage. We generally use independent towing services to retrieve vehicles and tow back to our storage facilities.

Our Catastrophe Action Team (CAT) can rapidly deploy a complete salvage-processing and claims recovery solution wherever a natural disaster or other catastrophe has occurred. We mobilize our CAT staff and equipment to swiftly establish local communications, vehicle storage and inspection centers, ensuring prompt service and file closure.

We also offer, through our Specialty Salvage Division, salvage services for specialty vehicles such as trucks, heavy equipment, farm equipment, boats, recreational vehicles and classic and exotic cars. Marketing these vehicles nationwide to specialty buyers provides insurance companies with the opportunity for better returns on units that typically do not sell for as much at local salvage pools due to a limited number of local buyers. These vehicles can be viewed online through our Internet Web site at www.iaai.com.

We also provide certain insurance company suppliers with anti-theft fraud control programs for vehicle salvage processing. Our CarCrush service helps insurance companies by ensuring that severely damaged or stripped “high profile” cars are crushed to prevent their vehicle identification numbers (VINs) from being used in auto theft. We also provide computerized reporting of vehicle sales to the National Insurance Crime Bureau (NICB). This includes detailed buyer information obtained through our registration process.

Information Systems

We utilize internally developed, proprietary software to manage our auction processes. Our management believes that information technology represents a critical tool for improving customer returns on salvage, shortening the claims processing cycle and lowing the cost of administering claims.

In addition to the real-time Internet bidding capabilities we provide our salvage vehicle buyers through I-bid LIVE and the comprehensive salvage analysis data management system we provide our salvage vehicle suppliers through CSA Today, we have developed many other systems and programs to enhance efficiencies and increase returns to our customers.

Web-Based Automated Auction Processing System (ASAP)

In order to consolidate 28 independent systems, we developed and implemented a new Web-based system designed to support vehicle registration and tracking, financial reporting, transaction settlement, vehicle title transfer and branch/headquarters communications. The new system is designed to streamline all aspects of our operations as well as support future growth and expansion plans. We began rolling out the new system to our branches during the third quarter of 2002. The Web-based ASAP provides vehicle suppliers with capabilities such as online inventory management and electronic data interchange of titling information. Additionally, ASAP supports buyer services such as Internet-based searchable parts inventories, transportation cost estimators, third-party appraisal requests and real-time bidding.

Our other information systems, including our I-bid LIVE service and CSA Today system, are integrated with our ASAP product, facilitating seamless auction processes and information flow with internal operational systems.

Electronic Data Interchange System (EDI)

A key element of our operational strategy is an integrated electronic data interchange system, which we refer to as EDI. EDI efficiently interfaces us with our suppliers. EDI provides our operations and customer

59

service personnel, vehicle suppliers and senior management with crucial, “real-time” information regarding current pricing, status of customer salvage, financial reports and other aspects of daily operations.

Our EDI system functions by dialing out every fifteen minutes (24 hours per day, seven days per week) to a network we built to retrieve all messages that were left there by the customer. These messages, including salvage assignments and invoice and payment rejection notices, are then incorporated into our processing system. At the same time, we generate an assignment confirmation notice acknowledging the receipt of the assignments to the insurance company. On a daily basis, we send the pre-bill notice and the deficit bill or final invoice to the insurance company as well as the settlement payment to the bank. The following morning, we receive payment notification from the bank.

Business Intelligence

In the second quarter of 2004, we embarked on the development of our next generation of business intelligence products. The first iteration of reports was released into production in the first quarter of 2005 and another larger group of reports will be released in the third quarter of 2005. This system is now providing enhanced financial and operational reporting and analytics for corporate and field management. We are now able to capture and store key business performance data, generate a series of pre-defined financial and operational reports and provide ad hoc analytical and reporting capabilities.

Operating Systems & Other Software

Our information technology infrastructure is based entirely on the Windows/Intel platform. All applications systems are written in Visual Basic and/or Java and utilize relational databases. Where applicable, we have chosen to deploy commercial application software packages, most notably for our financial and business intelligence systems. In support of our live and Internet-based auctions, we operate and manage a wireless network in each of our locations in order to provide full access to applicable applications systems during the auctions.

Sales and Marketing

Our internal sales force is our primary method of marketing our services to insurance company and non-insurance company salvage suppliers. These individuals solicit prospective vehicle providers at the national, regional and local levels. Branch managers also provide support in the form of day-to-day customer service and address customer needs at the local level.

In an effort to generate additional revenues and improve customer satisfaction, direct mail is also used to communicate services and benefits to customers. This initiative includes a national quarterly newsletter, entitled OnTrack, and other local market updates that discuss how we address specific customer needs. In addition, we participate in a number of local, regional and national trade show events that further promote the benefits of our products and services.

Using historical data supplied by prospective suppliers, we can provide suppliers with a detailed analysis of their current salvage returns and a proposal detailing ways in which we can improve salvage returns, reduce administrative costs, and provide proprietary turn-key claims processing services.

In addition to providing insurance companies and certain non-insurance company suppliers with a means of disposing of salvage vehicles, we also offer services intended to increase the net amount of salvage sale proceeds received by suppliers while also reducing the time required to receive net proceeds. We seek to become an integral part of our suppliers’ salvage processes, and we view such mutually beneficial relationships as an essential component of our effort to attract and retain suppliers.

We also seek to expand our supply relationships through recommendations from individual insurance company branch offices to other offices of the same insurance company. We believe that our existing

60

relationships, and the recommendations of branch offices, play a significant role in our marketing of services to national insurance companies. Indeed, as we have expanded our geographic coverage, we have been able to market our services to insurance company suppliers on a national basis or within an expanded geographic area.

We sell the majority of our vehicles through live auctions and maintain databases that contain information regarding over 38,500 registered buyers. No single buyer accounted for more than 5% of our revenue in 2004, highlighting the diversity of our buyer base. We generally accept cash, money orders, cashier’s checks, wire transfers and pre-approved checks for purchased vehicles. Vehicles are sold “as is” and “where is.” In advance of an auction, sales notices listing the vehicles to be auctioned on a particular day at a particular location are usually available at the auction facility or online on our Web site. Such notices list the rules of the auction and details about the vehicle, including its year and make, the nature of the damage, the status of title and the order of the vehicles in the auction. Multiple images of certain vehicles are available for review on our Web site at www.iaai.com.

Sources of Revenue

We process salvage vehicles primarily under two methods: fixed fee or percentage of sale consignment. Under the fixed fee consignment and percentage of sale consignment methods, we sell vehicles on behalf of insurance companies, which continue to own the vehicles until they are sold to buyers at auction. Under these methods, we generally conduct either live or closed bid auctions of the automotive salvage in return for agreed upon sales fees. In addition to fees, we generally charge our fixed fee consignment and percentage of sale consignment vehicle suppliers for various services, including towing and storage. We process a small percentage of vehicles under the purchase method, primarily using our BidFast service. Under the purchase method, we generally purchase vehicles from the insurance companies upon clearance of title, under financial terms determined by agreement with the insurance company supplier, and then resells these vehicles for our own account at our auctions. Under all methods of sale, we also charge the buyer of each vehicle various buyer-related fees.

Fixed Fee Consignment Sale Method

In 2004 and 2003, the percentage of vehicles processed by us that were sold under the fixed fee consignment sale method was approximately 68% and 52%, respectively. Under this sale method, we charge fees to the insurance company supplier for specific services. These fees typically include a salvage sales fee plus towing, title processing and storage fees. With this method of sale, we act as an agent for the insurance company, arrange for the salvaged vehicle to be towed to our facility and process it for sale. Because we never take ownership of the vehicle, our revenue per vehicle from consignment sales are received only from these fixed fees rather than from the revenue from the sale of the vehicle. As a result, exclusive of the buyer fees, revenue recognized per vehicle under the fixed fee consignment method of sale is approximately 5% to 15% of the revenue recognized per vehicle under the purchase method, where our revenue is principally comprised of the sale price of the vehicle.

Percentage of Sale Consignment Method

In 2004 and 2003, the percentage of vehicles processed by us that were sold under the percentage of sale consignment method was approximately 28% and 42%, respectively. Pursuant to this method of sale, we act as an agent for the insurance company and receive a negotiated percentage of the vehicle selling price. As an agent, we arrange for the salvaged vehicle to be towed to our facility and process it for sale for a fee based on a percentage of sale price. The percentage of sale consignment method provides suppliers with a potentially greater upside as our fees are tied to selling prices and, thus, the salvage supplier has a greater incentive to invest in improvements to salvage vehicles in order to maximize sales prices. Because we never take ownership of the vehicle, our revenues per vehicle from percent of sale consignment sales are generated from these sales fees rather than from the revenue from the sale of the vehicle. As a result, exclusive of the buyer fees, revenue

61

recognized per vehicle under the percentage of sales consignment method is approximately 5% to 15% of the revenue recognized per vehicle under the purchase method, where our revenue is principally comprised of the sale price of the vehicle.

Purchase Method

In 2004 and 2003, the percentage of vehicles processed by us that were sold under the purchase method of sale was approximately 4% and 6%, respectively. In 2004, the majority of the vehicles we sold under the purchase method were sold through our BidFast service. Under the purchase method of sale, we purchase total-loss and recovered theft vehicles. The purchases are customized, but typically require us to pay a fixed price or a specified percentage of a vehicle’s actual cash value, or ACV, which is equal to the estimated pre-accident fair value of the vehicle. ACV for any given vehicle depends on the vehicle’s age and condition. We assume the risk of market price variation for vehicles sold under a purchase method, and therefore, work to enhance the value of purchased vehicles in the selling process. Because our purchase price is fixed, changes in ACVs or in the market or auction prices for salvage vehicles have an impact on the profitability of the sale of vehicles under the purchase method. Revenue recorded from the sale of a purchase vehicle represents the actual selling price of the vehicle. The cost of the vehicle under this method is reflected in the vehicle cost line of cost of sales.

Customers

We obtain the majority of our supply of vehicles from insurance companies and smaller quantities from suppliers such as rental car companies and non-profit organizations. Historically, a limited number of insurance companies have accounted for a substantial portion of our revenues. In 2004, vehicles supplied by our three largest suppliers accounted for approximately 37% of our unit sales. See “Risk Factors—We depend on a limited number of key insurance companies to supply the salvage vehicles we sell at auction. A significant loss of or significant reduction in business with any of these suppliers could have a material adverse effect on our operating results and financial condition.”

We currently maintain relationships with over 38,500 registered buyers of salvage vehicles, including dismantlers, rebuilders, salvage dealers, body/repair shops and other buyers from across the United States and abroad.

Competition

We face intense competition for the supply of salvage vehicles as well as competition from processors of vehicles from other national and regional salvage pools. We may encounter further competition from existing competitors and new market entrants that are significantly larger and have greater financial and marketing resources. Other potential competitors include used car auction companies, providers of claims software to insurance companies, certain salvage buyer groups and insurance companies, some of which presently supply auto salvage to us. While most insurance companies have abandoned or reduced efforts to sell salvage vehicles without the use of service providers such as us, they may in the future decide to dispose of their salvage directly to end users. We may not be able to compete successfully against current or future competitors, which could impair our ability to grow and achieve or sustain profitability.

Governmental Regulation

Our operations are subject to regulation, supervision and licensing under various federal, state and local agencies statutes and ordinances. The acquisition and sale of totaled and recovered theft vehicles is regulated by state motor vehicle departments in each of the locations in which we operate. In many of these states, regulations require that the title of a salvage vehicle be forever “branded” with a salvage notice in order to notify prospective purchasers of the vehicle’s previous salvage status. Some state and local regulations also limit who can purchase salvage vehicles, as well as determine whether a salvage vehicle can be sold as rebuildable or must be sold for parts only.

62

In addition to the regulation of sales and acquisitions of vehicles, we are also subject to various local zoning requirements with regard to the location of our auction and storage facilities. These zoning requirements vary from location to location.

Changes in law or governmental regulations or interpretations of existing law or regulations can result in increased costs, reduced salvage vehicle prices and decreased profitability for us. Failure to comply with present or future regulations or changes in existing regulations could have a material adverse effect on our operating results and financial condition.

Environmental Regulation

Our operations are subject to federal, state and local environmental laws and regulations, governing, among other things, the handling, storage, transportation and disposal of waste and other materials. In the salvage vehicle auction industry, large numbers of wrecked vehicles are stored at auction facilities for short periods of time. Minor spills of gasoline, motor oils and other fluids may occur from time to time at our facilities and may result in soil, surface water or groundwater contamination. Virtually all of our facilities maintain above-ground storage tanks for diesel fuel and, in some cases, propane gas for use in our vehicles and equipment. We also own and maintain underground storage tanks at a number of our facilities around the country, primarily to store vehicle fuel. Waste materials, such as waste solvents or used oils, are generated at some of our facilities and are disposed of as non-hazardous or hazardous wastes. We believe that we are in compliance in all material respects with applicable environmental regulations and do not anticipate any material capital expenditure for environmental compliance or remediation. To date, we have not incurred significant expenditures for preventive or remedial action with respect to contamination or the use of hazardous materials. Environmental laws and regulations, however, could become more stringent over time and we may be subject to significant compliance costs in the future. Future contamination at any one or more of our facilities, or the potential contamination by previous users of certain acquired facilities, create the risk, however, that we could incur significant expenditures for preventive or remedial action, as well as potential liability arising as a consequence of hazardous material contamination, which could have a material adverse effect on our operating results and financial condition.

History

We were organized as a California corporation in 1982 under the name Los Angeles Auto Salvage, Inc. In January 1990, all our outstanding capital stock was acquired in a leveraged buyout, and in October 1991 we changed our name to Insurance Auto Auctions, Inc. We completed our initial public offering in November 1991. In 1997, we reincorporated in the State of Illinois. On February 22, 2005, Axle Holdings, Axle Merger and IAAI entered into a merger agreement that provided for the merger of Axle Merger with and into IAAI, with IAAI continuing as the surviving corporation. Upon completion of the merger and related transactions on May 25, 2005, we became a direct, wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso), and our common stock was delisted from the Nasdaq Stock Market.

Employees

At June 26, 2005, we employed approximately 956 full-time persons. We are not subject to any collective bargaining agreements and believe that our relationship with our employees is good.

Properties

Currently, we serve our customer base through 80 facilities in 32 states, with locations in 60 of the top 75 metropolitan markets in the United States. We lease approximately 69 properties in Alabama, Arkansas, Arizona, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington and Wisconsin. We own 11 properties in Illinois, Kansas,

63

Michigan, New Mexico, New York, Oklahoma, South Carolina and Texas. All of these properties are used primarily for auction and storage purposes consisting on average of approximately 21 acres of land.

Our principal administrative, sales, marketing and support functions are located in Westchester, Illinois. The lease on the office space in Westchester expires on August 31, 2016. Management believes that our properties are adequate for our current needs and that suitable additional space will be available on reasonably acceptable terms as required.

Legal Proceedings

We are party to a number of lawsuits arising in the normal course of our business. We do not believe that any pending litigation will have a material adverse effect on our consolidated financial position.

Emery Air Freight Accident

On February 4, 2003, we filed a lawsuit in the Superior Court of California, County of Sacramento, against Emery Air Freight Corporation, or Emery, Tennessee Technical Services, or TN Tech, and Bob and Corrine Spence, or the Spences. The lawsuit sought to recover damages caused by the crash of an Emery DC-8 aircraft onto our Rancho Cordova, California facility on February 16, 2000. The aircraft was destroyed, and the three crew members aboard the aircraft were killed. The crash and the resulting release of jet fuel and fire destroyed a significant part of our facility and contaminated it with ash, hydrocarbon, lead and other toxic materials. Emery refused to clean up the contamination, and we were required to do so. We suffered more than $3.0 million in inventory loss, clean-up and remediation costs, business interruption losses, legal and consulting fees, and other losses, costs, and expenses. We maintained insurance policies that covered a significant portion of our losses. Our insurer, Reliance Insurance Company, paid almost $1.0 million on our lost inventory claims. However, in October 2001, the Pennsylvania Insurance Commissioner put Reliance into reorganization, a petition in bankruptcy was filed, and it appears unlikely that Reliance will make any further payments to us. We have filed claims with the California Insurance Guarantee Association, which provides coverage for California property losses insured by an admitted insurer that is unable to pay covered claims. The Association has refused to pay our claims and has taken the position that its liability to us is limited to $0.5 million.

In our lawsuit, we sought to recover from Emery and TN Tech for negligence, trespass, and negligent maintenance of the aircraft. We also filed suit against the Spences, alternatively, seeking to recover from the Spences for breach of provisions in our lease requiring that they as landlord either pay for or share the cost of remediation of hazardous wastes. The Spences filed a cross-complaint against us alleging breach of contract. On October 6, 2004, we entered into a settlement and arbitration agreement with the Spences whereby each party dismissed, without prejudice, its claims against the other. Furthermore, on April 12, 2005, we mediated the remaining claims against Emery and TN Tech and reached a settlement whereby TN Tech agreed to pay us $2.35 million for our unrecovered losses resulting from the crash. In exchange, we agreed to release TN Tech and Emery from all claims arising from the crash. On June 8, 2005, we received payment of the settlement amount and filed a motion dismissing the lawsuit against all parties.

Relocation of the Woodinville Branch

On September 16, 2003, we received notice from the King County Wastewater Treatment Division, Department of Natural Resources, that King County was in the process of building a water treatment facility and that our Woodinville, Washington branch was located within the boundaries of the likely site for placement of this facility. In the notice, we were advised that if the site was selected, King County would pursue acquisition of the property from our landlord, Waterman Properties.

On October 3, 2003, we received further notice from King County that it had extended an offer to purchase the Woodinville site from Waterman Properties and that, if the offer was accepted, we would be expected to enter

64

into a lease arrangement with King County until such time as King County directed it to vacate the facility. The notice stated that we would be entitled to at least 90 days’ notice prior to being required to vacate. In an open house meeting on December 1, 2003, King County announced that it expected all property owners and tenants to vacate the proposed water treatment site no later than the end of 2004. We never received formal notice of this timeline from King County; instead, we were advised of the timeline from counsel who attended the open house meeting.

We have retained counsel and other consultants to assist in our relocation effort, protect our interests in the value of leasehold improvements made to the premises and recover costs resulting from the relocation. Pursuant to applicable law, we are entitled to reimbursement of certain costs associated with the relocation of our business from this site to another suitable location.

Under our lease with Waterman Properties, we are entitled to the value of our leasehold improvements invested in the property. There is currently a dispute between us and Waterman Properties regarding how to value the improvements made to the Woodinville facility. On March 4, 2004, we filed a lawsuit in Snohomish County Superior Court against King County and Waterman Properties asking the court to appoint a receiver to manage a portion of the funds (up to $1.5 million) that Waterman Properties might receive from King County and to award us a portion of the condemnation award in an amount equal to the value of our leasehold improvements. The outcome of this action is uncertain at this time.

Since that date, we began searching for an alternate location on which to relocate, believing that in all likelihood we would be required to vacate the Woodinville facility by year’s end. On November 16, 2004, we entered into a new lease for property located in Tukwila, Washington. Simultaneously, we negotiated a settlement with King County, whereby we terminated our lease with Waterman Properties and dismissed our complaint against King County to permit the sale and purchase of the Woodinville property. The settlement further provided for $900,000 of the purchase price to be placed into escrow for payment of any judgment that might be awarded in our ongoing suit against Waterman. The outcome of this action remains uncertain at this time. At year end, we exited the Woodinville facility and we wrote off leasehold improvements of approximately $991,000. To date, we have received $296,000 in relocation expenses.

65

MANAGEMENT

Directors, Executive Officers and Other Key Employees

The following table provides certain information regarding our directors, executive officers and key employees as of August 23, 2005. Each director and officer will hold office until a successor is elected or qualified or until his earlier death, resignation or removal. Kelso has the right to designate all of our directors pursuant to a shareholders agreement and to remove any or all of them from time to time. See “Certain Relationships and Related Transactions—Shareholders Agreement.”

Name	Age	Position
Thomas C. O’Brien	51	President, Chief Executive Officer and Director
David R. Montgomery	48	Senior Vice President and Chief Operating Officer
Scott P. Pettit	42	Senior Vice President and Chief Financial Officer
Donald J. Hermanek	56	Senior Vice President, Sales and Marketing
John R. Nordin	48	Senior Vice President, Chief Information Officer
John W. Kett	41	Senior Vice President, Planning and Business Development
Sidney L. Kerley	31	Vice President, General Counsel and Secretary
David J. Ament	30	Director
Brian T. Clingen	45	Director
Church M. Moore	33	Director
David I. Wahrhaftig	48	Director

Thomas C. O’Brien became President and Chief Executive Officer in November 2000. As President and Chief Executive Officer Mr. O’Brien oversees our overall corporate administration as well as strategic planning. Prior to joining us, Mr. O’Brien served as president of Thomas O’Brien & Associates from 1999 to 2000. From 1996 to 1999, he served as executive vice president of Vistar, Inc. From 1992 to 1996, he served as president of Globe Glass & Mirror Co., one of the two entities combined to form Vistar, Inc.

David R. Montgomery joined us in April 2001 as Senior Vice President and Chief Operating Officer. Mr. Montgomery is responsible for our operations, including our National Network and specialty salvage business. Prior to joining us, Mr. Montgomery served as chief executive officer of Greenleaf Acquisitions, LLC, a subsidiary of Ford Motor Company, from 1999 to April 2001. From 1996 to 1999, he served as area vice president of Safelite/Vistar Autoglass. From 1988 to 1996, he served in various management capacities at Windshields America, Inc., one of the two entities combined to form Vistar, Inc.

Scott P. Pettit joined us in April 2001 as Senior Vice President and Chief Financial Officer. Mr. Pettit is responsible for financial functions, real estate and investor relations. Prior to joining us, Mr. Pettit served as senior vice president and chief financial officer of Corsolutions Medical Inc. from 1998 to April 2001. From 1996 to 1998, he served as vice president finance and chief financial officer of Vistar, Inc. From 1994 to 1996, he served as senior vice president and chief financial officer of Globe Glass & Mirror Co., one of the two entities combined to form Vistar, Inc.

Donald J. Hermanek joined us in August 2000 as Senior Vice President of Sales and Marketing. Mr. Hermanek is responsible for the sales and marketing functions, including field sales and the corporate accounts group. Prior to joining us, Mr. Hermanek served as vice president of business development for Consolidated Services Corp. from 1997 to 2000. He also served as vice president of National Sales for Safelite Glass Corporation from 1992 to 1997.

John R. Nordin joined us in November 2003 as Senior Vice President, Chief Information Officer. Mr. Nordin is responsible for information services functions, including software application acquisition and development, computer operations and telecommunications. Prior to joining us, Mr. Nordin served as vice president and chief information officer at A. M. Castle & Co. from 1998 to November 2003. From 1995 to 1998, he served as vice president and chief information officer at Candle Corporation of America.

66

John W. Kett joined us in August 2001 as Vice President of Field Support. In June 2004, he was named Senior Vice President of Planning and Business Development. Mr. Kett is responsible for planning, pricing, financial analysis and has primary responsibility for business development. Prior to joining us, Mr. Kett served as controller for Central Steel and Wire Co. from 1998 to 2001 and controller of Vistar, Inc from 1996 to 1998. From 1992 to 1996, Mr. Kett held various positions at Globe Glass & Mirror Co. including regional operations manager.

Sidney L. Kerley joined us in April 2001 as Corporate Counsel. In April 2002, he was named Vice President, Corporate Counsel. He is responsible for our general legal affairs, including SEC compliance and filings, mergers and acquisitions, corporate finance and litigation. Prior to joining us, Mr. Kerley served as an attorney at Fairbank & Vincent.

David J. Ament became a director in May 2005. Mr. Ament joined Parthenon Capital in 2003 and is a partner in its Boston office. Prior to joining Parthenon, he was a principal at Audax Group from 2001 to 2003. Prior to that, Mr. Ament was an investment professional at Apollo Advisors.

Brian T. Clingen became a director in May 2005. Mr. Clingen is the founder and president of BP Capital Management, an investment management company based in Oak Brook, Illinois. Mr. Clingen founded BP Capital Management in August 1998. Mr. Clingen is also a director of Endo Pharmaceuticals, Inc.

Church M. Moore became a director in May 2005. Mr. Moore joined Kelso & Company in 1998 and has been a Vice President since 2004. From 1997 to 1998, he was an associate at Investcorp International, Inc. From 1994 to 1997, Mr. Moore was an associate at BT Securities Corporation. Mr. Moore is also a director of Del Laboratories, Inc.

David I. Wahrhaftig became a director in May 2005. Mr. Wahrhaftig joined Kelso & Company in 1987 and has been managing director since 1997. From 1982 to 1987, he served as associate director of mergers and acquisitions and a management consultant for Arthur Young & Company. Mr. Wahrhaftig is also a director of Consolidated Vision Group, Inc., Endo Pharmaceuticals, Inc., BWAY Corporation and Earle M. Jorgensen Company.

Committees of the Board of Directors

The board of directors has established an audit committee and a compensation committee. The audit committee recommends the annual appointment of independent auditors. The audit committee reviews with the auditors the scope of the audit and non-audit assignments and related fees, accounting principles we use in financial reporting, internal auditing procedures and the adequacy of our internal controls. The compensation committee reviews and approves the compensation and benefits of our employees, directors and consultants, administers our employee benefits plans, authorizes and ratifies stock option grants and other incentive arrangements, authorizes employment and related agreements and oversees our corporate governance matters. Messrs. Clingen, Moore and Wahrhaftig serve on the audit committee and Messrs. Clingen, Moore, O’Brien and Wahrhaftig serve on the compensation committee. Mr. Clingen serves as chairman of the audit committee and Mr. Wahrhaftig serves as chairman of the compensation committee.

67

Executive Compensation

The following table provides certain information concerning the compensation earned, for services rendered in all capacities to us and our subsidiaries during each of the last three years, by our Chief Executive Officer and each of our other four most highly compensated executive officers in 2004, collectively the “named executive officers.”

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	ANNUAL COMPENSATION								LONG-TERM COMPENSATION AWARDS				All Other Compensation($)
		Salary($)(1)			Bonus($)		Other Annual Compensation($)			Restricted Stock Awards($)(2)		Securities Underlying Options(#)
Thomas C. O’Brien President and Chief Executive Officer	2004 2003 2002	$	400,000 400,000 350,000		$	—   163,000 —	$	18,000 18,000 18,000	(3) (3) (3)	$	663,000 207,750 —	—   60,000 60,000	(5) (6)	$	13,000 6,000 8,000	(4) (4) (4)
David R. Montgomery Sr. Vice President and Chief Operating Officer	2004 2003 2002		257,000 257,000 232,000			—   87,000 —		18,000 18,000 18,000	(3) (3) (3)		331,500 103,875 —	—   30,000 30,000	(5) (6)		8,000 8,000 7,000	(4) (4) (4)
Scott P. Pettit Sr. Vice President and Chief Financial Officer	2004 2003 2002		230,000 230,000 205,000			—   76,000 —		18,000 18,000 18,000	(3) (3) (3)		331,500 103,875 —	—   30,000 30,000	(5) (6)		7,000 8,000 7,000	(4) (4) (4)
Donald J. Hermanek Sr. Vice President—Sales and Marketing	2004 2003 2002		220,000 220,000 200,000			—   75,000 —		18,000 18,000 18,000	(3) (3) (3)		331,500 103,875 —	—   30,000 30,000	(5) (6)		9,000 7,000 7,000	(4) (4) (4)
John R. Nordin Sr. Vice President, Chief Information Officer	2004 2003 2002		180,000 21,000 —	(7)		—   —   —		18,000 1,500 —	(3)		331,500 103,875 —	—   30,000 —	(8)		7,000 —   —	(4)

(1) Includes salary deferred under our company’s 401(k) Plan and Internal Revenue Service Section 125 Plan. All amounts are rounded to the nearest thousand.

(2) The market value of the common stock underlying restricted stock units, or RSUs, was determined by using the closing price per share of the common stock on the applicable grant date, as reported on the NASDAQ Stock Market, and without recognizing any diminution in value attributable to the restrictions on RSUs. Fiscal 2004 RSUs were granted on November 19, 2004 (the closing price on that date was $22.10) and fiscal 2003 RSUs were granted on November 14, 2003 (the closing price on that date was $13.85). All RSUs became fully vested in connection with the transactions.

(3) Reflects amounts paid by us pursuant to an automobile allowance.

(4) Represents matching contributions that we made to our 401(k) Plan on behalf of the named executive officer.

(5) Includes a grant of options to purchase shares of common stock at a price of $13.85 per share pursuant to a resolution adopted by the Board of Directors on September 16, 2003.

(6) Includes a grant of options to purchase shares of common stock at a price of $15.50 per share pursuant to a resolution adopted by the Board of Directors on December 4, 2002.

(7) Mr. Nordin became an employee on November 14, 2003. The salary paid to Mr. Nordin for the 2003 fiscal year was based on his employment agreement dated October 23, 2003.

(8) Mr. Nordin received a grant of options to purchase 30,000 shares of common stock at a price of $13.85 per share pursuant to his employment agreement dated October 23, 2003.

Stock Options

There were no stock options granted to the named executive officers during 2004.

68

The following table sets forth information with respect to unexercised options held as of the end of the 2004 fiscal year by the named executive officers. No stock appreciation rights were outstanding at the end of 2004.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR

AND FISCAL YEAR-END OPTION VALUES

	Number of Securities Underlying Unexercised Options at Fiscal Year-End(#)		Value of Unexercised In-the-Money Options at Fiscal Year-End(1)(2)
Name	Exercisable	Unexercisable	Exercisable		Unexercisable
Thomas C. O’Brien	345,000	75,000	$	3,728,550	$	573,750
David R. Montgomery	97,500	62,500		891,375		529,925
Scott P. Pettit	97,500	62,500		891,375		529,925
Donald J. Hermanek	77,500	47,500		562,885		369,095
John R. Nordin	7,500	22,500		62,325		186,975

(1) “In-the-money” options are options whose exercise prices were less than the market price of the common stock on December 26, 2004, the last day of the 2004 fiscal year.

(2) Based upon the market price of $22.16 per share, which was the closing price per share of the common stock on the NASDAQ National Market on December 26, 2004, less the exercise price payable per share.

2005 Shareholder Value Incentive Plan

The 2005 shareholder value incentive plan, which was adopted by IAAI’s board of directors on February 22, 2005, granted an aggregate transaction bonus of approximately $875,086 upon the closing of the merger to the following executive officers: Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley. The plan expired upon payment of the transaction bonuses. Pursuant to the 2005 shareholder value incentive plan, executive officers and directors of IAAI received the following payments in cash upon consummation of the merger:

NAME OF EXECUTIVE OFFICER	AMOUNT OF TRANSACTION BONUS
Thomas C. O’Brien	$	192,500
David R. Montgomery	$	145,862
Scott P. Pettit	$	145,862
Donald J. Hermanek	$	145,862
John R. Nordin	$	87,500
John W. Kett	$	87,500
Sidney L. Kerley	$	70,000
Total	$	875,086

2005 Incentive Plan

At the time of the merger, we had in effect a 2005 Incentive Plan under which incentive bonuses were payable to executive officers and certain other management employees upon the achievement of goals and objectives determined by the board of directors. The plan terminated upon the closing of the merger and payments under the plan were made to management employees other than the named executive officers. Aggregate payments to be made to the executive officers under the plan are approximately $0.8 million and have been deferred. We expect these amounts to be paid later this year.

Profit Interests in the LLC

In connection with the merger, our named executive officers and certain other officers were awarded profit interests in the LLC that entitle them to a portion of any appreciation in the value of the assets of the LLC following the closing of the transactions. Approximately one-third of the profit interests are service-related and

69

will vest in equal quarterly installments over three years, and the remaining profit interests are performance-related and will vest based on Kelso’s achievement of certain multiples on its original indirect equity investment in Axle Holdings, subject to an internal rate of return minimum and continued employment with the LLC or affiliates thereof, including IAAI. Profit interests are subject to transfer restrictions. The combined economic interest in the appreciation in the equity of Axle Holdings granted through LLC profit interests and through the new stock incentive plan (as further described below) of Axle Holdings is expected to be approximately 13.0% on a fully diluted basis, in the aggregate.

Axle Holdings Stock Incentive Plan

Axle Holdings has adopted a new stock incentive plan that provides for grants of incentive and non-qualified stock options as well as grants of restricted stock to officers or other key employees of Axle Holdings or any subsidiary. 281,352 shares are reserved for issuance of options under the incentive plan, which represents approximately 4.78% of the outstanding shares of Axle Holdings common stock on a fully diluted basis immediately after the merger. The combined economic interest in the appreciation in the equity of Axle Holdings granted to employees of IAAI through the new stock incentive plan and to continuing investors and other persons, if any, through LLC profit interests is expected to be approximately 13.0% on a fully diluted basis, in the aggregate.

The exercise price, vesting schedule and number of options granted under the incentive plan will be determined by the compensation committee, provided that the exercise price cannot be less than the fair market value (as determined under the incentive plan) of the Axle Holdings common stock on the date of grant.

The compensation committee may grant awards of restricted stock, subject to such restrictions, terms and conditions, as the compensation committee shall determine in its sole discretion. The compensation committee shall also determine the price to be paid for each share of restricted stock subject to the award which, to the extent required by law, shall not be less than the par value of the common stock of Axle Holdings. The vesting of a restricted stock award granted under the incentive plan may be conditioned upon the completion of a specified period of employment or service with Axle Holdings, upon the attainment of specified performance goals, and/or upon such other criteria as the compensation committee may determine in its sole discretion.

Unless otherwise determined by the compensation committee at the time of grant, upon an Exit Event (as defined in the incentive plan), all awards of restricted stock (whether or not then exercisable) shall vest and each option that, by its terms, becomes exercisable solely upon completion of a stated period of service, together with any outstanding options that, prior to or in connection with such exit event, have become exercisable in connection with the attainment of performance objectives, will be canceled in exchange for a payment in cash of an amount equal to the excess of the price paid in the exit event transaction over the exercise price of such restricted stock award or option. All remaining options that have not become exercisable at the time of the Exit Event will be canceled. Notwithstanding the foregoing, if provided in the option agreement, no cancellation or cash settlement or other payment will occur upon an Exit Event with respect to any option if the compensation committee reasonably determines in good faith prior to the occurrence of an Exit Event that such option will be honored or assumed, or new rights substituted therefor by a participant’s employer (or the parent or a subsidiary of such employer) immediately following the Exit Event.

To be approved by the compensation committee, any honored, assumed or new rights must:

• provide the participant with equivalent or better rights and entitlements than the rights available under the current options; and

• have substantially equivalent economic value to the current options.

An award of options or restricted stock is not transferable other than by will or by the laws of descent and distribution or, if permitted by the compensation committee. All of the shares acquired upon exercise of any

70

option or the grant of a restricted stock award will be subject to the stockholder arrangements described below. See “Certain Relationships and Related Transactions—Shareholders Agreement.”

Compensation of Directors

Directors who are employed by us, Kelso or Parthenon are not entitled to receive any fees for serving as directors. We have not yet determined whether directors who are not employed by us, Kelso or Parthenon will receive any compensation for serving on the board of directors or any reimbursement for their out-of-pocket expenses incurred in connection with attendance in person at board or committee meetings.

Employment Contracts And Change-In-Control Arrangements

The following is a description of the employment or consulting agreements in effect between our company and the named executive officers.

The compensation paid to Thomas C. O’Brien, President and Chief Executive Officer, for the 2004 fiscal year was based on an amended and restated employment agreement dated April 2, 2001. Under his employment agreement, Mr. O’Brien is entitled to an annual base salary of $350,000 or such increased amount as may be determined from time to time by the Board, and a performance incentive bonus of 100% of his annual salary based upon the achievement of target performance goals. Mr. O’Brien will be entitled to receive in excess of 100% of his annual salary as a performance incentive if our company’s performance exceeds the goals and objectives determined by the Board. We also granted Mr. O’Brien an option to purchase 300,000 shares of common stock in November 2000, which was exercisable in four equal annual installments.

The compensation paid to David R. Montgomery, Sr. Vice President and Chief Operating Officer, for the 2004 fiscal year was based on an April 2, 2001 employment agreement. Under his employment agreement, Mr. Montgomery is entitled to an annual base salary of $225,000 or such increased amount as may be determined from time to time by the Board, and a performance incentive bonus of 75% of his annual salary based upon the achievement of target performance goals. We also paid Mr. Montgomery a signing bonus of $25,000 and granted him an option to purchase 100,000 shares of common stock in April 2001, which was exercisable in four equal annual installments.

The compensation paid to Scott P. Pettit, Sr. Vice President and Chief Financial Officer, for the 2004 fiscal year was based on an April 2, 2001 employment agreement. Under his employment agreement, Mr. Pettit is entitled to an annual base salary of $195,000 or such increased amount as may be determined from time to time by the Board, and a performance incentive bonus of 75% of his annual salary based upon the achievement of target performance goals. We paid Mr. Pettit a signing bonus of $35,000 and granted him an option to purchase 100,000 shares of common stock in April 2001, which was exercisable in four equal annual installments.

The compensation paid to John R. Nordin, Sr. Vice President and Chief Information Officer, for the 2004 fiscal year was based on an October 23, 2003 employment agreement. Under his employment agreement, Mr. Nordin is entitled to an annual base salary of $180,000 or such increased amount as may be determined from time to time by the Board, and a performance incentive bonus of 50% of his annual salary based upon the achievement of target performance goals. We granted Mr. Nordin an option to purchase 30,000 shares of common stock, which is exercisable in four equal annual installments.

Additionally, each of the agreements for the above-named executive officers has a change of control provision that provides that in the event that the named executive officer’s employment with our company is terminated involuntarily or without cause within two years of the effective date of a change in control (as defined therein), the named executive officer will be entitled to receive 18 months worth of annual base salary and other accrued obligations, plus continued coverage under our health benefit plans for up to 18 months under certain circumstances. The transactions constituted a change of control under the employment agreements.

On September 5, 2000, we entered into a change of control and employment agreement with Mr. Hermanek. The term of the agreement commences upon a change of control and ends on the second anniversary of the date of the change of control, unless renewed pursuant to the terms of the agreement. Under this agreement, during the two years following a change of control (as defined therein), Mr. Hermanek is entitled to an annual base salary

71

equal to at least 12 times the highest monthly base salary paid to him during the year immediately preceding the month in which a change of control occurs. During the two years following a change of control, Mr. Hermanek is entitled to an annual bonus at least equal to the greater of (i) Mr. Hermanek’s target bonus payable under our incentive plans for the fiscal year in which the change of control occurs and (ii) the average of Mr. Hermanek’s annual bonuses actually paid under our incentive plans for the three fiscal years immediately preceding the fiscal year in which the change of control occurs. This agreement also provides that in the event that Mr. Hermanek’s employment with our company is terminated by us without cause or by Mr. Hermanek with good reason (as such terms are defined therein), he will be entitled to receive (i) a lump sum payment of his base salary plus bonus calculated as set forth in the agreement, plus (ii) benefits to Mr. Hermanek and his family at least equal to those which would have been provided to them in accordance with our plans, programs, practices and policies then in place (until he is employed by another employer and is eligible to receive comparable benefits from such employer) and (iii) additional benefits through COBRA at the end of that 18-month period. The transactions constituted a change of control under Mr. Hermanek’s agreement.

Executive Severance Plan

Effective August 9, 2000, we adopted a severance plan that provides certain severance benefits to our executive officers for a minimum of six months up to a maximum of 12 months in the event the executive officer’s employment is terminated under certain circumstances.

Unless otherwise increased by us in our sole discretion, if we terminate the executive officer’s employment for any reason other than for cause (as defined in the plan), or if the executive officer voluntarily terminates employment with us for good reason, (as defined in the plan), the executive officer will receive, in exchange for providing us with a duly executed waiver and release, a monthly severance benefit payable over a minimum of six months up to a maximum of 12 months, in an amount equal to the product of (i) times (ii), where:

(i) represents the sum of:

(A) the executive officer’s annualized base salary on the termination date; plus

(B) the executive officer’s average annual bonus received over the eight fiscal quarters immediately preceding the fiscal quarter during which the executive officer’s employment is terminated, without exceeding the executive officer’s target bonus for the fiscal year during which the termination occurs; plus

(C) the executive officer’s auto allowance for the fiscal year during which the termination occurs;

(ii) represents a fraction, the numerator of which is the number of whole completed years of employment, but not less than six nor more than 12, and the denominator of which is 12; provided, however, that in the event that the executive officer’s termination of employment occurs within one year following the date on which a new chief executive officer is hired by us, the executive officer shall receive 12 months of severance pay generally calculated on the basis of the amounts set forth; provided, further, that the amount taken into account as the executive officer’s bonus shall be equal to the executive officer’s target bonus for the fiscal year during which the executive officer’s employment is terminated.

An executive officer is not entitled to any benefit if we terminate the officer’s employment for cause, if the officer voluntarily terminates employment for any reason other than good reason, or if the officer’s employment is terminated as a result of death or disability. If an officer has an employment agreement with us, the officer is not eligible for severance benefits under the plan. Currently, all of our executive officers have employment agreements and thus are not eligible for benefits under the plan.

Code of Ethics

Our board of directors has adopted a code of ethics that applies to all of our directors, officers and employees, including its principal executive officer, principal financial officer, controller and principal accounting officer. Our code of ethics is available on our website at www.iaai.com. Any amendments to, or waivers from, our code of ethics will be disclosed on our website.

72

SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERSHIP

The LLC, through Axle Holdings, owns 100% of our equity interests. The following table sets forth certain information as of June 26, 2005 with respect to the beneficial ownership of Axle Holdings’ equity securities by: (1) each person or entity who owns of record or beneficially 5% or more of any class of Axle Holdings’ voting securities; (2) each of our named executive officers and directors; and (3) all of our directors and named executive officers as a group. To our knowledge, each shareholder will have sole voting and investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a footnote to the following table. Unless otherwise indicated in a footnote, the business address of each person is our corporate address.

	Shares Beneficially Owned
Name	Number of Shares of Common Stock(1)	Percentage of Class(2)
Principal Shareholders:
Axle Holdings II, LLC(3)	5,605,697	100.0	%
Kelso Investment Associates VII, L.P.(3)(4)	4,741,418	84.6
KEP VI, LLC(3)(4)	4,741,418	84.6
Frank T. Nickell(3)(4)(5)	4,741,418	84.6
Thomas R. Wall, IV(3)(4)(5)	4,741,418	84.6
George E. Matelich(3)(4)(5)	4,741,418	84.6
Michael B. Goldberg(3)(4)(5)	4,741,418	84.6
David I. Wahrhaftig(3)(4)(5)(8)	4,741,418	84.6
Frank K. Bynum, Jr.(3)(4)(5)	4,741,418	84.6
Philip E. Berney(3)(4)(5)	4,741,418	84.6
Frank J. Loverro(3)(4)(5)	4,741,418	84.6
James J. Connors, II(3)(4)(5)	4,741,418	84.6
Entities affiliated with Parthenon(6)(7)	585,553	10.4
Executive Officers and Directors:
Thomas C. O’Brien(8)(9)	129,213	2.2
David R. Montgomery(10)	46,767	*
Scott P. Pettit(11)	46,767	*
John R. Nordin(12)	7,398	*
Donald J. Hermanek(13)	35,546	*
John W. Kett(14)	11,183	*
Sidney L. Kerley(15)	4,497	*
David J. Ament(8)	—	*
Brian T. Clingen(8)	78,074	1.4
Church M. Moore(8)(16)	—	*
David I. Wahrhaftig(5)(8)	4,741,418	84.6
Executive Officers and Directors as a group (11 persons)(17)	5,100,863	91.0

 * Less than one percent.

(1) The number of shares includes shares of common stock subject to options exercisable within 60 days of the completion of the transactions.

(2) Shares subject to options exercisable within 60 days of June 26, 2005 are considered outstanding for the purpose of determining the percent of the class held by the holder of such option, but not for the purpose of computing the percentage held by others. Percentages for the LLC, Kelso Investment Associates VII, L.P., a Delaware limited partnership, or KIA VII, KEP VI, LLC, or KEP VI, and Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and Connors are reflective of beneficial ownership of LLC common interests. Percentages for entities affiliated with Parthenon are reflective of beneficial ownership of LLC common interests held by Parthenon, PCIP Investors, or PCIP, and J&R Founders Fund II, L.P., or J&R. Except as indicated, percentages for executive officers and directors are reflective of beneficial

73

ownership of outstanding shares of Axle Holdings (including shares that may be deemed to be owned by virtue of ownership interests in the LLC).

(3) The business address for these persons is c/o Kelso & Company, 320 Park Avenue, 24th Floor, New York, New York 10022.

(4) Includes shares of common stock held by: (i) KIA VII and (ii) KEP VI. KIA VII and KEP VI may be deemed to share beneficial ownership of shares of common stock owned of record by the LLC, by virtue of their ownership interests in the LLC. KIA VII and KEP VI, due to their common control, could be deemed to beneficially own each of the other’s shares. Each of KIA VII and KEP VI disclaim such beneficial ownership.

(5) Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and Connors may be deemed to share beneficial ownership of shares of common stock owned of record by the LLC, by virtue of their status as managing members of KEP VI and of Kelso GP VII, LLC, a Delaware limited liability company, the principal business of which is serving as the general partner of Kelso GP VII, L.P., a Delaware limited partnership, the principal business of which is serving as the general partner of KIA VII. Each of Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and Connors share investment and voting power with respect to the ownership interests owned by KIA VII and KEP VI but disclaim beneficial ownership of such interests.

(6) Includes (i) 568,941 shares held by Parthenon, (ii) 7,829 shares held by PCIP and (iii) 8,783 shares held by J&R. Parthenon, PCIP and J&R may be deemed to share beneficial ownership of shares of common stock owned of record by the LLC, by virtue of their ownership interests in the LLC. Parthenon, PCIP and J&R, due to their common control, could be deemed to beneficially own each of the other’s shares. Each of Parthenon, PCIP and J&R disclaim such beneficial ownership. The managing partners of the ultimate general partner of Parthenon, Mr. Ernest K. Jacquet and Mr. John C. Rutherford, each have beneficial ownership of (i) the shares held by Parthenon, through their indirect control of PCAP Partners II, LLC, an affiliate of Parthenon, (ii) the shares held by PCIP, a general partnership of which they have control as general partners, and (iii) the shares held by J&R, a limited partnership which they control through its general partner, J&R Advisors F.F., Inc. These individuals have shared voting and investment authority over these shares and disclaim beneficial ownership of these shares except to the extent of their pecuniary interest therein.

(7) The business address for Parthenon, PCIP and J&R is 75 State Street, 26th floor, Boston, MA 02109.

(8) Members of our board of directors.

(9) Includes (i) 128,432 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. O’Brien’s ownership interest in the LLC.

(10) Includes (i) 45,986 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Montgomery’s ownership interest in the LLC.

(11) Includes (i) 45,986 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Pettit’s ownership interest in the LLC.

(12) Includes (i) 6,617 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Nordin’s ownership interest in the LLC.

(13) Includes (i) 34,765 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Hermanek’s ownership interest in the LLC.

(14) Includes (i) 10,402 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Kett’s ownership interest in the LLC.

(15) Includes (i) 3,716 shares of common stock issuable pursuant to options that are currently exercisable and (ii) 781 shares of common stock held of record by the LLC, by virtue of Mr. Kerley’s ownership interest in the LLC.

(16) Mr. Moore may be deemed to share beneficial ownership of shares of common stock owned of record by the LLC, by virtue of his status as a non-managing member of KEP VI and of Kelso GP VII, LLC, the principal business of which is serving as the general partner of Kelso GP VII, L.P., the principal business of which is serving as the general partner of KIA VII. Mr. Moore disclaims beneficial ownership of such interests.

(17) Includes shares of common stock the beneficial ownership of which Mr. Wahrhaftig may be deemed to share, as described in footnote 5 above.

74

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Shareholders Agreement

IAAI is a direct, wholly-owned subsidiary of Axle Holdings. On May 25, 2005, Axle Holdings entered into a shareholders agreement with the LLC, which owns all of Axle Holdings issued and outstanding common stock, and the continuing investors who own options to purchase common stock of Axle Holdings. The board of directors of Axle Holdings currently consists of five directors. Pursuant to the shareholders agreement, the LLC has the right to designate all of the directors on the board of directors of Axle Holdings.

The shareholders agreement generally restricts the transfer of shares of common stock and options (including any shares into which any options have been exercised) owned by the continuing investors, or any other shareholders, that are or become parties to the agreement. Exceptions to this restriction include certain transfers of shares for estate planning purposes, certain pledges and certain involuntary transfers in connection with a default, foreclosure, forfeiture, divorce, court order or otherwise than by a voluntary decision of the continuing investor or employee (so long as Axle Holdings has been given the opportunity to purchase the common stock subject to such involuntary transfer).

In addition, the parties to the shareholders agreement have “tag-along” rights to sell their shares on a pro rata basis with the LLC in significant sales by the LLC to third parties, and the LLC will have “drag-along” rights to cause the other parties to the shareholders agreement to sell their shares on a pro rata basis with the LLC in significant sales by the LLC to third parties. The continuing investors are subject to “put” and “call” rights, which entitle these persons to require Axle Holdings to purchase their shares or options, and which entitle Axle Holdings to require these persons to sell their shares or options to Axle Holdings, upon certain terminations of the shareholder’s employment with IAAI or any affiliate, at differing prices, depending upon the circumstances of the termination.

Registration Rights Agreement

Axle Holdings entered into a registration rights agreement with the other parties to the shareholders agreement on May 25, 2005. Under the terms of the registration rights agreement, the LLC has the right to make an unlimited number of requests that Axle Holdings use its best efforts to register its shares under the Securities Act. In any demand registration, or if Axle Holdings proposes to register any shares (subject to certain exceptions, such as benefit plan registrations), all of the parties to the registration rights agreement have the right to participate on a pro rata basis, subject to certain conditions.

LLC Agreement

Affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors entered into the LLC agreement dated May 25, 2005. The Kelso affiliates, Parthenon and certain of its affiliates, Magnetite and Messrs. Clingen and Simon own approximately 99.9% of the common interests in the LLC and the continuing investors own less than 0.1% of the common interests in the LLC. Parthenon and its affiliates acquired approximately 10.4% of the common interests in the LLC. Magnetite acquired approximately 1.4% of the common interests in the LLC. Messrs. Clingen and Simon acquired, in the aggregate, approximately 3.5% of the common interests in the LLC. The LLC agreement provides that the continuing investors and possibly others having senior management and/or strategic planning-type responsibilities may be awarded profit interests in the LLC that may entitle such persons to a portion of the future appreciation in the value of the assets of the LLC (including the stock in IAAI held through Axle Holdings) following the closing of the transactions. The combined economic interest in the appreciation in the equity of Axle Holdings granted to continuing investors and possibly others through profit interests and to employees of IAAI through the new Axle Holdings stock incentive plan is approximately 13.0% on a fully diluted basis, in the aggregate.

75

The LLC agreement generally restricts the transfer of interests in the LLC owned by the continuing investors and the other members of the LLC. Exceptions to this restriction include transfers of common interests for certain estate planning purposes and certain involuntary transfers in connection with a default, foreclosure, forfeiture, divorce, court order or otherwise than by a voluntary decision (so long as the LLC has been given the opportunity to purchase the interests subject to such involuntary transfer). In addition, the non-Kelso members have “tag-along” rights to sell their common interests on a pro rata basis with the Kelso affiliates in significant sales to third parties. Similarly, the Kelso affiliates have “drag-along” rights to cause the other members to sell their shares on a pro rata basis with the Kelso affiliates in significant sales to third parties. The continuing investors are subject to “put” and “call” rights, which entitle these persons to require the LLC to purchase their common interests, and which entitle the LLC to require these persons to sell their common interests to the LLC, under certain specified circumstances.

The Kelso affiliates have the right to designate all of the directors on the board of directors of the LLC. Pursuant to the LLC agreement, the LLC will be dissolved and its affairs wound up upon the occurrence of: (i) the vote of the board of directors and members or (ii) any event which under applicable law would cause the dissolution of the LLC.

Conversion Agreements and Exchange Agreements

On May 25, 2005, each of the continuing investors entered into a separate conversion agreement and a separate exchange agreement with Axle Holdings under which the continuing investor agreed to (i) exchange, effective as of the closing of the merger, certain of his options to purchase common stock of IAAI for options to purchase common stock of Axle Holdings and (ii) accept a cash payment in exchange for cancellation of his remaining options to purchase common stock in IAAI. The continuing investors converted and exchanged stock options of IAAI having an aggregate spread value of approximately $3.3 million for Axle Holdings stock options with an equivalent spread value and received an aggregate payment of $11,407,666 for cancellation of their remaining options. As a result of these agreements, the continuing investors hold options to purchase Axle Holdings stock representing in the aggregate approximately 4.7% of the common stock of Axle Holdings on a fully diluted basis immediately after the merger. In addition, the continuing investors own, through their ownership interests in the LLC, common stock of Axle Holdings representing in the aggregate less than 0.1% of the common stock of Axle Holdings on a fully diluted basis.

Financial Advisory Agreements

Under the terms of a financial advisory and closing fee letter agreement between Kelso and Axle Merger, upon completion of the merger, IAAI (1) paid a fee of $4.475 million to Kelso and (2) commenced paying to Kelso an annual financial advisory fee of $500,000 payable in quarterly installments in advance (with the first such installment, prorated for the remainder of the then current quarter, payable at the closing of the merger) for services to be provided by Kelso to IAAI. The financial advisory agreement provides that IAAI will indemnify Kelso, Axle Holdings and Kelso’s officers, directors, affiliates, and their respective partners, employees, agents and control persons (as such term is used in the Securities Act and the rules and regulations thereunder) in connection with the merger and the transactions contemplated by the merger agreement (including the financing of the merger), Kelso’s investment in IAAI, Kelso’s control of Axle Merger, IAAI and their respective subsidiaries, and the services rendered to IAAI under the financial advisory agreement. It requires IAAI to reimburse Kelso’s expenses incurred in connection with the merger and with respect to services to be provided to IAAI on a going-forward basis. The financial advisory agreement also provides for the payment of certain fees by IAAI to Kelso, as may be determined by the board of directors of IAAI and Kelso, in connection with future investment banking services and for the reimbursement by IAAI of expenses incurred by Kelso in connection with such services.

Under the terms of a letter agreement between PCAP, L.P., an affiliate of Parthenon, and Axle Merger, upon completion of the merger IAAI paid to PCAP, L.P. a fee of $525,000.

76

M & M Acquisition

In January 1992, we purchased the auto salvage pool operations of M & M Auto Storage Pool, Inc., or M & M, and acquired an option to purchase the original 35 acres of land on which M & M’s operation is located. Melvin R. Martin, the founder, chief executive officer and principal shareholder of the auto salvage operation, was elected a director of our company in January 1992. Mr. Martin retired from the board in August 2004. We are required to pay rent to Mr. Martin during the 10-year term, or extended term, of the lease relating to the real property owned by Mr. Martin. In 2004, we paid $500,321 pursuant to the lease. We believe the terms of the lease are no less favorable than those available from unaffiliated third party lessors or licensors.

Dallas, Texas Lease

We lease certain property located in Dallas, Texas from a partnership in which Mr. Martin is a partner. In 2004, we paid $632,536 in rent under this lease. We believe the terms of the lease are no less favorable than those available from unaffiliated third party lessors.

Temporary Use License Agreement

On March 1, 2004, we entered into a Temporary License Agreement with Mr. Martin for the month-to-month rental of additional property adjacent to our Phoenix facility. Pursuant to the Temporary License Agreement, we expect to pay Mr. Martin $3,000 per month in additional rents. In 2004, we paid $36,000 pursuant to the temporary license agreement. We believe the terms of the Temporary License Agreement are no less favorable than those available from unaffiliated third party lessors or licensors.

Mr. Martin and our company are parties to an agreement pursuant to which Mr. Martin is compensated on a daily basis for consulting services, primarily in the areas of acquisitions and real estate. Mr. Martin received no compensation pursuant to the agreement in 2004.

77

DESCRIPTION OF SENIOR CREDIT FACILITIES

Overview

On May 19, 2005, Axle Merger entered into new senior credit facilities with Bear Stearns Corporate Lending Inc., as administrative agent, Deutsche Bank Securities Inc., as syndication agent, Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., as lead arrangers, and the lenders party thereto from time to time. Upon the completion of the merger, IAAI assumed all the obligations of Axle Merger under the senior credit facilities. The following is a summary description of certain terms of our senior credit facilities.

Our senior credit facilities provide for aggregate maximum borrowings of $165.0 million under (1) a term loan in an aggregate principal amount of $115.0 million with a seven-year maturity and (2) a revolving credit facility, providing for up to $50.0 million of revolving loans outstanding at any time (including letters of credit) with a six-year maturity. Currently, the full amount under the term loan has been drawn down. Undrawn amounts under the revolving credit facility will be available on a revolving credit basis for our general corporate purposes.

Prepayments

The principal amount of the term loan amortizes in quarterly installments equal to 0.25% of the original principal amount of the term loans, with the balance payable at maturity.

Subject to certain exceptions, the senior credit facilities are subject to mandatory prepayments and reduction in an amount equal to:

• the net proceeds of (1) certain debt offerings by us or any of our subsidiaries, (2) certain asset sales by us or any of our subsidiaries (subject to customary reinvestment provisions), and (3) certain insurance recovery and condemnation events;

• 50% of the net proceeds of certain equity offerings of Axle Holdings and us; and

• 75% of excess cash flow (to be defined) subject to reduction based on our achievement of specified consolidated leverage ratio levels.

Voluntary prepayments and commitment reductions are permitted, in whole or in part, in minimum amounts without premium or penalty, other than customary breakage costs.

Security; Guarantees

Our obligations under the senior credit facilities are guaranteed by Axle Holdings and each of our existing and certain future direct and indirect domestic subsidiaries.

The senior credit facilities and the interest rate hedging agreements thereof are secured on a first priority basis by (i) pledges of all the capital stock of all our direct or indirect domestic subsidiaries and up to 65% of the capital stock of each of our direct foreign subsidiaries and (ii) liens on substantially all of the tangible and intangible assets of us and the guarantors, subject to certain exceptions.

Interest

At our election, the interest rate per annum applicable to the loans under the senior credit facilities is based on a fluctuating rate of interest determined by reference to either (i) the euro dollar rate or (ii) the base rate, in each case plus an applicable margin to be subject to reduction based on our achievement of specified leverage ratio levels.

78

Fees

We pay certain fees with respect to the senior credit facilities, including (i) fees on the unused commitments of the lenders under the revolving facility, (ii) letter of credit fees on the aggregate face amount of outstanding letters of credit plus a fronting fee to the issuing bank, and (iii) administration fees.

Covenants

Our senior credit facilities contain a number of covenants that, among other things, limit or restrict our and our subsidiaries’ ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness (including the notes), pay dividends, create liens, make equity or debt investments, make acquisitions, modify the terms of the indenture under which the notes are issued, engage in mergers or make capital expenditures, or engage in certain transactions with affiliates. The credit agreement requires us to at all times have at least 50% of the aggregate principal amount of the notes and the term loan subject to either a fixed interest rate or interest rate protection for a period of not less than three years. We also are required to comply with specified financial ratios and tests. Our ability to borrow under our senior credit facilities is dependent on, among other things, our compliance with these financial ratio tests. Failure to comply with these tests would result in a violation of the credit agreement and, absent a waiver or an amendment from the lenders, permit the lenders to accelerate all outstanding borrowings under the credit facilities.

Events of Default

Our senior credit facilities contain customary events of default including non-payment of principal, interest or fees, failure to comply with covenants, inaccuracy of representations or warranties in any material respect, cross-default to certain other indebtedness, loss of lien perfection or priority, material judgments, change of control, and certain bankruptcy or insolvency events.

79

DESCRIPTION OF NOTES

Definitions of certain terms used in this Description of Notes may be found under the heading “Certain Definitions.” For purposes of this section, the terms “the Company,” “we,” “our” and “us” mean only IAAI and not any of our subsidiaries. Certain of IAAI’s subsidiaries are guarantors of the notes. Each subsidiary of the Company which guarantees the notes is referred to in this section as a “Subsidiary Guarantor.” Each such guarantee is termed a “Subsidiary Guarantee.”

The notes were issued under an indenture dated April 1, 2005 (the “Indenture”), among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as Trustee (the “Trustee”), in a private transaction that is not subject to the registration requirements of the Securities Act. The Indenture contains provisions which define your rights under the notes. In addition, the Indenture governs the obligations of the Company and of each Subsidiary Guarantor under the notes and the Subsidiary Guarantees. The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, or the TIA. For purposes of this section, the term “notes” refers to (i) the old notes, (ii) the new notes, and (iii) any Additional Notes (as defined below), except where the context otherwise requires.

The following description is meant to be only a summary of certain provisions of the Indenture. It does not restate the terms of the Indenture in their entirety. We urge that you carefully read the Indenture as it, and not this description, governs the rights of Holders (as defined below). You may obtain a copy of the Indenture from the Company at its address set forth elsewhere in this prospectus. See “Where You Can Find Additional Information.”

You can find definitions of certain terms used in this description under “—Certain Definitions.” Certain defined terms used in this description but not defined below under the caption “—Certain Definitions” have the respective meanings assigned to them in the Indenture.

Overview of the Notes and the Subsidiary Guarantees

The notes:

• are senior unsecured obligations of the Company,

• rank equally in right of payment with all existing and future senior Indebtedness of the Company,

• are senior in right of payment to all future Subordinated Obligations of the Company,

• are structurally subordinated to all liabilities (including Trade Payables) and Preferred Stock of each Subsidiary of the Company that is not a Subsidiary Guarantor, and

• are fully and unconditionally guaranteed by all existing and future Domestic Subsidiaries of the Company that guarantee payment by the Company of any Indebtedness (other than Immaterial Indebtedness) of the Company.

Since the notes are unsecured, in the event of a bankruptcy or insolvency, the Company’s secured lenders will have a prior secured claim to any collateral securing the debt owed to them.

The Subsidiary Guarantees of each Subsidiary Guarantor:

• are general senior obligations of such Subsidiary Guarantor,

• rank equally in right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor, and

• are senior in right of payment to all future Subordinated Obligations of such Subsidiary Guarantor.

80

Since the Subsidiary Guarantees are unsecured obligations of each Subsidiary Guarantor, in the event of a bankruptcy or insolvency, such Subsidiary Guarantor’s secured lenders will have a prior secured claim to any collateral securing the debt owed to them. As of June 26, 2005, IAAI and the Subsidiary Guarantors had total Secured Indebtedness of approximately $116.1 million, $2.3 million of outstanding letters of credit, and $47.7 million that was available for additional borrowings under the revolving portion of IAAI’s senior credit facilities.

Not all of our future Subsidiaries will be required to Guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us. The notes will not be guaranteed by any future Foreign Subsidiaries, or by any Domestic Subsidiary that does not Guarantee payment of any other Indebtedness (other than Immaterial Indebtedness) of the Company.

As of the date of the Indenture, all of our Subsidiaries were “Restricted Subsidiaries.” However, under the circumstances described below in the definition of “Unrestricted Subsidiary” under “—Certain Definitions,” we will be permitted to designate certain of our Subsidiaries as “Unrestricted Subsidiaries.” Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture and will not Guarantee the notes.

Principal, Maturity and Interest

We initially issued notes in an aggregate principal amount of $150.0 million. The notes will mature on April 1, 2013. We issued the notes in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000.

Each note we have issued or will issue will bear interest at a rate of 11% per annum payable semi-annually in arrears on April 1 and October 1, beginning on April 1, 2005 or, if interest has already been paid, from the date it was most recently paid. We will pay interest semiannually to Holders of record at the close of business on the March 15 or September 15 immediately preceding the interest payment date. We will pay interest on overdue principal at such rate, and we will pay interest on overdue installments of interest at such rate to the extent lawful.

We will also pay liquidated damages to Holders if the registration statement of which this prospectus is a part is not declared effective on a timely basis or if certain other conditions are not satisfied. These liquidated damages provisions are more fully explained under the heading “—Registration Rights; Liquidated Damages.”

Indenture May Be Used For Future Issuances

We may issue additional notes having substantially identical terms and conditions to the notes (the “Additional Notes”) under the Indenture from time to time. We will only be permitted to issue Additional Notes if the issuance is in compliance with the covenants contained in the Indenture. Any Additional Notes will be part of the same series as the notes that we are currently offering and will vote on all matters with such notes.

Paying Agent and Registrar

If a Holder of notes has given wire transfer instructions to us, we will pay all principal, interest and premium and liquidated damages, if any, on that Holder’s notes in accordance with those instructions. All other payments on the notes will be made at any of our offices or at any agency designated by us. We have initially designated the corporate trust office of the Trustee to act as the agent of the Company in such matters. The location of the corporate trust office is N9303-120, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479. We, however, reserve the right to pay interest to Holders by check mailed directly to Holders at their registered addresses.

81

Holders may exchange or transfer their notes at the same location given in the preceding paragraph. No service charge will be made for any registration of transfer or exchange of notes. We may, however, require Holders to pay any transfer tax or other similar governmental charge payable in connection with any such transfer or exchange.

Optional Redemption

Except as set forth in the following paragraphs of this “Optional Redemption” section, we may not redeem the notes prior to April 1, 2009. On and after this date, we may redeem the notes, in whole or in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest and liquidated damages, if any, thereon to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on April 1 of the years set forth below:

Year	Redemption Price
2009	105.500	%
2010	102.750	%
2011 and thereafter	100.000	%

We, in our discretion, may require the satisfaction of one or more conditions precedent in connection with any such optional redemption.

Prior to April 1, 2008, on one or more occasions, we also may redeem up to a maximum of 35% of the original aggregate principal amount of the notes (calculated giving effect to any issuance of Additional Notes) with funds in an aggregate amount not exceeding the aggregate Net Cash Proceeds of one or more Equity Offerings, at a redemption price equal to 111% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that after giving effect to any such redemption:

(1) at least 65% of the original aggregate principal amount of the notes (calculated giving effect to any issuance of Additional Notes) remains outstanding immediately following such redemption; and

(2) any such redemption must be made within 90 days of the related Equity Offering and must be made in accordance with certain procedures set forth in the Indenture.

We may give notice of such redemption prior to the completion of the related Equity Offering and, in our discretion, may require the satisfaction of one or more conditions precedent in connection with any such optional redemption, including but not limited to the completion of the related Equity Offering.

Mandatory Redemption

We are not required to make any mandatory redemption or sinking fund payments with respect to the notes.

Selection; Notice

If less than all of the notes are to be redeemed at any time, the Trustee will select notes for redemption on a pro rata basis by lot or by such method as the Trustee shall deem fair and appropriate, unless otherwise required by law or applicable stock exchange requirements, except that no note of $1,000 in original principal amount or less will be redeemed in part.

If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. We will issue a new note in principal amount

82

equal to the unredeemed portion of the original note in the name of the Holder thereof upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of notes called for redemption.

Notice of redemption will be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the Indenture.

Escrow of Proceeds and Other Amounts

Concurrently with the closing of the offering of the old notes (the “Offering”), the Company entered into an escrow agreement (the “Escrow Agreement”) with Wells Fargo Bank, National Association, as escrow agent (the “Escrow Agent”), pursuant to which the Company deposited with the Escrow Agent the net proceeds of the Offering and cash or Temporary Cash Investments (together with any other property in the escrow account as specified in the Escrow Agreement, the “Escrowed Property”) in an aggregate amount (together with interest on, or proceeds of, Temporary Cash Investments constituting Escrowed Property) sufficient to redeem in cash the notes at 100% of the aggregate principal amount thereof plus accrued and unpaid interest (the “Mandatory Redemption Price”) to the Mandatory Redemption Date, (the “Initial Deposit”). The “Mandatory Redemption Date” meant (a) September 29, 2005 if the assumption of IAAI Finance’s obligations under the notes and the Indenture (the “IAAI Assumption”) had not occurred on or prior to September 22, 2005 (the “Deadline Date”) or (b) the fifth day (or if such day is not a Business Day, the first Business Day thereafter) following the termination of the Acquisition Agreement on or prior to the Deadline Date for any reason.

In the event that the IAAI Assumption was not consummated on or prior to the Deadline Date or the Acquisition Agreement was terminated on or prior to the Deadline Date, for any reason, the Company was required to redeem all the notes (the “Mandatory Redemption”) at the applicable Mandatory Redemption Price.

The closing of the IAAI Assumption occurred on May 25, 2005, prior to the Deadline Date. Therefore, the Escrow Agent released all Escrowed Property to IAAI upon presentation of the documentation required under the Escrow Agreement.

Subsidiary Guarantees

Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. and all other future Domestic Subsidiaries of the Company that guarantee payment of any Indebtedness (other than Immaterial Indebtedness) of the Company, as primary obligors and not merely as sureties, have jointly and severally, fully and unconditionally Guaranteed on a senior unsecured basis the full and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all monetary obligations of the Company under the Indenture (including obligations to the Trustee) and the notes, whether for payment of principal of or interest on the notes, expenses, indemnification of the Trustee or otherwise (all such obligations Guaranteed by such Subsidiary Guarantors being herein called the “Guaranteed Obligations”). Each Subsidiary Guarantee is limited in amount to an amount not to exceed the maximum amount that can be Guaranteed by the applicable Subsidiary Guarantor without rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See “Risk Factors—Fraudulent transfer statutes may limit your rights as a holder of the notes.” The Company will cause each future Subsidiary Guarantor (other than an Unrestricted Subsidiary) to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will Guarantee payment of the notes. See “—Certain Covenants—Future Subsidiary Guarantors” below.

Each Subsidiary Guarantee is a continuing Guarantee and shall (a) remain in full force and effect until payment in full of all the Guaranteed Obligations or until the relevant Subsidiary Guarantor is released from the

83

Subsidiary Guarantee as provided below; (b) be binding upon each Subsidiary Guarantor and its successors; and (c) inure to the benefit of, and be enforceable by, the Trustee, the Holders and their successors, transferees and assigns.

The Subsidiary Guarantee of a Subsidiary Guarantor will be automatically and unconditionally released and discharged:

(1) in connection with any consolidation or merger if the Subsidiary Guarantor or surviving Person shall cease to be a Subsidiary of the Company, if the consolidation or merger complies with the provisions of the Indenture;

(2) in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with the provisions of the Indenture;

(3) if the Subsidiary Guarantor is designated to be an Unrestricted Subsidiary in accordance with the provisions of the Indenture;

(4) in connection with any (direct or indirect) sale of Capital Stock or other transaction that results in such Subsidiary Guarantor ceasing to be a Subsidiary of the Company, if the sale or other transaction complies with the provisions of the Indenture;

(5) upon the release of such Subsidiary Guarantor from its liability in respect of all Indebtedness (other than Immaterial Indebtedness) of the Company and all other Subsidiary Guarantors; and

(6) upon legal defeasance of the notes or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”

Change of Control

Upon the occurrence of a Change of Control, each Holder will have the right to require the Company to purchase all or any part (equal to $1,000 or an integral multiple of $1,000) of such Holder’s notes at a purchase price in cash equal to 101% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase the notes if it has exercised its right to redeem all the notes under the terms of the section titled “—Optional Redemption.” “Change of Control” means the occurrence of any of the following events:

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company, provided that so long as the Company is a Subsidiary of a Parent, no Person shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of the Company unless such Person shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such Parent;

(2) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new individuals whose election by such Board of Directors of the Company or whose nomination for election by the stockholders of the Company was approved by any Permitted Holder or a vote of a majority of the individuals of the Company then still in office who were either on the Board of Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company;

(3) the adoption of a plan relating to the liquidation or dissolution of the Company; or

84

(4) the Company merges or consolidates with or into, or sells or transfers (in one or a series of related transactions) all or substantially all of the assets of the Company and its Restricted Subsidiaries to, another Person (other than one or more Permitted Holders) and any “person” (as defined in clause (1) above), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as so defined), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the surviving Person in such merger or consolidation, or the transferee Person in such sale or transfer of assets, as the case may be, provided that so long as such surviving or transferee Person is a Subsidiary of a Parent, no Person shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such surviving or transferee Person unless such Person shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such Parent.

The Transactions did not constitute or give rise to a Change of Control.

For purposes of the foregoing, no Person who is a member of a “group” (as so defined) or a “beneficial owner” (as so defined) in respect of any such Voting Stock solely as a consequence of any agreement or arrangement with Permitted Holders shall be deemed a member of such “group” or such a “beneficial owner” for so long as (without giving effect to such agreement or arrangement) the Permitted Holders “beneficially own” (as so defined) a percentage of the total voting power of the Voting Stock of the Company (or any Parent or such surviving or transferee Person, as the case may be) at such time greater than that “beneficially owned” (as so defined) by such other Person.

In the event that at the time of the Change of Control the terms of any Credit Facility restrict or prohibit the repurchase of notes pursuant to this covenant, then prior to the mailing of the notice to Holders provided for in the immediately following paragraph, but in any event within 90 days following the date the Company obtains actual knowledge of any Change of Control, the Company shall:

(1) repay in full all Indebtedness under Credit Facilities the terms of which require repayment upon a Change of Control, or if doing so will allow the purchase of the notes, offer to repay in full all Indebtedness under such Credit Facilities and repay the Indebtedness under such Credit Facilities of each lender who has accepted such offer; or

(2) obtain the requisite consent under the agreements governing the Credit Facilities the terms of which require repayment upon a Change of Control to permit the repurchase of the notes as provided for in the immediately following paragraph.

Not later than 30 days following the date the Company obtains actual knowledge of any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

(1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase all or a portion of such Holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the purchase date (which shall be no earlier than 30 days nor later than 90 days from the date such notice is mailed);

(4) the instructions determined by the Company, consistent with this covenant and the Indenture, that a Holder must follow in order to have its notes purchased; and

(5) if such notice is mailed prior to the occurrence of a Change of Control, that such offer is conditioned on the occurrence of such Change of Control.

85

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with, the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under this covenant by virtue thereof.

The Change of Control purchase feature is a result of negotiations between the Company and the Initial Purchasers. Management has no present intention to engage in a transaction involving a Change of Control, although it is possible that the Company would decide to do so in the future. Subject to the limitations discussed below, the Company could, in the future, enter into certain transactions, including acquisitions, refinancings, recapitalizations or the purchase by a Permitted Holder of another Permitted Holder’s equity interest, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the Company’s capital structure or credit ratings. Restrictions on the ability of the Company to Incur additional Indebtedness are contained in the covenants described under “—Certain Covenants—Limitation on Indebtedness.” Such restrictions can only be waived with the consent of the Holders of a majority in principal amount of the notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture does not contain any covenants or provisions that may afford Holders protection in the event of a highly leveraged transaction.

The occurrence of certain of the events which would constitute a Change of Control would constitute a default under the Credit Agreement. Future Indebtedness of the Company may contain prohibitions of certain events which would constitute a Change of Control or require such Indebtedness to be repurchased or repaid upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Company to purchase the notes could cause a default under such Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company’s ability to pay cash to the Holders upon a purchase may be limited by the Company’s then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. The provisions under the Indenture relative to the Company’s obligation to make an offer to purchase the notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the notes.

Certain Covenants

The Indenture contains covenants including, among others, the following:

Limitation on Indebtedness. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company or any Subsidiary Guarantor may Incur Indebtedness if on the date of such Incurrence and after giving effect thereto (i) with respect to any Indebtedness Incurred on or prior to the date that is 18 months after the Effective Date, the Consolidated Coverage Ratio would be greater than 2.0:1, (ii) with respect to any Indebtedness Incurred subsequent to the date that is 18 months after the Effective Date but on or prior to the date that is 36 months after the Effective Date, the Consolidated Coverage Ratio would be greater than 2.25:1 and (iii) with respect to any Indebtedness Incurred subsequent to the date that is 36 months after the Effective Date, the Consolidated Coverage Ratio would be greater than 2.50:1.

(b) The Company will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor, as the

86

case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the notes or the applicable Subsidiary Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Subsidiary Guarantor, as the case may be. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of the fact that the holders of such Indebtedness have agreed, including by entering into one or more intercreditor agreements, to give one or more of such holders priority over the other holders in the collateral held by them.

(c) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries may Incur the following Indebtedness:

(1) Indebtedness under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $170.0 million;

(2) Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company or any Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof at the time of such issuance, transfer or other event;

(3) Indebtedness (A) represented by the notes (not including any Additional Notes) and the Subsidiary Guarantees, (B) outstanding on the Effective Date (other than the Indebtedness described in clauses (1) and (2) above), and (C) consisting of Refinancing Indebtedness;

(4) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the foregoing paragraph (a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (4) and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (4);

(5) Indebtedness (A) in respect of performance bonds, bankers’ acceptances, letters of credit and surety or appeal bonds provided by the Company and the Restricted Subsidiaries in the ordinary course of their business or other similar instruments or obligations issued, or relating to liabilities or obligations Incurred by the Company and the Restricted Subsidiaries in the ordinary course of their business (including those issued to governmental entities in connection with self-insurance under applicable workers’ compensation statutes), (B) in respect of the financing of insurance premiums by the Company or any Restricted Subsidiary in the ordinary course of their business and (C) under Interest Rate Agreements entered into for bona fide hedging purposes of the Company in the ordinary course of business, or otherwise in respect of any Credit Facility;

(6) Guarantees by the Company or any Restricted Subsidiary of Indebtedness or any other obligation or liability of the Company or any Restricted Subsidiary not incurred in violation of this “Limitation on Indebtedness” section;

(7) Indebtedness of a Receivables Subsidiary secured by a Lien on all or part of the assets disposed of in, or otherwise Incurred in connection with, a Financing Disposition (which Indebtedness is, except for Standard Receivables Obligations, otherwise without recourse to the Company or any Restricted Subsidiary of the Company (other than such Receivables Subsidiary));

87

(8) Indebtedness of the Company or any Restricted Subsidiary under Currency Agreements entered into, in the judgment of the Company, to protect the Company or such Restricted Subsidiary from fluctuations in currency exchange rates and not entered into for speculative purposes;

(9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days of Incurrence;

(10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of the Company, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition, provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross consideration actually received by the Company and its Restricted Subsidiaries in connection with such disposition; or

(11) Indebtedness in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (11) and to remain outstanding immediately after such Incurrence, will not exceed $15.0 million.

(d) For purposes of determining compliance with any Dollar-denominated restriction on the Incurrence of Indebtedness denominated in a foreign currency, the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness, provided that (x) the Dollar-equivalent principal amount of any such Indebtedness outstanding on the Effective Date shall be calculated based on the relevant currency exchange rate in effect on the Effective Date; (y) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced; and (z) the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency and that is incurred under any Credit Facility shall be calculated based on the relevant currency exchange rate in effect on, at the Company’s option, (i) the Effective Date; (ii) any date on which any of the respective commitments under such Credit Facility shall be reallocated between or among facilities or subfacilities thereunder, or on which such rate is otherwise calculated for any purpose thereunder; or (iii) the date of such Incurrence. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing. For purposes of determining the outstanding principal amount of any particular Indebtedness Incurred pursuant to this covenant:

(1) Indebtedness Incurred pursuant to the Credit Facilities on the Effective Date shall be treated as Incurred pursuant to clause (1) of paragraph (c) above,

(2) Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; and

(3) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this covenant, the Company, in its sole discretion, may classify such Indebtedness and only shall be required to include the amount of such Indebtedness in one of such clauses but may include the same in more than one of such clauses.

88

Limitation on Liens. The Company may not Incur any Secured Indebtedness, other than Secured Indebtedness secured by Permitted Liens, unless contemporaneously therewith effective provision is made to secure the notes equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to the notes) such Secured Indebtedness for so long as such Secured Indebtedness is secured by a Lien on any property or assets of the Company. A Subsidiary Guarantor may not Incur any Secured Indebtedness, other than Secured Indebtedness secured by Permitted Liens, unless contemporaneously therewith effective provision is made to secure the Subsidiary Guarantee of such Subsidiary Guarantor equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to such Subsidiary Guarantee) such Secured Indebtedness for as long as such Secured Indebtedness is secured by a Lien on any property or assets of such Subsidiary Guarantor.

Limitation on Restricted Payments. (a) The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to:

(1) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any Subsidiary of the Company) to the holders of its Capital Stock in their capacity as such, except (x) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock or, in the case of a Subsidiary, Preferred Stock) and (y) dividends or distributions payable to the Company or a Restricted Subsidiary (and, if such Restricted Subsidiary has stockholders or equity owners other than the Company or other Restricted Subsidiaries, to its other stockholders or equity owners on a pro rata basis);

(2) purchase, repurchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company held by Persons other than the Company or a Restricted Subsidiary or any Capital Stock of any Parent;

(3) purchase, repurchase, redeem, retire, defease or otherwise acquire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment any Subordinated Obligations (other than the purchase, repurchase redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations acquired in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of acquisition); or

(4) make any Investment (other than a Permitted Investment) in any other Person;

(any such dividend, distribution, payment, purchase, redemption, repurchase, defeasance, retirement, or other acquisition or Investment being herein referred to as a “Restricted Payment”), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(A) a Default will have occurred and be continuing (or would result therefrom);

(B) the Company could not Incur at least $1.00 of additional Indebtedness under paragraph (b) of the covenant described under “—Limitation on Indebtedness”; or

(C) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a resolution of the Board of Directors) declared or made subsequent to the Effective Date would exceed the sum, without duplication, of:

(i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Effective Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit);

(ii) the aggregate Net Cash Proceeds and Fair Market Value of property or assets received by the Company as capital contributions to the Company or from the issue or sale of its Capital Stock (other than Disqualified Stock) in each case, subsequent to the Effective Date (other than an

89

issuance or sale to (x) a Subsidiary of the Company or (y) an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries, except to the extent that Consolidated Net Worth increases as a result of such issue or sale to such plan or trust);

(iii) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Effective Date of any Indebtedness of the Company or any of its Restricted Subsidiaries issued after the Effective Date which is convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company or any Parent (less the amount of any cash or the Fair Market Value of other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange plus the amount of cash, property or assets (determined as provided above) received by the Company or any Restricted Subsidiary upon such conversion or exchange);

(iv) the amount equal to the net reduction in Investments, that was made after the Effective Date, in Unrestricted Subsidiaries resulting from (x) payments of dividends, repayments of the principal of loans or advances or other transfers of assets to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of “Investment”) not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; and

(v) in the case of any disposition or repayment or return of all or any portion of any Investment, that was made after the Effective Date, other than a Permitted Investment (without duplication of any amount deducted in calculating the amount of Investments at any time outstanding included in the amount of Restricted Payments), an amount in the aggregate equal to the lesser of the return of capital, repayment or other proceeds with respect to all such Investments and the initial amount of all such Investments.

(b) The provisions of the foregoing paragraph (a) will not prohibit any of the following (each a “Permitted Payment”):

(1) the making of any Restricted Payment (x) in exchange for, or out of the Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Capital Stock of the Company (other than Disqualified Stock) or (y) from the substantially concurrent contribution of common equity capital to the Company; provided, however, that:

(A) such Restricted Payment will be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above; and

(B) the Net Cash Proceeds from such sale applied in the manner set forth in this clause (1) will be excluded from the calculation of amounts under clause (4)(C)(ii) of paragraph (a) above;

(2) any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company that is permitted to be Incurred pursuant to paragraph (c) of the covenant described under “—Limitation on Indebtedness;” provided, however, that such prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value will be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(3) any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations (i) from Net Available Cash to the extent permitted by the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock”; (ii) to the extent provided by the agreement governing such Subordinated Obligations, following the occurrence of a Change

90

of Control (or, in the case of Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company, any similar event), but only if, in each case, the Company shall have complied with the covenant described under “—Change of Control” and, if required, purchased all notes tendered pursuant to the offer to repurchase all the notes tendered thereby prior to purchasing such Subordinated Obligations; or (iii) to the extent such Subordinated Obligations were Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company that was not Incurred in connection with, or in anticipation or contemplation of, the acquisition giving rise to the Incurrence of such acquired Indebtedness; provided, however, that such prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value will be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(4) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividends would have complied with this covenant; provided, however, that such dividends will be included in the calculation of the amount of Restricted Payments under paragraph (a) above;

(5) any purchase, repurchase, redemption, retirement or other acquisition for value of, or options to purchase, Capital Stock of the Company or any Parent from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, such Capital Stock or upon death, resignation or termination of employment, and loans, advances, dividends or distributions by the Company to any Parent to permit any Parent to make any such purchase, repurchase, redemption, retirement or other acquisition for value; provided, however, that the aggregate amount of such purchases, repurchases, redemptions, retirements and other acquisitions for value will not exceed $2.5 million in any calendar year (which amount shall be increased by the amount of any cash proceeds to the Company or any Parent from, or as a contribution to its capital from, (x) sales of Capital Stock to directors, officers or employees of the Company or any of its Subsidiaries subsequent to the Effective Date and (y) any “key man” life insurance policies which are used to make such redemptions or repurchases); provided that any unused amounts in one year can be carried forward to the next year, but cannot be carried forward to any succeeding year; provided further, however, that such purchases, repurchases, redemptions, retirements and other acquisitions for value shall be included in the calculation of the amount of Restricted Payments under paragraph (a) above;

(6) loans, advances, dividends or distributions to any Parent or other payments by the Company or any of its Restricted Subsidiaries to pay or permit any Parent to pay Parent Taxes or Parent Expenses; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(7) the payment of fees and compensation as permitted under clause (5) or (7) of paragraph (b) of section “—Limitation on Transactions with Affiliates”; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if such Capital Stock represents all or a portion of the exercise price thereof or taxes due in connection with such exercise; provided that such repurchases shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(9) Restricted Payments made pursuant to, or contemplated by, or made to any Parent to permit any Parent to perform its obligations under, the provisions of any Transaction Document as in effect on the date of the Indenture, and as the same may be amended or replaced either by a Board of Directors Approval or by any such amendment or replacement that is not materially more disadvantageous to the Holders in any material respect than the original Transaction Document as in effect on the date of the Indenture; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

91

(10) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the date of the Indenture in accordance with the covenant entitled “—Limitation on Indebtedness”; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(11) the distribution of Capital Stock of an Unrestricted Subsidiary to holders of Capital Stock of the Company, provided that such distribution is made promptly following the formation of, and investment in, such Unrestricted Subsidiary, and provided further that such distribution (but not such investment) shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(12) the Company or any Restricted Subsidiary from purchasing all (but not less than all), excluding directors’ qualifying shares, of the Capital Stock or other ownership interests in a Subsidiary of the Company which Capital Stock or other ownership interests were not theretofore owned by the Company or a Restricted Subsidiary of the Company, provided that such purchases shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(13) loans, advances, dividends, distributions or other payments, not to exceed $100,000 in the aggregate, to enable the Company or any Parent to make payments to holders of its Capital Stock in lieu of the issuance of fractional shares of its Capital Stock; provided that such loans, advances, dividends, distributions or other payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above;

(14) Restricted Payments made in connection with the Transactions; provided that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (a) above; or

(15) Restricted Payments (including loans and advances) in an aggregate amount at any time not to exceed $5.0 million (net of repayments of any such loans or advances); provided that such payments shall be included in the calculation of the amount of Restricted Payments under paragraph (a) above.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.

Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary, other than a Subsidiary Guarantor, to:

(1) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company;

(2) make any loans or advances to the Company; or

(3) transfer any of its property or assets to the Company, except:

(A) any encumbrance or restriction pursuant to applicable law, rules, regulations and/or orders or an agreement or instrument in effect at or entered into on the Effective Date (including the Indenture) and any encumbrance or restriction pursuant to the Credit Facilities;

(B) any encumbrance or restriction with respect to a Restricted Subsidiary or any of its Subsidiaries pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise

92

acquired by the Company) and outstanding on such date, which encumbrance or restriction is not applicable to the Company or its Restricted Subsidiaries, or the properties or assets of the Company or its Restricted Subsidiaries, other than the Restricted Subsidiary, or the property or assets of the Restricted Subsidiary, so acquired, or any Subsidiary thereof or the property or assets of any such Subsidiary;

(C) any encumbrance or restriction pursuant to an agreement or instrument effecting a Refinancing of Indebtedness Incurred pursuant to an agreement or instrument referred to in clause (A) or (B) of this covenant or this clause (C) or contained in any amendment, restatement, renewal, supplement or replacement to an agreement referred to in clause (A) or (B) of this covenant or this clause (C); provided, however, that the encumbrances and restrictions contained in any such Refinancing agreement or amendment, restatement, renewal, supplement or replacement are not materially less favorable taken as a whole, as determined by the Board of Directors acting in good faith, to the Holders than the encumbrances and restrictions contained in such predecessor agreement;

(D) in the case of clause (3), any encumbrance or restriction:

(i) that restricts the subletting, assignment or transfer of any property or asset or right and is contained in any lease, license or other contract entered into in the ordinary course of business; or

(ii) contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements;

(E) with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement or instrument entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(F) any encumbrances or restrictions contained in any Credit Facilities extended to any Foreign Subsidiary of the Company;

(G) any encumbrance or restriction arising under or in connection with Indebtedness or other contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Entity;

(H) restrictions on the transfer of property or assets pursuant to any Permitted Lien;

(I) any encumbrance or restriction arising under or in connection with any agreement or instrument relating to any Indebtedness permitted to be Incurred subsequent to the Effective Date pursuant to the provisions of the covenant described under “—Limitation on Indebtedness,” if (x) either (i) the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in the terms of such agreement or instrument or (ii) the Company in good faith determines that such encumbrance or restriction will not cause the Company not to have the funds necessary to pay the principal of or interest on the notes and (y) the encumbrance or restriction is not materially more disadvantageous to the Holders of the notes than is customary in comparable financings (as determined by the Company in good faith);

(J) any encumbrance or restriction arising under or in connection with any agreement or instrument governing Capital Stock of any Person other than a Wholly Owned Subsidiary that is acquired after the Effective Date; and

(K) any encumbrance or restriction arising under or in connection with the Indenture and the notes.

Limitation on Sales of Assets and Subsidiary Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Disposition unless:

(1) the Company or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time

93

of such Asset Disposition at least equal to the fair value, as determined in good faith by the Board of Directors, of the shares or assets subject to such Asset Disposition;

(2) at least 75% of the consideration thereof received is in the form of cash or Temporary Cash Investments; and

(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be):

(A) first, to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, purchase, repurchase, redeem, retire, defease or otherwise acquire for value Indebtedness of the Company or a Subsidiary Guarantor under any Credit Facility or Indebtedness (other than obligations in respect of Preferred Stock) of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case other than Indebtedness owed to the Company or an Affiliate of the Company and other than obligations in respect of Disqualified Stock) within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

(B) second, to the extent of the balance of Net Available Cash after application in accordance with clause (A), to the extent the Company or such Restricted Subsidiary elects, to reinvest in Additional Assets to be owned by the Company or a Restricted Subsidiary (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash) within 365 days from the later of such Asset Disposition or the receipt of such Net Available Cash, or, if such reinvestment in Additional Assets is a project authorized by the Board of Directors that will commence within 365 days but that will take longer than 365 days to complete, the period of time necessary to complete such project;

(C) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an Offer (as defined in paragraph (b) of this covenant below) to purchase the notes pursuant to and subject to the conditions set forth in paragraph (a) of this covenant; provided, however, that if the Company elects (or is required by the terms of any other Indebtedness (other than Subordinated Obligations)), such Offer may be made ratably to purchase the notes and such other Indebtedness of the Company; and

(D) fourth, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), for any general corporate purpose permitted by the terms of the Indenture; provided, however, that in connection with any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness pursuant to clause (A), (C) or (D) above, the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired, defeased or otherwise acquired for value.

Notwithstanding the foregoing provisions of this covenant, the Company and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash for all Asset Dispositions that is not applied in accordance with this covenant exceeds $10.0 million.

For the purposes of this covenant, the following are deemed to be cash:

• the amount of any liabilities (as shown on the Company or any Restricted Subsidiary’s most recent balance sheet or the notes thereto and other than obligations in respect of Disqualified Stock of the Company or Disqualified Stock and Preferred Stock of a Restricted Subsidiary that is a Subsidiary Guarantor) (i) that is assumed by the transferee of such assets and from which the Company and its Restricted Subsidiaries are unconditionally released or indemnified against by such transferee or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Asset Disposition has any obligation;

94

• securities received by the Company or any Restricted Subsidiary from the transferee that within 60 days are converted by the Company or such Restricted Subsidiary into cash; and

• any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of (x) 2.0% of the total assets less the goodwill, net, and other intangible assets, net, of the Company and its Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP, as of the most recent date for which a consolidated balance sheet of the Company and its Restricted Subsidiaries is available, and (y) $10.0 million at the time of the receipt of such Designated Non-Cash Consideration (with fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

Notwithstanding the immediately preceding paragraphs of this covenant, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Disposition without complying with such paragraphs to the extent that:

(1) at least 75% of the consideration for such Asset Disposition constitutes Additional Assets; and

(2) such Asset Disposition is for at least fair value, as determined in good faith by the Board of Directors; provided that the Net Available Cash from any consideration not constituting Additional Assets received by the Company or any of its Restricted Subsidiaries in connection with any Asset Disposition permitted to be consummated under this paragraph shall be subject to the provisions of the two preceding paragraphs;

provided that at the time of entering into such transaction or immediately after giving effect thereto, no Default or Event of Default shall have occurred or be continuing or would occur as a consequence thereof.

(b) In the event of an Asset Disposition that requires the purchase of notes pursuant to clause (a)(3)(C) of this covenant, the Company (i) will be required to purchase notes tendered pursuant to an offer by the Company to the Holders for the notes (the “Offer”) at a purchase price of 100% of their principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in the Indenture; and (ii) may purchase other Indebtedness (other than Subordinated Obligations) of the Company on the terms and to the extent contemplated thereby (provided that in no event shall the Company offer to purchase such other Indebtedness of the Company at a purchase price in excess of 100% of its principal amount (without premium), plus accrued and unpaid interest and liquidated damages, if any, thereon). If the aggregate purchase price of notes (and other Indebtedness (other than Subordinated Obligations)) tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of the notes (and such other Indebtedness (including liquidated damages, if any)), the Company will apply the remaining Net Available Cash in accordance with clause (a)(3)(D) of this covenant. The Company will not be required to make an Offer for notes (and such other Indebtedness) pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clauses (a)(3)(A) and (B)) is less than $10.0 million for any particular Asset Disposition (which lesser amount will be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition).

(c) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under this covenant by virtue thereof.

95

The agreements governing the Company’s outstanding Secured Indebtedness currently prohibit the Company from purchasing any notes, and also provide that certain change of control or asset disposition events with respect to the Company would constitute a default under these agreements. Any future credit agreements to which the Company becomes a party may contain similar restrictions and provisions. In the event an Asset Disposition occurs at a time when the Company is prohibited from purchasing notes, the Company could seek the consent of its lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing notes. In such case, the Company’s failure to purchase tendered notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Secured Indebtedness. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of notes.

Limitation on Transactions with Affiliates. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless such transaction is on terms:

(1) that are fair and reasonable to, and in the best interest of, the Company or such Restricted Subsidiary, as the case may be, as determined in good faith by the Board of Directors;

(2) that, in the event such Affiliate Transaction involves an aggregate amount in excess of $5.0 million;

(A) are set forth in writing; and

(B) have been approved by a majority of the members of the Board of Directors; and

(3) that, in the event such Affiliate Transaction involves an amount in excess of $20.0 million, have been determined by a nationally recognized appraisal, accounting or investment banking firm to be fair, from a financial point of view, to the Company or such Restricted Subsidiary, as the case may be.

(b) The provisions of the foregoing paragraph (a) will not prohibit:

(1) any Restricted Payment permitted to be paid pursuant to the covenant described under “—Limitation on Restricted Payments,” any Permitted Payment, or any Permitted Investments;

(2) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock or equity options and stock or equity ownership plans approved by the Board of Directors;

(3) the grant of stock or equity options or similar rights to employees and directors or members of the Board of Directors of the Company or its Subsidiaries pursuant to plans and/or contracts approved by the Board of Directors;

(4) loans or advances to officers, directors or employees of the Company or its Subsidiaries in the ordinary course of business in accordance with past practices of the Company, but in any event not to exceed $5.0 million in the aggregate outstanding at any one time;

(5) the payment of reasonable fees and compensation to, and the provision of indemnity on behalf of, directors, officers, employees, consultants or members of the Board of Directors of the Company or any Subsidiary as determined in good faith by the Company’s Board of Directors;

(6) any transaction between the Company and one or more Restricted Subsidiaries or between Restricted Subsidiaries;

(7) any transaction or any payment pursuant to or contemplated by the provisions of any Transaction Document as in effect on the date of the Indenture, and as the same may be amended or replaced either by a Board of Directors Approval or by any such amendment or replacement that is not materially more disadvantageous to the Holders in any material respect than the original Transaction Document as in effect on the date of the Indenture;

96

(8) transactions effected as part of a Qualified Receivables Transaction;

(9) the granting or performance of registration rights under a written registration rights agreement approved by the Board of Directors and containing customary terms, taken as a whole;

(10) transactions with Persons solely in their capacity as holders of Indebtedness or Capital Stock of the Company or any of its Restricted Subsidiaries, where such Persons are treated no more favorably than holders of Indebtedness or Capital Stock of the Company or such Restricted Subsidiary generally;

(11) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services in the ordinary course of business;

(12) sales of Capital Stock (other than Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor) for any consideration or any capital contribution;

(13) any agreement as in effect on the Effective Date and any amendment or supplement thereto or any replacement or renewal thereof or any transaction completed pursuant to such amendment, supplement, renewal or replacement agreement (including pursuant to any amendment thereto), so long as any such amendment or replacement agreement is not materially more disadvantageous to the Holders of notes in any material respect than the original agreement as in effect on the Effective Date;

(14) transactions permitted by, and complying with, the provisions of the covenant described under “—Merger and Consolidation;”

(15) execution, delivery and performance of a tax sharing agreement with respect to any of the charges, taxes or assessments described in the definition of “Parent Taxes;”

(16) any transaction in the ordinary course of business, or approved by a majority of the Board of Directors, between the Company or any Restricted Subsidiary and any Affiliate of the Company controlled by the Company that is a joint venture or similar entity (in which no other Affiliate of the Company, other than a Restricted Subsidiary, owns any Capital Stock); and

(17) any agreement to do any of the foregoing.

Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries. From and after the Effective Date, the Company will not permit any Restricted Subsidiary to issue any shares of its Preferred Stock except to the Company or a Restricted Subsidiary.

SEC Reports. Whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, from and after the Effective Date, the Company will furnish to the Holders of notes, cause the Trustee to furnish to the Holders of notes or file with the SEC, within the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, following the consummation of the exchange offer contemplated by the registration rights agreement, the Company will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing).

If, at any time after consummation of the exchange offer contemplated by the registration rights agreement, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with

97

the SEC within the time periods specified above unless the SEC will not accept such a filing. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on its website (if it then maintains a website) within the time periods that would apply if the Company were required to file those reports with the SEC.

In addition, the Company and the Subsidiary Guarantors agree that, for so long as any notes remain outstanding, if at any time they are not required to file with the SEC the reports required by the preceding paragraphs, they will furnish to the Holders of notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Future Subsidiary Guarantors. On the Effective Date, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. Guaranteed payment of the notes. The Company will cause each existing and future Domestic Subsidiary of the Company (other than an Unrestricted Subsidiary) that Guarantees payment by the Company of any Indebtedness (other than Immaterial Indebtedness) of the Company to become a Subsidiary Guarantor, and if applicable, execute and deliver to the Trustee a supplemental indenture in the form set forth in the Indenture pursuant to which such Domestic Subsidiary will, jointly and severally, fully and unconditionally Guarantee on a senior unsecured basis the Guaranteed Obligations within 10 business days of the date on which it enters into such Guarantee of Indebtedness (other than Immaterial Indebtedness) of the Company; provided that any such future Domestic Subsidiary that constitutes an Immaterial Subsidiary need not become a Subsidiary Guarantor until such time as it ceases to be an Immaterial Subsidiary. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be Guaranteed by that Subsidiary Guarantor, without rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

The Subsidiary Guarantee of a Subsidiary Guarantor will be automatically and unconditionally released and discharged:

(1) in connection with any consolidation or merger if the Subsidiary Guarantor or surviving Person shall cease to be a Subsidiary of the Company, if the consolidation or merger complies with the provisions of the covenant described under “—Merger and Consolidation;”

(2) in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with the provisions of the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock;”

(3) if the Subsidiary Guarantor is designated to be an Unrestricted Subsidiary in accordance with the provisions of the Indenture;

(4) in connection with any (direct or indirect) sale of Capital Stock or other transaction that results in such Subsidiary Guarantor ceasing to be a Subsidiary of the Company, if the sale or other transaction complies with the provisions of the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock;”

(5) upon the release of such Subsidiary Guarantor from its liability in respect of all Indebtedness (other than Immaterial Indebtedness) of the Company and all other Subsidiary Guarantors; and

(6) upon legal defeasance of the notes or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”

Business Activities. The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

98

Merger and Consolidation

The Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by a supplemental indenture and registration rights agreement (if applicable), executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the notes, the Indenture and the registration rights agreement (if applicable);

(2) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

(3) immediately after giving effect to such transaction and any related financing transactions on a pro forma basis either (i) the Successor Company would be able to Incur an additional $1.00 of Indebtedness under paragraph (b) of the covenant described under “—Certain Covenants—Limitation on Indebtedness” or (ii) the Consolidated Coverage Ratio of the Successor Company would be greater than the Consolidated Coverage Ratio of the Company immediately prior to such transaction; and

(4) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture.

In addition, the Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person unless:

(1) the resulting, surviving or transferee Person (the “Successor Guarantor”) will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such Person (if not such Subsidiary Guarantor) will expressly assume, by a supplemental indenture and registration rights agreement (if applicable), executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee and the registration rights agreement (if applicable), respectively; and

(2) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing.

Notwithstanding the foregoing:

(A) any Restricted Subsidiary (including any Subsidiary Guarantor) may consolidate with, merge into or transfer all or substantially all of its assets to the Company or any Subsidiary Guarantor;

(B) the Company or any Subsidiary Guarantor may merge with or into, or convey, transfer or lease all or substantially all its assets to, an Affiliate incorporated solely for the purpose of reincorporating the Company or such Subsidiary Guarantor in another jurisdiction, and the Company may merge with or into, or convey, transfer or lease all or substantially all its assets to, a Restricted Subsidiary (including a Subsidiary Guarantor) so long as all assets of the Company and the Restricted Subsidiary immediately prior to such transaction are owned by such Restricted Subsidiary and its Restricted Subsidiaries immediately after the consummation thereof; and

99

(C) any Subsidiary Guarantor may consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets so long as the transactions comply with the release provisions set forth in the second paragraph of the section entitled “—Certain Covenants—Future Subsidiary Guarantors.”

Defaults

Each of the following is an Event of Default:

(1) a default in any payment of interest on any note when due and payable, which default continues for a period of 30 days;

(2) a default in the payment of principal of any note when due and payable at its Stated Maturity, upon required redemption or repurchase (including failure to make a payment to purchase notes pursuant to the Mandatory Redemption), upon declaration of acceleration or otherwise;

(3) a default in the observance or performance of any other covenant or agreement contained in the Indenture, which default continues for a period of 60 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the notes;

(4) the failure to pay at final stated maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness of the Company or any Restricted Subsidiary (other than a Receivables Entity) of the Company, or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at final maturity or which has been accelerated (in each case with respect to which the 20-day period described above has elapsed), aggregates $20.0 million or more at any time;

(5) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the “bankruptcy provisions”);

(6) the rendering of any judgment or decree for the payment of money in excess of $20.0 million or its foreign currency equivalent against the Company or a Significant Subsidiary if:

(A) an enforcement proceeding thereon is commenced by any creditor, or

(B) such judgment or decree remains outstanding for a period of 60 days after such judgment becomes final and not appealable and is not discharged, paid, waived or stayed (the “judgment default provision”); or

(7) except as permitted by the Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, denies or disaffirms in writing its obligations under its Subsidiary Guarantee.

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clause (3) will not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in principal amount of the outstanding notes notify the Company and the Trustee of the default and the Company or the relevant Subsidiary Guarantor, as applicable, does not cure such default within the time specified in clause (3) hereof after receipt of such notice.

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the Holders of at least 25% in principal

100

amount of the outstanding notes by notice to the Company may declare the principal of and accrued but unpaid interest and liquidated damages, if any, on all the notes to be due and payable. Upon such a declaration, such principal and interest and liquidated damages, if any, will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest and liquidated damages, if any, on all the notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding notes may rescind any such acceleration with respect to the notes and its consequences.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, interest or premium or liquidated damages, if any, when due, no Holder may pursue any remedy with respect to the Indenture or the notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the outstanding notes have requested the Trustee in writing to pursue the remedy;

(3) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

(5) the Holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding notes will be given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

If a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, interest or premium or liquidated damages, if any, on any note (including payments pursuant to the redemption provisions of such note), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Holders. In addition, the Company will be required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any failure to comply with the conditions and covenants under the Indenture. The Company will also be required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which constitutes an Event of Default, its status and what action the Company is taking or proposes to take in respect thereof.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor, as such, will have any liability for any obligations of the Company or the Subsidiary Guarantors under the notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or

101

their creation. Each Holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Amendments and Waivers

Subject to certain exceptions, the Indenture or the notes and the Subsidiary Guarantees may be amended or supplemented with the written consent of the Holders of a majority in aggregate principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes) and any existing Default or Event of Default or compliance with any provision of the Indenture or the notes or the Subsidiary Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). In addition, one or more of the Subsidiary Guarantees may be released with the consent of the Holders of a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). However, without the consent of each Holder of an outstanding note affected, no amendment, supplement or waiver may (with respect to any notes held by a non-consenting Holder):

(1) reduce the principal amount of notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the rate of or extend the time for payment of interest, including default interest, on any note;

(3) reduce the principal of or change the Stated Maturity of any note;

(4) reduce the premium payable upon the redemption of any note or change the date at which any note may be redeemed as described under “—Optional Redemption” above;

(5) make any note payable in money other than that stated in the note;

(6) make any change in the provisions of the Indenture governing the right of any Holder to receive payment of principal of, and interest on, such Holder’s notes on or after the due dates therefor (except a rescission of acceleration of the notes by the Holders of at least a majority in aggregate principal amount of the then outstanding notes and a waiver of the payment default that resulted from such acceleration) or to institute suit for the enforcement of any payment on or with respect to such Holder’s notes;

(7) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or the Indenture, except in accordance with the terms of the Indenture;

(8) make any change in the ranking of the notes that is materially adverse to Holders or make any change in the amendment and waiver provisions which require each Holder’s consent; or

(9) make any change to the paragraph of the notes providing for the Mandatory Redemption which would adversely affect the rights of any of the Holders to receive the Mandatory Redemption Price.

Without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture, the notes or the Subsidiary Guarantees to:

• cure any ambiguity, omission, defect or inconsistency,

• provide for the assumption of the Company’s or a Subsidiary Guarantor’s obligations to Holders of notes and Subsidiary Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Subsidiary Guarantor’s assets, as applicable,

• provide for uncertificated notes in addition to or in place of certificated notes (provided, however, that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code),

• add additional Guarantees with respect to the notes,

102

• secure the notes,

• add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company,

• make any change that does not adversely affect the rights of any Holder, subject to the provisions of the Indenture,

• conform the text of the Indenture, the Subsidiary Guarantees or the notes to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of the Indenture, the Subsidiary Guarantees or the notes,

• provide for the issuance of the new notes or Additional Notes, or

• comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA.

The consent of the Holders will not be necessary to approve the particular form of any proposed amendment. It will be sufficient if such consent approves the substance of the proposed amendment.

After an amendment becomes effective, the Company is required to mail to Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders, or any defect therein, will not impair or affect the validity of the amendment.

Transfer and Exchange

A Holder will be able to transfer or exchange notes in accordance with the provisions of the Indenture. Upon any transfer or exchange, the registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes required by law or permitted by the Indenture. The Company will not be required to transfer or exchange any note selected for redemption or to transfer or exchange any note for a period of 15 days prior to a selection of notes to be redeemed. The notes will be issued in registered form and the Holder will be treated as the owner of such note for all purposes.

Legal Defeasance and Covenant Defeasance

The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officer’s Certificate, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Subsidiary Guarantors discharged with respect to their Subsidiary Guarantees (“Legal Defeasance”) except for:

(1) the rights of Holders of outstanding notes to receive payments in respect of the principal of, or interest or premium or liquidated damages, if any, on, such notes when such payments are due from the trust referred to below;

(2) the Company’s obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Subsidiary Guarantors’ obligations in connection therewith; and

(4) the Legal Defeasance and Covenant Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Subsidiary Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Offers pursuant to “—Certain Covenants—Limitation on Sales of Assets and

103

Subsidiary Stock” above) that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “Defaults” will no longer constitute an Event of Default with respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable U.S. Government Obligations, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium and liquidated damages, if any, on, the outstanding notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the notes are being defeased to such stated date for payment or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(6) the Company must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

(7) the Company must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance under the defeasance provisions of the Indenture have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a Legal Defeasance need not to be delivered if all notes not theretofor delivered to the Trustee for cancellation (1) have become due and payable or (2) will become due and payable on the maturity date within one year, or are to be called for redemption within one year, under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

104

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:

(1) either:

(A) all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

(B) all notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year, or are to be called for redemption within one year, and the Company or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations, or a combination of cash in U.S. dollars and non-callable U.S. Government Obligations, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the notes not delivered to the Trustee for cancellation for principal and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(3) the Company or any Subsidiary Guarantor has paid or caused to be paid all other sums then payable by it under the Indenture; and

(4) the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the notes at maturity or on the redemption date, as the case may be.

In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge under the satisfaction and discharge provisions of the Indenture have been satisfied.

Concerning the Trustee

Wells Fargo Bank, National Association is the Trustee under the Indenture and has been appointed by the Company as Registrar and Paying Agent with regard to the notes.

If the Trustee becomes a creditor of the Company or any Subsidiary Guarantor, the Indenture limits the right of the Trustee to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if the Indenture has been qualified under the TIA) or resign.

The Holders of a majority in aggregate principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default occurs and is continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs.

Governing Law

The Indenture and the notes are governed by, and are to be construed in accordance with, the laws of the State of New York.

105

Certain Definitions

“Acquisition” means the acquisition of Insurance Auto Auctions, Inc. by Axle Holdings, Inc. and Axle Merger Sub, Inc. pursuant to the Acquisition Agreement.

“Acquisition Agreement” means the Agreement and Plan of Merger among Insurance Auto Auctions, Inc., Axle Holdings, Inc. and Axle Merger Sub, Inc., dated as of February 22, 2005, as the same may be amended, modified or supplemented from time to time.

“Additional Assets” means:

(1) any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Restricted Subsidiary in a Permitted Business; or

(2) the Capital Stock of a Restricted Subsidiary or of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary.

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation, or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary; other than, in the case of (1), (2) and (3) above,

(A) a disposition by a Restricted Subsidiary to the Company or to another Restricted Subsidiary or by the Company to a Restricted Subsidiary;

(B) for purposes of the provisions described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” only, a disposition subject to the covenant described under “—Certain Covenants—Limitation on Restricted Payments;”

(C) any transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive aggregate consideration of less than $5.0 million;

(D) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted under “—Merger and Consolidation;”

(E) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

(F) the factoring of accounts receivable arising in the ordinary course of business pursuant to arrangements customary in the industry;

(G) the licensing of intellectual property;

(H) disposals or replacements of obsolete equipment in the ordinary course of business;

106

(I) sales of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity;

(J) transfers of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) by a Receivables Entity in a Qualified Receivables Transaction;

(K) leases or subleases to third persons not interfering in any material respect with the business of the Company or any of its Restricted Subsidiaries;

(L) pursuant to any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or any Subsidiary of the Company with a Lien on such assets, which Lien is permitted under the Indenture; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law; and

(M) the sale or other transfer involving only Temporary Cash Investments.

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing:

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment; by

(2) the sum of all such payments.

“Axle Holdings, Inc.” means Axle Holdings, Inc., a Delaware corporation, and any successor in interest thereto.

“Axle Holdings II, LLC” means Axle Holdings II, LLC, a Delaware limited liability company, and any successor in interest thereto.

“Axle Merger Sub, Inc.” means Axle Merger Sub, Inc., an Illinois corporation, and any successor in interest thereto.

“Board of Directors” of the Company or any other Person means (i) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; (ii) with respect to a partnership, the Board of Directors of the general partner of the partnership; (iii) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and (iv) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board of Directors Approval” means the approval of a transaction by a majority of directors who do not have a personal stake in the transaction being voted upon, evidenced by a written resolution of the Board of Directors authorizing such transaction.

“Business Day” means any day which is not a Legal Holiday.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into or exchangeable for such equity.

“Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the amount of such obligation required to be reflected as a liability on a

107

balance sheet prepared in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other similar amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Closing Date” means the date of the Indenture.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commodity Agreements” means, in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (i) the aggregate amount of Consolidated EBITDA of the Company and its Restricted Subsidiaries for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Company are available to (ii) Consolidated Interest Expense for such four fiscal quarters (in the case of each of clauses (i) and (ii)), determined, for each fiscal quarter (or portion thereof) of the four fiscal quarters ending prior to the Effective Date, on a pro forma basis to give effect to the Transactions as if they had occurred at the beginning of such four-quarter period), and subject and giving effect to the following adjustments:

(1) Incurrence of Indebtedness. If since the beginning of such period the Company or any Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on (A) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (B) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation).

(2) Discharge of Indebtedness. If since the beginning of such period the Company or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged any Indebtedness (each, a “Discharge”) or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and the commitments in respect thereof have been permanently terminated), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such Discharge had occurred on the first day of such period.

(3) Sales. If since the beginning of such period the Company or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business (any such disposition, a “Sale”), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to (A) the Consolidated Interest Expense attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus (B) if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such

108

period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale.

(4) Purchase. If since the beginning of such period the Company or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder (any such Investment or acquisition, a “Purchase”), Consolidated EBITDA (plus adjustments which will only include annualized cost savings achievable within one year and which shall be itemized in an Officer’s Certificate delivered to the Trustee by a responsible financial or accounting Officer of the Company) and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness), as if such Purchase occurred on the first day of such period.

(5) Adjustments for Acquired Person. If since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Company or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause (2), (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection therewith, the pro forma calculations in respect thereof shall be determined in good faith by a responsible financial or accounting Officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness to the extent of the remaining term of such Interest Rate Agreement). If any Indebtedness bears, at the option of the Company or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Company or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated EBITDA” means, for any period, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) provision for all taxes based on income, profits or capital, including, without limitation, state, franchise, value added, foreign or similar taxes; (ii) Consolidated Interest Expense; (iii) depreciation, amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs) and any non-cash impairment charges related to goodwill, other intangibles or long-lived assets; (iv) any expenses or charges related to any Equity Offering, Investment or Indebtedness permitted by the Indenture (whether or not consummated or incurred); (v) the amount of any minority interest expense; (vi) the amount, up to $0.5 million per year, paid to Kelso in respect of management, monitoring, consulting and advisory fees; (vii) any non-cash impairment charges resulting from the application of Statement of Financial Accounting Standards Nos. 142 and 144, and the write-off, depreciation or amortization of intangibles arising pursuant to Statement of Financial Accounting Standards No. 141 and any other charges as a result of the application of purchase accounting; (viii) other non-cash expenses reducing Consolidated Net Income for such period (including deferred rent but excluding any other such charge which

109

requires an accrual of or reserve for cash charges for any future period); and (ix) cash restructuring charges not to exceed $2.5 million per year and not to exceed $5.0 million in the aggregate.

“Consolidated Interest Expense” means, for any period, (i) the total interest expense of the Company and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of the Company and its Restricted Subsidiaries, including without limitation any such interest expense consisting of (a) interest expense attributable to Capitalized Lease Obligations; (b) amortization of debt discount; (c) the interest portion of any deferred payment obligation; (d) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing; and (e) to the extent not otherwise included in such interest expense, Receivables Fees; plus (ii) Preferred Stock dividends paid in cash in respect of Disqualified Stock of the Company or any Restricted Subsidiary held by Persons other than the Company or a Restricted Subsidiary; and minus (iii) to the extent otherwise included in such interest expense, amortization or write-off of financing costs, in each case under clauses (i) through (iii) as determined on a Consolidated basis in accordance with GAAP; provided that gross interest expense shall be determined after giving effect to any net payments made or received by the Company and its Restricted Subsidiaries with respect to Interest Rate Agreements.

“Consolidated Net Income” means, for any period, the net income (loss) of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided that there shall not be included in such Consolidated Net Income:

(i) any net income of any Person if such Person is not a Restricted Subsidiary or is accounted for by the equity method of accounting, except that the Company’s equity in the net income (but not loss) of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (ii) below);

(ii) any net income (loss) of any Restricted Subsidiary that is not a Subsidiary Guarantor if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to the Company by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its stockholders (other than (x) restrictions that have been waived or otherwise released and (y) restrictions pursuant to the notes or the Indenture), except that the Company’s equity in the net income (but not loss) of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that could have been made by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary and the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income up to the amount of loans, advances or other contributions, if any, made to such Restricted Subsidiary by the Company or any other Restricted Subsidiary during such period;

(iii) any gain or loss realized upon the sale or other disposition of any asset of the Company or any Restricted Subsidiary (including pursuant to any sale/leaseback transaction) that is not sold or otherwise disposed of in the ordinary course of business (as determined in good faith by the Board of Directors) and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

(iv) any extraordinary, unusual or nonrecurring gain, loss or charge (including, without limitation, option and severance expense, change of control payments and all other fees, expenses and charges associated with the Transactions and any acquisition, merger or consolidation after the Effective Date);

(v) the cumulative effect of a change in accounting principles;

(vi) any gains or losses in connection with any early extinguishment of Indebtedness or the termination of any Currency Agreement in connection therewith;

110

(vii) any unrealized gains or losses in respect of Currency Agreements;

(viii) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person;

(ix) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards; and

(x) any increase in depreciation, depletion or amortization or any one-time non-cash charges (such as capitalized manufacturing profit in inventory) resulting from the purchase accounting in connection with the Transactions or any acquisition, merger or consolidation that is consummated after the Effective Date.

In the case of any unusual or nonrecurring gain, loss or charge not included in Consolidated Net Income pursuant to clause (iv) above in any determination thereof, the Company will deliver an Officer’s Certificate to the Trustee promptly after the date on which Consolidated Net Income is so determined, setting forth the nature and amount of such unusual or nonrecurring gain, loss or charge.

“Consolidated Net Worth” means the total of the amounts shown on the balance sheet of the Company and its Restricted Subsidiaries, determined on a Consolidated basis, as of the end of the most recent fiscal quarter of the Company ending at least 45 days prior to the taking of any action for the purpose of which the determination is being made, as

(1) the par or stated value of all outstanding Capital Stock of the Company; plus

(2) paid-in capital or capital surplus relating to such Capital Stock; plus

(3) any retained earnings or earned surplus; less

(A) any accumulated deficit; and

(B) any amounts attributable to Disqualified Stock.

“Consolidation” means the consolidation of the accounts of each of the Restricted Subsidiaries with those of the Company in accordance with GAAP consistently applied; provided, however, that “Consolidation” will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will be accounted for as an investment. The term “Consolidated” has a correlative meaning.

“Credit Facilities” means the credit agreement to be dated on or about the Effective Date among the Company, the lenders named therein, Bear Stearns Corporate Lending Inc., as administrative agent, Deutsche Bank Securities Inc., as syndication agent, Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., as lead arrangers, and the lenders party thereto from time to time, in each case as such agreement may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreements extending the maturity of, refinancing, replacing (whether or not contemporaneously) or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted by the covenant described in “—Limitation on Indebtedness” above) or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreements and whether by the same or any other agent, lender or group of lenders or investors and whether such refinancing or replacement is under one or more debt facilities or commercial paper facilities, indentures or other agreements, in each case with banks or other institutional lenders or trustees or investors providing for revolving credit loans, term loans, notes or letters of credit, together with related documents thereto (including, without limitation, any guaranty agreements and security documents).

“Currency Agreement” means with respect to any Person any foreign exchange contract, currency swap agreements or other similar agreement or arrangement to which such Person is a party or of which it is a beneficiary.

111

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Non-Cash Consideration” means the fair market value of any non-cash consideration that is received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition and that is designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate. A particular item of Designated Non-Cash Consideration will no longer by considered to be outstanding when it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock.”

“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event:

(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary; provided, however, that any such conversion or exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable); or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in the case of each of clauses (1), (2) and (3), on or prior to the 90th day after the Stated Maturity of the notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 90th day after the Stated Maturity of the notes shall not constitute Disqualified Stock.

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia, other than any Foreign Subsidiary Holding Company.

“Effective Date” means the effective date of the Acquisition.

“Equity Offering” means (x) a sale of Capital Stock (other than Disqualified Stock) that is a sale of Capital Stock of the Company, or (y) a capital contribution to the Company or any of its Restricted Subsidiaries.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. The Fair Market Value of property or assets other than cash which involves (1) an aggregate amount in excess of $1.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors and (2) an aggregate amount in excess of $20.0 million, shall have been determined in writing by a nationally recognized appraisal, accounting or investment banking firm.

“Financing Disposition” means any sale, transfer, conveyance or other disposition of property or assets by the Company or any Subsidiary thereof to any Receivables Entity, or by any Receivables Subsidiary, in each case in connection with the Incurrence by a Receivables Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets.

“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not a Domestic Subsidiary, including without limitation, any Foreign Subsidiary Holding Company.

112

“Foreign Subsidiary Holding Company” means any Restricted Subsidiary that (A) has no material assets other than securities of one or more Foreign Subsidiaries and other assets relating to the ownership interest in any such securities and (B) does not guarantee any Indebtedness of the Company or any Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Closing Date, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entities as approved by a significant segment of the accounting profession; and

(4) the rules and regulations of the SEC governing the inclusion of financial statements in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

All ratios and computations based on GAAP contained in the Indenture shall be computed in conformity with GAAP.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial condition or otherwise), entered into in favor and for the benefit of the obligee of such Indebtedness or other obligation; or

(2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Guarantor” means any Person Guaranteeing any obligation.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement.

“Holder” means the Person in whose name a note is registered on the Registrar’s books.

“Immaterial Indebtedness” means Indebtedness that, individually or in the aggregate, does not exceed $15.0 million at any one time outstanding.

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose total assets, as of that date, are less than $100,000 and whose total revenues for the most recent 12-month period do not exceed $100,000.

“Incur” means issue, assume, enter into any Guarantee of, incur or otherwise become liable for; provided, however, that any Indebtedness of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it

113

becomes a Subsidiary and Indebtedness secured by a Lien encumbering any asset acquired by a Person shall be deemed to be Incurred by such Person at the time it acquires such asset. The term “Incurrence” when used as a noun shall have a correlative meaning. The amortization or accretion of principal of a non-interest bearing or other discount security, the accrual of interest, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock of the Company in the form of additional shares of the same class of Disqualified Stock shall not be deemed the Incurrence of Indebtedness.

“Indebtedness” means, with respect to any Person on any date of determination, without duplication:

(1) the principal of in respect of indebtedness of such Person for borrowed money;

(2) the principal of in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto);

(4) all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables and other accrued current liabilities arising in the ordinary course of business), which purchase price is due more than 12 months after the date of placing such property in service or taking delivery and title thereto;

(5) all Capitalized Lease Obligations of such Person;

(6) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (other than any Preferred Stock issued by any Subsidiary of the Company to the Company or any Restricted Subsidiary) (but excluding, in each case, any accrued dividends);

(7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person shall be the lesser of:

(A) the fair market value of such asset at such date of determination and

(B) the amount of such Indebtedness of such other Persons;

(8) Hedging Obligations of such Person; and

(9) all obligations of the type referred to in clauses (1) through (8) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

provided, however, that Indebtedness shall not include any obligation of the Company or any Subsidiary in respect of the Acquisition Agreement, any liability for Federal, state, provincial, foreign, local or other taxes owed or owing by such Person or advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date.

“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement to which such Person is party or of which it is a beneficiary.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers and suppliers in the ordinary course of business) or other extension of credit (including by way of Guarantee or

114

similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. For purposes of the definition of “Unrestricted Subsidiary” and the covenants described under “—Certain Covenants—Limitation on Restricted Payments”:

(1) “Investment” shall include the aggregate fair market value of all outstanding Investments owned directly or indirectly by the Company in the Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to:

(A) the Company’s Investment in such Subsidiary at the time of such redesignation; less

(B) the Company’s pro rata portion (proportionate to the Company’s direct or indirect equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Company’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided that to the extent the amount of Restricted Payments outstanding at any time is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Restricted Payments.” For purposes of calculating the amount at any time of Restricted Payments under paragraph (b)(15) under “—Certain Covenants—Limitation on Restricted Payments,” the amount of such Restricted Payments constituting Investments shall be the amount of such Investments outstanding at such time.

“Kelso” means Kelso & Company, L.P., a New York-based private investment firm.

“Kelso Agreements” means the Registration Rights Agreement, dated as of the Closing Date, among Axle Holdings, Inc., Axle Holdings II, LLC and the other parties thereto and the Financial Advisory Agreement, dated as of February 22, 2005, between Axle Merger Sub, Inc. and Kelso, in each case, as the same may be amended, modified or supplemented from time to time.

“Legal Holiday” means a Saturday, Sunday or other day on which banking institutions are not required by law, regulation or executive order to be open in the State of New York.

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Management Investor” means, the officers, directors, employees and other members of the management of any Parent, the Company or any of its Subsidiaries, or family members or relatives thereof, or trusts or partnerships for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Company or any Parent, and any Affiliate of any of the foregoing.

“Net Available Cash” from an Asset Disposition means the amount equal to the aggregate cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of

115

assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that were the subject of such Asset Disposition or received in any other noncash form) therefrom, in each case net of:

(1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and tax payments made with respect to such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and

(4) appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

“Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company. “Officer” of a Subsidiary Guarantor has a correlative meaning.

“Officer’s Certificate” means a certificate signed by an Officer.

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Subsidiary Guarantor or the Trustee.

“Parent” means any of Axle Holdings II, LLC, Axle Holdings, Inc. and any other Person of which the Company at any time is or becomes a Subsidiary after the Effective Date.

“Parent Expenses” means, without duplication, (A) costs (including all professional fees and expenses) incurred by any Parent in connection with its reporting obligations under or in compliance with applicable laws, applicable rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, the Indenture or any other agreement or instrument relating to Indebtedness of the Company or any Restricted Subsidiary, including any reports filed with respect to the Securities Act, Exchange Act or the respective rules and regulations promulgated thereunder, (B) indemnification obligations of any Parent owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person, (C) fees and expenses payable by any Parent in connection with the Transactions, (d) other operational expenses of any Parent incurred in the ordinary course of business, and (e) expenses incurred by any Parent in connection with any public offering of Capital Stock or Indebtedness (x) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Company or a Restricted Subsidiary, or (y) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or (z) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Company or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.

116

“Parent Taxes” means, without duplication, (x) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed on payments made by any Parent), required to be paid by any Parent by virtue of its being incorporated or otherwise organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Company, any of its Subsidiaries or any Parent), or being a holding company parent of the Company or receiving dividends from or other distributions in respect of the Capital Stock of the Company, or having Guaranteed any obligations of the Company or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Company is permitted to make payments to any Parent pursuant to the covenant described under “—Limitations on Restricted Payments,” or (y) for so long as the Company is a member of a group filing a consolidated, combined or unitary tax return with any Parent, amounts not to exceed the amount of the relevant tax (including any penalties and interest) that the Company would owe if the Company were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) that would be available to the Company (and any such Subsidiaries) from other taxable years if the Company were filing a separate tax return (or a separate consolidated or combined return with any such Subsidiaries).

“Permitted Business” means any business engaged in by the Company or any Restricted Subsidiary on the Closing Date and any Related Business.

“Permitted Holders” means any of (A) Kelso and its Affiliates, (B) the Management Investors (but only with respect to their “beneficial ownership” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of up to 10% in the aggregate of the total voting power of the Voting Stock of the Company or any Parent, as the case may be) and (C) any Person acting in the capacity of an underwriter in connection with a public or private offering of the Capital Stock of the Company or any Parent or securities convertible into or exchangeable or exercisable for such Capital Stock. Any person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary; is a Permitted Business;

(2) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary provided, however, that such Person’s primary business is a Permitted Business;

(3) Temporary Cash Investments;

(4) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(5) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(6) loans or advances to employees made in the ordinary course of business and not exceeding $5.0 million in the aggregate outstanding at any one time;

117

(7) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or upon bankruptcy or insolvency of creditors or customers;

(8) any Person to the extent such Investment represents the noncash portion of the consideration received for an Asset Disposition that was made pursuant to and in compliance with the covenant described under “—Certain Covenants—Limitation on Sale of Assets and Subsidiary Stock;”

(9) Investments existing on the Effective Date;

(10) Currency Agreements, Interest Rate Agreements and Commodity Agreements entered into by the Company or any of its Restricted Subsidiaries for bona fide business reasons and not for speculative purposes, and otherwise in compliance with the Indenture;

(11) Guarantees by the Company or any of its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred by the Company or any of its Restricted Subsidiaries under the Indenture;

(12) any Investment by the Company or a Restricted Subsidiary of the Company in a Receivables Entity or any Investment by a Receivables Entity in any other Person in connection with the Qualified Receivables Transaction;

(13) that portion of any Investment where the consideration provided is Capital Stock of the Company or any Parent (other than Disqualified Stock);

(14) the notes; or

(15) other Investments in an aggregate amount outstanding at any time not to exceed $20.0 million.

“Permitted Liens” means the following types of Liens:

(1) Liens securing the notes or any of the Subsidiary Guarantees;

(2) Liens existing on the Effective Date, together with any Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness secured by Liens existing on the Effective Date; provided that the Liens securing the Refinancing Indebtedness shall not extend to property other than that pledged under the Liens securing the Indebtedness being refinanced;

(3) Liens in favor of the Company or any Subsidiary Guarantor on the property or assets, or any proceeds, income or profit therefrom, of any Restricted Subsidiary;

(4) Liens securing Indebtedness (other than Subordinated Obligations) permitted to be Incurred pursuant to “—Certain Covenants—Limitation on Indebtedness”; provided that (x) with respect to Liens securing Indebtedness Incurred in reliance on clause (c)(4) of “—Certain Covenants—Limitation on Indebtedness,” such Liens do not extend to or cover any property or assets of the Company or of any Restricted Subsidiary other than the property or assets that secured such Indebtedness prior to the time the applicable Restricted Subsidiary became a Restricted Subsidiary and (y) with respect to Liens securing Refinancing Indebtedness which is Incurred to Refinance any Indebtedness which has been secured by a Lien permitted under the Indenture and which has been Incurred in accordance with the provisions of the Indenture, such Liens: (i) are no less favorable to the Holders in any material respect and are not more favorable to the lienholders in any material respect with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to or cover any property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced; and

(5) other Liens; provided that the maximum aggregate amount of outstanding obligations secured thereby shall not at any time exceed $5.0 million.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

118

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“principal” of a note means the principal of the note payable on the note which is due or overdue or is to become due at the relevant time.

“Purchase Money Indebtedness” means Indebtedness:

(1) consisting of or Incurred to finance the deferred purchase price of an asset, conditional sale obligations, obligations under any title retention agreement and other purchase money obligations, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed; and

(2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements; provided, however, that such Indebtedness is Incurred on or prior to the date that is 180 days after the acquisition by the Company or such Restricted Subsidiary of such asset.

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Entity (in the case of a transfer by the Company or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Entity), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all Guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

“Receivable” means a right to receive payment arising from a sale or lease of goods or services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit.

“Receivables Entity” means (x) any Receivables Subsidiary; or (y) any other Person that is engaged in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time), other accounts and/or other receivables, and/or related assets.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“Receivables Financing” means any financing of Receivables of the Company or any Restricted Subsidiary that have been transferred to a Receivables Entity in a Financing Disposition.

“Receivables Repurchase Obligation” means any obligation of a seller of receivables to repurchase receivables (including Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivable (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles)) arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

119

“Receivables Subsidiary” means a Subsidiary of the Company that (a) is engaged solely in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business; and (b) is designated as a “Receivables Subsidiary” by the Board of Directors.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness.

“Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the Effective Date, Incurred pursuant to the covenant described in clause (c)(3) of “—Certain Covenants—Limitation on Indebtedness” or Incurred in compliance with or permitted by the Indenture (including Indebtedness that Refinances Refinancing Indebtedness); provided, however, that:

(1) if the Indebtedness being refinanced is Subordinated Obligations, the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced;

(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus (y) fees, underwriting discounts, interest, premiums and other costs and expenses in connection with the issuance of the Refinancing Indebtedness and repayment of the Indebtedness being refinanced; and

(3) if the Indebtedness being Refinanced is subordinated in right of payment to the notes, such Refinancing Indebtedness is subordinated in right of payment to the notes at least to the same extent as the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include:

(A) Indebtedness of a Restricted Subsidiary (other than a Subsidiary Guarantor) that Refinances Indebtedness of the Company; or

(B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary, unless immediately after the Incurrence of such Indebtedness and the application of the proceeds thereof, such Unrestricted Subsidiary is designated as a Restricted Subsidiary.

“Related Business” means any business related, ancillary or complementary to the businesses of the Company and the Restricted Subsidiaries on the Closing Date.

“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company secured by a Lien. “Secured Indebtedness” of a Subsidiary Guarantor has a correlative meaning.

“Securities Act” means the Securities Act of 1933, as amended.

120

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” of the Company within the meaning of Article 1, Rule 1-02 under Regulation S-X promulgated by the SEC.

“Standard Receivable Obligations” means representations, warranties, covenants, indemnities and other obligations (including Guarantees and Indebtedness) which are reasonably customary in a Financing Disposition (as determined by the Company in good faith), including, without limitation, those relating to the servicing of the assets of a Receivables Entity, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Receivable Obligation.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency).

“Subordinated Obligation” means any Indebtedness of the Company (other than such Indebtedness as is described in clause (2) of paragraph (c) of “—Certain Covenants—Limitation on Indebtedness”) (whether outstanding on the Effective Date or thereafter Incurred) that is expressly subordinated in right of payment to the notes pursuant to a written agreement. “Subordinated Obligation” of a Subsidiary Guarantor has a correlative meaning with respect to Indebtedness that is expressly subordinated in right of payment to the Subsidiary Guarantees pursuant to a written agreement.

“Subsidiary” of any Person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, members of the Board of Directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by:

(1) such Person,

(2) such Person and one or more Subsidiaries of such Person or

(3) one or more Subsidiaries of such Person, or

any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“Subsidiary Guarantee” means each Guarantee of the obligations with respect to the notes issued by a Subsidiary of the Company pursuant to the terms of the Indenture.

“Subsidiary Guarantor” means (i) Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. and (ii) any other Subsidiary that has issued a Subsidiary Guarantee.

“Temporary Cash Investments” means any of the following:

(1) any investment in U.S. Government Obligations or obligations Guaranteed by the United States of America or any agency thereof;

(2) investments in time deposit accounts, certificates of deposit and money market deposits maturing within one year of the date of acquisition thereof issued by a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital, surplus and undivided profits aggregating in excess of $250.0 million (or the foreign currency equivalent thereof) and whose long-term debt is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);

121

(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;

(4) investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s Investors Service, Inc. (“Moody’s”) or “A-1” (or higher) according to Standard and Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. (“S&P”);

(5) investments in securities with maturities of one year or less from the date of acquisition issued or fully Guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s Investors Service, Inc.;

(6) investment funds investing 95% of their assets in securities of the type described in clauses (1) through (5) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution);

(7) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended; and

(8) similar investments approved by the Board of Directors in the ordinary course of business.

“TIA” means the Trust Indenture Act of 1939, as amended from time to time.

“Trade Payables” means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods, materials or services.

“Transaction Documents” means the Kelso Agreements, the agreements relating to the Acquisition, the financing thereof, or the services provided or to be provided in connection therewith (including pursuant to the Kelso Agreements), and the various ancillary documents, commitment letters and agreements relating thereto, as the same may be amended, modified or supplemented from time to time.

“Transactions” means the Acquisition and the financings thereof and the various other transactions and payments relating thereto.

“Trustee” means Wells Fargo Bank, National Association until a successor replaces it in accordance with the applicable provisions of the Indenture and, thereafter, means the successor serving under the Indenture.

“Trust Officer” means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below, and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either:

(A) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(B) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant entitled “—Certain Covenants—Limitation on Restricted Payments.”

122

The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

(x) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Indebtedness” and

(y) no Default shall have occurred and be continuing.

Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests and limited liability company interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, members of the Board of Directors, managers or trustees thereof.

“Wholly Owned Subsidiary” means a Restricted Subsidiary of the Company all the Capital Stock of which (other than directors’ qualifying shares or similar immaterial equity interests) is owned by the Company or another Wholly Owned Subsidiary.

123

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain material U.S. federal income tax consequences relating to (i) the exchange of the old notes for the new notes pursuant to the exchange offer to a holder of old notes that acquired its old notes at their initial issuance for cash at the initial offering price and (ii) the purchase, ownership and disposition of the new notes as of the date hereof. This summary is based on the Internal Revenue Code of 1986, as amended, Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect. This summary is limited to persons who hold their notes as capital assets for U.S. federal income tax purposes. This summary is general in nature, and does not address all of the U.S. federal income tax consequences that may be relevant to holders in light of their particular tax situations or to certain classes of holders subject to special treatment under the U.S. federal income tax laws (for example, dealers in securities, banks, insurance companies, expatriates, subchapter S corporations, persons who hold the notes through a pass-through entity, tax exempt entities, tax qualified plans, individual retirement and other tax-deferred accounts and persons who hold the notes as a hedge, who have otherwise hedged the risk of holding notes, who hold the notes as part of a straddle with other investments, who hold the notes in connection with a conversion transaction or whose functional currency is not the U.S. dollar). In addition, the discussion does not consider the effect of any foreign, state, local or other tax laws, or any U.S. considerations (e.g., estate or gift tax) other than U.S. federal income tax considerations that may be applicable to particular holders.

As used herein, a “U.S. holder” means a holder who (for U.S. federal income tax purposes) is (i) an individual citizen or resident of the U.S., (ii) a corporation or other entity treated as a corporation for tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who would have the authority to control all substantial decisions of the trust or a trust that has a valid election in place to be treated as a United States person. A “non-U.S. holder” means a holder that is not a U.S. holder and is not a partnership for U.S. federal income tax purposes.

Each holder should consult its tax advisor as to the particular tax consequences to such holder of the purchase, ownership and disposition of the notes, including the applicability of any federal, state, local or foreign tax laws, any changes in applicable tax laws and any pending or proposed legislation or regulations.

U.S. Holders

Interest

Stated interest payable on the notes generally will be included in the gross income of a U.S. holder as ordinary interest income at the time accrued or received, in accordance with such holder’s method of accounting for U.S. federal income tax purposes.

Disposition of notes

In general, the sale, exchange, redemption or other taxable disposition of the notes will result in capital gain or loss equal to the difference between the amount realized (except to the extent attributable to accrued interest, which will be taxable as ordinary income to the extent not previously included in income) and the holder’s adjusted tax basis in the notes immediately before such disposition. A holder’s tax basis in a note will generally equal the amount paid by the holder for the note.

Exchange of notes in the exchange offer

The exchange of old notes for new notes pursuant to the exchange offer should not constitute a taxable event to U.S. holders. Consequently, a U.S. holder should not recognize gain or loss upon receipt of a new note, the

124

U.S. holder’s basis in the new note should be the same as its basis in the corresponding note immediately before the exchange, and the U.S. holder’s holding period in the new note should include the holder’s holding period in the note exchanged therefor.

Discharge

If a discharge were obtained of the Indenture with respect to the notes issued thereunder and then outstanding, as described above under “Description of Notes—Satisfaction and Discharge,” such discharge generally would be deemed to constitute a taxable exchange of such outstanding notes for other property. In such case, a U.S. holder would be treated as described above under “—U.S. Holders—Disposition of Notes.” In addition, after such deemed exchange, a U.S. holder also might be required to recognize income from the property deemed to have been received in such exchange over the remaining life of the transaction in a manner or amount that is different than if the discharge had not occurred. U.S. holders should consult their tax advisors as to the specific consequences arising from a discharge in their particular situations.

Backup withholding and information reporting

Payments of principal and interest made on the notes and proceeds from the disposition of the notes may be subject to backup withholding unless the U.S. holder (1) is an exempt entity (including corporations, tax-exempt organizations and certain qualified nominees) or (2) provides its current taxpayer identification number, or TIN, and meets certain other certification requirements. If the holder is an individual, the TIN is generally his or her social security number. In addition, payments received by U.S. holders that are not exempt entities may be subject to information reporting requirements.

Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of U.S. federal income taxes, a refund may be obtained from the IRS provided the required information is timely furnished.

Non-U.S. Holders

U.S. federal withholding tax

U.S. federal withholding tax generally will not apply to any payments of interest provided that the following requirements are met:

• the non-U.S. holder (1) does not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock and (2) is not a controlled foreign corporation related to us directly or constructively through stock ownership; and

• either (1) the non-U.S. holder provides its name, address and certain other information on an appropriate IRS W-8 form (or substitute form) and certifies, under penalties of perjury, that it is not a U.S. person or (2) the non-U.S. holder holds its notes through certain foreign intermediaries or certain foreign partnerships and certain certification requirements are satisfied.

In addition, U.S. federal withholding tax will generally not apply to any payments of interest that is effectively connected with a trade or business in the United States provided that certain certification requirements are satisfied.

Payments of interest not exempt from U.S. federal withholding tax as described above will be subject to such withholding tax at a rate of 30% (unless a reduced rate or exemption applies under an applicable income tax treaty).

In general, U.S. federal withholding tax will not apply to any gain or income realized by a non-U.S. holder on the disposition of the notes (including a redemption for cash).

125

U.S. federal income tax

If a non-U.S. holder is engaged in a trade or business in the United States and interest on the notes is effectively connected with the conduct of that trade or business (and, if one of certain tax treaties applies, is attributable to a permanent establishment within the United States maintained by the non-U.S. holder), such non-U.S. holder will be subject to U.S. federal income tax on such interest on a net income basis in the same manner as if such non-U.S. holder were a United States resident. In addition, such non-U.S. holder that is a foreign corporation may be subject to a 30% (or, if a tax treaty applies, such lower rate as provided) branch profits tax.

Any gain realized on the disposition of notes by a non-U.S. holder generally will not be subject to U.S. federal income tax unless:

• that gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if one of certain tax treaties applies, is attributable to a permanent establishment within the United States maintained by the non-U.S. holder), in which case such gain will be taxed on a net income basis (and may be subject to a branch profits tax) in the same manner as interest that is effectively connected with the non-U.S. holder’s conduct of a United States trade or business; or

• the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the excess, if any, of such gain plus all other United States source capital gains recognized during the same taxable year over the non-U.S. holder’s United States source capital losses recognized during such taxable year.

Exchange of notes in the exchange offer

The exchange of notes for new notes in the exchange offer should not constitute a taxable event to non-U.S. holders for U.S. federal income tax purposes. Consequently, a non-U.S. holder should not recognize gain or loss upon receipt of a new note, the non-U.S. holder’s basis in the new note should be the same as its basis in the corresponding note immediately before the exchange, and the non-U.S. holder’s holding period in the new note should include the holder’s holding period in the note exchanged therefor.

Discharge

As described above under “U.S. Holders—Discharge,” a discharge generally would be deemed to constitute a taxable exchange of outstanding notes for other property. In such case, a non-U.S. holder might realize gain on such deemed exchange which would be treated in the same manner as gain on a disposition of notes as described above. A non-U.S. holder also may be required to recognize income with respect to the property deemed to have been received in such exchange over the remaining life of the transaction in a manner or amount that is different than if the discharge had not occurred, and such income may be subject to United States income and/or withholding taxes. Non-U.S. holders should consult their tax advisors as to the specific consequences arising from a discharge in their particular situations.

Backup withholding and information reporting

Generally, a payor must report annually to the IRS and to each non-U.S. holder (1) any interest that is subject to withholding or exempt from withholding pursuant to a tax treaty and (2) any payments of portfolio interest. Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. holder resides. Under certain circumstances, we will have to report to the IRS payments of principal.

Information reporting and backup withholding of U.S. federal income tax at the applicable rate may apply to payments of interest made with respect to the notes to a non-U.S. holder if such holder fails to make the appropriate certification that the holder is not a U.S. person or the payor has actual knowledge or reason to know that the payee is a U.S. person.

126

If the foreign office of a foreign broker, as defined in applicable regulations, pays the proceeds from a disposition of a note (including a redemption) to the seller, backup withholding and information reporting generally will not apply.

Payments of the proceeds from the disposition of a note (including a redemption) to or through a foreign office of a United States broker or a foreign broker with certain specified United States connections will be subject to information reporting requirements but not backup withholding unless such broker has evidence in its records that the payee is not a U.S. person and certain other conditions are met or the payee otherwise establishes an exemption.

Payments of the proceeds from the disposition of a note (including a redemption) to or through a United States office of a broker will be subject to information reporting and backup withholding unless the non-U.S. holder certifies that it is not a U.S. person or otherwise establishes an exemption.

Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of U.S. federal income taxes, a refund may be obtained from the IRS provided the required information is timely furnished.

127

PLAN OF DISTRIBUTION

Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where the old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the date on which the exchange offer is consummated, or such shorter period ending on the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. A broker-dealer intending to use this prospectus in the resale of new notes must so notify us on or prior to the expiration date.

We may, in certain cases, issue a notice suspending the use of the registration statement of which this prospectus forms a part. If we do so, the period during which the registration statement must remain effective will be extended for a number of days equal to the number of days the registration statement was in suspense.

We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own accounts pursuant to this exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of these methods of resale, at prevailing market prices at the time of resale, at prices related to prevailing market prices or at negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of new notes may be deemed to be an “underwriter” within the meaning of the Securities Act, and any profit on any resale of new notes and any commissions or compensation received by any persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the date on which the exchange offer is consummated, or such shorter period ending on the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, we will send additional copies of this prospectus and any amendments or supplements to this prospectus as soon as practicable to any broker-dealer that requests these documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer, other than commissions or concessions of any broker or dealer, and will indemnify the holders of notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

Based on interpretations by the Staff of the SEC as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-111 Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993)), we believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by any holder of such new notes, other than any such holder that is a broker-dealer or an “affiliate” of us within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

• such new notes are acquired in the ordinary course of business;

• at the time of the commencement of the exchange offer such holder has no arrangement or understanding with any person to participate in a distribution of such new notes; and

• such holder is not engaged in and does not intend to engage in a distribution of such new notes.

We have not sought and do not intend to seek a no-action letter from the SEC, with respect to the effects of the exchange offer, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the new notes as it has in such no-action letters.

128

LEGAL MATTERS

We are represented by Katten Muchin Rosenman LLP, Chicago, Illinois in connection with the exchange offer. Katten Muchin Rosenman LLP will pass upon the validity of the new notes and guarantees offered hereby.

EXPERTS

The consolidated financial statements of Insurance Auto Auctions, Inc. and subsidiaries as of December 26, 2004 and December 28, 2003 and for each of the fiscal years in the three-year period ended December 26, 2004, have been included herein in reliance upon the report by KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

In connection with the exchange offer, we have filed with the SEC a registration statement on Form S-4, under the Securities Act, relating to the new notes to be issued in the exchange offer. This prospectus, which is a part of the registration statement, does not contain all of the information included in the registration statement. Any statement made in this prospectus concerning the contents of any contract, agreement or other document is not necessarily complete. For a more complete understanding of the exchange offer and our company, you should refer to the registration statement, including its exhibits. If we have filed any contract, agreement or other document as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of the documents or matter involved.

Following effectiveness of the registration statement relating to the exchange offer, we will file annual, quarterly and current reports and other information with the SEC. In addition, the indenture pursuant to which the notes are issued requires us to distribute to the holders of the notes annual reports containing our financial statements audited by our independent auditors, quarterly reports and current reports.

You will be able to inspect and copy any reports, statements and other information that we file with the SEC at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also inspect these reports and other information without charge at a website maintained by the SEC. The address of this site is http://www.sec.gov. The SEC’s website is included in this prospectus as an inactive textual reference only. You may also obtain a copy of the exchange offer’s registration statement and other information that we file with the SEC at no cost by calling us or writing to us at the following address or telephone number: Insurance Auto Auctions, Inc., Two Westbrook Corporate Center, Suite 500, Westchester, Illinois 60154, Attention: Sidney L. Kerley, Vice President, General Counsel, phone: (708) 492-7000.

In order to obtain timely delivery of such materials, you must request documents from us no later than five business days prior to the expiration date.

129

INDEX TO FINANCIAL STATEMENTS

	Page
Audited Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 26, 2004 and December 28, 2003	F-3
Consolidated Income Statements for the years ended December 26, 2004, December 28, 2003 and December 29, 2002	F-4
Consolidated Statements of Shareholders’ Equity for the years ended December 26, 2004, December 28, 2003 and December 29, 2002	F-5
Consolidated Statements of Cash Flows for the years ended December 26, 2004, December 28, 2003 and December 29, 2002	F-6
Notes to Consolidated Financial Statements	F-7
Unaudited Financial Statements:
Condensed Consolidated Balance Sheets as of June 26, 2005 (successor) and December 26, 2004 (predecessor)	F-21
Condensed Consolidated Statements of Operations for the period from May 26, 2005 through June 26, 2005 (successor), the period March 28, 2005 through May 25, 2005 (predecessor), the three month period ended June 27, 2004 (predecessor), the period December 27, 2004 through May 25, 2005 (predecessor) and the six month period ended June 27, 2004 (predecessor)	F-22
Condensed Consolidated Statements of Cash Flows for the period from May 26, 2005 through June 26, 2005 (successor), the period December 27, 2004 through May 25, 2005 (predecessor) and the six month period ended June 27, 2004 (predecessor)	F-23
Notes to Condensed Consolidated Financial Statements	F-24

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Insurance Auto Auctions, Inc.:

We have audited the accompanying consolidated balance sheets of Insurance Auto Auctions, Inc. and subsidiaries as of December 26, 2004 and December 28, 2003, and the related consolidated income statements, statements of shareholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 26, 2004. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Insurance Auto Auctions, Inc. and subsidiaries as of December 26, 2004 and December 28, 2003, and the results of their operations and their cash flows for each of the fiscal years in the three-year period ended December 26, 2004, in conformity with U.S. generally accepted accounting principles.

/s/    KPMG LLP

Chicago, Illinois

March 11, 2005

F-2

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)

	December 26, 2004			December 28, 2003
ASSETS
Current assets:
Cash	$	13,325		$	15,486
Accounts receivable, net		50,443			48,375
Inventories		14,498			13,602
Deferred income taxes		4,693			4,180
Other current assets		1,613			3,099
Total current assets		84,572			84,742
Property and equipment, net		74,684			60,187
Deferred income taxes		6,481			5,608
Intangible assets, net		1,747			2,101
Goodwill, net		137,494			135,062
Other assets		482			93
	$	305,460		$	287,793
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	38,505		$	36,658
Accrued liabilities		13,513			12,556
Obligations under capital leases		1,094			2,822
Income taxes payable		1,067			—
Obligation under line of credit		6,000			—
Current installments of long-term debt		7,512			7,547
Total current liabilities		67,691			59,583
Deferred income taxes		20,729			17,748
Other liabilities		4,353			2,598
Obligation under capital leases		661			1,891
Long-term debt, excluding current installments		9,375			16,887
Total liabilities	$	102,809		$	98,707
Shareholders’ equity:
Preferred stock, par value of $.001 per share
Authorized 5,000,000 shares; none issued		—			—
Common stock, par value of $.001 per share
Authorized 20,000,000 shares; 12,709,758 shares issued and 11,569,156 outstanding as of December 26, 2004; and 12,325,482 shares issued and 11,518,273 outstanding as of December 28, 2003		12			12
Additional paid-in capital		151,793			145,856
Treasury stock, 906,480 shares at December 26, 2004 and 807,209 shares at December 28, 2003		(9,637	)		(8,012	)
Deferred compensation related to restricted stock		(4,343	)		(892	)
Accumulated other comprehensive income (loss)		(186	)		(625	)
Retained earnings		65,012			52,747
Total shareholders’ equity		202,651			189,086
	$	305,460		$	287,793

See accompanying Notes to Consolidated Financial Statements

F-3

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(dollars in thousands, except per share amounts)

	2004			2003			2002
Revenues:
Fee income	$	208,743		$	169,687		$	162,845
Vehicle sales		31,436			39,963			71,352
		240,179			209,650			234,197
Cost of sales:
Branch cost		157,297			135,157			125,530
Vehicle cost		26,694			35,301			65,463
		183,991			170,458			190,993
Gross profit		56,188			39,192			43,204
Operating expense:
Selling, general and administrative		34,978			30,225			27,711
Loss (gain) on sale of property and equipment		301			54			(104	)
Business transformation costs		—			3,902			8,067
Earnings from operations		20,909			5,011			7,530
Other (income) expense:
Interest expense		1,572			1,505			678
Other income		(67	)		(130	)		(171	)
Earnings before income taxes		19,404			3,636			7,023
Income taxes		7,139			1,304			3,015
Net earnings	$	12,265		$	2,332		$	4,008
Earnings per share:
Basic	$	1.06		$	.20		$	.33
Diluted	$	1.04		$	.20		$	.32
Weighted average shares outstanding (in thousands):
Basic		11,526			11,652			12,235
Effect of stock options		288			80			296
Diluted		11,814			11,732			12,531

See accompanying Notes to Consolidated Financial Statements

F-4

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

	Common Stock				Additional Paid-in Capital		Treasury Stock			Deferred Compensation (Restricted Stock)			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Shareholders’ Equity
	Number of Shares		Amount
Balance at December 30, 2001	12,162,290		$	12	$	142,575	$	—		$	—		$	—		$	46,407	$	188,994
Net earnings	—			—		—		—			—			—			4,008		4,008
Other comprehensive loss
Change in fair value of interest rate swap contract (net of tax benefit, $467)	—			—		—		—			—			(745	)		—		(745	)
Comprehensive income																			3,263
Stock options exercised	115,555			—		1,341		—			—			—			—		1,341
Tax benefit related to stock options exercised	—			—		247		—			—			—			—		247
Shares issued for the employee stock purchase plan	14,754			—		257		—			—			—			—		257
Balance at December 29, 2002	12,292,599		$	12	$	144,420	$	—		$	—		$	(745	)	$	50,415	$	194,102
Net earnings	—			—		—		—			—			—			2,332		2,332
Other comprehensive income—
Change in fair value of interest rate swap contract (net of tax, $78)	—			—		—		—						120			—		120
Comprehensive income																			2,452
Stock options exercised	6,920			—		127		—			—			—			—		127
Tax benefit related to stock options exercised	—			—		15		—			—			—			—		15
Shares issued for the employee stock purchase plan	25,963			—		373		—			—			—			—		373
Treasury stock purchased	(807,209	)		—		—		(8,012	)		—			—			—		(8,012	)
Deferred compensation relating to restricted stock grants	—			—		921		—			(921	)		—			—		—
Amortization of deferred compensation	—			—		—		—			29			—			—		29
Balance at December 28, 2003	11,518,273		$	12	$	145,856	$	(8,012	)	$	(892	)	$	(625	)	$	52,747	$	189,086
Net earnings																	12,265		12,265
Other comprehensive income—
Change in fair value of interest rate swap contract (net of tax, $273)	—			—		—		—			—			439			—		439
Comprehensive income																			12,704
Stock options exercised	104,231			—		1,297		—			—			—			—		1,297
Tax benefit related to stock options exercised	—			—		275		—			—			—			—		275
Shares issued for the employee stock purchase plan	29,298			—		329		—			—			—			—		329
Treasury stock purchased	(99,271	)		—		—		(1,625	)		—			—			—		(1,625	)
Deferred compensation relating to restricted stock grants	—			—		4,036		—			(4,036	)		—			—		—
Amortization of deferred compensation	—			—		—		—			585			—			—		585
Restricted stock released	16,625			—		—		—			—			—			—		—
Balance at December 26, 2004	11,569,156		$	12	$	151,793	$	(9,637	)	$	(4,343	)	$	(186	)	$	65,012	$	202,651

See accompanying Notes to Consolidated Financial Statements

F-5

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	2004			2003			2002
Cash flows from operating activities:
Net earnings	$	12,265		$	2,332		$	4,008
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		12,985			10,661			9,901
Loss (gain) on disposal of fixed assets		301			54			(104	)
Loss (gain) on change in fair market value of derivative		—			(307	)		307
Deferred compensation related to restricted stock		585			29			—
Deferred income taxes		1,595			788			2,827
Tax benefit related to employee stock compensation		275			15			247
Changes in assets and liabilities (excluding effects of acquired companies):
(Increase) decrease in:
Accounts receivable, net		(1,536	)		(752	)		9,180
Inventories		(896	)		(2,442	)		2,347
Other current assets		1,486			489			594
Other assets		(1,438	)		(975	)		(64	)
Increase (decrease) in:
Accounts payable		1,612			6,349			(12,795	)
Accrued liabilities		3,151			(878	)		2,289
Income taxes		1,067			—			—
Total adjustments		19,187			13,031			14,729
Net cash provided by operating activities		31,452			15,363			18,737
Cash flows from investing activities:
Capital expenditures	$	(28,717	)	$	(16,343	)	$	(15,241	)
Proceeds from sale of investments		—			—			2,643
Proceeds from disposal of property and equipment		1,520			60			187
Payments made in connection with acquired companies, net of cash acquired		(1,912	)		(7,872	)		(1,510	)
Net cash used in investing activities		(29,109	)		(24,155	)		(13,921	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,626			500			1,598
Proceeds from borrowings		6,000			30,000			—
Principal payments of long-term debt		(7,547	)		(5,668	)		(20,041	)
Purchase of treasury stock		(1,625	)		(8,012	)		—
Principal payments—capital leases		(2,958	)		(2,569	)		(813	)
Net cash provided by (used in) financing activities		(4,504	)		14,251			(19,256	)
Net increase (decrease) in cash		(2,161	)		5,459			(14,440	)
Cash at beginning of year		15,486			10,027			24,467
Cash at end of year	$	13,325		$	15,486		$	10,027
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	1,723		$	1,639		$	1,433
Income taxes paid	$	5,404		$	855		$	2,492
Income taxes refunded	$	1,011		$	1,390		$	3,860
Non-cash financing activities:
Capital leases	$	—		$	3,375		$	4,720

See accompanying Notes to Consolidated Financial Statements

F-6

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Principles

Background

Insurance Auto Auctions, Inc. (the “Company”) operates in a single business segment—providing insurance companies and other vehicle suppliers cost-effective salvage processing solutions including selling total loss and recovered theft vehicles.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform with the current year presentation.

Fiscal Periods

Fiscal years 2004, 2003 and 2002 each consisted of 52 weeks and ended on December 26, 2004, December 28, 2003 and December 29, 2002, respectively.

Revenue Recognition

Revenues (including vehicle sales and fee income) are generally recognized at the date the vehicles are sold at auction. Revenue not recognized at the date the vehicles are sold at auction includes certain buyer-related fees, which are recognized when payment is received.

Inventories

Inventories are stated at the lower of cost or estimated realizable value. Cost includes the cost of acquiring ownership of total loss and recovered theft vehicles, charges for towing and, less frequently, reconditioning costs. The costs of inventories sold are charged to operations based upon the specific-identification method.

Disclosures About Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, short and long-term debt and derivative financial instruments. The fair values of these instruments approximate their carrying values.

Goodwill Impairment

As part of an ongoing review of the valuation and amortization of intangible assets, management assesses the carrying value of the Company’s intangible assets if facts and circumstances suggest that such assets may be impaired. If this review indicates that an asset is impaired as determined by a comparison of the fair value to the carrying amount, including goodwill, the carrying value of the asset would be reduced to its estimated fair market value. The annual impairment test of intangible assets is performed in the first quarter of each year. The fiscal 2004 annual test did not indicate any impairment.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a

F-7

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

comparison of the assets carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset. If the estimated undiscounted future cash flows change in the future, the Company may be required to reduce the carrying amount of an asset to its fair value.

Use of Estimates

The Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results will likely differ from these estimates, but management believes that such differences are not material.

Depreciation and Amortization

Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the related assets ranging from three to forty years. Leasehold improvements are amortized on a straight-line basis over their estimated economic useful life or the life of the lease, whichever is less.

Income Taxes

The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carry forwards. The effect of a rate change on deferred tax assets and liabilities is recognized in the period of enactment.

Credit Risk

Vehicles are sold generally for cash; therefore, very little credit risk is incurred from the selling of vehicles. Receivables arising from advance charges made on behalf of vehicle suppliers, most of which are insurance companies, are generally satisfied from the net proceeds payable to the vehicle suppliers. A small percentage of vehicles sold do not have sufficient net proceeds to satisfy the related receivables, and in these cases, the receivable is due from the vehicle suppliers. Management performs regular evaluations concerning the ability of its customers and suppliers to satisfy their obligations and records a provision for doubtful accounts based upon these evaluations. The Company’s credit losses for the periods presented are insignificant and have not exceeded management’s estimates.

Restricted Stock

In 2003, the Company initiated a restricted stock program. Under the Company’s restricted stock grant program, shares of common stock of the Company may be granted at no cost to certain officers and key employees. Plan participants are entitled to cash dividends and to vote their respective shares received pursuant to the program. Restrictions limit the sale or transfer of these shares over a four-year period. The sale and transfer restrictions on shares received under the program expire at a rate of 25% per year or earlier, on the achievement of certain performance based goals. Upon issuance of shares of common stock under the plan, unearned compensation equivalent to the market value of the shares at the date of the grant is charged to shareholders’ equity and subsequently amortized to expense over the restriction period.

In 2003, 66,500 restricted shares were granted. In 2004, 182,600 restricted shares were granted. Compensation expense in 2004 was $0.6 million and in 2003 was less than $0.1 million. Compensation expense was accelerated by $0.3 million in the fiscal year ended December 26, 2004 due to the achievement of certain performance levels. In fiscal 2004 and 2003, there were no forfeitures of restricted shares.

F-8

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Options

The Company accounts for its fixed plan stock options under the intrinsic value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such, compensation expense would be recorded on the date of grant and amortized over the period of service only if the current market value of the underlying stock exceeded the exercise price. No stock-based employee compensation cost related to stock option grants is recognized in net earnings, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant.

The following table illustrates the effect on net earnings if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” awards of stock options and restricted stock to employees, including straight-line recognition of compensation cost over the related vesting periods for fixed awards:

	2004			2003			2002
	(dollars in thousands)
Net earnings as reported	$	12,265		$	2,332		$	4,008
Add: Stock-based employee compensation expense included in reported net earnings, net of related tax effects		370			45			—
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects		(2,835	)		(1,795	)		(1,288	)
Pro forma net earnings	$	9,800		$	582		$	2,720
Pro forma earnings per share
Basic	$	.85		$	.05		$	.22
Diluted	$	.83		$	.05		$	.22

The per share weighted average fair value of stock options granted during 2004, 2003 and 2002 was $11.98, $9.65 and $10.13, respectively, based upon grant date valuations using the Black-Scholes option pricing model with the following weighted average assumptions in 2004, 2003 and 2002: expected dividend yield of 0.0% in all years; expected volatility of .89%, .84% and .83%, respectively; risk-free interest rate of 3.7%, 3.1% and 2.8%, respectively; and an average expected option life of 5.2, 5.0 and 4.9 years, respectively.

Capitalized Software Costs

The Company capitalizes certain internal use computer software costs, after technological feasibility has been established in accordance with SOP 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” Capitalized software costs are amortized utilizing the straight-line method over the economic lives of the related assets not to exceed five years.

Derivative Financial Instrument

In 2002, the Company entered into an interest rate swap to mitigate its exposure to interest rate fluctuations, but does not, as a matter of policy, enter into hedging contracts for trading or speculative purposes. The interest rate swap has been accounted for in accordance with the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended. The swap has been designated as a cash flow hedge. Changes in fair value of the swap are recorded in other comprehensive income to the extent that the swap is effective as a hedge and reclassified to earnings in the same period that earnings are affected by the variability in cash flows of the hedged item.

F-9

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

New Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151 (SFAS 151), “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS 151 discusses the general principles applicable to the pricing of inventory. Paragraph 5 of ARB 43, Chapter 4 provides guidance on allocating certain costs to inventory. This Statement amends ARB 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. As required by SFAS 151, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins after June 15, 2005. The Company is currently evaluating the impact of adoption on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (SFAS 153), “Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29.” SFAS 153 addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29 “Accounting for Nonmonetary Transactions” and replaces it with an exception for exchanges that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. As required by SFAS 153, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins after June 15, 2005. The Company is currently evaluating the impact of adoption on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R (SFAS 123R) “Share-Based Payment.” SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R establishes fair value as the measurement method in accounting for share-based payments to employees and eliminates the alternative use of the intrinsic value method of accounting under APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement is effective for public entities as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. The Company is currently evaluating the impact of adoption on our financial statements.

(2) Goodwill and Other Intangibles

Goodwill and other intangibles are recorded at cost less accumulated amortization and consist of the following at December 26, 2004 and December 28, 2003:

	Cost
	Assigned Life	2004			2003
	(dollars in millions)
Goodwill	Indefinite	$	167.0		$	164.6
Covenants not to compete	3 to 5 years		4.2			4.0
		$	171.2		$	168.6
	Accumulated Amortization
	Assigned Life	2004			2003
	(dollars in millions)
Goodwill	Indefinite	$	(29.5	)	$	(29.5	)
Covenants not to compete	3 to 5 years		(2.5	)		(1.9	)
		$	(32.0	)	$	(31.4	)

F-10

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill increased by $2.4 million in fiscal 2004. During the year, the Company acquired one new facility. The excess of the purchase price over the fair market value of the net identifiable assets acquired of $1.4 million has been recorded as goodwill. The balance of $1.0 million was due to earnout payments made in 2004 associated with prior year acquisitions.

Amortization expense for the years ended December 26, 2004, December 28, 2003 and December 29, 2002 was $0.6 million, $0.5 million and, $0.3 million, respectively. These amounts are included within selling, general and administrative expense on the Company’s Consolidated Income Statements. Based on existing intangibles, the projected annual amortization expense for each fiscal years 2005 and 2006 is $0.6 million, $0.4 million for 2007 and $0.2 million for 2008. The assets will be fully amortized by 2009.

(3) Comprehensive Income

Comprehensive income consists of net earnings and the change in fair value of the Company’s interest rate swap agreement for the years ended December 26, 2004, December 28, 2003 and December 29, 2002 as follows:

	2004			2003			2002
	(dollars in thousands)
Net earnings	$	12,265		$	2,332		$	4,008
Other comprehensive income (loss)
Change in fair value of interest rate swap agreement		712			198			(1,212	)
Income tax benefit (expense)		(273	)		(78	)		467
Comprehensive income	$	12,704		$	2,452		$	3,263

The changes in fair value of the Company’s interest rate swap agreement were due to changes in interest rates.

(4) Credit Facilities

Long-term debt is summarized as follows:

	2004		2003
	(dollars in thousands)
Unsecured term loan, interest payable at variable rate based upon LIBOR. Principal repaid in 16 equal installments commencing March 31, 2003	$	16,875	$	24,375
Notes payable issued in connection with the acquisition of a subsidiary, interest payable at 8%		12		59
		16,887		24,434
Less current installments		7,512		7,547
	$	9,375	$	16,887

Total principal repayments required for each of the next three fiscal years under all long-term debt agreements are summarized as follows:

	(dollars in thousands)
2005	$	7,512
2006		7,500
2007		1,875
	$	16,887

F-11

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On February 15, 2003, the Company borrowed all remaining available funds under its $30.0 million credit facility. The credit facility was a one-year revolver that converted on February 15, 2003 into a four-year term loan carrying a variable rate based upon LIBOR. The aggregate principal balance of the loan was required to be paid in sixteen consecutive equal quarterly installments commencing on March 31, 2003.

On June 25, 2003, the Company entered into an amended and restated credit facility. This facility added a $20.0 million revolving line of credit, carrying a variable rate based on LIBOR, to the existing term loan. This amended and restated facility also modified all existing covenants except for the rent expense covenant. The amended credit facility also granted the Company latitude to purchase additional shares of its outstanding common stock.

On March 19, 2004, the Company entered into the Second Amended and Restated Credit Agreement relating to its senior credit facility. The agreement amends certain financial covenants, including those applicable as of December 28, 2003 and those applicable for fiscal 2004, provides that advances made under the facility will be subject to a monthly asset coverage test equal to 85% of eligible receivables, and requires the Company to provide collateral for amounts due under the facility in the event it fails to meet certain financial projections for two consecutive quarters. The Company’s financing agreement limits potential future dividend payments to no more than 25% of the Company consolidated net income earned over a specified period. As of December 26, 2004, the Company has borrowed $6.0 million against the revolving line of credit and $16.9 million under the term credit facility. At December 26, 2004, the Company was in compliance with its credit agreement covenants, except its expenditure basket covenant for which it received a waiver in March 2005.

(5) Financial Instruments and Hedging Activities

The Company, as a matter of policy, does not enter into derivative contracts for trading or speculative purposes. During the first quarter of 2002, the Company entered into an interest rate swap to mitigate its exposure to interest rate fluctuations and to effectively fix its borrowing rate at 5.6%. Under the interest rate swap agreement, the Company pays a fixed rate of interest of 5.6% and receives LIBOR-based floating rate payments. During the year ended December 29, 2002, the Company recorded a non-cash charge of $0.3 million related to the change in fair value for the portion of its interest rate swap agreement which did not qualify for hedge accounting. At December 29, 2002, the Company also recorded $0.7 million (net of tax) as a comprehensive loss related to the change in fair market value of the portion of its interest rate swap agreement which qualified for hedge accounting.

In 2003, the Company recorded a $0.3 million non-cash benefit related to the change in fair value of the interest rate swap agreement. At December 28, 2003, the Company also recorded $0.1 million (net of tax) as comprehensive income related to the change in fair market value of its interest rate swap agreement. At December 26, 2004, the entire swap agreement qualified for hedge accounting and all charges in the fair value of the swap were recorded, net of tax, through other comprehensive income (see Note 3).

F-12

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(6) Income Taxes

Income tax expense is summarized as follows:

	2004		2003		2002
	(dollars in thousands)
Current:
Federal	$	5,028	$	573	$	(161	)
State		790		19		(116	)
		5,818		592		(277	)
Deferred:
Federal		1,092		509		2,756
State		229		203		536
		1,321		712		3,292
	$	7,139	$	1,304	$	3,015

The Company evaluates the realizability of its deferred tax assets on an ongoing basis. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 26, 2004. The Company has established a valuation allowance when the utilization of the tax asset is uncertain. Additional timing differences, future earning trends and/or tax strategies may occur which could warrant a need for establishing an additional valuation allowance or a reserve.

Deferred income taxes are composed of the effects of the components listed below. A valuation allowance has been recorded to reduce the carrying value of deferred tax assets for which the Company believes a tax benefit will not be realized.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 26, 2004 and December 28, 2003 are presented below:

	2004			2003
	(dollars in thousands)
Deferred tax assets attributable to:
Inventories	$	2,261		$	1,931
Other		2,432			2,249
Depreciation		5,946			5,219
State net operating losses carried forward		1,618			2,108
Gross Deferred Tax Assets		12,257			11,507
Valuation allowance		(1,083	)		(1,719	)
Net deferred tax assets		11,174			9,788
Deferred tax liabilities attributable to:
Intangible assets		(20,729	)		(17,748	)
Net deferred tax liabilities	$	(9,555	)	$	(7,960	)

F-13

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The actual income tax expense differs from the “expected” tax expense computed by applying the Federal corporate tax rate to earnings before income taxes as follows:

	2004			2003			2002
	(dollars in thousands)
“Expected” income tax expense	$	6,791		$	1,236		$	2,388
State income taxes, net of Federal effect		662			146			277
Increase (decrease) in valuation allowance		(636	)		264			308
Reduction of tax accruals		—			(527	)		(291	)
Other		322			185			333
	$	7,139		$	1,304		$	3,015

The Company is obligated to file tax returns and pay Federal and state income taxes in numerous jurisdictions. The reductions in income tax accruals relate to amounts that were no longer required, due primarily to closed tax return audits and closed tax years for a number of jurisdictions.

At December 26, 2004, the Company had state income tax net operating loss carryforwards of approximately $34.4 million. The net operating loss carryforwards expire in the years 2005 through 2024.

Due to the fact that NOLs can be audited well beyond a normal three-year statutory audit period and the inherent uncertainty of estimates of future taxable income, the amount of the NOLs which may ultimately be utilized to offset future taxable income may vary materially from the Company’s estimates. The Company has established a reserve for NOL-related contingencies based on its estimates of the amount of benefit from these NOLs that it may ultimately be unable to realize due to factors other than estimates of future taxable income. Subsequent revisions to the estimated realizable value of the deferred tax asset or the reserve for tax-related contingencies may cause the Company’s provision for income taxes to vary significantly from period to period, although cash tax payments will remain unaffected until the NOLs are utilized.

(7) Employee Benefit Plans

The Company adopted the Insurance Auto Auctions, Inc. 2003 Stock Incentive Plan (the 2003 Plan) in June 2003 to replace the Insurance Auto Auctions, Inc. 1991 Stock Option Plan (the 1991 Plan), as amended and restated, covering 3,100,000 shares of the Company’s common stock. The 2003 Plan provides for the grant of incentive stock options and restricted stock to key employees and nonqualified stock options and stock appreciation rights to key employees, directors, consultants and independent contractors. The 2003 Plan expires June 18, 2013. In general, new non-employee directors will automatically receive grants of nonqualified options to purchase 10,000 shares and subsequent grants to purchase 5,000 shares at specified intervals.

During 1995, the Company adopted the Insurance Auto Auctions, Inc. Supplemental Stock Option Plan (the 1995 Plan) covering 200,000 shares of the Company’s common stock. The 1995 Plan provides for the grant of nonqualified stock options to employees, other than executive officers, consultants and other independent advisors who provide services to the Company. The 1995 Plan will expire on October 1, 2005.

Under the Plans, as of December 26, 2004, options to purchase an aggregate of 1,745,492 shares were outstanding at a weighted average exercise price of $13.50 per share and 169,713 shares remained available for future grant.

In 2003, the Company initiated a restricted stock program. Under the Company’s restricted stock program, common stock of the Company may be granted at no cost to certain officers and key employees. Plan participants

F-14

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

are entitled to cash dividends and to vote their respective shares. Restrictions limit the sale or transfer of these shares over a four year period. The sale and transfer restrictions on shares received under the program expire at a rate of 25% per year or earlier, based on the achievement of certain performance based goals. Upon issuance of stock under the plan, unearned compensation equivalent to the market value of the shares at the date of grant is charged to shareholders’ equity and subsequently amortized to expense over the restriction period. In 2004, 182,600 restricted shares were granted and in 2003, 66,500 restricted shares were granted. Compensation expense in 2004 was $0.6 and less than $0.1 million in 2003. Compensation expense was accelerated by $0.2 million in the fiscal year ended December 26, 2004 due to anticipated achievement of performance goals in 2005. In fiscal 2004, there were no forfeitures of restricted shares.

Activity under the Plans during 2004, 2003 and 2002 is as follows:

	2004 Shares			Weighted Average Exercise Price		2003 Shares			Weighted Average Exercise Price		2002 Shares		Weighted Average Exercise Price
Balance at beginning of year	$	1,821,000		$	13.49	$	1,518,000		$	14.13	1,397,000		$	14.48
Options granted		75,000			16.72		490,000			13.89	377,000			15.75
Options canceled		(47,000	)		20.60		(180,000	)		20.09	(140,000	)		24.13
Options exercised		(104,000	)		12.44		(7,000	)		11.61	(116,000	)		11.62
Balance at end of year		1,745,000			13.50		1,821,000		$	13.49	1,518,000		$	14.13
Options exercisable at end of year	$	1,122,000					824,000				596,000

Additional information about options outstanding as of December 26, 2004 is presented below:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Weighted Average			Number of Options	Weighted Average Exercise Price
		Remaining Contractual Life (in years)	Exercise Price
$  7.00 to $10.00	34,000	3.59	$	9.21	34,000	$	9.21
10.38 to   13.95	1,198,000	6.06		12.54	833,000		12.11
14.11 to   22.75	509,000	7.56		15.93	251,000		15.95
28.63 to   32.50	4,000	.41		28.63	4,000		28.63
$  7.00 to $32.50	1,745,000	6.44		13.50	1,122,000		12.94

The Company has a 401(k) defined contribution plan covering all full-time employees. Plan participants can elect to contribute up to 15% of their gross payroll. Company contributions are determined at the discretion of the Board of Directors; during the years 2002 to 2004, the Company matched 100% of employee contributions up to 4% of eligible earnings. Company contributions to the plan were $0.8 million in 2004, $0.8 million in 2003 and $0.8 million in 2002.

(8) Related Party Transactions

The Company leases certain properties from a recently retired member of its Board of Directors. The Company believes the terms of the leases are no less favorable than those available from unaffiliated third party lessors. Rental payments to the Related Party were $1.2 million in 2004 and $0.8 million in 2003 and 2002. In 2004 and 2003, the Company incurred $3.9 million and $2.7 million, respectively in costs to upgrade properties

F-15

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

owned by the Related Party. A portion of the investment to upgrade these facilities was funded by the Related Party. The Company agreed to modify its future lease payments to take into consideration the costs funded by the Related Party. The total of all future rent payments related to the Related Party’s funding is $2.8 million. The Company also initiated a temporary license agreement in March 2004 to expand the amount of property available at one of the leased facilities. The temporary lease agreement does not have a specified term, can be terminated by either party upon 30 days’ written notice, and has an annual rental of less than $0.2 million.

(9) Commitments and Contingencies

The Company leases its facilities and certain equipment under operating leases with related and unrelated parties, which expire through August 2021. Rental expense for the years ended December 26, 2004, December 28, 2003 and December 29, 2002, was $24.1 million, $22.5 million and $22.1 million, respectively.

In 2004, the Company entered into a new lease agreement for 38,000 square feet of space for use as its corporate offices in Westchester, Illinois. This lease commenced in September 2004 and expires in August 2016. The total future rent obligation associated with this new lease is $10.3 million. The Company used an allowance totaling $1.9 million from the lessor to build-out the office space.

In 2002, the Company began leasing certain equipment under capital leases. Equipment leased under these leases amounted to $1.8 in 2004, $3.4 million in 2003 and $4.7 million in 2002.

Minimum annual rental commitments for the next five years under noncancelable operating and capital leases at December 26, 2004 are as follows:

	Operating Leases		Capital Leases
	(dollars in thousands)
2005	$	21,528	$	1,203
2006		19,731		387
2007		16,355		316
2008		14,345		33
2009		12,178		—
Thereafter		67,623		—
	$	151,760	$	1,939
Less amount representing interest expense				184
Future capital lease obligation			$	1,755

Assets as of December 26, 2004 and December 28, 2003 recorded under capital leases are included in property and equipment, net as follows:

	2004			2003
	(dollars in thousands)
Computer equipment	$	5,221		$	6,654
Security fencing		1,441			1,441
		6,662			8,095
Accumulated amortization		(4,819	)		(3,378	)
	$	1,843		$	4,717

F-16

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company has compensation agreements with certain officers and other key employees. In addition to base salary and bonus information, certain agreements have change in control provisions that address compensation due to the executive in the event of termination following a change of control.

On September 16, 2003, the Company received notice from the King County Wastewater Treatment Division, Department of Natural Resources, that King County was in the process of building a water treatment facility and that the Company’s Woodinville, Washington branch was located within the boundaries of the likely site for placement of this facility. On October 3, 2003, the Company received further notice from King County that it had extended an offer to purchase the Woodinville site from Waterman Properties and that, if the offer was accepted, the Company would be expected to enter into a lease arrangement with King County until such time as King County directed it to vacate the facility. In an open house meeting on December 1, 2003, King County announced that it expected all property owners and tenants to vacate the proposed water treatment site no later than the end of 2004. On March 4, 2004, the Company filed a lawsuit in Snohomish County Superior Court against King County and Waterman Properties asking the Court to appoint a receiver to manage a portion of the funds (up to $1.5 million) that Waterman Properties might receive from King County and to award the Company a portion of the condemnation award in an amount equal to the value of its leasehold improvements.

In 2004, the Company negotiated a settlement with King County whereby the Company terminated its lease with Waterman Properties and dismissed its complaint against King County to permit the sale and purchase of the Woodinville property. The settlement further provided for $900,000 of the purchase price to be placed into escrow for payment of any judgment that might be awarded in the Company’s on-going suit against Waterman Properties. The outcome of this action remains uncertain at this time. At year end, the Company exited the Woodinville facility wrote off its leasehold improvements of approximately $991,000. The Company expects to recover approximately $375,000 of which $200,000 that was recorded in 2004 as a reduction of the loss is for branch re-establishment and $175,000 is for relocation of inventory.

The Company is subject to certain miscellaneous legal claims, which have arisen during the ordinary course of its business. None of these claims are expected to have a material adverse effect on the Company’s financial condition or operating results.

(10) Treasury Stock

The Company records treasury stock purchases using the cost method of accounting. In the third quarter of 2004, the Company repurchased 95,800 shares at an average price of $16.17 and in the fourth quarter the Company repurchased 3,471 shares at an average price of $21.75. The Company did not repurchase any shares during the first and second quarters of 2004. On a full year basis, the Company has repurchased 99,271 shares at an average price of $16.37 per share and a total cost of $1.6 million.

(11) Accounts Receivable

Accounts receivable consists of the following as of December 26, 2004 and December 28, 2003:

	2004			2003
	(dollars in thousands)
Unbilled receivables	$	35,555		$	35,188
Trade accounts receivable		14,596			12,787
Other receivables		1,086			1,213
		51,237			49,188
Less allowance for doubtful accounts		(794	)		(813	)
	$	50,443		$	48,375

F-17

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Unbilled receivables represent amounts paid to third parties on behalf of insurance companies for which the Company will be reimbursed when the vehicle is sold. Trade accounts receivable include fees and proceeds to be collected from both insurance companies and buyers.

(12) Property and Equipment

Property and equipment consists of the following at December 26, 2004 and December 28, 2003:

	2004			2003
	(dollars in thousands)
Land	$	7,662		$	7,582
Buildings and improvements		13,722			11,506
Equipment		49,645			39,302
Leasehold improvements		49,485			38,304
		120,514			96,694
Less accumulated depreciation and amortization		(45,830	)		(36,507	)
	$	74,684		$	60,187

Depreciation expense was $12.4 million in 2004 and $10.2 million in 2003. Amortization of intangibles was $0.6 million in 2004 and $0.5 million in 2003.

(13) Earnings per Share

There were no adjustments to net income to calculate diluted earnings per share. The table below reconciles basic weighted shares outstanding to diluted weighted average shares outstanding for the years ended December 26, 2004, December 28, 2003 and December 29, 2002.

	2004	2003	2002
	(dollars in thousands)
Basic weighted average shares outstanding	11,526	11,652	12,235
Effect of dilutive securities—stock options	288	80	296
Diluted weighted average shares outstanding	11,814	11,732	12,531

Options to purchase 0.1 million, 1.1 million and 0.1 million shares of common stock at an average price of $18.61, $14.81 and $28.90 per share were outstanding during the fiscal years ended 2004, 2003 and 2002, respectively, but were not included in the Company’s diluted earnings per share calculations because the options’ exercise prices were greater than the average market price of the Company’s shares for the period.

(14) Accumulated Postretirement Benefit Obligation

In connection with the acquisition of the capital stock of Underwriters Salvage Company (“USC”), the Company assumed the obligation for certain health care and death benefits for retired employees of USC. In accordance with the provisions of SFAS No. 106, “Employers Accounting for Postretirement Benefits Other than Pensions,” costs related to the benefits are accrued over an employee’s service life.

The accumulated post retirement benefit obligation was determined using a discount rate of 5.75% at December 26, 2004, 6.25% at December 28, 2003 and 6.75% at December 29, 2002 and an average health care cost trend rate of approximately 10.0%, progressively decreasing to approximately 5.0% in the year 2009 and thereafter. A one percentage point change in the assumed health care cost trend rate would not have a material effect on the postretirement benefit obligation or on the aggregate service cost and interest cost components.

F-18

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the funded status of this program as of December 26, 2004 and December 28, 2003 follows:

Benefit Obligation and Funded Status	2004			2003
	(dollars in thousands)
Change in accumulated postretirement benefit obligation
Accumulated postretirement benefit obligation at the beginning of the year	$	1,432		$	1,506
Interest cost		47			95
Actuarial (gain) or loss		(678	)		(69	)
Benefits paid		(57	)		(100	)
Accumulated postretirement benefit obligation at the end of the year		744			1,432
Change in plan assets
Benefits paid		(56	)		(100	)
Employer contributions		56			100
Fair value of assets		—			—
Net amount recognized
Funded status		(744	)		(1,432	)
Unrecognized net (gain) or loss		(1,620	)		(1,166	)
Net amount recognized	$	(2,364	)	$	(2,598	)
Amounts recognized in the statement of financial position
Accrued benefit liability	$	(2,364	)	$	(2,598	)
Weighted average assumptions at the end of the year
Discount Rate		5.75	%		6.25	%
Assumed health care costs trend rates
Health care cost trend rate assumed for next year		10.00	%		8.50	%
Ultimate rate		5.00	%		5.00	%
Year that the ultimate rate is reached		2009			2010

No periodic benefit cost (income) is summarized as follows for the fiscal years 2004, 2003, and 2002:

Net Periodic Benefit Cost (Income)	2004			2003			2002
	(dollars in thousands)
Interest cost	$	47		$	95		$	103
Amortization of net (gain) or loss		(224	)		(133	)		(130	)
Total net periodic benefit cost (income)	$	(177	)	$	(38	)	$	(27	)

Estimated future benefit payments for the next five years as of December 26, 2004 are as follows:

	(dollars in thousands)
2005	$	126
2006		117
2007		118
2008		108
2009		97
Thereafter		259
	$	825

Effective January 20, 1994, the date of acquisition, the Company discounted future participation for active employees.

F-19

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(15) Acquisitions and Divestitures

In fiscal 2004, the Company acquired Mid-South Salvage LLC located in Jackson, Mississippi. The acquisition leverages the Company’s existing regional coverage in this market. The acquisition was accounted for using the purchase method of accounting. The results of operations of this acquisition are included in the Company’s consolidated financial statements from the date of acquisition. The aggregate purchase price of this acquisition was $1.9 million.

In fiscal 2004, the Company sold its West Bridgewater, Massachusetts facility to Harvey Industries, Inc., a Massachusetts corporation, for $1.1 million. The Company recorded a gain on the sale of the West Bridgewater facility of $0.3 million, net of taxes.

(16) Subsequent Event (Unaudited)

In January 2005, the Company announced the opening of a new greenfield facility in Lincoln, Illinois. This new 15-acre facility will provide needed coverage in the central part of the state. The new facility will also improve the Company’s regional coverage, complementing other existing locations.

In February 2005, the Company entered into a definitive merger agreement to be acquired by affiliates of Kelso & Company (“Kelso”), a New York based private equity firm. The closing of the transactions is subject to certain terms and conditions customary for transactions of this type, including shareholder approval and the completion of financing.

(17) Quarterly Financial Data (Unaudited)

Summarized unaudited financial data for 2004 and 2003 are as follows:

	First   Quarter		Second   Quarter		Third   Quarter			Fourth   Quarter
	(dollars in thousands. except per share amounts)
2004
Revenues	$	57,191	$	60,002	$	60,752		$	62,234
Earnings from operations		4,334		4,877		5,734			5,964
Net earnings		2,301		2,655		3,354			3,955
Basic earnings per share		.20		.23		.29			.34
Diluted earnings per share		.20		.22		.28			.33
2003
Revenues	$	56,040	$	53,338	$	49,127		$	51,145
Earnings (loss) from operations		3,382		2,627		(520	)		(478	)
Net earnings		1,976		1,280		(594	)		(330	)
Basic earnings (loss) per share		.16		.11		(.05	)		(.03	)
Diluted earnings (loss) per share		.16		.11		(.05	)		(.03	)

The sum of earnings per share for the four quarters of 2004 and 2003 does not equal the full year amount due to rounding and the impact of changes in the average shares outstanding.

F-20

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands except per share amounts)

	SUCCESSOR			PREDECESSOR
	June 26, 2005			December 26, 2004
	(Unaudited)
ASSETS
Current assets:
Cash	$	20,185		$	13,325
Accounts receivable, net		42,039			50,443
Inventories		14,846			14,498
Income taxes receivable		10,083			—
Deferred income taxes		5,863			4,693
Other current assets		4,707			1,613
Total current assets		97,723			84,572
Property and equipment, net		67,957			74,684
Deferred income taxes		6,622			6,481
Intangible assets, net		134,048			1,747
Goodwill		213,909			137,494
Debt issuance cost		9,279			—
Other assets		771			482
	$	530,309		$	305,460
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	24,903		$	38,505
Accrued liabilities		19,151			13,513
Obligations under capital leases		492			1,094
Income taxes payable		—			1,067
Obligations under line of credit		—			6,000
Current installments of long-term debt		862			7,512
Total current liabilities		45,408			67,691
Deferred income taxes		68,312			20,729
Deferred rent		1,678			707
Other liabilities		4,773			3,646
Obligations under capital leases		570			661
Senior Notes		150,000			—
Long-term debt, excluding current installments		114,138			9,375
Total liabilities		384,879			102,809
Shareholders’ equity:
Preferred stock, par value of $.001 per share
Authorized 5,000,000 shares; none issued (predecessor)		—			—
Common stock, par value of $.001 per share
Authorized 20,000,000 shares; 12,709,758 shares issued and 11,569,156 outstanding as of December 26, 2004 (predecessor)		—			12
Common stock, par value of $.01 per share
100 shares authorized and issued (successor)		—			—
Additional paid-in capital		149,930			151,793
Treasury stock, 906,480 shares at December 26, 2004 (predecessor)		—			(9,637	)
Deferred compensation related to restricted stock		—			(4,343	)
Accumulated other comprehensive loss		—			(186	)
Retained earnings (loss)		(4,500	)		65,012
Total shareholders’ equity		145,430			202,651
	$	530,309		$	305,460

See accompanying notes to condensed consolidated financial statements.

F-21

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)

	SUCCESSOR			PREDECESSOR
	May 26 - June 26, 2005			March 28 - May 25, 2005			Three Months Ended June 27, 2004			December 27, 2004 - May 25, 2005			Six Months Ended June 27, 2004
	(unaudited)			(unaudited)
Revenues:
Fee income	$	19,242		$	42,102		$	51,777		$	103,203		$	101,841
Vehicle sales		3,119			7,399			8,225			17,242			15,352
		22,361			49,501			60,002			120,445			117,193
Cost of Sales
Branch cost		14,481			29,877			39,598			72,554			77,993
Vehicle cost		2,652			6,175			7,187			14,640			13,171
		17,133			36,052			46,785			87,194			91,164
Gross profit		5,228			13,449			13,217			33,251			26,029
Operating expense:
Selling, general and administrative		3,400			5,773			8,357			15,822			16,837
Loss (gain) on sale of property and equipment		17			(864	)		(18	)		(896	)		(19	)
Merger costs		5,021			14,508			—			15,741			—
		8,438			19,417			8,339			30,667			16,818
Earnings (loss) from operations		(3,210	)		(5,968	)		4,878			2,584			9,211
Other (income) expense
Interest expense		2,642			148			410			567			887
Other income		(41	)		(2,411	)		(11	)		(2,442	)		(22	)
Earnings (loss) before income taxes		(5,811	)		(3,705	)		4,479			4,459			8,346
Income taxes		(1,311	)		1,756			1,824			4,899			3,390
Net earnings (loss)	$	(4,500	)	$	(5,461	)	$	2,655		$	(440	)	$	4,956

See accompanying notes to condensed consolidated financial statements.

F-22

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	SUCCESSOR			PREDECESSOR
	May 26 - June 26, 2005			December 27, 2004 - May 25, 2005			Six Months Ended June 27, 2004
	(unaudited)			(unaudited)
Cash flows from operating activities:
Net earnings (loss)	$	(4,500	)	$	(440	)	$	4,956
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		1,859			5,464			6,522
(Gain) loss on disposal of fixed assets		17			(896	)		(19	)
Deferred compensation related to restricted stock		—			4,343			114
Deferred income taxes		1,489			(1,448	)		—
Tax benefit related to employee stock compensation		678			8,394			—
Changes in assets and liabilities (excluding effects of acquired companies):
(Increase) decrease in:
Accounts receivable, net		13,880			(5,312	)		2,935
Income tax receivable		(7,464	)		(2,618	)		—
Inventories		124			(472	)		209
Other current assets		(2,574	)		(520	)		137
Other assets		(12	)		(827	)		(1,117	)
Increase (decrease) in:
Accounts payable		(20,321	)		6,719			1,282
Accrued liabilities		(7,308	)		12,279			407
Income taxes		—			(1,067	)		2,470
Total adjustments		(19,632	)		24,039			12,940
Net cash provided by (used in) operating activities		(24,132	)		23,599			17,896
Cash flows from investing activities:
Purchase of IAAI, Inc.		(356,753	)		—			—
Capital expenditures		(1,612	)		(8,221	)		(11,105	)
Payments made in connection with acquisitions, net of cash acquired		—			(600	)		—
Proceeds from disposal of property and equipment		22			1,391			200
Net cash used in investing activities		(358,343	)		(7,430	)		(10,905	)
Cash flows from financing activities:
Proceeds from issuance of common stock		—			905			361
Contributed capital		143,600			—			—
Proceeds from short-term borrowings		—			3,000			—
Payment of financing and other fees		(12,758	)		—			—
Principal payments on long-term debt		(22,125	)		(3,762	)		(3,772	)
Purchase of treasury stock		—			(1	)		—
Principal payments on capital leases		(79	)		(614	)		(1,438	)
Issuance of senior notes		150,000			—			—
Issuance of term loan		115,000			—			—
Net cash provided (used) by financing activities		373,638			(472	)		(4,849	)
Net increase (decrease) in cash		(8,837	)		15,697			2,142
Cash at beginning of period		29,022			13,325			15,486
Cash at end of period	$	20,185		$	29,022		$	17,628
Supplemental disclosures of cash flow information:
Cash paid or refunded during the period for:
Interest	$	9		$	689		$	1,025
Income taxes paid	$	3,987		$	1,654		$	2,026
Income taxes refunded	$	—		$	26		$	1,011
Non-cash transactions:
Options exchanged in merger transaction	$	5,653		$	—		$	—

See accompanying notes to condensed consolidated financial statements

F-23

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization and Other Matters

Defined Terms

Unless the context indicates otherwise, in the following terms used herein shall have the following meanings:

• the term “Axle Holdings” refers to Axle Holdings, Inc., the corporate parent of Axle Merger;

• the term “Axle Merger” refers to Axle Merger Sub, Inc., the entity that merged with and into IAAI as part of the transactions;

• the term “continuing investors” refers to Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley;

• the terms “IAAI,” “we,” “us,” “our” and other similar terms refer to Insurance Auto Auctions, Inc. and its subsidiaries;

• the term “IAAI Finance” refers to IAAI Finance Corp.;

• the term “Kelso” refers to Kelso & Company, L.P., a New York based private investment firm;

• the term “LLC” refers to Axle Holdings II, LLC, the limited liability company parent of Axle Holdings and an entity controlled by affiliates of Kelso;

• the term “Magnetite” refers to Magnetite Asset Investors III, L.L.C.;

• the term “merger” refers to the merger of Axle Merger with and into IAAI and the merger of IAAI Finance with and into IAAI on May 25, 2005;

• the term “notes” refers to the 11% Senior Notes due 2013 of IAAI;

• the term “Parthenon” refers to Parthenon Investors II, L.P.; and

• the term “transactions” refers, collectively, to the merger and the following transactions which occurred in connection with the merger;

• the equity contributions made by Kelso;

• the investment by the continuing investors;

• our entry into senior credit facilities;

• the offering of the notes and the application of the net proceeds therefrom; and

• the repayment of outstanding principal and accrued interest under our prior credit facility.

Merger Transactions

On February 22, 2005, Axle Holdings, Axle Merger and IAAI entered into a merger agreement that provided for the merger of Axle Merger with and into IAAI, with IAAI continuing as the surviving corporation. Upon completion of the merger and related transactions, IAAI became a direct, wholly owned subsidiary of Axle Holdings, which is owned by the LLC (which is controlled by affiliates of Kelso).

F-24

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

The following transactions occurred in connection with the merger:

• approximately 11.8 million shares of IAAI’s outstanding common stock converted into the right to receive $28.25 per share in cash;

• all outstanding options to purchase shares of IAAI’s common stock (other than certain options held by the continuing investors, i.e., Thomas C. O’Brien, Scott P. Pettit, David R. Montgomery, Donald J. Hermanek, John W. Kett, John R. Nordin and Sidney L. Kerley, which were exchanged into stock options of Axle Holdings) were canceled in exchange for payments in cash of $28.25 per underlying share, less the applicable option exercise price;

• affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors contributed approximately $143.6 million in cash to the LLC, which in turn held all the outstanding shares of common stock of Axle Holdings immediately after the closing of the transactions;

• the continuing investors exchanged stock options of IAAI with an aggregate spread value of approximately $3.3 million into stock options of Axle Holdings with an equivalent aggregate spread value;

• Axle Merger entered into the senior credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon the completion of the merger, IAAI assumed Axle Merger’s obligations under such credit facilities, and all of IAAI’s domestic subsidiaries, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp., guaranteed such credit facilities;

• The LLC contributed to Axle Merger, through Axle Holdings, approximately $143.6 million in cash, representing the cash equity contribution by affiliates of Kelso, Parthenon and certain of its affiliates, Magnetite, Brian T. Clingen, Dan Simon and the continuing investors;

• IAAI Finance issued $150 million of 11% Senior Notes due 2013;

• IAAI Finance merged with and into IAAI, with IAAI continuing as the surviving corporation; and

• IAAI assumed IAAI Finance’s obligations under the notes and all of IAAI’s domestic subsidiaries unconditionally guaranteed the notes on a senior unsecured basis at the time IAAI Finance merged with and into IAAI.

We used the net proceeds from these contributions and financings to: (i) fund the cash consideration payable to our shareholders and option holders under the merger agreement; (ii) repay any outstanding principal and accrued interest under our existing credit facility as of the closing of the merger; and (iii) pay related transaction fees and expenses.

The notes mature on April 1, 2013. The notes are non-callable for four years, after which they are callable at a premium declining ratably to par at the end of year six.

The aggregate purchase price paid in the merger transactions for shares and outstanding stock options was approximately $366.4 million, consisting of $356.8 million in outstanding stock and options, $5.7 million representing the “fair value” of the options converted and exchanged, $3.9 million of transaction expenses and costs related to exit of towing operations. The intrinsic value of the options converted is $3.3 million. The merger was recorded in accordance with Statement of Financial Accounting Standards No. 141 (SFAS 141). The table

F-25

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

below summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The estimates are based on preliminary valuations and information currently available and are derived from management’s estimates and judgment. We believe that the preliminary valuations and estimates are a reasonable basis for the allocation of the purchase price. However, our analysis of the fair value estimates is continuing to be refined in accordance with SFAS 141. As additional information becomes available and as actual results vary from these estimates, the underlying assets or liabilities may need to be adjusted, thereby impacting intangible asset estimates, as well as goodwill. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed (in thousands):

Current assets	$	110,068
Property, plant, & equipment		67,359
Deferred income tax asset		13,872
Goodwill		213,944
Income tax receivable		2,619
Intangibles		134,800
Debt issuance cost		9,357
Other		760
Total assets	$	552,779
Current liabilities	$	63,028
Capital lease obligation		1,142
Senior notes		150,000
Credit facilities		115,000
Deferred income tax liability		68,155
Unfavorable leases		3,800
Other		2,401
Total liabilities	$	403,526
Net assets acquired	$	149,253

The preliminary valuations resulted in recognition of $134.8 million of intangibles, which are comprised of $105.8 million in supplier relationships, $0.6 million in non-compete agreements, $14.9 million in trade names, and $13.5 million in proprietary software.

Significant Items Affecting Comparability

The merger transactions resulted in a new basis of accounting under SFAS 141. This change creates many differences between reporting for IAAI post-merger, as successor, and IAAI pre-merger, as predecessor. The predecessor financial data for periods ending on or prior to May 25, 2005, generally will not be comparable to the successor financial data for periods after that date. The merger resulted in IAAI having an entirely new capital structure, which results in significant differences between predecessor and successor in the equity sections of the statements. In addition, the successor incurred debt issuance costs and $265.0 million of debt in connection with the merger. The $22.1 million of debt related to the predecessor’s credit facilities was paid off in connection with the merger. As a result, interest expense, debt and debt issuance costs will not be comparable between the predecessor and the successor. We have made certain adjustments to increase or decrease the carrying amount of assets and liabilities as a result of preliminary estimates and certain assumptions we believe are reasonable, which, in a number of instances, has resulted in changes to amortization and depreciation expense amounts. The

F-26

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

final appraisals are not yet complete, and thus we have not yet completed our allocation of purchase price and may make further adjustments to the preliminary allocations in subsequent periods.

The following table reflects the unaudited pro forma results as if the acquisition occurred on December 28, 2003 (in thousands):

	Three Months Ended						Six Months Ended
	June 26, 2005			June 27, 2004			June 26, 2005			June 27, 2004
Revenue	$	71,862		$	60,002		$	142,806		$	117,193
Earnings (loss) before taxes		(15,246	)		(3,691	)		(13,848	)		(7,926	)
Earnings (loss)		(13,571	)		(2,492	)		(12,812	)		(5,296	)

The pro forma results reflect the incremental interest related to the new debt, changes in amortization and depreciation expense due to the change in basis and related remaining lives, and the addition of the annual financial advisory service fee for services provided by Kelso.

General

Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and, in our opinion, reflect all adjustments necessary for a fair presentation for each of the periods presented. The results of operations for interim periods are not necessarily indicative of results for full fiscal years.

As contemplated by the Securities and Exchange Commission, or SEC, under Rule 10-01 of Regulation S-X, the accompanying consolidated financial statements and related notes have been condensed and do not contain certain information that is included in our annual consolidated financial statements and notes thereto. For further information, refer to our consolidated financial statements and notes thereto included elsewhere in this prospectus.

Fiscal year 2004 consisted of 52 weeks and ended December 26, 2004. Fiscal year 2005 will consist of 52 weeks and will end on December 25, 2005.

IAAI operates in a single business segment—providing insurance companies and other vehicle suppliers cost-effective salvage processing solutions, including selling total loss and recovered theft vehicles.

Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151 (SFAS 151), “Inventory Costs an amendment of ARB No. 43, Chapter 4.” SFAS 151 discusses the general principles applicable to the pricing of inventory. Paragraph 5 of ARB 43, Chapter 4 provides guidance on allocating certain costs to inventory. This Statement amends ARB 43, Chapter 4, to clarify

F-27

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. As required by SFAS 151, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins after June 15, 2005. We are currently evaluating the impact of the adoption of SFAS 151 on our financial statements, although we presently do not anticipate the adoption of SFAS 151 to have a material impact on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R (SFAS 123R) “Share-Based Payment.” SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R establishes fair value as the measurement method in accounting for share-based payments to employees and eliminates the alternative use of the intrinsic value method of accounting under APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement is effective for public entities as of the beginning of the first annual reporting period that begins after June 15, 2005. We are currently evaluating the impact of the adoption of SFAS 123R on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (SFAS 153), “Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29.” SFAS 153 addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29 “Accounting for Nonmonetary Transactions” and replaces it with an exception for exchanges that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. As required by SFAS 153, we will adopt this new accounting standard at the beginning of our first interim or annual reporting period that begins June 15, 2005. We are currently evaluating the impact of the adoption of SFAS 153 on our financial statements, although we presently do not anticipate the adoption of SFAS 153 to have a material impact on our financial statements.

2. Income Taxes

Income taxes were computed using the effective tax rates estimated to be applicable for the full fiscal years, which are subject to ongoing review and evaluation by us.

The income tax receivable as of June 26, 2005 is due to the recording of a federal income tax refund attributable to tax benefits relating to employee stock compensation.

The income tax provision of $3.6 million for the June 26, 2005 year to date period was based on our expected effective tax rate for the predecessor and successor periods. The difference from the statutory rate was attributable to expenses incurred in connection with the merger transaction that are not deductible for income tax purposes.

We evaluate the realizability of our deferred tax assets on an ongoing basis. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowances at

F-28

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

June 26, 2005. We have established a valuation allowance when the utilization of the tax asset is uncertain. Additional timing differences, future earning trends and/or tax strategies may occur which could warrant a need for establishing an additional valuation allowance or a reserve.

Deferred tax liabilities of $46.5 million were established for new intangible assets established in connection with the merger. The deferred liability will decrease over the book life of these new intangible assets.

3. Goodwill and Intangibles

As of June 26, 2005, we had $213.9 million of net goodwill recorded in our consolidated financial statements that was recorded as a result of the merger transactions. In accordance with Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets,” we assess goodwill for possible impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value of this asset may not be recoverable. Important factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results; significant negative industry or economic trends; and our market capitalization relative to net book value. If we determine that the carrying value of goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, we would measure any impairment based on the excess of carrying amount over fair value measured using a projected discounted cash flow model or other valuation techniques.

F-29

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

Goodwill and other intangibles are recorded at cost less accumulated amortization and consist of the following at June 26, 2005 and December 26, 2004:

	Cost
	Assigned Life	June 26, 2005			December 26, 2004
	(dollars in millions)
Predecessor
Goodwill	Indefinite	$	—		$	167.0
Covenants not to compete	3 to 5 years		—			4.2
Successor
Goodwill	Indefinite		213.9			—
Supplier relationships	20 years		105.8			—
Trade names	15 years		14.9			—
Software	6 years		13.5			—
Covenants not to compete	12 to 18 months		0.7			—
		$	348.8		$	171.2
	Accumulated Amortization
	Assigned Life	June 26, 2005			December 26, 2004
	(dollars in millions)
Predecessor
Goodwill	Indefinite	$	—		$	(29.5	)
Covenants not to compete	3 to 5 years		—			(2.5	)
Successor
Supplier relationships	20 years		(0.5	)		—
Software	6 years		(0.2	)		—
Trade names	15 years		(0.1	)		—
Covenants not to compete	18 months		(0.1	)		—
		$	(0.9	)	$	(32.0	)

Amortization for the predecessor periods of March 28, 2005 through May 25, 2005 and December 27, 2004 through May 25, 2005 are $0.1 million and $0.2 million, respectively. Amortization for the successor period of May 26, 2005 through June 26, 2005 is $0.9 million. The amortization expense for the three months ended and the six months ended June 27, 2004 are $0.1 million and $0.3 million, respectively. This amount is included within selling, general and administrative expense on our Condensed Consolidated Statements of Operations. Based upon existing intangibles, the projected annual amortization expense is $5.3 million for 2005, $8.9 million for 2006, and $8.5 million for the years 2007 through 2009.

4. Financial Instruments and Hedging Activities

The predecessor company was exposed to interest rate fluctuations on its floating rate credit facility, under which we had outstanding a $13.1 million term loan at the merger date, May 25, 2005. In 2002, we entered into an interest rate swap to mitigate our exposure to interest rate fluctuations. As a matter of policy, we do not enter into hedging contracts for trading or speculative purposes. At the merger date, the interest rate swap agreement had a notional amount of $13.1 million, and provided that IAAI pay a fixed rate of interest of 4.4% and receive a LIBOR-based floating rate on the notional amount. At the merger date, the entire swap agreement qualified for hedge accounting and all changes in the fair value of the swap were recorded, net of tax, through other

F-30

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

comprehensive income (see Note 5). At the merger date, the entire predecessor credit facility was paid off and the swap agreement was terminated. The fair market value of the swap was $75,160 at the merger date.

On April 1, 2005, IAAI Finance issued $150.0 million of 11% senior notes due April 1, 2013. The proceeds were funded into escrow until the closing of the merger transactions. As part of the merger transactions, IAAI Finance merged with and into IAAI, with IAAI as the surviving corporation, and IAAI assumed IAAI Finance’s obligations under the notes. All of IAAI’s domestic subsidiaries unconditionally guaranteed the notes on a senior unsecured basis in connection with the merger transactions. The notes are non-callable for four years, after which they are callable at a premium declining ratably to par at the end of year six.

The notes contain covenants that among other things, limit the issuance of additional indebtedness, the incurrence of liens, the payment of dividends or other distributions, distributions from certain subsidiaries, the issuance of preferred stock, the sale of assets and subsidiary stock, transactions with affiliates and consolidations, mergers and transfers of assets. All of these limitations and prohibitions however are subject to a number of important qualifications set forth in the indenture.

On May 19, 2005, Axle Merger entered into new senior secured credit facilities, comprised of a $50.0 million revolving credit facility and a $115.0 million term loan B and, upon the completion of the merger, IAAI assumed Axle Merger’s obligations under these credit facilities, and all of IAAI’s domestic subsidiaries guaranteed these credit facilities. At June 26, 2005, the interest rate on the term loan was 6.2%.

The senior secured credit facilities are secured by a perfected first priority security interest in all present and future tangible and intangible assets of IAAI and the guarantors, including the capital stock of IAAI and each of its direct and indirect domestic subsidiaries and 65% of the capital stock of its direct and indirect foreign subsidiaries. The seven-year term loan is payable in quarterly installments equal to 0.25% of the initial aggregate principle amount, beginning December 31, 2005, with the balance payable at maturity. The senior secured credit facility is subject to mandatory prepayments and reduction in an amount equal to (i) the net proceeds of certain debt issuances, asset sales, recovery events, and sales and leasebacks of real property, (ii) 50% of the net proceeds of certain equity offerings or contributions by Axle Holdings and (iii) for any fiscal year ending on or after December 31, 2005, 75% of excess cash flow, as defined in the credit agreement, when the consolidated leverage ratio, as defined in the credit agreement, is 4.0x or greater, or 50% of excess cash flow when the consolidated leverage ratio is at least 3.0x but less than 4.0x.

Under the terms of the credit agreement, interest rates and borrowings are based upon, at IAAI’s option, eurodollar or prime rates. The terms of the agreement include a commitment fee based on unutilized amounts and an annual agency fee. The agreement includes covenants that, among other things, limit or restrict IAAI’s and its subsidiaries’ abilities to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, including the senior notes, pay dividends, create liens, make equity or debt investments, make acquisitions, modify the terms of the indenture, engage in mergers, make capital expenditures and engage in certain affiliate transactions. The agreement also requires us to at all times have at least 50% of the aggregate principal amount of the notes and the term loan subject to either a fixed interest rate or interest rate protection for a period of not less than three years. The senior secured credit facility is subject to the following financial covenants: (i) minimum consolidated interest coverage and (ii) maximum consolidated leverage.

The revolver was made for working capital and general corporate purposes. There were no borrowings under the revolver at the time of the merger or as of June 26, 2005, although we did have outstanding letters of credit in the aggregate amount of $2.3 million as of June 26, 2005.

F-31

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

Long-term debt consisted of the following:

	Successor			Predecessor
	June 26, 2005			December 26, 2004
	(dollars in thousands)
11% senior notes	$	150,000		$	—
Senior secured credit facility		115,000			—
Credit facility		—			16,875
Notes payable		—			12
	$	265,000		$	16,887
Less current portion		(862	)		(7,512	)
	$	264,138		$	9,375

5. Comprehensive Income (Loss)

Comprehensive income (loss) consists of net earnings and the change in fair value of our interest rate swap agreement as follows (dollars in thousands):

	Successor			Predecessor
	May 26, 2005 - June 26, 2005			December 27, 2004 - May 25, 2005			Six Months Ended June 27, 2004
Net earnings (loss)	$	(4,500	)	$	(440	)	$	4,956
Other comprehensive income
Change in fair value of interest rate swap agreement		75			227			470
Income tax expense		(29	)		(87	)		(181	)
Comprehensive income (loss)	$	(4,454	)	$	(300	)	$	5,245

The changes in fair value of our interest rate swap agreement were due to changes in interest rates. In connection with the merger, the swap agreement was terminated. As of June 26, 2005, the Company no longer is a party to a swap agreement.

6. Stock Options

Prior to the merger transaction, IAAI had stock option plans and a restricted stock grant program. Each of these plans contained a provision that would cause the options and grants to immediately vest upon a change of control. As a result of the merger transaction, all outstanding options and restricted stock grants became fully vested on the date of the merger.

Except for certain options that were exchanged and are discussed below, the holders of the options cancelled their options in exchange for the right to receive $28.25 per underlying share, less the applicable option exercise price. In accordance with Accounting Principles Board Opinion No. 25 (APB 25) “Accounting for Stock Issues to Employees” and related interpretations, there was no compensation expense recognized either in current or prior periods for the options.

The holders of the restricted stock grants cancelled their grants in exchange for the right to receive $28.25 per underlying share. Upon issuance of the restricted stock grants in 2003 and 2004, unearned compensation was

F-32

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

recorded at the market value of the shares at the time of the grant. The unearned compensation was then recognized as compensation expense over the anticipated vesting period. At the time of the merger, there was $3.5 million of unearned compensation remaining. The merger triggered the full vesting of the restricted stock grants and as a result, the $3.5 million was recognized as compensation expense by the predecessor in the period December 27, 2004 through May 25, 2005. The number of shares granted in 2003 and 2004 was 66,500 and 182,600, respectively. In the first quarter of 2005, there were forfeitures of 1,200 shares. In the second quarter of 2005, there were forfeitures of an additional 1,200 shares. There were no additional grants made in the second quarter of 2005.

Certain executives of IAAI exchanged a portion of their fully vested options in the predecessor company into options of the same value in Axle Holdings, which owned 100% of IAAI as of June 26, 2005. In accordance with APB 25 and other applicable pronouncements, we are not required to recognize compensation expense on the option exchange as the market price of the underlying shares of the new options are the same as the old options.

The following table illustrates the effect on net earnings if we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (SFAS 123), “Accounting for Stock-Based Compensation,” to the measurement of stock-based employee compensation relating to stock options and restricted stock, including straight-line recognition of compensation costs over the related vesting periods for fixed awards (dollars in thousands):

	Successor			Predecessor
	May 26, 2005 - June 26, 2005			December 27, 2004 - May 25, 2005			Six Months Ended June 27, 2004
Net earnings (loss) as reported	$	(4,500	)	$	(440	)	$	4,956
Add: Stock-based employee compensation expense included in reported net earnings, net of related tax effects		—			2,672			68
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects		—			4,473			1,241
Pro forma net earnings (loss)	$	(4,500	)	$	(2,241	)	$	3,783

7. Commitments and Contingencies

We lease our facilities and certain equipment under operating and capital leases. As of June 26, 2005, we had not entered into any capital leases in the current year.

On February 4, 2003, we filed a lawsuit in the Superior Court of California, County of Sacramento, against, among others, Emery Air Freight Corporation, or Emery, and Tennessee Technical Services, or TN Tech, the aircraft maintenance provider. The lawsuit sought to recover damages caused by the crash of an Emery DC-8 aircraft onto our Rancho Cordova, California facility on February 16, 2000. The aircraft was destroyed, and the three crew members aboard the aircraft were killed. The crash and the resulting release of jet fuel and fire destroyed a significant part of our facility and contaminated it with ash, hydrocarbon, lead and other toxic materials. Emery refused to clean up the contamination, and we were required to do so. We suffered more than $3.0 million in inventory loss, clean-up and remediation costs, business interruption losses, legal and consulting

F-33

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

fees, and other losses, costs, and expenses. Our property insurance carrier, Reliance, paid a large portion of our inventory losses. On October 6, 2004, we entered into a settlement agreement whereby we dismissed our claims against third parties other than Emery and TN Tech, and those other third parties dismissed their claims against us. On April 12, 2005, we engaged in mediation with TN Tech. The mediation resulted in a settlement of the dispute whereby TN Tech agreed to pay $2.35 million to us for our unrecovered losses resulting from the crash. In exchange, we agreed to release TN Tech and Emery from all of our claims arising from the crash. On June 8, 2005, we received payment of the settlement amount and recorded it as other income in the predecessor period.

8. Accumulated Postretirement Benefit Obligation

In connection with the acquisition of the capital stock of Underwriters Salvage Company (USC), the Company assumed the obligation for certain health care and death benefits for retired employees of USC. In accordance with the provisions of SFAS No. 106, “Employers Accounting for Postretirement Benefits Other than Pensions,” costs related to the benefits are accrued over an employee’s service life.

As a result of the merger transaction, the fair value of the accrued benefit liability of $2.3 million at December 26, 2004 was reduced by the unrecognized net gain of $1.6 million. The amount recorded at June 26, 2005 for the postretirement benefit liability was $0.7 million.

9. Related Party Transactions

Kelso owns the controlling interest in IAAI. Under the terms of a financial advisory agreement between Kelso and Axle Merger, upon completion of the merger, IAAI (1) paid to Kelso a fee of $4.475 million and (2) commenced paying an annual financial advisory fee of $500,000, payable quarterly in advance to Kelso (with the first such fee, prorated for the remainder of the then-current quarter, payable at the closing of the merger), for services to be provided by Kelso to IAAI. The financial advisory agreement provides that IAAI indemnify Kelso, Axle Holdings and Kelso’s officers, directors, affiliates, and their respective partners, employees, agents and control persons (as such term is used in the Securities Act and the rules and regulations thereunder) in connection with the merger and the transactions contemplated by the merger agreement (including the financing of the merger), Kelso’s investment in IAAI, Kelso’s control of Axle Merger (and, following the merger, IAAI as the surviving corporation) or any of its subsidiaries and the services rendered to IAAI under the financial advisory agreement. It also requires that IAAI reimburse Kelso’s expenses incurred in connection with the merger and with respect to services to be provided to IAAI on a going-forward basis. The financial advisory agreement also provides for the payment of certain fees, as may be determined by the board of directors of IAAI and Kelso, by IAAI to Kelso in connection with future investment banking services and for the reimbursement by IAAI of expenses incurred by Kelso in connection with such services.

Parthenon and certain of its affiliates own approximately 10.4% of IAAI. Under the terms of a letter agreement between PCAP, L.P., an affiliate of Parthenon, and Axle Merger, upon completion of the merger IAAI paid to PCAP, L.P. a fee of $525,000.

10. Treasury Stock

Prior to the merger, IAAI had treasury stock. The treasury stock purchases were recorded using the cost method of accounting. The treasury stock was retired as part of the merger transaction. We did not repurchase any shares since the merger.

F-34

INSURANCE AUTO AUCTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(UNAUDITED)

11. Accounts Receivable

Accounts receivable consists of the following as of June 26, 2005 and December 26, 2004 (dollars in thousands):

	Successor			Predecessor
	June 26, 2005			December 26, 2004
Unbilled receivables	$	30,682		$	35,555
Trade accounts receivable		11,176			14,596
Other receivables		781			1,086
		42,639			51,237
Less allowance for doubtful accounts		(600	)		(794	)
	$	42,039		$	50,443

Unbilled receivables represent amounts paid to third parties on behalf of insurance companies for which we will be reimbursed when the vehicle is sold. Trade accounts receivable includes fees and proceeds to be collected from both insurance companies and buyers.

12. Property and Equipment

Property and equipment consists of the following at June 26, 2005 and December 26, 2004 (dollars in thousands):

	Successor			Predecessor
	June 26, 2005			December 26, 2004
Land	$	5,863		$	7,662
Buildings and improvements		2,293			13,722
Equipment		27,254			49,645
Leasehold improvements		33,554			49,485
		68,964			120,514
Less accumulated depreciation and amortization		(1,007	)		(45,830	)
	$	67,957		$	74,684

As discussed in Note 1, in connection with the merger transactions, the property and equipment of the successor was revalued at the fair market value based on preliminary estimates and assumptions, resulting in adjusted basis, and the accumulated depreciation was eliminated.

13. Acquisitions and Divestitures

In the second quarter of 2005, we acquired Insurance Recovery Center, Inc. located just outside Altoona, Pennsylvania. The acquisition leverages our existing regional coverage in this market. The results of operations of this acquisition are included in our consolidated financial statements from the date of acquisition. The aggregate purchase price of this acquisition was $0.8 million.

In the second quarter of 2005, we sold one of our Houston properties for $1.2 million in cash. We recorded a gain on the sale of this facility of $0.5 million, net of taxes in the predecessor period.

14. Subsequent Events

On June 29, 2005, we announced a new acquisition in Ravenel, South Carolina. The acquisition is accounted for as a purchase business combination and the results of operations of the acquired business will be included in our future consolidated financial statements from the date of acquisition. The aggregate purchase price of this acquisition is $0.3 million.

F-35

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Certain provisions of the Illinois Business Corporation Act of 1983, as amended (the “BCA”), provide that we may, and in some cases must, indemnify the directors and officers of us and of each of our subsidiaries against liabilities and expenses incurred by such person by reason of the fact that such person was serving in such capacity, subject to certain limitations and conditions set forth in the statute.

Article VII of our Articles of Incorporation and Article V of our Bylaws provide for indemnification of our directors, officers and other agents to the extent permitted by the BCA. We also maintain insurance for the benefit of our current directors and officers that insures such persons against certain liabilities, including liabilities under the securities laws.

We have entered into indemnification agreements with each of our directors and executive officers. Each such agreement provides that we will indemnify the indemnitee against expenses, including reasonable attorney’s fees, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by his or her in connection with any civil or criminal action or administrative proceedings arising out of the performance of his or her duties as an officer, director, employee or agent of us.

For six years after the merger that was consummated on May 25, 2005, Axle Holdings, Inc. agreed that it will cause IAAI, as the surviving corporation, to maintain director and officer liability insurance coverage for each person who was an officer and director of IAAI or any of its subsidiaries prior to the closing of the merger that is comparable to the policy or policies maintained by IAAI or the applicable subsidiary, and with comparable insurance companies, for the benefit of such covered individuals. We have purchased the extended reporting period coverage option provided under certain of our existing fiduciary liability insurance policies and one of our existing directors’ and officers’ liability insurance policies, in each case providing coverage for a period of six years commencing from the effective time of the merger.

Insofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors and officers pursuant to the foregoing provisions, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

See Exhibit Index attached hereto.

Item 22. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, or the Securities Act.

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the

II-1

prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer of controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed by the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(e) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, Insurance Auto Auctions, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on August 23, 2005.

Insurance Auto Auctions, Inc.
By:	/s/    THOMAS C. O’BRIEN
	Thomas C. O’Brien President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on August 23, 2005 by the following persons in the capacities indicated.

Signature	Title
/s/    THOMAS C. O’BRIEN           Thomas C. O’Brien	President, Chief Executive Officer (Principal Executive Officer) and Director
/s/    SCOTT P. PETTIT           Scott P. Pettit	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/    DAVID J. AMENT           David J. Ament	Director
/s/    BRIAN T. CLINGEN           Brian T. Clingen	Director
/s/    CHURCH M. MOORE           Church M. Moore	Director
/s/    DAVID I. WAHRHAFTIG           David I. Wahrhaftig	Director

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrants have duly caused this Registration Statement on Form S-4 to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on August 23, 2005.

Insurance Auto Auctions Corp.
IAA Services, Inc.
IAA Acquisition Corp.
By:	/s/    THOMAS C. O’BRIEN
	Thomas C. O’Brien President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on August 23, 2005 by the following persons in the capacities indicated.

Signature	Title
/s/    THOMAS C. O’BRIEN           Thomas C. O’Brien	President and Chief Executive Officer (Principal Executive Officer)
/s/    SCOTT P. PETTIT           Scott P. Pettit	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) and Director
/s/    SIDNEY L. KERLEY           Sidney L. Kerley	Director

II-4

EXHIBIT INDEX

Exhibit Number	Description
2.1	Agreement and Plan of Merger dated February 22, 2005, by and among Insurance Auto Auctions, Inc. (“IAAI”), Axle Holdings, Inc. (“Axle Holdings”) and Axle Merger Sub, Inc. (“Axle Merger”), filed as Appendix A to IAAI’s Definitive Proxy Statement on Schedule 14A filed April 26, 2005 and incorporated herein by reference
3.1	Articles of Incorporation of IAAI, as filed with the Illinois Secretary of State on August 7, 1997, as amended and filed with the Illinois Secretary of State on May 25, 2005*
3.2	Bylaws of IAAI, as amended as of May 25, 2005*
3.3	Certificate of Incorporation of Insurance Auto Auctions Corp., as filed with the Delaware Secretary of State on January 2, 1997*
3.4	By-laws of Insurance Auto Auctions Corp.*
3.5	Articles of Incorporation of IAA Services, Inc., as filed with the Illinois Secretary of State on May 5, 1999*
3.6	By-laws of IAA Services, Inc.*
3.7	Certificate of Incorporation of IAA Acquisition Corp., as filed with the Delaware Secretary of State on March 6, 2000*
3.8	By-laws of IAA Acquisition Corp.*
4.1	Indenture, dated April 1, 2005, among IAAI, as successor to IAAI Finance Corp., the Subsidiary Guarantors (as defined therein) and Wells Fargo Bank, National Association, as Trustee*
4.2	Supplemental Indenture, dated May 25, 2005, among IAAI, IAAI Finance Corp., Insurance Auto Auctions Corp., IAA Services, Inc., IAA Acquisition Corp., and Wells Fargo Bank, National Association, as Trustee*
4.3	Form of 11% Senior Notes due 2013 (included in Exhibit 4.1 hereto)*
4.4	Registration Rights Agreement dated April 1, 2005, among IAAI Finance Corp., Deutsche Bank Securities Inc. and Bear Stearns & Co. Inc., relating to the 11% Senior Notes due 2013 of IAAI, as successor to IAAI Finance Corp.*
4.5	Assumption Agreement, dated May 25, 2005, among IAAI, IAAI Finance Corp., Insurance Auto Auctions Corp., IAA Services, Inc., and IAA Acquisition Corp.*
5.1	Opinion of Katten Muchin Rosenman LLP*
10.1	Stock Incentive Plan of Axle Holdings*
10.2	Form of Nonqualified Stock Option Agreement of Axle Holdings pursuant to the Stock Incentive Plan*
10.3	Amended and Restated Employment Agreement dated April 2, 2001, between IAAI and Thomas C. O’Brien, filed as Exhibit 10.1 to IAAI’s Quarterly Report on Form 10-Q filed May 16, 2001 and incorporated herein by reference
10.4	Employment Agreement dated April 2, 2001, between IAAI and David R. Montgomery, filed as Exhibit 10.2 to IAAI’s Quarterly Report on Form 10-Q filed May 16, 2001 and incorporated herein by reference
10.5	Employment Agreement dated April 2, 2001, between IAAI and Scott P. Pettit, filed as Exhibit 10.3 to IAAI’s Quarterly Report on Form 10-Q filed May 16, 2001 (File No. 000-19594) and incorporated herein by reference

II-5

Exhibit Number	Description
10.6	Employment Agreement dated October 23, 2003, between IAAI and John R. Nordin, Sr., filed as Exhibit 10.177 to IAAI’s Annual Report on Form 10-K filed March 29, 2004 and incorporated herein by reference
10.7	Change of Control and Employment Agreement dated September 5, 2000 between IAAI and Donald J. Hermanek*
10.8	Employment Agreement dated July 23, 2004, between IAAI and John W. Kett, filed as Exhibit 10.1 to IAAI’s Quarterly Report on Form 10-Q filed August 10, 2004 and incorporated herein by reference
10.9	Employment Agreement dated October 6, 2004, between IAAI and Sidney L. Kerley, filed as Exhibit 10.32 to IAAI’s Annual Report on Form 10-K filed March 14, 2005 and incorporated herein by reference
10.10	Credit Agreement, dated May 19, 2005 (the “Credit Agreement”), among Axle Holdings, Axle Merger and IAAI (as successor to Axle Merger), as borrowers, the several lenders from time to time parties thereto, Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners, Deutsche Bank Securities Inc. as syndication agent, Bear Stearns Corporate Lending Inc., as administrative agent and GMAC Commercial Finance LLC, ING Capital LLC and Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services, Inc., as co-documentation agents*
10.11	Guarantee and Collateral Agreement dated May 25, 2005 made by Axle Holdings, Axle Merger and IAAI and certain of its subsidiaries in favor of Bear Stearns Corporate Lending Inc., as administrative agent under the Credit Agreement*
10.12	Form of Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing for Commercial Purposes by IAAI, as mortgagor, to Bear Stearns Corporate Lending Inc., as mortgagee and the administrative agent under the Credit Agreement*
10.13	Intellectual Property Security Agreement dated May 25, 2005 made by IAAI and each of the grantors listed on Schedule I thereto in favor of Bear Stearns Corporate Lending Inc. as administrative agent for the secured parties (as defined in the Credit Agreement)*
10.14	Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated May 25, 2005, by and among the individuals or entities listed on Schedule A attached thereto *
10.15	Shareholders Agreement of Axle Holdings dated May 25, 2005, among Axle Holdings, Axle Holdings II, LLC, and those employees of Axle Holdings or its subsidiaries who are listed on Schedule I thereto*
10.16	Amended and Restated Registration Rights Agreement, dated May 25, 2005, among Axle Holdings, Axle Holdings II, LLC, and those employees of Axle Holdings or its subsidiaries listed on Schedule I thereto*
10.17	Form of Conversion Agreement dated May 25, 2005 between Axle Holdings and each of Thomas C. O’Brien, David Montgomery, Scott Pettit, John Nordin, Don Hermanek, John Kett and Sidney Kerley*
10.18	Form of Exchange Stock Option Agreement dated May 25, 2005 between Axle Holdings and each of Thomas C. O’Brien, David Montgomery, Scott Pettit, John Nordin, Don Hermanek, John Kett and Sidney Kerley*
10.19	Financial Advisory and Closing Fee Letter Agreement dated February 22, 2005 from Axle Merger to Kelso & Company, L.P.*

II-6

Exhibit Number	Description
10.20	Letter Agreement dated May 25, 2005 from Axle Merger to PCAP, L.P.*
10.21	Insurance Auto Auctions, Inc. 2005 Incentive Plan adopted by the board of directors on December 15, 2004*
12.1	Statement re: computation of ratio of earnings to fixed charges*
21.1	List of subsidiaries of IAAI*
23.1	Consent of Katten Muchin Rosenman LLP (included in Exhibit 5.1)*
23.2	Consent of KPMG LLP*
24.1	Power of Attorney for the Company*
24.2	Power of Attorney for the Guarantors*
25.1	Form T-1, Statement of Eligibility and Qualification of Wells Fargo Bank, National Association*
99.1	Form of Letter of Transmittal*
99.2	Form of Notice of Guaranteed Delivery*
99.3	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees*
99.4	Form of Letter to Clients*

* Filed herewith.

II-7

EX-3.1

Exhibit 3.1

File Number 5953-635-4

State of Illinois

Office of

The Secretary of State

Whereas, ARTICLES OF INCORPORATION OF INSURANCE AUTO AUCTIONS (ILLINOIS), INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.

Now Therefore, I, George H. Ryan, Secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation.

In Testimony Whereof, I hereto set my hand and cause to be affixed the Great Seal of the State of Illinois, at the City of Springfield, this 7th day of August A.D. 1997 and of the Independence of the United States the two hundred and 22nd.

Secretary of State

Form BCA-2.10	ARTICLES OF INCORPORATION
(Rev. Jan. 1995)	This space for use by Secretary of State	SUBMIT IN DUPLICATE
George H. Ryan Secretary of State Department of Business Services Springfield, IL _2758
		This space for use by Secretary of State
		Date                     8.7.97
Payment must be made by certified check, cashier’s check, Illinois attorney’s check, Illinois C.P.A’s check or money order, payable to “Secretary of State.”		Franchise Tax  $ 25.00 Filing Fee          $ 75.00                             100.00 Approved:        /s/ Illegible

1.	CORPORATE NAME:	Insurance Auto Auctions (Illinois), Inc.
	(The corporate name must contain the word “corporation”, “company,” “incorporated,” “limited” or an abbreviation thereof.)
2.	Initial Registered Agent:	Gaspare Ruggirello
		First Name	Middle Initial	Last Name
	Initial Registered Office:	850 East Alqonquin Road		Sta. 100
		Number	Street	Suite #
		Schaumburg	60173	Cook
		City	Zip Code	County
3.	Purpose or purposes for which the corporation is organized:
	(If not sufficient space to cover this point, add one or more sheets of this size.)
	The transaction of any or all lawful businesses for which corporations may be incorporated under the Illinois Business Corporation Act.
4.	Paragraph 1: Authorized Shares, issued Shares and Consideration Received:

Class	Par Value per Share		Number of Shares Authorized	Number of Shares Proposed to be Issued	Consideration to be Received Therefor
Common	$	NPV	20,000,000	1,000	$	1
Preferred		NPV	5,00,000	0		0
(6,10)
				TOTAL = $1

Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the share of each class are:

(If not sufficient space to cover this point, add one or more sheets of this size.)

See attachment.

(over)

5.	OPTIONAL:	(a)    Number of directors constituting the initial board of directors of the corporation:
		(b)    Names and addresses of the persons who are to serve as directors until the first annual meeting shareholders or until their successors are elected and qualify:
		Name	Residential Address	City, State, ZIP
		_________________	_____________________	_____________________
		_________________	_____________________	_____________________
		_________________	_____________________	_____________________
6.	OPTIONAL:	(a)    It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be:		$
		(b)    It is estimated that the value of the property to be located within the State of Illinois during the following year will be:		$
		(c)    It is estimated that the gross amount of business that will be transacted by the corporation during the following year will be:		$
		(d)    It is estimated that the gross amount of business that will be transacted from places of business in the State of Illinois during the following year will be:		$
7.	OPTIONAL:	OTHER PROVISIONS
		Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing a duration other than perpetual, etc.
8.		NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)

The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true.

Dated April 30, 1997.

	Signature and Name		Address
1.	/s/ Robert J. Minkus	1.	7200 Sears Tower
	Signature		Street
	Robert J. Minkus		Chicago,                IL                60606
	(Type or Print Name)		City/Town            State            Zip Code
2.		2.
	Signature		Street
	(Type or Print Name)		City/Town            State            Zip Code
3.		3.
	Signature		Street
	(Type or Print Name)		City/Town            State            Zip Code

(Signatures must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be used on conformed copies.)

NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and if execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

• The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in this state, with a minimum of $25.

• The filing fee is $75.

• The minimum total due (franchise tax + filing fee) is $100.

(Applies when the Consideration to be Received as se forth in Item 4 does not exceed $16,667)

• The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary

Illinois Secretary of State	Springfield. IL 62756
Department of Business Services	Telephone (217) 782-9522 or 762-9523

Article 4, Paragraph 2:

a. Number of Authorized Shares.

The Corporation shall have authority to issue a total of twenty-five million (25,000,000) shares of capital stock, divided into classes as follows:

(1) Twenty million (20,000,000) shares of capital stock shall constitute a separate and single class designated “Common Shares,” which shall have no par value and $.001 stated value.

(2) Five million (5,000,000) shares of capital stock shall constitute a separate and single class designated “Preferred Shares,” which shall have no par value and $.001 stated value and may be issued in series, with all Preferred Shares of the same series having identical rights, preferences and limitations.

b. Common Shares.

(1) Dividend Rights. Subject to the rights of any class of shares (or series thereof) of the Corporation ranking, as to dividends, senior to Common Shares, the holders of Common Shares shall be entitled to receive such dividends, if any, as may be declared by the Board of Directors of the Corporation from time to time and paid on Common Shares out of any assets of the Corporation at the time legally available for the payment of dividends.

(2) Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of the Common Shares shall be entitled to share ratably in the assets of the Corporation remaining after all distributions or payments shall have been made to the holders of any class of shares (or series thereof) of the Corporation ranking senior, as to liquidation rights, to Common Shares.

The merger or share exchange of the Corporation with any other corporation, or a sale, lease or conveyance of all or substantially all of its assets, shall not be regarded as a liquidation, dissolution or winding up of the Corporation within the meaning of this section.

(3) Voting. Subject to the rights of any outstanding Preferred Shares or as may be required by law, all voting power shall rest exclusively in the holders of Common Shares. Each Common Share shall be entitled to one vote on each matter submitted to a vote of the shareholders of the Corporation.

c. Preferred Shares.

Preferred Shares may be issued from time to time in one or more series, in such amounts and for such consideration as the Board of Directors may determine and with such

1

preferences, limitations and relative rights as shall be determined and stated by the Board of Directors. The Board of Directors is hereby granted further authority to determine such preferences, limitations and relative rights for each such series of Preferred Shares by resolution prior to the issuance of each such series. Without limiting the generality of the authority granted to the Board of Directors herein, the Board of Directors shall have the power, right and authority to determine the following preferences, limitations and relative rights:

(1) Designation. The designation of each series, which designation shall be by distinguishing letter, number, title or combination thereof.

(2) Number. The number of shares of any series to be issued.

(3) Dividend Source, Rate and Dates. The source, rate and dates of any dividends payable with respect to shares of any series; provided, however, that no dividends shall be payable upon the Preferred Shares to the extent that (A) the Corporation would not be able to pay its debts as they become due in the usual course of business; or (B) the Corporation’s total assets would be less than the sum of its total liabilities plus (unless otherwise provided herein) the amount that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of the shareholders whose preferential rights are superior to those receiving the distribution.

(4) Dividend Accumulations. Whether any dividends which may be payable with respect to shares of any series shall be cumulative; and, if they shall be cumulative, then the dates from which such dividends shall start to cumulate.

(5) Dividend Preferences. The preference or preferences, if any, to be accorded dividends payable with respect to shares of any series.

(6) Redemption. The redemption rights and prices, if any, with respect to shares of any series.

(7) Sinking Fund. The terms and amount of any sinking fund provided for the redemption of shares of any series.

(8) Rights of Purchase. The rights, if any, of the Corporation to purchase for retirement, other than by way of redemption, shares of any series, and the terms and conditions of any such purchase rights.

(9) Conversion. Whether or not the shares of any series shall be convertible into Common Shares or into shares of any other series or number of series or into any other security; and, if so, the conversion price or prices, any adjustments thereof and/or any other terms and conditions upon which such conversion may be effected.

2

(10) Liquidation. The preference or preferences, if any, with respect to shares of any series entitled to receive the net assets of the Corporation upon liquidation, dissolution or winding up of the Corporation.

(11) Voting. The voting rights, if any, to which the holders of any series of Preferred Shares may be entitled.

d. Distributions to Shareholders.

The Board of Directors may authorize, and the Corporation may make, distributions to its shareholders if, after giving the distribution effect, (1) the Corporation would be able to pay its debts as they become due in the usual course of business and (2) the Corporation’s total assets would be greater than its total liabilities, without regard to any amount that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

Article 7:

a. Indemnification of Officers, Directors, Employees and Agents.

The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was a director or officer of the Corporation, or who is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The Corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was an employee or agent of the Corporation, or who is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself,

3

create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful.

b. Limitation of Liability of Directors.

The liability of the directors of the Corporation for monetary damages shall be eliminated to the fullest extent permissible under Illinois law.

c. No Cumulative Voting.

In all elections for directors, cumulative voting by the shareholders is hereby denied under all circumstances.

d. No Informal Action by Shareholders.

Any action which may or must be taken by the shareholders must be taken at any annual or special meeting of the shareholders and may not be taken by any consent in writing of the shareholders.

4

File Number 5953-635-4

State of Illinois

Office of

The Secretary of State

Whereas, ARTICLES OF MERGER OF INSURANCE AUTO AUCTIONS (ILLINOIS), INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.

Now Therefore, I, George H. Ryan, Secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation.

In Testimony Whereof, I hereto set my hand and cause to be affixed the Great Seal of the State of Illinois, at the City of Springfield, this 20th day of August A.D. 1997 and of the Independence of the United States the two hundred and 22nd.

Secretary of State

Form BCA-11.25	ARTICLES OF MERGER	File # 5953-63
(Rev. Jan. 1995)	CONSOLIDATION OR EXCHANGE	SUBMIT IN DUPLICATE
George H. Ryan		This space for use by
Secretary of State		Secretary of State
Department of Business Services DO NOT SEND CASHI Remit payment in check or money order, payable to “Secretary of State,” Filing fee is $100, but if a merger or consolidation of more than 2 corporations, $50 for each additional corporation.		Date 8/20/97 Filing Fee         $___ Approved: Illegible

1. Names of the corporations proposing to merge, and the state or country of their incorporation.

Name of Corporation	State or Country Of Incorporation	Corporation File No.
Insurance Auto Auctions, Inc.	California	5839-396-_
Insurance Auto Auctions (Illinois), Inc.	Illinois	5953-635-4
___________________________________________________	____________	___________
___________________________________________________	____________	___________

2. The laws of the state or country under which each corporation is incorporated permit such merger, consolidation or exchange.

3. (a) Name of the surviving corporation: Insurance Auto Auctions (Illinois), Inc.

(b) it shall be governed by the laws of: Illinois

4. Plan of merger is as follows: Please see attached agreement and plan of merger.

If not sufficient space to cover this point, add one or more sheets of this size.

5. Plan of merger __________ was approved, as to each corporation not organized in Illinois, in compliant _______ exchange with the laws of the state under which it is organized, and (b) as to _____ Illinois corporation, as follows:

(The following items are not applicable to mergers under §11.30—90% owned subsidiary provision See Article 7.)

(Only “X” one box for each corporation)

Name of Corporation	By the shareholders, a resolution of the board of directors having been duly adopted and submitted to a vote at a meeting of shareholders. Not less than the minimum number of votes required by statute and by the articles of incorporation voted in favor of the action taken. (§11.20)	By written consent of the shareholders having not less than the minimum number of votes required by statute and by the articles of incorporation. Shareholders who have not consented in writing have been given notice in accordance with §7.10        (§11.220)	By written consent of ALL the shareholders entitled to vote on the action, in accordance with §7.10 & §11.20
Insurance Auto Auctions (Illinois), Inc.	¨	¨	x
Insurance Auto Auctions, Inc.	x	¨	¨
________________________________	¨	¨	¨
________________________________	¨	¨	¨
________________________________	¨	¨	¨

6. (Not applicable if surviving, new or acquiring corporation is an Illinois corporation)

It is agreed that, upon and after the issuance of a certificate of merger, consolidation or exchange by the Secretary of State of the State of Illinois:

a. The surviving, new or acquiring corporation may be served with process in the State of Illinois in any proceeding for the enforcement of any obligation of any corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or exchange and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such corporation organized under the laws of the State of Illinois against the surviving, new or acquiring corporation.

b. The Secretary of State of the State of Illinois shall be and hereby is irrevocably appointed as the agent of the surviving, new or acquiring corporation to accept service of process in any such proceedings, and

c. The surviving, new or acquiring corporation will promptly pay to the dissenting shareholders of any corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or exchange the amount, If any, to which they shall be entitled under the provisions of “The Business Corporation Act of 1983” of the State of Illinois with respect to the rights of dissenting shareholders.

7. (Complete this item if reporting a merger under §11.30—90% owned subsidiary provisions.)

a. The number of outstanding shares of each class of each merging subsidiary corporation and the number of such shares of each class owned immediately prior to the adoption of the plan of merger by the parent corporation, are:

Name of Corporation	Total Number of Shares Outstanding of Each Class	Number of Shares of Each Class Owned Immediately Prior to Merger by the Parent Corporation
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________

b. (Not applicable to 100% owned subsidiaries)

The date of mailing a copy of the plan of merger and notice of the right to dissent to the shareholders of each merging subsidiary corporation was                         , 19__.

Was written consent for the merger or written waiver of the 30-day period by the holders of all the outstanding shares of the subsidiary corporations received?    ¨ Yes    ¨ No

(If the answer is “No.” the duplicate copies of the Articles of Merger may not be delivered to the Secretary of State until after 30 days following the mailing of a copy of the plan of merger and of the notice of the right to dissent to the shareholders of each merging subsidiary corporation.)

8. The undersigned corporations have caused these articles to be signed by their duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true. (All signatures must be in BLACK INK.)

Dated August 14, 1997		Insurance Auto Auctions, Inc.
		(Exact Name of Corporation)
attested by	/s/ Linda C. Larrabee	by	/s/ James P. Alampi
	(Signature of Secretary or Assistant Secretary)		(Signature of President or Vice President)
	Linda C. Larrabee, Secretary	James P. Alampi, President
	(Type or Print Name and Title)	(Type or Print Name and Title)
Dated August 14, 1997		Insurance Auto Auctions (Illinois), Inc.
		(Exact Name of Corporation)
attested by	/s/ Linda C. Larrabee	by	/s/ James P. Alampi
	(Signature of Secretary or Assistant Secretary)		(Signature of President or Vice President)
	Linda C. Larrabee, Secretary		James P. Alampi, President
	(Type or Print Name and Title)		(Type or Print Name and Title)
Dated ____________, 19
			(Exact Name of Corporation)
attested by		by
	(Signature of Secretary or Assistant Secretary)		(Signature of President or Vice President)
(Type or Print Name and Title)		(Type or Print Name and Title)

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (hereinafter called the “Merger Agreement”) is made as of August 7, 1997, by and between Insurance Auto Auctions, Inc., a California corporation (“California Company”), and Insurance Auto Auctions (Illinois), Inc., an Illinois corporation (“Illinois Company”). California Company and Illinois Company are sometimes referred to as the “Constituent Corporations.”

The authorized capital stock of California Company consists of 5,000,000 shares of Preferred Stock, par value $.001 per share, and 20,000,000 shares of Common Stock, par value $.001 per share, and the authorized capital stock of Illinois Company consists of 5,000,000 Preferred Shares, without par value, and 20,000,000 Common Shares, without par value. The Boards of Directors of the Constituent Corporations deem it advisable and to the advantage of said corporations that California Company merge with and into Illinois Company upon the terms and conditions herein provided.

NOW, THEREFORE, the parties do hereby adopt the plan of reorganization encompassed by this Merger Agreement and do hereby agree that California Company shall merge with and into Illinois Company on the following terms, conditions and other provisions.

I. TERMS AND CONDITIONS

1.1 Merger. California Company shall be merged with and into Illinois Company, and Illinois Company shall be the surviving corporation, effective upon the date when this Merger Agreement has been filed with the Secretary of State.

(the “Effective Date”).

1.2 Succession. On the Effective Date, Illinois Company shall succeed to all of the rights, privileges / immunities and property of California Company.

1.3 Common Stock of California Company. Upon the Effective Date, by virtue of the merger and without any action on the part of the holder thereof, each share of Common Stock of California Company outstanding immediately prior thereto shall be changed and converted into one fully paid and non-assessable Common Share of Illinois Company, without par value.

1.4 Common Shares of Illinois Company. Upon the Effective Date, by virtue of the merger and without any action on the part of the holder thereof, each Common Share of Illinois Company outstanding immediately prior thereto shall be canceled and returned to the status of authorized but unissued.

1.5 Stock Certificates. On and after the Effective Date, all of the outstanding certificates which prior to that time represented the shares of Common Stock of California Company shall be deemed for all purposes to evidence ownership of and to represent the Common

Shares of Illinois Company into which the shares of Common Stock of California Company represented by such certificates have been converted as herein provided. The registered owner on the books and records of Illinois Company or its transfer agents of any such outstanding stock certificate shall, until such certificate shall have been surrendered for transfer or conversion or otherwise accounted for to Illinois Company or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the Common Shares of Illinois Company evidenced by such outstanding certificate as above provided.

1.6 Options; Purchase Rights. Upon the Effective Date, Illinois Company will assume and continue California Company’s 1991 Stock Option Plan (the “1991 Plan”) and Employee Stock Purchase Plan. Each option to buy shares of Common Stock of California Company outstanding under the 1991 Plan and each right to purchase shares of Common Stock of California Company outstanding under the Employee Stock Purchase Plan shall become an option or purchase right, as the case may be, for the same number of Common Shares of Illinois Company with no other changes in the terms and conditions of such option or purchase right, including exercise or purchase price, effective upon the Effective Date. Upon the Effective Date, Illinois Company will assume the outstanding and unexercised portion of each such option and the obligations of California Company with respect thereto, and each outstanding purchase right under the Employee Stock Purchase Plan.

II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS

2.1 Articles of Incorporation and By-laws. The Articles of Incorporation of Illinois Company in effect on the Effective Date                                                                                                                           shall continue to be the Articles of Incorporation of Illinois Company without change or amendment, until further amended in accordance with the provisions thereof and applicable law; provided that upon the Effective Date, Article I of such Articles of Incorporation shall be amended to read as follows:

The name of the corporation is “Insurance Auto Auctions, Inc.”

The By-laws of Illinois Company in effect on the Effective Date, shall continue to be the By-laws of Illinois Company without change or amendment until further amended in accordance with the provisions thereof and applicable law.

2.2 Directors. The directors of California Company shall become the directors of Illinois Company on and after the Effective Date to serve until the expiration of their current terms and until their successors are elected and qualified.

2.3 Officers. The officers of California Company shall become the officers of Illinois Company on the Effective Date to serve at the pleasure of the Board of Directors.

-2-

III. MISCELLANEOUS

3.1 Further Assurances. From time to time, as and when required by Illinois Company or by its successors and assigns, there shall be executed and delivered on behalf of California Company such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to confirm of record or otherwise, in Illinois Company the title to and possession of all the property, interests, assets, rights, privileges, immunities,             franchises, and authority of California Company and otherwise to carry out the purposes of this Merger Agreement, and the officers and directors of Illinois Company are fully authorized in the name and on behalf of California Company or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

3.2 Abandonment. At any time before the Effective Date, this Merger Agreement may be terminated and the merger may be abandoned by the Board of Directors of either California Company or Illinois Company or both, notwithstanding the approval of this Merger Agreement by the shareholders of California Company.

3.3 Counterparts. In order to facilitate the filing and recording of this Merger Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Merger Agreement.

-3-

OFFICE OF THE SECRETARY OF STATE

JESSE WHITE • Secretary of State

MAY 25, 2005 5953-635-4

CORP-LINK SERVICES, INC.

118 W EDWARDS ST STE 200

SPRINGFIELD IL 62704

RE INSURANCE AUTO AUCTIONS, INC.

DEAR SIR OR MADAM:

ENCLOSED YOU WILL FIND THE ARTICLES OF MERGER REGARDING THE ABOVE NAMED CORPORATION.

FEES IN THIS CONNECTION HAVE BEEN RECEIVED AND CREDITED.

THIS DOCUMENT MUST BE RECORDED IN THE OFFICES OF THE RECORDERS OF THE COUNTIES IN WHICH THE REGISTERED OFFICES OF THE MERGING CORPORATIONS ARE LOCATED. IN ORDER TO COMPLY WITH ARTICLE 6 OF THE COUNTIES CODE, AS AMENDED JANUARY 1, 1995, THE PAGES OF THIS DOCUMENT MUST BE SEPARATED BEFORE IT IS PRESENTED FOR RECORDING.

THE SURVIVING CORPORATION SHALL EXECUTE A REPORT FOLLOWING MERGER (FORMS ARE ENCLOSED) AND FILE SAME IN THIS OFFICE WITHIN SIXTY DAYS AFTER MERGER.

SINCERELY YOURS,

JESSE WHITE

SECRETARY OF STATE

DEPARTMENT OF BUSINESS SERVICES

CORPORATION DIVISION

TELEPHONE (217) 782-6961

Springfield, Illinois 62756

FORM BCA 11.25 (rev. Dec. 2003)

ARTICLES OF MERGER,

CONSOLIDATION OR EXCHANGE

Business Corporation Act

Jesse White, Secretary of State

Department of Business Services

Springfield, IL 62758

Telephone (217) 782-6961

www.cyberdriveillinois.com

Remit payment in the form of a

check or money order payable

to the Secretary of State.

The filing fee is $100, but if merger or

consolidation involves more than 2

corporations, $50 for each additional

corporation.

                                                                                   File # 5953-6354 Filing Fee: $100.00 Approved: _________                                                           Submit in duplicate                                                   Type or Print clearly in black ink                          Do not write above this line                                                          

NOTE: Strike inapplicable words in items 1, 3 and 4.

1. Names of the corporations proposing to merge, and the state or country of their incorporation:

Name of Corporation	State or Country of Incorporation	Corporation File Number
Insurance Auto Auctions, Inc.	Illinois	59536354
Axle Merger Sub, Inc.	Illinois	64050869
__________________________________________________________________	________	________
__________________________________________________________________	________	________

2. The laws of the state or country under which each corporation is incorporated permits such merger, consolidation or exchange.

3. (a) Name of the surviving new acquiring corporation: Insurance Auto Auctions, Inc.

(b) it shall be governed by the laws of: Illinois

If not sufficient space to cover this point, add one or more sheets of this size.

4.      Plan of merger is as follows:

Please see attached Exhibit A.

5. Plan of merger consolidation exchange was approved, as to each corporation not organized in Illinois, in compliance with the laws of the state under which it is organized, and (b) as to each Illinois corporation, as follows:

(The following items are not applicable to mergers under § 11.30 — 90% owned subsidiary provisions. See Article 7.)

(Only “X” one box for each Illinois corporation)

Name of Corporation	By the shareholders, a resolution of the board of directors having been duly adopted and submitted to a vote at a meeting of shareholders. Not less than the minimum number of votes required by statute and by the articles of incorporation voted in favor of the action taken. (§ 11.20)	By written consent of the shareholders having not less than the minimum number of votes required by statute and by the articles of incorporation. Shareholders who have not consented in writing have been given notice in accordance with § 7.10 (§ 11.20)	By written consent of ALL the shareholders entitled to vote on the action, in accordance with § 7.10 &§ 11.20
Insurance Auto Auctions, Inc.	þ	¨	¨
Axle Merger Sub, Inc.	¨	¨	þ
_________________________	¨	¨	¨
_________________________	¨	¨	¨
_________________________	¨	¨	¨

6. (Not applicable if surviving, new or acquiring corporation is an Illinois corporation)

It is agreed that, upon and after the issuance of a certificate of merger, consolidation or exchange by the Secretary of State of the State of Illinois:

a. The surviving, new or acquiring corporation may be served with process in the State of Illinois in any proceeding for the enforcement of any obligation of any corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or exchange and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such corporation organized under the laws of the State of Illinois against the surviving, new or acquiring corporation.

b. The Secretary of State of the State of Illinois shall be and hereby is irrevocably appointed as the agent of the surviving, new or acquiring corporation to accept service of process in any such proceedings, and

c. The surviving, new, or acquiring corporation will promptly pay to the dissenting shareholders of any corporation organized under the laws of the State of Illinois which is a party to the merger, consolidation or exchange the amount, if any, to which they shall be entitled under the provisions of “The Business Corporation Act of 1983” of the State of Illinois with respect to the rights of dissenting shareholders.

7. (Complete this item if reporting a merger under §11.30—90% owned subsidiary provisions.)

a. The number of outstanding shares of each class of each merging subsidiary corporation and the number of such shares of each class owned immediately prior to the adoption of the plan of merger by the parent corporation, are:

Name of Corporation	Total Number of Shares Outstanding of Each Class	Number of Shares of Each Class Owned Immediately Prior to Merger by the Parent Corporation
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________
____________________________	____________________________	____________________________

b. (Not applicable to 100% owned subsidaries)

The date of mailing a copy of the plan of merger and notice of the right to dissent to the shareholders of each merging subsidiary corporation was                                 ,                     .

                            (Month & Day)          (Year)

Was written consent for the merger or written waiver of the 30-day period by the holders of all the outstanding shares of all subsidiary corporations received?    ¨ Yes    ¨ No

(If the answer is “No,” the duplicate copies of the Articles of Merger may not be delivered to the Secretary of State until after 30 days following the mailing of a copy of the plan of merger and of the notice of the right to dissent to the shareholders of each merging subsidiary corporation.)

8. The undersigned corporations have caused these articles to be signed by their duly authorized officers, each of whom affirms, under penalties of perjury, that the facts stated herein are true. (All signatures must be in BLACK INK.)

Dated	5-25, 2005	Insurance Auto Auctions, Inc.
	(Month & Day) (Year)	(Exact Name of Corporation)
	/s/ Thomas C. O’Brien
	(Any authorized officer’s signature)
	Thomas C. O’Brien, President & CEO
	(Type or Print Name and Title)
Dated	May 25, 2005	Axle Merger Sub, Inc.
	(Month & Day) (Year)	(Exact Name of Corporation)
	/s/ James J. Connors II
	(Any authorized officer’s signature)
	James J. Connors II, Esq. VP and Asst. Secy
	(Type or Print Name and Title)
Dated	,
	(Month & Day) (Year)	(Exact Name of Corporation)
	(Any authorized officer’s signature)
	(Type or Print Name and Title)

EXHIBIT A

PLAN OF MERGER

This Plan of Merger sets forth terms of the merger (the “Merger”) by and between INSURANCE AUTO AUCTIONS, INC., an Illinois corporation (“IAAI”) and AXLE MERGER SUB, INC., an Illinois corporation (the “Buyer”), relating to effect of the Merger, the governing documents of the Surviving Corporation and the Conversion of Shares, agreed to pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 22, 2005, by and among IAAI, AXLE HOLDINGS, INC., a Delaware corporation (the “Buyer Parent”) and the Buyer.

Any capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Merger Agreement.

RECITALS

A. The Board of Directors and shareholders of each of IAAI and the Buyer have approved the Merger Agreement.

ARTICLE

I

THE MERGER

1.1 Effect of Merger. The Buyer shall be merged with and into IAAI and the separate corporate existence of the Buyer shall thereupon cease and IAAI, as the corporation surviving the Merger (the “Surviving Corporation”), shall continue to exist under and be governed by the Business Corporation Act of 1983 of the State of Illinois, as amended (the “Act”). The Merger shall have the effects set forth in the Act and other applicable Law. Without limiting the generality of the foregoing, at the Effective Time (as defined below), all of the property, rights, privileges, powers and franchises of IAAI and the Buyer shall vest in the Surviving Corporation, and all of the debts, liabilities, obligations, restrictions and duties of IAAI and the Buyer shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.

1.2 Effective Time. The Merger shall become effective (the “Effective Time”) at the date and time when the properly executed Articles of Merger are filed with the Secretary of State of the State of Illinois, as provided in the Act.

1.3 Supplementary Action. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that consistent with the terms of the Merger Agreement any further assignments or assurances in Law or any other acts are necessary or desirable (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, title to and possession of any property or right of either of IAAI or the Buyer acquired or to be acquired by reason of, or as a result of, the Merger, or (b) otherwise to carry out the purposes of the Merger Agreement, then, subject to the terms and conditions of the Merger Agreement, each of IAAI or the Buyer and its officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments and assurances in Law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such property or rights in the Surviving Corporation and otherwise to carry out the purposes of the Merger Agreement; and the officers and directors of the Surviving Corporation are fully authorized in the name of either of IAAI or the Buyer to take any and all such action.

II

THE SURVIVING CORPORATION

2.1 The Surviving Corporation. The name of the Surviving Corporation shall be Insurance Auto Auctions, Inc.

2.2 The Articles of Incorporation. As of the Effective Time, the Articles of Incorporation of the Surviving Corporation shall be amended to conform with the Articles of Incorporation of the Buyer pursuant to the amendments attached hereto as Attachment A. Such amended Articles of Incorporation of the Surviving Corporation shall remain the Articles of Incorporation of the Surviving Corporation until such Articles of Incorporation are changed or amended as provided therein or by applicable Law.

2.3 The By-Laws. The By-Laws of the Buyer, as in effect immediately prior to the Effective Time, shall be the By-Laws of the Surviving Corporation from and after the Effective Time until such By-Laws are changed or amended as provided therein or by applicable Law.

2.4 The Directors and Officers. The board of directors of the Buyer immediately prior to the Effective Time shall be the initial board of directors of the Surviving Corporation, and the officers of IAAI immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified. If, at the Effective Time, a vacancy shall exist on the board of directors of the Surviving Corporation or in any office of the Surviving Corporation, such vacancy may thereafter be filled in the manner provided by Law.

III

CONVERSION OF SHARES

3.1 Conversion of Company Common Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of the common stock, no par value per share of IAAI (the “IAAI Common Stock”):

(a) Each share of IAAI Common Stock issued and outstanding immediately prior to the Effective Time shall be cancelled and extinguished and converted into the right to receive an amount of cash equal to $28.25 per Share (the “Merger Consideration”).

(b) Each issued and outstanding share of IAAI Common Stock that is held in IAAI’s treasury or in the treasury of any subsidiary of IAAI immediately prior to the Effective Time, if any, shall be cancelled and extinguished without the payment of any consideration therefor.

3.2 Conversion of the Buyer Capital Stock. Each share of capital stock of the Buyer issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $.01, of the Surviving Corporation.

3.3 Payment for Company Common Stock. The Buyer Parent shall be responsible for payment of the Merger Consideration.

ATTACHMENT A

Amendments to the Articles of Incorporation of the Surviving Corporation

1. Article 4 of the Articles of Incorporation of the Surviving Corporation is hereby amended in its entirety to read as follows:

“4. Paragraph 1. Authorized Shares: The corporation shall have authority to issue One Hundred (100) shares of common stock, par value $.01 per share.”

Paragraph 2. The preferences, qualifications, imitations, restrictions and special or relative rights in respect of the shares of each class are:

The holders of common stock shall have such rights as are provided by law and shall be entitled to one vote for each share held by them.

The Board of Directors may authorize, and the Corporation may make, distributions to its shareholders if, after giving the distribution effect, (1) the Corporation would be able to pay its debts as they come due in the usual course of business and (2) the Corporation’s total assets would be greater than its total liabilities.”

2. Article 7d of the Articles of Incorporation of the Surviving Corporation is hereby deleted.

EX-3.2

Exhibit 3.2

BY-LAWS

OF

INSURANCE AUTO AUCTIONS, INC.

An Illinois Corporation

Effective May 25, 2005

TABLE OF CONTENTS

		Page
ARTICLE I OFFICES
Section 1.	Registered Office	1
Section 2.	Other Offices	1
ARTICLE II MEETINGS OF SHAREHOLDERS
Section 1.	Place of Meetings	1
Section 2.	Annual Meetings	1
Section 3.	Special Meetings	2
Section 4.	Notice	2
Section 5.	Adjournments	3
Section 6.	Quorum	3
Section 7.	Voting	4
Section 8.	Proxies	4
Section 9.	Consent of Shareholders in Lieu of Meeting	6
Section 10.	List of Shareholders Entitled to Vote	8
Section 11.	Record Date	9
Section 12.	Transfer Books	10
Section 13.	Conduct of Meetings	11
Section 14.	Inspectors of Election	12
ARTICLE III DIRECTORS
Section 1.	Number and Election of Directors	12
Section 2.	Vacancies	13
Section 3.	Duties and Powers	13
Section 4.	Meetings	13
Section 5.	Organization	14
Section 6.	Resignations and Removals of Directors	14
Section 7.	Quorum	15

i

Section 8.	Actions of the Board by Written Consent	15
Section 9.	Meetings by Means of Conference Telephone	16
Section 10.	Committees	16
Section 11.	Compensation	17
Section 12.	Interested Directors	17
ARTICLE IV OFFICERS
Section 1.	General	18
Section 2.	Election	19
Section 3.	Voting Securities Owned by the Corporation	19
Section 4.	Chairman of the Board of Directors	20
Section 5.	President	21
Section 6.	Vice Presidents	21
Section 7.	Secretary	22
Section 8.	Treasurer	23
Section 9.	Assistant Secretaries	24
Section 10.	Assistant Treasurers	24
Section 11.	Other Officers	25
ARTICLE V SHARES
Section 1.	Form of Certificates	25
Section 2.	Signatures	26
Section 3.	Lost Certificates	26
Section 4.	Transfers	27
Section 5.	Dividend Record Date	27
Section 6.	Record Owners	28
Section 7.	Transfer and Registry Agents	28
ARTICLE VI NOTICES
Section 1.	Notices	29
Section 2.	Waivers of Notice	29

ii

ARTICLE VII GENERAL PROVISIONS
Section 1.	Dividends	30
Section 2.	Disbursements	31
Section 3.	Fiscal Year	31
Section 4.	Corporate Seal	31
ARTICLE VIII INDEMNIFICATION
Section 1.	Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation	31
Section 2.	Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation	32
Section 3.	Authorization of Indemnification	33
Section 4.	Good Faith Defined	34
Section 5.	Indemnification by a Court	35
Section 6.	Expenses Payable in Advance	36
Section 7.	Nonexclusivity of Indemnification and Advancement of Expenses	37
Section 8.	Insurance	37
Section 9.	Certain Definitions	38
Section 10.	Survival of Indemnification and Advancement of Expenses	39
Section 11.	Limitation on Indemnification	39
Section 12.	Indemnification of Employees and Agents	40
ARTICLE IX AMENDMENTS
Section 1.	Amendments	40
Section 2.	Entire Board of Directors	40
ARTICLE X SEVERABILITY
Section 1.	Severability	41

iii

BY-LAWS

OF

Insurance Auto Auctions, Inc.

(hereinafter called the “Corporation”)

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the Corporation shall be in the City of Chicago, County of Cook, State of Illinois.

Section 2. Other Offices. The Corporation may also have offices at such other places, both within and without the State of Illinois, as the Board of Directors may from time to time determine.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Place of Meetings. Meetings of the shareholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Illinois, as shall be designated from time to time by the Board of Directors.

Section 2. Annual Meetings. The Annual Meeting of Shareholders for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting of Shareholders.

Section 3. Special Meetings. Unless otherwise required by law or by the articles of incorporation of the Corporation, as amended and restated from time to time (the “Articles of Incorporation”), Special Meetings of Shareholders, for any purpose or purposes, may be called by either (i) the Chairman, if there be one, or (ii) the President, (iii) any Vice President, if there be one, (iv) the Secretary or (v) any Assistant Secretary, if there be one, and shall be called by any such officer at the request in writing of (i) the Board of Directors, (ii) a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority include the power to call such meetings or (iii) shareholders owning a majority of the shares of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. At a Special Meeting of Shareholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).

Section 4. Notice. Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than

2

ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to notice of and to vote at such meeting. Notice shall be either personally or by mail, by or at the direction of the president, the secretary, the officer or persons calling the meeting. Notice will be sent to each shareholder of record entitled to vote at that meeting. If mailed, the notice will be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his or her address as it appears in the records of the corporation, with postage prepaid. No notice of any meeting of shareholders need be given to any shareholder who submits a signed waiver of notice, whether before or after the meeting.

Section 5. Adjournments. Any meeting of the shareholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.

Section 6. Quorum. Unless otherwise required by applicable law or the Articles of Incorporation, the holders of a majority of the Corporation’s shares issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business. A quorum, once established, shall not be broken by

3

the withdrawal of enough votes to leave less than a quorum. If, however, less than a majority of the outstanding shares are represented at said meeting, a majority of the shares so represented may adjourn the meeting at any time without further notice.

Section 7. Voting. Unless otherwise required by law, the Articles of Incorporation or these By-Laws, any question brought before any meeting of the shareholders, other than the election of directors, shall be decided by the vote of the holders of a majority of the total number of votes of the Corporation’s shares represented and entitled to vote thereat, voting as a single class. Unless otherwise provided in the Articles of Incorporation, and subject to Section 11(a) of this Article II, each shareholder represented at a meeting of the shareholders shall be entitled to cast one (1) vote for each share of the shares entitled to vote thereat held by such shareholder. Such votes may be cast in person or by proxy as provided in Section 8 of this Article II. No shareholder shall have cumulative voting rights with respect to any matter upon which shareholders are entitled to vote (including, without limitation, voting with respect to the election of directors). The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the shareholders, in such officer’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 8. Proxies. Each shareholder entitled to vote at a meeting of the shareholders or to express consent or dissent to corporate action in

4

writing without a meeting may authorize another person or persons to act for such shareholder as proxy, or by his duly authorized attorney in fact, but no such proxy shall be voted upon after eleven (11) months from its date, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the shareholder executing it unless otherwise provided in such proxy. Without limiting the manner in which a shareholder may authorize another person or persons to act for such shareholder as proxy, the following shall constitute a valid means by which a shareholder may grant such authority:

(i) A shareholder may execute a writing authorizing another person or persons to act for such shareholder as proxy. Execution may be accomplished by the shareholder signing such writing or affixing his or her signature to such writing by any reasonable means, including, but not limited to, by facsimile signature.

(ii) A shareholder may authorize another person or persons to act for such shareholder as proxy by transmitting or authorizing the transmission of a telegram or cablegram to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such telegram or cablegram, provided that any such telegram or cablegram must either set forth or be submitted with information from which

5

it can be determined that the telegram or cablegram was authorized by the shareholder. If it is determined that such telegrams or cablegrams are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.

Any copy, facsimile telecommunication or other reliable reproduction of the writing, telegram or cablegram authorizing another person or persons to act as proxy for a shareholder may be substituted or used in lieu of the original writing, telegram or cablegram for any and all purposes for which the original writing, telegram or cablegram could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing, telegram or cablegram.

Section 9. Consent of Shareholders in Lieu of Meeting. Unless otherwise provided in the Articles of Incorporation or Section 12.10 of the Business Corporation Act of 1983 of the State of Illinois (the “Business Corporation Act”), any action required or permitted to be taken at any Annual or Special Meeting of Shareholders of the Corporation may be taken without a meeting and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed (i) by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, or (ii) by all of the

6

shareholders entitled to vote with respect to the subject matter thereof. If such consent is signed by less than all of the shareholders entitled to vote, then such consent shall become effective only if at least five (5) days prior to the execution of the consent a notice in writing is delivered to all the shareholders entitled to vote with respect to the subject matter thereof and, after the effective date of the consent, prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing. Such written consent or consents shall be delivered to the Corporation by delivery to its registered office in the State of Illinois, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the shareholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each shareholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 9 to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Illinois, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the shareholders are

7

recorded. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

Section 10. List of Shareholders Entitled to Vote. The officer of the Corporation who has charge of the transfer books for shares of the Corporation shall prepare and make, within twenty (20) days after the record date for a meeting of shareholders or ten (10) days before every meeting of the shareholders, whichever earlier, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held or (ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present.

8

Section 11. Record Date.

(a) In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of the shareholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) days and, for a meeting of shareholders, not less than ten (10) days, or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than twenty (20) days, immediately preceding such meeting. If no record date is fixed by the Board of Directors, the record date for determining shareholders entitled to notice of or to vote at a meeting of the shareholders shall be the date on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of shareholders of record entitled to notice of or to vote at a meeting of the shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the shareholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of

9

Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Illinois, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the shareholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

Section 12. Transfer Books. The transfer books of shares of the Corporation shall be the only evidence as to who are the shareholders entitled to examine such transfer books, the list required by Section 10 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the shareholders.

10

Section 13. Conduct of Meetings. The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the shareholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to shareholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.

11

Section 14. Inspectors of Election. In advance of any meeting of the shareholders, the Board of Directors, by resolution, the Chairman or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the shareholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

ARTICLE III

DIRECTORS

Section 1. Number and Election of Directors. The Board of Directors shall consist of not less than three nor more than eight members, the exact number of which shall initially be fixed by the Incorporator and thereafter from time

12

to time by the Board of Directors. Except as provided in Section 2 of this Article III, directors shall be elected by a plurality of the votes cast at each Annual Meeting of Shareholders and each director so elected shall hold office until the next Annual Meeting of Shareholders and until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. Directors need not be shareholders.

Section 2. Vacancies. Unless otherwise required by law or the Articles of Incorporation, vacancies arising through death, resignation, removal, an increase in the number of directors or otherwise may be filled only by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier death, resignation or removal.

Section 3. Duties and Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-Laws required to be exercised or done by the shareholders.

Section 4. Meetings. The Board of Directors may hold meetings, both regular and special, either within or without the State of Illinois.

13

Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President, or by any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director by mail not less than five (5) business days prior thereto.

Section 5. Organization. At each meeting of the Board of Directors, the Chairman of the Board of Directors, or, in his or her absence, a director chosen by a majority of the directors present, shall act as chairman. The Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 6. Resignations and Removals of Directors. Any director of the Corporation may resign at any time, by giving notice in writing to the Chairman of the Board of Directors, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance or such resignation shall not be necessary to make it effective. Except as otherwise

14

required by applicable law, any director or the entire Board of Directors may be removed from office at any time by the affirmative vote of the holders of at least a majority in voting power of the issued and outstanding shares of the Corporation entitled to vote in the election of directors.

Section 7. Quorum. Except as otherwise required by law or the Articles of Incorporation, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

Section 8. Actions of the Board by Written Consent. Unless otherwise provided in the Articles of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

15

Section 9. Meetings by Means of Conference Telephone. Unless otherwise provided in the Articles of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.

Section 10. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may

16

exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.

Section 11. Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.

Section 12. Interested Directors. So long as it is fair to the Corporation at the time it was authorized, approved, or ratified by the Board of Directors, a committee thereof or the shareholders, no contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely

17

because any such director’s or officer’s vote is counted for such purpose if: (i) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

ARTICLE IV

OFFICERS

Section 1. General. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its discretion, also may choose a Chairman of the Board of Directors (who must be a director) and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices

18

may be held by the same person, unless otherwise prohibited by law, the Articles of Incorporation or these By-Laws. The officers of the Corporation need not be shareholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

Section 2. Election. The Board of Directors, at its first meeting held after each Annual Meeting of Shareholders (or action by written consent of shareholders in lieu of the Annual Meeting of Shareholders), shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer’s successor is elected and qualified, or until such officer’s earlier death, resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

Section 3. Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer

19

may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4. Chairman of the Board of Directors. The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the shareholders and of the Board of Directors. The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation, unless the Board of Directors designates the President as the Chief Executive Officer, and, except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these By-Laws or by the Board of Directors.

20

Section 5. President. The President shall, subject to the control of the Board of Directors and, if there be one, the Chairman of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the shareholders and, provided the President is also a director, the Board of Directors. If there be no Chairman of the Board of Directors, or if the Board of Directors shall otherwise designate, the President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these By-Laws or by the Board of Directors.

Section 6. Vice Presidents. At the request of the President or in the President’s absence or in the event of the President’s inability or refusal to act

21

(and if there be no Chairman of the Board of Directors), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

Section 7. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all

22

meetings of the shareholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary shall have authority to affix the same to any instrument requiring it and, when so affixed, it may be attested by the signature of the Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer’s signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer

23

shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer’s possession or under the Treasurer’s control belonging to the Corporation.

Section 9. Assistant Secretaries. Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 10. Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give

24

the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Assistant Treasurer’s possession or under the Assistant Treasurer’s control belonging to the Corporation.

Section 11. Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

SHARES

Section 1. Form of Certificates. Every holder of shares in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation (i) by the Chairman of the Board of Directors, or the President or a Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by such shareholder in the Corporation.

25

Section 2. Signatures. The issued shares of the Corporation shall be represented by certificates signed by the appropriate corporate officers. If a certificate is countersigned by a transfer agent or registrar, other than the Corporation itself or its employee, any other signatures or countersignature on the certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such an officer, transfer agent or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 3. Lost Certificates. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of shares to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity

26

against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.

Section 4. Transfers. Shares of the Corporation shall be transferable in the manner prescribed by applicable law and in these By-Laws. Transfers of shares shall be made on the books of the Corporation only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; provided, however, that such surrender and endorsement or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Corporation shall be marked Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of shares shall be valid as against the Corporation for any purpose until it shall have been entered in the share records of the Corporation by an entry showing from and to whom transferred.

Section 5. Dividend Record Date. In order that the Corporation may determine the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the shareholders entitled to

27

exercise any rights in respect of any change, conversion or exchange of shares, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6. Record Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

Section 7. Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

28

ARTICLE VI

NOTICES

Section 1. Notices. Whenever written notice is required by law, the Articles of Incorporation or these By-Laws, to be given to any director, member of a committee or shareholder, such notice may be given by mail, addressed to such director, member of a committee or shareholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may be given personally or by telegram, telex or cable.

Section 2. Waivers of Notice. Whenever any notice is required by applicable law, the Articles of Incorporation or these By-Laws, to be given to any director, member of a committee or shareholder, a waiver thereof in writing, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Annual or Special Meeting of Shareholders or any regular

29

or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Articles of Incorporation or these By-Laws.

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the shares of the Corporation, subject to the requirements of the Business Corporation Act and the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 8 of Article III hereof), and may be paid in cash, in property, or in shares of the Corporation’s shares. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of the Corporation or shares of warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

30

Section 2. Disbursements. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 4. Corporate Seal. The Board may determine to issue a corporate seal, which seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Illinois”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1. Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or as a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director

31

or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was

32

a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

Section 3. Authorization of Indemnification. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not

33

parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the shareholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful, on the merits or otherwise, in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case. If the Corporation indemnifies or advances expenses to a director or officer under Section 2 of this Article VIII, the Corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders meeting.

Section 4. Good Faith Defined. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s

34

conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be.

Sections 5. Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to any court of competent jurisdiction in the State of Illinois for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a

35

contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

Section 6. Expenses Payable in Advance. Expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

36

Section 7. Nonexclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Articles of Incorporation, these By-Laws, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 1 and Section 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the Business Corporation Act, or otherwise.

Section 8. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.

37

Section 9. Certain Definitions. For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the surviving corporation, any merging corporation (including any merging corporation having merger with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such merging corporation, or is or was a director or officer of such merging corporation serving at the request of such merging corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued. The term “another enterprise” as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director,

38

officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.

Section 10. Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 11. Limitation on Indemnification. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

39

Section 12. Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

ARTICLE IX

AMENDMENTS

Section 1. Amendments. These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by the shareholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such meeting of the shareholders or Board of Directors, as the case may be. All such amendments must be approved by either the holders of a majority of the outstanding shares entitled to vote thereon or by a majority of the entire Board of Directors then in office.

Section 2. Entire Board of Directors. As used in this Article IX and in these By-Laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.

40

ARTICLE XI

SEVERABILITY

Section l. Severability. If any provision of these By-Laws is held to be unenforceable or invalid (including, without limitation, if any such provision shall be in conflict with any provision of the Business Corporation Act), that provision shall be severed from these By-Laws and the remainder of these By-Laws shall remain in full force and effect.

* * *

41

EX-3.3

Exhibit 3.3

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “INSURANCE AUTO AUCTIONS CORP.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE EIGHTH DAY OF DECEMBER, A.D. 1993, AT 3:30 O’CLOCK P.M.

CERTIFICATE OF OWNERSHIP, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 1995, AT 9:03 O’CLOCK A.M.

CERTIFICATE OF AGREEMENT OF MERGER, CHANGING ITS NAME FROM “TAP ACQUISITION CORP.” TO “INSURANCE AUTO AUCTIONS CORP.”, FILED THE THIRTEENTH DAY OF JANUARY, A.D. 1995, AT 9:04 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE SEVENTEENTH DAY OF MAY, A.D. 1996, AT 10 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE SECOND DAY OF JANUARY, A.D. 1997, AT 9:02 O’CLOCK A.M.

CERTIFICATE OF OWNERSHIP, FILED THE SECOND DAY OF JANUARY, A.D. 1997, AT 9:03 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID

[SEAL]
	Harriet Smith Windsor, Secretary of State
2362823 8100H	AUTHENTICATION: 4062835
050634465	DATE: 08-02-05

PAGE 1

Delaware

The First State

CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.

[SEAL]
	Harriet Smith Windsor, Secretary of State
2362823 8100H	AUTHENTICATION: 4062835
050634465	DATE: 08-02-05

PAGE 2

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 03:30 PM 12/08/1993

753342809 - 2362823

CERTIFICATE OF INCORPORATION OF

TAP ACQUISITION CORP.

ARTICLE I

The name of this corporation is TAP Acquisition Corp.

ARTICLE II

The address of the registered office of the corporation in the State of Delaware is 32 Loockerman Square, Suite 1-100 in the City of Dover, County of Kent. The name of its registered agent at such address is The Prentice-Hall Corporation System.

ARTICLE III

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

This corporation is authorized to issue one class of stock to be designated common stock (“Common Stock”). The number of shares of Common Stock authorized to be issued is One Hundred (100), par value $0.001 per share.

ARTICLE V

The name and mailing address of the incorporator is Scott C. Dettmer, Brobeck, Phleger & Harrison. Two Embarcadero Place, 2200 Geng Road, Palo Alto, California 94303.

ARTICLE VI

Except as otherwise provided in this Certificate of Incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend, and rescind any or all of the Bylaws of the corporation.

ARTICLE VII

The number of directors of the corporation shall be fixed from time to time by a bylaw or amendment thereof duly adopted by the Board of Directors or by the stockholders.

ARTICLE VIII

Elections of directors need not be by written ballot unless the Bylaws of the corporation shall so provide.

ARTICLE IX

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the corporation.

ARTICLE X

A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article to authorize corporation action further eliminating or limiting the personal liability of directors then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law as so amended.

Any repeal or modification of the foregoing provisions of this Article X by the stockholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification.

ARTICLE XI

The corporation reserves the right to amend, alter, change, or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

IN WITNESS WHEREOF, the undersigned has signed this Certificate this 7th day of December, 1993.

/s/ Scott C. Dettmer

Scott C. Dettmer, Incorporator

2.

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:03 AM 01/13/1995

950010249 - 2362823

CERTIFICATE OF OWNERSHIP AND MERGER

Pursuant to Section 253 of the General Corporation Law of the State of Delaware, TAP Acquisition Corp., a Delaware corporation (the “Corporation”), for the purpose of effecting the merger of Texas Auto Pool, Inc., a Texas corporation and a wholly-owned subsidiary of TAP Acquisition Corp. (the “Subsidiary”), with and into the Corporation (the “Merger”), does hereby certify:

FIRST: That the Corporation was incorporated and duly organized pursuant to the General Corporation Law of the State of Delaware.

SECOND: That the Corporation owns all of the outstanding shares of each class of the capital stock of the Subsidiary.

THIRD: Attached as Exhibit A hereto are resolutions from the Action By Unanimous Written Consent of the Board of Directors of the Corporation, dated as of December 31, 1994, approving the Merger and this Certificate of Ownership and Merger.

IN WITNESS WHEREOF, TAP Acquisition Corp. has caused this certificate to be signed by William W. Liebeck, its Executive Vice President, this 31st day of December, 1994.

TAP ACQUISITION CORP.
By:	/s/ William W. Liebeck
	William W. Liebeck, Executive Vice President

Exhibit A

Resolutions from Action By Unanimous Written Consent of the

Board of Directors of TAP Acquisition Corp.,

dated December 31, 1994

1. Merger of Texas Auto Pool, Inc., and the Company

RESOLVED, that the merger of Texas Auto Pool, Inc., a Texas corporation and a wholly-owned subsidiary of the Company (“TAP”), with and into the Company (the “TAP Merger”) and the assumption of all liabilities of TAP by the Company be, and it hereby is, adopted and approved; and

RESOLVED FURTHER, that the Articles of Merger in the form attached as Exhibit A hereto be, and they hereby are, authorized and approved, with such additional changes that the officers of the Company deem in their sole discretion to be necessary and appropriate; and

RESOLVED FURTHER, that the Certificate of Ownership and Merger in the form attached as Exhibit B hereto be, and it hereby is, authorized and approved, with such additional changes that the officers of the Company deem in their sole discretion to be necessary and appropriate; and

RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions, including, but not limited to, providing notification of the TAP Merger to any appropriate governmental or regulatory agencies, and filing the Articles of Merger, Certificate of Ownership and Merger, and any other forms and documents with such agencies as may be required or advisable by them or by law, and to obtain such consents from third parties and governmental or regulatory agencies as may be necessary or advisable to carry out the TAP Merger.

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:04 AM 01/13/1995

950010250 - 2362823

AGREEMENT OF MERGER

BY AND BETWEEN

TAP ACQUISITION CORP.

AND

TASP ACQUISITION CORP.

This Agreement of Merger (the “Agreement”) is made and entered into as of December 31, 1994 by and between TAP Acquisition Corp., a Delaware corporation (“Newco”), and TASP Acquisition Corp., a Delaware corporation (TASP”).

RECITALS

WHEREAS, the Boards of Directors of Newco and TASP deem it advisable and in their mutual best interests and in the best interests of the stockholders of Newco and TASP that TASP be merged with and into Newco in accordance with this Agreement (the “Merger”);

WHEREAS, to effectuate the Merger, Newco and TASP have entered into this Agreement, whereby all of the outstanding shares of capital stock of TASP (“TASP Common Stock”) will be exchanged for the common stock of Newco (“Newco Common Stock”);

WHEREAS, the Boards of Directors and stockholders of Newco and TASP have duly approved and adopted this Agreement and the Merger;

NOW, THEREFORE, in consideration of the mutual benefits to be derived from this Agreement, the parties hereto, intending to be legally bound, do hereby agree as follows:

ARTICLE 1

GENERAL

1.1 Board of Directors’ and Stockholders’ Approval. The respective Boards of Directors of Newco and TASP have duly adopted and approved the Merger and this Agreement. The respective stockholders of Newco and TASP have, by resolutions duly adopted and approved, approved the Merger and all transactions

contemplated by this Agreement in accordance with the applicable provisions of the General Corporation Law of the State of Delaware (the “Delaware Law”).

1.2 The Merger. In accordance with the provisions of this Agreement and the applicable provisions of Delaware Law, TASP shall be merged with and into Newco, with Newco as the surviving corporation, and the separate existence of TASP shall thereupon cease, and, at the Effective Time (as hereinafter defined), Newco, as the surviving corporation in the Merger, shall continue its corporate existence under the laws of the State of Delaware. The Bylaws and officers and directors of Newco in effect immediately preceding the Merger shall be the Bylaws and officers and directors, respectively, of the surviving corporation. The Certificate of Incorporation of Newco in effect immediately preceding the Merger shall be the Certificate of Incorporation of the surviving corporation, except that:

(a) Article I of the Certificate of Incorporation of the surviving corporation shall read as follows:

“The name of this corporation is Insurance Auto Auctions Corp.”; and

(b) Article IV of the Certificate of Incorporation of the surviving corporation shall read as follows:

“This corporation is authorized to issue one class of stock to be designated common stock (“Common Stock”). The number of shares of Common Stock authorized to be issued is Two Hundred (200), par value $0.001 per share.”

Upon consummation of the Merger, Newco shall assume all of the obligations and liabilities of TASP, it being agreed that the surviving corporation shall have all such obligations and liabilities.

1.3 Effective Time. The Merger shall become effective as of 11:59 p.m. California Time on December 31, 1994 (the “Effective Time” of the Merger).

ARTICLE 2

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF

TASP ACQUISITION CORP.

2.1 Status and Conversion of TASP Common Stock.

(a) At the Effective Time, each of the issued and outstanding shares of TASP Common Stock and all rights existing with respect thereto shall, by

2.

virtue of the Merger and without any action on the part of any holder thereof, cease to be outstanding and shall be converted into and exchanged for one share of Newco Common Stock.

(b) Until surrendered, each certificate that prior to the Effective Time represented shares of TASP Common Stock shall be deemed to represent the right to receive that number of shares of Newco Common Stock as provided in Section 2.1(a) hereof. Each of the stockholders of TASP, as a holder of a certificate or certificates theretofore representing all of the outstanding shares of TASP Common Stock, is hereby notified to surrender all of such holder’s certificates to Newco and simultaneously with such surrender such holder shall be entitled to receive in exchange the Newco Common Stock provided in Section 2.1(a) hereof.

ARTICLE 3

TERMINATION

3.1 Termination by Mutual Consent. At any time prior to the filing date, this Agreement may be terminated by the mutual express written consent of Newco and TASP, notwithstanding approval of the Merger by the stockholders of TASP.

ARTICLE 4

MISCELLANEOUS PROVISIONS

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

3.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed on its behalf as of the day and year first above written.

TAP ACQUISITION CORP.
By:	/s/ William W. Liebeck
	William W. Liebeck, Executive Vice President
TASP ACQUISITION CORP.
By:	/s/ William W. Liebeck
	William W. Liebeck, Executive Vice President and Assistant Secretary

4.

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 10:00 AM 05/17/1996

960143630 - 2362823

CERTIFICATE OF OWNERSHIP AND MERGER

Pursuant to Section 253 of the General Corporation Law of the State of Delaware, Insurance Auto Auctions Corp., a Delaware corporation (the “Parent Corporation”), for the purpose of effecting the merger (the “Merger”) of East Atlanta Group, Inc., a Georgia corporation and the wholly owned subsidiary of the Parent Corporation (the “Subsidiary Corporation”), with and into the Parent Corporation, does hereby certify:

FIRST: That the Parent Corporation is incorporated and duly organized under the laws of the State of Delaware.

SECOND: That the Parent Corporation owns all of the outstanding shares of each class of the capital stock of the Subsidiary Corporation.

THIRD: That the laws of the jurisdiction of organization of the Subsidiary Corporation permit the merger of a business corporation of that jurisdiction with a business corporation of another jurisdiction.

FOURTH: That the Parent Corporation hereby merges the Subsidiary Corporation into the Parent Corporation.

FIFTH: That attached as Exhibit A hereto are resolutions of the Board of Directors of the Parent Corporation, duly adopted by the unanimous written consent of the members thereof and dated as of December 31, 1995, approving the Merger and this Certificate of Ownership and Merger.

IN WITNESS WHEREOF, Parent Corporation has caused this certificate to be executed by William W. Liebeck, Executive Vice President, this 31^st day of December 1995.

INSURANCE AUTO AUCTIONS CORP., a Delaware corporation
By:	/s/ William W. Liebeck
	William W. Liebeck, Executive Vice President

EXHIBIT A

ACTION BY UNANIMOUS WRITTEN CONSENT

OF THE BOARD OF DIRECTORS OF

INSURANCE AUTO AUCTIONS, CORP.,

a Delaware corporation

(the “Company”)

ACTION BY UNANIMOUS WRITTEN CONSENT OF

THE BOARD OF DIRECTORS OF

INSURANCE AUTO AUCTIONS CORP.,

a Delaware corporation

The undersigned directors of Insurance Auto Auctions Corp., a Delaware corporation (the “Company”), in accordance with the provisions of Section 141(f) of the Delaware General Corporation Law and the Company’s Bylaws, take the following action by written consent in lieu of a meeting as of the 31st day of December, 1995:

1. Merger of East Atlanta Group, Inc. and the Company

RESOLVED, that the merger of East Atlanta Group, Inc., a Georgia corporation and a wholly owned subsidiary of the Company (“EAG”), with and into the Company (the “EAG Merger”) and the assumption of all liabilities of EAG by the Company be, and it hereby is, adopted and approved;

RESOLVED FURTHER, that the Agreement and Plan of Merger in the form attached as Exhibit A hereto be, and it hereby is, authorized and approved, with such additional changes as the officers of the Company deem in their sole discretion to be necessary and appropriate;

RESOLVED FURTHER, that the Certificate of Ownership and Merger in the form attached as Exhibit B hereto be, and it hereby is, authorized and approved, with such additional changes as the officers of the Company deem in their sole discretion to be necessary and appropriate;

RESOLVED FURTHER, that the Articles of Merger in the form attached as Exhibit C hereto be, and they hereby are, authorized and approved, with such additional changes as the officers of the Company deem in their sole discretion to be necessary and appropriate; and

RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions, including, but not limited to, providing notification of the EAG Merger to any appropriate governmental or regulatory agencies, and filing the Certificate of Ownership and Merger, the Articles of Merger, the Agreement and Plan of Merger, and any other forms and documents with such agencies as may be required or advisable by them or by law, and to obtain such consents from third parties and governmental or regulatory agencies as may be necessary or advisable to carry out the EAG Merger.

2. General Authority Conferred on Officers

RESOLVED, that the officers of the Company be, and they hereby are, authorized for and on behalf of the Company to take such actions and to execute and deliver such documents and papers as they deem necessary or advisable to effectuate the purposes of the foregoing resolutions and to consummate the transactions contemplated thereby.

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

/s/ Bradley S. Scott

Bradley S. Scott

/s/ William W. Liebeck

William W. Liebeck

2

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING ADBCO ACQUISITION CORP., A DELAWARE CORPORATION,

WITH AND INTO INSURANCE AUTO AUCTIONS CORP.,

A DELAWARE CORPORATION

Pursuant to Section 253 of the General Corporation Law of the State of Delaware, Insurance Auto Auctions Corp., a Delaware corporation (the “Company”), for the purpose of effecting the merger (the “Merger”) of ADBCO Acquisition Corp., a Delaware corporation (“ADBCO Acquisition Corp.”), with and into the Company, does hereby certify:

FIRST: That the Company is incorporated pursuant to the General Corporation Law of the State of Delaware.

SECOND: That the Company owns all of the outstanding shares of ADBCO Acquisition Corp.

THIRD: That attached as Exhibit A hereto are resolutions of the Board of Directors of the Parent Corporation, duly adopted by the unanimous written consent of the members thereof and dated as of December 31, 1996, approving the Merger and this Certificate of Ownership and Merger.

IN WITNESS WHEREOF, Insurance Auto Auctions Corp. has caused this certificate to be executed by Linda C. Larrabee, Senior Vice President and Secretary, this 31^st day of December, 1996.

INSURANCE AUTO AUCTIONS CORP. a Delaware corporation
By:	/s/ Linda C. Larrabee
	Linda C. Larrabee, Senior Vice President and Secretary

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:02 AM 01/02/1997

971000338 - 2362823

EXHIBIT A

ACTION BY WRITTEN CONSENT

OF THE BOARD OF DIRECTORS OF

INSURANCE AUTO AUCTIONS CORP.

a Delaware Corporation

The undersigned, constituting all of the members of the Board of Directors of Insurance Auto Auctions Corp., a Delaware corporation (the “Company”), pursuant to Section 141(f) of the Delaware General Corporation Law and the Company bylaws, hereby adopt the following resolutions by written consent effective December 31,1996:

1. Merger of ADBCO Acquisition Corp. with and into the Company

WHEREAS, the Company owns one hundred percent (100%) of the outstanding shares of ADBCO Acquisition Corp., a Delaware corporation (“ADBCO Acquisition Corp.”);

RESOLVED, that ADBCO Acquisition Corp. be merged with and into the Company pursuant to General Corporation Law Section 253;

RESOLVED FURTHER, that the officers of the Company and ADBCO Acquisition Corp. are authorized and directed to do all acts and to execute, verify and file all documents necessary to effectuate the Merger pursuant to General Corporation Law Section 253; and

RESOLVED FURTHER, that the Company assumes all liabilities of ADBCO Acquisition Corp.

2. Notices and Consents with Respect to the Merger

RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions, including, but not limited to providing notification of the Merger to any appropriate governmental or regulatory agencies, and filing any forms and documents with such agencies as may be required or advisable by them or by law, and to obtain such consents from third parties and governmental or regulatory agencies as may be necessary or advisable to carry out the Merger.

3. General Authority Conferred on Officers to Effectuate Resolutions

RESOLVED, that the officers of the Company be, and they hereby are, authorized for and on behalf of the Company to take such actions and to execute and deliver such documents and papers as they deem necessary or advisable to effectuate the purposes of the foregoing resolutions and to consummate the transactions contemplated thereby.

IN WITNESS WHEREOF, the undersigned have executed this Action by Written Consent as of 31^st day of December, 1996.

DIRECTORS:

/s/ James P. Alampi

James P. Alampi

/s/ Linda C. Larrabee

Linda C. Larrabee

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:03 AM 01/02/1997

971000339 - 2362823

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING INSURANCE AUTO AUCTIONS CO.,

A NORTH CAROLINA CORPORATION,

WITH AND INTO INSURANCE AUTO AUCTIONS CORP.,

A DELAWARE CORPORATION

Pursuant to Section 253 of the General Corporation Law of the State of Delaware, Insurance Auto Auctions Corp., a Delaware corporation (the “Parent Corporation”), for the purpose of effecting the merger (the “Merger”) of Insurance Auto Auctions Co., a North Carolina corporation and the wholly-owned subsidiary of the Parent Corporation (the “Subsidiary Corporation”), with and into the Parent Corporation, does hereby certify:

FIRST: That the Parent Corporation is incorporated and duly organized under the laws of the State of Delaware.

SECOND: That the Parent Corporation owns all of the outstanding shares of each class of the capital stock of the Subsidiary Corporation.

THIRD: That the laws of the jurisdiction of organization of the Parent Corporation permit the merger of a business corporation of that jurisdiction with a business corporation of another jurisdiction.

FOURTH: That the Parent Corporation hereby merges the Subsidiary Corporation into the Parent Corporation.

FIFTH: That attached at Exhibit A hereto are resolutions of the Board of Directors of the Parent Corporation, duly adopted by the unanimous written consent of the members thereof and dated as of December 31, 1996, approving the Merger and this Certificate of Ownership and Merger.

IN WITNESS WHEREOF, Parent Corporation has caused this certificate to be executed by Linda C. Larrabee, Senior Vice President and Secretary, this 31^st day of December, 1996.

INSURANCE AUTO AUCTIONS CORP.
a Delaware corporation
By:	/s/ Linda C. Larrabee
	Linda C. Larrabee,
	Senior Vice President and Secretary

EXHIBIT A

ACTION BY WRITTEN CONSENT

OF THE BOARD OF DIRECTORS OF

INSURANCE AUTO AUCTIONS CORP.

A DELAWARE CORPORATION

The undersigned, constituting all of the members of the Board of Directors of Insurance Auto Auctions Corp., a Delaware corporation (the “Company”), pursuant to Section 141(f) of the Delaware General Corporation Law and the Company bylaws, hereby adopt the following resolutions by written consent effective December 31, 1996:

1. Merger of Insurance Auto Auctions Co. with and into the Company

WHEREAS, the Company owns one hundred percent (100%) of the outstanding shares of Insurance Auto Auctions Co., a North Carolina corporation (“Insurance Auto Auctions Co.”);

RESOLVED, that the Plan of Merger (the “Merger”) is hereby approved and adopted;

RESOLVED FURTHER, that Insurance Auto Auctions Co. be merged with and into the Company pursuant to General Corporation Law Section 253;

RESOLVED FURTHER, that the officers of the Company and Insurance Auto Auctions Co. are authorized and directed to do all acts and to execute, verify and file all documents necessary to effectuate the Merger pursuant to General Corporation Law Section 253; and

RESOLVED FURTHER, that the Company assumes all liabilities of Insurance Auto Auctions Co.

2. Notices and Consents with Respect to the Merger

RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions, including, but not limited to providing notification of the Merger to any appropriate governmental or regulatory agencies, and filing any forms and documents with such agencies as may be required or advisable by them or by law, and to obtain such consents from third parties and governmental or regulatory agencies as may be necessary or advisable to carry out the Merger.

3. General Authority Conferred on Officers to Effectuate Resolutions

RESOLVED, that the officers of the Company be, and they hereby are, authorized for and on behalf of the Company to take such actions and to execute and deliver such documents and papers as they deem necessary or advisable to effectuate the

purposes of the foregoing resolutions and to consummate the transactions contemplated thereby.

IN WITNESS WHEREOF, the undersigned have executed this Action by Written Consent as of the 31^st day of December, 1996.

DIRECTORS:

/s/ James P. Alampi

James P. Alampi

/s/ Linda C. Larrabee

Linda C. Larrabee

EX-3.4

Exhibit 3.4

Bylaws

of

Insurance Auto Auctions Corp.

f/k/a TAP Acquisition Corp.

BYLAWS

OF

TAP ACQUISITION CORP.

ARTICLE I

OFFICES

Section 1. The registered office shall be in the City of Wilmington, County of Kent, State of Delaware.

Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. All meetings of the stockholders for the election of directors shall be held in the City of Wilmington, State of Delaware or the City of North Hollywood, State of California, at such place as may be fixed from time to time by the Board of Directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Annual meetings of stockholders, commencing with the year 1994, shall be held at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not fewer than ten (10) nor more than sixty (60) days before the date of the meeting.

Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning

2.

a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 8. The holders of fifty percent (50%) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

3.

Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 10. Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 11. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action

4.

without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

Section 1. The number of directors which shall constitute the whole board shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.

Section 2. Vacancies and new created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office.

5.

Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4. The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5. The first meeting of each newly elected Board of Directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected Board of Directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 7. Special meetings of the board may be called by the president on two (2) days’ notice to each director by mail or forty-eight (48) hours notice to each director either personally or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director, in which case special meetings shall be called by the

6.

president or secretary in like manner and on like notice on the written request of the sole director.

Section 8. At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9. Unless otherwise restricted by the certificate of incorporation of these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 10. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 11. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one

7.

or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence of disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

Section 12. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

8.

COMPENSATION OF DIRECTORS

Section 13. Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 14. Unless otherwise restricted by the certificate of incorporation or bylaw, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

ARTICLE IV

NOTICES

Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram.

9.

Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

Section 1. The officers of the corporation shall be chosen by the Board of Directors and shall be a president, treasurer and a secretary. The Board of Directors may elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one or more vice-presidents, assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide.

Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a president, a treasurer, and a secretary and may choose vice presidents.

Section 3. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

Section 4. The salaries of all officers and agents of the corporation shall be fixed by the Board of Directors.

Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board

10.

of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

THE CHAIRMAN OF THE BOARD

Section 6. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

Section 7. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board and as may be provided by law.

THE PRESIDENT AND VICE-PRESIDENTS

Section 8. The president shall be the chief executive officer of the corporation; and in the absence of the Chairman and Vice Chairman of the Board he shall preside at all meetings of the stockholders and the Board of Directors; he shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.

Section 9. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

11.

Section 10. In the absence of the president or in the event of his inability or refusal to act, the vice-president, if any, (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 11. The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.

Section 12. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or

12.

in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 13. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors.

Section 14. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 15. If required by the Board of Directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

Section 16. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the Board of Directors (or if there be no

13.

such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

ARTICLE VI

CERTIFICATE OF STOCK

Section 1. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the Board of Directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation.

Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the

14.

corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2. Any of or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

LOST CERTIFICATES

Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

15.

TRANSFER OF STOCK

Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

FIXING RECORD DATE

Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

REGISTERED STOCKHOLDERS

Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to

16.

or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

GENERAL PROVISIONS

DIVIDENDS

Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

CHECKS

Section 3. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

17.

FISCAL YEAR

Section 4. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

SEAL

Section 5. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

INDEMNIFICATION

Section 6. The corporation shall, to the fullest extent authorized under the laws of the State of Delaware, as those laws may be amended and supplemented from time to time, indemnify any director made, or threatened to be made, a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of being a director of the corporation or a predecessor corporation or, at the corporation’s request, a director or officer of another corporation, provided, however, that the corporation shall indemnify any such agent in connection with a proceeding initiated by such agent only if such proceeding was authorized by the Board of Directors of the corporation. The indemnification provided for in this Section 6 shall: (i) not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) continue as to a person who has ceased to be a director, and (iii) inure to the benefit of the heirs, executors and administrators of such a person. The corporation’s obligation to provide

18.

indemnification under this Section 6 shall be offset to the extent of any other source of indemnification or any otherwise applicable insurance coverage under a policy maintained by the corporation or any other person.

Expenses incurred by a director of the corporation in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director of the corporation (or was serving at the corporation’s request as a director or officer of another corporation) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized by relevant sections of the General Corporation Law of Delaware. Notwithstanding the foregoing, the corporation shall not be required to advance such expenses to an agent who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors of the corporation which alleges willful misappropriation of corporate assets by such agent, disclosure of confidential information in violation of such agent’s fiduciary or contractual obligations to the corporation or any other willful and deliberate breach in bad faith of such agent’s duty to the corporation or its stockholders.

The foregoing provisions of this Section 6 shall be deemed to be a contract between the corporation and each director who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.

19.

The Board of Directors in its discretion shall have power on behalf of the corporation to indemnify any person, other than a director, made a party to any action, suit or proceeding by reason of the fact that he, his testator or intestate, is or was an officer or employee of the corporation.

To assure indemnification under this Section 6 of all directors, officers and employees who are determined by the corporation or otherwise to be or to have been “fiduciaries” of any employee benefit plan of the corporation which may exist from time to time, Section 145 of the General Corporation Law of Delaware shall, for the purposes of this Section 6, be interpreted as follows: an “other enterprise” shall be deemed to include such an employee benefit plan, including without limitation, any plan of the corporation which is governed by the Act of Congress entitled “Employee Retirement Income Security Act of 1974,” as amended from time to time; the corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed “fines.”

ARTICLE VIII

AMENDMENTS

Section 1. These bylaws may be altered, amended or repealed or new bylaws may be adopted by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the certificate of incorporation at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the

20.

stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal bylaws is conferred upon the Board of Directors by the certificate or incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal bylaws.

21.

CERTIFICATE OF SECRETARY OF

TAP ACQUISITION CORP.

The undersigned, William W. Liebeck, hereby certifies that he is the duly elected and acting Secretary of TAP Acquisition Corp., a Delaware corporation (the “Corporation”), and that the Bylaws attached hereto constitute the Bylaws of said Corporation as duly adopted by Unanimous Written Consent of the Board of Directors on December     , 1993.

IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name this      day of December, 1993.

William W. Liebeck,

Secretary

EX-3.5

Exhibit 3.5

File Number 6048-171-7

State of Illinois

Office of

The Secretary of State

Whereas, ARTICLES OF INCORPORATION OF IAA SERVICES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS, IN FORCE JULY 1, A.D. -1984.

Now Therefore, I, Jesse White, Secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation.

In Testimony Whereof, I hereto set my hand and cause to be affixed the Great Seal of the State of Illinois, at the City of Springfield, this 5th day of May A.D. 1999 and of the Independence of the United States the two hundred and 23rd.

Secretary of State

Form BCA-2.10	ARTICLES OF INCORPORATION
(Rev. Jan. 1999)	This space for use by Secretary of State	SUBMIT IN DUPLICATE!
Jesse White Secretary of State Department of Business Services Springfield, IL 62756 http://www.sos.state.il.us
		This space for use by Secretary of State
		Date 5-5-99
Payment must be made by certified check, cashier’s check, Illinois attorney’s check, Illinois C.P.A’s check or money order, payable to “Secretary of State.”		Franchise Tax  $ 25.00 Filing Fee          $ 75.00                             100.00 Approved: /s/ Illegible

1.	CORPORATE NAME:	IAA SERVICES, INC.
	(The corporate name must contain the word “corporation”, “company,” “incorporated,” “limited” or an abbreviation thereof.)
2.	Initial Registered Agent:	Illinois Corporation Service Company
		First Name	Middle Initial	Last Name
	Initial Registered Office:	700 south second street
		Number	Street	Suite #
		Springfield	IL Sangamon	62704
		City	County	Zip Code

3.	Purpose or purposes for which the corporation is organized:
	(If not sufficient space to cover this point, add one or more sheets of this size.)
	To transact any or all lawful businesses for which corporations may be incorporated under the Business Corporation Act of 1983, as amended.
4.	Paragraph 1: Authorized Shares, Issued Shares and Consideration Received:

Class	Par Value per Share		Number of Shares Authorized	Number of Shares Proposed to be Issued	Consideration to be Received Therefor
Common	$	.01	1,000	100	$	100
				TOTAL = $100

Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the share of each class are:

(If not sufficient space to cover this point, add one or more sheets of this size.)

(over)

5.	OPTIONAL:	(a)	Number of directors constituting the initial board of directors of the corporation: N/A
		(b)	Names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualify:
			Name	Residential Address	City, State, ZIP
			_________	____________________________	________________________
			_________	____________________________	________________________
			_________	____________________________	________________________
6.	OPTIONAL:	(a)	It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be:		$ N/A
		(b)	It is estimated that the value of the property to be located within the State of Illinois during the following year will be:		$ N/A
		(c)	It is estimated that the gross amount of business that will be transacted by the corporation during the following year will be:		$ N/A
		(d)	It is estimated that the gross amount of business that will be transacted from places of business in the State of Illinois during the following year will be:		$ N/A
7.	OPTIONAL:	OTHER PROVISIONS
		Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing a duration other than perpetual, etc.
8.		NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)

The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true.

Dated	4/13	, 99
	(Month & Day)	Year

	Signature and Name		Address
1.	/s/ Carolyn M. Perry	1.	c/o Schiff Hardin & Waite, 6600 Sears Tower
	Signature		Street
	Carolyn M. Perry		Chicago             Illinois            60606
	(Type or Print Name)		City/Town            State            ZIP Code
2.		2.
	Signature		Street
	(Type or Print Name)		City/Town            State            ZIP Code
3.		3.
	Signature		Street
	(Type or Print Name)		City/Town            State            ZIP Code

(Signatures must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be used on conformed copies.)

NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

• The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in this state, with a minimum of $25.

• The filing fee is $75.

• The minimum total due (franchise tax + filing fee) is $100.

(Applies when the Consideration to be Received as set forth in Item 4 does not exceed $16,667)

• The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary.

Illinois Secretary of State	Springfield, IL 62756
Department of Business Services	Telephone (217) 782-9522 or 782-9523

ARTICLE 7

A. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS. The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was a director or officer of the Corporation, or who is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The Corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was an employee or agent of the Corporation, or who is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person, acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful.

B. LIMITATION OF LIABILITY OF DIRECTORS. The liability of the directors of the Corporation for monetary damages shall be eliminated to the fullest extent permissible under Illinois law.

C. NO CUMULATIVE VOTING. In all elections for directors, cumulative voting by the shareholders is hereby denied under all circumstances.

EX-3.6

Exhibit 3.6

BY-LAWS

OF

IAA SERVICES, INC.

ARTICLE 1

OFFICES; REGISTERED AGENT

§ 1.1 REGISTERED OFFICE AND AGENT. The corporation shall maintain in the State of Illinois a registered office and a registered agent whose business office is the registered office.

§ 1.2 PRINCIPAL BUSINESS OFFICE. The corporation shall have its principal business office at such location within or without the State of Illinois as the board of directors may from time to time determine.

ARTICLE 2

SHAREHOLDERS

§ 2.1 ANNUAL MEETING. The annual meeting of the shareholders shall be held for the purpose of electing directors and for the transaction of such other business as may come before the meeting on the last Wednesday in April each year, at the hour of 10:00 a.m. or, if this date in any year shall be a legal holiday, then the meeting shall be held on the next succeeding business day, provided, however, that the board of directors may, by resolution adopted before notice of the meeting is given to the shareholders, fix a different date and/or time for holding any annual meeting.

§ 2.2 SPECIAL MEETINGS. Special meetings of the shareholders may be called by the president, by the board of directors or by the holders of not less than one-fifth of all the outstanding shares of the corporation entitled to vote on the matter for which the meeting is called.

§ 2.3 PLACE OF MEETING. The board of directors may designate any place, either within or without the State of Illinois, as the place for any annual meeting or for any special meeting called by the board of directors, but if no designation is made, or If a special meeting be otherwise called, the place of meeting shall be the principal business office of the corporation; provided, however, that for any meeting of the shareholders for which a waiver of notice designating a place is signed by all of the shareholders, then that shall be the place for the holding of such meeting.

§ 2.4 NOTICE OF MEETINGS. Written notice stating the place, date and hour of the meeting of the shareholders and, in the case of a special meeting, the purpose or purposes for which the meeting is called, either shall be delivered personally or mailed to each shareholder of record entitled to vote at the meeting, not less than 10 nor more than 60 days before the date of the meeting, or, in the case of a meeting called for the purpose of acting upon a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than 20 nor more than 60 days before the meeting, by or at the direction of the president, the secretary, or other persons calling the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the shareholder at his or her address as it appears on the records of the corporation, with postage thereon prepaid.

§ 2.5 WAIVER OF NOTICE. A waiver of notice in writing signed by a shareholder entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to giving notice to such shareholder. Attendance at any meeting shall constitute waiver of notice thereof unless the person so attending objects to the holding of the meeting because proper notice was not given.

§ 2.6 FIXING OF RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of the shareholders, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or in order to make a determination of shareholders for any other proper purpose, the board of directors may fix in advance a record date for any such determination of shareholders, which shall be not more than 60 days and, for a meeting of shareholders, not less than 10 days, or in the case of a meeting called for the purpose of acting upon a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets, not less than 20 days, before the date of the event for which the determination is required. If no record date is fixed as aforesaid, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the date on which notice of the meeting is mailed and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts resolution(s) relating thereto. A determination of shareholders entitled to vote at any meeting of the shareholders shall apply to any adjournment of the meeting.

§ 2.7 VOTING LISTS. The officer or agent having charge of the share transfer books of the corporation shall make, within 20 days after the record date for a meeting of shareholders or 10 days before such meeting, whichever is earlier, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares held by each, which list shall be kept on file at the registered office of the corporation and shall be subject to inspection by any shareholder, and to copying at the shareholder’s expense, at any time during usual business hours for a period of 10 days prior to each meeting of the shareholders. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to inspection by any shareholder during the whole time of the meeting. The original share ledger or transfer books, or a duplicate thereof kept in the State of Illinois, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer books or to vote at any meeting of the shareholders.

§ 2.8 QUORUM AND VOTE REQUIRED FOR ACTION. The holders of outstanding shares having a majority of the total votes which all of the outstanding shares of the corporation would be entitled to cast on a matter at the meeting, present in person or by proxy, shall constitute a quorum for consideration of such matter at any meeting of the shareholders; provided that if a quorum is not present at said meeting, then the holders who are present in person or by proxy may by majority vote adjourn the meeting from time to time without further notice. If a quorum is present at any meeting of the shareholders, the affirmative vote of the majority of the votes entitled to be cast on a matter by holders of shares who are present in person or by proxy shall be the act of the shareholders, unless the Illinois Business Corporation Act of 1983 as amended or the articles of incorporation of the corporation require a different number of votes. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of shareholders from any meeting shall not cause failure of a duly constituted quorum at that meeting.

§ 2.9 PROXIES. Each shareholder entitled to vote at a meeting of the shareholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Such proxy shall be in writing delivered to the person so appointed and shall be filed with the secretary of the corporation before or at the time of the meeting or the giving of such written consent, as the case may be.

§ 2.10 VOTING OF SHARES. Subject to the provisions of Section 2.13, each outstanding share, regardless of class, shall be entitled to one vote upon each matter submitted to a vote of the shareholders.

§ 2.11 VOTING OF SHARES BY CERTAIN HOLDERS.

(a) Shares registered in the name of another corporation, domestic or foreign, may be voted by any officer, agent, proxy or other legal representative authorized to vote such shares under the law of incorporation of such corporation. The corporation may treat the president or other person holding the position of chief executive officer of such other corporation as authorized to vote such shares, together with any other person indicated and any other holder of an office indicated by the corporate shareholder to the corporation as a person or an office authorized to vote such shares. Such persons and offices indicated shall be registered by the corporation on the transfer books for shares and included in any voting list prepared in accordance with these by-laws.

(b) Shares registered in the name of a deceased person, a minor ward or a person under legal disability may be voted by his or her administrator, executor or court appointed guardian, either in person or by proxy without a transfer of such shares into the name of such administrator, executor or court appointed guardian. Shares registered in the name of a trustee may be voted by him or her, either in person or by proxy.

(c) Shares registered in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his or her name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed.

(d) A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.

(e) Shares of a corporation belonging to the corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares entitled to vote at any given time, but shares of the corporation held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares entitled to vote at any given time.

§ 2.12 INSPECTORS. At any meeting of the shareholders, the presiding officer may, or upon the request of any shareholder shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the shareholders. Each report of an inspector shall be in writing and signed by him or her or a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

§ 2.13 VOTING BY BALLOT. Voting on any question shall be by ballot when so requested by any shareholder or directed by the presiding officer.

§ 2.14 INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided in the articles of incorporation of the corporation, any action required to be taken at any annual or special meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting

forth the action so taken, shall be signed (i) by all of the shareholders entitled to vote with respect to the subject matter thereof, or (ii) by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting. Any consent may be signed in counterparts with the same force and effect as if all the shareholders so signing had signed the same copy. If the consent is signed by less than all of the shareholders entitled to vote, then it shall become effective only if at least five (5) days prior to the execution of the consent a notice in writing is delivered to all the shareholders entitled to vote with respect to the subject matter thereof and, after the effective date of the consent, prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be delivered in writing to those shareholders who have not consented in writing.

ARTICLE 3

DIRECTORS

§3.1 GENERAL POWERS. The business and affairs of the corporation shall be managed by or under the direction of the board of directors.

§ 3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be not less than three nor more than eight. The term of office of each director shall be until the next annual election of the shareholders or until his or her successor shall have been elected and qualified. Directors need not be residents of the State of Illinois or shareholders of the corporation.

§ 3.3 REGULAR MEETINGS. A regular meeting of the board of directors shall be held, without other notice than this by-law, immediately after, and at the same place as, the annual meeting of the shareholders. The board of directors may provide, by resolution, the time and place, either within or without the State of Illinois, for the holding of additional regular meetings without other notice than such resolution.

§ 3.4 SPECIAL MEETINGS. Special meetings of the board of directors may be called by or at the request of the president or any two directors. The person or persons authorized to call special meetings of the board of directors may fix any place, either within or without the State of Illinois, as the place for holding any special meeting of the board of directors called by them.

§ 3.5 NOTICE AND WAIVER. Notice of any special meeting shall be given at least              days prior thereto by written notice to each director at his or her business address or such other address as he or she may have advised the secretary of the corporation to use for such purpose. If delivered, such notice shall be deemed to be given when delivered. If mailed, such notice shall be deemed to be given two business days after deposit in the United States mail so addressed, with postage thereon prepaid, and if given by telegraph such notice shall be deemed to be given the next business day following the day the telegram is given to the telegraph company. A waiver of notice in writing signed by the director entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any meeting shall constitute waiver of notice thereof unless the person attends the meeting for the express purpose of objecting to the transacting of business at the meeting because proper notice was not given. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

§3.6 QUORUM. A majority of the number of directors fixed by these by-laws shall constitute a quorum for the transaction of business at any meeting of the board of directors, unless a greater number is specified by the articles of incorporation of the corporation or these by-laws; provided, that if a quorum is not present, then a majority of the directors present at said meeting

may adjourn the meeting from time to time without further notice than announcement at the meeting.

§ 3.7 MANNER OF ACTING. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the act of a greater number is required by the articles of incorporation of the corporation or these by-laws.

§ 3.8 ATTENDANCE BY CONFERENCE TELEPHONE. Members of the board of directors may participate in and act at any meeting of such board through use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting by such means shall constitute attendance and presence in person at the meeting of the person or persons so participating for all purposes including fulfilling the requirements of sections 3.6 and 3.7.

§ 3.9 VACANCIES. Any vacancy occurring in the board of directors, and any directorship to be filled by reason of an increase in the number of directors, may be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose; provided, however, that the board of directors may. fill vacancies arising between meetings of shareholders for any reason, including vacancies due to an increase in the number of directors.

§ 3.10 INFORMAL ACTION BY DIRECTORS. Any action required to be taken at a meeting of the board of directors, or any other action which may be taken at a meeting of the board of directors may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors. Any consent may be signed in counterparts with the same force and effect as if all directors had signed the same copy. All signed copies of any such written consent shall be delivered to the secretary to be filed in the corporate records. The action taken shall be effective when all the directors have signed the consent unless the consent specifies a different effective date. Any such consent signed by all of the directors shall have the same effect as a unanimous vote.

§ 3.11 COMPENSATION. The board of directors, by the affirmative vote of a majority of directors then in office, and irrespective of any personal interest of any of its members, shall have authority to establish reasonable compensation of all directors for services to the corporation as directors, officers or otherwise, and to authorize the payment of the directors’ expenses, if any, of attendance at each meeting of the board in addition to such compensation.

§ 3.12 PRESUMPTION OF ASSENT. A director who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be conclusively presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the meeting or unless he or she shall file his or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the secretary of the corporation Immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

§ 3.13 COMMITTEES. A majority of the directors may create one or more committees and appoint members of the board to serve on the committee or committees. Each committee shall have two or more members, who serve at the pleasure of the board of directors. Members of any committee of the board of directors may participate in and act at any meeting of such committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting by such means shall constitute attendance and presence in person at the meeting of the person or persons so participating for all purposes. Unless in its appointment the board of directors decides otherwise, a majority of any committee shall constitute a quorum and a majority of a quorum shall be necessary for committee action. A committee may act by unanimous consent in writing without a meeting, and shall decide the time and place of its meetings and the notice therefor, unless the board of directors decides otherwise. To the extent specified by the board of

directors, a committee may exercise the power of the board, subject to such limitations as may be provided by law.

ARTICLE 4

OFFICERS

§ 4.1 NUMBER. The officers of the corporation shall be a president, a treasurer, and a secretary, and such number of vice presidents, assistant treasurers, assistant secretaries and other officers as may be elected by the board of directors. Any two or more offices may be held by the same person.

§ 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until one of the following first occurs: his or her successor shall have been duly elected and shall have qualified, until his or her death or resignation or until he or she shall have been removed in the manner hereinafter provided.

§ 4.3 REMOVAL. Any officer may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election of an officer shall not of itself create contract rights.

§ 4.4 PRESIDENT. The president shall be the chief executive officer of the corporation and, subject to the direction and control of the board of directors, he or she shall be in charge of the business of the corporation. In general, he or she shall discharge all duties incident to the chief executive office of the corporation and such other duties as may be prescribed by the board of directors from time to time. Without limiting the generality of the foregoing, the president shall see that the resolutions and directions of the board of directors are carried into effect except in those instances in which that responsibility is specifically assigned to some other person by the board of directors; he or she shall preside at all meetings of the shareholders and, if he or she is a director of the corporation, of the board of directors; and, except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors, he or she may execute for the corporation certificates for its shares (the issue of which shall have been authorized by the board of directors), and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized, and he or she may (without previous authorization by the board of directors) execute such contracts and other instruments as the conduct of the corporation’s business in its ordinary course requires, and he or she may accomplish such execution in each case either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument. Also, the president may vote all securities which the corporation is entitled to vote except as and to the extent such authority shall be vested in a different officer or agent of the corporation by the board of directors.

§ 4.5 THE VICE PRESIDENTS. The vice president (and, in the event that there is more than one vice president, each of the vice presidents) shall assist the president in the discharge of his or her duties as the president may direct and shall perform such other duties as from time to time may be assigned to him or her by the president or by the board of directors. In the absence of the president or in the event of his or her inability or refusal to act, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated by the board of directors, or by the president if the board of directors has not made such a

designation, or in the absence of any designation, then in the order of seniority of tenure as vice president) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the vice president (or each of them if there are more than one) may execute for the corporation certificates for its shares (the issue of which shall have been authorized by the board of directors), and any contracts, deeds, mortgages, bonds or other instruments which the board of directors has authorized, and he or she may (without previous authorization by the board of directors) execute such contracts and other instruments as the conduct of the corporation’s business in its ordinary course requires, and he or she may accomplish such execution in each case either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument.

§ 4.6 THE TREASURER. The treasurer shall be the principal accounting and financial officer of the corporation and as such shall perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him or her by the board of directors or the president. Without limiting the generality of the foregoing, he or she shall (a) have charge of and be responsible for the maintenance of adequate books of account for the corporation; and (b) have charge and custody of all funds and securities of the corporation, and be responsible therefor and for the receipt and disbursement thereof. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his or her duties in such sum and with such surety or sureties as the board of directors may determine.

§ 4.7 THE SECRETARY. The secretary shall perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him or her by the board of directors or president. Without limiting the generality of the foregoing, he or she shall (a) record the minutes of the meetings of the shareholders and the board of directors and will record or keep the minutes of all committees in one or more books provided for that purpose and shall include in such books the actions by written consent of the shareholders and the board of directors; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be the custodian of the corporate records and the seal of the corporation (if a seal has been authorized by the board of directors) and certify the by-laws, resolutions of the shareholders and board of directors and any committees of the board of directors and other documents of the corporation as being true and correct copies thereof; (d) keep a register of the post-office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) sign with the president, or a vice president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized, and he or she may (without previous authorization by the board of directors) sign with such other officers as aforesaid such contracts and other instruments as the conduct of the corporation’s business in its ordinary course requires, in each case according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors or these by-laws; and (f) have general charge of the stock transfer books of the corporation.

§ 4.8 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers and assistant secretaries shall perform such duties as shall be assigned to them by the treasurer, in the case of assistant treasurers, or the secretary, in the case of assistant secretaries, or by the president or the board of directors in either case. Each assistant secretary may sign with the president, or a vice president, or any other officer thereunto authorized by the board of directors, certificates for shares of the corporation, the issue of which shall have been authorized by the board of directors, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized, and may (without previous authorization by the board of directors) sign with such other officers as aforesaid such contracts and other instruments as the conduct of the corporation’s business in its ordinary course requires, in each

case according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the board of directors. The assistant treasurers shall, if required by the board of directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the board of directors shall determine.

§ 4.9 COMPENSATION. The officers’ compensation shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a director of the corporation.

ARTICLE 5

INDEMNIFICATION

§ 5.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The corporation shall, to the fullest extent to which it is empowered to do so by the Illinois Business Corporation Act of 1983 as amended or any other applicable laws as may from time to time be in effect, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

§ 5.2 CONTRACT WITH THE CORPORATION. The provisions of this Article 5 shall be deemed to be a contract between the corporation and each director or officer who serves in any such capacity at any time while this Article is in effect, and any repeal or modification of this Article 5 shall not affect any rights or obligations hereunder with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.

§ 5.3 INDEMNIFICATION OF EMPLOYEES AND AGENTS. Persons who are not covered by the foregoing provisions of this Article 5 and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors; provided, however, that to the extent that such employee or agent has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding to which he or she was made a party by reason of the fact that he or she is or was an employee or agent acting in the above-described capacity, or in defense of any claim, issue or matter therein, the corporation shall indemnify such employee or agent against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

§ 5.4 ADVANCEMENT OF EXPENSES. The corporation shall pay expenses incurred by any officer or director, and may pay expenses incurred by any employee or agent, in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation as authorized by these by-laws or by the Illinois Business Corporation Act of 1983 as amended.

§ 5.5 OTHER RIGHTS OF INDEMNIFICATION. The indemnification or advancement of expenses provided or permitted by this Article 5 shall not be deemed exclusive of any other rights to which those indemnified may be entitled by law or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

ARTICLE 6

CONTRACTS, LOANS, CHECKS AND DEPOSITS

§ 6.1 CONTRACTS. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; provided, however, that this Section 6.1 shall not be a limitation on the powers of office granted under Article 4 of these by-laws.

§ 6.2 LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by the board of directors or a duly authorized committee thereof. Such authority may be general or confined to specific instances.

§ 6.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by the board of directors or by an officer or officers of the corporation designated by the board of directors to make such determination.

§ 6.4 DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the board of directors or such officer or officers designated by the board of directors may select.

ARTICLE 7

CERTIFICATES FOR SHARES AND THEIR TRANSFER

§ 7.1 CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be signed by the president or a vice president and by the treasurer or an assistant treasurer or the secretary or an assistant secretary and, if the corporation has a corporate seal, may be sealed with such seal or a facsimile thereof. All certificates for shares shall be consecutively numbered or otherwise identified and shall state the name of the person to whom the shares represented thereby are issued, the number and class of shares, with designation of series, if any, the date of issue, the fact that the corporation is organized under Illinois law, and such other information or statement as may be required by law. The name and address of each shareholder, the number of shares held and the date on which the certificates for the shares were issued shall be entered on the stock transfer books of the corporation. The person in whose name shares are registered on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation.

§ 7.2 TRANSFERS OF SHARES; LOST CERTIFICATES. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment, or other authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books, provided that the corporation or a transfer agent of the corporation shall not have received a notification of adverse interest and that the new reference system of the Illinois Revised Statutes have been met. No new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost or destroyed certificate, or one so mutilated that it cannot be identified, a new one may be issued therefor upon such terms and indemnity to the corporation as the board of directors may prescribe.

ARTICLE 8

FISCAL YEAR

The fiscal year of the corporation shall be as fixed from time to time by resolution of the board of directors.

ARTICLE 9

DIVIDENDS

The board of directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the articles of incorporation of the corporation.

ARTICLE 10

SEAL

The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words “Corporate Seal, Illinois.” The corporate seal may be used by causing it or a facsimile thereof to be impressed, affixed or in any manner reproduced.

ARTICLE 11

AMENDMENTS

These by-laws may be altered, amended or repealed and new by-laws may be adopted by the board of directors of the corporation or by the shareholders of the corporation entitled to vote thereon.

EX-3.7

EXHIBIT 3.7

PAGE 1

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE TRUE AND CORRECT COPIES OF ALL DOCUMENTS ON FILE OF “IAA ACQUISITION CORP.” AS RECEIVED AND FILED IN THIS OFFICE.

THE FOLLOWING DOCUMENTS HAVE BEEN CERTIFIED:

CERTIFICATE OF INCORPORATION, FILED THE SIXTH DAY OF MARCH, A.D. 2000, AT 9 O’CLOCK A.M.

AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.

3188340 8100H 050634467 /s/ Harriet Smith Windsor Harriet Smith Windsor, Secretary of State AUTHENTICATION: 4062839 DATE: 08-02-05

STATE OF DELAWARE

SECRETARY OF STATE

DIVISION OF CORPORATIONS

FILED 09:00 AM 03/06/2000

001111546 – 3188340

CERTIFICATE OF INCORPORATION

OF

IAA ACQUISITION CORP.

FIRST: The name of the corporation is IAA Acquisition Corp. (the “Corporation”).

SECOND: The address of the Corporation’s registered office in the State of Delaware is 9 E. Loockerman Street, Dover, Delaware 19901 in the county of Kent. The name of the Corporation’s registered agent is National Registered Agents, Inc.

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware (the “GCL”).

FOURTH: The total number of shares of capital stock which the Corporation shall have authority to issue is 1,000 shares of common stock, par value $.01 per share.

FIFTH: The name and mailing address of the Corporation’s incorporator is:

Name	Mailing Address
Suzanne M. Hoffman	c/o Katten Muchin Zavis 525 West Monroe Street Suite 1600 Chicago, Illinois 60661-3693

SIXTH: The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the by-laws of the Corporation (the “By-Laws”).

SEVENTH: Elections of directors need not be by written ballot unless otherwise provided in the By-Laws.

EIGHTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the GCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the

-2-

provisions of Section 279 of Title 8 of the GCL order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on this Corporation.

NINTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the GCL.

TENTH: The Corporation shall indemnify each director, officer, trustee, employee or agent of the Corporation and each person who is or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise in the manner and to the fullest extent provided in Section 145 of the GCL as the same now exists or may hereafter be amended.

The undersigned incorporator hereby acknowledges that the foregoing certificate of incorporation is such incorporator’s act and deed and that the facts stated therein are true.

Dated: March 6, 2000

/s/ Suzanne M. Hoffman

Suzanne M. Hoffman, Incorporator

c/o Katten Muchin Zavis

525 West Monroe Street

Suite 1600

Chicago, Illinois 60661-3693

-3-

EX-3.8

Exhibit 3.8

BY-LAWS

OF

IAA ACQUISITION CORP.

ARTICLE I

OFFICES

SECTION 1. The registered office of the Corporation shall be in the City of Dover, County of Kent, State of Delaware. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

Stockholders

SECTION 2.1. Annual Meeting. An annual meeting of the stockholders shall be held on the third Thursday in February of each year, or on such other date as may be determined by resolution of the Board of Directors; provided, however, that if in any year such date is a legal holiday, such meeting shall be held on the next succeeding business day. At each annual meeting, the stockholders shall elect directors to hold office for the term provided in Section 3.1 of these By-laws.

SECTION 2.2. Special Meeting. A special meeting of the stockholders may be called by the Chairman of the Board, the Chief Executive Officer of the Corporation, the Board of Directors, or by such other officers or persons as the Board of Directors may designate. Special meetings may also be called by the holders of not less than one-fifth of all of the outstanding shares entitled to vote on the matter for which the meeting is called.

SECTION 2.3. Place of Stockholder Meetings. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting. If no such place is designated by the Board of Directors, the place of meeting will be the principal business office of the Corporation.

SECTION 2.4. Notice of Meetings. Unless waived as herein provided, whenever stockholders are required or permitted to take any action at a meeting, written notice of the meeting shall be given stating the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Such written notice shall be given not less than ten (10) days nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at the meeting or in the event of a merger, consolidation, share

exchange, dissolution or sale, lease or exchange of all or substantially all of the Corporation’s property, business or assets not less than twenty (20) days before the date of the meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at the stockholder’s address as it appears on the records of the Corporation.

When a meeting is adjourned to another time or place in accordance with Section 2.5 of these By-laws, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting in which the adjournment is taken. At the adjourned meeting the Corporation may conduct any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting; a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

SECTION 2.5. Quorum and Adjourned Meetings. Unless otherwise provided by law or the Corporation’s Certificate of Incorporation, a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the shares entitled to vote at a meeting of stockholders is present in person or represented by proxy at such meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting. The stockholders present at a meeting may continue to transact business until adjournment, notwithstanding the withdrawal of such number of stockholders as may leave less than a quorum.

SECTION 2.6. Fixing of Record Date. (a) For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b) For the purpose of determining stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is established by the Board of Directors, and which date shall not be more than ten (10) days after the date on which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth

-2-

the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal office, or an officer or agent of the Corporation having custody of the book in which the proceedings of meetings of stockholders are recorded. Delivery to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders’ consent to corporate action in writing without a meeting shall be the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c) For the purpose of determining the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect to any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix the record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining the stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

SECTION 2.7. Voting List. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

SECTION 2.8. Voting. Unless otherwise provided by the Certificate of Incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by each stockholder. In all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Directors shall be elected by plurality of the votes of the shares present in person or represented by a proxy at the meeting entitled to vote on the election of directors.

SECTION 2.9. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may

-3-

remain irrevocable regardless of whether the interest with which it is coupled is as interest in the stock itself or an interest in the Corporation generally.

SECTION 2.10. Ratification of Acts of Directors and Officers. Except as otherwise provided by law or by the Certificate of Incorporation of the Corporation, any transaction or contract or act of the Corporation or of the directors or the officers of the Corporation may be ratified by the affirmative vote of the holders of the number of shares which would have been necessary to approve such transaction, contract or act at a meeting of stockholders, or by the written consent of stockholders in lieu of a meeting.

SECTION 2.11. Informal Action of Stockholders. Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. In the event that the action which is consented to is such as would have required the filing of a certificate with any governmental body, if such action had been voted on by stockholders at a meeting thereof, the certificate filed shall state, in lieu of any statement required by law concerning any vote of stockholders, that written consent had been given in accordance with the provisions of Section 228 of the Delaware General Corporation Law, and that written notice has been given as provided in such section.

SECTION 2.12. Organization. Such person as the Board of Directors may designate or, in the absence of such a designation, the Chairman of the Board or, in his or her absence, the Chief Executive Officer of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of such meeting. In the absence of the secretary of the Corporation, the chairman of the meeting shall appoint a person to serve as secretary at the meeting.

ARTICLE III

DIRECTORS

SECTION 3.1. Number and Tenure of Directors. The initial Board of Directors shall consist of three (3) members. On a going forward basis, the Board of Directors of the Corporation shall consist of not less than one (1) nor more than five (5) members as fixed from time to time, by the directors or the stockholders without further amendment to this Section, but no decrease shall have the effect of shortening the term of any incumbent director. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.9 of these By-laws. Each director shall hold office until such director’s successor is elected and

-4-

qualified or until such director’s earlier resignation or removal. Any director may resign at any time upon written notice to the Corporation.

SECTION 3.2. Election of Directors. Directors shall be elected at the annual meeting of stockholders. In all elections for directors, every stockholder shall have the right to vote the number of shares owned by such stockholder for each director to be elected, unless otherwise provided in the Certificate of Incorporation, as the same may be from time to time amended.

SECTION 3.3. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and in such place as shall from time to time be determined by the board.

SECTION 3.4. Annual Meetings. The first meeting of each newly elected Board of Directors shall be held at such time and in such place as shall be fixed by the vote of the stockholders at the annual meeting, and no notice of such meeting shall be necessary to the newly elected directors in order to legally constitute the meeting, provided that a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected Board of Directors, or in the event that such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver of notice signed by all of the directors.

SECTION 3.5. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, the President or at least one-third of the number of directors constituting the whole board. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Delaware, as the place for holding any special meeting of the Board of Directors called by them.

SECTION 3.6. Notice of Special Meetings of the Board of Directors. Notice of any special meeting of the Board of Directors shall be given at least two (2) days previous thereto by written notice to each director at his or her address. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail so addressed, with first-class postage thereon prepaid. If sent by any other means (including facsimile, courier, or express mail, etc.), such notice shall be deemed to be delivered when actually delivered to the home or business address of the director.

SECTION 3.7. Quorum. Unless otherwise provided by law or the Corporation’s Certificate of Incorporation, a majority of the total number of directors fixed by these By-laws, or in the absence of a By-Law which fixes the number of directors, the number stated in the Certificate of Incorporation or named by the incorporators or stockholders, shall constitute a quorum for the transaction of business. If less than a majority of the directors are present at a meeting of the Board of Directors, a majority of the directors present may adjourn the meeting from time to time without further notice.

-5-

SECTION 3.8. Voting. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the Delaware General Corporation Law or the Certificate of Incorporation requires a vote of a greater number.

SECTION 3.9. Vacancies. Vacancies in the Board of Directors shall be filled by an election either at an annual meeting or at a special meeting of the stockholders called for that purpose. Any directors elected by the stockholders to fill a vacancy shall hold office for the balance of the term for which he or she was elected.

SECTION 3.10. Removal of Directors. A director, or the entire Board of Directors, may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.; provided, however, that if cumulative voting obtains and less than the entire Board of Directors is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors.

SECTION 3.11. Informal Action of Directors. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

SECTION 3.12. Participation by Conference Telephone. Members of the Board of Directors, or any committee designated by such board, may participate in a meeting of the Board of Directors, or committee thereof, by means of conference telephone or similar communications equipment as long as all persons participating in the meeting can speak with and hear each other, and participation by a director pursuant to this Section 3.12 shall constitute presence in person at such meeting.

ARTICLE IV

WAIVER OF NOTICE

SECTION 4.1. Written Waiver of Notice. A written waiver of any required notice, signed by the person entitled to notice, whether before or after the date stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of stockholders, directors or members of a committee of directors need be specified in any written waiver of notice.

SECTION 4.2. Attendance as Waiver of Notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, and objects at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

-6-

ARTICLE V

COMMITTEES

The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member at any meeting of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease, or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the By-laws of the Corporation; and, unless the resolution so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger, pursuant to Section 253 of the Delaware General Corporation Law.

ARTICLE VI

OFFICERS

SECTION 6.1. General Provisions. The Board of Directors shall elect a President and a Secretary of the Corporation. The Board of Directors may also elect a Chairman of the Board, one or more Vice Chairmen of the Board, a Chief Executive Officer, one or more Vice Presidents, a Treasurer, one or more Assistant Secretaries and Assistant Treasurers and such additional officers as the Board of Directors may deem necessary or appropriate from time to time. Any two or more offices may be held by the same person. The officers elected by the Board of Directors shall have such duties as are hereafter described and such additional duties as the Board of Directors may from time to time prescribe.

SECTION 6.2. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors at the regular meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as may be convenient. New offices of the Corporation may be created and filled and vacancies in offices may be filled at any time, at a meeting or by the written consent of the Board of Directors. Unless removed

-7-

pursuant to Section 6.3 of these By-laws, each officer shall hold office until his successor has been duly elected and qualified, or until his earlier death or resignation. Election or appointment of an officer or agent shall not of itself create contract rights.

SECTION 6.3. Removal of Officers. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person(s) so removed.

SECTION 6.4. The Chief Executive Officer. The Board of Directors shall designate whether the Chairman of the Board, if one shall have been chosen, or the president shall be the Chief Executive Officer of the Corporation. If a Chairman of the Board has not been chosen, or if one has been chosen but not designated Chief Executive Officer, then the President shall be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall be the principal executive officer of the Corporation and shall in general supervise and control all of the business and affairs of the Corporation, unless otherwise provided by the Board of Directors. The Chief Executive Officer shall preside at all meetings of the stockholders and of the Board of Directors and shall see that orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer may sign bonds, mortgages, certificates for shares and all other contracts and documents whether or not under the seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board of Directors or by these By-laws to some other officer or agent of the Corporation. The Chief Executive Officer shall have general powers of supervision and shall be the final arbiter of all differences between officers of the Corporation and his decision as to any matter affecting the Corporation shall be final and binding as between the officers of the Corporation subject only to the Board of Directors.

SECTION 6.5. The President. In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, if the Chairman of the Board has been designated Chief Executive Officer, the President shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. At all other times the President shall have the active management of the business of the Corporation under the general supervision of the Chief Executive Officer. The President shall have concurrent power with the Chief Executive Officer to sign bonds, mortgages, certificates for shares and other contracts and documents, whether or not under the seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board of Directors, or by these By-laws to some other officer or agent of the Corporation. In general, the President shall perform all duties incident to the office of president and such other duties as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.6. The Chairman of the Board. The Chairman of the Board, if one is chosen, shall be chosen from among the members of the board. If the Chairman of the Board has not been designated Chief Executive Officer, the Chairman of the Board shall perform

-8-

such duties as may be assigned to the Chairman of the Board by the Chief Executive Officer or by the Board of Directors.

SECTION 6.7. Vice Chairman of the Board. In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, if the Chairman of the Board has been designated Chief Executive Officer, the Vice Chairman, or if there be more than one, the Vice Chairmen, in the order determined by the Board of Directors, shall perform the duties of the Chief Executive Officer, and when so acting shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. At all other times, the Vice Chairman or Vice Chairmen shall perform such duties and have such powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.8. The Vice President. In the absence of the President or in the event of his inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Executive Vice President and then the other Vice President or Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.9. The Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision he shall be. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

SECTION 6.10. The Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.11. The Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be

-9-

designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond (which shall be renewed every six (6) years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

SECTION 6.12. The Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.13. Duties of Officers Mar be Delegated. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate the powers or duties, or any of such powers or duties, of any officers or officer to any other officer or to any director.

SECTION 6.14. Compensation. The Board of Directors shall have the authority to establish reasonable compensation of all officers for services to the Corporation.

ARTICLE VII

CERTIFICATES FOR SHARES

SECTION 7.1. Certificates of Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, Chief Executive Officer, or the President or Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be a facsimile.

SECTION 7.2. Signatures of Former Officer, Transfer Agent or Registrar. In case any officer, transfer agent, or registrar who has signed or whose facsimile

-10-

signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent or registrar at the date of issue.

SECTION 7.3. Transfer of Shares. Transfers of shares of the Corporation shall be made only on the books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of certificate for such shares. Prior to due presentment of a certificate for shares for registration of transfer, the Corporation may treat a registered owner of such shares as the person exclusively entitled to vote, to receive notifications and otherwise have and exercise all of the right and powers of an owner of shares.

SECTION 7.4. Lost, Destroyed or Stolen Certificates. Whenever a certificate representing shares of the Corporation has been lost, destroyed or stolen, the holder thereof may file in the office of the Corporation an affidavit setting forth, to the best of his knowledge and belief, the time, place, and circumstance of such loss, destruction or theft together with a statement of indemnity sufficient in the opinion of the Board of Directors to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate. Thereupon the Board may cause to be issued to such person of such person’s legal representative a new certificate or a duplicate of the certificate alleged to have been lost, destroyed or stolen. In the exercise of its discretion, the Board of Directors may waive the indemnification requirements provided herein.

ARTICLE VII

DIVIDENDS

The Board of Directors of the Corporation may declare and pay dividends upon the shares of the Corporation’s capital stock in any form determined by the Board of Directors, in the manner and upon the terms and conditions provided by law.

ARTICLE IX

CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 9.1. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

-11-

SECTION 9.2. Loans. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

SECTION 9.3. Checks. Drafts. Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by one or more officers or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

SECTION 9.4. Deposits. The funds of the Corporation may be deposited or invested in such bank account, in such investments or with such other depositories as determined by the Board of Directors.

ARTICLE X

AMENDMENTS

These By-laws may be adopted, amended or repealed by the Corporation’s stockholders or the Board of Directors, but no By-law adopted by the stockholders may be altered, amended or repealed by the Board of Directors.

ARTICLE XI

INDEMNIFICATION

SECTION 11.1. Right to Indemnity.

(a) The Corporation shall, to the fullest extent to which it is empowered to do so by the Delaware General Corporation Law, as amended (the “Code”), or any other applicable laws as may from time to time be in effect, indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was a director or officer of the Corporation, or who is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(b) The Corporation shall, to the fullest extent to which it is empowered to do so by the Code or any other applicable laws as may from time to time be in effect,

-12-

indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in a right of the Corporation to procure judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in manner he or she reasonably believed to be in, or not opposed to the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.

(c) To the extent that a director or officer of the Corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(d) Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case, upon a determination that indemnification of the director or officer is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders.

(e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such, amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the Corporation as authorized in this Article XI.

(f) The indemnification provided by this Article XI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer, and shall inure to the benefit of the heirs, executors and administrators of such a person.

-13-

(g) If the Corporation has paid indemnity or has advanced expenses to a director, officer, employee or agent, the Corporation shall report the indemnification or advance in writing to the stockholders with or before the notice of the next stockholders’ meeting.

SECTION 11.2. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under this Article XI.

SECTION 11.3. Contract with the Corporation. The provisions of this Article XI shall be deemed to be a contract between the Corporation and each director, officer, employee or agent who serves in any such capacity at any time while this Article XI and the relevant provisions of the Code or other applicable law, if any, are in effect, and any repeal or modification of any such law or of this Article XI shall not affect any rights or obligations then existing with respect to any state of facts then or heretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon such state of facts.

-14-

EX-4.1

Exhibit 4.1

IAAI FINANCE CORP.

to be assumed by and to be merged with and into

INSURANCE AUTO AUCTIONS, INC.

11% SENIOR NOTES DUE 2013

INDENTURE

Dated as of April 1, 2005

Wells Fargo Bank, National Association

Trustee

CROSS-REFERENCE TABLE*

Trust Indenture Act Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	2.05
(b)	13.03
(c)	13.03
313(a)	7.06
(b)(1)	N.A.
(b)(2)	7.06; 7.07
(c)	7.06; 13.02
(d)	7.06
314(a)	4.03;13.02; 13.05
(b)	N.A.
(c)(1)	13.04
(c)(2)	13.04
(c)(3)	N.A.
(d)	N.A.
(e)	13.05
(f)	N.A.
315(a)	7.01
(b)	7.05; 13.02
(c)	7.01
(d)	7.01
(e)	6.11
316(a) (last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N.A.
(b)	6.07
(c)	2.12
317(a)(1)	6.08
(a)(2)	6.09
(b)	2.04
318(a)	13.01
(b)	N.A.
(c)	13.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

-i-

TABLE OF CONTENTS

		Page
ARTICLE 1
DEFINITIONS
Section 1.01.	Definitions	1
Section 1.02.	Other Definitions	26
Section 1.03.	Incorporation by Reference of Trust Indenture Act	26
Section 1.04.	Rules of Construction	27
ARTICLE 2
THE NOTES
Section 2.01.	Form and Dating	27
Section 2.02.	Execution and Authentication	28
Section 2.03.	Registrar and Paying Agent	29
Section 2.04.	Paying Agent to Hold Money in Trust	29
Section 2.05.	Holder Lists	30
Section 2.06.	Transfer and Exchange	30
Section 2.07.	Replacement Notes	42
Section 2.08.	Outstanding Notes	42
Section 2.09.	Treasury Notes	43
Section 2.10.	Temporary Notes	43
Section 2.11.	Cancellation	43
Section 2.12.	Defaulted Interest	43
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01.	Notices to Trustee	44
Section 3.02.	Selection of Notes to Be Redeemed or Purchased	44
Section 3.03.	Notice of Redemption	45
Section 3.04.	Effect of Notice of Redemption	46
Section 3.05.	Deposit of Redemption or Purchase Price	46
Section 3.06.	Notes Redeemed or Purchased in Part	47
Section 3.07.	Optional Redemption	47
Section 3.08.	Mandatory Redemption	48
ARTICLE 4
COVENANTS
Section 4.01.	Payment of Notes	48
Section 4.02.	Maintenance of Office or Agency	48
Section 4.03.	SEC Reports	49
Section 4.04.	Compliance Certificate	49

-ii-

		Page
Section 4.05.	[Intentionally Omitted]	50
Section 4.06.	Stay, Extension and Usury Laws	50
Section 4.07.	Limitation on Restricted Payments	50
Section 4.08.	Limitation on Restrictions on Distributions from Restricted Subsidiaries	55
Section 4.09.	Limitation on Indebtedness	56
Section 4.10.	Limitation on Sales of Assets and Subsidiary Stock	59
Section 4.11.	Limitation on Transactions with Affiliates	63
Section 4.12.	Limitation on Liens	65
Section 4.13.	Business Activities	65
Section 4.14.	Corporate Existence	66
Section 4.15.	Offer to Repurchase upon Change of Control	66
Section 4.16.	Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries	68
Section 4.17.	Future Subsidiary Guarantors	68
ARTICLE 5
SUCCESSORS
Section 5.01.	Merger and Consolidation	68
Section 5.02.	Successor Corporation Substituted	69
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01.	Default	70
Section 6.02.	Acceleration	71
Section 6.03.	Other Remedies	72
Section 6.04.	Waiver of Past Defaults	72
Section 6.05.	Control by Majority	72
Section 6.06.	Limitation on Suits	72
Section 6.07.	Rights of Holders of Notes to Receive Payment	73
Section 6.08.	Collection Suit by Trustee	73
Section 6.09.	Trustee May File Proofs of Claim	73
Section 6.10.	Priorities	74
Section 6.11.	Undertaking for Costs	74
ARTICLE 7
TRUSTEE
Section 7.01.	Duties of Trustee	74
Section 7.02.	Rights of Trustee	75
Section 7.03.	Individual Rights of Trustee	76
Section 7.04.	Trustee’s Disclaimer	76
Section 7.05.	Notice of Defaults	76
Section 7.06.	Reports by Trustee to Holders of the Notes	76
Section 7.07.	Compensation and Indemnity	76
Section 7.08.	Replacement of Trustee	77

-iii-

		Page
Section 7.09.	Successor Trustee by Merger, etc.	78
Section 7.10.	Eligibility; Disqualification	78
Section 7.11.	Preferential Collection of Claims Against Company	78
Section 7.12.	Escrow Authorization	78
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01.	Option to Effect Legal Defeasance or Covenant Defeasance	79
Section 8.02.	Legal Defeasance and Discharge	79
Section 8.03.	Covenant Defeasance	80
Section 8.04.	Conditions to Legal or Covenant Defeasance	80
Section 8.05.	Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions	81
Section 8.06.	Repayment to Company	82
Section 8.07.	Reinstatement	82
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01.	Without Consent of Holders of Notes	82
Section 9.02.	With Consent of Holders of Notes	83
Section 9.03.	Compliance with Trust Indenture Act	85
Section 9.04.	Revocation and Effect of Consents	85
Section 9.05.	Notation on or Exchange of Notes	85
Section 9.06.	Trustee to Sign Amendments, etc.	85
ARTICLE 10
[RESERVED]
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01.	Guarantee	86
Section 11.02.	[Reserved]	87
Section 11.03.	Limitation on Subsidiary Guarantor Liability	87
Section 11.04.	Delivery of Subsidiary Guarantee	87
Section 11.05.	Subsidiary Guarantors May Consolidate, etc., on Certain Terms	88
Section 11.06.	Releases	88
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01.	Satisfaction and Discharge	89
Section 12.02.	Application of Trust Money	90
Section 12.03.	Repayment to Company	90

-iv-

		Page
ARTICLE 13
MISCELLANEOUS
Section 13.01.	Trust Indenture Act Controls	91
Section 13.02.	Notices	91
Section 13.03.	Communication by Holders of Notes with Other Holders of Notes	92
Section 13.04.	Certificate and Opinion as to Conditions Precedent	92
Section 13.05.	Statements Required in Certificate or Opinion	92
Section 13.06.	Rules by Trustee and Agents	93
Section 13.07.	No Personal Liability of Directors, Officers, Employees and Stockholders	93
Section 13.08.	Governing Law	93
Section 13.09.	No Adverse Interpretation of Other Agreements	93
Section 13.10.	Successors	93
Section 13.11.	Severability	94
Section 13.12.	Counterpart Originals	94
Section 13.13.	Table of Contents, Headings, etc.	94

EXHIBITS

Exhibit A	–	FORM OF NOTE
Exhibit B	–	FORM OF CERTIFICATE OF TRANSFER
Exhibit C	–	FORM OF CERTIFICATE OF EXCHANGE
Exhibit D	–	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E	–	FORM OF SUPPLEMENTAL INDENTURE FOR FUTURE SUBSIDIARY GUARANTORS

-v-

INDENTURE dated as of April 1, 2005 among IAAI Finance Corp., a Delaware corporation (“IAAI Finance”), which will be merged with and into Insurance Auto Auctions, Inc., an Illinois corporation (“IAAI”), with IAAI continuing as the surviving corporation, the Subsidiary Guarantors (as defined) and Wells Fargo Bank, National Association, as trustee.

The Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 11% Senior Notes due 2013 (the “Notes”):

ARTICLE 1

DEFINITIONS

Section 1.01.  Definitions.

“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

“Acquisition” means the acquisition of IAAI by Axle Holdings and Axle Merger pursuant to the Acquisition Agreement.

“Acquisition Agreement” means the Agreement and Plan of Merger among IAAI, Axle Holdings and Axle Merger, dated as of February 22, 2005, as the same may be amended, modified or supplemented from time to time.

“Additional Assets” means:

(1) any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Restricted Subsidiary in a Permitted Business; or

(2) the Capital Stock of a Restricted Subsidiary or of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary.

“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation, or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary;

other than, in the case of (1), (2) and (3) above,

(a) a disposition by a Restricted Subsidiary to the Company or to another Restricted Subsidiary or by the Company to a Restricted Subsidiary;

(b) for purposes of the provisions of Section 4.10 hereof only, a disposition subject to Section 4.07 hereof;

(c) any transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive aggregate consideration of less than $5.0 million;

(d) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted under Section 5.01 hereof;

(e) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

(f) the factoring of accounts receivable arising in the ordinary course of business pursuant to arrangements customary in the industry;

(g) the licensing of intellectual property;

(h) disposals or replacements of obsolete equipment in the ordinary course of business;

(i) sales of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity;

(j) transfers of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) by a Receivables Entity in a Qualified Receivables Transaction;

(k) leases or subleases to third persons not interfering in any material respect with the business of the Company or any of its Restricted Subsidiaries;

-2-

(l) pursuant to any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or any Subsidiary of the Company with a Lien on such assets, which Lien is permitted under this Indenture; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law; and

(m) the sale or other transfer involving only Temporary Cash Investments.

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing:

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment; by

(2) the sum of all such payments.

“Axle Holdings” means Axle Holdings, Inc., a Delaware corporation, and any successor in interest thereto.

“Axle Holdings II, LLC” means Axle Holdings II, LLC, a Delaware limited liability company, and any successor in interest thereto.

“Axle Merger” means Axle Merger Sub, Inc., an Illinois corporation, and any successor in interest thereto.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

“Board of Directors” of the Company or any other Person means (i) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; (ii) with respect to a partnership, the Board of Directors of the general partner of the partnership; (iii) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and (iv) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board of Directors Approval” means the approval of a transaction by a majority of directors who do not have a personal stake in the transaction being voted upon, evidenced by a written resolution of the Board of Directors authorizing such transaction.

“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

“Business Day” means any day which is not a Legal Holiday.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into or exchangeable for such equity.

“Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount

-3-

of Indebtedness represented by such obligation shall be the amount of such obligation required to be reflected as a liability on a balance sheet prepared in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other similar amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Change of Control” means the occurrence of any of the following events:

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company, provided that so long as the Company is a Subsidiary of a Parent, no Person shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of the Company unless such Person shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such Parent;

(2) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new individuals whose election by such Board of Directors of the Company or whose nomination for election by the stockholders of the Company was approved by any Permitted Holder or a vote of a majority of the individuals of the Company then still in office who were either on the Board of Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company;

(3) the adoption of a plan relating to the liquidation or dissolution of the Company; or

(4) the Company merges or consolidates with or into, or sells or transfers (in one or a series of related transactions) all or substantially all of the assets of the Company and its Restricted Subsidiaries to, another Person (other than one or more Permitted Holders) and any “person” (as defined in clause (1) above), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as so defined), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the surviving Person in such merger or consolidation, or the transferee Person in such sale or transfer of assets, as the case may be, provided that so long as such surviving or transferee Person is a Subsidiary of a Parent, no Person shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such surviving or transferee Person unless such Person shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such Parent.

The Transactions shall not constitute or give rise to a Change of Control.

For purposes of the foregoing, no Person who is a member of a “group” (as so defined) or a “beneficial owner” (as so defined) in respect of any such Voting Stock solely as a consequence of any agreement or arrangement with Permitted Holders shall be deemed a member of such “group” or such a “beneficial owner” for so long as (without giving effect to such agreement or arrangement) the Permitted Holders “beneficially own” (as so defined) a percentage of the total voting power of the Voting Stock of the Company (or any Parent or such surviving or transferee Person, as the case may be) at such time greater than that “beneficially owned” (as so defined) by such other Person.

“Clearstream” means Clearstream Banking, S.A.

-4-

“Closing Date” means April 1, 2005.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commodity Agreements” means, in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.

“Company” means (i) prior to the Effective Date, only IAAI Finance and not any of its affiliates, and (ii) from and after the Effective Date, IAAI and not any of its subsidiaries; and any successor thereto.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (i) the aggregate amount of Consolidated EBITDA of the Company and its Restricted Subsidiaries for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Company are available to (ii) Consolidated Interest Expense for such four fiscal quarters (in the case of each of clauses (i) and (ii)), determined, for each fiscal quarter (or portion thereof) of the four fiscal quarters ending prior to the Effective Date, on a pro forma basis to give effect to the Transactions as if they had occurred at the beginning of such four-quarter period), and subject and giving effect to the following adjustments:

(1) Incurrence of Indebtedness. If since the beginning of such period the Company or any Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on (A) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (B) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation).

(2) Discharge of Indebtedness. If since the beginning of such period the Company or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged any Indebtedness (each, a “Discharge”) or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and the commitments in respect thereof have been permanently terminated), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such Discharge had occurred on the first day of such period.

(3) Sales. If since the beginning of such period the Company or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business (any such disposition, a “Sale”), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to (A) the Consolidated

-5-

Interest Expense attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus (B) if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale.

(4) Purchase. If since the beginning of such period the Company or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder (any such Investment or acquisition, a “Purchase”), Consolidated EBITDA (plus adjustments which will only include annualized cost savings achievable within one year and which shall be itemized in an Officer’s Certificate delivered to the Trustee by a responsible financial or accounting Officer of the Company) and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness), as if such Purchase occurred on the first day of such period.

(5) Adjustments for Acquired Person. If since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Company or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause (2), (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection therewith, the pro forma calculations in respect thereof shall be determined in good faith by a responsible financial or accounting Officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness to the extent of the remaining term of such Interest Rate Agreement). If any Indebtedness bears, at the option of the Company or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Company or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

-6-

“Consolidated EBITDA” means, for any period, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) provision for all taxes based on income, profits or capital, including, without limitation, state, franchise, value added, foreign or similar taxes; (ii) Consolidated Interest Expense; (iii) depreciation, amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs) and any non-cash impairment charges related to goodwill, other intangibles or long-lived assets; (iv) any expenses or charges related to any Equity Offering, Investment or Indebtedness permitted by this Indenture (whether or not consummated or incurred); (v) the amount of any minority interest expense; (vi) the amount, up to $0.5 million per year, paid to Kelso in respect of management, monitoring, consulting and advisory fees; (vii) any non-cash impairment charges resulting from the application of Statement of Financial Accounting Standards Nos. 142 and 144, and the write-off, depreciation or amortization of intangibles arising pursuant to Statement of Financial Accounting Standards No. 141 and any other charges as a result of the application of purchase accounting; (viii) other non-cash expenses reducing Consolidated Net Income for such period (including deferred rent but excluding any other such charge which requires an accrual of or reserve for cash charges for any future period); and (ix) cash restructuring charges not to exceed $2.5 million per year and not to exceed $5.0 million in the aggregate.

“Consolidated Interest Expense” means, for any period, (i) the total interest expense of the Company and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of the Company and its Restricted Subsidiaries, including without limitation any such interest expense consisting of (a) interest expense attributable to Capitalized Lease Obligations; (b) amortization of debt discount; (c) the interest portion of any deferred payment obligation; (d) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing; and (e) to the extent not otherwise included in such interest expense, Receivables Fees; plus (ii) Preferred Stock dividends paid in cash in respect of Disqualified Stock of the Company or any Restricted Subsidiary held by Persons other than the Company or a Restricted Subsidiary; and minus (iii) to the extent otherwise included in such interest expense, amortization or write-off of financing costs, in each case under clauses (i) through (iii) as determined on a Consolidated basis in accordance with GAAP; provided that gross interest expense shall be determined after giving effect to any net payments made or received by the Company and its Restricted Subsidiaries with respect to Interest Rate Agreements.

“Consolidated Net Income” means, for any period, the net income (loss) of the Company and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided that there shall not be included in such Consolidated Net Income:

(1) any net income of any Person if such Person is not a Restricted Subsidiary or is accounted for by the equity method of accounting, except that the Company’s equity in the net income (but not loss) of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below);

(2) any net income (loss) of any Restricted Subsidiary that is not a Subsidiary Guarantor if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to the Company by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation

-7-

applicable to such Restricted Subsidiary or its stockholders (other than (x) restrictions that have been waived or otherwise released and (y) restrictions pursuant to the Notes or this Indenture), except that the Company’s equity in the net income (but not loss) of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that could have been made by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary and the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income up to the amount of loans, advances or other contributions, if any, made to such Restricted Subsidiary by the Company or any other Restricted Subsidiary during such period;

(3) any gain or loss realized upon the sale or other disposition of any asset of the Company or any Restricted Subsidiary (including pursuant to any sale/leaseback transaction) that is not sold or otherwise disposed of in the ordinary course of business (as determined in good faith by the Board of Directors) and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person;

(4) any extraordinary, unusual or nonrecurring gain, loss or charge (including, without limitation, option and severance expense, change of control payments and all other fees, expenses and charges associated with the Transactions and any acquisition, merger or consolidation after the Effective Date);

(5) the cumulative effect of a change in accounting principles;

(6) any gains or losses in connection with any early extinguishment of Indebtedness or the termination of any Currency Agreement in connection therewith;

(7) any unrealized gains or losses in respect of Currency Agreements;

(8) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person;

(9) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards; and

(10) any increase in depreciation, depletion or amortization or any one-time non-cash charges (such as capitalized manufacturing profit in inventory) resulting from the purchase accounting in connection with the Transactions or any acquisition, merger or consolidation that is consummated after the Effective Date.

In the case of any unusual or nonrecurring gain, loss or charge not included in Consolidated Net Income pursuant to clause (4) above in any determination thereof, the Company will deliver an Officer’s Certificate to the Trustee promptly after the date on which Consolidated Net Income is so determined, setting forth the nature and amount of such unusual or nonrecurring gain, loss or charge.

“Consolidated Net Worth” means the total of the amounts shown on the balance sheet of the Company and its Restricted Subsidiaries, determined on a Consolidated basis, as of the end of the most recent fiscal quarter of the Company ending at least 45 days prior to the taking of any action for the purpose of which the determination is being made, as

-8-

(1) the par or stated value of all outstanding Capital Stock of the Company; plus

(2) paid-in capital or capital surplus relating to such Capital Stock; plus

(3) any retained earnings or earned surplus; less

(a) any accumulated deficit; and

(b) any amounts attributable to Disqualified Stock.

“Consolidation” means the consolidation of the accounts of each of the Restricted Subsidiaries with those of the Company in accordance with GAAP consistently applied; provided, however, that “Consolidation” will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will be accounted for as an investment. The term “Consolidated” has a correlative meaning.

“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company.

“Credit Facilities” means the credit agreement to be dated on or about the Effective Date among the Company, the lenders named therein, Bear Stearns Corporate Lending Inc., as administrative agent, Deutsche Bank Securities Inc., as syndication agent, Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., as lead arrangers, and the lenders party thereto from time to time, in each case as such agreement may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreements extending the maturity of, refinancing, replacing (whether or not contemporaneously) or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted by Section 4.09) or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreements and whether by the same or any other agent, lender or group of lenders or investors and whether such refinancing or replacement is under one or more debt facilities or commercial paper facilities, indentures or other agreements, in each case with banks or other institutional lenders or trustees or investors providing for revolving credit loans, term loans, notes or letters of credit, together with related documents thereto (including, without limitation, any guaranty agreements and security documents).

“Currency Agreement” means with respect to any Person any foreign exchange contract, currency swap agreements or other similar agreement or arrangement to which such Person is a party or of which it is a beneficiary.

“Custodian” means the Trustee, as custodian for the Depositary or its nominee with respect to the Notes in global form, or any successor entity thereto.

“Deadline Date” means September 22, 2005.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

-9-

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

“Designated Non-Cash Consideration” means the fair market value of any non-cash consideration that is received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition and that is designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate. A particular item of Designated Non-Cash Consideration will no longer by considered to be outstanding when it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 4.10 hereof.

“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event:

(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary; provided, however, that any such conversion or exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable); or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in the case of each of clauses (1), (2) and (3), on or prior to the 90^th day after the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the 90^th day after the Stated Maturity of the Notes shall not constitute Disqualified Stock.

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia, other than any Foreign Subsidiary Holding Company.

“Effective Date” means the effective date of the Acquisition.

“Equity Offering” means (x) a sale of Capital Stock (other than Disqualified Stock) that is a sale of Capital Stock of the Company, or (y) a capital contribution to the Company or any of its Restricted Subsidiaries.

“Escrow Agent” means the escrow agent from time to time under the Escrow Agreement.

“Escrow Agreement” means the Escrow Agreement dated as of the date hereof between IAAI Finance, Wells Fargo Bank, National Association, as escrow agent and Wells Fargo Bank, National Association, as Trustee thereunder, as amended from time to time.

“Escrowed Property” has the meaning ascribed thereto in the Escrow Agreement.

“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

-10-

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Notes” has the meaning set forth in the Registration Rights Agreement.

“Exchange Offer” has the meaning set forth in the Registration Rights Agreement.

“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights Agreement.

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. The Fair Market Value of property or assets other than cash which involves (1) an aggregate amount in excess of $1.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors and (2) an aggregate amount in excess of $20.0 million, shall have been determined in writing by a nationally recognized appraisal, accounting or investment banking firm.

“Financing Disposition” means any sale, transfer, conveyance or other disposition of property or assets by the Company or any Subsidiary thereof to any Receivables Entity, or by any Receivables Subsidiary, in each case in connection with the Incurrence by a Receivables Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets.

“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not a Domestic Subsidiary, including without limitation, any Foreign Subsidiary Holding Company.

“Foreign Subsidiary Holding Company” means any Restricted Subsidiary that (a) has no material assets other than securities of one or more Foreign Subsidiaries and other assets relating to the ownership interest in any such securities and (b) does not guarantee any Indebtedness of the Company or any Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Closing Date, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entities as approved by a significant segment of the accounting profession; and

(4) the rules and regulations of the SEC governing the inclusion of financial statements in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP.

-11-

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial condition or otherwise), entered into in favor and for the benefit of the obligee of such Indebtedness or other obligation; or

(2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Guarantor” means any Person Guaranteeing any obligation.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement.

“Holder” means the Person in whose name a Note is registered on the Registrar’s books.

“IAAI Assumption” means the assumption by IAAI and the Subsidiary Guarantors of the obligations of IAAI Finance under this Indenture, the Notes, the Registration Rights Agreement, the Purchase Agreement and the Escrow Agreement.

“IAI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

“Immaterial Indebtedness” means Indebtedness that, individually or in the aggregate, does not exceed $15.0 million at any one time outstanding.

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose total assets, as of that date, are less than $100,000 and whose total revenues for the most recent 12-month period do not exceed $100,000.

“Incur” means issue, assume, enter into any Guarantee of, incur or otherwise become liable for; provided, however, that any Indebtedness of a Person existing at the time such Person becomes a

-12-

Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary and Indebtedness secured by a Lien encumbering any asset acquired by a Person shall be deemed to be Incurred by such Person at the time it acquires such asset. The term “Incurrence” when used as a noun shall have a correlative meaning. The amortization or accretion of principal of a non-interest bearing or other discount security, the accrual of interest, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock of the Company in the form of additional shares of the same class of Disqualified Stock shall not be deemed the Incurrence of Indebtedness.

“Indebtedness” means, with respect to any Person on any date of determination, without duplication:

(1) the principal of in respect of indebtedness of such Person for borrowed money;

(2) the principal of in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto);

(4) all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables and other accrued current liabilities arising in the ordinary course of business), which purchase price is due more than twelve months after the date of placing such property in service or taking delivery and title thereto;

(5) all Capitalized Lease Obligations of such Person;

(6) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (other than any Preferred Stock issued by any Subsidiary of the Company to the Company or any Restricted Subsidiary) (but excluding, in each case, any accrued dividends);

(7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person shall be the lesser of:

(a) the fair market value of such asset at such date of determination and

(b) the amount of such Indebtedness of such other Persons;

(8) Hedging Obligations of such Person; and

(9) all obligations of the type referred to in clauses (1) through (8) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

provided, however, that Indebtedness shall not include any obligation of the Company or any Subsidiary in respect of the Acquisition Agreement, any liability for Federal, state, provincial, foreign, local or other

-13-

taxes owed or owing by such Person or advances paid by customers in the ordinary course of business for services or products to be provided or delivered in the future.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

“Initial Deposit” means the deposit made to the Escrow Agent of the Escrowed Property in an amount sufficient to redeem in cash the Notes at the Mandatory Redemption Price.

“Initial Notes” means (i) the first $150,000,000 aggregate principal amount of Notes issued under this Indenture on the date hereof, (ii) any Exchange Note, and (iii) any Note issued pursuant to Sections 2.06(a), (c), (e) or (f), Section 2.07 or Section 2.10 hereof.

“Initial Purchasers” means Deutsche Bank Securities Inc and Bear, Stearns & Co. Inc.

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who is not also a QIB.

“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement to which such Person is party or of which it is a beneficiary.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers and suppliers in the ordinary course of business) or other extension of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

(1) “Investment” shall include the aggregate fair market value of all outstanding Investments owned directly or indirectly by the Company in the Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Company’s Investment in such Subsidiary at the time of such redesignation; less

(b) the Company’s pro rata portion (proportionate to the Company’s direct or indirect equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

-14-

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Company’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided that to the extent the amount of Restricted Payments outstanding at any time is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to Section 4.07(b) hereof. For purposes of calculating the amount at any time of Restricted Payments under Section 4.07(c)(15) hereof, the amount of such Restricted Payments constituting Investments shall be the amount of such Investments outstanding at such time.

“Kelso” means Kelso & Company, L.P., a New York-based private investment firm.

“Kelso Agreements” means the Registration Rights Agreement, dated as of the Closing Date, among Axle Holdings, Inc., Axle Holdings II, LLC and the other parties thereto and the Financial Advisory Agreement, dated as of February 22, 2005, between Axle Merger and Kelso, in each case, as the same may be amended, modified or supplemented from time to time.

“Legal Holiday” means a Saturday, Sunday or other day on which banking institutions are not required by law, regulation or executive order to be open in the State of New York.

“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Liquidated Damages” means all liquidated damages then owing pursuant to the Registration Rights Agreement.

“Management Investor” means, the officers, directors, employees and other members of the management of any Parent, the Company or any of its Subsidiaries, or family members or relatives thereof, or trusts or partnerships for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Company or any Parent, and any Affiliate of any of the foregoing.

“Mandatory Redemption” means the mandatory redemption of all of the Notes at the applicable Mandatory Redemption Price in the event that, for any reason, the IAAI Assumption is not consummated on or prior to the Deadline Date or the Acquisition Agreement is terminated on or prior to the Deadline Date.

“Mandatory Redemption Date” means (a) September 29, 2005 if the IAAI Assumption has not occurred on or prior to the Deadline Date or (b) the fifth day (or if such day is not a Business Day), the first Business Day thereafter) following the termination of the Acquisition Agreement on or prior to the Deadline Date.

“Mandatory Redemption Price” means 100% of the aggregate principal amount of the Notes plus accrued and unpaid interest up to but not including the Mandatory Redemption Date.

-15-

“Merger Supplemental Indenture” means a Supplemental Indenture among IAAI, certain of its Subsidiaries party thereto and the Trustee, substantially in the form attached to the Escrow Agreement, to be entered into in connection with the merger of Axle Merger with and into IAAI, with IAAI as the surviving corporation.

“Net Available Cash” from an Asset Disposition means the amount equal to the aggregate cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that were the subject of such Asset Disposition or received in any other noncash form) therefrom, in each case net of:

(1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and tax payments made with respect to such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and

(4) appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

“Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company. “Officer” of a Subsidiary Guarantor has a correlative meaning.

“Officer’s Certificate” means a certificate signed by an Officer.

-16-

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Subsidiary Guarantor or the Trustee.

“Parent” means any of Axle Holdings II, LLC, Axle Holdings and any other Person of which the Company at any time is or becomes a Subsidiary after the Effective Date.

“Parent Expenses” means, without duplication, (a) costs (including all professional fees and expenses) incurred by any Parent in connection with its reporting obligations under or in compliance with applicable laws, applicable rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, this Indenture or any other agreement or instrument relating to Indebtedness of the Company or any Restricted Subsidiary, including any reports filed with respect to the Securities Act, Exchange Act or the respective rules and regulations promulgated thereunder, (b) indemnification obligations of any Parent owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person, (c) fees and expenses payable by any Parent in connection with the Transactions, (d) other operational expenses of any Parent incurred in the ordinary course of business, and (e) expenses incurred by any Parent in connection with any public offering of Capital Stock or Indebtedness (x) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Company or a Restricted Subsidiary, or (y) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or (z) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Company or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.

“Parent Taxes” means, without duplication, (x) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed on payments made by any Parent), required to be paid by any Parent by virtue of its being incorporated or otherwise organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Company, any of its Subsidiaries or any Parent), or being a holding company parent of the Company or receiving dividends from or other distributions in respect of the Capital Stock of the Company, or having Guaranteed any obligations of the Company or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Company is permitted to make payments to any Parent pursuant to Section 4.07 hereof, or (y) for so long as the Company is a member of a group filing a consolidated, combined or unitary tax return with any Parent, amounts not to exceed the amount of the relevant tax (including any penalties and interest) that the Company would owe if the Company were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) that would be available to the Company (and any such Subsidiaries) from other taxable years if the Company were filing a separate tax return (or a separate consolidated or combined return with any such Subsidiaries).

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“Permitted Business” means any business engaged in by the Company or any Restricted Subsidiary on the Closing Date and any Related Business.

-17-

“Permitted Holders” means any of (a) Kelso and its Affiliates, (b) the Management Investors (but only with respect to their “beneficial ownership” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of up to 10% in the aggregate of the total voting power of the Voting Stock of the Company or any Parent, as the case may be), and (c) any Person acting in the capacity of an underwriter in connection with a public or private offering of the Capital Stock of the Company or any Parent or securities convertible into or exchangeable or exercisable for such Capital Stock. Any person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Permitted Business;

(2) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Permitted Business;

(3) Temporary Cash Investments;

(4) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(5) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(6) loans or advances to employees made in the ordinary course of business and not exceeding $5.0 million in the aggregate outstanding at any one time;

(7) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or upon bankruptcy or insolvency of creditors or customers;

(8) any Person to the extent such Investment represents the noncash portion of the consideration received for an Asset Disposition that was made pursuant to and in compliance with Section 4.10 hereof;

(9) Investments existing on the Effective Date;

(10) Currency Agreements, Interest Rate Agreements and Commodity Agreements entered into by the Company or any of its Restricted Subsidiaries for bona fide business reasons and not for speculative purposes, and otherwise in compliance with this Indenture;

-18-

(11) Guarantees by the Company or any of its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred by the Company or any of its Restricted Subsidiaries under this Indenture;

(12) any Investment by the Company or a Restricted Subsidiary of the Company in a Receivables Entity or any Investment by a Receivables Entity in any other Person in connection with the Qualified Receivables Transaction;

(13) that portion of any Investment where the consideration provided is Capital Stock of the Company or any Parent (other than Disqualified Stock);

(14) the Notes; or

(15) other Investments in an aggregate amount outstanding at any time not to exceed $20.0 million.

“Permitted Liens” means the following types of Liens:

(1) Liens securing the Notes or any of the Subsidiary Guarantees;

(2) Liens existing on the Effective Date, together with any Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness secured by Liens existing on the Effective Date; provided that the Liens securing the Refinancing Indebtedness shall not extend to property other than that pledged under the Liens securing the Indebtedness being refinanced;

(3) Liens in favor of the Company or any Subsidiary Guarantor on the property or assets, or any proceeds, income or profit therefrom, of any Restricted Subsidiary;

(4) Liens securing Indebtedness (other than Subordinated Obligations) permitted to be Incurred pursuant to Section 4.09; provided that (x) with respect to Liens securing Indebtedness Incurred in reliance on Section 4.09(d)(4), such Liens do not extend to or cover any property or assets of the Company or of any Restricted Subsidiary other than the property or assets that secured such Indebtedness prior to the time the applicable Restricted Subsidiary became a Restricted Subsidiary and (y) with respect to Liens securing Refinancing Indebtedness which is Incurred to Refinance any Indebtedness which has been secured by a Lien permitted under the Indenture and which has been Incurred in accordance with the provisions of the Indenture, such Liens: (i) are no less favorable to the Holders in any material respect and are not more favorable to the lienholders in any material respect with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to or cover any property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced; and

(5) other Liens; provided that the maximum aggregate amount of outstanding obligations secured thereby shall not at any time exceed $5.0 million.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the

-19-

distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“Principal” of a Note means the principal of the Note payable on the Note which is due or overdue or is to become due at the relevant time.

“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

“Purchase Agreement” means the Purchase Agreement, dated as of March 24, 2005, among IAAI Finance and the Initial Purchasers.

“Purchase Money Indebtedness” means Indebtedness:

(1) consisting of or Incurred to finance the deferred purchase price of an asset, conditional sale obligations, obligations under any title retention agreement and other purchase money obligations, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed; and

(2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements;

provided, however, that such Indebtedness is Incurred on or prior to the date that is 180 days after the acquisition by the Company or such Restricted Subsidiary of such asset.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Entity (in the case of a transfer by the Company or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Entity), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all Guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

“Receivable” means a right to receive payment arising from a sale or lease of goods or services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit.

“Receivables Entity” means (x) any Receivables Subsidiary; or (y) any other Person that is engaged in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time), other accounts and/or other receivables, and/or related assets.

-20-

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“Receivables Financing” means any financing of Receivables of the Company or any Restricted Subsidiary that have been transferred to a Receivables Entity in a Financing Disposition.

“Receivables Repurchase Obligation” means any obligation of a seller of receivables to repurchase receivables (including Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivable (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles)) arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

“Receivables Subsidiary” means a Subsidiary of the Company that (a) is engaged solely in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business; and (b) is designated as a “Receivables Subsidiary” by the Board of Directors.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the Effective Date, Incurred pursuant to Section 4.09(d)(3) or Incurred in compliance with or permitted by this Indenture (including Indebtedness that Refinances Refinancing Indebtedness); provided, however, that:

(1) if the Indebtedness being refinanced is Subordinated Obligations, the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced;

(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus (y) fees, underwriting discounts, interest, premiums and other costs and expenses in connection with the issuance of the Refinancing Indebtedness and repayment of the Indebtedness being refinanced; and

(3) if the Indebtedness being Refinanced is subordinated in right of payment to the Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at least to the same extent as the Indebtedness being Refinanced;

-21-

provided further, however, that Refinancing Indebtedness shall not include:

(a) Indebtedness of a Restricted Subsidiary (other than a Subsidiary Guarantor) that Refinances Indebtedness of the Company; or

(b) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary unless immediately after the Incurrence of such Indebtedness and the application of the proceeds thereof, such Unrestricted Subsidiary is designated as a Restricted Subsidiary.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of April 1, 2005, among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time, and, with respect to any Additional Notes, one or more registration rights agreements among the Company and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes with respect to the registration of such Additional Notes, and any Notes issued in exchange therefor, under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate.

“Regulation S Permanent Global Note” means a permanent Global Note in the form of Exhibit A hereto bearing each of the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.

“Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A hereto bearing each of the legend set forth in Section 2.06(g)(3), the Global Note Legend and the Private Placement Legend, deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.

“Related Business” means any business related, ancillary or complementary to the businesses of the Company and the Restricted Subsidiaries on the Closing Date.

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

-22-

“Rule 903” means Rule 903 promulgated under the Securities Act.

“Rule 904” means Rule 904 promulgated under the Securities Act.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company secured by a Lien. “Secured Indebtedness” of a Subsidiary Guarantor has a correlative meaning.

“Securities Act” means the Securities Act of 1933, as amended.

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” of the Company within the meaning of Article 1, Rule 1-02 under Regulation S-X promulgated by the SEC.

“Standard Receivable Obligations” means representations, warranties, covenants, indemnities and other obligations (including Guarantees and Indebtedness) which are reasonably customary in a Financing Disposition (as determined by the Company in good faith), including, without limitation, those relating to the servicing of the assets of a Receivables Entity, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Receivable Obligation.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency).

“Subordinated Obligation” means any Indebtedness of the Company (other than such Indebtedness as is described in Section 4.09(d)(2) hereof) (whether outstanding on the Effective Date or thereafter Incurred) that is expressly subordinated in right of payment to the Notes pursuant to a written agreement. “Subordinated Obligation” of a Subsidiary Guarantor has a correlative meaning with respect to Indebtedness that is expressly subordinated in right of payment to the Subsidiary Guarantees pursuant to a written agreement.

“Subsidiary” of any Person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, members of the Board of Directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by:

(1) such Person,

(2) such Person and one or more Subsidiaries of such Person or

(3) one or more Subsidiaries of such Person, or

-23-

any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“Subsidiary Guarantee” means each Guarantee of the obligations with respect to the Notes issued by a Subsidiary of the Company pursuant to the terms of this Indenture.

“Subsidiary Guarantor” means (i) as of the Effective Date, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. and (ii) any Subsidiary that has issued a Subsidiary Guarantee.

“Temporary Cash Investments” means any of the following:

(1) any investment in U.S. Government Obligations or obligations Guaranteed by the United States of America or any agency thereof;

(2) investments in time deposit accounts, certificates of deposit and money market deposits maturing within one year of the date of acquisition thereof issued by a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital, surplus and undivided profits aggregating in excess of $250.0 million (or the foreign currency equivalent thereof) and whose long-term debt is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);

(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;

(4) investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s Investors Service, Inc. (“Moody’s”) or “A-1” (or higher) according to Standard and Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. (“S&P”);

(5) investments in securities with maturities of one year or less from the date of acquisition issued or fully Guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s Investors Service, Inc.;

(6) investment funds investing 95% of their assets in securities of the type described in clauses (1) through (5) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution);

(7) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended; and

(8) similar investments approved by the Board of Directors in the ordinary course of business.

-24-

“TIA” means the Trust Indenture Act of 1939, as amended from time to time.

“Trade Payables” means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods, materials or services.

“Transaction Documents” means the Kelso Agreements, the agreements relating to the Acquisition, the financing thereof, or the services provided or to be provided in connection therewith (including pursuant to the Kelso Agreements), and the various ancillary documents, commitment letters and agreements relating thereto, as the same may be amended, modified or supplemented from time to time.

“Transactions” means the Acquisition and the financings thereof and the various other transactions and payments relating thereto.

“Trust Officer” means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.

“Trustee” means Wells Fargo Bank, National Association until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below, and (2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.07.

The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

(x) the Company could Incur $1.00 of additional Indebtedness under Section 4.09(b) of this Indenture and

(y) no Default shall have occurred and be continuing.

-25-

Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests and limited liability company interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, members of the Board of Directors, managers or trustees thereof.

“Wholly-Owned Subsidiary” means a Restricted Subsidiary of the Company all the Capital Stock of which (other than directors’ qualifying shares or similar immaterial equity interests) is owned by the Company or another Wholly-Owned Subsidiary.

Section 1.02.  Other Definitions.

Term	Defined in Section
“Affiliate Transaction”	4.11
“Authentication Order”	2.02
“Change of Control Offer”	4.15
“Change of Control Payment Date”	4.15
“Covenant Defeasance”	8.03
“DTC”	2.03
“Event of Default”	6.01
“Guarantee Blockage Notice”	11.02	(c)
“Legal Defeasance”	8.02
“Offer”	4.10
“Offer Amount”	4.10
“Offer Period”	4.10
“Paying Agent”	2.03
“Payment Blockage Notice”	10.03
“Purchase Date”	4.10
“Registrar”	2.03
“Restricted Payments”	4.07
“Successor Company”	5.01

Section 1.03.  Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

-26-

The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Subsidiary Guarantees means the Company and the Subsidiary Guarantors, respectively, and any successor obligor upon the Notes and the Subsidiary Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04.  Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) words in the singular include the plural, and in the plural include the singular;

(5) “will” shall be interpreted to express a command;

(6) provisions apply to successive events and transactions; and

(7) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.

ARTICLE 2

THE NOTES

Section 2.01.  Form and Dating.

(a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have such appropriate insertions, omissions, substitutions, notations, legends, endorsements identifications and other variations as are required or permitted by law, stock exchange rule or depositary rule or usage, agreements to which the Company is subject, if any, or other customary usage, or as may consistently herewith be determined by the Officer or Officers of the Company executing such Notes, as evidenced by such execution (provided always that any such notation, legend, endorsement, identification or variation is in a form acceptable to the Company). Each Note will

-27-

be dated the date of its authentication. The Notes will be issued in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000.

The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, by adjustments made thereon and/or in the records of the Custodian to reflect exchanges and redemptions as herein after provided. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S will, unless (in the case of Additional Notes) the Company otherwise notifies the Trustee in writing, be issued initially in the form of the Regulation S Temporary Global Note, which will be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee at the Corporate Trust Office of the Trustee, as Custodian, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided.

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee will cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made thereon and/or on the records of the Trustee, the Custodian or the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by Participants through Euroclear or Clearstream.

Section 2.02.  Execution and Authentication.

At least one Officer must sign the Notes for the Company by manual or facsimile signature.

-28-

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee will, upon receipt of a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.

Section 2.03.  Registrar and Paying Agent.

The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.

The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.04.  Paying Agent to Hold Money in Trust.

The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.

-29-

Section 2.05.  Holder Lists.

The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA § 312(a).

Section 2.06.  Transfer and Exchange.

(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if:

(1) the Depositary notifies the Company that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary;

(2) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or

(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes, and the Depositary requests such exchange.

Upon the occurrence of either of the preceding events in (1) or (2) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except as provided in this Section 2.06(a). A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

-30-

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Neither the Company nor any agent of the Company shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar (in each case in form and substance reasonably satisfactory to the Trustee and the Company) either:

(A) both:

(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

(B) both:

(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above;

provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act.

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee, the Custodian or the Depositary or its nominee, as the case may be, shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof

-31-

in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable.

(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, provides the certifications required by the applicable Letter of Transmittal and Exchange Offer Registration Statement;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement and applicable law;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement and applicable law; or

(D) the Registrar receives the following:

(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

-32-

and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Company and the Trustee) to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable;

(F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

-33-

(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee, the Custodian or the Depositary or its nominee, as the case may be, shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(2) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and applicable law and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, provides in the certifications required by the applicable Letter of Transmittal and the Exchange Offer Registration Statement;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement and applicable law;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement and applicable law; or

(D) the Registrar receives the following:

(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the

-34-

form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Company and the Trustee) to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee, the Custodian or the Depositary or its nominee, as the case may be, will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth

-35-

in Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable;

(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.

(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and applicable law and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, provides the certifications required by the applicable Letter of Transmittal and Exchange Offer Registration Statement;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement and applicable law;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement and applicable law; or

(D) the Registrar receives the following:

(i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Company and the Trustee) to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

-36-

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar and the Company duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable.

(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and applicable law and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, provides the certifications

-37-

required by the applicable Letter of Transmittal and Exchange Offer Registration Statement;

(B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement and applicable law;

(C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement and applicable law; or

(D) the Registrar receives the following:

(i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests, an opinion of counsel (which opinion and counsel shall be reasonably satisfactory to the Company and the Trustee) to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes and/or Unrestricted Definitive Notes in an aggregate principal amount equal to the aggregate principal amount of the beneficial interests in the Restricted Global Notes, or the Restricted Definitive Notes, as the case may be, accepted for exchange in the Exchange Offer in accordance with the Registration Rights Agreement and applicable law.

Concurrently with the issuance of such Notes, the Trustee, the Custodian or the Depositary or its nominee, as the case may be, will cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly.

(g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

-38-

(1) Private Placement Legend. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

-39-

(2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(3) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note will bear a Legend in substantially the following form:

“EXCEPT AS SPECIFIED IN THE INDENTURE, BENEFICIAL OWNERSHIP INTERESTS IN THIS REGULATION S TEMPORARY GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE REGULATION S PERMANENT GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40 DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(3) OF REGULATION S UNDER THE SECURITIES ACT). DURING SUCH 40 DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS REGULATION S TEMPORARY GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.V., AS OPERATOR OF THE EUROCLEAR SYSTEM, OR CLEAR-

-40-

STREAM BANKING, S.A. NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.”

(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee, the Custodian or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee, the Custodian or by the Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges.

(1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06 and 9.05 hereof).

(3) The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(5) Neither the Registrar nor the Company will be required:

(A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;

(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

-41-

(6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

(8) All certifications, certificates and opinions of counsel required to be submitted to the Trustee and/or the Company pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile unless the Trustee or the Company otherwise require.

The Trustee shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.06 (including all Notes received for transfer pursuant to Section 2.06). The Company shall have the right to require the Trustee to deliver to the Company, at the Company’s expense, copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Trustee.

In connection with any transfer of any Note, the Trustee and the Company shall be entitled to receive, shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the certificates, opinions and other information referred to herein (or in the forms provided herein, attached hereto or to the Notes, or otherwise) received from any Holder and any transferee of any Note regarding the validity, legality and due authorization of any such transfer, the eligibility of the transferee to receive such Note and any other facts and circumstances related to such transfer.

Section 2.07.  Replacement Notes.

If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.

Every replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08.  Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

-42-

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

Section 2.09.  Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Subsidiary Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Subsidiary Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

Section 2.10.  Temporary Notes.

Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

Holders of temporary Notes will be entitled to all of the benefits of this Indenture.

Section 2.11.  Cancellation.

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes will be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12.  Defaulted Interest.

If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

-43-

ARTICLE 3

REDEMPTION AND PREPAYMENT

Section 3.01.  Notices to Trustee.

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days (unless a shorter notice shall be satisfactory to the Trustee) but not more than 60 days before a redemption date, an Officer’s Certificate setting forth:

(1) the clause of this Indenture pursuant to which the redemption shall occur;

(2) the expected redemption date;

(3) the principal amount of Notes to be redeemed;

(4) the redemption price; and

(5) any conditions precedent to such redemption.

If the Company is required to redeem the Notes pursuant to paragraph 8 of the Notes (other than Exchange Notes), the Company shall notify the Trustee in writing of the redemption date, the redemption price and the principal amount of Notes to be redeemed and the Company shall also notify the Escrow Agent concurrently with its notification to the Trustee. In the case of a redemption pursuant to paragraph 8 of the Notes (other than Exchange Notes), the Company shall give notices to the Trustee and the Escrow Agent provided for in this Section promptly after the occurrence of the event triggering the requirement to redeem the Notes.

Section 3.02.  Selection of Notes to Be Redeemed or Purchased.

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or purchase on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate except:

(1) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

(2) if otherwise required by law.

In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply

-44-

to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03.  Notice of Redemption.

At least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article 8 or 12 hereof.

The notice will identify the Notes to be redeemed and will state:

(1) the expected redemption date;

(2) the redemption price;

(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;

(4) the name and address of the Paying Agent;

(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(6) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(8) any conditions precedent to such redemption; and

(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

In addition, if such redemption, purchase or notice is subject to satisfaction of one or more conditions precedent, as permitted by Section 3.07, such notice shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the redemption date may be delayed (but may not be delayed more than 60 days beyond the date the Company mails the applicable notice of redemption) until such time as any or all such conditions are satisfied, or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date.

At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days (unless a shorter notice shall be satisfactory to the Trustee) prior to the expected redemption date, an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

-45-

The notice if mailed in the manner herein provided shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.04.  Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price; provided that Notes called for redemption may be subject to the satisfaction of one or more conditions precedent, as provided in Section 3.07 of this Indenture, and included in the redemption notice mailed to Holders pursuant to Section 3.03 hereof. Such redemption may be extended or delayed, and such redemption may be rescinded, as provided in Section 3.03.

Section 3.05.  Deposit of Redemption or Purchase Price.

One Business Day prior to the redemption date, or any purchase date referred to in Section 4.10(d) or Section 4.15 hereof, as applicable, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Liquidated Damages, if any, on, all Notes to be redeemed or purchased.

If a redemption is subject to one or more conditions precedent that have been included in the redemption notice mailed to Holders pursuant to Section 3.03 hereof, and any of such conditions precedent have not been satisfied or waived by the Company prior to the close of business on the redemption date given in the notice of redemption mailed to the Holders pursuant to Section 3.03 hereof (as such date may have been extended or delayed as provided in Section 3.03 hereof), or such redemption shall have been rescinded as provided in Section 3.03 hereof, the Trustee or Paying Agent will promptly return to the Company money deposited with the Trustee or the Paying Agent by the Company to pay the redemption price of, and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed. If the Trustee returns the redemption price of, and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed because such condition precedent has not been satisfied, then, within 15 days following the redemption date given in the notice of redemption mailed to Holders (as such date may be have been extended or delayed as provided in Section 3.03 hereof), the Company will mail or caused to be mailed, by first class mail, a notice to each Holder whose Notes were to be redeemed at its registered address, stating that (i) such redemption has been rescinded in accordance with Section 3.03 hereof, (ii) any Notes surrendered for redemption by such Holder have been credited to such Holder’s account or otherwise returned to such Holder, (iii) such Notes remain issued and outstanding and (iv) interest on the Notes did not cease to accrue and will continue to accrue pursuant to this Indenture, and including such other information as determined by the Company, consistent with this Article 3.

Subject to the final sentence of this paragraph, if the Company complies with the provisions of the first paragraph of this Section 3.05, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the first paragraph of this Section 3.05, interest shall be paid on the unpaid principal, from the redemption or purchase

-46-

date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. If any Note called for redemption is not so paid upon surrender for redemption on the redemption date because one or more conditions precedent to redemption is not satisfied, interest shall continue to accrue on such Note or the portions thereof called for redemption.

Section 3.06.  Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

Section 3.07.  Optional Redemption.

(a) At any time prior to April 1, 2008, the Company may on any one or more occasions redeem up to a maximum of 35% of the original aggregate principal amount of Notes (calculated giving effect to any issuance of Additional Notes) with funds in the aggregate amount not exceeding the aggregate Net Cash Proceeds of one or more Equity Offerings, at a redemption price equal to 111% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that after giving effect to any such redemption:

(1) at least 65% of the original aggregate principal amount of the Notes (calculated giving effect to any issuance of Additional Notes) remains outstanding immediately following such redemption; and

(2) any such redemption by the Company must be made within 90 days of the related Equity Offering and must be made in accordance with certain procedures set forth in this Indenture.

Any notice of such redemption may be given prior to the completion of the related Equity Offering, and any such redemption or notice may, at the Company’s discretion, be subject to the satisfaction of one or more conditions precedent, including but not limited to the completion of the related Equity Offering.

(b) Except pursuant to the preceding paragraphs, the Notes will not be redeemable at the Company’s option prior to April 1, 2009.

-47-

(c) On or after April 1, 2009, the Company may redeem all or a part of the Notes, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes redeemed to the applicable redemption date, subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date if redeemed during the twelve-month period commencing on April 1 of the years indicated below.

Year	Percentage
2009	105.500	%
2010	102.750	%
2011 and thereafter	100.000	%

Unless the Company defaults in the payment of the redemption price or such redemption is rescinded as provided in Section 3.03 hereof, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08.  Mandatory Redemption.

(a) In the event that (i) the IAAI Assumption is not consummated on or prior to September 22, 2005 or (ii) the Acquisition Agreement is terminated on or prior to September 22, 2005, for any reason, the Company shall redeem all the Notes at the applicable Mandatory Redemption Price on (a) September 29, 2005, in the event that the IAAI Assumption is not consummated on or prior to September 22, 2005, or (b) the fifth day (or if such day is not a Business Day, the next following Business Day) following the termination of the Acquisition Agreement.

(b) Except as set forth in Section 3.08(a), the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

ARTICLE 4

COVENANTS

Section 4.01.  Payment of Notes.

The Company will pay or cause to be paid the principal of, premium, if any, and interest and Liquidated Damages, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest and Liquidated Damages, if any will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. If a payment date is not a Business Day, payment may be made on the next succeeding day that is a Business Day and no interest shall accrue on such payment for the intervening period. The Company will pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02.  Maintenance of Office or Agency.

The Company will maintain an office or agency designated by it (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration

-48-

of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of any such designation or rescission of any such designation, and the location and any change in the location, of such office or agency (other than the designation and location specified in the following paragraph). If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof.

Section 4.03.  SEC Reports.

(a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, from and after the Effective Date, the Company will furnish to the Holders of Notes, cause the Trustee to furnish to the Holders of Notes or file with the SEC, within the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file reports; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants. In addition, following the consummation of the Exchange Offer contemplated by the Registration Rights Agreement, the Company will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing). The Company will at all times comply with TIA § 314(a).

If, at any time after consummation of the Exchange Offer contemplated by the Registration Rights Agreement, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraphs with the SEC within the time periods specified above unless the SEC will not accept such a filing. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on its website (if it then maintains a website) within the time periods that would apply if the Company were required to file those reports with the SEC.

(b) For so long as any Notes remain outstanding, if at any time they are not required to file with the SEC the reports required by Section 4.03(a), the Company and the Subsidiary Guarantors will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Section 4.04.  Compliance Certificate.

(a) The Company and each Subsidiary Guarantor (to the extent that such Subsidiary Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal

-49-

year, an Officer’s Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, conditions and covenants of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

(b) So long as any of the Notes are outstanding, the Company will deliver to the Trustee, within 30 days after the occurrence thereof, specifying such Default or Event of Default, its status and what action the Company is taking or proposes to take in respect thereof.

Section 4.05.  [Intentionally Omitted]

Section 4.06.  Stay, Extension and Usury Laws.

The Company and each of the Subsidiary Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Subsidiary Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07.  Limitation on Restricted Payments.

(a) Prior to the Effective Date, the Company will not make any Restricted Payment or any Permitted Investment except in connection with the consummation of the Transactions, the IAAI Assumption and the transactions contemplated thereby, including any Investments deemed to exist by virtue of the Escrow Agreement. The foregoing will not prohibit the Company from paying a dividend or otherwise distributing to the holders of its Capital Stock an amount equal to the excess of the Escrowed Property over the Mandatory Redemption Price.

(b) From and after the Effective Date, the Company will not, and will not permit any Restricted Subsidiary, directly or indirectly to:

(1) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any Subsidiary of the Company) to the holders of its Capital Stock in their capacity as such, except (x) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock or, in the case of a Subsidiary, Preferred Stock) and (y) dividends or distributions payable to the Company or a Restricted Subsidiary (and, if such Restricted Subsidiary has stockholders or equity owners other than the Company or other Restricted Subsidiaries, to its other stockholders or equity owners on a pro rata basis);

-50-

(2) purchase, repurchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company held by Persons other than the Company or a Restricted Subsidiary or any Capital Stock of any Parent;

(3) purchase, repurchase, redeem, retire, defease or otherwise acquire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment any Subordinated Obligations (other than the purchase, repurchase redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations acquired in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of acquisition); or

(4) make any Investment (other than a Permitted Investment) in any other Person;

(any such dividend, distribution, payment, purchase, redemption, repurchase, defeasance, retirement, or other acquisition or Investment being herein referred to as a “Restricted Payment”), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(A) a Default will have occurred and be continuing (or would result therefrom);

(B) the Company could not Incur at least $1.00 of additional Indebtedness under Section 4.09(b) hereof; or

(C) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a resolution of the Board of Directors) declared or made subsequent to the Effective Date would exceed the sum, without duplication, of:

(i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Effective Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit);

(ii) the aggregate Net Cash Proceeds and Fair Market Value of property or assets received by the Company as capital contributions to the Company or from the issue or sale of its Capital Stock (other than Disqualified Stock) in each case, subsequent to the Effective Date (other than an issuance or sale to (x) a Subsidiary of the Company or (y) an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries, except to the extent that Consolidated Net Worth increases as a result of such issue or sale to such plan or trust);

(iii) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Effective Date of any Indebtedness of the Company or any of its Restricted Subsidiaries issued after the Effective Date which is convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company or any Parent

-51-

(less the amount of any cash or the Fair Market Value of other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange plus the amount of cash, property or assets (determined as provided above) received by the Company or any Restricted Subsidiary upon such conversion or exchange);

(iv) the amount equal to the net reduction in Investments that was made after the Effective Date in Unrestricted Subsidiaries resulting from (x) payments of dividends, repayments of the principal of loans or advances or other transfers of assets to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of “Investment”) not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; and

(v) in the case of any disposition or repayment or return of all or any portion of any Investment that was made after the Effective Date, other than a Permitted Investment (without duplication of any amount deducted in calculating the amount of Investments at any time outstanding included in the amount of Restricted Payments), an amount in the aggregate equal to the lesser of the return of capital, repayment or other proceeds with respect to all such Investments and the initial amount of all such Investments.

(c) The provisions of the foregoing paragraph (b) will not prohibit any of the following (each a “Permitted Payment”):

(1) the making of any Restricted Payment (x) in exchange for, or out of the Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Capital Stock of the Company (other than Disqualified Stock) or (y) from the substantially concurrent contribution of common equity capital to the Company; provided, however, that:

(A) such Restricted Payment will be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above; and

(B) the Net Cash Proceeds from such sale applied in the manner set forth in this clause (c) will be excluded from the calculation of amounts under clause (4)(C)(ii) of paragraph (b) above;

(2) any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company that is permitted to be Incurred pursuant to Section 4.09(d) hereof; provided, however, that such prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value will be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(3) any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations (i) from Net Available Cash to the extent permitted by Section 4.10 hereof (ii) to the extent provided by the agreement

-52-

governing such Subordinated Obligations, following the occurrence of a Change of Control (or, in the case of Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company, any similar event), but only if, in each case, the Company shall have complied with Section 4.15 hereof and, if required, purchased all Notes tendered pursuant to the offer to repurchase all the Notes tendered thereby prior to purchasing such Subordinated Obligations; and (iii) to the extent such Subordinated Obligations were Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company that was not Incurred in connection with, or in anticipation or contemplation of, the acquisition giving rise to the Incurrence of such acquired Indebtedness; provided, however, that such prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value will be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(4) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividends would have complied with this covenant; provided, however, that such dividends will be included in the calculation of the amount of Restricted Payments under paragraph (b) above;

(5) any purchase, repurchase, redemption, retirement or other acquisition for value of, or options to purchase, Capital Stock of the Company or any Parent from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, such Capital Stock or upon death, resignation or termination of employment, and loans, advances, dividends or distributions by the Company to any Parent to permit any Parent to make any such purchase, repurchase, redemption, retirement or other acquisition for value; provided, however, that the aggregate amount of such purchases, repurchases, redemptions, retirements and other acquisitions for value will not exceed $2.5 million in any calendar year (which amount shall be increased by the amount of any cash proceeds to the Company or any Parent from, or as a contribution to its capital from, (x) sales of Capital Stock to directors, officers or employees of the Company or any of its Subsidiaries subsequent to the Effective Date and (y) any “key man” life insurance policies which are used to make such redemptions or repurchases); provided that any unused amounts in one year can be carried forward to the next year, but cannot be carried forward to any succeeding year; provided further, however, that such purchases, repurchases, redemptions, retirements and other acquisitions for value shall be included in the calculation of the amount of Restricted Payments under paragraph (b) above;

(6) loans, advances, dividends or distributions to any Parent or other payments by the Company or any of its Restricted Subsidiaries to pay or permit any Parent to pay Parent Taxes or Parent Expenses; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(7) the payment of fees and compensation as permitted under Section 4.11(c)(5) or (7) hereof; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if such Capital Stock represents all or a portion of the exercise price thereof or taxes due in

-53-

connection with such exercise; provided that such repurchases shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(9) Restricted Payments made pursuant to, or contemplated by, or made to any Parent to permit any Parent to perform its obligations under, the provisions of any Transaction Document as in effect on the date of this Indenture, and as the same may be amended or replaced either by a Board of Directors Approval or by any such amendment or replacement that is not materially more disadvantageous to the Holders in any material respect than the original Transaction Document as in effect on the date of this Indenture; provided, that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(10) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the date of this Indenture in accordance with Section 4.09 hereof; provided that such payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(11) the distribution of Capital Stock of an Unrestricted Subsidiary to holders of Capital Stock of the Company; provided that such distribution is made promptly following the formation of, and investment in, such Unrestricted Subsidiary; and provided further that such distribution (but not such investment) shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(12) the Company or any Restricted Subsidiary from purchasing all (but not less than all), excluding directors’ qualifying shares, of the Capital Stock or other ownership interests in a Subsidiary of the Company which Capital Stock or other ownership interests were not theretofore owned by the Company or a Restricted Subsidiary of the Company; provided that such purchases shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(13) loans, advances, dividends, distributions or other payments, not to exceed $100,000 in the aggregate, to enable the Company or any Parent to make payments to holders of its Capital Stock in lieu of the issuance of fractional shares of its Capital Stock; provided that such loans, advances, dividends, distributions or other payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above;

(14) Restricted Payments made in connection with the Transactions; provided that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments under paragraph (b) above; or

(15) Restricted Payments (including loans and advances) in an aggregate amount at any time not to exceed $5.0 million (net of repayments of any such loans or advances); provided that such payments shall be included in the calculation of the amount of Restricted Payments under paragraph (b) above.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.

-54-

Section 4.08.  Limitation on Restrictions on Distributions from Restricted Subsidiaries.

From and after the Effective Date, the Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary, other than a Subsidiary Guarantor, to:

(1) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company;

(2) make any loans or advances to the Company; or

(3) transfer any of its property or assets to the Company,

except:

(A) any encumbrance or restriction pursuant to applicable law, rules, regulations and/or orders or an agreement or instrument in effect at or entered into on the Effective Date (including this Indenture) and any encumbrance or restriction pursuant to the Credit Facilities;

(B) any encumbrance or restriction with respect to a Restricted Subsidiary or any of its Subsidiaries pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company) and outstanding on such date, which encumbrance or restriction is not applicable to the Company or its Restricted Subsidiaries, or the properties or assets of the Company or its Restricted Subsidiaries, other than the Restricted Subsidiary, or the property or assets of the Restricted Subsidiary, so acquired, or any Subsidiary thereof or the property or assets of any such Subsidiary;

(C) any encumbrance or restriction pursuant to an agreement or instrument effecting a Refinancing of Indebtedness Incurred pursuant to an agreement or instrument referred to in clause (A) or (B) of this Section 4.08 or this clause (C) or contained in any amendment, restatement, renewal, supplement or replacement of an agreement referred to in clause (A) or (B) of this Section 4.08 or this clause (C); provided, however, that the encumbrances and restrictions contained in any such Refinancing agreement or amendment, restatement, renewal, supplement or replacement are not materially less favorable taken as a whole, as determined by the Board of Directors acting in good faith, to the Holders than the encumbrances and restrictions contained in such predecessor agreement;

(D) in the case of clause (3), any encumbrance or restriction:

(i) that restricts the subletting, assignment or transfer of any property or asset or right and is contained in any lease, license or other contract entered into in the ordinary course of business; or

(ii) contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements;

-55-

(E) with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement or instrument entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(F) any encumbrances or restrictions contained in any Credit Facilities extended to any Foreign Subsidiary of the Company;

(G) any encumbrance or restriction arising under or in connection with Indebtedness or other contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Entity;

(H) restrictions on the transfer of property or assets pursuant to any Permitted Lien;

(I) any encumbrance or restriction arising under or in connection with any agreement or instrument relating to any Indebtedness permitted to be Incurred subsequent to the Effective Date pursuant to the provisions of Section 4.09 hereof, if (x) either (i) the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in the terms of such agreement or instrument or (ii) the Company in good faith determines that such encumbrance or restriction will not cause the Company not to have the funds necessary to pay the principal of or interest on the Notes and (y) the encumbrance or restriction is not materially more disadvantageous to the Holders of the Notes than is customary in comparable financings (as determined by the Company in good faith);

(J) any encumbrance or restriction arising under or in connection with any agreement or instrument governing Capital Stock of any Person other than a Wholly Owned Subsidiary that is acquired after the Effective Date; and

(K) any encumbrance or restriction arising under or in connection with this Indenture and the Notes.

Section 4.09.  Limitation on Indebtedness.

(a) Prior to the Effective Date, the Company will not Incur any Indebtedness except the following:

(1) the Notes in an aggregate principal amount not to exceed $150.0 million; and

(2) Indebtedness of the Company that is not secured by a Lien on any assets, property or Capital Stock owned by the Company or any of its Subsidiaries, the proceeds of which Indebtedness are used solely for deposit (or the purchase of Temporary Cash Investments to be deposited) with the Escrow Agent in an amount not to exceed the amount necessary, together with net proceeds to the Company of the issuance of the Notes, to enable the Company to make the Initial Deposit.

(b) From and after the Effective Date, the Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company or any Subsidiary Guarantor may Incur Indebtedness if on the date of such Incurrence and after giving effect thereto (i) with respect to any Indebtedness Incurred on or prior to the date that is 18 months after the Effective Date, the Consolidated Coverage Ratio would be greater than 2.0:1, (ii) with respect to any Indebtedness Incurred subsequent to the date that is 18 months after the Effective Date but on or prior to the date that is 36 months after the Effective Date, the Consolidated Coverage Ratio would be greater

-56-

than 2.25:1 and (iii) with respect to any Indebtedness Incurred subsequent to the date that is 36 months after the Effective Date, the Consolidated Coverage Ratio would be greater than 2.50:1.

(c) The Company will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, Incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the applicable Subsidiary Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Subsidiary Guarantor, as the case may be. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of the fact that the holders of such Indebtedness have agreed, including by entering into one or more intercreditor agreements, to give one or more of such holders priority over the other holders in the collateral held by them.

(d) Notwithstanding the foregoing paragraph (b), the Company and its Restricted Subsidiaries may Incur the following Indebtedness:

(1) Indebtedness under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $170.0 million;

(2) Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company or any Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof at the time of such issuance, transfer or other event;

(3) Indebtedness (A) represented by the Notes (not including any Additional Notes) and the Subsidiary Guarantees, (B) outstanding on the Effective Date (other than the Indebtedness described in clauses (1) and (2) above) and (C) consisting of Refinancing Indebtedness;

(4) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the Company (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the foregoing paragraph (b) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (4) and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (4);

(5) Indebtedness (A) in respect of performance bonds, bankers’ acceptances, letters of credit and surety or appeal bonds provided by the Company and the Restricted Subsidiaries in the ordinary course of their business or other similar instruments or obligations issued, or relating to liabilities or obligations Incurred by the Company and the Restricted Subsidiaries in the ordinary course of their business (including those issued to governmental entities in connection with

-57-

self-insurance under applicable workers’ compensation statutes), (B) in respect of the financing of insurance premiums by the Company or any Restricted Subsidiary in the ordinary course of their business and (C) under Interest Rate Agreements entered into for bona fide hedging purposes of the Company in the ordinary course of business, or otherwise in respect of any Credit Facility;

(6) Guarantees by the Company or any Restricted Subsidiary of Indebtedness or any other obligation or liability of the Company or any Restricted Subsidiary not incurred in violation of this Section 4.09;

(7) Indebtedness of a Receivables Subsidiary secured by a Lien on all or part of the assets disposed of in, or otherwise Incurred in connection with, a Financing Disposition (which Indebtedness is, except for Standard Receivables Obligations, otherwise without recourse to the Company or any Restricted Subsidiary of the Company (other than such Receivables Subsidiary));

(8) Indebtedness of the Company or any Restricted Subsidiary under Currency Agreements entered into, in the judgment of the Company, to protect the Company or such Restricted Subsidiary from fluctuations in currency exchange rates and not entered into for speculative purposes;

(9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days of Incurrence;

(10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn out or other similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of the Company, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition, provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross consideration actually received by the Company and its Restricted Subsidiaries in connection with such disposition; or

(11) Indebtedness in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (11) and to remain outstanding immediately after such Incurrence, will not exceed $15.0 million.

(e) For purposes of determining compliance with any Dollar-denominated restriction on the Incurrence of Indebtedness denominated in a foreign currency, the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness, provided that (x) the Dollar-equivalent principal amount of any such Indebtedness outstanding on the Effective Date shall be calculated based on the relevant currency exchange rate in effect on the Effective Date; (y) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal

-58-

amount of such Indebtedness being refinanced; and (z) the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency and that is incurred under any Credit Facility shall be calculated based on the relevant currency exchange rate in effect on, at the Company’s option, (i) the Effective Date; (ii) any date on which any of the respective commitments under such Credit Facility shall be reallocated between or among facilities or subfacilities thereunder, or on which such rate is otherwise calculated for any purpose thereunder; or (iii) the date of such Incurrence. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing. For purposes of determining the outstanding principal amount of any particular Indebtedness Incurred pursuant to this covenant:

(1) Indebtedness Incurred pursuant to the Credit Facilities on the Effective Date shall be treated as Incurred pursuant to clause (1) of paragraph (d) above,

(2) Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; and

(3) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this Section 4.09, the Company, in its sole discretion, may classify such Indebtedness and only shall be required to include the amount of such Indebtedness in one of such clauses but may include the same in more than one of such clauses.

Section 4.10.  Limitation on Sales of Assets and Subsidiary Stock.

(a) Prior to the Effective Date, the Company will not consummate an Asset Disposition except in connection with the consummation of the Transactions and the transactions contemplated by the Escrow Agreement including the IAAI Assumption and related release to IAAI of the Escrowed Property.

(b) From and after the Effective Date, the Company will not, and will not permit any Restricted Subsidiary to, make any Asset Disposition unless:

(1) the Company or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the fair value, as determined in good faith by the Board of Directors, of the shares or assets subject to such Asset Disposition;

(2) at least 75% of the consideration thereof received is in the form of cash or Temporary Cash Investments; and

(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be):

(A) first, to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, purchase, repurchase, redeem, retire, defease or otherwise acquire for value Indebtedness of the Company or a Subsidiary Guarantor under any Credit Facility or Indebtedness (other than obligations in respect of Preferred Stock) of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case other than Indebtedness

-59-

owed to the Company or an Affiliate of the Company and other than obligations in respect of Disqualified Stock) within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

(B) second, to the extent of the balance of Net Available Cash after application in accordance with clause (A), to the extent the Company or such Restricted Subsidiary elects, to reinvest in Additional Assets to be owned by the Company or a Restricted Subsidiary (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash) within 365 days from the later of such Asset Disposition or the receipt of such Net Available Cash, or, if such reinvestment in Additional Assets is a project authorized by the Board of Directors that will commence within 365 days but that will take longer than 365 days to complete, the period of time necessary to complete such project;

(C) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an Offer (as defined in Section 4.10(c) below) to purchase the Notes pursuant to and subject to the conditions set forth in Section 4.10(c); provided, however, that if the Company elects (or is required by the terms of any other Indebtedness (other than Subordinated Obligations)), such Offer may be made ratably to purchase the Notes and such other Indebtedness of the Company; and

(D) fourth, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), for any general corporate purpose permitted by the terms of this Indenture;

provided, however, that in connection with any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness pursuant to clause (A), (C) or (D) above, the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired, defeased or otherwise acquired for value.

Notwithstanding the foregoing provisions of this covenant, the Company and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash for all Asset Dispositions that is not applied in accordance with this covenant exceeds $10.0 million.

For the purposes of this Section 4.10, the following are deemed to be cash:

(A) the amount of any liabilities (as shown on the Company or any Restricted Subsidiary’s most recent balance sheet or the notes thereto and other than obligations in respect of Disqualified Stock of the Company or Disqualified Stock and Preferred Stock of a Restricted Subsidiary that is a Subsidiary Guarantor) (i) that is assumed by the transferee of such assets and from which the Company and its Restricted Subsidiaries are unconditionally released or indemnified against by such transferee or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Asset Disposition has any obligation,

(B) securities received by the Company or any Restricted Subsidiary from the transferee that within 60 days are converted by the Company or such Restricted Subsidiary into cash, and

-60-

(C) any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of (x) 2.0% of the total assets less the goodwill, net, and other intangible assets, net, of the Company and its Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP, as of the most recent date for which a consolidated balance sheet of the Company and its Restricted Subsidiaries is available, and (y) $10.0 million at the time of the receipt of such Designated Non-Cash Consideration (with fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

Notwithstanding the immediately preceding paragraphs of this Section 4.10, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Disposition without complying with such paragraphs to the extent that:

(1) at least 75% of the consideration for such Asset Disposition constitutes Additional Assets; and

(2) such Asset Disposition is for at least fair value, as determined in good faith by the Board of Directors; provided that the Net Available Cash from any consideration not constituting Additional Assets received by the Company or any of its Restricted Subsidiaries in connection with any Asset Disposition permitted to be consummated under this paragraph shall be subject to the provisions of the two preceding paragraphs;

provided that at the time of entering into such transaction or immediately after giving effect thereto, no Default or Event of Default shall have occurred or be continuing or would occur as a consequence thereof.

(c) In the event of an Asset Disposition that requires the purchase of Notes pursuant to Section 4.10(b)(3)(C), the Company (i) will be required to purchase Notes tendered pursuant to an offer by the Company to the Holders for the Notes (the “Offer”) at a purchase price of 100% of their principal amount plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in this Indenture; and (ii) may purchase other Indebtedness (other than Subordinated Obligations) of the Company on the terms and to the extent contemplated thereby (provided that in no event shall the Company offer to purchase such other Indebtedness of the Company at a purchase price in excess of 100% of its principal amount (without premium), plus accrued and unpaid interest and Liquidated Damages, if any, thereon). If the aggregate purchase price of Notes (and other Indebtedness (other than Subordinated Obligations)) tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of the Notes (and such other Indebtedness (including Liquidated Damages, if any)), the Company will apply the remaining Net Available Cash in accordance with Section 4.10(b)(3)(D). The Company will not be required to make an Offer for Notes (and such other Indebtedness) pursuant to this Section 4.10 if the Net Available Cash available therefor (after application of the proceeds as provided in clauses (b)(3)(A) and (B)) is less than $10.0 million for any particular Asset Disposition (which lesser amount will be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition).

(d) In the event that, pursuant to this Section 4.10, the Company is required to commence an Offer to all Holders to purchase Notes, it will follow the procedures specified below.

-61-

The Offer shall be made to all Holders and all holders of other Senior Subordinated Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets in accordance with this Indenture. The Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Net Available Cash (the “Offer Amount”) to the purchase of Notes and such other Senior Subordinated Indebtedness in accordance with Section 4.10(c). Payment for any Notes so purchased will be made in the same manner as interest payments are made.

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Liquidated Damages, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Offer.

Upon the commencement of an Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Offer. The notice, which will govern the terms of the Offer, will state:

(1) that the Offer is being made pursuant to this Section 4.10, and the length of time the Offer will remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment will continue to accrue interest;

(4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Offer will cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Offer may elect to have Notes purchased in integral multiples of $1,000 only;

(6) that Holders electing to have Notes purchased pursuant to any Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Company will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments

-62-

as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, will be purchased); and

(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

(e) On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.10. The Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Offer on the Purchase Date.

(f) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.10. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under this Section 4.10 by virtue thereof.

Section 4.11.  Limitation on Transactions with Affiliates.

(a) Prior to the Effective Date, the Company will not enter into or permit to exist any Affiliate Transactions (as defined below) other than in connection with the consummation of the Transactions, the IAAI Assumption and the transactions contemplated thereby.

(b) From and after the Effective Date, the Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless such transaction is on terms:

(1) that are fair and reasonable to, and in the best interest of, the Company or such Restricted Subsidiary, as the case may be, as determined in good faith by the Board of Directors;

(2) that, in the event such Affiliate Transaction involves an aggregate amount in excess of $5.0 million;

(A) are set forth in writing; and

(B) have been approved by a majority of the members of the Board of Directors; and

-63-

(3) that, in the event such Affiliate Transaction involves an amount in excess of $20.0 million, have been determined by a nationally recognized appraisal, accounting or investment banking firm to be fair, from a financial point of view, to the Company or such Restricted Subsidiary, as the case may be.

(c) The provisions of the foregoing paragraph (b) will not prohibit:

(1) any Restricted Payment permitted to be paid pursuant to Section 4.07 hereof, any Permitted Payment or any Permitted Investments;

(2) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock or equity options and stock or equity ownership plans approved by the Board of Directors;

(3) the grant of stock or equity options or similar rights to employees and directors or members of the Board of Directors of the Company or its Subsidiaries pursuant to plans and/or contracts approved by the Board of Directors;

(4) loans or advances to officers, directors or employees of the Company or its Subsidiaries in the ordinary course of business in accordance with past practices of the Company, but in any event not to exceed $5.0 million in the aggregate outstanding at any one time;

(5) the payment of reasonable fees and compensation to, and the provision of indemnity on behalf of, directors, officers, employees, consultants or members of the Board of Directors of the Company or any Subsidiary as determined in good faith by the Company’s Board of Directors;

(6) any transaction between the Company and one or more Restricted Subsidiaries or between Restricted Subsidiaries;

(7) any transaction or any payment pursuant to or contemplated by the provisions of any Transaction Document as in effect on the date of this Indenture, and as the same may be amended or replaced either by a Board of Directors Approval or by any such amendment or replacement that is not materially more disadvantageous to the Holders in any material respect than the original Transaction Document as in effect on the date of this Indenture;

(8) transactions effected as part of a Qualified Receivables Transaction;

(9) the granting or performance of registration rights under a written registration rights agreement approved by the Board of Directors and containing customary terms, taken as a whole;

(10) transactions with Persons solely in their capacity as holders of Indebtedness or Capital Stock of the Company or any of its Restricted Subsidiaries, where such Persons are treated no more favorably than holders of Indebtedness or Capital Stock of the Company or such Restricted Subsidiary generally;

(11) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services in the ordinary course of business;

-64-

(12) sales of Capital Stock (other than Disqualified Stock or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor) for any consideration or any capital contribution;

(13) any agreement as in effect on the Effective Date and any amendment or supplement thereto or any replacement or renewal thereof or any transaction completed pursuant to such amendment, supplement, renewal or replacement agreement (including pursuant to any amendment thereto), so long as any such amendment or replacement agreement is not materially more disadvantageous to the Holders of Notes in any material respect than the original agreement as in effect on the Effective Date;

(14) transactions permitted by, and complying with, the provisions of Section 5.01 hereof;

(15) execution, delivery and performance of a tax sharing agreement with respect to any of the charges, taxes or assessments described in the definition of “Parent Taxes”;

(16) any transaction in the ordinary course of business, or approved by a majority of the Board of Directors, between the Company or any Restricted Subsidiary and any Affiliate of the Company controlled by the Company that is a joint venture or similar entity (in which no other Affiliate of the Company, other than a Restricted Subsidiary, owns any Capital Stock); and

(17) any agreement to do any of the foregoing.

Section 4.12.  Limitation on Liens.

Prior to the Effective Date, the Company will not create, incur, assume or suffer to exist any Lien of any kind against or upon any of its property or assets, or any proceeds, income or profit therefrom, which secures any Indebtedness other than as contemplated by the Escrow Agreement.

The Company may not Incur after the Effective Date any Secured Indebtedness, other than Secured Indebtedness secured by Permitted Liens, unless contemporaneously therewith effective provision is made to secure the Notes equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to the Notes) such Secured Indebtedness for so long as such Secured Indebtedness is secured by a Lien on any property or assets of the Company. A Subsidiary Guarantor may not Incur any Secured Indebtedness, other than Secured Indebtedness secured by Permitted Liens, unless contemporaneously therewith effective provision is made to secure the Subsidiary Guarantee of such Subsidiary Guarantor equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to such Subsidiary Guarantee) such Secured Indebtedness for as long as such Secured Indebtedness is secured by a Lien on any property or assets of such Subsidiary Guarantor.

Section 4.13.  Business Activities.

Prior to the Effective Date, the Company will not engage in any business operations other than those in connection with the issuance of the Notes, the Escrow Agreement and the Transactions.

From and after the Effective Date, the Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.

-65-

Section 4.14.  Corporate Existence.

Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:

(1) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary; and

(2) the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, of the Company or any Restricted Subsidiary or (ii) the corporate, partnership or other existence of any Restricted Subsidiary if the maintenance and preservation thereof is in the judgment of the Company no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.

Section 4.15.  Offer to Repurchase upon Change of Control.

(a) Upon the occurrence of any Change of Control, each Holder will have the right to require the Company to purchase all or any part (equal to $1,000 or an integral multiple of $1,000) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). In the event that at the time of such Change of Control the terms of any Credit Facility restrict or prohibit the repurchase of Notes pursuant to this Section 4.15, then prior to the mailing of the notice to Holders provided for in the immediately following paragraph but in any event within 90 days following the date the Company obtains actual knowledge of any Change of Control, the Company shall:

(1) repay in full all Indebtedness under Credit Facilities the terms of which require repayment upon a Change of Control or if doing so will allow the purchase of the Notes, offer to repay in full all Indebtedness under such Credit Facilities and repay the Indebtedness under such Credit Facilities of each lender who has accepted such offer; or

(2) obtain the requisite consent under the agreements governing the Credit Facilities the terms of which require repayment upon a Change of Control to permit the repurchase of the Notes as provided for in the immediately following paragraph.

(b) Not later than 30 days following the date the Company obtains actual knowledge of any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

(1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase all or a portion of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

-66-

(3) the purchase date (which shall be no earlier than 30 days nor later than 90 days from the date such notice is mailed) (the “Change of Control Payment Date”);

(4) that any Note not tendered will continue to accrue interest;

(5) that, unless the Company defaults in the payment of a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date) in respect of any Notes or portions of Notes properly tendered, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(7) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased;

(8) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof;

(9) such other instructions determined by the Company, consistent with this Section 4.15 and this Indenture, that a Holder must follow in order to have its Notes purchased; and

(10) if such notice is mailed prior to the occurrence of a Change of Control, that such offer is conditioned on the occurrence of such Change of Control.

(c) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under this covenant by virtue thereof.

(d) On the Change of Control Payment Date, the Company will, to the extent lawful:

(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date) in respect of all Notes or portions of Notes properly tendered; and

-67-

(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

The Paying Agent will promptly mail (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered 101% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(e) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless or until (i) there is a default in payment of the applicable redemption prices or(ii) the Company fails to pay the applicable redemption price on the redemption date (as such redemption date may be extended or delayed, or such redemption may be rescinded, as provided in Section 3.03 hereof).

(f) The Transactions shall not constitute or give rise to a Change of Control.

Section 4.16.  Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries.

From and after the Effective Date, the Company will not permit any Restricted Subsidiary to issue any shares of its Preferred Stock except to the Company or a Restricted Subsidiary.

Section 4.17.  Future Subsidiary Guarantors.

On the Effective Date, Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. will provide a Guarantee of payment of the Notes. From and after the Effective Date, the Company will cause each existing and future Domestic Subsidiary of the Company (other than an Unrestricted Subsidiary) that guarantees payment by the Company of any Indebtedness (other than Immaterial Indebtedness) of the Company to become a Subsidiary Guarantor, and if applicable, execute and deliver to the Trustee a supplemental indenture in the form set forth in this Indenture pursuant to which such Domestic Subsidiary will, jointly and severally, fully and unconditionally Guarantee on an unsecured senior basis the Guaranteed Obligations within 10 business days of the date on which it enters into such guarantee of Indebtedness (other than Immaterial Indebtedness) of the Company; provided that any such future Domestic Subsidiary that constitutes an Immaterial Subsidiary need not become a Subsidiary Guarantor until such time as it ceases to be an Immaterial Subsidiary.

ARTICLE 5

SUCCESSORS

Section 5.01.  Merger and Consolidation.

(a) Except for or in connection with the IAAI Assumption, the related release of the Escrowed Property and the Acquisition, prior to the Effective Date, the Company will not, in a single transaction

-68-

or a series of related transactions, consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets to, another Person or Persons.

Upon the execution and delivery by IAAI to the Trustee of a supplemental indenture, pursuant to which IAAI assumes IAAI Finance’s Obligations under this Indenture and the Notes, IAAI will be the successor obligor under this Indenture and the Notes and will succeed to, and be substituted for, and may exercise every right and power of IAAI Finance under this Indenture and the notes and IAAI Finance will be discharged from all obligations and covenants under this Indenture and the Notes.

(b) From and after the Effective Date, the Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by a supplemental indenture and registration rights agreement (if applicable), executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement (if applicable);

(2) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

(3) immediately after giving effect to such transaction and any related financing transactions on a pro forma basis either (i) the Successor Company would be able to Incur an additional $1.00 of Indebtedness under Section 4.09(b) hereof or (ii) the Consolidated Coverage Ratio of the Successor Company would be greater than the Consolidated Coverage Ratio of the Company immediately prior to such transaction; and

(4) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

(c) This Section 5.01 shall not apply to the Transactions.

Section 5.02.  Successor Corporation Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Company” shall refer instead to the successor Person and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein. Notwithstanding Section 5.01 hereof, this Section 5.02 shall apply to the Transactions as if the Transactions are subject to, and comply with the provisions of, Section 5.01 hereof.

-69-

The Company may merge with or into, or convey, transfer or lease all or substantially all its assets to (x) an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction or (y) a Restricted Subsidiary (including a Subsidiary Guarantor) so long as all assets of the Company and the Restricted Subsidiary immediately prior to such transaction are owned by such Restricted Subsidiary and its Restricted Subsidiaries immediately after the consummation thereof

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01.  Default.

Each of the following is an “Event of Default”:

(1) a default in any payment of interest on any Note when due and payable, which default continues for a period of 30 days;

(2) a default in the payment of principal of any Note when due and payable at its Stated Maturity, upon required redemption or repurchase (including failure to make a payment to purchase Notes pursuant to the Mandatory Redemption), upon declaration of acceleration or otherwise;

(3) a default in the observance or performance of any other covenant or agreement contained in this Indenture, which default continues for a period of 60 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes;

(4) the failure to pay at the Stated Maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness of the Company or any Restricted Subsidiary (other than a Receivables Entity) of the Company, or the acceleration of the Stated Maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at the Stated Maturity or which has been accelerated (in each case with respect to which the 20-day period described above has elapsed), aggregates $20.0 million or more at any time;

(5) the Company or a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

(A) commences a voluntary case,

(B) consents to the entry of an order for relief against it in an involuntary case,

(C) consents to the appointment of a custodian of it or for all or substantially all of its property,

(D) makes a general assignment for the benefit of its creditors, or

(E) generally is not paying its debts as they become due;

-70-

(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A) is for relief against the Company or a Significant Subsidiary in an involuntary case;

(B) appoints a custodian of the Company or a Significant Subsidiary or for all or substantially all of the property of the Company or a Significant Subsidiary; or

(C) orders the liquidation of the Company or a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(7) the rendering of any judgment or decree for the payment of money in excess of $20.0 million or its foreign currency equivalent against the Company or a Significant Subsidiary if:

(A) an enforcement proceeding thereon is commenced by any creditor, or

(B) such judgment or decree remains outstanding for a period of 60 days after such judgment becomes final and not appealable and is not discharged, paid, waived or stayed; or

(8) except as permitted by this Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, denies or disaffirms in writing its obligations under its Subsidiary Guarantee.

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clause (3) will not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in principal amount of the outstanding Notes notify the Company and the Trustee of the default and the Company or the relevant Subsidiary Guarantor, as applicable, does not cure such default within the time specified in clause (3) hereof after receipt of such notice.

Section 6.02.  Acceleration.

If an Event of Default (other than an Event of Default pursuant to Section 6.01(5) or Section 6.01(6)) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes by notice to the Company may declare the principal of and accrued but unpaid interest and Liquidated Damages, if any, on all the Notes to be due and payable. Upon such a declaration, such principal and interest and Liquidated Damages, if any, will be due and payable immediately. If an Event of Default pursuant to Section 6.01(5) or Section 6.01(6) relating to the Company occurs, the principal of and interest and Liquidated Damages, if any, on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration and its consequences, if

-71-

the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium or Liquidated Damages, if any, that has become due solely because of the acceleration) have been cured or waived.

Section 6.03.  Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Liquidated Damages, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04.  Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, or interest on, the Notes; provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05.  Control by Majority.

Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of Notes or that would involve the Trustee in personal liability.

Section 6.06.  Limitation on Suits.

A Holder may pursue a remedy with respect to this Indenture or the Notes only if:

(1) such Holder gives to the Trustee written notice that an Event of Default is continuing;

(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

-72-

(5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07.  Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, and interest on the Note, on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08.  Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09.  Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

-73-

Section 6.10.  Priorities.

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any and interest, respectively; and

Third: to the Company or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11.  Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01.  Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

-74-

(2) the Trustee will not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02.  Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it (unless other evidence be herein specifically prescribed) may require an Officer’s Certificate or Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

(f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

-75-

Section 7.03.  Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04.  Trustee’s Disclaimer.

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05.  Notice of Defaults.

If a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, interest or premium or Liquidated Damages, if any, on any Note (including payments pursuant to the redemption provisions of such Note), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Holders.

Section 7.06.  Reports by Trustee to Holders of the Notes.

(a) Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit by mail all reports as required by TIA § 313(c).

(b) A copy of each report at the time of its mailing to the Holders of Notes will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Company will promptly notify the Trustee when the Notes are listed on any stock exchange.

Section 7.07.  Compensation and Indemnity.

(a) The Company will pay to the Trustee from time to time such compensation as the Company and the Trustee shall agree from time to time in writing for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in accordance with any provision of this Indenture, except any such disbursement, advance or expense as may be attributable to its negligence or

-76-

bad faith. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

(b) The Company and the Subsidiary Guarantors will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Subsidiary Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, the Subsidiary Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company or any of the Subsidiary Guarantors of their obligations hereunder. The Company or such Subsidiary Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Subsidiary Guarantor need pay for any settlement made without its consent.

(c) The obligations of the Company and the Subsidiary Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture.

(d) To secure the Company’s and the Subsidiary Guarantors’ payment obligations in this Section 7.07, the Trustee will have a claim prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such claim will survive the satisfaction and discharge of this Indenture.

(e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.

Section 7.08.  Replacement of Trustee.

(a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

(b) The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10 hereof;

(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(3) a custodian or public officer takes charge of the Trustee or its property; or

(4) the Trustee becomes incapable of acting.

-77-

(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

(e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f) A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.

Section 7.09.  Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

Section 7.10.  Eligibility; Disqualification.

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition.

This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

Section 7.11.  Preferential Collection of Claims Against Company.

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

Section 7.12.  Escrow Authorization

Each Holder, by its acceptance of a Note, consents and agrees to the terms of the Escrow Agreement, including related documents thereto, as the same may be in effect or may be amended from time to time in writing by the parties thereto (provided that no amendment that would materially adversely

-78-

affect the rights of the Holders may be effected without the consent of each Holder affected thereby), and authorizes and directs the Trustee to enter into the Escrow Agreement and to perform its obligations and exercise its rights thereunder in accordance therewith. The Company shall do or cause to be done all such acts and things as may be necessary or proper, or as may be required by the provisions of the Escrow Agreement, to assure and confirm to the Trustee the security interest in the Permitted Investments contemplated hereby, by the Escrow Agreement or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purpose herein expressed. The Company shall take, or shall cause to be taken, upon request of the Trustee, any and all actions reasonably required to cause the Escrow Agreement to create and maintain, as security for the obligations of the Company under this Indenture and the Notes as provided in the Escrow Agreement, valid and enforceable first priority perfected liens in and on all the Permitted Investments, in favor of the Trustee for its benefit and the ratable benefit of the Holders, superior to and prior to the rights of third Persons and subject to no other Liens.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an Officer’s Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and Subsidiary Guarantees upon compliance with the conditions set forth below in this Article 8.

Section 8.02.  Legal Defeasance and Discharge.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Subsidiary Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Subsidiary Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Subsidiary Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Subsidiary Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium or Liquidated Damages, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;

(2) the Company’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s and the Subsidiary Guarantors’ obligations in connection therewith; and

(4) this Article 8.

-79-

Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03.  Covenant Defeasance.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Subsidiary Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof and clauses (2) and (3) of Section 5.01 hereof and clause (1) of Section 11.05 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Subsidiary Guarantees, the Company and the Subsidiary Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Section 6.01(3) and 6.01(4) hereof will not constitute Events of Default.

Section 8.04.  Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;

(2) in the case of an election under Section 8.02 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

(A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

(B) since the date of this Indenture, there has been a change in the applicable federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax

-80-

purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default shall have occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(6) the Company must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

(7) the Company must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a Legal Defeasance need not to be delivered if all Notes not therefore delivered to the Trustee for cancellation (1) have become due and payable or (2) will become due and payable on the maturity date within one year, or are to be called for redemption within one year, under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

Section 8.05.  Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section

-81-

8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Company from time to time upon the request of the Company any money or non-callable U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06.  Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or Liquidated Damages, if any, or interest on, any Note and remaining unclaimed for two years after such principal, premium or Liquidated Damages, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 8.07.  Reinstatement.

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable U.S. Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Subsidiary Guarantors’ obligations under this Indenture and the Notes and the Subsidiary Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium or Liquidated Damages, if any, or interest on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.  Without Consent of Holders of Notes.

Notwithstanding Section 9.02 of this Indenture, without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the Notes or the Subsidiary Guarantees, to:

(1) cure any ambiguity, omission, defect or inconsistency,

-82-

(2) provide for the assumption by a successor of the Company’s or a Subsidiary Guarantor’s obligations to the Holders of the Notes and Subsidiary Guarantees in the case of a merger or consolidation or sale, conveyance, transfer or lease of all or substantially all of the Company’s or such Subsidiary Guarantor’s assets, as applicable,

(3) provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code),

(4) add additional Guarantees with respect to the Notes,

(5) secure the Notes,

(6) add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company,

(7) make any change that does not adversely affect the rights of any Holder, subject to the provisions of this Indenture,

(8) conform the text of this Indenture, the Subsidiary Guarantees or the Notes to any provision of the “Description of Notes” section of the offering memorandum relating to the initial issuance of the Notes to the extent that such provision in that “Description of Notes” section was intended to be a verbatim recitation of a provision of this Indenture, the Subsidiary Guarantees or the Notes,

(9) provide for the issuance of the Exchange Notes or Additional Notes, or

(10) comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 13.04 hereof, the Trustee will join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Notwithstanding the foregoing provisions of this Section 9.01 and Section 9.02, IAAI Finance, IAAI, the Subsidiary Guarantors party thereto and the Trustee may execute and deliver the Merger Supplemental Indenture, in each case without notice to or consent of any Holder.

Section 9.02.  With Consent of Holders of Notes.

Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including, without limitation, Sections 4.10 and 4.15 hereof) and the Notes and the Subsidiary Guarantees with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing

-83-

Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, or interest on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the Subsidiary Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). In addition, one or more of the Subsidiary Guarantees may be released with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 13.04 hereof, the Trustee will join with the Company and the Subsidiary Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.

It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes or the Subsidiary Guarantees. However, without the consent of each Holder of an outstanding Note affected, no amendment, supplement or waiver under this Section 9.02 may (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the rate of or extend the time for payment of interest, including default interest, on any Note;

(3) reduce the principal of or change the Stated Maturity of any Note;

(4) reduce the premium payable upon the redemption of any Note or change the date at which any Note may be redeemed under Section 3.07;

(5) make any Note payable in money other than that stated in the Note;

(6) make any change in the provisions of this Indenture governing the right of any Holder to receive payment of principal of, and interest on, such Holder’s Notes on or after the due dates therefor (except a rescission of acceleration of the Notes by the Holders of at least a majority

-84-

in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration) or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(7) release any Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture;

(8) make any change in the ranking of the Notes that is materially adverse to Holders or make any change in the amendment and waiver provisions which require each Holder’s consent; or

(9) make any change to paragraph (8) of the Notes providing for the Mandatory Redemption which would adversely affect the rights of any of the Holders to receive the Mandatory Redemption Price.

Section 9.03.  Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Notes will be set forth in a amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04.  Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date on which the Trustee receives an Officer’s Certificate certifying that the Holders of the requisite principal amount of Notes have consented (and not thereafter revoked such consent) to the amendment, supplement or waiver. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

Section 9.05.  Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06.  Trustee to Sign Amendments, etc.

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until the Board of Directors of the Company approves it. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 13.04 hereof, an Officer’s Certificate and (except in the case of

-85-

the execution by the Trustee of the Merger Supplemental Indenture) an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE 10

[RESERVED]

ARTICLE 11

SUBSIDIARY GUARANTEES

Section 11.01.  Guarantee.

(a) From and after the Effective Date and subject to this Article 11, each of the Subsidiary Guarantors hereby, as primary obligor and not merely as surety, jointly and severally, fully and unconditionally Guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

(1) the principal of, premium and Liquidated Damages, if any, and interest on, the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other monetary obligations of the Company to the Holders or the Trustee hereunder whether for payment of principal of or interest on the Notes, expenses, indemnification of the Trustee or otherwise, or thereunder will be punctually paid in full, all in accordance with the terms hereof and thereof; and

(2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be punctually paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

Failing payment when due of any amount so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

(b) The Subsidiary Guarantors hereby agree that (to the fullest extent permitted by law) their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives (to the fullest extent permitted by law) diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant (except as otherwise provided in Section 11.06 hereof) that this Subsidiary Guarantee will not be discharged except by complete performance of the monetary obligations contained in the Notes and this Indenture.

(c) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Subsidiary Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Subsidiary Guarantors, any amount paid by either to the Trustee or

-86-

such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

(d) Each Subsidiary Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor further agrees (to the fullest extent permitted by law) that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Subsidiary Guarantee. The Subsidiary Guarantors will have the right to seek contribution from the Company any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantee.

Section 11.02.  [Reserved]

Section 11.03.  Limitation on Subsidiary Guarantor Liability.

Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or fraudulent conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors hereby irrevocably agree that the obligations of such Subsidiary Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article 11, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or fraudulent conveyance. Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that its Subsidiary Guarantee, and the waiver set forth in Section 11.01(d), are knowingly made in contemplation of such benefits.

Section 11.04.  Delivery of Subsidiary Guarantee.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in this Indenture or any supplemental indenture on behalf of the Subsidiary Guarantors. Neither the Company nor any Subsidiary Guarantor shall be required to make a notation on the Notes to reflect any Subsidiary Guarantee or any such release, termination or discharge thereof.

The Company shall cause each Restricted Subsidiary that is required to become a Subsidiary Guarantor pursuant to Section 4.18, and each Subsidiary of the Company that the Company causes to become a Subsidiary Guarantor pursuant to Section 4.18, to promptly execute and deliver to the Trustee a Supplemental Indenture substantially in the form set forth in Exhibit E to this Indenture, or otherwise in form and substance reasonably satisfactory to the Trustee, evidencing its Subsidiary Guarantee on substantially the terms set forth in this Article 11.

-87-

Section 11.05.  Subsidiary Guarantors May Consolidate, etc., on Certain Terms.

Except as otherwise provided in this Section 11.05 and Section 11.06, the Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease all or substantially all of the assets of such Subsidiary Guarantor to, any Person unless:

(1) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and

(2) the Successor Guarantor will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such Person (if not such Subsidiary Guarantor) will expressly assume, by a supplemental indenture and registration rights agreement (if applicable), executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee and the Registration Rights Agreement (if applicable), respectively.

In case of any such consolidation, merger, conveyance, transfer or lease and upon the assumption by the successor Person, by such supplemental indenture, of such Subsidiary Guarantee, such successor Person will succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor. All the Subsidiary Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof.

Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (1) and (2) above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Subsidiary Guarantor with or into the Company or another Subsidiary Guarantor, or will prevent any sale, conveyance or transfer of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety to the Company or another Subsidiary Guarantor.

The Company may permit any Subsidiary Guarantor to consolidate or merge, or convey, transfer or lease all or substantially all of the assets of such Subsidiary Guarantor if such transaction would result in the release of the Subsidiary Guarantee of such Subsidiary Guarantor pursuant to Section 11.06 hereof.

The Company may permit any Subsidiary Guarantor to merge with or into, or convey, transfer or lease all or substantially all its assets to an Affiliate incorporated solely for the purpose of reincorporating such Subsidiary Guarantor in another jurisdiction.

Section 11.06.  Releases.

(a) The Subsidiary Guarantee of a Subsidiary Guarantor will be automatically and unconditionally released and discharged:

(1) in connection with any consolidation or merger if the Subsidiary Guarantor or surviving Person shall cease to be a Subsidiary of the Company, if the consolidation or merger complies with the provisions of Section 5.01 hereof;

-88-

(2) in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with the provisions of Section 4.10 hereof;

(3) if the Subsidiary Guarantor is designated to be an Unrestricted Subsidiary in accordance with the provisions of this Indenture;

(4) in connection with any (direct or indirect) sale of Capital Stock or other transaction that results in such Subsidiary Guarantor ceasing to be a Subsidiary of the Company, if the sale or other transaction complies with the provisions of Section 4.10 hereof;

(5) upon the release of such Subsidiary Guarantor from its liability in respect of all Indebtedness (other than Immaterial Indebtedness) of the Company and all other Subsidiary Guarantors; and

(6) upon legal defeasance of the Notes in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 12 hereof, each Subsidiary Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee.

Upon any such occurrence specified in this Section 11.06, the Trustee will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee.

Any Subsidiary Guarantor not released from its obligations under its Subsidiary Guarantee as provided in this Section 11.06 will remain liable for the full amount of principal of and interest and premium and Liquidated Damages, if any, on the Notes and for the other obligations of any Subsidiary Guarantor under this Indenture as provided in this Article 11.

ARTICLE 12

SATISFACTION AND DISCHARGE

Section 12.01.  Satisfaction and Discharge.

This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when:

(1) either:

(a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

(b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year            , or are to be called for redemption within one year, and the Company or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations,

-89-

or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

(3) the Company or any Subsidiary Guarantor has paid or caused to be paid all sums then payable by it under this Indenture; and

(4) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be.

In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 12.01, the provisions of Sections 12.02 and 8.06 hereof will survive. In addition, nothing in this Section 12.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

Section 12.02.  Application of Trust Money.

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 12.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Liquidated Damages, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 12.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Subsidiary Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01 hereof; provided that if the Company has made any payment of principal of, premium or Liquidated Damages, if any, or interest on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

Section 12.03.  Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or Liquidated Damages, if any, or interest on, any Note

-90-

and remaining unclaimed for two years after such principal, premium or Liquidated Damages, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

ARTICLE 13

MISCELLANEOUS

Section 13.01.  Trust Indenture Act Controls.

If any provision hereof limits, qualifies or conflicts with a provision of the TIA that is required under the TIA to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed (i) to apply to this Indenture as so modified or (ii) to be excluded, as the case may be.

Section 13.02.  Notices.

Any notice or communication by the Company, any Subsidiary Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Company and/or any Subsidiary Guarantor:

Insurance Auto Auctions, Inc.

Two Westbrook Corporate Center, Suite 600

Westchester, IL 60154

Facsimile No.: (708) 492-7575

Attention: Chief Financial Officer

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, New York 10036

Facsimile No.: (917) 777-2918

Attention: Gregory A. Fernicola

If to the Trustee:

Wells Fargo Bank, National Association

N9303-120

Sixth Street & Marquette Avenue

Minneapolis, MN 55479

Facsimile No.: (612) 667-9825

Attention: IAAI Administrator

-91-

The Company, any Subsidiary Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time.

Section 13.03.  Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

Section 13.04.  Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(1) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

Section 13.05.  Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and must include:

(1) a statement that the Person making such certificate or opinion has read such covenant or condition;

-92-

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 13.06.  Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 13.07.  No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor, as such, will have any liability for any obligations of the Company or the Subsidiary Guarantors under the Notes, this Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 13.08.  Governing Law.

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 13.09.  No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 13.10.  Successors.

All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Subsidiary Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 11.05 hereof.

-93-

Section 13.11.  Severability.

In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

Section 13.12.  Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement.

Section 13.13.  Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

[Signatures on following page]

-94-

SIGNATURES

Dated as of April 1, 2005

IAAI FINANCE CORP.
By:	/S/ JAMES J. CONNORS, II
	Name: James J. Connors, II
	Title: Vice President and Assistant Secretary
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:	/S/ JEFFERY ROSE
	Name: Jeffery Rose
	Title: Corporate Trust Officer

S-1

EXHIBIT A

[Face of Note]

CUSIP/CINS                     

11% Senior Notes due 2013

No.          $                    

IAAI Finance Corp.

promises to pay to                  or registered assigns,

the principal sum of                                                                                                                                                         DOLLARS on April 1, 2013.

Interest Payment Dates: April 1 and October 1

Record Dates: March 15 and September 15

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officers.

Dated:                     

IAAI FINANCE CORP.
By:
	Name:
	Title:

This is one of the Notes referred to

in the within-mentioned Indenture:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Signatory

A-1

[Back of Note]

11% Senior Notes due 2013

[Insert the Regulation S Temporary Global Note legend set forth in Section 2.06(g)(3) if applicable pursuant to the provisions of the Indenture]

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

(1) INTEREST. [Name of Company] (the “Company,” which term includes any successor corporation), promises to pay interest on the principal amount of this Note at 11% per annum until maturity and shall pay the Liquidated Damages, if any, payable pursuant to the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages, if any, semi-annually in arrears on April 1 and October 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be October 1, 2005¹[                    , 20    ]². The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

(2) METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the March 15 or September 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal,

¹ Include only for Notes issued on the Closing Date.

² For any Additional Notes, insert the Interest Payment Date immediately preceding the date of issuance of such Additional Notes, or if the date of issuance of such Additional Notes is an Interest Payment Date, such date of issuance, or the date of issuance of such Additional Notes, as applicable.

A-2

premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose, provided that payment by wire transfer of immediately available funds will be made with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent, provided, further, that the Company reserves the right to pay interest and Liquidated Damages, if any, by check mailed directly to the Holders at their addresses set forth in the register of Holders maintained by the Registrar. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

(3) PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

(4) INDENTURE. The Company issued the Notes under an Indenture dated as of April 1, 2005 (the “Indenture”) between the Company and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the Company. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

(5) OPTIONAL REDEMPTION. (a) Except as set forth in subparagraphs (b) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to April 1, 2009. On or after April 1, 2009, the Company will have the option to redeem the Notes, in whole or in part, at the following redemption prices (expressed as percentages of principal amount) plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes to the applicable redemption date, (subject to the rights of Holders on the relevant record date to receive interest on the relevant interest payment date) if redeemed during the twelve-month period commencing on April 1 of the years set forth below:

Year	Percentage
2009	105.500	%
2010	102.750	%
2011 and thereafter	100.000	%

Any such redemption and notice thereof may, in the Company’s discretion, be subject to the satisfaction of one or more conditions precedent.

Unless the Company defaults in the payment of the redemption price or such redemption is rescinded in accordance with the Indenture, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to April 1, 2008, the Company may, on any one or more occasions, redeem up to 35% of the original aggregate principal amount of Notes (calculated giving effect to any issuance of Additional Notes) issued under the Indenture with funds in the aggregate amount not exceeding the aggregate Net Cash Proceeds of one or more Equity Offerings, at a redemption price equal to 111% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any thereon to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that, after giving effect to any such redemption: (1) at least 65% of the

A-3

original aggregate principal amount of the Notes (calculated giving effect to any issuance of Additional Notes) remains outstanding and (2) any such redemption by the Company must be made within 90 days of the related Equity Offering and must be made in accordance with certain procedures set forth in the Indenture.

Any notice of such redemption may be given prior to the completion of the related Equity Offering, and any such redemption or notice may, at the Company’s discretion, be subject to the satisfaction of one or more conditions precedent, including but not limited to the completion of the related Equity Offering.

(6) MANDATORY REDEMPTION. Except as set forth in paragraph 8, the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

(7) OFFER TO REPURCHASE. (a) Upon the occurrence of a Change of Control, each Holder will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as and to the extent provided in the Indenture. Not later than 30 days following the date the Company obtains actual knowledge of any Change of Control, the Company shall mail notice to each Holder with a copy to the Trustee setting forth the procedures governing the Change of Control Offer as required by the Indenture.

(b) If the Company or a Restricted Subsidiary of the Company consummates any Asset Dispositions, to the extent that the aggregate Net Available Cash for all Asset Dispositions that is not applied in accordance with Section 4.10 of the Indenture exceeds $10.0 million and such Asset Disposition requires the purchase of the Notes pursuant to the Indenture, the Company (i) will be required to purchase Notes tendered pursuant to an offer by the Company to the Holders for the Notes (the “Offer”) at a purchase price of 100% of their principal amount plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in the Indenture; and (ii) may purchase other Indebtedness of the Company on the terms and to the extent contemplated thereby (provided that in no event shall the Company offer to purchase such other Indebtedness of the Company at a purchase price in excess of 100% of its principal amount (without premium), plus accrued and unpaid interest and liquidated damages, if any, thereon) to the date of purchase, in accordance with the procedures set forth in the Indenture. Holders of Notes that are the subject of an offer to purchase will receive an Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

(8) MANDATORY REDEMPTION. In the event that (i) the IAAI Assumption is not consummated on or prior to September 22, 2005 or (ii) the Acquisition Agreement is terminated on or prior to September 22, 2005, for any reason, the Company shall redeem all the Notes at the applicable Mandatory Redemption Price on (a) September 29, 2005, in the event that the IAAI Assumption is not consummated on or prior to September 22, 2005, or (b) the fifth day (or if such day is not a Business Day, the next following Business Day) following the termination of the Acquisition Agreement.

(9) NOTICE OF REDEMPTION. Notice of redemption pursuant to paragraph (5) will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date and notice of redemption pursuant to paragraph 8 will be mailed promptly after the occurrence of the event triggering such redemption, in each case to each Holder of Notes to be redeemed at its registered address, except

A-4

that redemption notices pursuant to paragraph (5) may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed.

(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in fully registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not transfer or exchange any Note for a period of 15 days prior to a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

(11) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes or the Subsidiary Guarantees may be amended or supplemented with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, or interest on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Indenture or the Notes or the Subsidiary Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Without the consent of any Holder of a Note, the Indenture or the Notes or the Subsidiary Guarantees may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, provide for the assumption by a successor of the Company’s or a Subsidiary Guarantor’s obligations to the Holders of the Notes and Subsidiary Guarantees in the case of a merger or consolidation or sale, conveyance, transfer or lease of all or substantially all of the Company’s or such Subsidiary Guarantor’s assets, as applicable, provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code), add additional Guarantees with respect to the Notes, secure the Notes, add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company, make any change that does not adversely affect the rights of any Holder, subject to the provisions of the Indenture, conform the text of the Indenture, the Subsidiary Guarantees or the Notes to any provision of the “Description of Notes” section of the Company’s offering memorandum, relating to the initial issuance of the Notes to the extent that such provision in the “Description of Notes” section was intended to be a verbatim recitation of a provision of the Indenture, the Subsidiary Guarantees or the Notes, provide for the issuance of the Exchange Notes or Additional Notes, or comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA.

(13) DEFAULTS AND REMEDIES. Events of Default include: (i) a default in any payment of interest on any Note when due and payable, which default continues for a period of 30 days; (ii) a default in the payment of principal of any Note when due and payable at its Stated Maturity, upon required redemption

A-5

or repurchase (including failure to make a payment to purchase Notes pursuant to the Mandatory Redemption), upon declaration of acceleration or otherwise; (iii) a default in the observance or performance of any other covenant or agreement contained in the Indenture, which default continues for a period of 60 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes; (iv) the failure to pay at the Stated Maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness of the Company or any Restricted Subsidiary (other than a Receivables Entity) of the Company, or the acceleration of the Stated Maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at the Stated Maturity or which has been accelerated (in each case with respect to which the 20-day period described above has elapsed), aggregates $20.0 million or more at any time; (v) certain events of bankruptcy or insolvency with respect to the Company or a Significant Subsidiary; (vi) certain judgments for the payment of money that remain undischarged for a period of 60 days; and (vii) except as permitted by the Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, denies or disaffirms in writing its obligations under its Subsidiary Guarantee. However, a default under clause (iii) above will not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in principal amount of the outstanding Notes notify the Company and the Trustee of the default and the Company or the relevant Subsidiary Guarantor, as applicable, does not cure such default within the time specified in clause (iii) above after receipt of such notice. If any Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or premium or Liquidated Damages, if any,) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

(15) NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor, as such, will have any liability for any obligations of the Company or the Subsidiary Guarantors under the Notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of

A-6

Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(16) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

(17) ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

(18) [ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of [Restricted Global Notes and Restricted Definitive Notes]³ [Restricted Global Notes, Restricted Definitive Notes and Regulation S Temporary Global Note]⁴ will have all the rights set forth in the Registration Rights Agreement dated as of April 1, 2005, among IAAI Finance Corp., a Delaware corporation, and the other parties named on the signature pages thereof, in the case of Additional Notes, Holders of [Restricted Global Notes and Restricted Definitive Notes]⁵ [Restricted Global Notes, Restricted Definitive Notes and Regulation S Temporary Global Note]⁶ will have the rights set forth in one or more registration rights agreements, if any, among the Company, the Subsidiary Guarantors and the other parties thereto, relating to rights given by the Company and the Subsidiary Guarantors to the purchasers of any Additional Notes (collectively, the “Registration Rights Agreement”).]⁷

(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

³ Include for any Note other than a Regulation S Temporary Global Note.

⁴ Include only for any Regulation S Temporary Global Note.

⁵ Include for any Note other than a Regulation S Temporary Global Note.

⁶ Include only for any Regulation S Temporary Global Note.

⁷ Include for any Note other than an Exchange Note.

A-7

(20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

[Name of Company]

[Address]

Attention: Chief Financial Officer

A-8

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
	(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-9

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

¨ Section 4.10                                                          ¨ Section 4.15

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

$                    

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Tax Identification No.:

Signature Guarantee*:

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-10

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of decrease in Principal Amount of this Global Note Amount of increase in Principal Amount of this Global Note Principal Amount of this Global Note
following such
decrease (or increase) Signature of
authorized officer of
Trustee
or Custodian

* This schedule should be included only if the Note is issued in global form.

A-11

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

[Name of Company]

[Address]

Wells Fargo Bank, National Association

N9303-120

Sixth Street & Marquette Avenue

Minneapolis, MN 55479

Re: 11% Senior Notes due 2013

Reference is hereby made to the Indenture, dated as of April 1, 2005 (as amended, supplemented or modified from time to time, the “Indenture”), between IAAI Finance Corp., as issuer (“IAAI Finance”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                                              (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                     in such Note[s] or interests (the “Transfer”), to                                          (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in

B-1

the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof;

or

(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

or

(d) ¨ such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Company and the Trustee) provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

B-2

4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

(a) ¨ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) ¨ Check if Transfer is pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) ¨ Check if Transfer is pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:

Dated:                                 

B-3

ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a) ¨ a beneficial interest in the:

(i) ¨ 144A Global Note (CUSIP             ), or

(ii) ¨ Regulation S Global Note (CUSIP             ), or

(iii) ¨ IAI Global Note (CUSIP             ); or

(b) ¨ a Restricted Definitive Note.

2. After the Transfer the Transferee will hold:

[CHECK ONE]

(a) ¨ a beneficial interest in the:

(i) ¨ 144A Global Note (CUSIP             ), or

(ii) ¨ Regulation S Global Note (CUSIP             ), or

(iii) ¨ IAI Global Note (CUSIP             ); or

(iv) ¨ Unrestricted Global Note (CUSIP             ); or

(b) ¨ a Restricted Definitive Note; or

(c) ¨ an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

B-4

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

[Name of Company]

[Address]

Wells Fargo Bank, National Association

N9303-120

Sixth Street & Marquette Avenue

Minneapolis, MN 55479

Re: 11% Senior Notes due 2013

Reference is hereby made to the Indenture, dated as of April 1, 2005 (as amended, supplemented or modified from time to time, the “Indenture”), between IAAI Finance Corp., as issuer (“IAAI Finance”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                                                              (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                                 in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(c) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a

C-1

beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

(b) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note, ¨ Regulation S Global Note, ¨ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

C-2

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:

Dated:                                              

C-3

EXHIBIT D

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

[Name of Company]

[Address]

Wells Fargo Bank, National Association

N9303-120

Sixth Street & Marquette Avenue

Minneapolis, MN 55479

Re: 11% Senior Notes due 2013

Reference is hereby made to the Indenture, dated as of April 1, 2005 (as amended, supplemented or modified from time to time, the “Indenture”), between IAAI Finance Corp., as issuer (“IAAI Finance”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

In connection with our proposed purchase of $                             aggregate principal amount of:

(a) ¨ a beneficial interest in a Global Note, or

(b) ¨ a Definitive Note,

we confirm that:

1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an opinion of counsel (which opinion and counsel are reasonably satisfactory to the Company and the Trustee) to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

D-1

3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

[Insert Name of Accredited Investor]
By:
	Name:
	Title:

Dated:                                              

D-2

EXHIBIT E

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS]

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                                 , 200    , among                                      (the “Guaranteeing Subsidiary”), a Subsidiary of [Name of Company] (or its permitted successor), a                      corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and Wells Fargo Bank, National Association, as trustee under the Indenture referred to below (the “Trustee”).

WITNESSETH

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of April 1, 2005 providing for the issuance of 11% Senior Notes due 2013 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture including but not limited to Article 11 thereof.

3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

E-1

5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

E-2

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

[GUARANTEEING SUBSIDIARY]
By:
	Name:
	Title:
[NAME OF COMPANY]
By:
	Name:
	Title:
[EXISTING SUBSIDIARY GUARANTORS]
By:
	Name:
	Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By:
	Authorized Signatory

E-3

EX-4.2

EXHIBIT 4.2

SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE, dated as of May 25, 2005, among Insurance Auto Auctions, Inc., an Illinois corporation (“IAAI”), IAAI Finance Corp., a Delaware corporation (“IAAI Finance”), Insurance Auto Auctions Corp., a Delaware corporation, IAA Services, Inc., an Illinois corporation, and IAA Acquisition Corp., a Delaware corporation (individually, a “Guarantor” and together, the “Guarantors”), and Wells Fargo Bank, National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H:

WHEREAS, IAAI Finance and the Trustee heretofore executed and delivered an Indenture, dated as of April 1, 2005 (as heretofore amended and supplemented, the “Indenture”), providing for the issuance of the 11% Senior Notes due 2013 (the “Securities”) of IAAI Finance (capitalized terms used herein but not otherwise defined have the meanings ascribed thereto in the Indenture);

WHEREAS, Section 5.01(a) of the Indenture provides that upon the execution and delivery by IAAI to the Trustee of this Supplemental Indenture, IAAI shall be the successor Company under the Indenture and the Securities and shall succeed to, and be substituted for, and may exercise every right and power of, IAAI Finance under the Indenture and the Securities and IAAI Finance shall be discharged from all obligations and covenants under the Indenture and the Securities;

WHEREAS, pursuant to the Indenture, upon execution and delivery by each Guarantor to the Trustee of this Supplemental Indenture, such Guarantor shall be a Guarantor under the Indenture and the Securities;

WHEREAS, Section 9.01 of the Indenture provides that IAAI Finance, IAAI, the Guarantors and the Trustee may execute and deliver this Supplemental Indenture without notice to or consent of any Holder; and

WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate action on the part of each of IAAI, the Guarantors and IAAI Finance.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, IAAI, the Guarantors, IAAI Finance and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

ARTICLE I

Assumption by Successor Company, Guarantee

Section 1.1. Assumption of the Securities. IAAI hereby expressly assumes and agrees promptly to pay, perform and discharge when due each and every debt, obligation, covenant and agreement incurred, made or to be paid, performed or discharged by IAAI Finance under the Indenture and the Securities.

IAAI hereby agrees to be bound by all the terms, provisions and conditions of the Indenture and the Securities and that it shall be the successor Company and shall succeed to, and be substituted for, and may exercise every right and power of, IAAI Finance, as the predecessor Company, under the Indenture and the Securities.

The Guarantors hereby agrees to guarantee the obligations of IAAI under the Indenture being assumed by IAAI pursuant to the terms of this Supplemental Indenture.

Section 1.2. Discharge of IAAI Finance. IAAI Finance is hereby expressly discharged from all debts, obligations, covenants and agreements under the Indenture and the Securities.

Section 1.3 Guarantee. Each Guarantor hereby agrees, fully and unconditionally, to guarantee the Guaranteed obligations under the Indenture and the Securities on the terms and subject to the conditions set forth in Article 11 of the Indenture and to be bound by (and shall be entitled to the benefits of) all other applicable provisions of the Indenture as a Guarantor. The Guarantee of the Guarantors is subject to the subordination provisions of the Indenture, and shall terminate and be of no further force and effect, and the Guarantors shall be released and discharged from all obligations in respect of such Guarantee, as and when provided in Section 11.06 of the Indenture.

Section 1.4. Trustee’s Acceptance. The Trustee hereby accepts this Supplemental Indenture and agrees to perform the same under the terms and conditions set forth in the Indenture.

ARTICLE II

Miscellaneous

Section 2.1. Effect of Supplemental Indenture. Upon the execution and delivery of this Supplemental Indenture by IAAI, the Guarantors, IAAI Finance and the Trustee, the Indenture shall be supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder shall be bound thereby.

Section 2.2. Indenture Remains in Full Force and Effect. Except as supplemented hereby, all provisions in the Indenture shall remain in full force and effect.

2

Section 2.3. Indenture and Supplemental Indenture Construed Together. This Supplemental Indenture is an indenture supplemental to and in implementation of the Indenture, and the Indenture and this Supplemental Indenture shall henceforth be read and construed together.

Section 2.4. Confirmation and Preservation of Indenture. The Indenture as supplemented by this Supplemental Indenture is in all respects confirmed and preserved.

Section 2.5. Conflict with Trust Indenture Act. If any provision of this Supplemental Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939, as amended (the “TIA”), that is required under the TIA to be part of and govern any provision of this Supplemental Indenture, the provision of the TIA shall control. If any provision of this Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Supplemental Indenture, as the case may be.

Section 2.6. Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.7. Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders, any benefit of any legal or equitable right, remedy or claim under the Indenture, this Supplemental Indenture or the Securities.

Section 2.8. Successors. All agreements of IAAI and the Guarantors in this Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

Section 2.9. Certain Duties and Responsibilities of the Trustee. In entering into this Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture and the Securities relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided.

Section 2.10. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

Section 2.11. Multiple Originals. The parties may sign any number of copies of this Supplemental Indenture, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

3

Section 2.12. Headings. The Article and Section headings herein are inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

Section 2.13. The Trustee. The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made by IAAI and IAAI Finance.

4

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date and year first above written.

INSURANCE AUTO AUCTIONS, INC.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAAI FINANCE CORP.
By:	/S/ JAMES J. CONNORS, II
Name:	James J. Connors, II
Title:	Vice President and Assistant Secretary
INSURANCE AUTO AUCTIONS CORP.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAA SERVICES, INC.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAA ACQUISITION CORP.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
WELLS FARGO BANK, NATIONAL ASSOCIATION as Trustee
By:	/S/ JEFFERY ROSE
Name:	Jeffery Rose
Title:	Vice President

EX-4.4

Exhibit 4.4

REGISTRATION RIGHTS AGREEMENT

Dated as of April 1, 2005

by and among

IAAI FINANCE CORP.

and

DEUTSCHE BANK SECURITIES INC.

BEAR, STEARNS & CO. INC.

This Registration Rights Agreement (this “Agreement”) is dated as of April 1, 2005, between IAAI FINANCE CORP., a Delaware corporation (the “Company”), and DEUTSCHE BANK SECURITIES INC. and BEAR STEARNS & CO., INC. as initial purchasers (the “Initial Purchasers”).

This Agreement is entered into in connection with the Purchase Agreement by and between the Company and the Initial Purchasers, dated as of March 24, 2005 (the “Purchase Agreement”), which provides for, among other things, the sale by the Company to the Initial Purchasers of $150,000,000 aggregate principal amount of the Issuer’s 11% Senior Notes due 2013 (the “Initial Notes”). In connection with the merger (the “Merger”) of Axle Merger Sub, Inc. (“Merger Sub”) and Insurance Auto Auctions, Inc., an Illinois corporation (“IAAI”), IAAI will assume the obligations of the Company under the Initial Notes and the related Indenture (the “Indenture”), dated as of the date hereof, among the Company and Wells Fargo Corporate Trust, as Trustee (the “Trustee”) (the “IAAI Assumption”). References to the “Issuer” refer to (x) prior to the IAAI Assumption and in the event that that the IAAI Assumption is not consummated, the Company and (y) after the IAAI Assumption, IAAI and the guarantors listed on Schedule I hereto (the “Guarantors”). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuer has agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and any subsequent holder or holders of the Notes. The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligation to purchase the Notes under the Purchase Agreement.

The parties hereby agree as follows:

SECTION 1.  DEFINITIONS

As used in this Agreement, the following capitalized terms shall have the following meanings:

Act: The Securities Act of 1933, as amended.

Affiliate: As defined in Rule 144.

Blackout Period: As defined in Section 6(d) hereof.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York are authorized by law, regulation or executive order to remain closed.

Closing Date: The date hereof.

Commission: The United States Securities and Exchange Commission.

Controlling Person: As defined in Section 8(a) hereof.

Consummate: An Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the period required pursuant to Section 3(b) hereof and (c) the delivery by the Issuer to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes tendered by Holders thereof pursuant to the Exchange Offer.

Consummation Deadline: As defined in Section 3(b) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Notes: The Issuer’s 11% Senior Notes due 2013 to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) as contemplated by Section 4 hereof.

Exchange Offer: The exchange and issuance by the Issuer of a principal amount of Exchange Notes (which shall be registered pursuant to the Exchange Offer Registration Statement) equal to the outstanding principal amount of Initial Notes that are tendered by such Holders in connection with such exchange and issuance.

Exchange Offer Effectiveness Deadline: As defined in Section 3(a) hereof.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Filing Deadline: As defined in Section 3(a) hereof.

Holders: As defined in Section 2 hereof.

Person: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity.

Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Recommencement Date: As defined in Section 6(d) hereof.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Issuer relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, (i) that is filed pursuant to the provisions of this Agreement, (ii) including the Prospectus included therein,

-2-

and (iii) including all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Rule 144: Rule 144 promulgated under the Act.

Shelf Filing Deadline: As defined in Section 4(a) hereof.

Shelf Registration Statement: As defined in Section 4 hereof.

Shelf Registration Statement Effectiveness Deadline: As defined in Section 4(a) hereof.

Suspension Notice: As defined in Section 6(d) hereof.

TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.

Transactions Effective Date: The date on which the merger between Merger Sub and IAAI is consummated pursuant to the Agreement and Plan of Merger dated as of February 22, 2005, as amended or supplemented from time to time and the IAAI Assumption is completed.

Transfer Restricted Securities: Each Initial Note until the earliest to occur of (a) the date on which such Initial Note has been exchanged in the Exchange Offer by a Person other than a Broker-Dealer for an Exchange Note entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Act, (b) following the exchange by a Broker-Dealer in the Exchange Offer of an Initial Note for an Exchange Note, the earlier of (x) the date that is 90 days after the Consummation of the Exchange Offer and (y) the date on which such Exchange Note is sold to a purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement, (c) the date on which such Initial Note has been effectively registered under the Act and disposed of in accordance with the Shelf Registration Statement (and the purchasers thereof have been issued Exchange Notes) or (d) the date on which such Initial Note is distributed to the public pursuant to Rule 144.

SECTION 2.  HOLDERS

A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3.  REGISTERED EXCHANGE OFFER

(a) Unless the Exchange Offer shall not be permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a)(i) below have been complied with), the Issuer shall (i) use all commercially reasonable efforts to cause the Exchange Offer Registration Statement to be filed with the Commission no later than 90 days after the Transactions Effective Date (such 90th day being the “Filing Deadline”), (ii) use all commercially reasonable efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than the day that is the 180th day after such Exchange Offer Registration

-3-

Statement was filed with the Commission (such day being the “Exchange Offer Effectiveness Deadline”), (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause it to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Exchange Notes to be made under the blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting (i) registration of the Exchange Notes to be offered in exchange for the Initial Notes that are Transfer Restricted Securities and (ii) resales of Exchange Notes by Broker-Dealers that tendered into the Exchange Offer Initial Notes that such Broker-Dealer acquired for its own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Issuer or any of its Affiliates) as contemplated by Section 3(c) below. The Exchange Offer shall not be subject to any conditions, other than that (i) the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the SEC and (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Issuer to proceed with the Exchange Offer, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuer.

(b) The Issuer shall use all of its commercially reasonable efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Issuer shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Notes shall be included in the Exchange Offer Registration Statement. The Issuer shall use all of its commercially reasonable efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days thereafter, or longer, if required by applicable law or Commission policy (such 30th (or longer) day being the “Consummation Deadline”).

(c) The Issuer shall include a “Plan of Distribution” section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Broker-Dealer who holds Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Issuer or any Affiliate of the Issuer), may exchange such Transfer Restricted Securities pursuant to the Exchange Offer. Such “Plan of Distribution” section shall also contain all other information with respect to such sales by such Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer, except to the extent required by the Commission as a result of a change in policy, rules or regulations after the date of this Agreement. See the Shearman & Sterling no-action letter (available July 2,1993).

-4-

Because such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the Issuer shall permit the use of the Prospectus contained in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement. To the extent necessary to ensure that the Prospectus contained in the Exchange Offer Registration Statement is available for sales of Exchange Notes by Broker-Dealers, the Issuer agrees to use all of its commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(a) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of 180 days from the date on which the Exchange Offer is Consummated or such shorter period ending on the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities. The Issuer shall provide sufficient copies of the latest version of such Prospectus to such Broker-Dealers, promptly upon request, and in no event later than one Business Day after such request, at any time during such period.

SECTION 4.  SHELF REGISTRATION

(a) Shelf Registration. If (i) the Issuer is not (A) required to file the Exchange Offer Registration Statement or (B) permitted to Consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the Issuer has complied with the procedures set forth in Section 6(a)(i) below) or (ii) any Holder of Transfer Restricted Securities (A) other than an Initial Purchaser, is prohibited by law or Commission policy from participating in the Exchange Offer, (B) may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder (other than, in either case, due solely to the status of such Holder as an Affiliate of the Issuer or due to such Holder’s inability to make the representations in Section 6(a)(ii) hereof) or (C) is an Initial Purchaser and so requests with respect to Initial Notes that have the status of unsold allotments in an initial distribution, and notification thereof is given by such Holder to the Issuer prior to the 20th Business Day following the Consummation of the Exchange Offer, then the Issuer shall:

(x) use all commercially reasonable efforts on or prior to 60 days after the earlier of (i) the date as of which the Issuer determines that the Exchange Offer Registration Statement will not be or cannot be, as the case may be, filed as a result of clause (a)(i) above and (ii) the date on which the Issuer receives the notice specified in clause (a)(ii) above (such earlier date, the “Shelf Filing Deadline”), to file a shelf registration statement with the Commission pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (the “Shelf Registration Statement”)), relating to all Transfer Restricted Securities; and

(y) use all commercially reasonable efforts to cause such Shelf Registration Statement to become effective on or prior to 120 days after the Shelf Filing Deadline (such 120th day, the “Shelf Registration Statement Effectiveness Deadline”).

-5-

If, after the Issuer has filed an Exchange Offer Registration Statement that satisfies the requirements of Section 3(a) above, the Issuer is required to file and make effective a Shelf Registration Statement solely because the Exchange Offer is not permitted as a result of the circumstances described under clause (a)(i)(B) above (i.e., applicable federal law or Commission policy), then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above; provided that, in such event, the Issuer shall remain obligated to meet the Shelf Registration Statement Effectiveness Deadline.

To the extent necessary to ensure that the Shelf Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii) hereof, the Issuer shall use its commercially reasonable efforts to keep any Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years (as extended pursuant to Section 6(d) hereof) following the Closing Date, or such shorter period as will terminate at (i) such time all Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant thereto or (ii) such time as the applicable Notes may be distributed to the public under Rule 144(k) promulgated under the Securities Act without volume limitation.

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Issuer in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Issuer by such Holder not materially misleading.

SECTION 5.  LIQUIDATED DAMAGES

If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline or Shelf Filing Deadline, as applicable, (ii) any of such Registration Statements is not declared effective by the Commission on or prior to the Exchange Offer Effectiveness Deadline or the Shelf Registration Statement Effectiveness Deadline, as applicable, (iii) the Exchange Offer has not been Consummated within 30 Business Days of the Exchange Offer Effectiveness Deadline or (iv) any Registration Statement required by this Agreement is filed and declared effective but thereafter ceases to be effective or usable for its intended purpose during the periods specified herein (each such event referred to in clauses (i) through (iv), a “Registration Default”), then the Issuer agrees to pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages in an amount equal to a per annum rate of 0.25% on the principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues for the first 12-week

-6-

period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional per annum rate of 0.25% with respect to each subsequent 12-week period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of 1.0% per annum on the principal amount of Transfer Restricted Securities; provided that liquidated damages on such Transfer Restricted Securities may not accrue under more than one of the foregoing clauses (i) through (iv) at any one time. Notwithstanding anything to the contrary set forth herein, such liquidated damages shall cease to accrue on such Transfer Restricted Securities (1) upon the filing of the Exchange Offer Registration Statement (and/or, if applicable the Shelf Registration Statement), in the case of clause (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable the Shelf Registration Statement), in the case of clause (ii) above, (3) upon consummation of the Exchange Offer in the case of clause (iii) above, or (4) upon the filing of a post effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable the Shelf Registration Statement) to again be declared effective or made usable, in the case of clause (iv) above, the liquidated damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease. Without limiting the foregoing, liquidated damages with respect to a failure to file, cause to become effective or maintain the effectiveness of a Shelf Registration Statement shall cease to accrue upon the consummation of the Exchange Offer in the case of a Shelf Registration Statement required to be filed due to failure to consummate the Exchange Offer within the required period of time.

All accrued liquidated damages shall be paid to the Holders entitled thereto, in the manner provided for the payment of interest in the Indenture, on each Interest Payment Date (as defined in the Indenture), as more fully set forth in the Indenture and the Notes. Notwithstanding the fact that any securities for which liquidated damages are due cease to be Transfer Restricted Securities, all obligations of the Issuer to pay liquidated damages with respect to securities shall survive until such time as such obligations with respect to such securities shall have been satisfied in full.

SECTION 6.  REGISTRATION PROCEDURES

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Issuer shall (x) comply with all applicable provisions of Section 6(c) below, (y) use all of its commercially reasonable efforts to effect such exchange and to permit the resale of Exchange Notes by Broker-Dealers that tendered in the Exchange Offer Initial Notes that such Broker-Dealer acquired for its own account as a result of its market-making activities or other trading activities (other than Initial Notes acquired directly from the Issuer or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof, and (z) comply with all of the following provisions:

(i) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Issuer, prior to the Consummation of the Exchange Offer, a written representation to the Issuer (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Issuer, (B) it is not engaged in, and does not

-7-

intend to engage in, and at the time of the commencement or consummation of the Exchange Offer, neither such Holder nor, to the actual knowledge of such Holder, any other person receiving Exchange Notes from such Holder has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer, (C) it is acquiring the Exchange Notes in its ordinary course of business and (D) if such Holder is a Broker-Dealer, such Holder has acquired the Initial Notes as a result of market-making activities or other trading activities and that it will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).

(ii) Prior to effectiveness of the Exchange Offer Registration Statement, the Issuer shall provide a supplemental letter to the Commission (A) stating that the it is registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as interpreted in the Commission’s letter to Shearman & Sterling dated July 2,1993, and (B) including a representation that the Issuer has not entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Issuer’s information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Issuer shall:

(i) comply with all the provisions of Section 6(c) below and use all of their respective commercially reasonable efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Issuer pursuant to Section 4(b) hereof), and pursuant thereto the Issuer will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof, and

(ii) issue, upon the request of any Holder or purchaser of Initial Notes covered by any Shelf Registration Statement contemplated by this Agreement, Exchange Notes having an aggregate principal amount equal to the aggregate principal amount of Initial Notes sold pursuant to the Shelf Registration Statement and surrendered to the Issuer for cancellation; the Issuer shall register Exchange Notes on the Shelf Registration Statement for this purpose and issue the Exchange Notes to the purchaser(s) of securities subject to the Shelf Registration Statement in the names as such purchaser(s) shall designate.

-8-

(c) General Provisions. In connection with any Registration Statement and any related Prospectus required by this Agreement, the Issuer shall:

(i) use all of their respective commercially reasonable efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 hereof, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Issuer shall file promptly an appropriate amendment to such Registration Statement curing such defect, and, if Commission review is required, use all of its commercially reasonable efforts to cause such amendment to be declared effective as soon as practicable;

(ii) use all of its commercially reasonable efforts to prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as the case may be; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise each Holder promptly and, if requested by such Holder, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue in any material respect, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws,

-9-

the Issuer shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

(iv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, use all of its commercially reasonable efforts to prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(v) furnish to each Holder in connection with any exchange or sale pursuant to such Registration Statement or any such related Prospectus, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders in connection with such sale, if any, for a period of at least five Business Days prior to such filing, and the Issuer will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which such Holders shall reasonably object within five Business Days after the receipt thereof; provided, however, that if the Issuer’s failure to file a Registration Statement or Prospectus, or any amendments or supplements thereto, in the applicable time periods as set forth in Sections 3 or 4 hereof, is based solely upon such an objection, then the applicable time periods as set forth in Sections 3 or 4 hereof, as applicable, shall be extended by an additional 30 days. A Holder shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Act;

(vi) make available on a confidential basis, at reasonable times and in a reasonable manner, for inspection by a representative of, and not more than one counsel acting for Holders of, a majority of the outstanding aggregate principal amount of the Transfer Restricted Securities being sold, all financial and other records, pertinent corporate documents of the Issuer and cause the Issuer’s officers, directors and employees to supply all information reasonably necessary to conduct reasonable investigation within the meaning of Section 11 of the Act in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; provided, however, that the foregoing investigation and information gathering shall be coordinated on behalf of all such parties by one counsel designated by and on behalf of all such parties;

(vii) if requested by Holders of a majority of the outstanding aggregate principal amount of the Transfer Restricted Securities in connection with any exchange or sale

-10-

pursuant to such Registration Statement or any such related Prospectus, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Issuer is notified of the matters to be included in such Prospectus supplement or post-effective amendment;

(viii) if requested by any Holders in connection with any exchange or sale pursuant to such Registration Statement or any such related Prospectus, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request with respect to such Holder as such Holder may reasonably request to have included therein;

(ix) furnish to each Holder in connection with any exchange or sale pursuant to such Registration Statement or any such related Prospectus, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each Holder without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; and, while the applicable Registration Statement remains effective and subject to Section 6(d) hereof, the Issuer hereby consents to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each selling Holder in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) upon the request of any Holder, enter into such agreements (including underwriting agreements) and make such representations and warranties and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any applicable Registration Statement contemplated by this Agreement as may be reasonably requested by any Holder in connection with any sale or resale pursuant to any applicable Registration Statement. In such connection, the Issuer shall:

(A) upon request of the Holders of a majority of the outstanding aggregate principal amount of the Transfer Restricted Securities being sold, furnish (or in the case of paragraphs (2) and (3), use all commercially reasonable efforts to cause to be furnished) to each Holder, upon Consummation of the Exchange Offer or upon the effectiveness of the Shelf Registration Statement, as the case may be:

(1) a certificate, dated such date, signed on behalf of the Issuer by (x) the President or any Vice President and (y) a principal financial or accounting officer of the Issuer, confirming to the extent possible, as of the date thereof, the matters set forth in Section 8(e) of the Purchase Agreement and such other similar matters as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Transfer Restricted Securities;

-11-

(2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Issuer, addressed to the underwriters, in customary form subject to customary limitations, assumptions and exclusions and covering such matters, of the type customarily covered by opinions reasonably requested in connection with underwritten offerings; and

(3) a customary comfort letter, dated the date of Consummation of the Exchange Offer, or as of the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Company’s independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with underwritten offerings; and

(B) deliver such other documents and certificates as may be reasonably requested by the Holders of a majority of the outstanding aggregate principal amount of the Transfer Restricted Securities being sold to evidence compliance with the matters covered in clause (A) above and with any customary conditions contained in the any agreement entered into by the Issuer pursuant to this clause (xi);

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or blue sky laws of such jurisdictions as the selling Holders may reasonably request and use all of their respective commercially reasonable efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that the Issuer shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject;

(xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the

-12-

selling Holders may request at least two Business Days prior to such sale of Transfer Restricted Securities;

(xiv) use all of their respective commercially reasonable efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above;

(xv) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company;

(xvi) otherwise use all of their respective commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 under the Act (which need not be audited) covering a twelve-month period (i) commencing at the end of any fiscal quarter in which Transferred Restricted Securities are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first month of the Company’s first fiscal quarter, after the effective date of a Registration Statement;

(xvii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use all of their respective commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner, and

(xviii) provide promptly to each Holder, upon request, each document filed with the Commission pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act.

(d) Restrictions on Holders. Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(iii)(C) or any notice from the Issuer of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof or (iii) commencement of a Blackout Period (in each case, a “Suspension Notice”), such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until (i) such Holder has received copies of the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Issuer that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case,

-13-

the “Recommencement Date”). Each Holder receiving a Suspension Notice hereby agrees that it will either (i) destroy any Prospectuses, other than permanent file copies, then in such Holder’s possession which have been replaced by the Issuer with more recently dated Prospectuses or (ii) deliver to the Issuer (at the Issuer’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of the Suspension Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by a number of days equal to the number of days in the period from and including the date of delivery of the Suspension Notice to the Recommencement Date.

Notwithstanding anything to the contrary in this Agreement, the Issuer, upon notice to the Holders of Transfer Restricted Securities that the applicable Registration Statement is unusable pending a material development (but not for the purpose of avoiding its obligations under this Agreement in a manner contrary to the intent of the Agreement), may suspend the use of the Prospectus included in any Registration Statement for a period of time (the “Blackout Period”) not to exceed an aggregate of 60 days in any twelve month period; provided, that, upon the termination of such Blackout Period, the Issuer promptly shall notify the Holders of Transfer Restricted Securities that such Blackout Period has been terminated.

SECTION 7.  REGISTRATION EXPENSES

(a) All expenses incident to the Issuer’s performance of or compliance with this Agreement will be borne by the Issuer, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Issuer and the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Issuer (including the expenses of any special audit letters required by or incident to such performance); but excluding any and all fees and expenses of any advisors to the Initial Purchaser and each Holder (except as set forth in Section 7(b) below) and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Transfer Restricted Securities by a Holder pursuant to any Registration Statement.

The Issuer will, in any event, bear its and the Guarantors’ internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuer.

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), regardless of whether a Registration Statement becomes effective, the Issuer will reimburse the Initial Purchaser and the Holders of Transfer Restricted Securities being tendered into in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the

-14-

Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Cahill Gordon & Reindel LLP, unless another firm shall be chosen by the Holders of the outstanding aggregate principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

SECTION 8.  INDEMNIFICATION

(a) The Issuer agrees to indemnify and hold harmless each Holder, its directors, officers and each Person, if any, who controls such Holder (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities, judgments, and expenses (including without limitation, any legal or other expenses incurred in connection with investigating, preparing or defending any matter, including any action that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement thereto) provided by the Issuer to any Holder or any prospective purchaser of Exchange Notes or registered Initial Notes, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that the Issuer shall not be liable in any such case to the extent that any such losses, claims, damages, liabilities or judgments are caused by an untrue statement or omission or alleged untrue statement or omission that is based upon information relating to any of the Holders furnished in writing to the Issuer by any of the Holders; provided, further, that with respect to any untrue statement or omission or alleged untrue statement or omission made in any prospectus, or any amendment or supplement thereto, or any preliminary prospectus relating to a Registration Statement, the indemnity contained in this Section 8 shall not inure to the benefit of any indemnified party from whom the Person asserting any such loss, claim, damage or liability purchased the Transfer Restricted Securities concerned to the extent (i) that a prospectus relating to such Transfer Restricted Securities was required to be delivered to such Person, and there was not given or sent to such Person, at or prior to the written confirmation of the sale of such Transfer Restricted Securities to such Person, a copy of the final prospectus (in the case of any such preliminary prospectus) or a prospectus supplement (in any other case) if the Issuer had previously furnished copies thereof to such indemnified party in sufficient quantity and sufficiently in advance of the time of such written confirmation to allow for distribution by the time of such written confirmation, (ii) such untrue statement or omission or alleged untrue statement or omission was corrected in such final prospectus or prospectus amendment or supplement in a manner that would have cured the defect giving rise to such loss, claim, damage or liability. The indemnity provided for in this Section 8 will be in addition to any liability that the Issuer may otherwise have to the indemnified parties. The Issuer shall not be liable under this Section 8 for any settlement of any claim or action effected without its prior written consent, which shall not be unreasonably withheld.

(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Issuer, and each of its directors and each of its officers who sign any Registration Statement, and each Controlling Person of the Issuer to the same extent as the foregoing indemnity from the Issuer set forth in section (a) above, but only with reference to information relating to such Holder furnished in writing to the Issuer by such Holder expressly

-15-

for use in any Registration Statement. In no event shall any Holder, its directors, officers or any Person who controls such Holder be liable or responsible for any amount in excess of the amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such Holder, its directors, officers or any Person who controls such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnity provided for in this Section 8 will be in addition to any liability that each Holder may otherwise have to the indemnified parties. No Holder shall be liable under this Section 8 for any settlement of any claim or action effected without such Holder’s prior written consent, which shall not be unreasonably withheld.

(c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the “indemnified party”), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the “indemnifying person”) in writing and the indemnifying party shall assume the defense of such action (but the failure so to notify an indemnifying party shall not relieve it from any liability that it may have under this Section 8 except to the extent that it has been prejudiced in any material respect by such failure or from any liability that it may otherwise have and shall not relieve it from any liability that it may have otherwise than under this Agreement), including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity maybe sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required to assume the defense of such action pursuant to this Section 8(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Holder). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Holders of a majority of the outstanding aggregate principal amount of the Transfer Restricted Securities, in the case of the parties indemnified pursuant to Section 8(a), and by the Issuer, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than twenty Business

-16-

Days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party.

(d) To the extent that the indemnification provided for in this Section 8 is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer, on the one hand, and the Holders, on the other hand, from their sale of Transfer Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Issuer, on the one hand, and of the Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative fault of the Issuer, on the one hand, and of the Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer, on the one hand, or by the Holder, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Issuer and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any matter, including any action that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, no Holder, its directors, its officers or any Person, if any, who controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total received by such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within

-17-

the meaning of Section 1l(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(d) are several in proportion to the respective principal amount of Transfer Restricted Securities held by each Holder hereunder and not joint.

SECTION 9.  RULE 144A AND RULE 144

The Issuer agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Issuer (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder, to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Act, and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings required thereby in a timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144.

SECTION 10.  UNDERWRITTEN OFFERINGS

If any of the Transfer Restricted Securities covered by any Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority of the outstanding aggregate principal amount of such Transfer Restricted Securities included in such offering subject to the consent of the Issuer (not to be unreasonably withheld). Such Holders shall be responsible for all underwriting commissions and discounts in connection therewith.

No Holder of Transfer Restricted Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

SECTION 11.  MISCELLANEOUS

(a) Remedies. The Issuer acknowledges and agrees that any failure by it to comply with its obligations under Sections 3 and 4 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Issuer’s obligations under Sections 3 and 4 hereof. The Issuer further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. The Issuer will not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Issuer has not previously entered into, nor is currently party to, any agreement granting any registration rights with respect to its securities to any Person that would require such securities to

-18-

be included in any Registration Statement filed hereunder. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s securities under any agreement in effect on the date hereof.

(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 1l(c)(i), the Issuer has obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Issuer has obtained the written consent of Holders of a majority of the outstanding aggregate principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Issuer or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being tendered pursuant to the Exchange Offer, and that does not affect directly or indirectly the rights of other Holders whose Transfer Restricted Securities are not being tendered pursuant to such Exchange Offer, may be given by the Holders of a majority of the outstanding aggregate principal amount of Transfer Restricted Securities subject to such Exchange Offer.

(d) Additional Guarantors. The Issuer shall cause any of its Domestic Restricted Subsidiaries (as defined in the Indenture) that becomes, prior to the consummation of the Exchange Offer, a Guarantor in accordance with the terms and provisions of the Indenture to become a party to this Agreement as a Guarantor. Notwithstanding the generality of the foregoing statement, any entity that becomes a Guarantor upon the consummation of the Acquisition (as defined in the Purchase Agreement) shall become a party to this Agreement as a Guarantor. It is understood and agreed that if, prior to the Exchange Offer, a Guarantor that has executed this Agreement is no longer a Guarantor under the Indenture pursuant to and in accordance with the provisions of the Indenture, such Guarantor shall no longer be a Guarantor for purposes of this Agreement.

(e) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Issuer, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.

(f) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telecopier or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

-19-

(ii) if to the Issuer

Insurance Auto Auctions, Inc.

Two Westbrook Corporate Center, Suite 600

Westchester, IL 60154

Telecopier No.: (708) 492-7575

Attention: Chief Financial Officer

With a copy to:

Skadden, Arps, Meagher & Flom LLP

4 Times Square

New York, New York 10036

Telecopier No.: (917) 777-2918

Attention: Gregory A. Fernicola, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(g) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such Person, shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof.

(h) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(i) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.

-20-

(k) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(1) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

(Signature pages follow)

If the foregoing correctly sets forth the understanding among the Initial Purchasers and IAAI Finance, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

IAAI FINANCE CORP.
By:	/s/ James J. Connors, II
	Name: James J. Connors, II
	Title: Vice President

-21-

If the foregoing correctly sets forth the understanding among the Initial Purchasers and IAAI Finance, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

IAAI FINANCE CORP.
By:	/s/ James J. Connors, II
	Name:	James J. Connors, II
	Title:	Vice President and Assistant Secretary

Registration Rights Agreement

Accepted and agreed to as of
the date first above written:
DEUTSCHE BANK SECURITIES INC.
By:	/s/ James J. Paris
	Name:	James J. Paris
	Title:	Director
By:	/s/ Sean L. Murphy
	Name:	Sean L. Murphy
	Title:	Director

Registration Rights Agreement

Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By:	/s/ James S. Wolfe
	Name:	James S. Wolfe
	Title:	Senior Managing Director

Registration Rights Agreement

SCHEDULE I

Guarantors

Insurance Auto Auctions Corp.

IAA Acquisition Corp.

IAA Services, Inc.

A-1

EX-4.5

EXHIBIT 4.5

ASSUMPTION AGREEMENT

ASSUMPTION AGREEMENT, dated as of May 25, 2005, among Insurance Auto Auctions, Inc., an Illinois corporation (“IAAI”), IAAI Finance Corp., a Delaware corporation (“IAAI Finance”), and Insurance Auto Auctions Corp., a Delaware corporation, IAA Services, Inc., an Illinois corporation, and IAA Acquisition Corp., a Delaware corporation (the “Guarantors”).

W I T N E S S E T H:

WHEREAS, IAAI Finance and Well Fargo Bank, National Association, as trustee (the “Trustee”), executed and delivered an Indenture, dated as of April 1, 2005 (as heretofore amended and supplemented, the “Indenture”), providing for the issuance of the 11% Senior Notes due 2013 (the “Securities”) of IAAI Finance;

WHEREAS, concurrently herewith, IAAI, IAAI Finance and the Guarantors are executing and delivering to the Trustee, pursuant to Section 5.01(a) of the Indenture, a Supplemental Indenture, dated as of the date hereof, pursuant to which IAAI is assuming IAAI Finance’s obligations under the Indenture and the Securities and each of the Guarantors is guaranteeing IAAI’s obligations under the Indenture and the Securities;

WHEREAS, IAAI Finance is a party to each of (i) the Purchase Agreement, dated March 24, 2005 (the “Purchase Agreement”), among IAAI Finance, Deutsche Bank Securities Inc. and Bear, Stearns & Co. Inc., as initial purchasers (the “Initial Purchasers”), (ii) the Registration Rights Agreement, dated as of April 1, 2005 (the “Registration Rights Agreement”), among IAAI Finance and the Initial Purchasers and (iii) the Escrow Agreement, dated as of April 1, 2005 (the “Escrow Agreement” and, together with the Purchase Agreement and Registration Rights Agreement, the “Assigned Agreements”), among IAAI Finance, Well Fargo Bank, National Association, as escrow agent (the “Escrow Agent”), and the Trustee;

WHEREAS, IAAI Finance, pursuant to this Assumption Agreement, desires to assign all of its right, title and interest to, and liabilities and obligations under, the Assigned Agreements to IAAI and IAAI desires to assume all of IAAI Finance’s right, title and interest thereto and liabilities and obligations thereunder; and

WHEREAS, this Assumption Agreement has been duly authorized by all necessary corporate action on the part of each of IAAI, IAAI Finance and the Guarantors.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, IAAI, the Guarantors and IAAI Finance mutually covenant and agree:

ARTICLE I

Assignment, Guarantee and Assumption

Section 1.1. Assignment. IAAI Finance hereby grants, assigns, conveys, sets over and delivers to IAAI and its successors and assigns all of its right, title and interest to, and liabilities and obligations under, the Assigned Agreements, to have and hold unto IAAI and its successors and assigns forever.

Section 1.2. Assumption. In consideration of the assignment made herein to IAAI, IAAI hereby agrees to assume, pay, perform and observe all covenants, agreements, liabilities and obligations of IAAI Finance under the Assigned Agreements. As provided in each of the Assigned Agreements, IAAI Finance shall be released and discharged from and shall not be responsible to any person for the discharge or performance of any duty or obligation pursuant to or in connection with the Assigned Agreements and IAAI shall be substituted in lieu of IAAI Finance as a party to each of the Assigned Agreements. Upon and concurrently with such assignment and assumption, the Guarantors agrees to guarantee the payment, performance and observance of IAAI’s covenants, agreements, liabilities and obligations under the Assigned Agreements.

Section 1.3. Further Assurances. Each of IAAI Finance, the Guarantors and IAAI shall execute such additional documents and instruments and take such further action as may be reasonably required or desirable to carry out the provisions hereof.

ARTICLE II

Miscellaneous

Section 2.1. Severability. In case any provision in this Assumption Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.2. Governing Law. This Assumption Agreement shall be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

Section 2.3. Multiple Originals. The parties may sign any number of copies of this Assumption Agreement, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 2.4. Headings. The Article and Section headings herein are inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

2

IN WITNESS WHEREOF, the parties hereto have caused this Assumption Agreement to be duly executed as of the date and year first above written.

INSURANCE AUTO AUCTIONS, INC.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAAI FINANCE CORP.
By:	/S/ JAMES J. CONNORS, II
Name:	James J. Connors, II
Title:	Vice President and Assistant Secretary
INSURANCE AUTO AUCTIONS CORP.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAA SERVICES, INC.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer
IAA ACQUISITION CORP.
By:	/S/ THOMAS C. O’BRIEN
Name:	Thomas C. O’Brien
Title:	President and Chief Executive Officer

EX-5.1

Exhibit 5.1

[Letterhead of Katten Muchin Rosenman LLP]

August     , 2005

Insurance Auto Auctions, Inc.

Two Westbrook Corporate Center,

Suite 500

Westchester, IL 43615

Re: Insurance Auto Auctions, Inc.

Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as counsel to Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”), in connection with:

• the offer to exchange (the “Exchange Offer”) up to $150,000,000 aggregate principal amount of 11% Senior Notes due 2013 (the “Old Notes”) for a like principal amount of 11% Senior Notes due 2013 (the “Registered Notes”); and

• the registration by the Company under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form S-4, Reg. No. 333-                , as amended to the date hereof (as so amended, the “Registration Statement”) filed with the Securities and Exchange Commission, of (i) $150,000,000 aggregate principal amount of Registered Notes and (ii) Guarantees of the Registered Notes (the “Guarantees”) by Insurance Auto Auctions Corp., a Delaware corporation, IAA Services, Inc., an Illinois corporation, and IAA Acquisition Corp., a Delaware corporation, which entities are each a subsidiary of the Company (the “Guarantors”).

The Registered Notes and the Guarantees will be issued pursuant to an Indenture, dated as of April 1, 2005 among the IAAI Finance Corp., a Delaware corporation, the Company, the Guarantors, and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended and supplemented (the “Indenture”). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.

In connection with this opinion, we have relied as to matters of fact, without investigation, upon certificates of public officials and others and upon affidavits, certificates and written statements of the Trustee and of directors, officers and employees of, and the accountants for, the Company. We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such instruments, documents and records as we have deemed relevant and necessary to examine for the purpose of this opinion, including (a) the Registration Statement, (b) records of proceedings of the Boards of Directors of the Company and the Guarantors, (c) the Indenture,

Insurance Auto Auctions, Inc.

[Date]

Page 2

and (d) the Amended and Restated Registration Rights Agreement dated as of April 1, 2005, among the Company (as successor to IAAI Finance Corp.), Deutsche Bank Securities Inc. and Bear Stearns & Co. Inc.

In connection with this opinion, we have assumed (i) the accuracy and completeness of all documents and records that we have reviewed, (ii) the genuineness of all signatures, (iii) the authenticity of the documents submitted to us as originals, (iv) the conformity to authentic original documents of documents submitted to us as certified, conformed, or reproduced copies, and (v) the due authorization, execution and delivery of all documents by all parties and the validity, binding effect and enforceability thereof (other than the authorization, execution and delivery of documents by the Company and the Guarantors and the validity, binding effect and enforceability thereof upon the Company and the Guarantors).

On the basis of the foregoing and subject to the limitations and qualifications set forth herein, we are of the opinion that:

1. The Registered Notes and related Guarantees have been duly authorized by all necessary corporate action.

2. When the Registration Statement has become effective and the Registered Notes have been duly authenticated and registered by the Trustee in accordance with the Indenture and have been duly executed and delivered by the Company in exchange for Old Notes of like aggregate principal amount, all in accordance with the Exchange Offer contemplated by the Registration Statement, such Registered Notes will constitute the valid and legally binding obligations of the Company and the related Guarantees will constitute the valid and legally binding obligations of the Guarantors, in each case enforceable against such parties in accordance with their respective terms and the terms of the Indenture, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and to principles of equity, whether considered in law or equity.

Our opinion expressed above is limited to the Business Corporation Act of the State of Illinois, the General Corporation Law of the State of Delaware, the applicable provisions of the Illinois and Delaware constitutions and the reported judicial decisions interpreting such laws, and New York law and we do not express any opinion concerning any other laws. This opinion is given as of the date hereof and we assume no obligation to advise you of changes that may hereafter be brought to our attention.

This opinion is furnished for use in connection with the Registration Statement and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose, without our express written permission. We hereby consent to the use of our name under the heading “Legal Matters” in the Prospectus forming a part of the Registration Statement and to the use of this opinion for filing as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not

Insurance Auto Auctions, Inc.

[Date]

Page 3

thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the related rules and regulations thereunder.

Very truly yours,

KATTEN MUCHIN ROSENMAN LLP

EX-10.1

Exhibit 10.1

Axle Holdings, Inc.

Stock Incentive Plan

SECTION 1.

PURPOSE

The purpose of this Plan (as such term and any other capitalized terms used herein without definition are defined in Section 2) is to foster and promote the long-term financial success of the Company and the Subsidiaries and materially increase stockholder value by (a) motivating superior performance by means of service- and performance-related incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by Employees and (c) enabling the Company and the Subsidiaries to attract and retain the services of an outstanding management team upon whose judgment, interest and special effort the successful conduct of its and their operations is largely dependent.

SECTION 2.

DEFINITIONS

Whenever used herein, the following terms shall have the respective meanings set forth below:

Act: the Securities Act of 1933, as amended.

Adjustment Event: shall mean any stock dividend, stock split or share combination of, or extraordinary cash dividend on, the Common Stock, or any recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares affecting the Common Stock, or any issuance of any warrants or rights offering (other than any such issuance or offering under the Plan) to purchase Common Stock at a price materially below Fair Market Value, or any other similar event affecting the Common Stock.

Award: shall mean individually or collectively, a grant under the Plan of Options or Restricted Stock.

Award Agreement: any written agreement, contract, or other instrument or document evidencing an Award.

Board: the Board of Directors of the Company.

Cause: (i) the refusal or neglect of the Participant to perform substantially his or her employment-related duties, (ii) the Participant’s personal dishonesty, incompetence, willful misconduct or breach of fiduciary duty, (iii) the Participant’s conviction of or entering a plea of guilty or nolo contendere (or any applicable equivalent thereof) to a crime constituting a felony (or a crime or offense of equivalent magnitude in any jurisdiction) or his or her willful violation of any other law, rule, or regulation (other than a traffic violation or other offense or violation outside of the course of employment which in no way adversely affects the Company or any Subsidiary or its reputation or the ability of the Participant to perform his or her employment related duties or to represent the Company or any Subsidiary) or (iv) the material breach by the Participant of any covenant or agreement with the Company or any Subsidiary, or any written policy of the Company or any Subsidiary, not to disclose any information pertaining to the Company or any Subsidiary or not to compete or interfere with the Company or any Subsidiary; provided that, with respect to any Participant who is party to an employment agreement with the Company or any Subsidiary, “Cause” shall have the meaning specified in such Participant’s employment agreement or, in the case of any such Participant who is not party to an employment agreement but is a party to the Shareholders Agreement, “Cause” shall have the meaning specified in the Shareholders Agreement.

Code: the Internal Revenue Code of 1986, as amended.

Committee: the Compensation Committee of the Board or, if there shall not be any such committee then serving, the Board.

Common Stock: the Common Stock of the Company, par value $.01 per share.

Company: Axle Holdings, Inc., a Delaware corporation, and any successor thereto.

Disability: the termination of a Participant’s employment with the Company or any Subsidiary as a result of such Participant’s incapacity due to reasonably documented physical or mental illness that shall have prevented such Participant from performing his duties for the Company on a full-time basis for more than six months and within 30 days after written notice of termination has been given to such Participant, such Participant shall not have returned to the full time performance of his duties. The date of termination in the case of a termination due to “Disability” shall be deemed to be the last day of the aforementioned 30-day period. Notwithstanding the foregoing, (i) with respect

2

to any Participant who is a party to an employment agreement with the Company or any Subsidiary, “Disability” shall have the meaning, if any, specified in such Participant’s employment agreement or, with respect to any such Participant who is not party to an employment agreement but is a party to the Shareholders Agreement, “Disability” shall have the meaning, if any, specified in the Shareholders Agreement, and (ii) in the event a Participant whose employment with the Company terminates due to Disability continues to serve as a director of or a consultant to the Company, such Participant’s employment with the Company shall not be deemed to have terminated for purposes of the Plan or any Award Agreement evidencing Awards granted to such Participant until the date as of which such Participant’s services as a director of and consultant to the Company shall have also terminated.

Employee: any officer or other key employee of the Company or any Subsidiary.

Exit Event: shall mean an “Exit Event” as defined in the Limited Liability Company Agreement of Axle Holdings II, LLC.

Exit Event Price: the price per share of Common Stock paid in conjunction with any transaction resulting in an Exit Event (as determined in good faith by the Committee if any part of the price is paid other than in cash).

Fair Market Value: if no Public Offering has occurred, the fair market value of a share of Common Stock as determined in accordance with the Shareholders Agreement. Following a Public Offering, the Fair Market Value, on any date of determination, shall mean the average of the closing sales prices for a share of Common Stock as reported on a national exchange for each of the ten business days preceding the date of determination or the average of the last transaction prices for a share of Common Stock as reported on a nationally recognized system of price quotation for each of the ten business days preceding the date of determination. In the event that there are no Common Stock transactions reported on such exchange or system on such date, Fair Market Value shall mean the closing price on the immediately preceding date on which Common Stock transactions were so reported.

Good Reason: the termination of a Participant’s employment with the Company or any Subsidiary shall be for “Good Reason” if such Participant voluntarily terminates his or her employment with the Company or any Subsidiary as a result of either of the following: (i) without such Participant’s prior written consent, a significant reduction by the Company or any Subsidiary of his or her current salary, other than any such reduction which is part of a general salary reduction or other concessionary arrangement affecting all employees or affecting the group of employees of which the Participant is a member (after receipt by the Company or such Subsidiary of written notice and the expiration of a 20-day cure period) or (ii) the taking of any action by the

3

Company or any Subsidiary that would substantially diminish the aggregate value of the benefits provided him or her under the Company’s or such Subsidiary’s accident, disability, life insurance and any other employee benefit plans in which he or she was participating on the date of his or her execution of the applicable Award agreement, other than any such reduction which is (A) required by law, (B) implemented in connection with a general concessionary arrangement affecting all employees or affecting the group of employees of which the Participant is a member or (C) generally applicable to all beneficiaries of such plans (after receipt by the Company or such Subsidiary of written notice and a 20-day cure period); provided that, with respect to any Participant who is party to an employment agreement with the Company or any Subsidiary, “Good Reason” shall have the meaning, if any, specified in such Participant’s employment agreement or, in the case of any such Participant who is not party to an employment agreement but is a party to the Shareholders Agreement, “Good Reason” shall have the meaning, if any, specified in the Shareholders Agreement.

Kelso: Kelso Investment Associates VII, L.P.

Kelso Entities: collectively, Kelso and KEP VI, LLC.

Option: the right to purchase Common Stock pursuant to the terms of the Plan at a stated price for a specified period of time. For purposes of the Plan, an Option may be either (i) an “Incentive Stock Option” within the meaning of Section 422 of the Code (an “Incentive Stock Option”) or (ii) an Option which is not an Incentive Stock Option (a “Non-Qualified Stock Option”).

Participant: any Employee designated by the Committee to receive an award of Options under the Plan.

Permitted Transferee: a transferee permitted under Section 1.3 or 1.4 of the Shareholders Agreement.

Plan: this Axle Holdings, Inc. Stock Incentive Plan, as set forth herein and as the same may be amended from time to time in accordance with its terms.

Public Offering: a public offering pursuant to an effective registration statement filed with the Securities and Exchange Commission that covers (together with prior effective registrations) (i) not less than 25% of the then outstanding shares of Common Stock, on a fully diluted basis, or (ii) shares of Common Stock that, after the closing of such public offering, will be traded on the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automated Quotation System.

4

Registration Rights Agreement: the Registration Rights Agreement, dated as of April 1, 2005, among the Company, and Axle Holdings II, LLC, as it may be amended from time to time.

Restricted Stock: a share of Common Stock that is subject to restrictions set forth in the Plan or any Award Agreement.

Retirement: the voluntary termination of a Participant’s employment with the Company or any Subsidiary on or after the date the Participant attains age 65. Notwithstanding the foregoing, (i) with respect to any Participant who is a party to an employment agreement with the Company or any Subsidiary, “Retirement” shall have the meaning, if any, specified in such Participant’s employment agreement or, with respect to any such Participant who is not party to an employment agreement but is a party to the Shareholders Agreement, “Retirement” shall have the meaning, if any, specified in the Shareholders Agreement, and (ii) in the event a Participant whose employment with the Company terminates due to Retirement continues to serve as a director of or a consultant to the Company, such Participant’s employment with the Company shall not be deemed to have terminated for purposes of the Plan or any Option agreement evidencing Options granted to such Participant until the date as of which such Participant’s services as a director of and consultant to the Company shall have also terminated, at which time the Participant shall be deemed to have terminated employment due to retirement.

Shareholders Agreement: the Shareholders Agreement, dated as of May 25, 2005, among the Company, Axle Holdings II, LLC, a Delaware limited liability company, and certain other stockholders of the Company, as it may be amended from time to time.

Subsidiary: any corporation a majority of whose outstanding voting securities is owned, directly or indirectly, by the Company.

Voluntary Resignation: the termination of a Participant’s employment with the Company or any Subsidiary by the Participant other than for Good Reason (provided that the time of such termination the Company does not have the right to terminate the Participant for Cause); provided that, with respect to any Participant who is a party to an employment agreement with the Company or any Subsidiary, “Voluntary Resignation” shall have the meaning, if any, specified in such Participant’s employment agreement.

5

SECTION 3.

ELIGIBILITY AND PARTICIPATION

Participants in the Plan shall be those Employees selected by the Committee to participate in the Plan. The selection of an Employee as a Participant shall neither entitle such Employee to, nor disqualify such Employee from, participation in any other award or incentive plan of the Company or any Subsidiary.

SECTION 4.

ADMINISTRATION

4.1. Power to Grant and Establish Terms of Awards. The Committee shall have the discretionary authority, subject to the terms of the Plan, to determine the Employees to whom Awards shall be granted (which may include Employees who are members of the Committee) and the terms and conditions of any and all Awards, including, but not limited to, the number of shares of Common Stock covered by each Option, the time or times at which Awards shall be granted and the terms and provisions of the instruments by which Awards shall be evidenced and to designate Options as Incentive Stock Options or Non-Qualified Stock Options. The Committee may condition the grant of an Award upon a Participant’s execution of the Shareholders Agreement and Registration Rights Agreement. The proper officers of the Company may suggest to the Committee the Participants who should receive Awards. The terms and conditions of each Award grant shall be determined by the Committee at the time of grant and, subject to Section 9, such terms and conditions shall not be subsequently changed in a manner which would be adverse to the Participant without the consent of the Participant to whom such Award has been granted, even if this Plan shall be subsequently amended. The Committee may establish different terms and conditions for different Participants receiving Awards and for the same Participant for each Award such Participant may receive, whether or not granted at the same or different times. The grant of any Award to any Employee shall neither entitle such Employee to, nor disqualify him from, the grant of any other Award.

4.2. Substitute Awards. The Committee shall have the right, subject to the consent of Participants to whom Awards have been granted, to grant in substitution for outstanding Awards, replacement Awards which may contain terms more favorable to the Participant than the Awards they replace and to cancel replaced Awards.

4.3. Administration. The Committee shall be responsible for the administration of the Plan. Any Awards granted by the Committee may be subject to such conditions, not inconsistent with the terms of the Plan, as the Committee shall

6

determine, in its sole discretion. The Committee shall have discretionary authority to prescribe, amend and rescind rules and regulations relating to the Plan, to provide for conditions deemed necessary or advisable to protect the interests of the Company, to interpret the Plan and to make all other determinations necessary or advisable for the administration and interpretation of the Plan and to carry out its provisions and purposes. Determinations, interpretations or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding and conclusive for all purposes and upon all persons and shall be given deference in any proceeding with respect thereto. The Committee may consult with legal counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

SECTION 5.

STOCK SUBJECT TO PLAN

5.1. Number. Subject to the provisions of Section 5.3, the number of shares of Common Stock subject to Options under the Plan may not exceed 281,352 shares. The shares of Common Stock to be delivered under the Plan may consist, in whole or in part, of shares held in treasury or authorized but unissued shares not reserved for any other purpose. All shares available for issuance under the Plan may be made subject to the grant of Incentive Stock Options.

5.2. Canceled, Terminated or Forfeited Awards. Any shares of Common Stock subject to an Award which for any reason expires or is canceled, terminated, forfeited, exchanged, surrendered, substituted for or otherwise settled without the issuance of such shares of Common Stock shall again be available for grant under the Plan.

5.3. Adjustment in Capitalization. The aggregate number of shares of Common Stock available for grants of Awards under Section 5.1 or subject to outstanding Award grants and the respective prices and/or vesting criteria applicable to outstanding Awards shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, each Adjustment Event. To the extent deemed equitable and appropriate by the Committee, in its good faith judgment, and subject to any required action by stockholders, in any stock dividend, stock split, recapitalization, merger, consolidation, reorganization, liquidation, dissolution or other similar transaction (other than an Exit Event), any Award granted under the Plan shall pertain to the securities or other property to which a holder of the number of shares of Common Stock covered by the Award would have been entitled to receive in connection with such event.

7

SECTION 6.

STOCK OPTIONS

6.1. Grant of Options. Options may be granted to Participants at such time or times as shall be determined by the Committee, provided that any such grants are conditioned upon the Participant’s execution of the Registration Rights Agreement and Shareholders Agreement. Options granted pursuant to this Plan may be of two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. The date of grant of an Option under the Plan will be the date on which the Option is awarded by the Committee or, if so determined by the Committee on the date of award of an Option, the date on which occurs any event the occurrence of which is an express condition precedent to the grant of the Option. The Committee shall determine the number of Options, if any, to be granted to a Participant. Each Option shall be evidenced by an Option agreement that shall specify the type of Option granted, the exercise price, the duration of the Option, the number of shares of Common Stock to which the Option pertains, the conditions upon which the Options or any portion thereof shall become vested or exercisable and otherwise shall be in substantially the form of the Option agreement attached hereto as Exhibit A, subject to such changes not inconsistent with the Plan as the Committee shall determine, in its good faith judgment, to be equitable and appropriate.

6.2. Option Price. Non-Qualified Stock Options and Incentive Stock Options granted pursuant to the Plan shall have an exercise price per share of Common Stock determined by the Committee, provided that such per share exercise price may not be less than the Fair Market Value of a share of Common Stock on the date the Option is granted. No Incentive Stock Option shall be granted to any employee of the Company or any of its Subsidiaries if such employee owns, immediately prior to the grant of the Incentive Stock Option, stock representing more than 10 percent of the voting power or more than 10 percent of the value of all classes of stock of the Company or a Subsidiary, unless the purchase price for the stock under the Incentive Stock Option shall be at least 110 percent of its Fair Market Value at the time such Incentive Stock Option is granted and the Incentive Stock Option, by its terms, shall not be exercisable more than five years from the date it is granted. In determining the stock ownership under the paragraph, the provisions of Section 424(d) of the Code shall be controlling.

6.3. Exercise of Options. Options awarded to a Participant under the Plan shall be exercisable at such times and shall be subject to such restrictions and conditions, including the performance of a minimum period of service or the satisfaction of performance goals, as the Committee may impose at the time of grant of such Options, subject to the Committee’s right to accelerate the exercisability of such Options in its discretion. Notwithstanding the foregoing, no Option shall be exercisable on or after the tenth anniversary of the date on which it is granted. Except as may be provided in any provision approved by the Committee pursuant to this Section 6.3, after becoming

8

exercisable each installment of an Option shall remain exercisable until expiration, termination or cancellation of the Option. Subject to Section 10.7, an Option may be exercised from time to time, in whole or in part, up to the total number of shares of Common Stock with respect to which it is then exercisable.

6.4. Payment. The Committee shall establish procedures governing the exercise of Options, which shall require that (x) as a condition to the issuance of any shares of Common Stock upon the exercise of the Options prior to a Public Offering, the Participant (or any other person or entity entitled to exercise the Options) become a party to the Shareholders Agreement and the Registration Rights Agreement with respect to such shares, (y) written notice of exercise be given to the Company and (z) the Option exercise price be paid in full at the time of exercise in one of the following ways: (i) in cash or cash equivalents, (ii) with the consent of the Committee, in shares of Common Stock, valued at the Fair Market Value on the date of exercise, or (if permitted by the Committee and subject to such terms and conditions as it may determine) by surrender of outstanding Awards under the Plan, or (iii) the Committee may permit such payment of exercise price by any other method it deems satisfactory in its discretion (including by permitting broker’s cashless exercise procedure). Subject to Section 10.4, as soon as practicable after receipt of a written exercise notice, payment of the Option exercise price and receipt of evidence of the Participant’s execution of the Shareholders Agreement and the Registration Rights Agreement in accordance with this Section 6.4, the Company shall deliver to the Participant a certificate or certificates representing the acquired shares of Common Stock.

6.5. Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of any Participant affected thereby, to cause any Incentive Stock Option previously granted to fail to qualify for the federal income tax treatment afforded under Section 421 of the Code.

6.6. Repurchase of Options. Upon any termination of a Participant’s employment with the Company or any Subsidiary, the Company may repurchase all or any portion of the Options then held by such Participant in accordance with the terms of the Shareholders Agreement.

6.7. Termination of Unvested Options. Subject to Section 6.11, upon the termination of a Participant’s employment, any Options that are not then exercisable shall terminate and be canceled effective upon the date of such termination.

6.8. Termination of Employment Without Cause or for Good Reason. Subject to Sections 6.6 and 6.11, in the event a Participant’s employment with the

9

Company or any Subsidiary is terminated by the Company without Cause or by the Participant for Good Reason, any Options granted to such Participant which, on or prior to the date of such termination, have become exercisable in accordance with Section 6.3, may be exercised at any time during the 60 day period following the Participant’s termination of employment or the expiration of the term of the Options, whichever period is shorter, and shall terminate immediately thereafter.

6.9. Termination of Employment Due to Death, Disability or Retirement. Subject to Sections 6.6 and 6.11, in the event a Participant’s employment with the Company or any Subsidiary terminates by reason of Retirement, death or Disability, any Options granted to such Participant which on or prior to the date of such termination, have become exercisable in accordance with Section 6.3, may be exercised by the Participant or the Participant’s designated beneficiary (or, if no such beneficiary is named, in accordance with Section 10.2) at any time prior to the first anniversary of the Participant’s termination of employment or the expiration of the term of the Options, whichever period is shorter, and shall terminate immediately thereafter.

6.10. Termination of Employment For Cause or Due to Voluntary Resignation. Subject to Section 6.6, in the event a Participant’s employment with the Company or any Subsidiary is terminated for Cause or due to Voluntary Resignation, all Options granted to such Participant which are then outstanding (whether or not exercisable on or prior to the date of such termination) shall be immediately forfeited and canceled.

6.11. Committee Discretion. Notwithstanding anything else contained in this Section 6 to the contrary, the Committee may permit all or any portion of any Options to be exercised following a Participant’s termination of employment for any reason on such terms and subject to such conditions not less favorable to such Participant than those terms and conditions provided for herein or in the Option agreement evidencing the grant to such Participant of the applicable Options, as the Committee shall determine for a period up to and including, but not beyond, the expiration of the term of such Options.

SECTION 7.

RESTRICTED STOCK

7.1. Grant of Restricted Stock. The Committee may grant Awards of Restricted Stock, subject to such restrictions, terms and conditions, as the Committee shall determine in its sole discretion and as shall be evidenced by the applicable Award Agreement (provided that any such Award is subject to the vesting requirements described herein). The Committee shall determine the price, which, to the extent required

10

by law, shall not be less than par value of the Stock, to be paid by the Participant for each share of Restricted Stock subject to the Award. Each Award Agreement with respect to such Award shall set forth the amount (if any) to be paid by the Participant with respect to such Award and when and under what in circumstances such payment is required to be made.

7.2. Vesting. The vesting of a Restricted Stock Award granted under the Plan may be conditioned upon the completion of a specified period of employment or service with the Company or any Subsidiary or affiliate, upon the attainment of specified performance goals, and/or upon such other criteria as the Committee may determine in its sole discretion.

7.3. Stock Certificates. The Committee may, upon such terms and conditions as the Committee determines, provide that a certificate or certificates representing the shares underlying a Restricted Stock Award shall be registered in the Participant’s name and bear an appropriate legend specifying that such shares are not transferable and are subject to the provisions of the Plan, the Shareholders Agreement and Registration Rights Agreement and the restrictions, terms and conditions set forth in the applicable Award Agreement, and that such certificate or certificates shall be held in escrow by the Company on behalf of the Participant until such shares become vested or are forfeited.

7.4. Voting / Dividends. If and to the extent that the applicable Award Agreement may so provide, a Participant shall have the right to vote and receive dividends on Restricted Stock granted under the Plan. Unless otherwise provided in the applicable Award Agreement, any Common Stock received as a dividend on or in connection with a stock split of the shares of Common Stock underlying a Restricted Stock Award shall be subject to the same restrictions as the shares of Common Stock underlying such Restricted Stock Award.

7.5. Termination of Employment for Cause or Voluntary Resignation. Unless otherwise determined by the Committee at the time of grant, in the event a Participant’s employment with the Company or any Subsidiary is terminated by the Company for Cause or by the Participant by Voluntary Resignation, any Restricted Stock granted to such Participant shall be forfeited.

7.6. Termination of Employment Without Cause, for Good Reason or Due to Death, Disability or Retirement. Unless otherwise determined by the Committee at the time of grant, in the event a Participant’s employment with the Company or any Subsidiary is terminated by the Company without Cause, by the Participant for Good Reason or terminates by reason of Retirement, death or Disability, all outstanding shares of Restricted Stock shall immediately vest.

11

SECTION 8.

EXIT EVENT

8.1. Accelerated Vesting and Payment. Unless otherwise determined by the Committee at the time of grant, but subject to Section 8.2, in the event of an Exit Event, all Awards of Restricted Stock shall vest and each Option that, by its terms, becomes exercisable solely upon the completion of a stated period of service (whether or not then exercisable), together with any outstanding Options that, prior to or in connection with such Exit Event, have become exercisable in connection with the attainment of performance objectives, shall be canceled in exchange for a payment in cash by the Company to each Option holder of an amount equal to the excess (if any) of the Exit Event Price over the exercise price for such Option. Any other Options shall be cancelled, forfeited and of no further effect.

8.2. Alternative Awards. If provided in the Option agreement evidencing the Options, no cancellation or cash settlement or other payment shall occur with respect to any Option that would otherwise have been canceled pursuant to Section 8.1 if the Committee reasonably determines in good faith prior to the occurrence of an Exit Event that such Option shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted award hereinafter called an “Alternative Award”) by a Participant’s employer (or the parent or a subsidiary of such employer) immediately following the Exit Event, provided that any such Alternative Award must:

(i) provide such Participant (or each Participant in a class of Participants) with rights and entitlements substantially equivalent to or better than the rights applicable under such Option, including, but not limited to, a substantially similar or better exercise or vesting schedule and substantially similar or better timing and methods of payment; and

(ii) have substantially equivalent economic value to such Option (determined at the time of the Exit Event).

8.3. Conflict with Option Agreement. With respect to any Options granted hereunder that may become exercisable upon the attainment of performance objectives (including, without limitation, specified returns with respect to the Kelso Entities’ investment in the Company and its affiliates), in the event of a conflict between this Section 8 and the terms and conditions set forth in the Award Agreement evidencing such Options, the terms and conditions set forth in the Award Agreement evidencing such Options shall control.

8.4. Limitation on Benefits. Notwithstanding anything contained in the Plan or an Option agreement to the contrary if, whether as a result of accelerated vesting,

12

the grant of an Alternative Award or otherwise, a Participant would receive any payment, deemed payment or other benefit as a result of the operation of Section 8.1 or Section 8.2 that, together with any other payment, deemed payment or other benefit a Participant may receive under any other plan, program, policy or arrangement, would constitute an “excess parachute payment” under Section 280G of the Code, then, notwithstanding anything in this Plan to the contrary, the payments, deemed payments or other benefits such Participant would otherwise receive under Section 8.1 or Section 8.2 shall be reduced to the extent necessary to eliminate any such excess parachute payment and such Participant shall have no further rights or claims with respect thereto. If the preceding sentence would result in a reduction of the payments, deemed payments or other benefits a Participant would otherwise receive, the Company will use its good faith efforts to seek the approval of the Company’s shareholders in the manner provided for in Section 280G(b)(5) of the Code and the regulations thereunder with respect to such reduced payments or other benefits (if the Company is eligible to do so), so that such payments would not be treated as “parachute payments” for these purposes (and therefore would cease to be subject to reduction pursuant to this Section 8.4).

SECTION 9.

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

9.1. In General. The Committee may at its discretion at any time and from time to time alter, amend, suspend, or terminate the Plan and any unvested Options (but not any previously granted vested Options) in whole or in part, including without limitation, amending the criteria for vesting and exercisability set forth in Section 6 hereof (or in any Option agreement), substituting alternative vesting and exercisability criteria and imposing certain blackout periods on Options, provided, however, that (i) such alteration, amendment, suspension or termination shall preserve the economic value, as determined by the Committee in its sole good faith discretion, of any previously granted Option and (ii) the Committee shall only be permitted to alter, amend, suspend or terminate previously granted unvested Options with the consent of the holders of a majority of such Options.

9.2. Public Offering. Unless otherwise determined by the Committee, in the event of a Public Offering, the Committee shall have the authority to amend any outstanding Options to provide for (i) subject to Section 9.1 above, the substitution of the exercisability criteria that may relate to the Kelso Entities’ return on their investment with criteria based on stock price and (ii) the imposition of certain blackout periods, in each case, as the Committee shall determine to be appropriate, provided that such amendments shall preserve the economic value of the Options, as determined by the Committee in its sole good faith discretion.

13

SECTION 10.

MISCELLANEOUS PROVISIONS

10.1. Nontransferability of Awards. Unless the Committee shall permit (on such terms and conditions as it shall establish) an Award to be transferred to a Permitted Transferee, no Award granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. All rights with respect to any Option granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant or, if permitted by the Committee, any such Permitted Transferee.

10.2. Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee and will be effective only when filed by the Participant in writing with the Committee during his lifetime. In the absence of any such designation, benefits remaining unpaid or Options outstanding at the Participant’s death shall be paid to or exercisable by the Participant’s surviving spouse, if any, or otherwise to or by his estate.

10.3. No Guarantee of Employment or Participation; No Additional Compensation for Loss of Rights Under Plan. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or any Subsidiary. No Employee shall have a right to be selected as a Participant, or, having been so selected, to receive any future Option grants. If any Participant’s employment with the Company or any Subsidiary shall be terminated for any reason, such Participant shall not be entitled to any compensation or other form of remuneration with respect to such termination (except as otherwise provided herein) to compensate such Participant for the loss of any rights under the Plan notwithstanding any provision to the contrary in his or her contract of employment.

10.4. Tax Withholding. The Company or any Subsidiary shall have the power to withhold, or require a Participant to remit to the Company or such Subsidiary promptly upon notification of the amount due, an amount sufficient to satisfy the statutory minimum federal, state, local and foreign withholding tax requirements with respect to any Option and the Company or such Subsidiary may defer payment of cash or issuance or delivery of Common Stock until such requirements are satisfied.

14

10.5. Indemnification. Each person who is or shall have been a member of the Board or the Committee (an “Indemnified Person”) shall, to the maximum extent provided under the Company’s By-Laws as in effect on the effective date of the Plan, be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such Indemnified Person in connection with or resulting from any claim, action, suit or proceeding to which such Indemnified Person may be made a party or in which such Indemnified Person may be involved by reason of any action taken or failure to act under the Plan (or any option agreement) and against and from any and all amounts paid by such Indemnified Person in settlement thereof, with the Company’s approval, or paid by such Indemnified Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnified Person, provided that such Indemnified Person shall give the Company an opportunity, at its own expense, to handle and defend the same before such Indemnified Person undertakes to handle and defend it on such Indemnified Person’s own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such Indemnified Person may be entitled under the Company’s Articles of Incorporation or By-laws, by contract, as a matter of law or otherwise.

10.6. No Limitation on Compensation. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees in cash or property.

10.7. Requirements of Law. The granting of Awards, the exercisability of any Options and the issuance of shares of Common Stock shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

10.8. Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.

10.9. No Impact On Benefits. Awards granted under the Plan are not compensation for purposes of calculating an Employee’s rights under any employee benefit plan.

10.10. Securities Law Compliance. Instruments evidencing the grant of Awards may contain such other provisions, not inconsistent with the Plan, as the Committee deems advisable, including a requirement that a Participant represent to the Company in writing, when such Participant receives Restricted Stock or shares upon exercise of an Option (or at such other time as the Committee deems appropriate) that such Participant is acquiring such shares (unless they are then covered by an effective registration statement filed under the Act) for such Participant’s own account for investment only and with no present intention to transfer, sell or otherwise dispose of

15

such shares except such disposition by a legal representative as shall be required by will or the laws of any jurisdiction in winding up the estate of such Participant. Such shares shall be transferable only if the proposed transfer shall be permissible pursuant to the Plan and if, in the opinion of counsel satisfactory to the Company, such transfer at such time will be in compliance with all applicable securities laws.

10.11. Freedom of Action. Subject to Section 8, nothing in the Plan or any agreement entered into pursuant to this Plan shall be construed as limiting or preventing the Company or any Subsidiary from taking any action with respect to the operation or conduct of its business that it deems appropriate or in its best interest.

10.12. No Fiduciary Relationship. Nothing contained in the Plan and no action taken pursuant to the Plan shall create or be construed to create a trust of any kind or any fiduciary relationship between the Company or any Subsidiary and any Participant or executor, administrator or other personal representative or designated beneficiary of such Participant, or any other persons.

10.13. No Right to Particular Assets. Any reserves that may be established by the Company in connection with this Plan shall continue to be held as part of the general funds of the Company, and no individual or entity other than the Company shall have any interest in such funds until paid to a Participant.

10.14. Unsecured Creditor. To the extent that any Participant or his executor, administrator or other personal representative, as the case may be, acquires a right to receive any payment from the Company pursuant to this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.

10.15. Code Section 409A Compliance. Notwithstanding any provision of the Plan, to the extent that any Award would be subject to Section 409A of the Code, no such Award may be granted if it would fail to comply with the requirements set forth in Section 409A of the Code. To the extent that the Committee determines that the Plan or any Award is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, notwithstanding anything to the contrary contained in the Plan or in any Award Agreement, the Committee, reserves the right to amend or terminate the Plan and/or amend, restructure, terminate or replace the Award in order to cause the Award to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

10.16. Severability of Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provision had not been included.

16

10.17. Term of Plan. This Plan shall be effective as of May 25, 2005, and shall expire on the tenth anniversary of such date (except as to Options outstanding on that date), unless sooner terminated pursuant to Section 9.

17

EX-10.2

Exhibit 10.2

AXLE HOLDINGS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of                          ,              between Axle Holdings, Inc., a Delaware corporation (the “Company”), and                      (the “Employee”), pursuant to the Axle Holdings, Inc. Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”). Capitalized terms that are not defined herein shall have the meanings given to such terms in the Plan.

WHEREAS, the Company desires to grant options to purchase shares of its Common Stock, par value $.01 per share (the “Common Stock”) to certain key employees of the Company;

WHEREAS, the Company has adopted the Plan in order to effect such grants; and

WHEREAS, the Employee is a key employee as contemplated by the Plan, and the Committee has determined that it is in the interest of the Company to grant these options to the Employee.

NOW, THEREFORE, in consideration of the premises and subject to the terms and conditions set forth herein and in the Plan, the parties hereto agree as follows:

1. Confirmation of Grant, Option Price.

(a) Confirmation of Grant. The Company hereby evidences and confirms the grant to the Employee, effective as of the date hereof (the “Grant Date”), of:

(i) options to purchase from the Company              shares of Common Stock, which shall become exercisable, if at all, as provided in Section 2(a) (the “Service Options”); and

(ii) options to purchase from the Company              shares of Common Stock which shall become exercisable, if at all, as provided in Section 2(b) (the “Exit Options” and, together with the Service Options, the “Options”).

(b) Option Price. The Options shall have an exercise price of $             per share (the “Option Price”), which is not less than the Fair Market Value per share of the Common Stock on the Grant Date.

(c) Options Subject to Plan. The Options granted pursuant to this Agreement are conditioned upon the Employee’s execution of the Shareholders

Agreement and the Registration Rights Agreement and subject to the terms of the Shareholders Agreement, the Registration Rights Agreement and the Plan, all of the terms of which are made a part of and incorporated into this Agreement. By signing this Agreement, the Employee acknowledges that he has been provided a copy of the Plan and has had the opportunity to review such Plan.

(d) Character of Options. The Options granted hereunder are not intended to be “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

2. Exercisability.

(a) Service Options. The Service Options shall become exercisable in three equal installments on each of the first three anniversaries of the Grant Date, subject to the Employee’s continuous employment with the Company or a Subsidiary from the Grant Date to such anniversary. Notwithstanding the foregoing, all or a portion of such Options shall also become exercisable at the time and under the circumstances described in Sections 4(a) and 5.

(b) Exit Options. Subject to the second sentence of this Section 2(b), the Exit Options shall become exercisable, if at all, on the date of an Exit Event (the “Vesting Event”) as follows (and only as follows): (i) if the Aggregate Kelso Exit Value (as defined below) at the date of the Vesting Event is less than or equal to the Aggregate Floor Value (as defined below), no Exit Options shall become exercisable as of the Vesting Event, (ii) if the Aggregate Kelso Exit Value at the date of the Vesting Event is at least equal to the Aggregate Maximum Value, all of the Exit Options shall become exercisable as of the Vesting Event and (iii) if the Aggregate Kelso Exit Value at the date of the Vesting Event exceeds the Aggregate Floor Value but is less than the Aggregate Maximum Value, the Applicable Percentage (as defined below) of the Exit Options shall become exercisable as of the Vesting Event. Notwithstanding the foregoing or anything to the contrary, in no event shall any Exit Options become exercisable hereunder unless the Kelso Entities receive an internal rate of return, compounded annually (the “IRR”), on their investment in the Company and its affiliates (including Axle Holdings II, LLC, a Delaware limited liability company (the “LLC”)) of at least 12% and the Aggregate Kelso Exit Value at the date of the Vesting Event is at least equal to the Aggregate Floor Value. The Kelso Entities’ IRR will be calculated after giving full effect to the dilution of Kelso Entities’ equity interest in the Company by the Options and any override or incentive units issued by the LLC (i.e., after calculating assumed payments to holders of Options based on Section 2(a) above and the first sentence of this Section 2(b) and assumed distributions to holders of override units under the LLC Agreement based on the analogous methodology set forth in the LLC Agreement (but prior to the effect of any corresponding calculation of the Kelso Entities’ IRR under the LLC Agreement)). In the event that any portion of the Exit Options do not become exercisable pursuant to this

2

Section 2(b) upon the first occurrence of a Vesting Event, such portion of such Exit Options shall not become exercisable as a result of any subsequent Vesting Event, and shall automatically be canceled without payment therefor.

(c) Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

The “Aggregate Floor Value” means the product of (x) two and (y) the Original Cost.

The “Aggregate Maximum Value” means the product of (x) four and (y) the Original Cost.

The “Aggregate Kelso Exit Value” means the total fair market value of all distributions or proceeds (excluding fees and related payments) received and, pursuant to the applicable Exit Event, to be received by the Kelso Entities in respect of their investment in the Company and its affiliates (including the LLC). Distributions or proceeds to be received by the Kelso Entities upon an Exit Event shall be calculated (A) giving simultaneous effect to (i) the applicable level of vesting of Exit Options (determined in accordance with the first sentence of Section 2(b) above) and (ii) the applicable level and amount of participation in distributions of Value Units (as defined in the LLC Agreement) issued by the LLC under the LLC Agreement and (B) assuming (i) the vesting and exercise of all other outstanding “in the money” securities convertible or exchangeable into, and all other warrants, options and other rights (“Common Stock Equivalents”) exercisable for, shares of Common Stock (other than Exit Options), including all outstanding Service Options and shares of Restricted Stock and (ii) the participation in distributions of all other outstanding override or incentive based securities (other than Value Units) in the LLC, including all outstanding Operating Units (as defined in the LLC Agreement).

The “Applicable Percentage” means the percentage determined by dividing (i) the excess of the Aggregate Kelso Exit Value over the Aggregate Floor Value by (ii) the difference between the Aggregate Maximum Value and the Aggregate Floor Value, provided that, such percentage shall not exceed 100%.

The “LLC Agreement” means the Limited Liability Company Agreement of Axle Holdings II, LLC, dated as of May 25, 2005, as the same may be amended, modified, supplemented or restated from time to time.

The “Original Cost” means the aggregate cost of the Kelso Entities’ investment in the Company and its affiliates (including the amount of all capital contributions, whether in cash or property, to the LLC).

3

(d) Normal Expiration Date. Unless the Options earlier terminate in accordance with Sections 2, 4 or 5, the Options shall terminate on the tenth anniversary of the Grant Date (the “Normal Expiration Date”). Once Options have become exercisable pursuant to this Section 2, such Options may be exercised, subject to the provisions hereof, at any time and from time to time until the Normal Expiration Date.

(e) Calculations. All calculations required or contemplated by this Section 2 shall be made in the sole determination of the Committee and shall be final and binding on the Company and the Employee.

3. Method of Exercise and Payment.

All or part of the exercisable Options may be exercised by the Employee upon (a) the Employee’s written notice to the Company of exercise and (b) the Employee’s payment of the Option Price in full at the time of exercise (i) in cash or cash equivalents, (ii) with the consent of the Committee, in shares of Common Stock, valued at the Fair Market Value on the date of exercise, or (if permitted by the Committee and subject to such terms and conditions as it may determine) by surrender of outstanding Awards under the Plan, or (iii) in accordance with such procedures or in such other form as the Committee shall from time to time determine (including by permitting broker’s cashless exercise procedure). As soon as practicable after receipt of a written exercise notice and payment in full of the exercise price of any exercisable Options in accordance with this Section 3, but subject to Section 6 below, the Company shall deliver to the Employee (or such other person or entity) a certificate or certificates representing the shares of Common Stock acquired upon the exercise thereof, registered in the name of the Employee (or such other person or entity), provided that, if the Company, in its sole discretion, shall determine that, under applicable securities laws, any certificates issued under this Section 3 must bear a legend restricting the transfer of such Common Stock, such certificates shall bear the appropriate legend.

4. Termination of Employment.

(a) Special Termination. Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary terminates by reason of the Employee’s death, Disability or Retirement (each a “Special Termination”), then all Options held by the Employee that are exercisable as of the date of such Special Termination may be exercised by the Employee or the Employee’s beneficiary as designated in accordance with Section 9, or if no such beneficiary is named, by the Employee’s estate, at any time prior to one (1) year following the Employee’s termination of employment or the Normal Expiration Date of the Options, whichever period is shorter and shall terminate immediately thereafter. Upon a Special Termination, any Options that are not then exercisable shall terminate and be canceled immediately upon such termination of employment.

4

(b) Termination for Cause or Voluntary Resignation. Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary is terminated for Cause or due to Voluntary Resignation, all Options held by the Employee, whether or not then exercisable, shall terminate and be canceled immediately upon such termination of employment.

(c) Other Termination of Employment. Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary terminates for any reason other than (i) a Special Termination, (ii) for Cause or (iii) due to Voluntary Resignation, then any Options held by the Employee which are exercisable at the date of the Employee’s termination of employment shall be exercisable at any time up until the 60th day following the Employee’s termination of employment (or, in the event that the Employee dies after terminating his employment, but within the period during which the Options would otherwise be exercisable hereunder, the 120th day after the date of the Employee’s death) or the Normal Expiration Date of the Options, whichever period is shorter and shall terminate immediately thereafter, but any Options held by the Employee that are not then exercisable shall terminate and be canceled immediately upon such termination of employment.

(d) Committee Discretion. The Committee may at any time extend the post-termination exercise period of all or any portion of the Options up to and including, but not beyond, the Normal Expiration Date of such Options.

5. Exit Event.

(a) Accelerated Vesting and Payment. Unless the Committee shall otherwise determine in the manner set forth in Section 5(b), in the event of an Exit Event, each outstanding Service Option (regardless of whether such Service Options are at such time otherwise exercisable) and each outstanding Exit Option exercisable pursuant to Section 2(b) shall be canceled in exchange for a payment in cash of an amount equal to the excess, if any, of the Exit Event Price over the Option Price.

(b) Alternative Options. Notwithstanding Section 5(a), no cancellation or cash settlement or other payment shall occur with respect to any Option in connection with an Exit Event if the Committee reasonably determines in good faith, prior to the occurrence of such Exit Event, that such Option shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted Option being hereinafter referred to as an “Alternative Option”) by the new employer, provided that any such Alternative Option must:

(i) provide the Employee that held such Option with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Option, including, but not limited to, an

5

identical or better exercise and vesting schedule and identical or better timing and methods of payment; and

(ii) have substantially equivalent economic value to such Option (determined at the time of the Exit Event).

(c) Limitation on Benefits. Notwithstanding anything contained in this Option agreement or the Plan to the contrary if, whether as a result of accelerated vesting, the grant of an Alternative Award or otherwise, the Employee would receive any payment, deemed payment or other benefit as a result of the operation of Section 5(a) or Section 5(b) that, together with any other payment, deemed payment or other benefit the Employee may receive under any other plan, program, policy or arrangement, would constitute an “excess parachute payment” under Section 280G of the Code, then, notwithstanding anything in this Section 5 to the contrary, the payments, deemed payments or other benefits such Employee would otherwise receive under Section 5(a) or Section 5(b) shall be reduced to the extent necessary to eliminate any such excess parachute payment and such Employee shall have no further rights or claims with respect thereto. If the preceding sentence would result in a reduction of the payments, deemed payments or other benefits the Employee would otherwise receive, the Company will use good faith efforts to seek the approval of the Company’s shareholders in the manner provided for in Section 280G(b)(5) of the Code and the regulations thereunder with respect to such reduced payments or other benefits (if the Company is eligible to do so), so that such payments would not be treated as “parachute payments” for these purposes (and therefore would cease to be subject to reduction pursuant to this Section 5(c)).

6. Tax Withholding.

Whenever Common Stock is to be issued pursuant to the exercise of an Option or any cash payment is to be made hereunder, the Company or any Subsidiary shall have the power to withhold, or require the Employee to remit to the Company or such Subsidiary, an amount sufficient to satisfy the statutory minimum federal, state, and local withholding tax requirements relating to such transaction, and the Company or such Subsidiary may defer payment of cash or issuance of Common Stock until such requirements are satisfied.

7. Nontransferability of Awards.

No Options granted hereby may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or, on such terms and conditions as the Committee shall establish, to a Permitted Transferee. All rights with respect to Options granted to the Employee hereunder shall be exercisable during his lifetime only by such Employee or, if permitted by the Committee, a Permitted Transferee. Following the Employee’s death,

6

all rights with respect to Options that were exercisable at the time of the Employee’s death and have not terminated shall be exercised by his designated beneficiary, his estate or, if permitted by the Committee, a Permitted Transferee.

8. Buyout and Settlement for Shares.

Upon any termination of the Employee’s employment with the Company or any Subsidiary, the Company may repurchase all or any portion of the Options then held by the Employee in accordance with the terms of the Shareholders Agreement. Upon the purported exercise of any Option, in lieu of accepting payment of the exercise price therefor and delivering the number of shares of Common Stock for which the Option is being exercised, the Committee may cause the Company either (a) to pay the Employee an amount in cash equal to the amount, if any, by which the aggregate Fair Market Value of the shares of Common Stock as to which the Option is being exercised exceeds the aggregate Option Price, or (b) to deliver to the Employee a lesser number of shares of Common Stock, having a Fair Market Value on the date of exercise, equal to the amount, if any, by which the aggregate Fair Market Value of the shares of Common Stock as to which the Option is being exercised exceeds the aggregate Option Price for such shares. Notwithstanding anything else contained herein to the contrary, if the Committee exercises this authority at any time prior to a Public Offering and the date of the purported Option exercise (the “Exercise Date”) is on or after the first day of the seventh month of any fiscal year, the Fair Market Value of any share of Common Stock shall be calculated with reference to the most recent report to the Company describing the conclusions of an independent valuation consultant or appraiser of recognized national standing reasonably satisfactory to the Kelso Entities as to the value of the Common Stock as of the last day of the last ended fiscal year of the Company or such other more recent date requested by the Company (an “Appraisal Date”) rendered prior to such Exercise Date, plus (or minus) the product of (i) the increase (decrease) in such Fair Market Value from the Appraisal Date used in such last report to the Appraisal Date used in the next report issued following such Exercise Date and (ii) a fraction, the denominator of which is the number of days in the period between the Appraisal Dates preceding and following the Exercise Date and the numerator of which is the number of days elapsed from the earlier Appraisal Date to such Exercise Date. Upon payment of cash or distribution of shares of Common Stock pursuant to this Section 8, the Employee’s rights as to the portion of the Options which is the subject of such payment or distribution shall be deemed satisfied in full.

9. Beneficiary Designation.

The Employee may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) by whom any right under the Plan and this Agreement is to be exercised in case of his death. Each designation will revoke all prior designations by the Employee, shall be in a form reasonably prescribed

7

by the Committee, and will be effective only when filed by the Employee in writing with the Committee during his lifetime. If no beneficiary is named, or if a named beneficiary does not survive the Employee, Section 9.2 of the Plan shall determine who may exercise the Employee’s rights under the Plan.

10. Adjustment in Capitalization.

The aggregate number of shares of Common Stock subject to outstanding Option grants and the respective prices and/or vesting criteria applicable to outstanding Options, shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, any stock dividend, stock split or share combination of, or extraordinary cash dividend on, the Common Stock, or any recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares affecting the Common Stock, or any issuance of any warrants or rights offering (other than any such offering under the Plan) to purchase Common Stock at a price materially below Fair Market Value, or any other similar event affecting the Common Stock. All determinations and calculations required under this Section 10 shall be made in the sole discretion of the Committee.

11. Requirements of Law.

The issuance of shares of Common Stock pursuant to the Options shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. No shares of Common Stock shall be issued upon exercise of any Options granted hereunder, if such exercise would result in a violation of applicable law, including the U.S. federal securities laws and any applicable state or foreign securities laws.

12. No Guarantee of Employment.

Nothing in this Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate the Employee’s employment at any time, or confer upon the Employee any right to continue in the employ of the Company or any Subsidiary.

13. No Rights as Stockholder.

Except as otherwise required by law, the Employee shall not have any rights as a stockholder with respect to any shares of Common Stock covered by the Options granted hereby until such time as the shares of Common Stock issuable upon exercise of such Options have been so issued. Notwithstanding anything else contained herein to the contrary, the exercise of any portion of the Options conveyed hereby is expressly conditioned upon the Employee becoming a party to the Shareholders

8

Agreement and the Registration Rights Agreement with respect to any shares of Common Stock to be acquired upon such exercise.

14. Restrictions on Sale Upon Public Offering.

Except as otherwise provided in the Registration Rights Agreement, the Employee agrees that, in the event that the Company files a registration statement under the Act with respect to a public offering of any shares of its capital stock, the Employee will not effect any sale or distribution of any shares of the Common Stock including, but not limited to, pursuant to Rule 144 under the Securities Act, within seven days prior to and 90 days (unless the Company, in consultation with the managing underwriter, determines that a longer period, not to exceed 180 days, is required, or such shorter period as the managing underwriter for any underwritten offering may agree) after the effective date of the registration statement relating to such registration (the “Trigger Date”), except as part of such registration or unless, in the case of a sale or distribution not involving a public offering, the transferee agrees in writing to be subject to this Section 14; provided that, with respect to any shelf registration statement on Form S-3, the Trigger Date shall be the pricing of any offering made under such registration statement and the Employee agrees to execute a customary holdback agreement with the underwriters for any such public offering.

15. Interpretation; Construction.

Any determination or interpretation by the Committee under or pursuant to this Agreement shall be final and conclusive on all persons affected hereby. Except as otherwise expressly provided in the Plan, in the event of a conflict between any term of this Agreement and the terms of the Plan, the terms of the Plan shall control.

16. Amendments.

(a) In General. The Committee may, at its sole discretion, at any time and from time to time alter or amend this Agreement and the terms and conditions of any unvested Options (but not any previously granted vested Options) in whole or in part, including without limitation, amending the criteria for vesting and exercisability set forth in Section 2 hereof, substituting alternative vesting and exercisability criteria and imposing certain blackout periods on Options; provided, that such alteration, amendment, suspension or termination shall preserve the economic value, as determined by the Committee in its sole good faith discretion, of any previously granted Option. The Company shall give written notice to the Employee of any such alteration or amendment of this Agreement as promptly as practicable after the adoption thereof. This Agreement may also be amended by a writing signed by both the Company and the Employee.

9

(b) Public Offering. Unless otherwise determined by the Committee, in the event of a Public Offering, the Committee shall amend this Agreement and all Exit Options to provide for (i) subject to Section 16(a) above, the substitution of the exercisability criteria set forth in Section 2(b) with criteria based on stock price and (ii) the imposition of certain blackout periods, in each case, as the Committee shall determine to be appropriate; provided, however that such amendments shall preserve the economic value of the Options, as determined by the Committee in its sole good faith discretion.

17. Miscellaneous.

(a) Notices. All notices, requests, demands, letters, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered personally, (ii) mailed, certified or registered mail with postage prepaid, (iii) sent by next-day or overnight mail or delivery, or (iv) sent by fax, as follows:

(i) If to the Company, to it at:

Axle Holdings II, LLC

c/o Kelso & Company

320 Park Avenue, 24^th Floor

New York, New York 10022

Fax: 212-223-2379

Attention: James J. Connors II, Esq.

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Regina Olshan

Fax: (917) 777-3963

(ii) If to the Employee, to the Employee’s last known home address,

or to such other person or address as any party shall specify by notice in writing to the Company. All such notices, requests, demands, letters, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax, on the day delivered, provided that such delivery is confirmed.

(b) Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors

10

and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(c) Waiver. Either party hereto may by written notice to the other (i) extend the time for the performance of any of the obligations or other actions of the other under this Agreement, (ii) waive compliance with any of the conditions or covenants of the other contained in this Agreement and (iii) waive or modify performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of either party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by either party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

(d) Code Section 409A Compliance. Notwithstanding any provision of this Agreement, to the extent that the Committee determines that any Option granted under this Agreement is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, notwithstanding anything to the contrary contained in the Plan or in this Agreement, the Committee reserves the right to amend, restructure, terminate or replace the Option in order to cause the Option to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

(e) Applicable Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws.

(f) Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

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

— Signature page follows —

11

IN WITNESS WHEREOF, the Company and the Employee have duly executed this Agreement as of the date first above written.

AXLE HOLDINGS, INC.
By:
	Name:
	Title:
EMPLOYEE
Name

12

EX-10.7

Exhibit 10.7

CHANGE OF CONTROL AND EMPLOYMENT AGREEMENT

AGREEMENT (“Agreement”) by and between Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”) and Donald J. Hermanek (the “Executive” ), dated as of 9.5.00

The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) Subject to the next sentence, the “Effective Date” shall mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control (as defined in Section 2) occurs. However, if a Change of Control occurs and if the Executive’s employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then the “Effective Date” shall mean the date immediately prior to the date of such termination of employment.

(b) The “Change of Control Period” shall mean the period commencing on the date hereof and ending on the second anniversary of the date hereof; provided, however, that on the date one year after the date hereof, and on each annual anniversary of such date (such date, and each annual anniversary thereof, a “Renewal Date”), unless this Agreement shall have been terminated pursuant to Section 12(b)(ii), the Change of Control Period shall be automatically extended by an additional year (so as to terminate two years from such Renewal Date), unless at least 60 days prior to such Renewal Date the Company gives notice to the Executive that the Change of Control Period shall not be so extended, in which event the Change of Control Period shall terminate one year after such Renewal Date.

2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company shall not constitute a Change of Control; or

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual (other than an individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board) who becomes a director subsequent to the date hereof whose election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”) unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities and (ii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to

2

the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the “Employment Period”).

4. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, (A) the Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 75 miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed not later than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Based on such review, the Board, in its discretion, can increase the Annual Base Salary. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Neither the initial Annual Base Salary nor any increase to the Annual Base Salary shall be reduced. The term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as increased. As used in this Agreement, the term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in cash at least equal to greater of (A) the Executive’s target bonus payable under the Company’s Officer Incentive Plan or Management Incentive Plan, as the case may be, or any comparable bonus under any predecessor or successor plan, for the fiscal year in

3

which the Effective Date occurs (annualized in the event that the Executive was not employed by the Company for the whole of such fiscal year) and (B) the average of the Executive’s annual bonuses actually paid under the Company’s Officer Incentive Plan or Management Incentive Plan, as the case may be, for the three fiscal years immediately preceding the fiscal year in which the Effective Date occurs (annualized in the event that the Executive was not employed by the Company for the whole of any such fiscal years). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. Furthermore, the Executive shall pay the same amounts for all such benefits as other peer executives of the Company and its affiliated companies.

(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

4

(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, or an automobile allowance, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

5. Termination of Employment.

(a) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Disability of the Executive occurs during the Employment Period, the Company may give to the Executive written notice in accordance with Section 12(c) of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), unless within the 30-day period after such receipt, the Executive returns to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness, which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative.

(b) Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

(i) the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), 30 days after a written demand

5

for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive’s duties; or

(ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, upon the Company giving the Executive written notice thereof,

in each case as determined in the good faith opinion of the Board and set forth in a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board) specifying the particulars thereof in detail. For purposes of this provision, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

(c) Good Reason. The Executive’s employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii) the Company’s requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) of this Agreement or the Company’s requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

6

(iv) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 1l(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of “ Good Reason” made by the Executive shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(c) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies the Executive of such termination and (iii) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination.

(a) Good Reason; Other than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, Death or Disability, or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the greater of (I) the Annual Bonus payable for the fiscal year in which the Executive’s Date of Termination occurs (annualized in the event that the Executive was not employed by the Company for the whole

7

of such fiscal year) and (II) the average of the Executive’s Annual Bonuses actually paid for the three fiscal years immediately preceding the fiscal year in which the Executive’s Date of Termination occurs (annualized in the event that the Executive was not employed by the Company for the whole of any such fiscal years), including in each case any bonus or portion thereof which has been earned but deferred, if any (such higher amount being referred to as the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued Obligations”); and

B. an amount equal to the product of (1) one and one- half and (2) the sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual Bonus;

(ii) for 18 months after the Executive’s Date of Termination, the Company shall continue benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement (the “Company Welfare Plans”) if the Executive’s employment had not been terminated, provided, however, that such benefits shall be continued only to the extent permissible under the terms of such Company Welfare Plans and applicable law. If any of the Company’s Welfare Plans do not permit continued participation by the Executive and his family after the Executive’s Date of Termination, the Company shall reimburse the Executive for the cost of obtaining comparable coverage from a third-party insurer. If during the 18 month period described herein the Executive is reemployed by another employer, the rights of the Executive and his family to receive benefits under any Company Welfare Plan shall terminate on the date he and his family become eligible to receive comparable benefits from such employer. If, at the end of the 18-month period described herein, the Executive is receiving medical benefits under the Company’s medical plan and is not employed by another employer, the Company shall continue to provide medical benefits to the Executive and/or the Executive’s family pursuant to Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”), and for such purpose, the end of such 18-month period shall be considered the date of the “qualifying event” as such term is defined by COBRA, provided, however, that if the Executive is receiving medical benefits from a third-party insurer pursuant to this clause (ii), and is not then employed by another employer, the Company shall reimburse the Executive for the portion of the cost of such medical benefits equal to excess of the cost charged by the third-party insurer over the amount that would have been paid by the Executive under COBRA for continued coverage under the Company’s medical plan during the COBRA period;

(iii) for 18 months after the Executive’s Date of Termination, the Company shall continue the Executive’s participation as an active employee in any excess or supplemental pension or retirement plan maintained by the Company in which the Executive participated as of such Date of Termination; and

8

(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

The payments made and benefits provided pursuant to this Section 6(a) will be in lieu of any other severance benefits offered by the Company pursuant to any plan, program, policy or practice that may be in effect.

(b) Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. The “Other Benefits” to be provided shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of the Executive’s death.

(c) Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. The “Other Benefits” to be provided shall include, without limitation, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter.

(d) Cause; Other than for Good Reason. If the Executive’s employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the

9

Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

7. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 12(b)(iii), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or policy until the Date of Termination shall be payable in accordance with the practice or program of, or any contract or agreement with, the Company or any of its affiliated companies at or subsequent to such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

8. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).

9. Excise Tax.

(a) Gross-Up Payment. In the event a Change of Control shall occur, and a determination is made by legislation, regulation, ruling directed to the Executive or the Company, or court decision that the aggregate amount of any payment made to the Executive hereunder, or pursuant to any plan, program or policy of the Company in connection with, on account of, or as a result of, such Change of Control (the “Total Payments”) will be subject to the excise tax provisions of Section 4999 of the Code, or any successor section thereof, the Executive shall be entitled to receive from the Company, in addition to any other amounts payable thereunder, a lump sum payment (the “Gross-Up Payment”), sufficient to cover the full cost of such excise taxes and the Executive’s federal, state and local income and employment taxes on this additional payment so that the net amount retained by the Executive, after the payment of all such excise taxes on the Total Payments, and all federal, state and local income and employment taxes and excise taxes on the Gross-Up Payment, shall be equal to the Total Payments. The Total Payments,

10

however, shall be subject to any federal, state and local income and employment taxes thereon. For this purpose, the Executive shall be deemed to be in the highest marginal rate of federal, state and local taxes. Such amount shall be payable to the Executive as soon as may be reasonably practicable after such final determination is made.

(b) Determination. The Executive and the Company shall mutually and reasonably determine whether or not such determination has occurred, whether any appeal to such determination should be made and the amount of the Gross-Up Payment to be made to the Executive. Prior to the making of any such Gross-Up Payment, either party may request a determination as to the amount of such Gross-Up Payment. If such a determination is requested, it shall be made promptly, at the Company’s expense, by independent tax counsel selected by the Executive and approved by the Company (which approval shall not unreasonably be withheld), and such determination shall be conclusive and binding on the parties. The Company shall provide such information as such counsel may reasonably request, and such counsel may engage accountants or other experts at the Company’s expense to the extent that they deem necessary or advisable to enable them to reach a determination. The term “independent tax counsel” as used herein shall mean a law firm of recognized expertise in federal income tax matters that has not previously advised or represented either party.

10. Confidentiality. At all times, the Executive agrees to be bound by the provisions of the Restrictions on Use of Trade Secrets and Records and Assignments of Inventions Agreement (the “Confidentiality Agreement”) between Executive and the Company, as in effect from time to time, the provisions of which are incorporated by reference in this Agreement. In no event shall an asserted violation of the provisions of this Section 10 (or such Confidentiality Agreement) constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

11. Assignment; Binding Effect; Successors.

(a) Assignment. This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b) Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11

12. Miscellaneous.

(a) Governing Law; Headings.

(i) This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without reference to the principles of conflict of laws thereof.

(ii) The headings in this Agreement are not part of the provisions hereof and shall have no force or effect.

(b) Amendment; Termination; Employment.

(i) Except as otherwise expressly provided herein, this Agreement may be amended or modified only by written agreement duly executed and delivered by the parties hereto or their respective successors or legal representatives.

(ii) This Agreement may be terminated at any time prior to the Effective Date by the Company or the Executive, in which case the Executive shall have no further rights under this Agreement. No such termination shall affect the parties’ rights and obligations under the Confidentiality and Non-Solicitation Agreement referred to in Section 10 or any other agreement between the Executive and the Company.

(iii) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is “at will.” From and after the Effective Date, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

(c) Notices. All notices and other communications given hereunder shall be in writing and shall be given by hand delivery (including overnight courier or messenger) or electronic facsimile transmission to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

If to the Company:

Insurance Auto Auctions, Inc.

850 East Algonquin Road, Suite 100

Schaumburg, Illinois 60173

Facsimile: (847) 839-3678

Attention: General Counsel

12

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective on the date on which delivered if by hand delivery, the date of confirmation of transmission if by electronic facsimile transmission, the next business day if by nationally-recognized overnight delivery service or the first to occur of either the date of actual receipt or the fifth business day following deposit in the U.S. mail if by mail.

(d) Invalidity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(e) Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(f) Waiver. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written.

Executive
/s/ Donald J. Hermanek
INSURANCE AUTO AUCTIONS, INC.
By:	THOMAS C. O’BRIEN
Its:	PRESIDENT AND CHIEF EXECUTIVE OFFICER

13

EX-10.10

EXHIBIT 10.10

Execution copy

$165,000,000

CREDIT AGREEMENT

among

AXLE HOLDINGS, INC.,

AXLE MERGER SUB, INC. and

INSURANCE AUTO AUCTIONS, INC. (as successor to Axle Merger Sub, Inc.),

as Borrower,

The Several Lenders

from Time to Time Parties Hereto,

DEUTSCHE BANK SECURITIES INC.,

as Syndication Agent,

BEAR STEARNS CORPORATE LENDING INC.,

as Administrative Agent,

GMAC COMMERCIAL FINANCE LLC,

as Co-Documentation Agent,

ING CAPITAL LLC,

as Co-Documentation Agent,

and

MERRILL LYNCH CAPITAL,

A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,

as Co-Documentation Agent

Dated as of May 19, 2005

BEAR, STEARNS & CO. INC. and DEUTSCHE BANK SECURITIES INC.

Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

		Page
SECTION 1. DEFINITIONS		1
1.1.	Defined Terms	1
1.2.	Other Definitional Provisions	24
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS		24
2.1.	Term Commitments	24
2.2.	Procedure for Term Loan Borrowing	24
2.3.	Repayment of Term Loans	25
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS		25
3.1.	Revolving Commitments	25
3.2.	Procedure for Revolving Loan Borrowing	25
3.3.	Swingline Commitment	25
3.4.	Procedure for Swingline Borrowing; Refunding of Swingline Loans	26
3.5.	Commitment Fees, etc.	27
3.6.	Termination or Reduction of Revolving Commitments	27
3.7.	Letter of Credit Subcommitment	27
3.8.	Procedure for Issuance of Letter of Credit	28
3.9.	Fees and Other Charges	29
3.10.	L/C Participations	29
3.11.	Reimbursement Obligation of the Borrower	30
3.12.	Obligations Absolute	30
3.13.	Letter of Credit Payments	31
3.14.	Applications	31
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT		31
4.1.	Optional Prepayments	31
4.2.	Mandatory Prepayments and Commitment Reductions	31
4.3.	Conversion and Continuation Options	32
4.4.	Limitations on Eurodollar Tranches	33
4.5.	Interest Rates and Payment Dates	33
4.6.	Computation of Interest and Fees	34
4.7.	Inability to Determine Interest Rate	34
4.8.	Pro Rata Treatment and Payments	34
4.9.	Requirements of Law	36
4.10.	Taxes	37
4.11.	Indemnity	39
4.12.	Change of Lending Office	39
4.13.	Replacement of Lenders	40
4.14.	Evidence of Debt	40
4.15.	Illegality	41

SECTION 5. REPRESENTATIONS AND WARRANTIES		41
5.1.	Financial Condition	41
5.2.	No Change	42
5.3.	Corporate Existence; Compliance with Law	42
5.4.	Power; Authorization; Enforceable Obligations	42
5.5.	No Legal Bar	42
5.6.	Litigation	43
5.7.	No Default	43
5.8.	Ownership of Property; Liens	43
5.9.	Intellectual Property	43
5.10.	Taxes	43
5.11.	Federal Regulations	43
5.12.	Labor Matters	44
5.13.	ERISA	44
5.14.	Investment Company Act; Other Regulations	44
5.15.	Subsidiaries	44
5.16.	Use of Proceeds	44
5.17.	Environmental Matters	45
5.18.	Accuracy of Information, etc.	45
5.19.	Security Documents	46
5.20.	Solvency	47
5.21.	[Reserved]	47
5.22.	Regulation H	47
5.23.	Certain Documents	47
SECTION 6. CONDITIONS PRECEDENT		47
6.1.	Conditions to Initial Extension of Credit	47
6.2.	Conditions to Each Extension of Credit	50
6.3.	Conditions to Effectiveness	51
SECTION 7. AFFIRMATIVE COVENANTS		51
7.1.	Financial Statements	51
7.2.	Certificates; Other Information	51
7.3.	Payment of Obligations	53
7.4.	Maintenance of Existence; Compliance	53
7.5.	Maintenance of Property; Insurance	53
7.6.	Inspection of Property; Books and Records; Discussions	53
7.7.	Notices	54
7.8.	Environmental Laws	54
7.9.	Interest Rate Protection	55
7.10.	Additional Collateral, etc.	55
7.11.	Use of Proceeds	56
7.12.	Title Insurance	56
7.13.	Further Assurances	57
SECTION 8. NEGATIVE COVENANTS		57
8.1.	Financial Condition Covenants.	57

ii

8.2.	Indebtedness	59
8.3.	Liens	60
8.4.	Fundamental Changes	62
8.5.	Disposition of Property	62
8.6.	Restricted Payments	63
8.7.	Capital Expenditures	64
8.8.	Investments	64
8.9.	Optional Payments and Modifications of Certain Debt Instruments	65
8.10.	Transactions with Affiliates	66
8.11.	Sales and Leasebacks	67
8.12.	Hedge Agreements	67
8.13.	Changes in Fiscal Periods	67
8.14.	Negative Pledge Clauses	67
8.15.	Clauses Restricting Subsidiary Distributions	67
8.16.	Lines of Business	68
8.17.	Amendments to Acquisition Documents	68
SECTION 9. EVENTS OF DEFAULT		68
SECTION 10. THE AGENTS		72
10.1.	Appointment	72
10.2.	Delegation of Duties	72
10.3.	Exculpatory Provisions	72
10.4.	Reliance by Agents	73
10.5.	Notice of Default	73
10.6.	Non-Reliance on Agents and Other Lenders	73
10.7.	Indemnification	74
10.8.	Agent in Its Individual Capacity	74
10.9.	Successor Administrative Agent	74
10.10.	Agents Generally	75
10.11.	Agents Other than the Administrative Agent	75
10.12.	Withholding Tax	75
SECTION 11. MISCELLANEOUS		75
11.1.	Amendments and Waivers	75
11.2.	Notices	76
11.3.	No Waiver; Cumulative Remedies	78
11.4.	Survival of Representations and Warranties	78
11.5.	Payment of Expenses and Taxes; Indemnity	78
11.6.	Successors and Assigns; Participations and Assignments	79
11.7.	Adjustments; Set-off	82
11.8.	Counterparts	83
11.9.	Severability	83
11.10.	Integration	83
11.11.	GOVERNING LAW	83
11.12.	Submission To Jurisdiction; Waivers	83
11.13.	Acknowledgments	84
11.14.	Releases of Guarantees and Liens	84
11.15.	Confidentiality	85
11.16.	WAIVERS OF JURY TRIAL	85
11.17.	Delivery of Addenda	85
11.18.	USA PATRIOT Act	85

iii

ANNEX:
A	Pricing Grids
B	Lenders & Commitments
SCHEDULES:
1.1	Mortgaged Property
5.4	Consents, Authorizations, Filings and Notices
5.9	Intellectual Property Litigation
5.15	Subsidiaries
5.17	Environmental Matters
6.1(h)	Closing Date Title Insurance
6.1(k)	Indebtedness To Be Repaid
7.12	Post Closing Title Insurance
8.2(d)	Existing Indebtedness
8.3(i)	Existing Liens
8.8(e)	Existing Investments
EXHIBITS:
A	Form of Guarantee and Collateral Agreement
B	Form of Compliance Certificate
C	Form of Closing Certificate of the Guarantors
D	Form of Mortgage
E	Form of Assignment and Assumption
F	Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
G	Form of Exemption Certificate
H-1	Form of Term Note
H-2	Form of Revolving Note
H-3	Form Swingline Note
I	Form of Addendum
J	Form of Solvency Certificate
K	Form of Closing Certificate of the Borrower

iv

CREDIT AGREEMENT, dated as of May 19, 2005, among AXLE HOLDINGS, INC., a Delaware corporation (“Holdings”), AXLE MERGER SUB, INC., an Illinois corporation and Insurance Auto Auctions, Inc. (collectively, as further defined in Section 1.1, the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), BEAR, STEARNS & CO. INC. and DEUTSCHE BANK SECURITIES INC. as joint lead arrangers and joint bookrunners (in such capacities, the “Lead Arrangers”), DEUTSCHE BANK SECURITIES INC., as syndication agent (in such capacity, the “Syndication Agent”), GMAC COMMERCIAL FINANCE LLC, ING CAPITAL LLC and MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., as co-documentation agents (in such capacity, each a “Co-Documentation Agent,” and collectively, the “Co-Documentation Agents”), and BEAR STEARNS CORPORATE LENDING INC., as administrative agent (in such capacity, the “Administrative Agent”).

Recitals

WHEREAS, on the Closing Date (as defined below) the Borrower will merge with and into Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”), pursuant to the Merger Agreement (as defined below), with the Company continuing as the surviving corporation; and

WHEREAS, upon the effectiveness of the Merger (as defined below), the Company will succeed to all rights and obligations of the Borrower by operation of law and all references herein and in the other Loan Documents to the term “Borrower” shall thereupon be deemed to be references to the Company;

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into this Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower hereunder, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

1.1. Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“Acquisition”: the Merger and all related transactions contemplated by the Acquisition Documentation.

“Acquisition Documentation”: collectively, the Merger Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into to effectuate the Merger.

“Addendum”: an instrument, substantially in the form of Exhibit I, by which a Lender becomes a party to this Agreement as of the Closing Date.

“Adjustment Date”: as defined in the Pricing Grids.

“Administrative Agent”: as defined in the preamble to this Agreement.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“Agents”: the collective reference to the Syndication Agent, the Arrangers and the Administrative Agent, which term shall include, for purposes of Section 10 only, the Issuing Lender.

“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

“Agreement”: this Credit Agreement.

“Applicable Margin”: for each Type and class of Loan the rate per annum set forth below opposite the description of such Loan:

Eurodollar Term Loans	2.75	%
Eurodollar Revolving Loans	2.75	%
Base Rate Term Loans	1.75	%
Base Rate Revolving Loans and Swingline Loans	1.75	%

provided, that on and after the first Adjustment Date, the Applicable Margin will be determined pursuant to the Pricing Grids.

“Application”: an application, in a form as the Issuing Lender may reasonably specify from time to time to request the Issuing Lender open a Letter of Credit.

“Approved Fund”: (a) a CLO and (b) with respect to any Lender that is a fund which invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Asset Sale”: any Disposition of Property or series of related Dispositions of Property (including any issuance or sale of Capital Stock of any Subsidiary of the Borrower, but excluding any Disposition permitted by clause (a), (b), (c), (d), (e) or (f) of Section 8.5) that yields gross proceeds to any Group Member (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $500,000.

“Assignee”: as defined in Section 11.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the form of Exhibit E.

2

“Available Retained ECF Amount”: (i) an amount which is initially equal to zero, plus (ii) the cumulative amount for all then-completed fiscal years (commencing with the Borrower’s 2006 fiscal year) of the amount of Excess Cash Flow permitted to be retained by the Borrower for any fiscal year after giving effect to the calculation of Excess Cash Flow for such fiscal years and the payment of Loans required pursuant to Section 4.2(d) in respect of such fiscal years, minus (iii) the amount of Excess Cash Flow (expressed as a positive amount) for any fiscal year in which Excess Cash Flow was a negative number, minus (iv) any amount of the Available Retained ECF Amount used to make Capital Expenditures as permitted by Section 8.7, minus (v) the amount of the Available Retained ECF Amount utilized to effectuate one or more Permitted Acquisitions pursuant to clause (c) of the definition thereof.

“Available Revolving Commitment”: as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding; provided that, in calculating any Lender’s Revolving Extensions of Credit for the purpose of determining such Lender’s Available Revolving Commitment pursuant to Section 3.5, the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero.

“Base Rate”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. For purposes hereof: “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Bank of New York as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by the Bank of New York in connection with extensions of credit to debtors). Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Base Rate Loans”: Loans the rate of interest applicable to which is based upon the Base Rate.

“Benefited Lender”: as defined in Section 11.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

“Borrower”: prior to the Merger, Axle Merger Sub, Inc., an Illinois corporation; and from and after the Merger, Insurance Auto Auctions, Inc., an Illinois corporation.

“Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.

“Business”: as defined in Section 5.17(b).

“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

“Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease)

3

of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) which would, in accordance with GAAP, be set forth as capital expenditures in the consolidated statement of cash flow of the Company, but excluding in any event any Permitted Acquisitions.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP. For the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of six months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within six months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition or money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

“CLO”: any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an affiliate of such Lender.

“Closing Certificate of the Borrower” a certificate duly executed by a Responsible Officer on behalf of the Borrower substantially in the form of Exhibit K.

4

“Closing Date”: the date, not later than August 22, 2005, on which the conditions precedent set forth in Section 6.1 shall have been satisfied or waived.

“Co-Documentation Agent”: as defined in the preamble to this Agreement.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

“Commitment”: as to any Lender, the sum of the Term Commitment and the Revolving Commitment of such Lender.

“Commitment Fee Rate”: 0.5% per annum; provided, that on and after the first Adjustment Date occurring after the completion of the first full fiscal quarter of the Borrower after the Closing Date, the Commitment Fee Rate will be determined pursuant to the Pricing Grids.

“Commonly Controlled Entity”: any trade or business, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or (solely for purposes of Section 302 of ERISA and Section 412 of the Code) is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

“Company”: as defined in the recitals hereto.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer on behalf of the Borrower substantially in the form of Exhibit B.

“Conduit Lender”: any special purpose entity organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument (a copy of which shall be provided by the Administrative Agent to the Borrower upon request), subject to the consent of the Administrative Agent and the Borrower (which consent shall not be unreasonably withheld); provided, that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations under this Agreement (including its obligation to fund a Loan) if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender, (b) be deemed to have any Commitment or (c) be designated if such designation would otherwise increase the costs of any Facility to the Borrower.

“Confidential Information Memorandum”: the Confidential Information Memorandum dated April 14, 2005 and furnished to the Lenders in connection with this Agreement.

“Consolidated Current Assets”: at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date.

“Consolidated Current Liabilities”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a

5

consolidated balance sheet of the Borrower and its Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline Loans to the extent otherwise included therein.

“Consolidated EBITDA”: for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) the aggregate amount of all provisions for all taxes (whether or not paid, estimated or accrued) based upon the income and profits of the Borrower or alternative taxes imposed as reflected in the provision for income taxes in the Borrower’s consolidated financial statements, (b) interest expense, amortization or write-off of debt discount and debt issuance costs, and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring charges or losses (including stock option payments and severance expenses, change of control and employee payments, financing fees, and other fees and expenses incurred in connection with the Acquisition in an aggregate amount not to exceed $35,000,000 and in connection with Permitted Acquisitions), whether or not included as a separate item in the statement of Consolidated Net Income, (f) any cash compensation expense relating to the cancellation or retirement of stock options in connection with the Acquisition in an aggregate amount not to exceed $27,500,000, (g) non-cash compensation expenses from stock, options to purchase stock and stock appreciation rights issued to the management of the Borrower, (h) any other non-cash charges, non-cash expenses or non-cash losses of the Borrower or any of its Subsidiaries for such period (including deferred rent but excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period); provided, however, that cash payments made in such period or in any future period in respect of such non-cash charges, expenses or losses (excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period) shall be subtracted from Consolidated Net Income in calculating Consolidated EBITDA in the period when such payments are made, (i) cash restructuring charges itemized in a certificate delivered to the Administrative Agent by a Responsible Officer not exceeding $2,500,000 per fiscal year and $5,000,000 in the aggregate from the date hereof; (j) no more than $500,000 accrued in any fiscal year for payment to the Sponsor in respect of management, monitoring, consulting and advisory fees, (k) any write-off, depreciation or amortization of intangibles arising pursuant to Statement of Financial Accounting Standards No. 141 or to Statement of Financial Accounting Standards No. 142 and any other non-cash charges resulting from purchase accounting, (l) any reduction in revenue resulting from the purchase accounting effects of adjustments to deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and its Subsidiaries), as a result of the Acquisition, any acquisition consummated prior to the Closing Date or any Permitted Acquisition, (m) any loss realized upon the sale or other disposition of any asset (including pursuant to any sale/leaseback transaction) that is not Disposed of in the ordinary course of business and any loss realized upon the sale or other disposition of any Capital Stock of any Person, (n) any unrealized losses in respect of Hedge Agreements, (o) any unrealized foreign currency translation losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person, and (p) the amount of any minority expense net of dividends and distributions paid to the holders of such minority interest; and minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) interest income, (b) any extraordinary, unusual or non-recurring income or gains whether or not included as a separate item in the statement of Consolidated Net Income, (c) all non-cash gains on the sale or disposition of any property other than inventory sold in the ordinary course of business, (d) any other non-cash income (excluding any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period that are described in the parenthetical to

6

clause (h) above), (e) any gain realized upon the sale or other disposition of any asset (including pursuant to any sale/leaseback transaction) that is not Disposed of in the ordinary course of business and any gain realized upon the sale or other disposition of any Capital Stock of any Person, (f) any unrealized gains in respect of Hedge Agreements and (g) any unrealized foreign currency translation gains in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person, all as determined on a consolidated basis. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $3,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $3,000,000. Notwithstanding the foregoing, (x) Consolidated EBITDA shall be deemed to be $13,700,000, $10,500,000, $10,900,000 and $14,900,000, respectively, for the fiscal quarters ending on or about June 30, 2004, September 30, 2004, December 31, 2004 and March 31, 2005, and (y) Consolidated EBITDA for the fiscal quarters ending June 30, 2005 and September 30, 2005 shall be increased by $1,000,000 and $1,000,000, respectively, as an allowance for anticipated cost-savings identified by the Sponsor.

“Consolidated Interest Coverage Ratio”: for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.

“Consolidated Interest Expense”: for any period, total cash interest expense (including that attributable to Capital Lease Obligations), net of cash interest income, of the Borrower and its Subsidiaries (determined on a consolidated basis in each case in accordance with GAAP) for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including, to the extent treated as interest expense under GAAP, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period but excluding any amortization or write-off of financing costs otherwise included therein).

“Consolidated Leverage Ratio”: the ratio of (a) Consolidated Total Debt on the last day of any fiscal quarter of the Borrower to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters then ended.

“Consolidated Net Income”: for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded the income (or loss) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions.

7

“Consolidated Total Debt”: at any date, the aggregate amount shown or required by GAAP to be shown as a liability on a consolidated balance sheet of the Borrower and its Subsidiaries as of such date in respect of all Indebtedness of the Borrower or any of its Subsidiaries then outstanding.

“Consolidated Working Capital”: at any date, the excess of Consolidated Current Assets on such date over Consolidated Current Liabilities on such date.

“Continuing Directors”: the directors of Holdings or a Parent on the Closing Date, after giving effect to the Acquisition and the other transactions contemplated hereby, and each other director of Holdings or such Parent whose nomination for election to the board of directors of Holdings or such Parent is recommended by at least a majority of the then Continuing Directors or such other director receives the vote of the Permitted Investors in his or her election by the shareholders of Holdings or such Parent.

“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control Investment Affiliate”: as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person or a common controlling Person primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Credit Facilities”: to the extent specified by the Borrower by notice to the Administrative Agent, one or more other debt facilities or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

“Default”: any of the events specified in Section 9, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollars” and “$”: dollars in lawful currency of the United States.

“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

“Earnout Obligation”: an obligation to pay the seller in an acquisition a future payment that is contingent upon the financial performance of the business acquired in such acquisition exceeding a specified benchmark level and that becomes payable when such excess financial performance is achieved.

8

“ECF Percentage”: with respect to any fiscal year of the Borrower ending on or after December 31, 2005, 75.0%; provided that the ECF Percentage shall be (i) reduced to 50.0% if the Consolidated Leverage Ratio as of the last day of such fiscal year is less than 4.0 to 1.0 but equal to or greater than 3.0 to 1.0 and (ii) equal to 0% if the Consolidated Leverage Ratio as of the last day of such fiscal year is less than 3.0 to 1.0.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection or preservation of the environment and natural resources, including those relating to the generation, use storage, transportation, disposal, release, or threatened release of, or exposure to, Materials of Environmental Concern, as now or may at any time hereafter be in effect.

“Environmental Permits”: any and all permits, licenses, approvals, registrations, notifications, exemptions and other authorizations required under any Environmental Law.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Escrow Agreement”: as defined in the definition of Senior Unsecured Note Proceeds Escrow.

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be reasonably selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 a.m., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

9

“Eurodollar Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

“Eurodollar Tranche”: the collective reference to Eurodollar Loans under a particular Facility for which the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 9, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Excess Cash Flow”: for any fiscal year of the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such fiscal year, and (iv) the aggregate net amount of non-cash losses by the Borrower and its Subsidiaries during such fiscal year, to the extent deducted in arriving at such Consolidated Net Income over (b) the sum, without duplication, of (i) the aggregate amount actually paid by the Borrower and its Subsidiaries in cash during such fiscal year on account of Capital Expenditures and Permitted Acquisitions (excluding the principal amount of Indebtedness incurred and equity contributions received to finance such payments and any such payments financed with the proceeds of any Reinvestment Deferred Amount or any Available Retained ECF Amount), (ii) the aggregate amount of all prepayments of Revolving Loans and Swingline Loans during such fiscal year to the extent accompanying permanent optional reductions of the Revolving Commitments and all optional prepayments of the Term Loans during such fiscal year, (iii) the aggregate amount of all regularly scheduled and voluntary principal payments of Funded Debt (including the Term Loans) of the Borrower and its Subsidiaries made during such fiscal year (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), (iv) increases in Consolidated Working Capital for such fiscal year, and (v) the aggregate net amount of non-cash gains, non-cash income and non-cash credits accrued by the Borrower and its Subsidiaries during such fiscal year, to the extent included in arriving at such Consolidated Net Income.

“Excluded Indebtedness”: all Indebtedness permitted by Section 8.2 (except any “Additional Notes” (as defined in the Senior Unsecured Note Indenture) issued after the Closing Date, the proceeds of which are not applied within 90 days after issuance to finance Capital Expenditures or a Permitted Acquisition).

“Excluded Redemption Obligation”: an obligation (i) to purchase, redeem, retire or otherwise acquire for value any Capital Stock that is not, and cannot in any contingency become required to be purchased, redeemed, retired or otherwise acquired prior to the first anniversary of the later of the Revolving Termination Date and the date final payment is due on the Term Loans or (ii) an obligation of Holdings to purchase, redeem, retire or otherwise acquire for value any Capital Stock of Holdings or any Parent from present or former officers, directors or employees of any Group Member upon the death, disability, retirement or termination of employment or service of such officer, director or employee, or otherwise under any stock option or employee stock ownership plan approved by the board of directors of Holdings or any Parent.

10

“Facility”: each of (a) the Term Commitments and the Term Loans made thereunder (the “Term Facility”), and (b) the Revolving Commitments and the extensions of credit made thereunder (the “Revolving Facility”).

“Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

“First Supplemental Indenture”: that certain supplemental indenture attached as Exhibit A to the Escrow Agreement.

“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary or that is a Foreign Subsidiary Holdco.

“Foreign Subsidiary Holdco”: any Domestic Subsidiary that (a) has no material assets other than securities of one or more Foreign Subsidiaries and other assets relating to the ownership interest in any such securities and (b) has no Guarantee Obligations in respect of any Indebtedness of the Borrower or any Domestic Subsidiary.

“Funded Debt”: as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans.

“Funding Office”: the office of the Administrative Agent specified in Section 11.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in effect from time to time except that for purposes of Section 8.1, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 5.1(b). In the event that any Accounting Change (as defined below) shall occur and such change would otherwise result in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.

11

“Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

“Group Members”: the collective reference to Holdings, the Borrower and their respective Subsidiaries (including, on and after the Closing Date, the Company and its Subsidiaries).

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to be executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit A.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation which (in the case of either clause (a) or clause (b)), guarantees or has the effect of guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any such obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

“Guarantors”: the collective reference to Holdings and the Subsidiary Guarantors.

“Hedge Agreements”: any interest rate protection agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Holdings”: as defined in the preamble to this Agreement.

“Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business and Earnout Obligations), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights

12

and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit or similar arrangements, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, except an Excluded Redemption Obligation, (h) all Guarantee Obligations of such Person in respect of obligations of others of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation; provided that the amount of such Indebtedness shall be limited to the lesser of such obligation and the value of the property subject to such Lien if such Person has not assumed or become liable for the payment of such obligation, (j) all preferred Capital Stock of any Subsidiary of such Person, and (k) for the purposes of Sections 8.2 and 9(e) only, all obligations of such Person in respect of Hedge Agreements, but in each case in the above clauses excluding obligations under operating leases and obligations under employment contracts entered into in the ordinary course of business. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

“Indemnified Liabilities”: as defined in Section 11.5.

“Indemnitee”: as defined in Section 11.5.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: the collective reference to all rights, and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses and technology, know-how, trade secrets and proprietary information of any type, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Intellectual Property Security Agreement”: the Intellectual Property Security Agreement to be executed and delivered by each applicable Loan Party in accordance with Section 5.10 of the Guarantee and Collateral Agreement.

“Interest Payment Date”: (a) as to any Base Rate Loan (other than any Swingline Loan), the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period, (d) as to any Loan (other than any Revolving Loan that is a Base Rate Loan and any Swingline Loan), the date of any repayment or prepayment made in respect thereof and (e) as to any Swingline Loan, the day that such Loan is required to be repaid.

13

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent no later than 1:00 p.m., New York City time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(ii) the Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Termination Date or beyond the date final payment is due on the Term Loans, as applicable;

(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and

(iv) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Loan.

“Investments”: as defined in Section 8.8.

“Issuing Lender”: any financial institution designated by the L/C Lender as “Issuing Lender” hereunder.

“L/C Fee Payment Date”: the last day of each March, June, September and December and the last day of the Revolving Commitment Period.

“L/C Lender”: Bear Stearns Corporate Lending Inc., in its capacity as the party responsible for causing the issuance of Letters of Credit hereunder.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.11.

“L/C Participants”: the collective reference to all the Revolving Lenders other than the Issuing Lender.

“L/C Subcommitment Amount”: $10,000,000.

“Lead Arrangers”: as defined in the recitals to this Agreement.

14

“Lenders”: as defined in the preamble hereto; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Conduit Lender.

“Letters of Credit”: as defined in Section 3.7(a).

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Loan”: any loan made by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, the Notes, each other agreement and each other material certificate or document executed by any Group Member and delivered to any Agent or any Lender pursuant to this Agreement or any Security Document.

“Loan Parties”: each Group Member that is a party to a Loan Document.

“Majority Facility Lenders”: with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Revolving Extensions of Credit, as the case may be, outstanding under such Facility (or, in the case of the Revolving Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Total Revolving Commitments and, in the case of the Term Loans prior to the Closing Date, holders of more than 50% of the aggregate Term Commitments).

“Management Advances”: promissory notes issued on an unsecured basis by Holdings to a Management Investor in accordance with the Management Stock Agreements to fund all or a portion of the purchase price paid in connection with the repurchase by Holdings or such Parent of its Capital Stock from such Management Investor, if such repurchase is occasioned by the death, disability, or retirement of such Management Investor.

“Management Agreement”: the Financial Advisory Agreement, dated as of the Closing Date, among Holdings, the Sponsor and the other parties thereto.

“Management Investors”: present or former officers, employees or directors of a Group Member who beneficially own outstanding capital stock of Holdings or any Parent.

“Management Stock Agreements”: any subscription agreement or stockholders agreement between Holdings or any Parent and any Management Investor.

“Material Adverse Effect”: a material adverse effect on (a) as of the Closing Date, the Acquisition or the financings thereof under this Agreement or the Senior Unsecured Note Indenture or any other transactions relating to the Acquisition, (b) the business, assets, property, financial condition or results of operations of the Group Members, taken as a whole or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder or the perfection or priority of the Administrative Agent’s Liens on a material portion of the Collateral.

15

“Material Environmental Amount”: an amount payable by the Borrower and/or its Subsidiaries in excess of $3,500,000 for remedial costs, compliance costs, compensatory damages, punitive damages, fines, penalties or any combination thereof pursuant to any Environmental Law.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined, listed or regulated as such in or under any Environmental Law, including polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances that are regulated pursuant to or could give rise to liability under any Environmental Law.

“Merger”: the merger of Axle Merger Sub, Inc., with and into Insurance Auto Auctions, Inc., in which Insurance Auto Auctions, Inc. is the surviving corporation, described in the Merger Agreement.

“Merger Agreement”: the Agreement and Plan of Merger dated as of February 22, 2005, among Insurance Auto Auctions, Inc., Axle Holdings, Inc., and Axle Merger Sub, Inc. as amended, modified and supplemented from time to time.

“Mortgaged Properties”: the owned real properties listed on Schedule 1.1, as to which the Administrative Agent for the benefit of the Secured Parties shall be granted a Lien pursuant to the Mortgages.

“Mortgages”: each of the mortgages, deeds to secure debts and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit D (with such changes thereto as (a) shall be advisable under the law of the jurisdiction in which such mortgage or deed of trust is to be recorded and (b) do not have a significant adverse economic effect on any Loan Party).

“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or by the Disposition of any non-cash consideration received in connection therewith or otherwise, but only as and when received, and Cash Equivalents at their maturity) of such Asset Sale or Recovery Event, net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) and other reasonable fees and expenses actually incurred in connection therewith and net of taxes paid, payable or reasonably estimated to be payable as a result thereof and (b) in connection with any issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other reasonable fees and expenses actually incurred in connection therewith; provided, that amounts provided as a reserve, in accordance with GAAP, against any liability under any indemnification obligations or purchase price adjustment associated with any of the foregoing shall not constitute Net Cash Proceeds except to the extent and at the time any such amounts are released from such reserve.

“Non-Excluded Taxes”: as defined in Section 4.10(a).

16

“Non-U.S. Lender”: as defined in Section 4.10(d).

“Notes”: the collective reference to any promissory note evidencing Loans.

“Obligations”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to any Agent or to any Lender (or, in the case of Specified Hedge Agreements or Specified Cash Management Arrangements, any Qualified Counterparty), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge Agreement, any Specified Cash Management Arrangements or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses, overdraft charges (including all reasonable fees, charges and disbursements of counsel to any Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge Agreement or Specified Cash Management Arrangement shall be secured and guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Hedge Agreements or Specified Cash Management Arrangements.

“Organizational Documents”: as to any Person, its certificate or articles of incorporation and by-laws if a corporation, its partnership agreement if a partnership, its limited liability company agreement if a limited liability company, or other organizational or governing documents of such Person.

“Other Taxes”: any and all present or future stamp or documentary taxes or any other excise taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Parent”: Holdings and any other Person of which Holdings at any time is or becomes a Subsidiary after the Closing Date.

“Participant”: as defined in Section 11.6(c).

“Patriot Act”: as defined in Section 11.18.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

“Permitted Acquisition”: any acquisition by purchase or otherwise of all or substantially all the business, assets or Capital Stock of any Person or a business unit of a Person, or a brand or trademark and related assets, to the extent the aggregate consideration paid by the Borrower and its Subsidiaries for such acquisition (including cash and indebtedness incurred or assumed in connection with such acquisition) consists solely of any combination of:

(a) Capital Stock of Holdings or any Parent;

17

(b) cash in an amount equal to the Net Cash Proceeds of issuance and sale of Capital Stock of Holdings or any Parent that is transferred to the Borrower as a contribution to its common equity within 90 days prior to the date of the relevant acquisition;

(c) any Available Retained ECF Amount; and

(d) other cash or property and other Indebtedness (whether incurred or assumed) in an aggregate amount which, when aggregated with all other amounts of such other cash and property paid for acquisitions at any time after the Closing Date and all such other Indebtedness incurred or assumed in acquisitions at any time after the Closing Date, does not exceed $50,000,000;

in each case if (i) no Default exists at the time of or results from such acquisition and (ii) the Borrower delivers to the Administrative Agent a certificate of a Responsible Officer demonstrating in reasonable detail that, on a pro-forma basis after giving effect to such acquisition and all related transactions as if completed on the first day of the twelve month period ending on the last day of the most recent fiscal quarter for which the Borrower’s balance sheet has been delivered (the “Test Date”), the Borrower would have been in compliance with Sections 8.1(a) and 8.1(b) on the Test Date, if such test date is September 30, 2005 or a later date, or (B) the Consolidated Leverage Ratio would not have exceeded 6.25:1 if the Test Date is earlier than September 30, 2005; provided, that, if the Borrower would have been in compliance as specified in the foregoing clause (ii), the Borrower shall not be required to deliver such certificate if the aggregate consideration paid for such Permitted Acquisition is less than $3,000,000.

“Permitted Investors”: the collective reference to the Sponsor, its Control Investment Affiliates, any Management Investors and their respective Permitted Transferees.

“Permitted Liens”: any Liens permitted by Section 8.3.

“Permitted Transferees”: (a) in the case of the Sponsor, (i) any Control Investment Affiliate of the Sponsor (collectively, “Sponsor Affiliates”), (ii) any managing director, general partner, limited partner, director, officer or employee of the Sponsor or any Sponsor Affiliate (collectively, the “Sponsor Associates”), (iii) the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any Sponsor Associate and (iv) any trust, the beneficiaries of which, or a corporation or partnership, the stockholders or partners of which, include only a Sponsor Associate, his or her spouse, parents, siblings, members of his or her immediate family (including adopted children) and/or direct lineal descendants; and (b) in the case of any Management Investors, (i) his or her heirs, executors, administrators, testamentary trustees, legatees or beneficiaries, (ii) his or her spouse, parents, siblings, members of his or her immediate family (including adopted children) or direct lineal descendants or (iii) a trust, the beneficiaries of which, or a corporation or partnership, the stockholders or partners of which, include only the Management Investor, as the case may be, and his or her spouse, parents, siblings, members of his or her immediate family (including adopted children) and/or direct lineal descendants.

“Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Plan”: at a particular time, any employee pension benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

18

“Pledged Notes”: as defined in the Guarantee and Collateral Agreement.

“Pledged Stock”: as defined in the Guarantee and Collateral Agreement.

“Pricing Grids”: the pricing grids and related provisions attached hereto as Annex A.

“Pro Forma Balance Sheet”: as defined in Section 5.1(a).

“Projections”: as defined in Section 7.2(c).

“Properties”: as defined in Section 5.17(a).

“Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

“Qualified Counterparty”: with respect to any Specified Hedge Agreement or Specified Cash Management Arrangement, any counterparty thereto that, at the time such Specified Hedge Agreement or Specified Cash Management Arrangement was entered into, was a Lender or an affiliate of a Lender.

“Recovery Event”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member, other than (x) any such settlement or payment arising by reason of any loss of revenues or interruption of business or operations caused thereby and (y) any such settlement or payment constituting reimbursement or compensation for amounts previously paid by any Group Member in respect of the theft, loss, destruction, damage or other similar event relating to any such claim or proceeding.

“Register”: as defined in Section 11.6(b).

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Reimbursement Obligation”: the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.11 for amounts drawn under Letters of Credit.

“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, an amount equal to the aggregate Net Cash Proceeds received by any Group Member in connection therewith that are not applied to prepay the Term Loans or reduce the Revolving Commitments pursuant to Section 4.2(c) as a result of the delivery of a Reinvestment Notice.

“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice”: a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends to use an amount equal to all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire, improve or repair fixed or capital assets useful in its business, or to complete a Permitted Acquisition.

“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant

19

Reinvestment Prepayment Date to acquire, improve or repair fixed or capital assets useful in the Borrower’s business, to acquire a brand or trademark and related assets or to complete a Permitted Acquisition.

“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the earlier of (a) the date occurring twelve months after the receipt by the Borrower of proceeds relating to such Reinvestment Event (or the 180^th day thereafter if the Reinvestment Event is a project authorized by the board of directors of the Borrower prior to such date and the Borrower or any of its Subsidiaries has entered into a contract to complete such project) and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire, improve or repair fixed or capital assets useful in the Borrower’s business, acquire a brand or trademark and related assets or complete a Permitted Acquisition with all or any portion of the relevant Reinvestment Deferred Amount.

“Related Agreements”: the Acquisition Documentation, the Senior Unsecured Notes Indenture, the Senior Unsecured Notes and each other document executed in connection with the Senior Unsecured Notes.

“Related Persons”: with respect to any specified Person, such Person’s Affiliates and the respective officers, directors, employees, attorneys, agents and advisors of such Person and such Person’s Affiliates.

“Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

“Required Lenders”: at any time, the holders of more than 50% of (a) until the funding of the Term Loans, the aggregate Commitments then in effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding and (ii) the Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Revolving Extensions of Credit then outstanding.

“Requirement of Law”: as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer”: the chief executive officer, president or chief financial officer of the Borrower, but in any event, with respect to financial matters, the chief financial officer of the Borrower.

“Restricted Payments”: as defined in Section 8.6.

“Revolving Commitment”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite such Lender’s name on Annex B hereto or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original amount of the Total Revolving Commitments is $50,000,000.

20

“Revolving Commitment Period”: the period from and including the Closing Date to the Revolving Termination Date.

“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender’s Revolving Percentage of the L/C Obligations then outstanding and (c) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.

“Revolving Lender”: each Lender that has a Revolving Commitment or that holds Revolving Loans.

“Revolving Loans”: as defined in Section 3.1(a).

“Revolving Percentage”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments (or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate principal amount of the Revolving Loans then outstanding).

“Revolving Termination Date”: the earlier of (a) the sixth anniversary of the Closing Date and (b) the date on which the Revolving Commitments are terminated pursuant to any provision of this Agreement.

“SEC”: the Securities and Exchange Commission, any successor thereto and otherwise any analogous Governmental Authority.

“Secured Obligations”: in the case of the Borrower, the Obligations and in the case of any other Loan Party, the obligations of such Loan Party under the Guaranty and Collateral Agreement and the other Loan Documents to which it is a party.

“Secured Parties”: as defined in the Guarantee and Collateral Agreement.

“Security Documents”: the collective reference to the Guarantee and Collateral Agreement, the Intellectual Property Security Agreements, the Mortgages and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

“Senior Unsecured Note Indenture”: the Indenture, dated as of April 1, 2005 entered into by IAAI Finance Corp., in connection with the issuance of the Senior Unsecured Notes.

“Senior Unsecured Note Proceeds Escrow”: the funds deposited in escrow pursuant to the Escrow Agreement (the “Escrow Agreement”), dated as of April 1, 2005, among IAAI Finance Corp., Wells Fargo Bank, National Association, as Escrow Agent, and Wells Fargo Bank, National Association, as trustee under the Senior Unsecured Note Indenture.

“Senior Unsecured Notes”: the collective reference to (a) the senior unsecured notes of IAAI Finance Corp. issued on April 1, 2005 pursuant to the Senior Unsecured Note Indenture and any Exchange Notes (as defined in the Senior Unsecured Note Indenture) issued in exchange therefore and (b) up to $50,000,000 aggregate principal amount of “Additional Notes” (defined in the Senior Unsecured Note Indenture) issued from time to time after the Closing Date and any Exchange Notes issued in exchange for such Additional Notes (defined in the Senior Unsecured Note Indenture).

21

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.

“Solvent”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Specified Cash Management Arrangement”: any arrangement for treasury, depositary or cash management services provided to the Borrower or any of its Subsidiaries by a Qualified Counterparty in connection with any transfer or disbursement of funds through an automated clearinghouse or on a same day or immediate or accelerated availability basis that has been designated as a Specified Cash Management Arrangement. The designation by the Borrower of any such arrangement as a Specified Cash Management Arrangement shall not create in favor of the Qualified Counterparty that is a party thereto any rights in connection with the management, enforcement or release of any Collateral or any claim against any Guarantor under the Guarantee and Collateral Agreement.

“Specified Change of Control”: a “Change of Control” (or any other defined term having a similar purpose) as defined in the Senior Unsecured Note Indenture.

“Specified Hedge Agreement”: any Hedge Agreement between the Borrower or any of its Subsidiaries and any Qualified Counterparty that has been designated as a Specified Hedge Agreement. The designation by the Borrower of any Hedge Agreement as a Specified Hedge Agreement (a) shall constitute a representation and warranty by the Borrower that such Hedge Agreement is permitted by Section 8.12 (upon which such Qualified Counterparty shall be entitled to rely conclusively) and (b) shall not create in favor of the Qualified Counterparty that is a party thereto any rights in connection with the management, enforcement or release of any Collateral or any claim against any Guarantor under the Guarantee and Collateral Agreement except to the extent expressly set forth in the Guarantee and Collateral Agreement.

“Sponsor”: Kelso & Company, L.P.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled,

22

directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Guarantor”: each Subsidiary of the Borrower other than IAAI Finance Corp. and any Foreign Subsidiary.

“Swingline Commitment Amount”: $10,000,000.

“Swingline Lender”: Bear Stearns Corporate Lending Inc., in its capacity as the lender of Swingline Loans.

“Swingline Loans”: as defined in Section 3.3(a).

“Swingline Participation Amount”: as defined in Section 3.4(c).

“Syndication Agent”: as defined in the preamble to this Agreement.

“Term Commitment”: as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower hereunder in a principal amount not to exceed the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Annex B hereto. The original aggregate amount of the Term Commitments is $115,000,000.

“Term Lender”: each Lender that has a Term Commitment or that holds a Term Loan.

“Term Loan”: as defined in Section 2.1.

“Term Percentage”: as to any Term Lender at any time, the percentage which such Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or, at any time after the funding of the Term Loans, the percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).

“Third Party Assignee” as defined in Section 11.6.

“Total Revolving Commitments”: at any time, the aggregate amount of the Revolving Commitments then in effect.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the Revolving Extensions of Credit outstanding at such time.

“Transferee”: any Assignee or Participant.

“Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

“United States”: the United States of America.

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law or de minimis shares held by nominees or others as required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

23

“Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

1.2. Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), and (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties of every type and nature and (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time (subject to any applicable restrictions hereunder).

(c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e) The expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to any Obligation shall mean the payment in full of such Obligation in cash in immediately available funds.

SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS

2.1. Term Commitments. Subject to the terms and conditions hereof, each Term Lender severally agrees to make a term loan (a “Term Loan”) to the Borrower on the Closing Date in an amount not to exceed the amount of the Term Commitment of such Lender. The Term Loans shall be either Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 4.3.

2.2. Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 1:00 p.m., New York City time, (a) one Business Day prior to the anticipated Closing Date in the case of Base Rate Loans and (b) three Business Days prior to the anticipated Closing Date in the case of Eurodollar Loans) requesting that the Term Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt of such notice the Administrative Agent shall

24

promptly notify each Term Lender thereof. Not later than 1:00 p.m., New York City time, on the Closing Date each Term Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders in immediately available funds.

2.3. Repayment of Term Loans. The Term Loan of each Term Lender shall mature and be payable in full on the date that is seven years after the Closing Date and shall be repayable prior to that date in consecutive quarterly installments, each of which shall be in an amount equal to such Lender’s Term Percentage of $287,500, due commencing on December 31, 2005 and continuing on the last day of each consecutive March, June, September and December thereafter.

SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS

3.1. Revolving Commitments. (a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“Revolving Loans”) to the Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Extensions of Credit then outstanding, does not exceed the amount of such Lender’s Revolving Commitment. Revolving Loans that are repaid may be reborrowed during the Revolving Commitment Period, subject to the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 3.2 and 4.3.

(b) The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date.

3.2. Procedure for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice, which must be received by the Administrative Agent prior to 1:00 p.m., New York City time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of Base Rate Loans and which shall specify (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $250,000 or a whole multiple thereof and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such amounts will then be made available to the Borrower by the Administrative Agent crediting an account of the Borrower maintained by the Administrative Agent, in like amounts and funds as received by the Administrative Agent.

3.3. Swingline Commitment. (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under the Revolving Commitments from time to time during the Revolving Commitment

25

Period by making swing line loans (“Swingline Loans”) to the Borrower; provided, that (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment Amount, (ii) the Borrower shall not request any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero, and (iii) the Swingline Lender shall not be required to make any Swingline Loans under this Section 3.3 at any time when an Event of Default has occurred and is continuing. Subject to the foregoing, Swingline Loans may be repaid and reborrowed from time to time.

(b) Swingline Loans shall be Base Rate Loans only.

(c) The Borrower shall repay all outstanding Swingline Loans (i) on each Borrowing Date for Revolving Loans, (ii) on the Revolving Termination Date and (iii) on demand by the Swingline Lender at any time when an Event of Default has occurred and is continuing.

3.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans. (a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swingline Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing of Swingline Loans shall be in an amount equal to $100,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the amount of the Swingline Loan to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swingline Loan available to the Borrower on such Borrowing Date by depositing such proceeds in the account of the Borrower with the Administrative Agent on such Borrowing Date in immediately available funds.

(b) The Swingline Lender may at any time, on behalf of the Borrower (which hereby irrevocably authorizes the Swingline Lender to do so), request a borrowing of Revolving Loans in an amount equal to the aggregate outstanding Swingline Loans and apply the proceeds of such borrowing to the repayment of the Swingline Loans. Each Revolving Lender agrees to fund its Revolving Percentage of any such borrowing so requested in immediately available funds, not later than 10:00 a.m., New York City time, on the first Business Day after the date of such borrowing is requested. The proceeds of such Revolving Loans shall immediately be made available by the Administrative Agent to the Swingline Lender for application to the repayment of Swingline Loans. The Borrower agrees to pay, and irrevocably authorizes the Swingline Lender and Administrative Agent to charge the Borrower’s accounts with the Swingline Lender or Administrative Agent as necessary to pay, all outstanding Swingline Loans to the extent amounts received from the Revolving Lenders upon any such request are not sufficient to repay the outstanding Swingline Loans.

(c) If the Swingline Lender at any time determines that it is precluded from making a request for a borrowing of Revolving Loans pursuant to Section 3.4(b), whether by reason of the occurrence of a Default described in Section 9(f) or otherwise for any reason, each Revolving Lender hereby purchases from the Swingline Lender an undivided participating interest in the then outstanding Swingline Loans (a “Swingline Participation Amount”) and shall promptly upon demand of the Swingline Lender complete such purchase at par by paying to the Swingline Lender an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate outstanding Swingline Loans.

26

(d) Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided, that if any such payment is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

(e) Each Revolving Lender’s obligation to make the Loans referred to in Section 3.4(b) and to purchase participating interests pursuant to Section 3.4(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of any Default or the failure to satisfy any of the conditions specified in Section 6; (iii) any adverse change in the condition (financial or otherwise) of the Borrower; (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Revolving Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

3.5. Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Commitment Period, computed at the Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on the last day of each March, June, September and December and on the Revolving Termination Date, commencing on the first of such dates to occur after the Closing Date.

(b) The Borrower agrees to pay to the Agents the fees in the amounts and on the dates agreed to in writing by the Borrower and the Administrative Agent.

3.6. Termination or Reduction of Revolving Commitments. The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $500,000, or a whole multiple thereof or the Total Revolving Commitment, and shall reduce permanently the Revolving Commitments then in effect.

3.7. Letter of Credit Subcommitment. (a) Subject to the terms and conditions hereof, the L/C Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.10(a), agrees to cause the Issuing Lender to issue, on a sight basis, letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day at any time and from

27

time to time during the Revolving Commitment Period, in such form as may be customarily used from time to time by the Issuing Lender or in such other form as may be reasonably satisfactory to the L/C Lender and the Issuing Lender; provided, that the L/C Lender shall have no obligation to cause any Letter of Credit to be issued if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Subcommitment Amount or (ii) the aggregate amount of the Available Revolving Commitments would be less than zero. Each Letter of Credit shall be denominated in Dollars and expire no later than the earlier of (i) the first anniversary of its date of issuance and (ii) the date that is five Business Days prior to the Revolving Termination Date; provided that any Letter of Credit with a one-year term may provide, with the consent of the L/C Lender and the Issuing Lender, for the automatic renewal thereof for additional periods of up to one year (which shall in no event extend beyond the date referred to in clause (ii) above without the consent of the L/C Lender and the Issuing Lender). If, as of the Revolving Termination Date, any Letter of Credit for any reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then outstanding amount of all Letters of Credit; provided, that all such Cash Collateral or Backstop L/Cs (each as defined below) shall be denominated in Dollars. For purposes of this Section 3.07, “Cash Collateralize” shall mean to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Lender, the Issuing Lender and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances (“Cash Collateral”) or one or more backstop letters of credit in form and substance acceptable to, and issued by financial institutions reasonably acceptable to the L/C Lender (each such letter of credit, a “Backstop L/C”) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Lender (which documents are hereby consented to by the Lenders). Derivatives of such above defined terms shall have corresponding meanings.

(b) L/C Lender shall not at any time be obligated to cause any Letter of Credit to be issued hereunder if such issuance would conflict with, or cause the L/C Lender, Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

3.8. Procedure for Issuance of Letter of Credit. (a) The Borrower may from time to time request that the L/C Lender cause a Letter of Credit to be issued by delivering to the L/C Lender at its address for notices specified herein, an Application therefor, completed to the reasonable satisfaction of the L/C Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Application, the L/C Lender will notify the Administrative Agent of the amount, the beneficiary and the requested expiration of the requested Letter of Credit, and upon receipt of confirmation from the Administrative Agent that after giving effect to the requested issuance, the Available Revolving Commitments would not be less than zero, the L/C Lender will cause such Application and the certificates, documents and other papers and information delivered to it in connection therewith to be processed by the L/C Lender and the Issuing Lender in accordance with their respective customary procedures and shall cause the Issuing Lender to promptly issue the Letter of Credit requested thereby (but in no event shall the L/C Lender be required to cause any Letter of Credit to be issued earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by causing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower. The L/C Lender shall furnish a copy of such Letter of Credit to the Borrower (with a copy to the Administrative Agent) promptly following the issuance thereof. The L/C Lender shall promptly furnish to the Administrative Agent which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

28

(b) The making of each request for a Letter of Credit by the Borrower shall be deemed to be a representation and warranty by the Borrower that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, Section 3.7(a) or any Requirement of Law applicable to the Loan Parties. Unless the L/C Lender has received notice from the Administrative Agent before it causes a Letter of Credit to be issued that one or more of the applicable conditions specified in Section 6.2 are not satisfied, or that the issuance of such Letter of Credit would violate Section 3.7, then the L/C Lender may cause the requested Letter of Credit to be issued for the account of the Borrower in accordance with the usual and customary practices of each of the L/C Lender and the Issuing Lender.

3.9. Fees and Other Charges. (a) The Borrower will pay a fee on the face amount of all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility, shared ratably among the Revolving Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the L/C Lender for its own account a fronting fee on the undrawn and unexpired amount of each Letter of Credit computed at the rate of 0.25% per annum and payable quarterly in arrears on each L/C Fee Payment Date.

(b) In addition to the foregoing fees, the Borrower shall pay or reimburse the L/C Lender and the Issuing Lender, as the case may be, for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.

3.10. L/C Participations. (a) The L/C Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the L/C Lender to cause Letters of Credit to be issued hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the L/C Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in the L/C Lender’s obligations and rights under and in respect of each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder (which shall include the L/C Lender’s obligation to reimburse such applicable Issuing Lender for the amount of such drawing). Each L/C Participant unconditionally and irrevocably agrees with the L/C Lender that, if a draft is paid under any Letter of Credit for which the L/C Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Administrative Agent upon demand of the L/C Lender an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. The Administrative Agent shall promptly forward such amounts to the L/C Lender.

(b) If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of the L/C Lender pursuant to Section 3.10(a) in respect of any unreimbursed portion of any payment made by L/C Lender to the Issuing Lender under any Letter of Credit is paid to the Administrative Agent for the account of the L/C Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Administrative Agent for the account of the L/C Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the L/C Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.10(a) is not made

29

available to the Administrative Agent for the account of the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the L/C Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans under the Revolving Facility. A certificate of the L/C Lender submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error.

(c) Whenever, at any time after the L/C Lender has made payment under any Letter of Credit and has received from any L/C Participant its prorata share of such payment in accordance with Section 3.10(a), the Administrative Agent or the L/C Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the L/C Lender), or any payment of interest on account thereof, the Administrative Agent or the L/C Lender, as the case may be, will distribute to such L/C Participant its prorata share thereof; provided, that if any such payment received by Administrative Agent or the L/C Lender, as the case may be, shall be required to be returned by the Administrative Agent or the L/C Lender, such L/C Participant shall return to the Administrative Agent for the account of the L/C Lender the portion thereof previously distributed to such L/C Participant.

3.11. Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse the L/C Lender on the same Business Day on which the L/C Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the L/C Lender or on the next Business Day, if such notice is received any time after 11:00 a.m., New York time on such Business Day for the amount of such draft so paid. Each such payment shall be made to the L/C Lender at its address for notices referred to herein in Dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (i) until the Business Day next succeeding the date of the relevant notice, Section 4.5(b) and (ii) thereafter, Section 4.5(c).

3.12. Obligations Absolute. The Borrower’s obligations under Section 3.11 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the L/C Lender, the Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the L/C Lender that the L/C Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.11 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The L/C Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender or any Related Person. The Borrower agrees that any action taken or by the L/C Lender or the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the L/C Lender or the Issuing Lender to the Borrower. The Issuing Lender shall not have any liability to the Borrower, the Administrative Agent, or the Lenders in respect of any Letters of Credit issued by it or any Letters of Credit requested to be issued by it, nor shall the Issuing Lender owe any

30

duty to any Person, or be deemed to have agreed, to issue any Letters of Credit (it being understood that the Issuing Lender shall issue Letters of Credit if at all, pursuant to separate contractual arrangements with and solely for the benefit of, the L/C Lender and any duties, obligations or liabilities of the Issuing Lender shall be only those set forth in such separate contractual arrangements).

3.13. Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the L/C Lender shall promptly notify the Borrower of the date and amount thereof. The responsibility of the L/C Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to causing the Issuing Lender to determine that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

3.14. Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. GENERAL PROVISIONS APPLICABLE

TO LOANS AND LETTERS OF CREDIT

4.1. Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 1:00 p.m., New York City time, three Business Days prior thereto in the case of Eurodollar Loans and no later than 1:00 p.m., New York City time, one Business Day prior thereto in the case of Base Rate Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 4.11. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein (provided, that a notice of prepayment of all outstanding Loans may state that such notice is conditioned upon the effectiveness of other credit facilities or other financing, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified date) if such condition is not satisfied), together with (except in the case of Revolving Loans that are Base Rate Loans and Swingline Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $500,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof.

4.2. Mandatory Prepayments and Commitment Reductions. (a) If at any time after the Closing Date any Group Member other than Holdings receives any Net Cash Proceeds from the incurrence of any Indebtedness other than Excluded Indebtedness, the Borrower shall prepay the Term Loans on the date of such receipt in an amount equal to the lesser of 100% of such Net Cash Proceeds (excluding Net Cash Proceeds received from the incurrence of any such Indebtedness to the extent used within 90 days thereafter to finance a Permitted Acquisition or to acquire or repair fixed or capital assets useful in its business) and the amount of the outstanding Term Loans.

(b) If at any time after the Closing Date Holdings or any Parent receives any Net Cash Proceeds from the issuance and sale of any Capital Stock or any equity contribution

31

(excluding (i) proceeds from Capital Stock of Holdings or any Parent issued to employees or directors of any Parent, Holdings, the Borrower or any of the Borrower’s Subsidiaries pursuant to employee benefit plans, employment arrangements or director arrangements, (ii) any capital contribution to the extent made by Holdings or another Subsidiary of Holdings (it being understood and agreed that in no event shall this clause (ii) exclude any proceeds received by Holdings from any capital contribution to it or any issuance of its equity), (iii) proceeds received from the equity financing referred to in paragraph 5 of the Closing Certificate of the Borrower, (iv) proceeds received by Holdings or any Parent after the Closing Date from issuances of its equity to, or contributions received from, any Parent or any Permitted Investors or Permitted Transferees and (v) proceeds received by Holdings or any Parent after the Closing Date from issuances of its equity or contributions to the extent used within 90 days thereafter to finance a Permitted Acquisition), the Borrower shall prepay the Term Loans within 90 days after the date of such receipt in an amount equal to the lesser of 50% of such Net Cash Proceeds and the amount of the outstanding Term Loans.

(c) If at any time after the Closing Date any Group Member receives any Net Cash Proceeds from any Asset Sale or Recovery Event in an amount exceeding $2,500,000 in any fiscal year, then, unless a Reinvestment Notice shall be delivered in respect thereof, the Borrower shall prepay the Term Loans on the third Business Day following the date of such receipt in an amount equal to the lesser of 100% of such Net Cash Proceeds to the extent exceeding $2,500,000 in any fiscal year and the amount of the outstanding Term Loans. If a Reinvestment Notice has been delivered in respect of any Asset Sale or Recovery Event, then on each Reinvestment Prepayment Date relating thereto, the Borrower shall prepay the Term Loans in an amount equal to the lesser of the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event and the amount of the outstanding Term Loans.

(d) If, for any fiscal year of the Borrower commencing with the fiscal year ending on or about December 31, 2006, there is any Excess Cash Flow, the Borrower shall prepay the Term Loans in an amount equal to the lesser of the ECF Percentage of such Excess Cash Flow on or before the 105^th day following the end of such fiscal year and the amount of the outstanding Term Loans.

(e) Mandatory prepayments of Term Loans shall be applied first to Base Rate Loans and then to Eurodollar Loans and shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. Each such prepayment shall be credited ratably to the remaining installments.

4.3. Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 12:00 noon, New York City time, on the Business Day preceding the proposed conversion date, provided, that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 1:00 p.m., New York City time, on the second Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefore), provided that no Base Rate Loan under a particular Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such conversions. If the Borrower requests a conversion to Eurodollar Loans in any such notice, but

32

fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided, that no Eurodollar Loan under a particular Facility may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. So long as no Event of Default has occurred and is continuing, if the Borrower requests a continuation of Eurodollar Loans in any such notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

4.4. Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $500,000 or a whole multiple of $250,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

4.5. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest on the outstanding principal amount thereof for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Base Rate plus the Applicable Margin.

(c) (i) If any portion of the principal of any Loan or Reimbursement Obligation is not paid when due (whether at the stated maturity, by acceleration or otherwise), such portion of such principal shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to Section 4.5(a) or 4.5(b) plus 2% per annum or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans under the Revolving Facility plus 2% per annum and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder is not paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans under the relevant Facility plus 2% per annum (or, in the case of any such other amounts that do not relate to a particular Facility, the rate then applicable to Base Rate Loans under the Revolving Facility plus 2% per annum), in each case, with respect to both clause (i) and clause (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

33

(d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

4.6. Computation of Interest and Fees. (a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate. Interest shall accrue on each Loan for each day on which it is made or outstanding, except the day on which it is repaid unless it is repaid on the same day that it was made.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 4.5(a).

4.7. Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower absent manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as Base Rate Loans (provided, that the Borrower may rescind such request promptly after receipt of such notice), (y) any Loans under the relevant Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period, to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

4.8. Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and

34

any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Term Percentages or Revolving Percentages, as the case may be, of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders. The amount of each principal prepayment of the Term Loans shall be applied to reduce the then remaining installments of Term Loans, pro rata based upon the then remaining principal amount thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.

(c) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders.

(d) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 1:00 p.m., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans under the relevant Facility, on demand, from the Borrower.

35

(f) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective prorata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

4.9. Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof, or compliance by any Lender with any request or directive whether or not having the force of law from any central bank or other Governmental Authority made subsequent to the date such Lender becomes a party hereto:

(i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for (A) changes in the rate of net income taxes, capital taxes, branch taxes, franchise taxes (imposed in lieu of income taxes) and net worth taxes (imposed in lieu of income taxes) and (B) Non-Excluded Taxes, provided that this provision shall not affect any obligation of the Borrower under Section 4.10);

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender reasonably deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its written demand (accompanied by a certificate of the type described in clause (c) below), any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(b) If any Lender shall have reasonably determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy whether or not having the force of law from any Governmental Authority made subsequent to the date such Lender becomes a party hereto shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption,

36

change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) by an amount reasonably deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request (accompanied by a certificate of the type described in clause (c) below) therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section 4.9 submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 4.9, the Borrower shall not be required to compensate a Lender pursuant to this Section 4.9 for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section 4.9 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

4.10. Taxes. (a) Except to the extent required under applicable law, all payments made under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes, capital taxes, branch taxes, franchise taxes (imposed in lieu of net income taxes) and net worth taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender or its applicable lending office or any branch, as a result of a present or former connection between such Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts payable to any Agent or any Lender hereunder (or are required to be withheld or paid by such Agent or Lender) subject to Subsection 4.10(i), the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender or Agent with respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s or Agent’s failure to comply with the requirements of paragraph (d) or (e) of this Section 4.10 or (ii) that are United States withholding taxes imposed on amounts payable to such Lender or Agent at the time such Lender or Agent becomes a party to this Agreement, except to the extent that such Lender’s or Agent’s assignor (if any) was entitled, at the time of assignment to receive additional amounts from the Borrower with respect to the Non-Excluded Taxes pursuant to this paragraph (a).

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

37

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Administrative Agent for its own account or for the account of the relevant Agent or Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the Lenders for any incremental taxes, interest or penalties that may become payable by any Agent or any Lender as a result of any such failure.

(d) Each Lender or Agent (or Transferee) that is not a “United States person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8IMY and/or Form W-8BEN (claiming benefits of an applicable tax treaty) or Form W-8ECI, as applicable (or successor form) or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver. Each Lender or Agent that is not a Non-U.S. Lender shall furnish an accurate and complete U.S. Internal Revenue Service Form W-9 (or successor form) establishing that such Lender or Agent is not subject to U.S. backup withholding, and to the extent it may lawfully do so at such times, provide a new Form W-9 (or successor form) upon the expiration or obsolescence of any previously delivered form.

(e) A Lender or Agent that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law and as reasonably requested in writing by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, to the extent that such Lender or Agent is legally entitled to complete, execute and deliver such documentation and in such Lender’s or Agent’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.

(f) If any Lender or Agent determines, in its reasonable discretion, that it has received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to

38

this Section 4.10, it shall promptly pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 4.10 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of such Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require any Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

(g) The agreements in this Section 4.10 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

(h) [Reserved].

(i) If a Lender or Agent changes its applicable lending office or assigns its rights or sells participations therein and the effect of the change, assignment or participation, as of the date of the change, would be to cause the Borrower to become obligated to pay any additional amount under Section 4.9(a)(i) or 4.10, the Borrower shall not be obligated to pay such additional amount in excess of amounts the Borrower was obligated to pay prior to such change, assignment or participation.

4.11. Indemnity. The Borrower agrees to indemnify each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting such compensation and the calculation of the amount of such compensation), for all losses, expenses and liabilities (including any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Eurodollar Loans but excluding loss of anticipated profits) that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section 4.11 submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

4.12. Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 4.9, 4.10(a) or 4.15 with respect to such Lender, it

39

will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Letters of Credit affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 4.9, 4.10(a) or 4.15.

4.13. Replacement of Lenders. The Borrower may replace, with a replacement financial lender reasonably satisfactory to the Administrative Agent, any Lender that (a) requests payment of any amounts payable under Section 4.9, 4.10(a) or 4.15, (b) defaults in its obligation to make Loans hereunder, or (c) declines to deliver any required consent to a waiver or modification of any provision of the Loan Documents that has been consented by the Borrower, Administrative Agent, Required Lenders and, if otherwise required, Majority Facility Lenders, but only if (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default has occurred and is continuing at the time of such replacement, (iii) prior to any such replacement, such Lender has taken no action under Section 4.12 so as to eliminate the demand or condition giving rise to the Borrower’s replacement right, (iv) the replacement lender purchases, at par, all Loans and other amounts owing to the replaced Lender on or prior to the date of replacement and assumes all obligations of the replaced Lender under the Loan Documents in accordance with Section 11.6 (except that the Borrower shall pay the registration and processing fee referred to therein), (v) the Borrower compensates the replaced Lender under Section 4.11 if any Eurodollar Loan outstanding to the replaced Lender is purchased other than on the last day of the Interest Period relating thereto and (vi) the Borrower shall pay the replaced Lender all amounts payable under Section 4.9 or 4.10(a). Notwithstanding the foregoing, all rights and claims of the Borrower, Administrative Agent and Lenders against any replaced Lender that has defaulted in its obligation to make Loans hereunder shall be in all respects reserved and unaffected by the replacement of such Lender.

4.14. Evidence of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing Indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(b) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and any Note evidencing such Loan, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

(c) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 4.14(a) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded, but the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

(d) The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the Borrower will execute and deliver to such Lender a promissory note of the

40

Borrower evidencing any Term Loans, Revolving Credit Loans or Swingline Loans, as the case may be, of such Lender, substantially in the forms of Exhibit H-1, H-2 or H-3, respectively, with appropriate insertions as to date and principal amount.

4.15. Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 4.11.

SECTION 5. REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, Holdings and the Borrower hereby jointly and severally represent and warrant to each Agent and each Lender that, unless otherwise specified, on and as of the Closing Date and on and as of each date as required by Section 6.2(b):

5.1. Financial Condition. (a) The unaudited pro forma consolidated balance sheet of the Company and its consolidated Subsidiaries as at on or about December 31, 2004 (including the notes thereto) (the “Pro Forma Balance Sheet”), copies of which have heretofore been furnished to each Lender party hereto as of the Closing Date, has been prepared giving effect (as if such events had occurred on such date) to (i) the consummation of the Acquisition, (ii) the Loans to be made and the Senior Unsecured Notes to be issued on or before the Closing Date and the use of proceeds thereof and (iii) the payment of fees and expenses in connection with the foregoing. The Pro Forma Balance Sheet has been prepared based on the best information available to the Borrower as of the date of delivery thereof, and presents fairly in all material respects on a pro forma basis the estimated financial position of the Company and its consolidated Subsidiaries as at on or about December 31, 2004, assuming that the events specified in the preceding sentence had actually occurred at such date (except in each case for the effects of fair value adjustments to the acquired tangible and intangible assets and liabilities required by purchase accounting principles).

(b) The audited consolidated balance sheets of the Company and its Subsidiaries as at on or about December 31, 2004, on or about December 31, 2003 and on or about December 31, 2002 and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report from KPMG LLC, present fairly in all material respects the consolidated financial condition of the Company and its Subsidiaries as at such dates and their consolidated results of operations and consolidated cash flows for the fiscal years then ended. All such financial statements, including the related schedules and notes (if any) thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). As of the Closing Date, no Group Member has any material Guarantee Obligations, contingent liabilities or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the most recent

41

financial statements referred to in this paragraph other than as contemplated by the Loan Documents and Related Agreements. During the period from on or about December 31, 2004 to and including the Closing Date there has been no Disposition by the Company or any of its Subsidiaries of any material part of its business or property other than the Acquisition.

5.2. No Change. Since the date of the audited consolidated balance sheets of the Company and its Subdiairies as at on or about December 31, 2004, there has been no development or event that has had or would reasonably be expected to have a Material Adverse Effect.

5.3. Corporate Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the organizational power and authority, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent the failure to be so qualified would not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law and Organizational Documents, except to the extent that the failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.4. Power; Authorization; Enforceable Obligations. Each Loan Party has the organizational power and authority, and the legal right, to make, deliver and perform the Loan Documents and the Related Agreements to which it is a party and, in the case of the Borrower, to obtain extensions of credit under this Agreement. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents and Related Agreements to which it is a party and, in the case of the Borrower, to authorize the extensions of credit under this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the Acquisition, the extensions of credit hereunder or the execution, delivery, performance, validity or enforceability of the Loan Documents or Related Agreements except (i) consents, authorizations, filings and notices described in Schedule 5.4, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect except as specifically described in Schedule 5.4 and (ii) the filings referred to in Section 5.19. Each Loan Document and Related Agreement has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, each other Loan Document upon execution will constitute, and each Related Agreement constitutes, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

5.5. No Legal Bar. The execution, delivery and performance of the Loan Documents and, the issuance of Letters of Credit and the borrowings hereunder do not and will not violate in any material respect any Requirement of Law, Organizational Documents or any material Contractual Obligation of any Loan Party or result in or require the creation or imposition of any Lien on any property or revenues of any Loan Party in any material respect pursuant to any Requirement of Law, Organizational Documents or material Contractual Obligation (other than the Liens created by the Security Documents). The execution, delivery and performance of the Related Agreements and the use of the proceeds thereof do not and will not violate any Requirement of Law, Organizational Documents or any Contractual Obligation of any Loan Party or result in or require the creation or imposition of any Lien on any property or revenues of any Loan Party pursuant to any Requirement of Law Organizational

42

Documents or Contractual Obligation (other than the Liens created by the Security Documents) except, as in each case, has not had and would not reasonably be expected to have a Material Adverse Effect. No Group Member is subject to any Requirement of Law, Organizational Documents or Contractual Obligation that has had or would reasonably be expected to have a Material Adverse Effect.

5.6. Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Holdings or the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that would reasonably be expected to have a Material Adverse Effect.

5.7. No Default. No Group Member is in default under or with respect to any of its Contractual Obligations in any respect that would reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

5.8. Ownership of Property; Liens. Each Loan Party has good and indefeasible title to the Mortgaged Properties, and to the knowledge of Holdings or the Borrower, has good and valid title to, or a valid leasehold interest in, all its other material property and none of such property is subject to any Lien except Permitted Liens.

5.9. Intellectual Property. Except as set forth in Schedule 5.9, each Group Member owns, or is licensed to use, all material Intellectual Property necessary for the conduct of its business as currently conducted. Except as, in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, (a) no material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does Holdings or the Borrower know of any valid basis for any such claim and (b) the use of Intellectual Property by each Group Member does not infringe on the rights of any Person in any material respect.

5.10. Taxes. Each Group Member has filed or caused to be filed all Federal and state income and other material tax returns that are required to be filed and has paid all material taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings (if any) and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Group Member); no tax Lien has been filed, and, to the knowledge of Holdings and the Borrower, no claim is being asserted, with respect to any material tax, fee or other charge. No Group Member intends to treat the Loan, the Acquisition, or any other transaction contemplated hereby as being as “reportable transaction” (within the meaning of Treasury Regulation section 1.6011-4).

5.11. Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

43

5.12. Labor Matters. Except as, in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against any Group Member pending or, to the knowledge of Holdings or the Borrower, threatened; (b) hours worked by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from any Group Member on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the relevant Group Member.

5.13. ERISA. Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan for which any Group Member or Commonly Controlled Entity has a material unpaid liability, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. No Group Member or Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or would reasonably be expected to result in a material liability under ERISA, and no Group Member or Commonly Controlled Entity would become subject to any material liability under ERISA if any Group Member or Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. No Group Member has any liability with respect to any employee benefit plan that is not subject to the laws of the United States or a political subdivision thereof that would reasonably be expected to result in a Material Adverse Effect.

5.14. Investment Company Act; Other Regulations. No Group Member is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law or restriction under its Organizational Documents (other than Regulation X of the Board) that limits its ability to incur Indebtedness under this Agreement or the Senior Unsecured Indenture.

5.15. Subsidiaries. Except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Closing Date, (a) Schedule 5.15 sets forth the name and jurisdiction of organization of each Subsidiary and, as to each such Subsidiary, the percentage of each class of Capital Stock owned by any Group Member and (b) there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees, former employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of the Group Member other than Holdings, except as created by the Loan Documents.

5.16. Use of Proceeds. The proceeds of the Term Loans and any Revolving Loans funded on the Closing Date shall be used to refinance existing Indebtedness of the Company and its Subsidiaries, finance a portion of the merger consideration for the Merger and pay related fees and expenses. Letters of Credit and the proceeds of Revolving Loans made after the Closing Date and Swingline Loans shall be used only for working capital, Permitted Acquisitions and other general corporate purposes.

44

5.17. Environmental Matters. Except as, in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect:

(a) Except as listed on Schedule 5.17, the facilities and properties owned, leased or operated by any Group Member (the “Properties”) do not contain any Materials of Environmental Concern or contamination in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could give rise to liability under, any Environmental Law;

(b) no Group Member has received or is aware of any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or any Group Member’s operation of any of the Properties or the business operated by any Group Member (the “Business”), nor does Holdings or the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened;

(c) the Group Members (i) hold all Environmental Permits (each of which is in full force and effect) required for the conduct of the business; and (ii) are, and within the period of all applicable statutes of limitation have been, in compliance with all of their Environmental Permits;;

(d) the Group Members have complied with all current requirements of Environmental Law and, to the knowledge of Holdings or the Borrower, compliance by each Group Member with all reasonably likely future requirements arising from either (i) existing Environmental Laws or (ii) formally proposed environmental regulations that have not yet been finally promulgated will be timely attained and maintained, as applicable, without material expense;

(e) Except as listed on Schedule 5.17, Materials of Environmental Concern have not been transported or disposed of by or on behalf of any Group Member from the Properties in violation of, or in a manner or to a location that would give rise to liability under, any Environmental Law, nor during any Group Member’s ownership or operation of either the Properties or any formerly owned, leased or operated facilities or properties (“Former Properties”) have any Materials of Environmental Concern been generated, treated, stored or disposed of, released or threatened to be released at, on or under any of the Properties or Former Properties or otherwise in connection with the Business in violation of Environmental Law, or in a manner that could give rise to liability under, any applicable Environmental Law;

(f) no judicial proceeding or governmental or administrative action is pending or, to the knowledge of Holdings and the Borrower, threatened, under any Environmental Law to which any Group Member is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business; and

(g) no Group Member has assumed any liability of any other Person under Environmental Laws.

5.18. Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, the Confidential Information Memorandum or any other

45

material document, certificate or statement furnished by or on behalf of any Group Member to the Administrative Agent or the Lenders, or any of them, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, taken as a whole, contained as of the date such statement, information, document or certificate was so furnished (or, in the case of the Confidential Information Memorandum, as of the date of this Agreement), any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. As of the Closing Date, to the best knowledge of the Borrower, the representations and warranties contained in the Acquisition Documentation are true and correct in all material respects (except those representations and warranties that refer solely to an earlier date, which representations and warranties shall be true and correct as of such earlier date). There is no fact known to any Loan Party that would reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents, in the Confidential Information Memorandum or in any other documents, certificates and statements furnished to the Administrative Agent and the Lenders for use in connection with the transactions contemplated hereby and by the other Loan Documents, taken as a whole.

5.19. Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and proceeds and products thereof, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when stock certificates representing such Pledged Stock are delivered to the Administrative Agent, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, to the extent provided therein, when financing statements, other filings specified on Schedule 4 to the Guarantee and Collateral Agreement in appropriate form are filed in the offices specified on Schedule 4 to the Guarantee and Collateral Agreement and the other actions described in Section 4.3 of the Guarantee and Collateral Agreement are completed, the Guarantee and Collateral Agreement shall be effective to create a perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case (to the extent provided therein) prior and superior in right to any other Person (except for Permitted Liens);

(b) Each of the Mortgages is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds and products thereof, and when the Mortgages are filed in the offices specified therein, each such Mortgage shall constitute, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally, (to the extent provided therein) a perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case (except as expressly set forth therein) prior and superior in right to any other Person (except for Permitted Liens). Schedule 1.1 lists, as of the Closing Date, each parcel of owned real property located in the United States and held by the Borrower or any of its Subsidiaries that has a value, in the opinion of the Borrower, in excess of $1,500,000.

46

(c) When delivered and at all times thereafter, each Intellectual Property Security Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Intellectual Property Collateral described therein and the proceeds and products thereof, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally. Upon the filing of (i) each Intellectual Property Security Agreement in the appropriate indexes of the United States Patent and Trademark Office (the “PTO”) relative to United States patents and United States trademarks, and the United States Copyright Office relative to United States copyrights, if any, and the taking of appropriate actions with respect to Intellectual Property which is the subject of a registration or application outside the United States under applicable local laws, together with provision for payment of all requisite fees, and (ii) financing statements in appropriate form for filing in the offices specified on Schedule 4 of the Guarantee and Collateral Agreement, each Intellectual Property Security Agreement shall constitute (to the extent provided in the Guarantee and Collateral Agreement) a perfected Lien on, and security interests in, all right, title and interest of the Loan Parties in such Intellectual Property Collateral and the proceeds and products thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case (except as expressly set forth therein) prior and superior in right to any other Person (except for Permitted Liens); provided that subsequent filings in the PTO and United States Copyright Office and actions under foreign law may be necessary with respect to registrations for Intellectual Property acquired by any Loan Party after the date hereof.

5.20. Solvency. Each Group Member is, and after giving effect to the Acquisition and the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent.

5.21. [Reserved].

5.22. Regulation H. No Mortgage encumbers improved real property that is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in respect of which the procurement of flood insurance is required by any Requirement of Law, unless such flood insurance has been obtained and is in full force and effect.

5.23. Certain Documents. The Borrower has delivered to the Administrative Agent a complete and correct copy of the Related Agreements, including any amendments, supplements or modifications with respect to any such Related Agreements.

SECTION 6. CONDITIONS PRECEDENT

6.1. Conditions to Initial Extension of Credit. The agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction, prior to the making of such extension of credit, of the following conditions precedent (which must in any event be satisfied on or before August 22, 2005):

(a) Credit Agreement; Security Documents. The Administrative Agent shall have received (i) this Agreement, or, in the case of the Lenders, this Agreement or an Addendum, executed and delivered by each Agent, Holdings, the Borrower and each Person identified herein as a Lender signatory hereto, (ii) the Guarantee and Collateral Agreement, executed and delivered by Holdings, the Borrower, the Company and each Subsidiary of the Company that is not a Foreign Subsidiary, (iii) an Acknowledgment and Consent in the form attached to the Guarantee

47

and Collateral Agreement, executed and delivered by each Issuer (as defined therein), if any, that is not a Loan Party, and (iv) the Intellectual Property Security Agreement, executed and delivered by each applicable Loan Party.

(b) Closing Certificate of the Borrower. The Administrative Agent shall have received (i) a certificate executed on behalf of the Borrower by a Responsible Officer of the Borrower dated the Closing Date, substantially in the form of Exhibit K with appropriate insertions and attachments including the certificate of incorporation of the Borrower certified by the relevant authority of the jurisdiction of organization of the Borrower, and (ii) a long form good standing certificate for the Borrower from its jurisdiction of organization.

(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated financial statements of the Company and its Subsidiaries ending on or about December 31, 2004, on or about December 31, 2003 and on or about December 31, 2002 and for the fiscal years then ended, and (iii) unaudited interim consolidated financial statements of the Company and its Subsidiaries as at the last day of the most recent fiscal quarter of the Company elapsed more than 45 days prior to the Closing Date and each month thereafter elapsed more than 30 days prior to the Closing Date.

(d) Fees. The Administrative Agent shall have received confirmation reasonably satisfactory to it that all fees required to be paid and all invoiced expense reimbursements payable by any Loan Party for account of any of the Agents or Lenders on or before the Closing Date will be paid concurrently with the funding of the Term Loans on the Closing Date.

(e) Closing Certificate of the Guarantors, Certificate of Incorporation; Good Standing. The Administrative Agent shall have received (i) a certificate of each Guarantor, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments including the certificate of incorporation of such Guarantor that is a corporation certified by the relevant authority of the jurisdiction of organization of such Loan Party, and (ii) a long form good standing certificate for such Guarantor from its jurisdiction of organization.

(f) Legal Opinions. The Administrative Agent shall have received the executed legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Borrower and its Subsidiaries, substantially in the form of Exhibit F.

(g) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) certificates representing the shares of Capital Stock listed on Schedule 2 to the Guarantee and Collateral Agreement, together with an undated stock power or equivalent for each such certificate executed in blank by the pledgor thereof and (ii) each promissory note (if any) listed on Schedule 2 to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(h) Mortgages, etc.

(i) The Administrative Agent shall have received a Mortgage with respect to each Mortgaged Property, executed and delivered by a duly authorized officer of each party thereto.

48

(ii) If requested by the Administrative Agent, the Administrative Agent shall have received, and the title insurance company issuing the policy referred to in clause (iii) below (the “Title Insurance Company”) shall have received, all maps or plats of an as-built survey of the sites of the Mortgaged Properties currently in the Borrower’s possession.

(iii) The Administrative Agent shall have received in respect of the Mortgaged Property listed on Schedule 6.1(h), a mortgagee’s title insurance policy (or policies) or marked up unconditional signed commitment or proforma for such insurance. Each such policy shall (A) be in an amount reasonably satisfactory to the Administrative Agent; (B) be issued at ordinary rates; (C) insure that the Mortgage insured thereby creates a valid first Lien on such Mortgaged Property free and clear of all defects and encumbrances, except as disclosed therein; (D) name the Administrative Agent for the benefit of the Secured Parties as the insured thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (F) contain such endorsements and affirmative coverage as the Administrative Agent may reasonably request (but without survey coverage) and (G) be issued by title companies reasonably satisfactory to the Administrative Agent (including any such title companies acting as co-insurers or reinsurers, at the option of the Administrative Agent). The Administrative Agent shall have received evidence reasonably satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording tax, and all related expenses, if any, have been paid.

(iv) If reasonably requested by the Administrative Agent, the Administrative Agent shall have received evidence reasonably satisfactory to it that the Borrower has obtained (A) a policy of flood insurance that (1) covers any parcel of improved real property that is encumbered by any Mortgage, (2) is written in an amount not less than the outstanding principal amount of the indebtedness secured by such Mortgage that is reasonably allocable to such real property or the maximum limit of coverage made available with respect to the particular type of property under the National Flood Insurance Act of 1968, whichever is less, and (3) has a term ending not later than the maturity of the Indebtedness secured by such Mortgage and (B) confirmation that the Borrower has received the notice required pursuant to Section 208(e)(3) of Regulation H of the Board.

(v) The Administrative Agent shall have received a copy of all recorded documents referred to, or listed as exceptions to title in, the title policy or policies referred to in clause (iii) above and a copy of all other material documents affecting the Mortgaged Properties.

(i) Solvency Certificate. The Administrative Agent shall have received and shall be reasonably satisfied with a solvency certificate of the chief financial officer of the Borrower substantially in the form of Exhibit J, which shall document the solvency of the Loan Parties as of the Closing Date after giving effect to the Acquisition and other transactions contemplated hereby.

(j) Insurance. The Administrative Agent shall have received insurance certificates satisfying the requirements of Section 5.3(b) of the Guarantee and Collateral Agreement.

(k) Completion of Merger and Merger Funding. The Lead Arrangers shall have received confirmation satisfactory to them that, substantially concurrently with the funding of the Loans to be made on the Closing Date, (i) Holdings will receive common equity of at least

49

$146,900,000 in cash or, in the case of Management Investors, in roll-over equity (which amount may be reduced by up to $10,000,000 to the extent the Company’s Closing Date indebtedness is lower or cash is higher than such corresponding indebtedness or cash amount, respectively, presented in financial statements for the fiscal year ended on or about December 31, 2004) and contribute the cash proceeds thereof as common equity to Axle Merger Sub, Inc., (ii) all funds in the Senior Unsecured Note Proceeds Escrow will be released to the Borrower or the Company, (iii) such cash proceeds and funds will be remitted to an account designated by the Administrative Agent for application, together with the proceeds of Loans made on the Closing Date, to fund payment of merger consideration in the Merger, repayment of Indebtedness listed on Schedule 6.1(k) and payment of fees and expenses in connection therewith, and (iv) concurrently with or forthwith upon such funding, a certificate of merger to complete the Merger will be filed with the Illinois Secretary of State, all Indebtedness listed on Schedule 6.1(k) will be paid in full and the security interests listed on Schedule 6.1(k) as securing such Indebtedness will be released.

(l) Closing Date EBITDA. The Administrative Agent shall have received and be reasonably satisfied with a certificate of the chief financial officer of the Company which shall document that (1) the EBITDA of the Company and its Subsidiaries, prepared without giving effect to the Acquisition or to any proforma or other adjustments and calculated in a manner reasonably satisfactory to the Arrangers, plus (2) the full year impact (to the extent not otherwise reflected in the financial statement described in Section 6.1(c)(ii)) of the incremental buyer payment revenue in an amount not to exceed $8,000,000, is not less than $42,200,000 (the “Minimum EBITDA”) for the twelve-month period ended on the last day of the most recent fiscal month for such financial statements are available; provided that, after March 31, 2005, the Minimum EBITDA shall be increased by $400,000 for each successive fiscal month that such financial statements are available.

(m) Miscellaneous. The Administrative Agent shall have received such other documents, agreements, certificates and information as it or the Lead Arrangers may reasonably request.

The Revolving Commitments and Term Commitments shall terminate without any further liability or obligation on the part of any Lender if the conditions set forth in this Section 6.1 are not satisfied on or before August 22, 2005.

6.2. Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be made by it on any date (including its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

(a) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

(b) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent that such representations and warranties refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

50

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 6.2 have been satisfied.

6.3. Conditions to Effectiveness. This Agreement shall become effective and binding upon the parties hereto only once the Administrative Agent shall have received (i) counterparts of this Agreement executed and delivered by Holdings, the Borrower and each Agent and (ii) an executed Addendum from each Lender listed on a Lender Addendum Schedule delivered to the Administrative Agent by the Lead Arrangers, in an aggregate amount equal to the Revolving Commitments and Term Commitments.

SECTION 7. AFFIRMATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Agent hereunder, the Borrower shall and shall cause each of its Subsidiaries to:

7.1. Financial Statements. Furnish to the Administrative Agent and each Lender:

(a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year and the current year budget, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit, by KPMG LLC or other independent certified public accountants of nationally recognized standing; and

(b) as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year and the current year budget, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes).

All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein).

Notwithstanding the foregoing such financial statements may be delivered in the form and with the accompanying certifications required by applicable Requirements of Law for filing Forms 10-K and Forms 10-Q with the SEC.

51

7.2. Certificates; Other Information. Furnish to the Administrative Agent and each Lender (or, in the case of clause (g), to the relevant Lender):

(a) concurrently with the delivery of any financial statements pursuant to Section 7.1, (i) a certificate of a Responsible Officer stating that, to the best of each such Responsible Officer’s knowledge, each Group Member during such period has observed in all material respects or performed all of the covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Loan Documents to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default, in each case except as specified in such certificate and (ii) in the case of quarterly or annual financial statements, (x) a Compliance Certificate containing all information and calculations reasonably necessary for determining compliance by each Group Member with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be, and, if applicable, for determining the Applicable Margins and Commitment Fee Rate, and (y) to the extent not previously disclosed to the Administrative Agent, a description of any change in the jurisdiction of organization of any Loan Party and, concurrently with the delivery of any financial statements pursuant to Section 7.1(a) only, a listing of any registered or applied-for material Intellectual Property acquired by any Loan Party since the date of the most recent list delivered pursuant to this clause (y) (or, in the case of the first such list so delivered, since the Closing Date);

(b) as soon as available, and in any event no later than 45 days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a description of the underlying assumptions applicable thereto) (collectively, the “Projections”), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections are based on reasonable estimates, information and assumptions and that such Responsible Officer has no reason to believe that such Projections are incorrect or misleading in any material respect, it being recognized by the Lenders that the projection and pro forma financial information contained in the material referenced above is based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made and that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount;

(c) if the Borrower is not then a reporting company under the Securities Exchange Act of 1934, as amended, within 45 days after the end of each fiscal quarter of the Borrower (90 days, in the case of the fourth fiscal quarter of any Fiscal Year), a narrative discussion and analysis of the financial condition and results of operations of the Borrower and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the portion of the Projections covering such periods and to the comparable periods of the previous year;

(d) no later than five Business Days prior to the effectiveness thereof, copies of substantially final drafts of any proposed amendment, supplement, waiver or other modification with respect to the Senior Unsecured Note Indenture or the Acquisition Documentation;

(e) within five Business Days after the same are sent, copies of all financial statements and reports that Holdings, any Parent or the Borrower sends to the holders of any class of its debt securities or public equity securities and, within five Business Days after the same are filed, copies of all financial statements and reports that Holdings or the Borrower may make to, or file with, the SEC;

52

(f) as soon as possible and in any event within 10 days of obtaining knowledge thereof: (i) notice of any development, event, or condition that, individually or in the aggregate with other developments, events or conditions that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect or liability in excess of the Material Environmental Amount, provided that, to the extent any such development, event, etc., is required by law to be reported to any Governmental Agency within a specific deadline which is longer than ten days, notice thereof to the Administrative Agent within such deadline shall be deemed timely pursuant to this Subsection 7.2(g); and (ii) any notice that any Governmental Authority may deny any application for an Environmental Permit sought by, or materially modify, revoke or refuse to renew any Environmental Permit or any other material Permit held by any Group Member or condition approval of any such material Permit on terms and conditions that are materially burdensome to any such Person, or to the operation of any of its businesses (both before and after giving effect to the Acquisition) or any property owned by such Person, in each case that would reasonably be expected to result in a Material Adverse Effect or liability in excess of the Material Environmental Amount; and

(g) promptly, such additional financial and other information as the Administrative Agent or any Lender may from time to time reasonably request.

7.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the relevant Group Member or where failure to pay, discharge or otherwise satisfy such material obligations, in the aggregate, has not had and would not reasonably be expected to result in a Material Adverse Effect.

7.4. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary to conduct its business, except, in each case, as otherwise permitted by Section 8.4 and except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

7.5. Maintenance of Property; Insurance. (a) Keep all material property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain with reputable insurance companies insurance on all its property in at least such amounts and against such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

7.6. Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit, upon reasonable prior notice, any persons designated by the Administrative Agent, or upon the occurrence and during the continuance of an Event of Default, any Lender, to visit and

53

inspect any of its properties and examine and make abstracts from any of its books and records at such reasonable times and upon reasonable intervals and to discuss the business, operations, properties and financial and other condition of the Group Members with officers of the Group Members and with their independent certified public accountants at such reasonable times and upon reasonable intervals, in each case as any Administrative Agent or, upon the occurrence of and during the continuance of an Event of Default, any Lender may reasonably request.

7.7. Notices. Promptly upon any Responsible Officer of any Group Member acquiring knowledge thereof, give notice to the Administrative Agent and each Lender of the following:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of any Group Member or (ii) litigation, investigation or proceeding that may exist at any time between any Group Member and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, would reasonably be expected to have a Material Adverse Effect;

(c) any litigation or proceeding affecting any Group Member (i) which, if determined adversely to such Group Member (after taking into account any available insurance coverage), would have or would reasonably be expected to have a Material Adverse Effect, (ii) in which injunctive or other temporary or specific relief is sought which, if granted, would reasonably be expected to have a Material Adverse Effect or (iii) which relates to any Loan Document;

(d) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, the incurrence of an “accumulated funding deficiency” (as defined in Section 302 of ERISA) (whether or not waived) with respect to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan; and

(e) any development or event that has had or would reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 7.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action, if any, the relevant Group Member proposes to take with respect thereto.

7.8. Environmental Laws. (a) Comply in all material respects with, and make all commercially reasonable efforts to ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and Environmental Permits, and obtain and comply in all material respects with and maintain, and make all commercially reasonable efforts to ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, in each case except for any such non-compliance or failure to obtain, individually or in the aggregate, would not be expected to result in a Material Adverse Effect.

54

(b) Unless being contested in good faith, conduct and complete in all material respects all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws; provided that compliance within deadlines set by such orders or authorities shall be deemed to be prompt.

7.9. Interest Rate Protection. In the case of the Borrower, within 60 days after the Closing Date, enter into, and thereafter maintain, Hedge Agreements to the extent necessary to provide that at least 50% of the aggregate principal amount of the Senior Unsecured Notes and the Term Loans is subject to either a fixed interest rate or interest rate protection for a period of not less than three years, which Hedge Agreements shall have terms and conditions reasonably satisfactory to the Administrative Agent.

7.10. Additional Collateral, etc. (a) With respect to any owned property acquired after the Closing Date by the Borrower or any Subsidiary Guarantor as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected Lien (except as expressly set forth in the applicable Security Document), promptly (or within such period of time as reasonably consented to by the Administrative Agent) (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such property and (ii) take all actions reasonably necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a (except as expressly set forth in the applicable Security Document) perfected security interest in such property, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent.

(b) With respect to any fee simple interest in any real property having a value of at least $1,500,000 acquired after the Closing Date by the Borrower or any Subsidiary Guarantor promptly (or within such period of time as reasonably consented to by the Administrative Agent) (i) execute, acknowledge and deliver a Mortgage in favor of the Administrative Agent, for the benefit of the Secured Parties, in an amount no greater than 125% of the purchase price if the property is located in a state with mortgage recording tax covering such real property, (ii) if requested by the Administrative Agent, provide the Secured Parties with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary or advisable by the Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(c) With respect to any new Subsidiary (other than a Foreign Subsidiary) created or acquired after the Closing Date by any Group Member (which, for the purposes of this paragraph (c), shall include any existing Subsidiary that ceases to be a Foreign Subsidiary), promptly (or within such period of time as reasonably consented to by the Administrative Agent) (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent reasonably deems necessary or advisable to

55

grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member, (ii) deliver to the Administrative Agent the certificates, if any, representing such Capital Stock, together with undated stock powers or equivalents, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B) to take such actions reasonably necessary or reasonably advisable to grant to the Administrative Agent for the benefit of the Secured Parties a (to the extent provided in the Guarantee and Collateral Agreement) perfected security interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent and (C) to deliver to the Administrative Agent a certificate of such Subsidiary, substantially in the form of Exhibit C, with appropriate insertions and attachments, and (iv) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(d) The Borrower will not issue or sell any of its Capital Stock (i) to any Person other than Holdings, (ii) unless such Capital Stock is issued subject to the security interest granted by the Guarantee and Collateral Agreement or (iii) in any form except as a certificated security delivered at or substantially concurrent with issuance to the Administrative Agent and pledged pursuant to the Guarantee and Collateral Agreement.

(e) With respect to any new Foreign Subsidiary created or acquired after the Closing Date by any Group Member (other than by any Group Member that is a Foreign Subsidiary), promptly (i) (or within such period of time as reasonably consented to by the Administrative Agent) execute and deliver to the Administrative Agent such amendments or supplements to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a (except as expressly set forth in the Guarantee and Collateral Agreement) perfected security interest in the Capital Stock of such new Subsidiary that is owned by any such Group Member (provided that in no event shall more than 65% of the total outstanding voting Capital Stock of any such new Subsidiary be required to be so pledged), (ii) deliver to the Administrative Agent the certificates, if any, representing such Capital Stock, together with undated stock powers or equivalents, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, as the case may be, and take such other action as may be reasonably necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

7.11. Use of Proceeds. Use the proceeds of the Loans only for the purposes specified in Section 5.16.

7.12. Title Insurance. With respect to each of the Mortgaged Properties listed on Schedule 7.12, deliver to the Administrative Agent, within 30 days after the Closing Date (or such later time as shall be reasonably acceptable to the Administrative Agent), a mortgagee’s title insurance policy (or policies) or marked up unconditional signed commitment or proforma for such insurance. Each such policy shall (A) be in an amount reasonably satisfactory to the Administrative Agent; (B) be issued at ordinary rates; (C) insure that the Mortgage insured thereby creates a valid first Lien on such Mortgaged

56

Property free and clear of all defects and encumbrances, except as disclosed therein; (D) name the Administrative Agent for the benefit of the Secured Parties as the insured thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (F) contain such endorsements and affirmative coverage as the Administrative Agent may reasonably request (but without survey coverage) and (G) be issued by title companies reasonably satisfactory to the Administrative Agent (including any such title companies acting as co-insurers or reinsurers, at the option of the Administrative Agent). Within 30 days after the Closing Date (or such later time as shall be reasonably acceptable to the Administrative Agent), the Administrative Agent shall have received evidence reasonably satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording tax, and all related expenses, if any, have been paid.

7.13. Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of perfecting or renewing the rights of the Administrative Agent and the Lenders with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by the borrower or any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording qualification or authorization of any Governmental Authority, the Borrower will, if reasonably requested by the Administrative Agent, use commercially reasonable efforts to execute and deliver, or to cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Administrative Agent or such Lenders may be required to obtain from the Borrower or any of its Subsidiaries for such governmental consent, approval, recording, qualification or authorization.

SECTION 8. NEGATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Agent hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:

8.1. Financial Condition Covenants. (a) Maximum Leverage Ratio. Permit the Consolidated Leverage Ratio, as of any date set forth below, to exceed the amount set forth opposite such date below:

Last Day of Fiscal Quarter Ending On or About	Maximum Consolidated Leverage Ratio
September 30, 2005	6.25 to 1.00
December 31, 2005	6.25 to 1.00
March 31, 2006	6.00 to 1.00
June 30, 2006	5.75 to 1.00
September 30, 2006	5.50 to 1.00
December 31, 2006	5.25 to 1.00
March 31, 2007	5.25 to 1.00
June 30, 2007	5.25 to 1.00
September 30, 2007	5.25 to 1.00

57

Last Day of Fiscal Quarter Ending On or About	Maximum Consolidated Leverage Ratio
December 31, 2007	4.75 to 1.00
March 31, 2008	4.75 to 1.00
June 30, 2008	4.75 to 1.00
September 30, 2008	4.75 to 1.00
December 31, 2008	4.50 to 1.00
March 31, 2009	4.50 to 1.00
June 30, 2009	4.50 to 1.00
September 30, 2009	4.50 to 1.00
December 31, 2009	4.00 to 1.00
March 31, 2010	4.00 to 1.00
June 30, 2010	4.00 to 1.00
September 30, 2010	4.00 to 1.00
December 31, 2010	3.50 to 1.00
March 31, 2011	3.50 to 1.00
June 30, 2011	3.50 to 1.00
September 30, 2011	3.50 to 1.00
December 31, 2011	3.50 to 1.00
March 31, 2012	3.50 to 1.00

(b) Minimum Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower ending on any date set forth below to be less than the ratio set forth below opposite such date below (provided that, for purposes of calculating Consolidated Interest Coverage Ratio for each of the periods ended September 30, 2005, December 31, 2005 and March 31, 2006, Consolidated Interest Expense shall be deemed to equal Consolidated Interest Expense for each full fiscal quarter commencing after the Closing Date multiplied by 4, 2 and 4/3, respectively):

Last Day of Fiscal Quarter Ending On or About	Minimum Consolidated Interest Coverage Ratio
September 30, 2005	1.75 to 1.00
December 31, 2005	1.75 to 1.00
March 31, 2006	1.75 to 1.00
June 30, 2006	1.75 to 1.00
September 30, 2006	1.75 to 1.00
December 31, 2006	2.00 to 1.00
March 31, 2007	2.00 to 1.00
June 30, 2007	2.00 to 1.00
September 30, 2007	2.00 to 1.00
December 31, 2007	2.00 to 1.00
March 31, 2008	2.00 to 1.00
June 30, 2008	2.00 to 1.00
September 30, 2008	2.00 to 1.00
December 31, 2008	2.25 to 1.00
March 31, 2009	2.25 to 1.00
June 30, 2009	2.25 to 1.00
September 30, 2009	2.25 to 1.00
December 31, 2009	2.50 to 1.00

58

Last Day of Fiscal Quarter Ending On or About	Minimum Consolidated Interest Coverage Ratio
March 31, 2010	2.50 to 1.00
June 30, 2010	2.50 to 1.00
September 30, 2010	2.50 to 1.00
December 31, 2010	2.75 to 1.00
March 31, 2011	2.75 to 1.00
June 30, 2011	2.75 to 1.00
September 30, 2011	2.75 to 1.00
December 31, 2011	2.75 to 1.00
March 31, 2012	2.75 to 1.00

8.2. Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary, (iii) of any Foreign Subsidiary to any Foreign Subsidiary and (iv) subject to Section 8.8(k), of any Foreign Subsidiary to the Borrower or any Wholly Owned Subsidiary Guarantor;

(c) Guarantee Obligations incurred in the ordinary course of business by the Borrower or any of its Subsidiaries of obligations of the Borrower, any Wholly Owned Subsidiary Guarantor and, subject to Section 8.8(k), of any Foreign Subsidiary; and Guarantee Obligations incurred by any Foreign Subsidiary of obligations of any other Foreign Subsidiary;

(d) Indebtedness of the Company and its Subsidiaries outstanding on the Closing Date and listed on Schedule 8.2(d);

(e) Indebtedness (including Capital Lease Obligations) secured by Liens permitted by Section 8.3(g) in an aggregate principal amount not to exceed $5,000,000 at any one time outstanding;

(f) Indebtedness of the Borrower in respect of the Senior Unsecured Notes in an aggregate principal amount not to exceed $200,000,000, and Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness subordinated to the same extent as the obligations of the Borrower in respect of the Senior Unsecured Notes;

(g) Hedge Agreements required under Section 7.9 or permitted under Section 8.12;

(h) Indebtedness of Foreign Subsidiaries, and guarantees thereof by Foreign Subsidiaries, incurred for working capital purposes in an aggregate principal amount not to exceed $5,000,000 at any time;

(i) Unsecured Indebtedness of Holdings in respect of Management Advances in an aggregate principal amount not to exceed $2,500,000 incurred in any fiscal year;

59

(j) guarantees of Indebtedness of directors, officers and employees of Holdings or any of its Subsidiaries in respect of expenses of such Persons in connection with relocations and other ordinary course of business purposes, if the aggregate amount of Indebtedness so guaranteed, when added to the aggregate amount of unreimbursed payments theretofore made in respect of such guarantees and the amount of Investments then outstanding under Section 8.8(f), shall not at any time exceed $2,500,000;

(k) Indebtedness of a Subsidiary of the Borrower acquired in a Permitted Acquisition and outstanding at the time of such Permitted Acquisition, Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness, and refinancings, renewals or extensions of any such Indebtedness that do not increase the outstanding principal amount or change the obligor in respect thereof, if (i) such Indebtedness was not incurred in connection with, or anticipation or contemplation of such Permitted Acquisition and (ii) the aggregate principal amount of such Indebtedness, refinancings, renewals and extensions does not at any time exceed $5,000,000;

(l) unsecured Indebtedness of the Borrower (which may be guaranteed by any or all Subsidiary Guarantors), in an aggregate outstanding principal amount not to exceed $7,500,000 any time, incurred to pay the purchase consideration of a Permitted Acquisition;

(m) guarantees of Indebtedness of a Person which is not a Subsidiary of the Borrower and in which the Borrower or a Subsidiary made an investment permitted by Section 8.8(n) or preferred Capital Stock of a Foreign Subsidiary which such Foreign Subsidiary is obligated to purchase, redeem, retire or otherwise acquire, if the aggregate outstanding principal amount so guaranteed and the aggregate outstanding redemption value of such Capital Stock, when added to (i) unreimbursed payments theretofore made in respect of such guarantees and (ii) Investments then outstanding under Section 8.8(n), does not at any time exceed $2,500,000; and

(n) additional unsecured Indebtedness of the Group Members in an aggregate principal amount not to exceed $15,000,000 at any one time outstanding.

8.3. Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except for:

(a) Liens for taxes, assessments or government charges not yet due or that are being contested in good faith by appropriate proceedings, provided that reserves with respect thereto are maintained on the books of the relevant Group Member in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 60 days or that are being contested in good faith by appropriate proceedings;

(c) pledges or deposits in connection with workers’ compensation, unemployment insurance, old age pensions, or other social security or retirement benefits or similar legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

60

(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of any Group Member;

(f) Liens created pursuant to the Loan Documents;

(g) Liens securing Indebtedness permitted by Section 8.2(e) if (i) such Liens are created substantially simultaneously with the incurrence of such Indebtedness (for the acquisition of certain property ) or within 90 days thereafter and (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness;

(h) any interest or title of a lessor under any lease entered into by a Group Member in the ordinary course of its business and covering only the assets so leased and other statutory and common law landlords’ liens under leases;

(i) until the first funding of Loans on the Closing Date, Liens in existence on the Closing Date listed on Schedule 8.3(i), provided, that no such Lien is spread to cover any additional property after the Closing Date and the amount of the aggregate obligations, if any, secured by any such Lien are not increased;

(j) attachment and judgment Liens, to the extent and for so long as the underlying judgments and decrees do not constitute an Event of Default pursuant to Section 9;

(k) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition, if (i) any Indebtedness secured by such Liens is permitted by Section 8.2(k), and (ii) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of any Group Member; and Liens on such property or assets securing refinancings, renewals and extensions of such Indebtedness permitted under Section 8.2(k);

(l) Liens on assets of Foreign Subsidiaries securing Indebtedness permitted pursuant to Section 8.2(h).

(m) Liens on property subject to sale-leaseback transactions to the extent such Sale-Leaseback Transactions are permitted by Section 8.11;

(n) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries taken as a whole;

(o) any encumbrances or restrictions (including put and call agreements) with respect to the Capital Stock of any joint venture agreed to by the holders of such Capital Stock;

(p) Liens not otherwise permitted by this Section so long as neither (i) the aggregate outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is incurred) of the assets subject thereto exceeds $500,000 at any one time; and

61

(q) any interest of the Company’s clients in vehicles that are on consignment to the Company and any proceeds thereof.

8.4. Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of, all or substantially all of its property or business, except:

(a) that any Subsidiary of the Borrower may be merged or consolidated (i) with or into the Borrower if the Borrower is the continuing or surviving corporation, (ii) with or into any Wholly Owned Subsidiary Guarantor if the Wholly Owned Subsidiary Guarantor is the continuing or surviving corporation) or (iii) subject to Section 8.8(k), with or into any Foreign Subsidiary; and any Foreign Subsidiary may be merged or consolidated with or into any other Foreign Subsidiary;

(b) that any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary liquidation, winding up, dissolution or otherwise) as permitted by Section 8.5, or to the Borrower or any Wholly Owned Subsidiary Guarantor or, subject to Section 8.8(k), any Foreign Subsidiary; and any Foreign Subsidiary may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to any other Foreign Subsidiary; and

(c) pursuant to the Merger.

8.5. Disposition of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

(a) the Disposition of obsolete or worn out property in the ordinary course of business;

(b) the sale of inventory or the licensing or other disposition of intellectual property in the ordinary course of business;

(c) Dispositions permitted by Section 8.4(b);

(d) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Wholly Owned Subsidiary Guarantor; and the sale or issuance of any Foreign Subsidiary’s Capital Stock to any other Foreign Subsidiary;

(e) sale-leaseback transactions permitted by Section 8.11;

(f) sales, transfers or dispositions by the Borrower or any of its Subsidiaries of non-strategic assets purchased as part of a Permitted Acquisition, so long as (i) no Default then exists or would result therefrom, (ii) the Borrower or such Subsidiary receives at least fair market value (as determined in good faith by the Borrower), (iii) the aggregate proceeds received by the Borrower or such Subsidiary from all such sales, transfers or dispositions relating to a given Permitted Acquisition do not exceed 40% of the aggregate consideration paid for such Permitted Acquisition, and (iv) such non-strategic assets are sold, transferred or disposed of on or prior to the first anniversary of such Permitted Acquisition; and

62

(g) the Disposition of other property having a fair market value not to exceed $10,000,000 in the aggregate for any fiscal year if the consideration received from such Disposition is no less than fair market value of such assets (as determined in good faith by the Borrower) of which at least 75% is received in cash or Cash Equivalents at the closing of such Disposition.

8.6. Restricted Payments. Declare or pay any dividend (other than dividends payable solely in common stock of the Person making such dividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Group Member (collectively, “Restricted Payments”), except that:

(a) any Subsidiary may make Restricted Payments to the Company or any Wholly Owned Subsidiary Guarantor; and any Foreign Subsidiary may make Restricted Payments to another Foreign Subsidiary;

(b) so long as no Event of Default has occurred and be continuing or would result therefrom, the Borrower may pay dividends or make loans or advances to Holdings or any Parent to permit Holdings or such Parent to (i) purchase Holdings’ or such Parent’s Capital Stock from present or former officers, directors or employees of any Group Member upon the death, disability, retirement or termination of employment or service of such officer, director or employee or otherwise under any stock option or employee stock ownership plan approved by the board of directors of Holdings or any Parent, in an aggregate amount (net of any proceeds received by Holdings or any Parent and contributed to the Borrower in connection with resales of any Capital Stock so purchased) not exceeding $2,500,000 in any fiscal year and (ii) pay management fees and expense reimbursements expressly permitted by Section 8.10;

(c) the Borrower may pay dividends or make loans and advances to Holdings or any Parent to permit Holdings or any Parent to (i) pay corporate overhead expenses incurred in the ordinary course of business in an aggregate amount not exceeding $1,000,000 in any fiscal year; (ii) pay (A) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed on payments made by Holdings or any Parent), required to be paid by Holdings or any Parent by virtue of its being incorporated or otherwise organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Borrower, any of its Subsidiaries or any Parent or Holdings), or being a holding company parent of the Borrower or receiving dividends from or other distributions in respect of the Capital Stock of the Borrower, or having guaranteed any obligations of the Borrower or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Borrower is permitted to make payments to Holdings or any Parent pursuant to the other clauses of this Section 8.6, or (B) for so long as the Borrower is a member of a group filing a consolidated, combined or unitary tax return with Holdings or any Parent,. amounts necessary for the payment of federal, state or local income taxes payable by Holdings or such Parent and measured by the income of the Borrower and its Subsidiaries which are payable by Holding or such Parent; (iii) to pay expenses incurred by Holdings or any Parent in connection with offerings, registrations, or exchange listings of equity securities and maintenance of same (A) where the net proceeds of such

63

offering are to be received by or contributed to the Borrower, or (B) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received or contributed or loaned, or (C) otherwise on an interim basis prior to completion of such offering so long as Holdings or any Parent shall cause the amount of such expenses to be repaid to the Borrower or the relevant Subsidiary of the Borrower out of the proceeds of such offering promptly if such offering is completed; (iv) to pay audit costs and any costs (including all professional fees and expenses) incurred by Holdings or any Parent in connection with reporting obligations under or otherwise incurred in connection with compliance with applicable laws, applicable rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, including in respect of any reports filed with respect to the Securities Act, the Securities Exchange Act or the respective rules and regulations promulgated thereunder; and (v) to pay (A) obligations of Holdings or any Parent under or in respect of director and officer insurance policies or indemnification obligations to directors or officers, or (B) to pay fees and perform its other obligations pursuant to the terms of the Management Agreement so long as no Default under Section 9(a) or 9(f) has occurred and is continuing; and

(d) the Borrower may make Restricted Payments pursuant to the Merger Agreement, and to Holdings to permit Holdings to make payments in connection with the Merger and the financing therefor (including payments of fees and expenses in connection therewith).

8.7. Capital Expenditures. Make or commit to make any Capital Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries in the ordinary course of business not exceeding $20,000,000 in fiscal year 2005, $15,000,000 in fiscal year 2006 and $17,500,000 in any fiscal year thereafter; provided, that (i) up to 100% of any amount permitted but not expended in any fiscal year may be carried over for expenditure in the next succeeding fiscal year (it being understood that no portion of such carried over amount for any fiscal year may be used until the entire initial amount of permitted Capital Expenditures for the current fiscal year has been used for Capital Expenditures), and (ii) Capital Expenditures made with the proceeds of any Reinvestment Deferred Amount or counted against any Available Retained ECF Amount will not be subject to the forgoing restriction.

8.8. Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, “Investments”), except:

(a) extensions of trade credit in the ordinary course of business;

(b) Investments in Cash Equivalents;

(c) Guarantee Obligations permitted by Section 8.2;

(d) Guarantee Obligations to insurers required in connection with worker’s compensation and other insurance coverage arranged in the ordinary course of business;

(e) Investments held by the Borrower or any Subsidiary on the Closing Date and described on Schedule 8.8(e);

(f) loans and advances to employees of any Group Member of the Borrower in the ordinary course of business (including for travel, entertainment and relocation expenses) in an aggregate amount for all Group Members not to exceed $2,500,000 at any one time outstanding;

64

(g) non-cash consideration received in any Disposition permitted by Section 8.5;

(h) the Merger;

(i) a Permitted Acquisition of Capital Stock of a Person that becomes a Domestic Subsidiary and a Subsidiary Guarantor;

(j) intercompany Investments by any Group Member in the Borrower or any Person that, prior to such Investment, is a Wholly Owned Subsidiary Guarantor;

(k) Investments in Foreign Subsidiaries (including Permitted Acquisitions of Persons which become Foreign Subsidiaries, incurrence of Guarantee Obligations with respect to obligations of Foreign Subsidiaries, loans made to Foreign Subsidiaries and Investments resulting from mergers with or sales of assets to any such Foreign Subsidiaries) so long as the aggregate amount of all such Investments by the Borrower or any of its Subsidiaries (except Investments by a Foreign Subsidiary in a Person that prior to such Investment is a Foreign Subsidiary) net of cash repayments and sale proceeds in the case of Investments in the form of Indebtedness and cash equity returns received as a distribution or dividend or by redemption or sale, when added to all Investments permitted by Section 8.8(q) that would have been permitted to be classified as investments permitted by this Section 8.8(k), does not exceed $5,000,000 at any time outstanding;

(l) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

(m) Hedge Agreements required under Section 7.9 or permitted under Section 8.12;

(n) intercompany Investments by any Foreign Subsidiary in any other Foreign Subsidiary;

(o) transactions permitted by Section 8.4; and

(p) in addition to Investments otherwise expressly permitted by this Section, Investments by the Borrower or any of its Subsidiaries in an aggregate amount, net of cash repayments and sale proceeds in the case of Investments in the form of Indebtedness and cash equity returns received as a distribution or dividend or by redemption or sale, not exceeding $15,000,000 at any time outstanding.

8.9. Optional Payments and Modifications of Certain Debt Instruments. (a) Make or offer to make any optional or voluntary payment, prepayment, repurchase or redemption of or otherwise optionally or voluntarily defease or segregate funds with respect to the Senior Unsecured Notes or (b) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Senior Unsecured Notes (other than technical corrections or modifications) (i) except as permitted by Section 8.2(f) (in the case of an increase in principal amount), which shortens the fixed maturity or increases the principal amount of, or increases the rate or shortens the time of payment of interest on, or increases the amount or shortens the time of payment of any principal or premium payable whether

65

at maturity, at a date fixed for prepayment or by acceleration or otherwise of the Indebtedness evidenced by any Senior Unsecured Notes, or increases the amount of, or accelerates the time of payment of, any fees or other amounts payable in connection therewith; (ii) which adds or relates to any material affirmative or negative covenants or any events of default or remedies thereunder and the effect of which is to subject the Borrower or any of its Subsidiaries to any more onerous or more restrictive provisions; or (iii) which otherwise adversely affects the interests of the Lenders with respect to the Senior Unsecured Notes or the interests of the Lenders under this Agreement or any other Loan Document in any material respect; provided that this clause (b) of Section 8.9 shall not be deemed to restrict (x) the execution, delivery and performance of the First Supplemental Indenture, dated as of the Closing date, to the Senior Unsecured Note Indenture, (y) the execution, delivery and performance of a supplemental indenture to the extent the amendment, modification or change effected pursuant thereto relates solely to the addition of a “Subsidiary Guarantor” (as defined in the Senior Unsecured Note Indenture) and related matters, pursuant to the terms of the Senior Unsecured Note Indenture or (z) the consummation of exchange offers in which “Exchange Notes” (as defined in the Senior Unsecured Note Indenture) are issued in exchange for any Senior Unsecured Notes.

8.10. Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than Holdings, the Borrower or any Wholly Owned Subsidiary) unless such transaction is (i) otherwise permitted under this Agreement, (ii) in the ordinary course of business of the relevant Group Member and (iii) upon fair and reasonable terms not materially less favorable to the relevant Group Member, than it would obtain in an arm’s length transaction with a Person that is not an Affiliate. Notwithstanding the foregoing, the Borrower and its Subsidiaries may do the following:

(a) Restricted Payments may be made to the extent permitted by Section 8.6;

(b) loans may be made and other transactions may be entered into by the Borrower and its Subsidiaries to the extent permitted by Sections 8.2, 8.4, 8.5 and 8.8;

(c) customary fees and indemnifications may be paid to directors of any Parent, Holdings, the Borrower and its Subsidiaries;

(d) the Borrower and its Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions and other similar compensatory arrangements with officers, employees and directors of any Parent, Holdings, the Borrower and its Subsidiaries in the ordinary course of business;

(e) the Borrower and its Subsidiaries may pay fees to the Sponsor and perform their other obligations pursuant to the terms of the Management Agreement so long as no Default under Section 9(a) or (f) has occurred and is continuing;

(f) the execution, delivery and performance of a tax sharing agreement with respect to any of the charges, taxes or assessments described in clause (B) of Section 8.6(c)(ii), to the extent that payments in connection with such tax sharing agreement are permitted by Section 8.6(c)(ii); and

66

(g) the Merger and any other contemporaneous transactions contemplated hereby (including the payment of fees and expenses in connection therewith) shall be permitted.

8.11. Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal property that has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member, except for (a) a sale of real or personal property made for cash consideration in an amount not less than the cost of such real or personal property and consummated within 90 days after the Borrower or any Subsidiary acquires or completes the construction of such property, and (b) the sale and contemporaneous leaseback of any real property for cash consideration, in an aggregate amount not less than the fair market value (as determined in good faith by the Borrower) if 100% of the Net Cash Proceeds of such sale are applied immediately upon receipt thereof to the repayment of the Term Loans.

8.12. Hedge Agreements. Enter into any Hedge Agreement, except (a) Hedge Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Capital Stock) and (b) Hedge Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

8.13. Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on or about a day other than December 31 or change the Borrower’s method of determining fiscal quarters without the prior consent of the Administrative Agent.

8.14. Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan Documents to which it is or may become a party other than (a) this Agreement and the other Loan Documents, (b) the Senior Unsecured Note Indenture, (c) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby, if the prohibition or limitation therein is only effective against the assets financed thereby, and (d) agreements for the benefit of the holders of Liens described in Sections 8.3(k) or 8.3(l) and applicable solely to the property subject to such Lien.

8.15. Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of any Group Member to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, any Group Member, (b) make loans or advances to, or other Investments in, any Group Member or (c) transfer any of its assets to any Group Member, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) any encumbrance or restriction pursuant to applicable law or an agreement in effect at or entered into on the Closing Date (including the Senior Unsecured Note Indenture), (iii) any encumbrance or restriction with respect to a Subsidiary or any of its Subsidiaries pursuant to an agreement relating to any Indebtedness incurred by such Subsidiary prior to the date on which it became a Subsidiary (other than Indebtedness incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary) and outstanding on such date, which encumbrance or restriction is not applicable to the any other Group Member or the properties or assets of any other Group Member, (iv) any encumbrance or restriction pursuant to an agreement effecting a refinancing of

67

Indebtedness incurred pursuant to an agreement referred to in clause (i), (ii) or (iii) of this covenant or this clause (iv) or contained in any amendment to an agreement referred to in clause (i), (ii) or (iii) of this covenant or this clause (iv); provided, however, that the encumbrances and restrictions contained in any such refinancing agreement or amendment are not materially less favorable taken as a whole, as determined by the Borrower in good faith, to the Lenders than the encumbrances and restrictions contained in such predecessor agreement, (v) with respect to clause (c), any encumbrance or restriction (A) that restricts the subletting, assignment or transfer of any property or asset or right and is contained in any lease, license or other contract entered into in the ordinary course of business or (B) contained in security agreements securing Indebtedness of a Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements, (vi) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, (vii) any encumbrances or restrictions applicable solely to a Foreign Subsidiary and contained in any Credit Facility extended to any Foreign Subsidiary; (viii) restrictions in the transfers of assets pursuant to a Lien permitted by Section 8.3, (ix) any encumbrance or restriction arising under or in connection with any agreement or instrument relating to any Indebtedness permitted by Section 8.2(k) if (A) either (x) the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in the terms of such agreement or instrument or (y) the Borrower in good faith determines that such encumbrance or restriction will not cause the Borrower not to have the funds necessary to pay the Obligations when due and (B) the encumbrance or restriction is not materially more disadvantageous to the Lenders than is customary in comparable financings (as determined in good faith by the Borrower) and (x) any encumbrance or restriction arising under or in connection with any agreement or instrument governing Capital Stock of any Person other than a Wholly Owned Subsidiary that is acquired after the Closing Date.

8.16. Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses in which the Company and its Subsidiaries are engaged on the date of this Agreement or that are reasonably related thereto or are reasonable extensions thereof.

8.17. Amendments to Acquisition Documents. (a) Amend, supplement or otherwise modify the terms and conditions of the Acquisition Documentation without the prior consent of the Arrangers (such consent not to be unreasonably withheld).

SECTION 9. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a) the Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document, within three Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made; or

(c) any Loan Party shall fail to observe or perform of any agreement contained in clause (i) or (ii) of Section 7.4(a) (with respect to Holdings and the Borrower only), Section 7.7(a) or Section 8 of this Agreement or Sections 5.5 and 5.7(b) of the Guarantee and Collateral Agreement, or an “Event of Default” under and as defined in any Mortgage shall have occurred and be continuing; or

68

(d) any Loan Party shall fail to observe or perform any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 9), and such failure shall continue unremedied for a period of 30 days after written notice thereof is given to the Borrower by the Administrative Agent or any Lender; or

(e) any Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist beyond the period of grace provided in such instrument or agreement, if any, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $7,500,000; or

(f) (i) any Group Member shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

(g) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with

69

respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Group Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate in a distress termination under Section 4041(c) of ERISA or in an involuntary termination by the PBGC under Section 4042 of ERISA, (v) any Group Member or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i), (iii), (iv), (v) and (vi) above, such event or condition, together with all other such events or conditions, if any, would, in the aggregate, reasonably be expected to have a Material Adverse Effect; or

(h) one or more judgments or decrees shall be entered against any Group Member involving in the aggregate a liability (not paid or fully covered by insurance) of $5,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or

(i) any of the Security Documents shall cease, for any reason other than as set forth in Section 11.14, to be in full force and effect, or any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable or (except as expressly set forth therein or as a result of the actions, or lack thereof, by the Administrative Agent) perfected as to any property of the Credit Parties having an aggregate value exceeding $1,500,000; or

(j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and effect or any Loan Party shall so assert; or

(k) (i) at any time prior to the initial registered public offering of voting Capital Stock of Holdings or any Parent, the Permitted Investors shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of (x) so long as Holdings is a Subsidiary of any Parent (other than a Parent that is a Subsidiary of another Parent), shares of voting Capital Stock having less than a majority of the total voting power of all outstanding shares of such Parent or (y) if Holdings is not a Subsidiary of any Parent, shares of voting Capital Stock having less than a majority of the total voting power of all outstanding shares of voting Capital Stock of Holdings, (ii) at any time on and after the date of the initial registered public offering of voting Capital Stock of Holdings or any Parent, (x) the Permitted Investors shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of (A) so long as Holdings is a Subsidiary of any Parent (other than a Parent that is a Subsidiary of another Parent), shares of voting Capital Stock having less than 35% of the total voting power of all outstanding shares of such Parent or (B) if Holdings is not a Subsidiary of any Parent, shares of voting Capital Stock having less than 35% of the total voting power of all outstanding shares of voting Capital Stock of Holdings, and (y) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Investors, shall be the “beneficial owner” of (A) so long as Holdings is a Subsidiary of any Parent (other than a Parent that is a Subsidiary of another Parent), shares of voting Capital Stock having a greater amount of the voting power of all outstanding shares of voting Capital Stock of such Parent

70

than such shares of which the Permitted Investors in the aggregate are the “beneficial owner” or (B) if Holdings is not a Subsidiary of any Parent, shares of voting Capital Stock having a greater amount of the voting power of all outstanding shares of the voting Capital Stock of Holdings than such shares of which the Permitted Investors in the aggregate are the “beneficial owner”; (iii) the board of directors of Holdings or any Parent shall cease to consist of a majority of Continuing Directors; (iv) Holdings shall cease to hold and own beneficially, of record and directly, and control 100% of each class of outstanding Capital Stock of the Borrower free and clear of all Liens (except Liens created by the Guarantee and Collateral Agreement); or (v) a Specified Change of Control shall occur and the Company delivers or is required to deliver a change of control notice to the holders of the Senior Unsecured Notes as required by the Senior Unsecured Note Indenture; or

(l) Holdings shall (i) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations other than those incidental to its direct or indirect ownership of the Capital Stock of the Borrower and its Subsidiaries, provided that Holdings may engage in those activities that are incidental to (A) the maintenance of its corporate existence in compliance with applicable law, (B) legal, tax and accounting matters in connection with any of the foregoing or following activities, (C) the entering into, and performing its obligations under, this Agreement, the other Loan Documents and the Management Agreement and Management Stock Agreements, in each case to which it is a party, (D) the issuance, sale or repurchase of its Capital Stock to the extent permitted under this Agreement, (E) dividends or distributions on its Capital Stock, (F) the filing of registration statements, and compliance with applicable reporting and other obligations, under federal, state or other securities laws, (G) the listing of its equity securities and compliance with applicable reporting and other obligations in connection therewith, (H) the retention of (and the entry into, and exercise of rights and performance of obligations in respect of, contracts and agreements with) transfer agents, private placement agents, underwriters, counsel, accountants and other advisors and consultants, (I) the performance of obligations under and compliance with its certificate of incorporation and by-laws, or any applicable law, ordinance, regulation, rule, order, judgment, decree or permit, including as a result of or in connection with the activities of its Subsidiaries, (J) the incurrence and payment of its operating and business expenses and any taxes for which it may be liable, (K) making loans to or other Investments in the Borrower or any Wholly-Owned Subsidiary Guarantor as and to the extent not prohibited by this Agreement, or (ii) incur, create, assume or suffer to exist any Indebtedness or other liabilities or financial obligations, except (A) nonconsensual obligations imposed by operation of law, (B) pursuant to the Loan Documents to which it is a party and (C) obligations with respect to its Capital Stock, or (D) Indebtedness owed to the Borrower or any Wholly-Owned Subsidiary Guarantor as and to the extent not prohibited by this Agreement and (E) other liabilities and obligations not constituting Indebtedness permitted in clause (i) above; or

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Revolving Commitments to be terminated forthwith, whereupon the Revolving Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued interest

71

thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay any of the other Secured Obligations pursuant to the requirements of the Collateral Agreement. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other Secured Obligations shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section 9, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower.

SECTION 10. THE AGENTS

10.1. Appointment. Each Lender hereby irrevocably designates and appoints each Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes such Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent.

10.2. Delegation of Duties. Each Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care.

10.3. Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agents under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Agents shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

72

10.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to Holdings or the Borrower), independent accountants and other experts selected by such Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected against any action or claim by any Lender or affiliate thereof, in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

10.5. Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender, Holdings or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement); provided, that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

10.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither the Agents nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

73

10.7. Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of Holdings or the Borrower to do so), ratably according to their respective Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent’s gross negligence or willful misconduct. The agreements in this Section 10.7 shall survive the payment of the Loans and all other amounts payable hereunder.

10.8. Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall include each Agent in its individual capacity.

10.9. Successor Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign as Administrative Agent. If the Administrative Agent shall have given notice of its resignation as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 9(a) or Section 9(f) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 30 days following a retiring Administrative Agent’s notice of resignation, then the resigning Administrative Agent may, on behalf of the Lenders and the L/C Lender, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. The Syndication Agent may, at any time, by notice to the Lenders and the Administrative Agent, resign as Syndication Agent hereunder, whereupon the duties, rights, obligations and responsibilities of the Syndication Agent hereunder shall automatically be assumed by, and inure to the benefit of, the Administrative Agent, without any further act by the Syndication Agent, the Administrative Agent or any Lender. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Section 10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

74

10.10. Agents Generally. Except as expressly set forth herein, no Agent shall have any duties or responsibilities hereunder in its capacity as such.

10.11. Agents Other than the Administrative Agent. The Lead Arrangers and the Syndication Agent, in their capacity as such, shall have no duties or responsibilities, and shall incur no liability, under this Agreement or any other Loan Document.

10.12. Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax. If any Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any penalties or interest and together with all expenses (including legal expenses, allocated internal costs and out-of-pocket expenses) incurred.

SECTION 11. MISCELLANEOUS

11.1. Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.1. The Required Lenders and each Loan Party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive the principal amount or extend the final scheduled date of maturity of any Loan, reduce the stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any post-default increase in interest rates, which waiver shall be effective with the consent of the Majority Facility Lenders of each adversely affected Facility and (y) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lender’s Commitment, in each case without the written consent of each Lender directly affected thereby; (ii) eliminate or reduce the voting rights of any Lender under this Section 11.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents or, except as set forth in Section 11.14, release all or substantially all of the Collateral or release all or substantially all of the Subsidiary Guarantors from their obligations under the Guarantee and Collateral Agreement, in each case without the written consent of all Lenders; (iv) extend the scheduled date or reduce the amount of any amortization payment in respect of any Term Loan, in each case, without the written consent of Lenders holding 80% or more in principal

75

amount of the aggregate outstanding Term Loans (or, prior to the funding of Term Loans, Term Commitments) and Revolving Commitments; (v) amend, modify or waive any condition precedent to any extension of credit under the Revolving Facility set forth in Section 6.2 (including in connection with any waiver of any Default) without the written consent of the Majority Facility Lenders under the Revolving Facility; (vi) amend, modify or waive any provision of Section 4.8 without the written consent of the Majority Facility Lenders under each Facility affected thereby, except that the additional written consent of each Lender directly and adversely affected thereby shall be required in the case of Section 4.8(a), 4.8(c) and the first sentence of Section 4.8(b); (vii) reduce the percentage specified in the definition of Majority Facility Lenders with respect to any Facility without the written consent of all Lenders under such Facility; (viii) amend, modify or waive any provision of Section 10 without the written consent of each Agent adversely affected thereby; (ix) amend, modify or waive any provision of Section 3.3 or 3.4 without the written consent of the Swingline Lender; or (x) amend, modify or waive any provision of Sections 3.7 to 3.14 without the written consent of the L/C Lender. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof (collectively, the “Additional Extensions of Credit”) to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and Revolving Extensions of Credit and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Majority Facility Lenders.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement Term Loans (as defined below) to permit the refinancing of all outstanding Term Loans (“Refinanced Term Loans”) with a replacement term loan tranche hereunder (“Replacement Term Loans”), but only if (a) the aggregate principal amount of the Replacement Term Loans does not exceed the aggregate principal amount of the Refinanced Term Loans, (b) the Applicable Margin for the Replacement Term Loans is not higher than the Applicable Margin for the Refinanced Term Loans, (c) the weighted average life to maturity of the Replacement Term Loans is not shorter than the weighted average life to maturity of such Refinanced Term Loans at the time of the refinancing and (d) all other terms applicable to such Replacement Term Loans are substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than, those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing.

11.2. Notices. (a) All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy or electronic pdf), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of Holdings, the Borrower and the Agents, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

76

Holdings:	Axle Holdings, Inc.
	c/o Kelso & Company
	320 Park Avenue, 24th Floor
	New York, NY 10022
	Attention: James Conners
	Telecopy: (212) 223-2379
	Telephone: (212) 751-3939
The Borrower:
Prior to the Merger:	Axle Merger Sub, Inc.
	c/o Kelso & Company
	320 Park Avenue, 24th Floor
	New York, NY 10022
	Attention: James Conners
	Telecopy: (212) 223-2379
	Telephone: (212) 751-3939
After the Merger:	Insurance Auto Auctions, Inc.
	Two Westbrook Corporate Center, Suite 500
	Westchester, IL 60154
	Attention: Scott Pettit
	Telecopy: (708) 492-7078
	Telephone: (708) 492-7999
	with a copy to: Sidney L. Kerley
The Administrative Agent or	Bear Stearns Corporate Lending Inc.
the L/C Lender:	383 Madison Avenue
	New York, NY 10179
	Attention: Stephen G. O’Keefe
	Telecopy: (212) 272-9184
	Telephone: (212) 272-9430
	Email: sokeefe@bear.com

(b) No notice, request or demand to or upon any Agent, the L/C Lender, the Lenders, Holdings or the Borrower shall be effective until received. Holdings and the Borrower shall be conclusively deemed to have received any notice, request or demand if such notice, request or demand is sent by courier service and delivery thereof is confirmed by the courier, if it is sent by fax or electronic pdf and receipt thereof is confirmed orally, if it is sent by certified mail or if it is served by any manner of service of process permitted by law. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent. Approval of such procedures may be limited to particular notices or communications;

(c) (i) Notices and other communications to the Lenders and the L/C Lender hereunder may be delivered or furnished by electronic communication (including e mail and

77

Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Lender pursuant to Sections 2 and 3 if such Lender or the L/C Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in their discretion, agree to accept notices and other communications to each of them hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

(ii) Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (b) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (a) of notification that such notice or communication is available and identifying the website address therefore.

11.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

11.4. Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

11.5. Payment of Expenses and Taxes; Indemnity. The Borrower agrees (a) to pay or reimburse each Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to such Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as such Agent shall deem appropriate, (b) to pay or reimburse each Lender and Agent for all its costs and expenses incurred in connection with the enforcement or preservaton of any rights under this Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of counsel to such Agent, (c) to pay, indemnify, and hold each Lender and Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying Other Taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment,

78

supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and Agent and each of their respective officers, directors, employees, attorneys, affiliates, agents and advisors (each, including each Lender and Agent, an “Indemnitee”) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the Properties or the unauthorized use by Persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such Persons and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”), provided, that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or any of its Related Persons. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 11.5 shall be payable not later than 10 days after written demand therefor. Statements payable by the Borrower pursuant to this Section 11.5 shall be submitted pursuant to the notice information for the Borrower set forth in Section 11.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. The agreements in this Section 11.5 shall survive repayment of the Loans and all other amounts payable hereunder.

11.6. Successors and Assigns; Participations and Assignments. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of the L/C Lender), except that (i) Holdings and the Borrower may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by Holdings or the Borrower without such consent shall be null and void), (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 11.6 and (iii) the Company and its Subsidiaries shall not be entitled to rely on or enforce any of the provisions of this Agreement until the conditions set forth in Section 6.1 are satisfied and the Merger and first funding of Loans have been completed.

(b) (i) Subject to the conditions set forth in paragraph (c) below, any Lender may assign to one or more assignees (each, an “Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other Person provided, further, that no consent of the

79

Borrower shall be required for an assignment by a Conduit Lender to its designated Lender, a conduit administered or managed by such Conduit Lender’s designated Lender or to such Conduit Lender’s liquidity providers;

(B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment to an Assignee that is a Lender, an affiliate of a Lender or an Approved Fund immediately prior to giving effect to such assignment, except in the case of an assignment of a Revolving Commitment to an Assignee that does not already have a Revolving Commitment provided, further, that no consent of the Administrative Agent shall be required for an assignment by a Conduit Lender to its designated Lender, a conduit administered or managed by such Conduit Lender’s designated Lender or to such Conduit Lender’s liquidity providers; and

(C) the L/C Lender and the Swingline Lender, in case of an assignment of a Revolving Commitment.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $2,500,000 (or, in the case of Term Loans, $1,000,000) unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any;

(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption;

(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire; and

(D) in the case of an assignment by a Conduit Lender to an Assignee that is not its designated Lender, another Conduit Lender administered or managed by such Conduit Lender’s designated Lender or such Conduit Lender’s liquidity providers (each such Assignee, a “Third Party Assignee”), such Conduit Lender’s designated Lender shall concurrently assign to the such Third Party Assignee or, if such Third Party Assignee is a conduit not administered by such designated Lender, to an Assignee designated by such Third Party Assignee an amount of its Commitment at least equal to the amount of the Loans assigned to such Third Party Assignee by such Conduit Lender; provided that if in connection with such assignment such Conduit Lender notifies the Borrower or the Administrative Agent that such Conduit Lender shall not make any additional Loans under this Agreement, such Conduit Lender’s designated Lender shall assign its entire Commitment to such Third Party Assignee or, if such Third Party Assignee is a conduit not administered by such designated Lender, to an Assignee designated by such Third Party Assignee.

80

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 4.9, 4.10, 4.11 and 11.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.7 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with, and subject to the limitations of Section 11.6 (c).

(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the L/C Lender and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the L/C Lender and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the L/C Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of Section 11.1 and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.9, 4.10 or 4.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 11.6. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.7(b) as though it were a Lender, provided such Participant shall be subject to Section 11.7(a) as though it were a Lender.

81

(ii) A Participant shall not be entitled to receive any greater payment under Section 4.9 or 4.10 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant. Any Participant that is a Non-U.S. Lender shall not be entitled to the benefits of Section 4.10 unless such Participant complies with Section 4.10(d).

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (d) above.

(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder to its designating Lender without the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section 11.6(b). Each of Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance.

11.7. Adjustments; Set-off. (a) Except to the extent that this Agreement expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefited Lender”) shall, at any time after the Loans and other amounts payable hereunder shall immediately become due and payable pursuant to Section 9, receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to Holdings or the Borrower, any such notice

82

being expressly waived by Holdings and the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by Holdings or the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of Holdings or the Borrower, as the case may be. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.8. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

11.9. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11.10. Integration. This Agreement and the other Loan Documents represent the entire agreement of Holdings, the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof. This Agreement supersedes all prior commitments and undertakings of any or all of the Agents and Lenders relating to the financing contemplated hereby. There are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

11.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

11.12. Submission To Jurisdiction; Waivers. Each of Holdings, the Borrower, the Agents and the Lenders hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

83

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Holdings or the Borrower, as the case may be at its address set forth in Section 11.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

11.13. Acknowledgments. Each of Holdings and the Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) no Agent or Lender has any fiduciary relationship with or duty to Holdings or the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Agents and Lenders, on one hand, and Holdings and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrower and the Lenders.

11.14. Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 11.1) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 11.1 or (ii) under the circumstances described in paragraph (b) below.

(b) At such time as the Loans, the Reimbursement Obligations and the other obligations under the Loan Documents (other than contingent surviving indemnity obligations in respect of which no claim or demand has been made and obligations under or in respect of Hedge Agreements or Specified Cash Management Arrangements) shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person. Additionally, the Administrative Agent shall deliver such other documentation reasonably requested by the Borrower to evidence the termination of this Agreement and the other Loan Documents and/or the

84

termination of the Liens on the Collateral, in favor of the Administrative Agent for the benefit of the Secured Parties, all in form reasonably satisfactory to the Administrative Agent and the Borrower. Any such documentation shall be made without recourse, representation or warranty. The Borrower shall pay all costs and expenses (including, but not limited to, reasonable attorney’s fees), that the Administrative Agent incurs in preparing and delivering the foregoing documents (or reviewing forms of such documents prepared by the Borrower or its counsel).

11.15. Confidentiality. Each Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to or in connection with this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent any Agent or any Lender from disclosing any such information (a) to any Agent, any other Lender or any Lender Affiliate, (b) to any actual or prospective Transferee or any direct or indirect counterparty to any Hedge Agreement (or any professional advisor to such counterparty), if such person is required to maintain confidentiality, (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates if such person is required to maintain confidentiality, (d) upon the request or demand of any Governmental Authority (e) in response to any order of any court or other Governmental Authority, or as may otherwise be required pursuant to any Requirement of Law, or if requested or required to do so in connection with any litigation or similar proceeding; provided, that such Agent or Lender, unless prohibited by any Requirement of Law, shall use reasonable efforts to notify the Borrower in advance of any disclosure pursuant to this clause (e) above but only to the extent reasonably practicable under the circumstances and on the understanding that no Agent or Lender shall incur any liability for failure to give such notice, (f) that has been publicly disclosed, (g) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender or (h) in connection with the exercise of any remedy hereunder or under any other Loan Document.

11.16. WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNpCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

11.17. Delivery of Addenda. Each initial Lender not a signatory party hereto may become a party to this Agreement by delivering to the Administrative Agent an Addendum duly executed by such Lender. The Administrative Agent is authorized to modify Annex B as necessary to reflect the Commitments assumed by such Lenders by Addendum.

11.18. USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Publ. L. 107-56 (signed into law October 26, 2001)), (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Patriot Act.

85

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

AXLE HOLDINGS, INC.
By:	/s/ Thomas C. O’Brien
Name:	Thomas C. O’Brien
Title:	CEO
AXLE MERGER SUB, INC.
By:	/s/ David I. Wahrhaftig
Name:	David I. Wahrhaftig
Title:	Vice President and Treasurer

S-1

BEAR, STEARNS & CO. INC.
as Joint Lead Arranger and Joint Bookrunner
By:	/s/ R. Bram Smith
Name:	Richard Bram Smith
Title:	Senior Managing Director
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arranger, Joint Bookrunner and Syndication Agent
By:	/s/ James J. Paris
Name:	James J. Paris
Title:	Director
BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent, L/C Lender and Lender
By:	/s/ R. Bram Smith
Name:	Richard Bram Smith
Title:	Vice President
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Lender
By:	/s/ Scottye Lindsey
Name:	Scottye Lindsey
Title:	Director

S-2

GMAC COMMERCIAL FINANCE LLC,
as Co-Documentation Agent and Lender
By:	/s/ Thomas Brent
Name:	Thomas Brent
Title:	Director
ING Capital LLC,
as Co-Documentation Agent and Lender
By:	/s/ Lawrence P. Eyink
Name:	Lawrence P. Eyink
Title:	Director
MERRILL Lynch Capital,
a division of Merrill Lynch Business Financial Services Inc.,
as Co-Documentation Agent and Lender
By:	/s/ Julia F. Maslanka
Name:	Julia F. Maslanka
Title:	Vice President

S-3

Annex A

PRICING GRIDS

The Applicable Margins and Commitment Fee Rate shall be adjusted on a quarterly basis after the completion of the first full fiscal quarter of the Borrower following the Closing Date, based on the Consolidated Leverage Ratio determined as of the last day of the most recent fiscal quarter for which financial statements have been delivered, with each such adjustment to become effective on the date (the “Adjustment Date”) that is three Business Days after the date on which the relevant financial statements are delivered to the Lenders pursuant to Section 7.1 and to remain in effect until the next adjustment is effected.

The Applicable Margins and Commitment Fee Rate effective on each Adjustment Date shall be determined in accordance with the pricing grids set forth below:

Revolving Loans, Swingline Loans (Base Rate Only) and Commitment Fee Rate

Pricing Level		Applicable Margin for Eurodollar	Applicable Margin for Base Rate	Commitment Fee Rate
	Consolidated Leverage Ratio	Loans	Loans
I	=3.75 to 1.00	2.75%	1.75%	0.50%
II	<3.75 to 1.00 but =3.00 to 1.00	2.50%	1.50%	0.50%
II	<3.00 to 1.00	2.25%	1.25%	0.50%

Term Loans

Pricing Level	Consolidated Leverage Ratio	Applicable Margin for Eurodollar Loans	Applicable Margin for Base Rate Loans
I	>3.75 to 1.00	2.75%	1.75%
II	=3.75 to 1.00	2.50%	1.50%

All rates in each pricing grid are per annum rates.

If any financial statements referred to above are not delivered within the time periods specified in Section 7.1, then until the date that is three Business Days after the date on which such financial statements are delivered the highest rate set forth in each column of each pricing grid shall apply. At all times after maturity or acceleration of the maturity of the Loans or the delivery of notice to the Borrower by any Agent or the Required Lenders that an Event of Default has occurred and is continuing or occurrence of any Event of Default specified in Section 9(f) (until such time, if any, as such Event of Default may be cured or waived), the highest rate set forth in each column of each pricing grid shall apply.

EX-10.11

Exhibit 10.11

Execution version

GUARANTEE AND COLLATERAL AGREEMENT

made by

AXLE HOLDINGS, INC.

and

AXLE MERGER SUB, INC.

and

INSURANCE AUTO AUCTIONS, INC.

and certain of its Subsidiaries

in favor of

BEAR STEARNS CORPORATE LENDING INC.,

as Administrative Agent

Dated as of May 25, 2005

TABLE OF CONTENTS

		Page
SECTION 1. DEFINED TERMS		1
1.1.	Definitions	1
1.2.	Other Definitional Provisions	6
SECTION 2. GUARANTEE		7
2.1.	Guarantee	7
2.2.	Reimbursement, Contribution and Subrogation	7
2.3.	Amendments, etc. with respect to the Borrower Obligations	9
2.4.	Guarantee Absolute and Unconditional	9
2.5.	Reinstatement	10
2.6.	Payments	10
SECTION 3. GRANT OF SECURITY INTEREST		10
SECTION 4. REPRESENTATIONS AND WARRANTIES		12
4.1.	Representations in Credit Agreement	12
4.2.	Title; No Other Liens	12
4.3.	Perfected First Priority Liens	12
4.4.	Jurisdiction of Organization; Chief Executive Office	13
4.5.	Inventory and Equipment	13
4.6.	Farm Products	13
4.7.	Pledged Stock and Pledged Notes	13
4.8.	Receivables	14
4.9.	Intellectual Property	14
SECTION 5. COVENANTS		16
5.1.	Covenants in Credit Agreement	16
5.2.	Delivery and Control of Instruments, Certificated Securities, Chattel Paper, Negotiable Documents, Investment Property and Letter of Credit Rights	16
5.3.	Maintenance of Insurance	17
5.4.	Payment of Obligations	18
5.5.	Maintenance of Perfected Security Interest; Further Documentation	18
5.6.	Changes in Locations, Name, etc.	18
5.7.	Notices	18
5.8.	Investment Property	19
5.9.	Receivables	20
5.10.	Intellectual Property	20
5.11.	Vehicles	22
SECTION 6. REMEDIAL PROVISIONS		22
6.1.	Certain Matters Relating to Receivables	22
6.2.	Communications with Obligors; Grantors Remain Liable	23
6.3.	Investment Property	23
6.4.	Proceeds to be Turned Over to Administrative Agent	24
6.5.	Application of Proceeds	25
6.6.	Code and Other Remedies	25
6.7.	Registration Rights	26
6.8.	Deficiency	26

i

SECTION 7. THE ADMINISTRATIVE AGENT		27
7.1.	Administrative Agent’s Appointment as Attorney-in-Fact, etc.	27
7.2.	Duty of Administrative Agent	28
7.3.	Financing Statements	28
7.4.	Authority, Immunities and Indemnities of Administrative Agent	29
SECTION 8. MISCELLANEOUS		29
8.1.	Amendments in Writing	29
8.2.	Notices	29
8.3.	No Waiver by Course of Conduct; Cumulative Remedies	29
8.4.	Enforcement Expenses; Indemnification	29
8.5.	Successors and Assigns	30
8.6.	Set-Off	30
8.7.	Counterparts	30
8.8.	Severability	30
8.9.	Section Headings	31
8.10.	Integration	31
8.11.	GOVERNING LAW	31
8.12.	Submission To Jurisdiction; Waivers	31
8.13.	Acknowledgements	31
8.14.	Additional Grantors	32
8.15.	Releases	32
8.16.	WAIVER OF JURY TRIAL	32
8.17.	Effectiveness of Obligations	32

SCHEDULES
Schedule 1	Notice Addresses
Schedule 2	Investment Property
Schedule 3	Jurisdictions of Organization and Chief Executive Offices
Schedule 4	Filings and Other Actions required for Perfection
Schedule 5	Inventory and Equipment Locations
Schedule 6	Intellectual Property
Schedule 7	Commercial Tort Claims
ANNEXES
Annex I	Form of Assumption Agreement
Annex II	Form of Acknowledgement and Consent
Annex III	Form of Intellectual Property Security Agreement

ii

GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 25, 2005, made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the “Grantors”), in favor of Bear Stearns Corporate Lending Inc., as administrative agent (in such capacity, the “Administrative Agent”) for the banks, financial institutions and other entities (the “Lenders”) from time to time party as Lenders to the Credit Agreement and the other Secured Parties, dated as of May 19, 2005 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Axle Holdings, Inc., a Delaware corporation (“Holdings”), Axle Merger Sub, Inc. (as further defined in Section 1.1, the “Borrower”), the Lenders, Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., as joint lead arrangers and joint bookrunners, GMAC Commercial Finance LLC, ING Capital LLC and Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as co-documentation agents, Deutsche Bank Securities Inc., as syndication agent, and the Administrative Agent.

RECITALS

A. Pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein and certain Qualified Counterparties have agreed to enter into certain Specified Hedge Agreements;

B. Upon the effectiveness of the Merger, the Borrower will be a member of an affiliated group of companies that includes each other Grantor;

C. The proceeds of the extensions of credit under the Credit Agreement and the entering into of the Specified Hedge Agreements will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

D. The Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

E. It is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement and of the Qualified Counterparties to enter into the Specified Hedge Agreements that the Grantors shall have executed and delivered this Agreement to the Administrative Agent for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the Agents and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees with the Administrative Agent, for the benefit of the Secured Parties, as follows:

SECTION 1. DEFINED TERMS

1.1. Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the New York UCC (and if defined in more than one Article of the New York UCC, shall have the meaning given in Article 8 or 9 thereof): Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures,

1

General Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights, Money, Negotiable Documents, Securities Accounts, Securities Entitlements, Supporting Obligations and Tangible Chattel Paper.

(b) The following terms shall have the following meanings:

“Agreement”: this Guarantee and Collateral Agreement.

“Borrower”: prior to the Merger, Axle Merger Sub, Inc., an Illinois corporation; and from and after the Merger, Insurance Auto Auctions, Inc., an Illinois corporation.

“Borrower Cash Management Arrangement Obligations”: all obligations and liabilities of the Borrower to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Specified Cash Management Arrangement or any material document made, delivered or given in connection therewith or pursuant thereto, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including interest accruing at the then applicable rate provided in the agreements governing such Specified Cash Management Arrangement after the maturity of the obligations thereof and interest accruing at the then applicable rate provided in the agreements governing any Specified Cash Management Arrangement after the commencement of any bankruptcy case or insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and all reasonable fees and disbursements of counsel to the Qualified Counterparty that are required to be paid by the Borrower pursuant to the terms of any Specified Cash Management Arrangement).

“Borrower Credit Agreement Obligations”: the unpaid principal of and interest on the Loans and Reimbursement Obligations and all other obligations and liabilities of the Borrower to any Agent, Lender or Indemnitee, whether direct or indirect, absolute or contingent, due or to become due or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement or the other Loan Documents or any Letter of Credit, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and Reimbursement Obligations and interest accruing at the then applicable rate provided in the Credit Agreement after the commencement of any bankruptcy case or insolvency, reorganization, liquidation or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and all expense reimbursement and indemnity obligations arising or incurred as provided in the Loan Documents after the commencement of any such case or proceeding, whether or not a claim for such obligations is allowed in such case or proceeding).

“Borrower Hedge Agreement Obligations”: all obligations and liabilities of the Borrower to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Specified Hedge Agreement or any other material document made, delivered or given in connection therewith or pursuant thereto, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including interest accruing at the then applicable rate provided in such Specified Hedge Agreement after the maturity of the obligations thereof and interest accruing at the then applicable rate provided in any Specified Hedge Agreement after the commencement of any bankruptcy case or insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and all reasonable fees and disbursements of counsel to the Qualified Counterparty that are required to be paid by the Borrower pursuant to the terms of any Specified Hedge Agreement).

2

“Borrower Obligations”: the Borrower Credit Agreement Obligations, Borrower Hedge Agreement Obligations, and Borrower Cash Management Arrangement Obligations.

“Collateral”: as defined in Section 3.

“Collateral Account”: any collateral account established by the Administrative Agent as provided in Section 6.1 or 6.4.

“Consigned Vehicle”: a vehicle with the certificate of title in the name of any other Person other than a Grantor (including a salvage provider or an insurance company).

“Consigned Vehicle Proceeds”: identifiable cash and non-cash proceeds of Consigned Vehicles.

“Copyrights”: (i) all United States and foreign copyrights, whether or not the underlying works of authorship have been published, and all copyright registrations and copyright applications, and any renewals or extensions thereof, including each registration identified on Schedule 6, (ii) the right to sue or otherwise recover for any and all past, present and future infringements thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (iv) all other rights of any kind whatsoever accruing thereunder or pertaining thereto.

“Copyright Licenses”: with respect to any Grantor, all agreements (whether or not in writing) naming such Grantor as licensor or licensee (including those agreements listed in Schedule 6), granting any right under any Copyright, including the grant of rights to print, publish, copy, distribute, exploit and sell materials derived from any Copyright, subject in each case, to the terms of such agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements.

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable jurisdiction and, in any event, including any demand, time, savings, passbook or like account maintained with a depositary institution.

“Excluded Perfection Assets”: (i) any Vehicle individually having a value less than $100,000 individually or $1,000,000 in the aggregate for all Vehicles; (ii) any foreign Intellectual Property; (iii) Goods included in Collateral received by any Person for “sale or return within the meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the extent of claims of creditors of such Person; (iv) Money which has been deposited into any Deposit Account of any Grantor and is not subject to a control agreement as required by Section 5.2(d); and (v) other than any foreign Intellectual Property and any Pledged Stock, any Collateral the aggregate value of which shall not exceed at any time $500,000 and for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside the United States.

“Foreign Entity”: means, with respect to any Grantor, any corporation, partnership, limited liability company or other business entity (i) which is organized under the laws of a jurisdiction other than a state of the United States or the District of Columbia and (ii) of which securities or other ownership interests representing more than 50% of the equity, more than 50% of the ordinary voting power, more than 50% of the general partnership interests or more than 50% of the limited liability company membership interests are, at the time any determination is being made, owned directly by such Grantor or one or more Grantors.

3

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign Subsidiary.

“Grantor”: as defined in the preamble hereto.

“Guarantor Obligations”: with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including Section 2) or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including all expense reimbursement and indemnity obligations arising or incurred as provided in the Loan Documents after the commencement of any bankruptcy case or insolvency, reorganization, liquidation or like proceeding, whether or not a claim for such obligations is allowed in such case or proceeding)

“Guarantors”: the collective reference to each Grantor other than the Borrower.

“Intellectual Property”: the collective reference to all intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets, and Trade Secret Licenses and all rights to sue at law or in equity for any past, present and future infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Intercompany Note”: any promissory note in a principal amount in excess of $500,000, evidencing loans or other monetary obligations owing to any Grantor by any Group Member.

“Investment Property”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Stock.

“Issuers”: the collective reference to each issuer of any Investment Property purported to be pledged hereunder.

“New York UCC”: the Uniform Commercial Code as from time to time in effect in the State of New York.

“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.

“Ordinary Course Transferees”: (i) with respect to Goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 9-320(a) and 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction and (ii) with respect to General Intangibles only, licensees in the ordinary course of business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

“Patents”: (i) all United States and foreign patents, patent applications, including, without limitation, each issued patent and patent application identified on Schedule 6, (ii) all inventions and improvements described and claimed therein, (iii) the right to sue or otherwise recover for any and all past, present and future infringements thereof, (iv) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (v) all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and

4

extensions thereof, all improvements thereon and all other rights of any kind whatsoever accruing thereunder or pertaining thereto.

“Patent License”: with respect to any Grantor, all agreements (whether or not in writing) providing for the grant by or to such Grantor of any right to manufacture, use, import, export, distribute, offer for sale or sell any invention covered in whole or in part by a Patent (including those agreements listed on Schedule 6), subject in each case, to the terms of such agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements.

“Pledged Notes”: all Intercompany Notes at any time issued to any Grantor (including those listed on Schedule 2) and all other promissory notes in excess of $500,000 in principal amount at any time issued to or owned, held or acquired by any Grantor (including those listed on Schedule 2), except promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business.

“Pledged Stock”: all shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Capital Stock of any Person (including those listed on Schedule 2) at any time issued or granted to or owned, held or acquired by any Grantor; provided that in no event shall (i) more than 65% of the total outstanding voting Capital Stock of any Foreign Entity or any Foreign Subsidiary Holdco be subject to the security interests granted hereby.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC, including, in any event, all dividends, returns of capital and other distributions from Investment Property and all collections thereon and payments with respect thereto.

“Receivable”: any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including all Accounts).

“Secured Parties”: the Agents, the Lenders and Indemnitees and, with respect to any Specified Hedge Agreement or Specified Cash Management Agreement, the Qualified Counterparty, party thereto and each of their respective successors and transferees.

“Securities Act”: the Securities Act of 1933, as amended.

“Trademarks”: (i) all United States, state and foreign trademarks, service marks, trade names, domain names, corporate names, company names, business names, trade dress, trade styles, or logos, and all registrations of and applications to register the foregoing and any new renewals thereof, including each registration and application identified in Schedule 6, (ii) the right to sue or otherwise recover for any and all past, present and future infringements and dilutions thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements and dilutions thereof), and (iv) all other rights of any kind whatsoever accruing thereunder or pertaining thereto, together in each case with the goodwill of the business connected with the use of, and symbolized by, each of the above.

“Trademark License”: with respect to any Grantor, any agreement (whether or not in writing) providing for the grant by or to such Grantor of any right to use any Trademark (including those agreements listed on Schedule 6), subject in each case, to the terms of such agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements.

5

“Trade Secrets”: (i) all trade secrets and confidential and proprietary information, (ii) the right to sue or otherwise recover for any and all past, present and future misappropriations thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or future misappropriations thereof), and (iv) all other rights of any kind whatsoever accruing thereunder or pertaining thereto.

“Trade Secret License”: with respect to any Grantor, any agreement, whether written or oral, providing for the grant by or to such Grantor of any right to use any Trade Secret, including any of the foregoing agreements referred to in Schedule 6 , subject in each case, to the terms of such agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements.

“UETA”: the Uniform Electronic Transaction Act, as in effect in the applicable jurisdiction.

“Vehicles”: all cars, trucks, trailers, vehicles which are used for construction, vehicles which can be considered earth moving equipment and other vehicles, vessels and aircrafts, each of which is covered by a certificate of title law of any jurisdiction and all appurtenances thereto.

1.2. Other Definitional Provisions.

(a) As used herein and in any certificate or other document made or delivered pursuant hereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), and (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties of every type and nature, and (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time (subject to any applicable restrictions hereunder).

(b) The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(d) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

(e) The expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to any Obligation shall mean the payment in full of such Obligation in cash in immediately available funds, which for the purpose of such expressions and similar terms or phrases includes the discharge of all Letters of Credit or Cash Collateralization of all L/C Obligations that remain outstanding.

6

SECTION 2. GUARANTEE

2.1. Guarantee.

(a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Secured Parties, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of each and all of the Borrower Obligations.

(b) Each Guarantor shall be liable under its guarantee set forth in Section 2.1 (a), without any limitation as to amount, for all present and future Borrower Obligations, including specifically all future increases in the outstanding amount of the Loans or Reimbursement Obligations and other future increases in the Borrower Obligations, whether or not any such increase is committed, contemplated or provided for by the Loan Documents on the date hereof; provided, that (i) enforcement of such guarantee against such Guarantor will be limited as necessary to limit the recovery under such guarantee to the maximum amount which may be recovered without causing such enforcement or recovery to constitute a fraudulent transfer or fraudulent conveyance under any applicable law, including any applicable federal or state fraudulent transfer or fraudulent conveyance law (giving effect, to the fullest extent permitted by law, to the reimbursement and contribution rights set forth in Section 2.2) and (ii) to the fullest extent permitted by applicable law, the foregoing clause (i) shall be for the benefit solely of creditors and representatives of creditors of each Guarantor and not for the benefit of such Guarantor or the holders of any equity interest in such Guarantor.

(c) The guarantee contained in this Section 2.1 (i) shall remain in full force and effect until all the Borrower Obligations and the obligations of each Guarantor under the guarantee contained in this Section 2.1 have been paid in full, and all commitments to extend credit under the Loan Documents have terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Borrower Obligations, (ii) unless released as provided in clause (iii) below, shall survive the repayment of the Loans and Reimbursement Obligations, the termination of commitments to extend credit under the Loan Documents, and the release of the Collateral and remain enforceable as to all Borrower Obligations that survive such repayment, termination and release and (iii) shall be released when and as set forth in Section 8.15.

(d) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by any Secured Party from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder in respect of any other Borrower Obligations then outstanding or thereafter incurred, other than as set forth in Section 8.15.

2.2. Reimbursement, Contribution and Subrogation. In case any payment is made on account of the Borrower Obligations by any Grantor or is received or collected on account of the Borrower Obligations from any Grantor or its property:

(a) If such payment is made by the Borrower or from its property, the Borrower shall not be entitled (i) to demand or enforce reimbursement or contribution in respect of such payment from any other Grantor or (ii) to be subrogated to any claim, interest, right or remedy of any Secured Party against any other Person, including any other Grantor or its property.

7

(b) If such payment is made by Holdings or from its property or if any payment is made by Holdings or from its property in satisfaction of the reimbursement right of any Subsidiary Guarantor set forth in Section 2.2(c), such payment shall constitute a contribution by Holdings to the common equity capital of the Borrower and Holdings shall not be entitled (i) to demand or enforce reimbursement or contribution in respect of such payment from any other Grantor or (ii) to be subrogated to any claim, interest, right or remedy of any Secured Party against any other Person, including any other Grantor or its property.

(c) If such payment is made by a Subsidiary Guarantor or from its property, such Subsidiary Guarantor shall be entitled, subject to and upon payment in full of all outstanding Obligations, and termination of all commitments to extend credit under the Loan Documents, (i) to demand and enforce reimbursement for the full amount of such payment from the Borrower and from Holdings and (ii) to demand and enforce contribution in respect of such payment from each other Subsidiary Guarantor which has not paid its fair share of such payment, as necessary to ensure that (after giving effect to any enforcement of reimbursement rights provided hereby) each Subsidiary Guarantor pays its fair share of the unreimbursed portion of such payment. For this purpose, the fair share of each Subsidiary Guarantor as to any unreimbursed payment shall be determined based on an equitable apportionment of such unreimbursed payment among all Subsidiary Guarantors based on the relative value of their assets (net of their liabilities, other than Obligations) and any other equitable considerations deemed appropriate by the court.

(d) If and whenever any right of reimbursement or contribution becomes enforceable by any Subsidiary Guarantor against any other Grantor under Section 2.2(c), such Subsidiary Guarantor shall be entitled, subject to and upon payment in full of all outstanding Obligations, and termination of all commitments to extend credit under the Loan Documents to be subrogated (equally and ratably with all other Subsidiary Guarantors entitled to reimbursement or contribution from any other Grantor under Section 2.2(c)) to any security interest that may then be held by the Administrative Agent upon any Collateral granted to it in this Agreement. To the fullest extent permitted under applicable law, such right of subrogation shall be enforceable solely against the Grantors, and not against the Secured Parties, and neither the Administrative Agent nor any other Secured Party shall have any duty whatsoever to warrant, ensure or protect any such right of subrogation or to obtain, perfect, maintain, hold, enforce or retain any Collateral for any purpose related to any such right of subrogation. If subrogation is demanded in writing by any Grantor, then (subject to and upon payment in full of all outstanding Obligations, and termination of all commitments to extend credit under the Loan Documents) the Administrative Agent shall deliver to the Grantor making such demand, or to a representative of such Grantor or of the Grantors generally, an instrument reasonably satisfactory to the Administrative Agent transferring, on a quitclaim basis without (to the fullest extent permitted under applicable law) any recourse, representation, warranty or obligation whatsoever, whatever security interest the Administrative Agent then may hold in whatever Collateral may then exist that was not previously released or disposed of by the Administrative Agent.

(e) All rights and claims arising under this Section 2.2 or based upon or relating to any other right of reimbursement, indemnification, contribution or subrogation that may at any time arise or exist in favor of any Grantor as to any payment on account of the Obligations made by it or received or collected from its property shall be fully subordinated in all respects to the prior payment in full of all of the Obligations. Until payment in full of the Obligations and termination of all commitments to extend credit under the Loan Documents, no Grantor shall demand or receive any collateral security, payment or distribution whatsoever (whether in cash, property or securities or otherwise) on account of any such right or claim. If any such payment or distribution is made or becomes available to any Grantor in any bankruptcy case or receivership, insolvency or liquidation proceeding, such payment or distribution shall be delivered by the person making such payment or distribution directly to the Administrative Agent, for application to the payment of the Obligations. If any such payment or distribution is received by any

8

Grantor, it shall be held by such Grantor in trust, as trustee of an express trust for the benefit of the Secured Parties, and shall forthwith be transferred and delivered by such Grantor to the Administrative Agent, in the exact form received and, if necessary, duly endorsed.

(f) The obligations of the Grantors under the Loan Documents, including their liability for the Obligations and the enforceability of the security interests granted thereby, are not contingent upon the validity, legality, enforceability, collectibility or sufficiency of any right of reimbursement, contribution or subrogation arising under this Section 2.2. To the fullest extent permitted under applicable law, the invalidity, insufficiency, unenforceability or uncollectibility of any such right shall not in any respect diminish, affect or impair any such obligation or any other claim, interest, right or remedy at any time held by any Secured Party against any Guarantor or its property. The Secured Parties make no representations or warranties in respect of any such right and shall, to the fullest extent permitted under applicable law, have no duty to assure, protect, enforce or ensure any such right or otherwise relating to any such right.

(g) Each Grantor reserves any and all other rights of reimbursement, contribution or subrogation at any time available to it as against any other Grantor, but (i) the exercise and enforcement of such rights shall be subject to this Section 2.2 and (ii) to the fullest extent permitted by applicable law, neither the Administrative Agent nor any other Secured Party shall ever have any duty or liability whatsoever in respect of any such right.

2.3. Amendments, etc. with respect to the Borrower Obligations. To the fullest extent permitted by applicable law, each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Borrower Obligations made by any Secured Party may be rescinded by such Secured Party and any of the Borrower Obligations continued, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the requisite Lenders) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any Secured Party for the payment of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. No Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law.

2.4. Guarantee Absolute and Unconditional. To the fullest extent permitted by applicable law, each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by any Agent or any Lender upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2. The Borrower Obligations, and each of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2. All dealings between the Borrower and any of the Guarantors, on the one hand, and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. To the fullest extent permitted by applicable law, each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Borrower Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed, to the fullest extent permitted by applicable law, as a continuing, absolute and unconditional

9

guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against any Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure by any Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

2.5. Reinstatement. The guarantee contained in this Section 2 shall be reinstated and shall remain in all respects enforceable to the extent that, at any time, any payment of any of the Borrower Obligations is set aside, avoided or rescinded or must otherwise be restored or returned by any Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, in whole or in part, and such reinstatement and enforceability shall, to the fullest extent permitted by applicable law, be effective as fully as if such payment had not been made.

2.6. Payments. Each Guarantor hereby agrees to pay all amounts payable by it under this Section 2 to the Administrative Agent without set-off or counterclaim in Dollars in immediately available funds at the Funding Office specified in the Credit Agreement.

SECTION 3. GRANT OF SECURITY INTEREST

Each Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Deposit Accounts;

(d) all Documents;

10

(e) all Equipment (whether or not constituting Fixtures);

(f) all General Intangibles;

(g) all Instruments, including Pledged Notes;

(h) all Intellectual Property, to the extent of each Grantor’s right, title or interest therein (except for “intent-to-use” applications for trademark or service mark registrations filed pursuant to Section l(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections l(c) and l(d) of said Act has been filed and accepted);

(i) all Inventory;

(j) all Investment Property;

(k) all Letter-of-Credit Rights;

(1) all Money;

(m) all Vehicles and certificates of title with respect to Vehicles;

(n) all Commercial Tort Claims identified on Schedule 7;

(o) all Capital Stock, Goods, insurance and other personal property not otherwise described above;

(p) all Supporting Obligations and products of any and all of the foregoing and all Guarantee Obligations, Liens and claims supporting, securing or in any respect relating to any of the foregoing;

(q) all books and records (regardless of medium) pertaining to any of the foregoing; and

(r) all Proceeds of any of the foregoing;

provided, that (i) this Agreement shall not constitute a grant of a security interest in any property to the extent that and for as long as such grant of a security interest (A) is prohibited by any applicable law, (B) requires a filing with or consent from any entity or person pursuant to any applicable law that has not been made or obtained, or (C) constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any lease, license or agreement, except to the extent that such applicable law or provisions of any such lease, license or agreement is ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC to prevent the attachment of the security interest granted hereunder or (D) is in Capital Stock which is specifically excluded from the definition of Pledged Stock by virtue of the proviso to such definition; (ii) the security interest granted hereby (A) shall attach at all times to all proceeds of such property, (B) shall attach to such property immediately and automatically (without need for any further grant or act) at such time as the condition described in clause (i) ceases to exist and (C) to the extent severable shall in any event attach to all rights in respect of such property that are not subject to the applicable condition described in clause (i); and (iii) the security interest granted hereby shall not attach to any Consigned Vehicles or Consigned Vehicle Proceeds.

11

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to each Agent and Lender that:

4.1. Representations in Credit Agreement. In the case of each Guarantor, the representations and warranties set forth in Section 5 of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct in all material respects, and each Agent and each Lender shall be entitled to rely on each of them as if they were fully set forth herein; provided that each reference in each such representation and warranty to the Borrower’s knowledge or Holdings’ knowledge shall, for the purposes of this Section 4.1, be deemed to be a reference to such Guarantor’s knowledge.

4.2. Title; No Other Liens. Except for the security interest granted to the Administrative Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such Grantor’s Collateral by the Credit Agreement, such Grantor owns each item of Collateral granted by it free and clear of any and all Liens. No effective financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to this Agreement or in respect of Liens that are permitted by the Credit Agreement or any other Loan Document or for which termination statements will be delivered on the Closing Date.

4.3. Perfected First Priority Liens.

(a) Upon the completion of the filings and other actions specified on Schedule 4 (which, in the case of all filings and other documents referred to on said Schedule (to the extent applicable), have been delivered to the Administrative Agent in completed and, where required, duly executed form), the payment of all applicable fees, the delivery to and continuing possession by the Administrative Agent of all Certificated Securities, all Instruments, all Tangible Chattel Paper and all Documents a security interest in which is perfected by possession, and the obtaining and maintenance of “control” (as described in the Uniform Commercial Code as in effect in the applicable jurisdiction) by the Administrative Agent of all Deposit Accounts, the Collateral Accounts, all Electronic Chattel Paper, Letter of Credit Rights, all Uncertificated Securities and all Securities Accounts, in each case a security interest in which is perfected by such “control”, the security interests granted in Section 3 will constitute valid perfected security interests in all of the Collateral (except for Excluded Perfection Assets) in favor of the Administrative Agent, for the benefit of the Secured Parties, as collateral security for such Grantor’s Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any such Collateral from such Grantor other than Ordinary Course Transferees, except as (x) enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) or by an implied covenant of good faith and fair dealing, and (y) to the extent that the recording or an assignment or other transfer of title to the Administrative Agent or the recording of other applicable documents in the United States Patent and Trademark Office or the United States Copyright Office (and the taking of appropriate actions with respect to Intellectual Property which is the subject of a registration or application outside the United States under applicable local law to perfect such Lien) may be necessary for enforceability, and is and will be prior to all other Liens on such Collateral except for Permitted Liens. Without limiting the foregoing and except as otherwise permitted or provided in Section 5 or with respect to any Excluded Perfection Assets, each Grantor has taken all actions necessary or desirable to: (i) establish the Administrative Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of

12

the UCC) over any portion of the Investment Property constituting Certificated Securities, Uncertificated Securities, Securities Accounts, Securities Entitlements or Commodity Accounts (each as defined in the UCC), (ii) establish the Administrative Agent’s “control” (within the meaning of Section 9-104 of the UCC) over all Deposit Accounts of such Grantor, (iii) establish the Administrative Agent’s “control” (within the meaning of Section 9-107 of the UCC) over all Letter of Credit Rights of such Grantor and (iv) establish the Administrative Agent’s control (within the meaning of Section 9-105 of the UCC) over all Electronic Chattel Paper of such Grantor.

(b) Each Grantor consents to the grant by each other Grantor of the security interests granted hereby and the transfer of any Capital Stock or Investment Property to the Administrative Agent or its designee following an Event of Default and to the substitution of the Administrative Agent or its designee or the purchaser upon any foreclosure sale as the holder and beneficial owner of the interest represented thereby.

4.4. Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor’s exact legal name, jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor’s chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 3. On the date hereof, such Grantor is organized solely under the law of the jurisdiction so specified and has not filed any certificates of domestication, transfer or continuance in any other jurisdiction. Except as otherwise indicated on Schedule 3, the jurisdiction of such Grantor’s organization or formation is required to maintain a public record showing the Grantor to have been organized or formed. On the date hereof, except as specified on Schedule 3, such Grantor has not changed its name, jurisdiction of organization, chief executive office or sole place of business or its corporate or organizational form in any way (e.g. by merger, consolidation, change in corporate form or otherwise) within the past five years and has not within the last five years become bound (whether as a result of merger or otherwise) as grantor under a security agreement entered into by another person, which (x) has not heretofore been terminated or (y) is in respect of a Lien that is not permitted by the Credit Agreement. Such Grantor has furnished to the Administrative Agent its Organizational Documents as in effect as of the Closing Date.

4.5. Inventory and Equipment.

(a) On the date hereof Schedule 5 sets forth all locations where any Inventory and Equipment (other than mobile goods) in excess of $100,000 in value are kept.

(b) All Inventory now or hereafter produced by any Grantor included in the Collateral has been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended.

(c) Except as specifically indicated on Schedule 5, to the knowledge of such Grantor none of the Inventory or Equipment of such Grantor with a value in excess of $100,000 is in possession of a bailee.

4.6. Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

4.7. Pledged Stock and Pledged Notes.

(a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor

13

or, in the case of Foreign Subsidiary Voting Stock, 65% of the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.

(b) All the shares of the Pledged Stock pledged by such Grantor hereunder have been duly and validly issued and are fully paid and nonassessable.

(c) To such Grantor’s knowledge, each of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

(d) Such Grantor is the record and beneficial owner of, and has good and valid title to, the Pledged Stock and Pledged Notes pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and Liens permitted by the Credit Agreement.

(e) The Organizational Documents applicable to each interest in any domestic partnership or limited liability company included in the Collateral shall not expressly provide that they are securities governed by Article 8 of the Uniform Commercial Code and any such interests shall not be certificated; provided, that, if any such interests become certificated, such Grantor will ensure that the Organizational Documents applicable to such interest shall expressly provide that they are securities governed by Article 8 of the Uniform Commercial Code and immediately deliver all such certificates to the Administrative Agent for continued possession.

4.8. Receivables. The amounts represented by such Grantor to the Administrative Agent or the other Secured Parties from time to time as owing to such Grantor in respect of such Grantor’s Receivables will at such time be the correct amount, in all material respects, actually owing thereunder, except to the extent that appropriate reserves therefor have been established on the books of such Grantor in accordance with GAAP.

4.9. Intellectual Property.

(a) Schedule 6 lists all issued Patents and pending published patent applications, and all registrations and applications to register Trademarks and registered Copyrights owned by such Grantor in its own name on the date hereof. Except as set forth in Schedule 6 or as permitted to exist on such Grantor’s Collateral by the Credit Agreement, such Grantor is the exclusive owner of the entire right, title and interest in and to such applications, registrations and issuances free and clear of any and all Liens (except Permitted Liens).

(b) On the date hereof, all Intellectual Property of such Grantor described on Schedule 6 is subsisting and unexpired and, to the knowledge of such Grantor, has not been abandoned and is valid and enforceable. Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of such Grantor, neither the operation of such Grantor’s business as currently conducted nor the use of the Intellectual Property in connection therewith conflicts with, infringes, misappropriates, dilutes, misuses or otherwise violates the Intellectual Property rights of any other Person.

(c) Except as set forth in Schedule 6, on the date hereof, (i) none of the material patents, trademarks, copyrights and trade secrets owned by any Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor and (ii) there are no

14

other material agreements, obligations, orders or judgments to which such Grantor is subject which adversely affect the use of any Intellectual Property owned by such Grantor.

(d) The rights of such Grantor in or to the Patents, Trademarks, Copyrights and Trade Secrets owned by such Grantor do not conflict with or infringe upon the rights of any third party, and no claim has been asserted that the use of such Intellectual Property does or may infringe upon the rights of any third party, in either case, which conflict or infringement would reasonably be expected to have a Material Adverse Effect. There is currently no infringement or unauthorized use of any item of such Intellectual Property owned by such Grantor that, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(e) No holding, decision or judgment has been rendered by any Governmental Authority which would limit or cancel or render invalid or unenforceable such Grantor’s rights in, any Patent, Trademark, Copyright or Trade Secret owned by such Grantor in any respect that would reasonably be expected to have a Material Adverse Effect. Such Grantor is not aware of any uses of any material item of Intellectual Property owned by such Grantor that could reasonably be expected to lead to such item becoming invalid or unenforceable including uses which were not supported by the goodwill of the business connected with Trademarks and Trademark Licenses, which uses, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(f) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof seeking to limit or cancel or render invalid any material Patent, Trademark, Copyright or Trade Secret owned by such Grantor or such Grantor’s ownership interest therein, which, if adversely determined, would have a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect, the consummation of the transactions contemplated by this Agreement will not result in the termination or impairment of any of the Intellectual Property owned or licensed by such Grantor.

(g) With respect to each Copyright License, Trademark License and Patent License, except as would not reasonably be expected to have a Material Adverse Effect: (i) such license is valid and binding and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license; (ii) such Grantor has not received any notice of termination or cancellation under such license; (iii) such Grantor has not received any notice of a breach or default under such license, which breach or default has not been cured; and (iv) such Grantor is not in breach or default in any material respect, and no event has occurred that, with notice and/or lapse of time, would constitute such a breach or default or permit termination, modification or acceleration under such license.

(h) To the extent such Grantor has reasonably determined that it is commercially practicable to do so, such Grantor has used proper statutory notice in connection with its use of each material Patent, Trademark and Copyright owned by such Grantor.

(i) Such Grantor has taken commercially reasonable steps to protect the confidentiality of its Trade Secrets.

(j) Such Grantor has made all material filings and recordations and paid all fees necessary in its reasonable business judgment to adequately protect its interest in its United States Patents, Trademarks and Copyrights and material non-United States Patents, Trademarks and Copyrights owned by such Grantor.

15

SECTION 5. COVENANTS

Each Grantor covenants and agrees with the Agents and Lenders that, from and after the date of this Agreement until the Collateral is released pursuant to Section 8.15(a):

5.1. Covenants in Credit Agreement. Such Grantor shall take, or refrain from taking, as the case may be, each action that is necessary to be taken or not taken, so that no breach of the covenants in the Credit Agreement pertaining to actions to be taken, or not taken, by such Grantor will result.

5.2. Delivery and Control of Instruments, Certificated Securities, Chattel Paper, Negotiable Documents, Investment Property and Letter of Credit Rights.

(a) If any of the Collateral of such Grantor is or shall become evidenced or represented by any Instrument, Negotiable Document or Tangible Chattel Paper (excluding any certificate of title of any Vehicle which is an Excluded Perfection Asset), upon the request of the Administrative Agent such Instrument, Negotiable Documents or Tangible Chattel Paper (excluding any certificate of title of any Vehicle which is an Excluded Perfection Asset) shall be immediately delivered to the Administrative Agent, duly indorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

(b) If any of the Collateral of such Grantor is or shall become “Electronic Chattel Paper” such Grantor shall ensure that (i) a single authoritative copy exists which is unique, identifiable, unalterable (except as provided in clauses (iii), (iv) and (v) of this paragraph), (ii) such authoritative copy identifies the Administrative Agent as the assignee and is communicated to and maintained by the Administrative Agent or its designee, (iii) copies or revisions that add or change the assignee of the authoritative copy can only be made with the participation of the Administrative Agent, (iv) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy and not the authoritative copy and (v) any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.

(c) If any of the Collateral of such Grantor is or shall become evidenced or represented by an Uncertificated Security in excess of $500,000, upon the request of the Administrative Agent, such Grantor shall cause the issuer thereof either (i) to register the Administrative Agent as the registered owner of such Uncertificated Security, upon original issue or registration of transfer or (ii) to promptly (but in any event with in 60 days of such request) agree in writing with such Grantor and the Administrative Agent that such Issuer will comply with instructions with respect to such Uncertificated Security originated by the Administrative Agent without further consent of such Grantor, such agreement to be in form and substance reasonably satisfactory to the Administrative Agent.

(d) If so requested by the Administrative Agent or Required Lenders at any time when any Event of Default under 9(a), 9(f)(i) or 9(f)(ii) of the Credit Agreement has occurred and is continuing, such Grantor shall, within 15 days after such request and at all times thereafter, maintain its Securities Entitlements, Securities Accounts and Deposit Accounts (other than (i) collection accounts that are swept (either directly or indirectly) on a daily basis, as and when good and collected funds are available, to an account that is subject to a control agreement, (ii) disbursement accounts that are funded only as and when payment demands are received, and (iii) other deposit accounts in which the aggregate amount on deposit at any time does not exceed $750,000) such that all cash and cash equivalents of the Loan Parties, net of and after deducting an allowance reasonably determined by the Borrower to be sufficient to pay all Consigned Vehicle Proceeds due to the owners of Consigned Vehicles who have not received final payment in full of the amount due to them, are maintained with financial institutions that

16

have agreed to comply with entitlement orders and instructions issued or originated by the Administrative Agent without further consent of such Grantor, such agreement to be in form and substance reasonably satisfactory to the Administrative Agent. The Administrative Agent hereby agrees to issue such entitlement orders and instructions only if an Event of Default under Section 9(a), 9(f)(i) or 9(f)(ii) of the Credit Agreement has occurred and is continuing.

(e) if any of the Collateral of such Grantor is or shall become evidenced or represented by any Certificated Security (other than any Capital Stock which is specifically excluded from the definition of Pledged Stock by virtue of the proviso to such definition and any promissory note that does not qualify as a Pledged Note pursuant to the definition thereof), such Certificated Security shall be promptly delivered to the Administrative Agent, duly indorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

(f) In addition to and not in lieu of the foregoing, if any issuer of any Investment Property is organized under the law of, or has its chief executive office in, a jurisdiction outside of the United States, each Grantor shall take such additional actions, including causing the issuer to register the pledge on its books and records, as may be reasonably requested by the Administrative Agent, under the laws of such jurisdiction to insure the validity, perfection and priority of the security interest of the Administrative Agent.

(g) In the case of any Letter-of-Credit Rights in any letter of credit exceeding $250,000 in value, upon the reasonable request of the Administrative Agent, each Grantor shall promptly (but in any event with in 60 days of such request or such later date to which the Administrative Agent may consent in writing) make commercially reasonable efforts to obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit in accordance with Section 5-114(c) of the New York UCC, pursuant to an agreement in form and substance reasonably satisfactory to the Administrative Agent.

(h) If any of the Collateral of such Grantor is or shall become “transferable records” as defined in UETA, such Grantor shall promptly notify the Administrative Agent thereof and, at the request of the Administrative Agent, shall take such action as the Administrative Agent may reasonably request to vest in the Administrative Agent “control” under Section 16 of UETA over such transferable records. The Administrative Agent agrees with such Grantor that the Administrative Agent will arrange, pursuant to procedures reasonably satisfactory to the Administrative Agent and so long as such procedures will not result in the Administrative Agent’s loss of control, for the Grantor to make alterations to the transferable records permitted under Section 16 of UETA for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such transferable records

5.3. Maintenance of Insurance.

(a) Such Grantor will maintain, with reputable companies, insurance policies (i) insuring the Collateral against loss by fire, explosion, theft or other risks as may be required by the Credit Agreement and (ii) naming the Administrative Agent on behalf of the Secured Parties as additional insureds under liability insurance policies to the extent reasonably requested by the Administrative Agent.

(b) All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage (other than materially proportionate reductions in amounts or coverage to reflect any disposition of property by such Grantor) thereof shall be effective until at least 30 days, or such earlier time with the consent of the Administrative Agent, after receipt by the Administrative Agent of written notice thereof and (ii) name the Administrative Agent as additional

17

insured party and/or loss payee in respect of property insurance. All proceeds of business and interruption insurance received by the Administrative Agent shall be released by the Administrative Agent to the Borrower for account of the Grantor entitled thereto.

5.4. Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes and other material assessments and governmental charges or levies imposed upon such Grantor’s Collateral or in respect of income or profits therefrom, as well as all claims of any kind (including claims for labor, materials and supplies) against or with respect to such Grantor’s Collateral, except such claims as to which the failure to pay or discharge would not reasonably be expected to result in a Material Adverse Effect.

5.5. Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interest created by this Agreement in such Grantor’s Collateral as a security interest having at least the perfection and priority described in Section 4.3 and shall defend such security interest against the claims and demands of all Persons whomsoever, subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral.

(b) Such Grantor will furnish to the Administrative Agent from time to time statements and schedules further identifying and describing the assets and property of such Grantor in reasonable detail and such other reports in connection therewith as the Administrative Agent may reasonably request.

(c) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of creating, perfecting, ensuring the priority of, protecting or enforcing the Administrative Agent’s security interest in the Collateral or otherwise conferring or preserving the full benefits of this Agreement and of the interests, rights and powers herein granted.

5.6. Changes in Locations, Name, etc. Such Grantor will not, except upon not less than 10 days’ prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a) all additional financing statements and other documents (executed where appropriate) reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 5 showing any additional location at which Inventory or Equipment shall be kept:

(i) change its jurisdiction of organization or the location of its chief executive office or sole place of business or principal residence from that referred to in Section 4.4;

(ii) change its name; or

(iii) permit any Inventory or Equipment (other than mobile goods) in excess of $250,000 in value to be kept at a location other than those listed on Schedule 5.

5.7. Notices. Such Grantor will advise the Administrative Agent and the Lenders promptly, in reasonable detail, of:

(a) any Lien (other than security interests created hereby or Liens permitted under the Credit Agreement) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and

18

(b) the occurrence of any other event which would reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the security interests created hereby.

5.8. Investment Property.

(a) If such Grantor shall become entitled to receive or shall receive any stock certificate (including any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Secured Parties, hold the same in trust for the Secured Parties and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power or equivalents covering such certificate duly executed in blank by such Grantor, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations; provided, that in no event shall there be pledged more than 65% of any of the outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary. Unless permitted to be retained pursuant to the Credit Agreement, any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid over to the Administrative Agent (unless otherwise agreed in the Credit Agreement) to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations. If any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

(b) Without the prior written consent of the Administrative Agent, such Grantor will not, except as permitted by the Credit Agreement, (i) vote to enable, or take any other action to permit, any Issuer of Pledged Stock to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof, (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement or Liens permitted by the Credit Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof (unless such restriction is permitted by the Credit Agreement).

(c) In the case of each Grantor which is an Issuer, such Grantor agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent

19

promptly in writing of the occurrence of any of the events described in Section 5.8(a) with respect to the Investment Property issued by it and (iii) it will take all actions required or reasonably requested by the Administrative Agent to enable or permit each Grantor to comply with Sections 6.3(c) and 6.7 as to all Investment Property issued by it.

5.9. Receivables.

(a) Other than in the ordinary course of business or as permitted by the Loan Documents, such Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that would materially adversely affect the value of the Receivables constituting Collateral taken as a whole.

(b) Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables.

5.10. Intellectual Property. (a) Except as permitted in the Credit Agreement:

(i) With respect to each material Trademark owned by such Grantor, such Grantor (either itself or through licensees) will take all reasonably necessary steps to (i) continue to use such Trademark consistent with its current use of such Trademark or as otherwise determined by such Grantor, in its reasonable business judgment, in connection with such Grantor’s businesses or goods and services offered by such Grantor, in order to maintain such Trademark in full force free from any valid claim of abandonment for non-use, (ii) maintain the quality of products and services offered under such Trademark and take all reasonably necessary steps to ensure that all licensed users of such Trademark maintain such quality and (iii) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for the benefit of the Secured Parties, shall have notice thereof and the opportunity to obtain a perfected security interest in such mark (if a United States mark) pursuant to this Agreement, and (iv) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way, except in the ordinary course of business consistent with such Grantor’s past conduct and pursuant to the exercise of its reasonable business judgment.

(ii) Such Grantor (either itself or through licensees) will not forfeit, abandon or dedicate to the public any material Patent, except in the ordinary course of business consistent with such Grantor’s past conduct and pursuant to the exercise of its reasonable business judgment.

(iii) Such Grantor (either itself or through licensees) will not (and will not permit any licensee or sublicensee thereof to) by any act or omission, forfeit, abandon, or dedicate to the public any material Copyright owned by such Grantor, except in the ordinary course of business, consistent with such Grantor’s past conduct and pursuant to the exercise of its reasonable business judgment.

(iv) Such Grantor (either itself or through licensees) will not do any act that knowingly uses any material Intellectual Property to knowingly infringe the intellectual property rights of any other Person.

20

(v) To the extent such Grantor has reasonably determined that it is commercially practicable to do so, such Grantor (either itself or through licensees) will use any proper statutory notice necessary or appropriate in connection with the use of each material Patent, Trademark and Copyright owned by such Grantor.

(vi) Such Grantor will notify the Administrative Agent and the Lenders promptly if it knows or has reason to believe that any application or registration relating to any material Patent, Trademark or Copyright of such Grantor has been or may imminently become forfeited, abandoned or dedicated to the public, or of any material adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding such Grantor’s ownership of, or the validity of, any material Patent, Trademark or Copyright owned by such Grantor or such Grantor’s right to register the same or to own and maintain the same.

(vii) Such Grantor will take all reasonable and necessary steps, including in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or group of countries or any political subdivision of any of the foregoing, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the material Patents, Trademarks and Copyrights owned by such Grantor, including the payment of required fees and taxes, the filing of responses to office actions issued by the United States Patent and Trademark Office and the United States Copyright Office, the filing of applications for renewal or extension, the filing of affidavits of use and affidavits of incontestability, the filing of divisional, continuation, continuation-in-part, reissue, and renewal applications or extensions, the payment of maintenance fees, and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings.

(viii) Such Grantor (either itself or through licensees) will not, without the prior written consent of the Administrative Agent, such consent not to be unreasonably withheld or delayed, discontinue use of or otherwise abandon any Intellectual Property, or abandon any application or any right to file an application for letters patent, trademark, or copyright, unless such Grantor shall have previously determined that such use or the pursuit or maintenance of such Intellectual Property is no longer desirable in the conduct of such Grantor’s business and that the loss thereof could not reasonably be expected to have a Material Adverse Effect and, such Grantor shall give prompt notice of any such abandonment of (i) material Intellectual Property or (ii) registered or issued Intellectual Property or pending applications therefore to the Administrative Agent in accordance herewith.

(ix) In the event that any material Intellectual Property is infringed, misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify the Administrative Agent after it learns thereof and, following consultation with the Administrative Agent, shall take such actions as it deems reasonable, which may include suing for infringement, misappropriation or dilution, seeking injunctive relief where appropriate and seeking to recover any and all damages for such infringement, misappropriation or dilution.

21

(x) Such Grantor shall take all steps reasonably necessary to protect the secrecy of all material Trade Secrets of such Grantor.

(b) After the date hereof, whenever such Grantor (i) shall acquire any registered, issued or applied for Patent, Trademark or Copyright or (ii) either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Patent, Trademark or Copyright owned by such Grantor with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such acquisition or filing to the Administrative Agent within 90 days after the last day of the fiscal year in which such acquisition or filing occurs. Such Grantor agrees that the provisions of Section 3 shall automatically apply to such Intellectual Property.

(c) Such Grantor agrees (i) to execute an Intellectual Property Security Agreement with respect to certain of its Intellectual Property in substantially the form of Annex III in order to record the security interest granted herein to the Administrative Agent for the benefit of the Secured Parties with the United States Patent and Trademark Office or the United States Copyright Office and (ii) to provide to the Administrative Agent, within 90 days after the last day of the fiscal year in which any Intellectual Property registered in such offices is acquired or registered by such Grantor, all documents necessary to record the security interest of the Administrative Agent in such Intellectual Property with such offices.

(d) Upon the reasonable request of the Administrative Agent, such Grantor shall execute and deliver, and use its commercially reasonable efforts to cause to be filed, registered or recorded, any and all agreements, instruments, documents, and papers which the Administrative Agent may reasonably request to evidence, register, record or perfect the Administrative Agent’s security interest in any registered, issued or applied for Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby, in any office anywhere in the world in which filing, registration or recorded may be necessary or appropriate, except that (so long as no Default has occurred and is continuing) the Administrative Agent shall not request such filing, registration or recording in any office in any jurisdiction outside of the United States in which the Group Members had, during the preceding 12-month period, net sales constituting less than 15% of the consolidated worldwide net sales of the Group Members.

5.11. Vehicles. Grantor will cause the Administrative Agent’s security interest in each Vehicle having a value greater than $100,000 to be duly perfected, by notation on the certificate of title or as otherwise required by applicable law, within 30 days after such security interest attaches to such Vehicle.

SECTION 6. REMEDIAL PROVISIONS

6.1. Certain Matters Relating to Receivables.

(a) The Administrative Agent shall have the right to make test verifications of the Receivables in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may reasonably require in connection with such test verifications. At any time and from time to time, upon the Administrative Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Receivables; provided, that unless a Default or Event of Default shall be continuing, the Administrative Agent shall request no more than four such reports during any calendar year.

22

(b) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s Receivables (not including amounts payable by the purchaser of a Consigned Vehicle), and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days of receipt by such Grantor) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a Collateral Account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Secured Parties only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Secured Parties, segregated from other funds of such Grantor. If so requested by the Administrative Agent, each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(c) At any time and from time to time after the occurrence and during the continuation of an Event of Default, if so requested by the Administrative Agent, each Grantor shall deliver to the Administrative Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including all original orders, invoices and shipping receipts.

6.2. Communications with Obligors; Grantors Remain Liable.

(a) The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Receivables.

(b) At any time after the occurrence and during the continuance of an Event of Default, the Administrative Agent may (and each Grantor at the request of the Administrative Agent shall) notify obligors on the Receivables that the Receivables have been assigned to the Administrative Agent for the benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Administrative Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of such Grantor’s Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

6.3. Investment Property.

(a) Unless an Event of Default has occurred and is continuing and the Administrative Agent has given notice to the relevant Grantor of the Administrative Agent’s intent to exercise its rights pursuant to Section 6.3(b), each Grantor may receive all cash dividends paid in respect of the Pledged

23

Stock and all payments made in respect of the Pledged Notes, in each case paid in the normal course of business of the relevant Issuer, to the extent permitted in the Credit Agreement, and may exercise all voting and corporate or other organizational rights with respect to Investment Property; provided, that no vote shall be cast or corporate or other organizational right exercised or other action taken (other than in connection with a transaction permitted by the Credit Agreement) which would impair the Collateral or be inconsistent with or result in any violation of any provision of any Loan Document.

(b) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or all of the Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may reasonably determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing; provided, that the Administrative Agent shall not exercise any voting or other consensual rights pertaining to any such Investment in a manner that constitutes an exercise of the remedies described in Section 6.6 other than in accordance with Section 6.6.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) after receipt by an Issuer or obligor of any instructions pursuant to Section 6.3(c)(i) hereof, pay any dividends or other payments with respect to the Investment Property directly to the Administrative Agent.

6.4. Proceeds to be Turned Over to Administrative Agent. In addition to the rights of the Agents and the Secured Parties specified in Section 6.1 with respect to payments of Receivables, if an Event of Default under Sections 9(a), 9(f)(i) or 9(f)(ii) of the Credit Agreement shall occur and be continuing or an exercise of remedies by the Administrative Agent or the Lenders with respect to any Event of Default shall occur and the Administrative Agent has instructed any Grantor to do so, all Proceeds (not including Consigned Vehicle Proceeds) received by such Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Agents and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Secured Parties) shall continue to be held as

24

collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

6.5. Application of Proceeds. All cash proceeds received by the Administrative Agent during the continuance of an Event of Default from the enforcement of the Guarantees in Section 2 or as proceeds of Collateral from the exercise of any of the remedies set forth or referred to in Section 6.6 or elsewhere in this Agreement shall be applied, unless otherwise required by the Credit Agreement, pro rata in proportion to the aggregate amount of the Secured Obligations owing to each Secured Party. For this purpose, the Administrative Agent may rely conclusively, and without further inquiry, on its own records as to the amount of the Secured Obligations outstanding to each Secured Party and may suspend payments or seek relief in the form of interpleader or other similar relief as it may determine to be appropriate. Any balance of such Proceeds remaining after the Obligations have been paid in full and all commitments to extend credit under the Loan Documents have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same.

6.6. Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other Loan Document, all rights and remedies of a secured party under the New York UCC or any other applicable law or in equity. Without limiting the generality of the foregoing, to the fullest extent permitted by applicable law, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, license, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder, including reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in such order as may be required by the Credit Agreement and otherwise as required by Section 6.5 above, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against any Secured Party arising out of the exercise of any rights hereunder other than any such claims, damages and demands that may arise from the gross negligence or willful misconduct of such Secured Party. If any notice of a proposed sale or other disposition of Collateral is required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

25

6.7. Registration Rights.

(a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.6, and if in the reasonable opinion of the Administrative Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will use its commercially reasonable efforts to cause the Issuer thereof to (i) execute and deliver, and use its commercially reasonable efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the Administrative Agent, necessary or reasonably advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the reasonable opinion of the Administrative Agent, are necessary or reasonably advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to use its commercially reasonable efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent shall reasonably designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

(c) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Secured Parties, that the Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that the Secured Parties may seek to have each and every covenant contained in this Section 6.7 be specifically enforced against such Grantor, and to the fullest extent permitted by applicable law, such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred or is continuing under the Credit Agreement.

6.8. Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the reasonable fees and disbursements of any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

26

SECTION 7. THE ADMINISTRATIVE AGENT

7.1. Administrative Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable of such Grantor or with respect to any other Collateral of such Grantor and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable of such Grantor or with respect to any other Collateral of such Grantor whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Secured Parties’ security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v) (A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral of such Grantor; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral of such Grantor; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral of such Grantor; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (G) subject to any permitted licenses and reserved rights permitted under the Loan Documents, assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine;

27

and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral of such Grantor as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral of such Grantor and the Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

The Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1 (a) unless an Event of Default has occurred and is continuing.

(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply with, or cause performance or compliance with, such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Revolving Loans that are Base Rate Loans under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to each Grantor until all security interests created hereby with respect to the Collateral of such Grantor are released.

7.2. Duty of Administrative Agent. The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Secured Parties hereunder are solely to protect the Secured Parties’ interests in the Collateral and shall not impose any duty upon any Secured Parties to exercise any such powers. The Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except, in the case of the Administrative Agent only in respect of its own gross negligence or willful misconduct, to the extent required by applicable law (subject to Section 11.12(e) of the Credit Agreement and other applicable provisions of the Loan Documents).

7.3. Financing Statements. Each Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, or any similar document in any jurisdictions and with any filing offices as the Administrative Agent may determine, in its reasonable discretion, are necessary or advisable to perfect or otherwise protect the security interest granted to the Administrative Agent herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Administrative Agent may determine, in its sole

28

discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Administrative Agent herein, including describing such property as “all assets” or “all personal property” and may (but need not) add thereto “whether now owned or hereafter acquired.” Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

7.4. Authority, Immunities and Indemnities of Administrative Agent. Each Grantor acknowledges, and, by acceptance of the benefits hereof, each Secured Party agrees, that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Secured Parties, be governed by the Credit Agreement and that the Administrative Agent shall have, in respect thereof, all rights, remedies, immunities and indemnities granted to it in the Credit Agreement. By acceptance of the benefits hereof, each Secured Party that is not a Lender agrees to be bound by the provisions of the Credit Agreement applicable to the Administrative Agent, including Article X thereof, as fully as if such Secured Party were a Lender. The Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8. MISCELLANEOUS

8.1. Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 11.1 of the Credit Agreement.

8.2. Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 11.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1 or to such other address as such Guarantor may notify the Administrative Agent in writing.

8.3. No Waiver by Course of Conduct; Cumulative Remedies. No Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

8.4. Enforcement Expenses; Indemnification.

(a) Each Guarantor agrees to pay, or reimburse each Secured Party for, all its reasonable costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including the reasonable fees and disbursements of

29

counsel (including the allocated fees and expenses of in-house counsel) to the Administrative Agent and counsel to the Lenders.

(b) Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

(c) Each Guarantor agrees to pay, and to save the Secured Parties harmless from, any and all liabilities, obligations, losses (other than lost profits), damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement on the terms set forth in Section 11.5 of the Credit Agreement.

(d) The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.

8.5. Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Secured Parties and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent and, unless so consented to, each such assignment, transfer or delegation by any Grantor shall be void.

8.6. Set-Off. Each Grantor hereby irrevocably authorizes each Agent and each Lender at any time and from time to time while an Event of Default shall have occurred and be continuing, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Agent or such Lender to or for the credit or the account of such Grantor, or any part thereof in such amounts as such Agent or such Lender may elect, against and on account of the obligations and liabilities of such Grantor to such Agent or such Lender hereunder and claims of every nature and description of such Agent or such Lender against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement or any other Loan Document, as such Agent or such Lender may elect, whether or not any Agent or any Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each Agent or each Lender shall notify such Grantor promptly of any such set-off and the application made by such Agent or such Lender of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Agent and each Lender under this Section are in addition to other rights and remedies (including other rights of set-off) which such Agent or such Lender may have.

8.7. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or electronic pdf), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

8.8. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

30

8.9. Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

8.10. Integration. This Agreement and the other Loan Documents represent the agreement of the Grantors and the Secured Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12. Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

8.13. Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(b) no Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

31

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Secured Parties.

8.14. Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 7.10 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1.

8.15. Releases.

(a) At such time as the Loans, the Reimbursement Obligations and all other Obligations (other than contingent surviving indemnity obligations in respect of which no claim or demand has been made, Borrower Hedge Agreement Obligations and Borrower Cash Management Arrangement Obligations) have been paid in full, all commitments to extend credit under the Loan Documents have terminated, the Collateral shall immediately and automatically be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder and execute and deliver to such Grantor such documents (in form and substance reasonably satisfactory to such Grantor and the Administrative Agent) as such Grantor may reasonably request to evidence such termination.

(b) If any of the Collateral is sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Lien created pursuant to this Agreement in such Collateral shall be immediately and automatically released, and the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable to evidence the release of such Collateral (not including Proceeds thereof) from the security interests created hereby. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at least five Business Days prior to the date of the proposed release, a written request for release identifying the relevant Subsidiary Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

8 16. WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

8.17. Effectiveness of Obligations. The covenants, agreements and other obligations hereunder of the Grantors will become effective concurrently with (but not prior to) the effectiveness of the Merger pursuant to the filing and acceptance of a certificate of merger with the Secretary of State of the State of Illinois (which the parties hereto intend to occur substantially concurrently with the funding of the Term Loans under the Credit Agreement), and thereupon such covenants, agreements and other obligations shall become fully effective and operative without any further grant, act, confirmation or consent by the Grantors.

32

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

AXLE HOLDINGS, INC.
By:	/s/ Thomas O’Brien
Name:	Thomas O’Brien
Title:	CEO

INSURANCE AUTO AUCTIONS, INC.
By:	/s/ Thomas O’Brien
Name:	Thomas O’Brien
Title:	CEO

IAA SERVICES, INC.
By:	/s/ Scott Pettit
Name:	Scott Pettit
Title:	CFO

IAA ACQUISITION CORP.
By:	/s/ Scott Pettit
Name:	Scott Pettit
Title:	CFO

INSURANCE AUTO AUCTIONS CORP.
By:	/s/ Scott Pettit
Name:	Scott Pettit
Title:	VP and CFO

GUARANTEE AND COLLATERAL AGREEMENT

AXLE MERGER SUB, INC.
By:	/s/ David I. Wahrhaftig
Name:	David I. Wahrhaftig
Title:	Vice President and Treasurer

GUARANTEE AND COLLATERAL AGREEMENT

BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent
By:	/s/ Bram Smith
Name:	Bram Smith
Title:	Vice President

GUARANTEE AND COLLATERAL AGREEMENT

EX-10.12

EXHIBIT 10.12

FORM OF MORTGAGE

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES

by

[INSURANCE AUTO AUCTIONS, INC.]

as Mortgagor

to

BEAR STEARNS CORPORATE LENDING INC.

as Mortgagee

Dated as of:                     , 2005

Property Address:

[                    ]

THIS INSTRUMENT WAS PREPARED BY AND

RECORD AND RETURN TO:

MICHELLE KELBAN

LATHAM & WATKINS LLP

885 THIRD AVENUE, SUITE 1000

NEW YORK, NY 10022

TABLE OF CONTENTS

1.	DEFINITIONS		1
2.	WARRANTIES, REPRESENTATIONS AND COVENANTS		3
	2.1	Title to Mortgaged Property and Lien of this Instrument	3
	2.2	First Lien Status	3
	2.3	Payment and Performance	3
	2.4	Replacement of Fixtures and Personalty	3
	2.5	Maintenance of Rights of Way, Easements and Licenses	3
	2.6	Inspection	4
	2.7	Other Covenants	4
	2.8	Condemnation Awards and Insurance Proceeds	4
	2.9	Transfer or Encumbrance of the Mortgaged Property	4
3.	DEFAULT AND FORECLOSURE		4
	3.1	Remedies	4
	3.2	Separate Sales	5
	3.3	Remedies Cumulative, Concurrent and Nonexclusive	6
	3.4	Release of and Resort to Collateral	6
	3.5	Waiver of Redemption, Notice and Marshalling of Assets	6
	3.6	Discontinuance of Proceedings	6
	3.7	Application of Proceeds	6
	3.8	Occupancy After Foreclosure	7
	3.9	Protective Advances and Disbursements; Costs of Enforcement	7
	3.10	No Mortgagee in Possession	7
4.	ASSIGNMENT OF RENTS AND LEASES		8
	4.1	Assignment	8
	4.2	No Obligation	8
	4.3	Right to Apply Rents	8
	4.4	No Merger of Estates	8
5.	SECURITY AGREEMENT		8
	5.1	Security Interest	8
	5.2	Financing Statements	9
	5.3	Fixture Filing	9
6.	MISCELLANEOUS		9
	6.1	Notices	9
	6.2	Covenants Running with the Land	9
	6.3	Attorney-in-Fact	9
	6.4	Successors and Assigns	10
	6.5	No Waiver	10
	6.6	Subrogation	10
	6.7	Credit Agreement	10
	6.8	Release	10
	6.9	Waiver of Stay, Moratorium and Similar Rights	10
	6.10	Obligations of Mortgagor, Joint and Several	10
	6.11	Governing Law	11
	6.12	Headings	11
	6.13	Entire Agreement	11

i

Exhibit A: legal description

INDEX OF DEFINED TERMS

Covenants	1
Credit Agreement	1
Fixtures	1
Hedging Agreements	1
Improvements	1
Land	1
Leases	2
Loan Documents	1
Mortgage	1
Mortgaged Property	1
Mortgagee	1
Mortgagor	1
Obligations	2
Permitted Liens	3
Personalty	2
Plans	2
Property Agreements	2
Rents	2
UCC	3

ii

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL

PURPOSES

This Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing for Commercial Purposes (this “Mortgage”) is executed as of             , 2005, by and from [INSURANCE AUTO AUCTIONS, INC.], an Illinois corporation (“Mortgagor”), whose address is Two Westbrook Corporate Center, Suite 500, Westchester, IL 60154, to BEAR STEARNS CORPORATE LENDING, INC., (“Mortgagee”), a Delaware corporation, as Administrative Agent for the Lenders under the Credit Agreement more fully described below, whose address is 383 Madison Avenue, New York, New York 10179.

1. DEFINITIONS

Capitalized terms used herein but not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement. As used herein, the following terms shall have the following meanings:

“Covenants”: All of the agreements, covenants, conditions, warranties, representations and other obligations made or undertaken by Mortgagor or any other person or entity to Mortgagee or others, as set forth in the Loan Documents.

“Loan Documents”: The (1) Credit Agreement dated as of May 19, 2005 among Axle Holdings, Inc. and Axle Merger Sub, Inc. (to be merged into Insurance Auto Auctions, Inc.), as borrower; the Lenders from time to time party thereto; Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., as joint lead arrangers and joint bookrunners; Deutsche Bank Securities Inc., as syndication agent; GMAC Commercial Finance LLC, ING Capital LLC and Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as co-documentation agents; and Bear Stearns Corporate Lending Inc., as administrative agent (the “Credit Agreement”), (2) the Security Documents, and the Notes, each as defined in the Credit Agreement, (3) this Mortgage, (4) all other documents now or hereafter executed by Mortgagor or any other person or entity to evidence or secure the payment and performance of the Obligations, (5) all modifications, restatements, consolidations, extensions, renewals and replacements of any of the foregoing, and (6) any Specified Hedge Agreement (the “Hedging Agreements”).

“Mortgaged Property”: All of Mortgagor’s right title and interest in or to (1) the real property described in Exhibit A, together with any greater estate therein as hereafter may be acquired by Mortgagor (the “Land”), (2) buildings, structures and other improvements, now or at any time situated, placed or constructed upon the Land (the “Improvements”), (3) fixtures, materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in or used in connection with any of the Improvements or the Land, and all water, gas, electrical, storm and sanitary sewer facilities and all other utilities whether or not situated in easements (the “Fixtures”), (4) all goods, instruments, documents, chattel paper and all other personal property of any kind or

character, including such items of personal property as defined in the UCC, now owned or hereafter acquired by Mortgagor and now or hereafter affixed to, placed upon, used in connection with, arising from or otherwise related to the Land and Improvements or that may be used in or relating to the planning, development, financing or operation of the Mortgaged Property, including, without limitation, furniture, furnishings, equipment, machinery, money, insurance proceeds, accounts, contract rights, goodwill, chattel paper, documents, property licenses and/or franchise agreements, rights of Mortgagor under leases of Fixtures or other personal property or equipment, inventory, all refundable, returnable or reimbursable fees, deposits or other funds or evidences of credit or indebtedness deposited by or on behalf of Mortgagor with any governmental authorities, boards, corporations, providers of utility services, public or private, including specifically, but without limitation, all refundable, returnable or reimbursable tap fees, utility deposits, commitment fees and development costs, but, in each case, only to the extent assignable (collectively, the “Personalty”), (5) reserves, escrows or impounds required under the Credit Agreement and all deposit accounts maintained by Mortgagor with respect to the Mortgaged Property, (6) plans, specifications, shop drawings and other technical descriptions prepared for construction, repair or alteration of the Improvements, and all amendments and modifications thereof (the “Plans”), (7) all leases, subleases, licenses, concessions, occupancy agreements or other agreements (written or oral, now or at any time in effect) which grant a possessory interest in, or the right to use, all or any part of the Mortgaged Property (the “Leases”), together with all related security and other deposits, (8) all of the rents, revenues, income, proceeds, profits, security and other types of deposits, and other benefits paid or payable by parties to the Leases other than Mortgagor for using, leasing, licensing, possessing, operating from, residing in, selling or otherwise enjoying the Mortgaged Property (the “Rents”). (9) to the extent assignable, all other agreements, such as construction contracts, architects’ agreements, engineers’ contracts, utility contracts, maintenance agreements, management agreements, service contracts, permits, licenses, certificates and entitlements in any way relating to the development, construction, use, occupancy, operation, maintenance, enjoyment, acquisition or ownership of the Mortgaged Property (the “Property Agreements”), (10) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing, and all right, title and interest, if any, of Mortgagor in and to any streets, ways, alleys, strips or gores of land adjoining the Land or any part thereof, (11) accessions, replacements and substitutions for any of the foregoing and all proceeds thereof,

(12) insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by Mortgagor, (13) all mineral, water, oil and gas rights now or hereafter acquired and relating to all or any part of the Mortgaged Property and (14) any awards, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any governmental authority pertaining to the Land, Improvements, Fixtures or Personalty. As used in this Mortgage, the term “Mortgaged Property” shall mean all or, where the context permits or requires, any portion of the above or any interest therein.

“Obligations”: As defined in the Credit Agreement, as well as all obligations arising under the Guarantee and Collateral Agreement (as defined in the Credit Agreement) and including, without limitation, all other indebtedness, obligations and liabilities now or hereafter existing of any kind of Mortgagor to Mortgagee under documents that recite that they are intended to be secured by this Mortgage.

2

“Permitted Liens”: The outstanding liens, easements, restrictions, security interests and other exceptions to title set forth in the policy of title insurance insuring the lien of this Mortgage issued on the date hereof, together with the liens and security interests in favor of Mortgagee created or permitted by the Loan Documents and/or Section 8.3 of the Credit Agreement.

“UCC”: The Uniform Commercial Code of the State of New York or, if the creation, perfection and enforcement of any security interest herein granted is governed by the laws of a state other than New York, then, as to the matter in question, the Uniform Commercial Code in effect in that state.

GRANT. To secure the full and timely payment and performance of the Obligations, Mortgagor MORTGAGES, GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS and HYPOTHECATES and CONVEYS the Mortgaged Property to Mortgagee, subject, however, to the Permitted Liens. The maturity date of the secured debt is            , 2012.

2. WARRANTIES, REPRESENTATIONS AND COVENANTS. Mortgagor warrants, represents and covenants to Mortgagee as follows:

2.1 Title to Mortgaged Property and Lien of this Instrument. Mortgagor owns the Mortgaged Property free and clear of any liens, claims or interests, except the Permitted Liens. This Mortgage creates a valid, enforceable first priority lien and security interest against the Mortgaged Property, except for the Permitted Liens.

2.2 First Lien Status. Mortgagor shall preserve and protect the first lien and security interest status of this Mortgage and the other Loan Documents. If any lien or security interest other than a Permitted Lien is asserted against the Mortgaged Property, Mortgagor shall promptly, and at its expense, (a) give Mortgagee a detailed written notice of such lien or security interest (including origin, amount and other terms), and (b) pay the underlying claim in full or take such other action so as to cause it to be released or contest the same in compliance with the requirements of the Credit Agreement (including the requirement of providing a bond or other security satisfactory to Mortgagee to the extent required by the Credit Agreement).

2.3 Payment and Performance. Mortgagor shall pay and perform the Obligations when due under the Loan Documents to which it is a party and shall perform the Covenants under the Loan Documents to which it is a party in full when they are required to be performed.

2.4 Replacement of Fixtures and Personalty. Except as permitted by the Credit Agreement, Mortgagor shall not, without the prior written consent of Mortgagee, not to be unreasonably withheld, permit any of the Fixtures or Personalty to be removed at any time from the Land or Improvements, unless the removed item is removed temporarily for maintenance and repair or, if removed permanently, is immaterial or is obsolete.

2.5 Maintenance of Rights of Way, Easements and Licenses. Mortgagor shall maintain all rights of way, easements, grants, privileges, licenses, certificates, permits, entitlements and franchises necessary for the use of the Mortgaged Property and will not, without the prior consent of Mortgagee, not to be unreasonably withheld or delayed, consent to any public restriction (including any zoning ordinance) or private restriction as to the use of the Mortgaged

3

Property which restriction is reasonably likely to materially and adversely effect the current use of the Mortgaged Property. Mortgagor shall comply in all material respects with all restrictive covenants affecting the Mortgaged Property, and all zoning ordinances and other public or private restrictions as to the use of the Mortgaged Property.

2.6 Inspection. Mortgagor shall permit Mortgagee, and Mortgagee’s respective agents, representatives and employees, to inspect the Mortgaged Property to the extent permitted in Section 7.6 of the Credit Agreement.

2.7 Other Covenants. All property-related covenants in the Credit Agreement are incorporated as though Mortgagor were the “Borrower” thereunder.

2.8 Condemnation Awards and Insurance Proceeds.

2.8.1 Condemnation Awards. Mortgagor assigns all awards and compensation for any condemnation or other taking, or any purchase in lieu thereof, to Mortgagee and authorizes Mortgagee to collect and receive such awards and compensation and to give proper receipts and acquaintances therefor, subject to the terms of the Credit Agreement.

2.8.2 Insurance Proceeds. Mortgagor assigns to Mortgagee all proceeds of any insurance policies insuring against loss or damage to the Mortgaged Property, subject to the terms of the Credit Agreement. Mortgagor authorizes and directs the issuer of each of such insurance policies to make payment for all such losses to Mortgagee, to be released by Mortgagee or applied in accordance with the terms of the Credit Agreement.

Notwithstanding the foregoing, Mortgagee shall make available to Mortgagor the foregoing awards, compensation and proceeds of condemnation and insurance, for the purpose of restoration and rebuilding the Mortgaged Property, to the same extent that Mortgagor or the borrowers would be entitled to retain Net Cash Proceeds in connection with a Recovery Event (as both of those terms are defined in the Credit Agreement), under the terms of the Credit Agreement.

2.9 Transfer or Encumbrance of the Mortgaged Property. Mortgagor shall not, except as and to the extent permitted in the Credit Agreement, sell, convey, alienate, mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or any part thereof, or permit the Mortgaged Property or any part thereof to be sold, conveyed, alienated, mortgaged, encumbered, pledged or otherwise transferred.

3. DEFAULT AND FORECLOSURE

3.1 Remedies. During the occurrence and continuance of an Event of Default (as defined in the Credit Agreement), Mortgagee may, at Mortgagee’s election and by or through Mortgagee or otherwise, exercise any or all of the following rights, remedies and recourses:

3.1.1 Acceleration. To the extent permitted by the Credit Agreement, declare the Obligations to be immediately due and payable, without further notice, presentment, protest, notice of intent to accelerate, notice of acceleration, demand or action of any nature whatsoever (each of which hereby is expressly waived by Mortgagor), whereupon the same shall become immediately due and payable.

4

3.1.2 Entry on Mortgaged Property. To the extent permitted by the Credit Agreement, enter the Mortgaged Property and take exclusive possession thereof and of all books, records and accounts relating thereto. If Mortgagor remains in possession of the Mortgaged Property after an Event of Default and without Mortgagee’s prior written consent, Mortgagee may invoke any legal remedies to dispossess Mortgagor.

3.1.3 Operation of Mortgaged Property. Hold, lease, develop, manage, operate or otherwise use the Mortgaged Property upon such terms and conditions as Mortgagee may deem reasonable under the circumstances (making such repairs, alterations, additions and improvements and taking other actions, from time to time, as Mortgagee deems necessary or desirable), and apply all Rents and other amounts collected by Mortgagee in connection therewith in accordance with the provisions of the Credit Agreement.

3.1.4 Foreclosure and Sale. Institute proceedings for the complete judicial or, to the extent permitted by applicable law, non-judicial foreclosure of this Mortgage, in which case the Mortgaged Property may be sold for cash or credit in one or more parcels. With respect to any notices required or permitted under the UCC, Mortgagor agrees that ten (10) days prior written notice shall be deemed commercially reasonable. At any such sale by virtue of any judicial proceedings or any other legal right, remedy or recourse, the title to and right of possession of any such property shall pass to the purchaser thereof, and to the fullest extent permitted by law, Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Mortgagor, and against all other persons claiming or to claim the property sold or any part thereof, by, through or under Mortgagor. Mortgagee may be a purchaser at such sale and if Mortgagee is the highest bidder, may credit the portion of the purchase price that would be distributed to Mortgagee against the Obligations in lieu of paying cash.

3.1.5 Receiver. Make application to a court of competent jurisdiction for, and obtain from such court as a matter of strict right and without notice to Mortgagor or regard to the adequacy of the Mortgaged Property for the repayment of the Obligations, the appointment of a receiver of the Mortgaged Property, and Mortgagor irrevocably consents to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain and otherwise operate the Mortgaged Property upon such terms as may be approved by the court, and shall apply such Rents in accordance with the provisions of the Credit Agreement.

3.1.6 Other. Exercise all other rights, remedies and recourses granted under the Loan Documents or otherwise available at law or in equity and under the UCC (including an action for specific performance of any covenant contained in the Loan Documents, or a judgment on the Notes either before, during or after any proceeding to enforce this Mortgage).

3.2 Separate Sales. During the occurrence and continuance of an Event of Default, Mortgagee may sell the Mortgaged Property in one or more parcels and in such manner and order as Mortgagee in its sole discretion may elect; the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

5

3.3 Remedies Cumulative, Concurrent and Nonexclusive. Mortgagee shall have all rights, remedies and recourses granted in the Loan Documents and available at law or equity (including the UCC), which rights (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Mortgagor or others obligated under the Notes and the other Loan Documents, or against the Mortgaged Property, or against any one or more of them, at the sole discretion of Mortgagee, (c) may be exercised as often as occasion therefor shall arise, and the exercise or failure to exercise any of them shall not be construed as a waiver or release thereof or of any other right, remedy or recourse, and (d) are intended to be, and shall be, nonexclusive. No action by Mortgagee in the enforcement of any rights, remedies or recourses under the Loan Documents or otherwise at law or equity shall be deemed to cure any Event of Default.

3.4 Release of and Resort to Collateral. Mortgagee may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Mortgaged Property, any part of the Mortgaged Property without, as to the remainder, in anyway impairing, affecting, subordinating or releasing the lien or security interests created in or evidenced by the Loan Documents or their stature as a first and prior lien and security interest in and to the remaining Mortgaged Property. For payment of the Obligations, Mortgagee may resort to any other security in such order and manner as Mortgagee may elect.

3.5 Waiver of Redemption, Notice and Marshalling of Assets. To the fullest extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefit that might accrue to Mortgagor by virtue of any present or future statute of limitations or law or judicial decision exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment, (b) all notices of any Event of Default or of Mortgagee’s election to exercise or its actual exercise of any right, remedy or recourse provided for under the Loan Documents, and (c) any right to a marshalling of assets or a sale in inverse order of alienation.

3.6 Discontinuance of Proceedings. If Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted under the Loan Documents and shall thereafter elect to discontinue or abandon it for any reason, Mortgagee shall have the unqualified right to do so and, in such an event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the Obligations, the Loan Documents, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Mortgagee shall continue as if the right, remedy or recourse had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default that may then exist or the right of Mortgagee thereafter to exercise any right, remedy or recourse under the Loan Documents for such Event of Default.

3.7 Application of Proceeds. The proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing, management, operation or other use of the Mortgaged Property, shall be applied by Mortgagee (or the receiver, if one is appointed) in the following order unless otherwise required by the Credit Agreement or applicable law:

6

3.7.1 to the payment of the costs and expenses actually incurred by Mortgagee in taking possession of the Mortgaged Property and of holding, using, leasing, repairing, improving and selling the same, including, without limitation: (1) Mortgagee’s and receiver’s reasonable fees and expenses, (2) court costs, (3) reasonable attorneys’ and accountants’ fees and expenses, (4) costs of advertisement, and (5) the payment of all ground rent, real estate taxes and assessments, except any taxes, assessments or other charges subject to which the Mortgaged Property shall have been sold;

3.7.2 to the payment of all amounts (including interest), other than the unpaid principal balance of the Note and accrued but unpaid interest, which may be due to Mortgagee under the Loan Documents;

3.7.3 to the payment of the Obligations and performance of the Covenants under the Loan Documents in such manner and order of preference as Mortgagee in its sole discretion may determine; and

3.7.4 the balance, if any, to the payment of the persons legally entitled thereto.

3.8 Occupancy After Foreclosure. The purchaser at any foreclosure sale pursuant to Section 4.1.4 shall become the legal owner of the Mortgaged Property. All occupants of the Mortgaged Property shall, at the option of such purchaser, become tenants of the purchaser at the foreclosure sale and shall deliver possession thereof immediately to the purchaser upon demand. It shall not be necessary for the purchaser at said sale to bring any action for possession of the Mortgaged Property other than the statutory action of forcible detainer in any justice court having jurisdiction over the Mortgaged Property.

3.9 Protective Advances and Disbursements; Costs of Enforcement.

3.9.1 If any Event of Default exists, Mortgagee shall have the right, but not the obligation, to cure such Event of Default in the name and on behalf of Mortgagor. All sums advanced and expenses incurred at any time by Mortgagee under this Section, or otherwise under this Mortgage or any of the other Loan Documents or applicable law, shall bear interest from the date that such sum is advanced or expense incurred, to and including the date of reimbursement, computed at the interest rate applicable to overdue Reimbursement Obligations under Section 4.5(c) of the Credit Agreement, and all such sums, together with interest thereon, shall be secured by this Mortgage.

3.9.2 Mortgagor shall pay all expenses (including reasonable attorneys’ fees and expenses) of or incidental to the perfection and enforcement of this Mortgage and the other Loan Documents, or the enforcement, compromise or settlement of the Obligations or any claim under this Mortgage and the other Loan Documents, and for the curing thereof, or for defending or asserting the rights and claims of Mortgagee in respect thereof, by litigation or otherwise.

3.10 No Mortgagee in Possession. Neither the enforcement of any of the remedies under this Article, the assignment of the Rents and Leases under Article 5, the security interests under Article 6, nor any other remedies afforded to Mortgagee under the Loan Documents, at law or in equity shall cause Mortgagee to be deemed or construed to be a mortgagee in possession of the Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or attempt to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability whatsoever under any of the Leases or otherwise.

7

4. ASSIGNMENT OF RENTS AND LEASES

4.1 Assignment. Mortgagor hereby grants to Mortgagee a present, absolute assignment of the Leases and Rents. While any Event of Default exists and is continuing, to the extent permitted by applicable law and subject to the terms of the Credit Agreement, Mortgagee shall be entitled to (a) notify any person that the Leases have been assigned to Mortgagee and that all Rents are to be paid directly to Mortgagee, whether or not Mortgagee has commenced or completed foreclosure or taken possession of the Mortgaged Property; (b) settle, compromise, release, extend the time of payment of, and make allowances, adjustments and discounts of any Rents or other obligations under the Leases; (c) enforce payment of Rents and other rights under the Leases, prosecute any action or proceeding, and defend against any claim with respect to Rents and Leases; (d) enter upon, take possession of and operate the Mortgaged Property; (e) lease all or any part of the Mortgaged Property; and/or (f) perform any and all obligations of Mortgagor under the Leases and exercise any and all rights of Mortgagor therein contained to the full extent of Mortgagor’s rights and obligations thereunder, with or without the bringing of any action or the appointment of a receiver.

4.2 No Obligation. Notwithstanding Mortgagee’s rights hereunder, Mortgagee shall not be obligated to perform, and Mortgagee does not undertake to perform, any obligation, duty or liability with respect to the Leases or Rents on account of this Mortgage. Mortgagee shall have no responsibility on account of this Mortgage for the control, care, maintenance or repair of the Mortgaged Property, for any waste committed on the Mortgaged Property, for any dangerous or defective condition of the Mortgaged Property, or for any negligence in the management, upkeep, repair or control of the Mortgaged Property except to the extent any of the foregoing are caused by Mortgagee or its agents.

4.3 Right to Apply Rents. Subject to the terms of the Credit Agreement, Mortgagee shall have the right, but not the obligation, to use and apply any Rents received hereunder in such order and such manner as Mortgagee may determine, including, without limitation, for: (a) the payment of costs and expenses of enforcing or defending the terms of this Mortgage or the rights of Mortgagee hereunder, and collecting any Rents and (b) the payment of costs and expenses of the operation and maintenance of the Mortgaged Property.

4.4 No Merger of Estates. So long as any part of the Obligations and Covenants secured hereby remain unpaid and undischarged, the fee and leasehold estates to the Mortgaged Property shall not merge, but shall remain separate and distinct, notwithstanding the union of such estates either in Mortgagor, Mortgagee, any lessee or any third party by purchase or otherwise.

5. SECURITY AGREEMENT

5.1 Security Interest. This Mortgage constitutes a “Security Agreement” on personal property within the meaning of the UCC and other applicable law and with respect to the Personalty, Fixtures, Plans, Leases, Rents and Property Agreements. To this end, Mortgagor

8

grants to Mortgagee a first and prior security interest in the Personality, Fixtures, Plans, Leases, Rents and Property Agreements and all other Mortgaged Property that is personal property to secure the payment of the Obligations and performance of the Covenants under the Loan Documents (subject to the Permitted Liens) and agrees that Mortgagee shall have all the rights and remedies of a secured party under the UCC with respect to such property. Any notice of sale, disposition or other intended action by Mortgagee with respect to the Personality, Fixtures, Plans, Leases, Rents and Property Agreement sent to Mortgagor at least ten days prior to any action under the UCC shall constitute reasonable notice to Mortgagor.

5.2 Financing Statements. Mortgagor shall execute and deliver to Mortgagee, in form and substance satisfactory to Mortgagee, such financing statements and such further assurances as Mortgagee may, from time to time, reasonably consider necessary to create, perfect and preserve Mortgagee’s security interest hereunder and Mortgagee may cause such statements and assurances to be recorded and filed, at such times and places as may be required or permitted by law to so create, perfect and preserve such security interest.

5.3 Fixture Filing. This Mortgage shall also constitute a “fixture filing” for the purposes of the UCC against all of the Mortgaged Property that is or is to become fixtures. Information concerning the security interest herein granted may be obtained at the addresses of Debtor (Mortgagor) and Secured Party (Mortgagee) as set forth in the first paragraph of this Mortgage.

6. MISCELLANEOUS

6.1 Notices. Any notice required or permitted to be given under this Mortgage shall be given in accordance with Section 11.2 of the Credit Agreement.

6.2 Covenants Running with the Land. All Obligations contained in this Mortgage are intended by Mortgagor and Mortgagee to be, and shall be construed as, covenants running with the Mortgaged Property. As used herein, “Mortgagor” shall refer to the party named in the first paragraph of this Mortgage and to any subsequent owner of all or any portion of the Mortgaged Property (without in any way implying that Mortgagee has or will consent to any such conveyance or transfer of the Mortgaged Property). All persons or entities who may have or acquire an interest in the Mortgaged Property shall be deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Loan Documents; however, no such party shall be entitled to any rights thereunder without the prior written consent of Mortgagee.

6.3 Attorney-in-Fact. Mortgagor hereby irrevocably appoints Mortgagee and its successor sand assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to execute and/or record any notices of completion, cessation of labor or any other notices that Mortgagee deems appropriate to protect Mortgagee’s interest, if Mortgagor shall fail to do so within ten (10) days after written request by Mortgagee, (b) upon the issuance of a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment, conveyance or further assurance with respect to the Leases, Rents, Personalty, Fixtures, Plans and Property Agreements in favor of the grantee of any such deed and as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements and applications for registration necessary to

9

create, perfect or preserve Mortgagee’s security interests and rights in or to any of the Mortgaged Property, and (d) while any Event of Default exists and is continuing, to perform any obligation of Mortgagor hereunder; however: (1) Mortgagee shall not under any circumstances be obligated to perform any obligation of Mortgagor; (2) any sums advanced by Mortgagee in such performance shall be added to and included in the Obligations and shall bear interest at the interest rate applicable to overdue Reimbursement Obligations under Section 4.5(c) of the Credit Agreement; (3) Mortgagee as such attorney-in-fact shall only be accountable for such funds as are actually received by Mortgagee; and (4) Mortgagee shall not be liable to Mortgagor or any other person or entity for any failure to take any action that it is empowered to take under this Section.

6.4 Successors and Assigns. This Mortgage shall be binding upon and inure to the benefit of Mortgagee and Mortgagor and their respective successors and assigns. Mortgagor shall not, without the prior written consent of Mortgagee, assign any rights, duties or obligations hereunder.

6.5 No Waiver. Any failure by Mortgagee to insist upon strict performance of any of the terms, provisions or conditions of the Loan Documents shall not be deemed to be a waiver of same, and Mortgagee shall have the right at any time to insist upon strict performance of all of such terms, provisions and conditions.

6.6 Subrogation. To the extent proceeds of the Loan have been used to extinguish, extend or renew any indebtedness against the Mortgaged Property, then Mortgagee shall be subrogated to all of the rights, liens and interests existing against the Mortgaged Property and held by the holder of such indebtedness and such former rights, liens and interests, if any, are not waived, but are continued in full force and effect in favor of Mortgagee.

6.7 Credit Agreement. If any conflict or inconsistency exists between this Mortgage and the Credit Agreement, the Credit Agreement shall govern.

6.8 Release. Upon payment in full of the Obligations, the termination or expiration of all Commitments (as defined in the Credit Agreement), and provided that no Letter of Credit (as defined in the Credit Agreement) shall be outstanding, Mortgagee, at Mortgagor’s expense, shall release the liens and security interests created by this Mortgage or, at Mortgagor’s request (but at no cost to Mortgagee) assign this Mortgage to a Mortgagee designated by Mortgagor.

6.9 Waiver of Stay, Moratorium and Similar Rights. Mortgagor agrees, to the full extent that it may lawfully do so, that it will not at any time insist upon or plead or in any way take advantage of any appraisement, valuation, stay, marshalling of assets, extension, redemption or moratorium law now or hereafter in force and effect so as to prevent or hinder the enforcement of the provisions of this Mortgage or the indebtedness secured hereby, or any agreement between Mortgagor and Mortgagee or any rights or remedies of Mortgagee.

6.10 Obligations of Mortgagor, Joint and Several. If more than one person or entity has executed this Mortgage as “Mortgagor,” the obligations of all such persons or entities hereunder shall be joint and several.

10

6.11 Governing Law. This Mortgage shall be governed by the laws of the State in which the Land is located.

6.12 Headings. The Article, Section and Subsection titles hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such Articles, Sections or Subsections.

6.13 Entire Agreement. This Mortgage and the other Loan Documents embody the entire agreement and understanding between Mortgagee and Mortgagor and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

[STATE SPECIFIC PROVISIONS]

11

IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date first above written.

[                            ]

By:

Name:

Title:

[STATE SPECIFIC NOTARY BLOCK]

EXHIBIT A

[Legal Description]

TO BE PROVIDED

EX-10.13

Exhibit 10.13

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of May 25, 2005 (as amended, supplemented or otherwise modified from time to time, the “Intellectual Property Security Agreement”), is made by each of the signatories hereto (collectively, the “Grantors”) in favor of Bear Stearns Corporate Lending Inc. as administrative agent (in such capacity, the “Administrative Agent”) for the Secured Parties (as defined in the Credit Agreement referred to below).

A. Insurance Auto Auctions, Inc., an Illinois corporation (the “Borrower”) (successor by merger to Axle Merger Sub, Inc., an Illinois corporation), and Axle Holdings, Inc., a Delaware corporation (“Holdings”), have entered into a Credit Agreement, dated as of May 19, 2005 (as amended, supplemented, or otherwise modified from time to time, the “Credit Agreement”), the financial institutions from time to time party thereto as lenders (the “Lenders”), Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners, GMAC Commercial Finance LLC, ING Capital LLC and Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as co-documentation agents, Deutsche Bank Securities Inc., as syndication agent, and the Administrative Agent.

B. It is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered that certain Guarantee and Collateral Agreement, dated as of May 25, 2005 in favor of the Administrative Agent (as amended, supplemented, replaced or otherwise modified from time to time, the “Guarantee and Collateral Agreement”). Capitalized terms used and not defined herein have the meanings given such terms in the Credit Agreement or the Guarantee and Collateral Agreement, as applicable.

C. Under the terms of the Guarantee and Collateral Agreement, the Grantors have granted a security interest in certain Property, including without limitation certain Intellectual Property of the Grantors to the Administrative Agent, for the benefit of the Secured Parties, and have agreed as a condition thereof to execute this Intellectual Property Security Agreement for recording with the United States Patent and Trademark Office, the United States Copyright Office, and other applicable Governmental Authorities.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantors agree as follows:

SECTION 1. Grant of Security. Each Grantor hereby grants to the Administrative Agent for the benefit of the Secured Parties a security interest in and to all of such Grantor’s right, title and interest in and to all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations (as defined in the Guarantee and Collateral Agreement):

(a) (i) all United States trademarks, service marks, trade names, domain names, corporate names, company names, business names, trade dress, trade styles or logos and all registrations of and applications to register the foregoing (except for “intent-to-use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed and accepted) and any new renewals thereof, including each registration and application identified in Schedule 1, (ii) the right to sue or otherwise recover for any and all past, present and future

infringements and dilutions thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements and dilutions thereof) and (iv) all other rights of any kind whatsoever accruing thereunder or pertaining thereto, together in each case with the goodwill of the business connected with the use of, and symbolized by, each of the above;

(b) (i) all United States patents, patent applications, including without limitation each issued patent and patent application identified on Schedule 1, (ii) all inventions and improvements described and claimed therein, (iii) the right to sue or otherwise recover for any and all past, present and future infringements thereof, (iv) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof) and (v) all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon and all other rights of any kind whatsoever accruing thereunder or pertaining thereto;

(c) (i) all United States copyrights, whether or not the underlying works of authorship have been published, and all copyright registrations and copyright applications, and any renewals or extensions thereof, including each registration identified on Schedule 1, (ii) the right to sue or otherwise recover for any and all past, present and future infringements thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof) and (iv) all other rights of any kind whatsoever accruing thereunder or pertaining thereto; and

(d) any and all Proceeds of the foregoing.

SECTION 2. Recordation. Each Grantor authorizes and requests that the United States Register of Copyrights or the United States Commissioner of Patents and Trademarks, as applicable, record this Intellectual Property Security Agreement.

SECTION 3. Execution in Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or electronic pdf), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

SECTION 4. Governing Law. This Intellectual Property Security Agreement shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

SECTION 5. Conflict Provision. This Intellectual Property Security Agreement has been entered into in conjunction with the provisions of the Guarantee and Collateral Agreement and the Credit Agreement. The rights and remedies of each party hereto with respect to the security interest granted herein are without prejudice to, and are in addition to those set forth in the Guarantee and Collateral Agreement and the Credit Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Intellectual Property Security Agreement are in conflict with the Guarantee and Collateral Agreement or the Credit Agreement, the provisions of the Guarantee and Collateral Agreement or the Credit Agreement shall govern.

IN WITNESS WHEREOF, each of the undersigned has caused this Intellectual Property Security Agreement to be duly executed and delivered as of the date first above written.

INSURANCE AUTO AUCTIONS, INC.
By:	/s/ Sidney L. Kerley
	Name: Sidney L. Kerley
	Title: VP and General Counsel

STATE OF ILLINOIS	)
	:	ss.:
COUNTY OF COOK	)

On this 20th day of May, 2005, before me personally appeared Sidney L. Kerley , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the entity upon behalf of which the person acted executed the instrument.

/s/ Dena S. Strand

Notary Public

My commission expires:

BEAR STEARNS CORPORATE LENDING INC., as Administrative Agent
By:	/S/ R. BRAM SMITH
	Name: Bram Smith
	Title: Vice President

Schedule 1

Borrower/Grantor	Trademarks	Filing Date (Application Date)		Status	Registration No. (Application No.)
Insurance Auto Auctions, Inc.	BIDFAST	2/12/1991		Registered	1,782,221
Insurance Auto Auctions, Inc.	DATALINK	3/11/1996		Registered	2,382,030
Insurance Auto Auctions, Inc.	FASTTOW	2/12/1991		Registered	1,783,610
Insurance Auto Auctions, Inc.	FASTTRACK	2/12/1991		Registered	1,788,966
Insurance Auto Auctions, Inc.	IAA	5/17/1994		Registered	1,900,846
Insurance Auto Auctions, Inc.	IAA & Design	5/5/1994		Registered	1,899,150
Insurance Auto Auctions, Inc.	IAA AUCTION CLUB	4/11/1995		Registered	1,966,717
Insurance Auto Auctions, Inc.	IAA AUCTION CLUB & Design	5/15/1995		Registered	1,968,483
Insurance Auto Auctions, Inc.	INSURANCE AUTO AUCTIONS	11/20/2003		Pending	(78/330,562	)
Insurance Auto Auctions, Inc.	INSURANCE AUTO AUCTIONS (Supplemental Registered)	6/20/1990		Registered	1,839,138
Insurance Auto Auctions, Inc.	RUN & DRIVE	4/9/1999		Registered	2,387,323
Insurance Auto Auctions, Inc.	SUREPAY	2/12/1991		Registered	1,794,418
Insurance Auto Auctions, Inc.	VIC/SMARTLOSS	6/1/1995		Registered	1,980,959
Insurance Auto Auctions, Inc.	CSATODAY	(3/2/2005	)	Pending	(78/578,485	)

Borrower/Grantor	Trademarks	Filing Date (Application Date)		Status	Registration No. (Application No.)
Insurance Auto Auctions, Inc.	I-BID LIVE	(3/2/3005	)	Pending	(78/578,528	)

EX-10.14

Exhibit 10.14

EXECUTION VERSION

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

AXLE HOLDINGS II, LLC

Table of Contents

		Page
ARTICLE I DEFINED TERMS
Section 1.1	Definitions	1
ARTICLE II FORMATION OF THE COMPANY
Section 2.1	Formation	9
Section 2.2	Company Name	9
Section 2.3	The Certificate, etc.	9
Section 2.4	Term of Company	9
Section 2.5	Registered Agent and Office	10
Section 2.6	Principal Place of Business	10
Section 2.7	Qualification in Other Jurisdictions	10
Section 2.8	Fiscal Year; Taxable Year	10
ARTICLE III PURPOSE AND POWERS OF THE COMPANY
Section 3.1	Purpose	10
Section 3.2	Powers of the Company	10
Section 3.3	Certain Tax Matters	10
ARTICLE IV MEMBERS
Section 4.1	Powers of Members	11
Section 4.2	Units Generally	11
Section 4.3	Meetings of Members	12
Section 4.4	Business Transactions of a Member with the Company	13
Section 4.5	No Cessation of Membership upon Bankruptcy	14
Section 4.6	Noncompetition; Confidentiality and Nonsolicitation	14
Section 4.7	Other Business for Kelso Members	18
Section 4.8	Additional Members	18
ARTICLE V MANAGEMENT
Section 5.1	Board	20
Section 5.2	Meetings of the Board	21
Section 5.3	Quorum and Acts of the Board	21
Section 5.4	Electronic Communications	21
Section 5.5	Committees of Directors	21
Section 5.6	Compensation of Directors	22
Section 5.7	Resignation	22

Table of Contents

(continued)

		Page
Section 5.8	Removal of Directors	22
Section 5.9	Vacancies	22
Section 5.10	Directors as Agents	23
Section 5.11	Officers	23
Section 5.12	Holdings Funding	23
ARTICLE VI INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.1	Representations, Warranties and Covenants of Members	23
Section 6.2	Additional Representations and Warranties of Management Members and Investor Members	25
Section 6.3	Additional Representations and Warranties of Kelso Members	25
Section 6.4	Certain Members	26
ARTICLE VII CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS
Section 7 1	Capital Accounts	26
Section 7.2	Adjustments	26
Section 7.3	Capital Contributions	27
Section 7.4	Additional Capital Contributions by Kelso	27
Section 7.5	Additional Capital Contributions	28
Section 7.6	Negative Capital Accounts	28
ARTICLE VIII ADDITIONAL TERMS APPLICABLE TO OVERRIDE UNITS
Section 8.1	Certain Terms	28
Section 8.2	Effects of Termination of Employment on Override Units	29
Section 8.3	Nontransferability of Awards	32
ARTICLE IX ALLOCATIONS
Section 9.1	Book Allocations of Net Profit and Net Loss	32
Section 9.2	Special Book Allocations	32
Section 9.3	Tax Allocations	33
ARTICLE X DISTRIBUTIONS
Section 10.1	Distributions Generally	34
Section 10.2	Distributions In Kind	35
Section 10.3	No Withdrawal of Capital	35
Section 10.4	Withholding	35
Section 10.5	Restricted Distributions	36
Section 10.6	Tax Distributions	36
Section 10.7	Benchmark Adjustment	36

ii

Table of Contents

(continued)

		Page
ARTICLE XI BOOKS AND RECORDS
Section 11.1	Books, Records and Financial Statements	36
Section 11.2	Filings of Returns and Other Writings; Tax Matters Partner	37
Section 11.3	Accounting Method	38
ARTICLE XII LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 12.1	Liability	38
Section 12.2	Exculpation	38
Section 12.3	Fiduciary Duty	38
Section 12.4	Indemnification	38
Section 12.5	Expenses	39
Section 12.6	Severability	39
ARTICLE XIII TRANSFERS OF INTERESTS
Section 13.1	Restrictions on Transfers of Interests by Investor Members and Management Members	39
Section 13.2	Estate Planning Transfers; Transfers upon Death of an Investor Member or Management Member; Affiliate Transfers	39
Section 13.3	Effect of Assignment	40
Section 13.4	Overriding Provisions	40
Section 13.5	Put and Call Rights	41
Section 13.6	Involuntary Transfers	43
Section 13.7	Assignment by the Company	44
Section 13.8	Substitute Members	,44
Section 13.9	Release of Liability	45
Section 13.10	Tag-Along and Drag-Along Rights	45
Section 13.11	Initial Public Offering	48
ARTICLE XIV DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1	Dissolving Events	48
Section 14.2	Dissolution and Winding-Up	49
Section 14.3	Distributions in Cash or in Kind	49
Section 14.4	Termination	50
Section 14.5	Claims of the Members	50

iii

Table of Contents

(continued)

		Page
ARTICLE XV MISCELLANEOUS
Section 15.1	Notices	50
Section 15.2	Securities Act Matters	51
Section 15.3	Headings	51
Section 15.4	Entire Agreement	51
Section 15.5	Counterparts	51
Section 15.6	Governing Law; Attorneys’ Fees	51
Section 15.7	Waiver of Jury Trial	51
Section 15.8	Waiver of Partition	52
Section 15.9	Severability	52
Section 15.10	Further Actions	52
Section 15.11	Amendments	52
Section 15.12	Power of Attorney	53
Section 15.13	Fees and Expenses	53

iv

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

AXLE HOLDINGS II, LLC

This Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, a Delaware limited liability company (the “Company”) is made as of May 25, 2005 by and among the individuals or entities listed under the heading “Kelso Members” on Schedule A hereto (each a “Kelso Member” and collectively, the “Kelso Members”), Thomas C. O’Brien, Scott Pettit, David Montgomery, Don Hermanek, John Kett, John Nordin and Sidney Kerley (each a “Management Member” and collectively, the “Management Members,” which term shall also include such other management employees of the Company and its Affiliates as shall become members of the Company after the date hereof in accordance with Section 4.8 of this Agreement), the entities listed under the heading “Parthenon Members” on Schedule A hereto (each a “Parthenon Member” and the collectively, the “Parthenon Members”), Magnetite Asset Investors III L.L.C. (“Magnetite,”), Brian T. Clingen and Dan Simon (each an “Investor Member” and, together with the Parthenon Members and Magnetite, collectively the “Investor Members,” which term shall also include those other individuals or entities who become members of the Company and are designated “Investor Members” after the date hereof in accordance with Section 4.8 of this Agreement). The Kelso Members, the Investor Members and the Management Members are collectively referred to herein as the “Members.” Any capitalized term used herein without definition shall have the meaning set forth in Article I.

ARTICLE I

DEFINED TERMS

Section 1.1 Definitions.

“Accounting Period” means, for the first Accounting Period, the period commencing on the day after the Initial Capital Contribution Date and ending on the next Adjustment Date. All succeeding Accounting Periods shall commence on the day after an Adjustment Date and end on the next Adjustment Date.

“Additional Capital Contribution Event” shall have the meaning set forth in Section 7.4(a).

“Additional Member” shall have the meaning set forth in Section 4.8(a).

“Adjustment Date” means the last day of each fiscal year of the Company or any other date determined by the Board, in its sole discretion, as appropriate for an interim closing of the Company’s books.

“Affiliate” means, with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“Agreement” means this Limited Liability Company Agreement of the Company, as this agreement may be amended, modified, supplemented or restated from time to time after the date hereof.

“Applicable Performance Percentage” shall have the meaning set forth in Section

“Auction Services Business” shall have the meaning set forth in Section 4.6(a)(i).

“Benchmark Amount” shall have the meaning set forth in Section 8.1(e).

“Board” shall have the meaning set forth in Section 5.1(a).

“Business Day” means any day of the week other than a Saturday, Sunday or a day on which the commercial banks in New York City are not open for business.

“Call Rights” shall have the meaning set forth in Section 13.5(b).

“Capital Account” shall have the meaning set forth in Section 7.1.

“Capital Contribution” means, for any Member, the total amount of cash and the Fair Market Value of any property contributed to the Company by such Member (including any capital deemed contributed pursuant to the provisions of the penultimate sentence of Section 7.5), as such amount is set forth opposite the name of such Member on Schedule A hereto under the heading “Capital Contribution.”

“Carrying Value” means with respect to any Interest purchased by the Company, the value equal to the Capital Contribution made by the selling Management Member in respect of any such Interest less the amount of distributions made in respect of such Interest.

“Certificate” means the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on behalf of the Company with the office of the Secretary of State of the State of Delaware pursuant to the Delaware Act.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” shall have the meaning set forth in the recitals to this Agreement.

2

“Common Units” mean a class of Interests in the Company, as described in Section 4.2(a). For the avoidance of doubt, Common Units shall not include Override Units.

“Compensation Committee” shall have the meaning set forth in Section 4.8(a).

“Confidential Information” shall have the meaning set forth in Section 4.6(b).

“Covered Person” means a current or former Member or Director, an Affiliate of a current or former Member or Director, any officer, director, shareholder, partner, member, employee, representative or agent of a current or former Member or Director or any of their respective Affiliates, or any current or former officer, employee or agent of the Company or any of its Affiliates.

“Deficit” shall have the meaning set forth in Section 9.2(a).

“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et seq., as amended from time to time.

“Directors” shall have the meaning set forth in Section 5.1 (a).

“Disability” means with respect to a Management Member, the termination of the employment of any Management Member by the Company or any Subsidiary of the Company that employs such individual (or by the Company on behalf of any such Subsidiary) as a result of such Management Member’s incapacity due to reasonably documented physical or mental illness that shall have prevented such Management Member from performing his or her duties for the Company on a full-time basis for more than six months and within 30 days after written notice has been given to such Management Member, such Management Member shall not have returned to the full time performance of his or her duties, in which case the date of termination shall be deemed to be the last day of the aforementioned 30-day period, provided that in the case of any Management Member who, as of the date of determination, is party to an effective services, severance or employment agreement with the Company or any Subsidiary of the Company that employs such individual, “Disability” shall have the meaning, if any, specified in such agreement.

“Distributable Amount” shall have the meaning set forth in Section 10.2.

“Drag-Along Right” shall have the meaning set forth in Section 13.10(b).

“Exit Event” shall mean a transaction or series of transactions (other than an Initial Public Offering):

(a) involving the sale, transfer or other disposition by the Kelso Members to one or more Persons that are not, immediately prior to such sale, Affiliates of the

3

Company or any Kelso Member, of all of the Interests of the Company beneficially owned by the Kelso Members as of the date of such transaction; or

(b) involving the sale, Transfer or other disposition of all of the assets of the Company and its Subsidiaries, taken as a whole, to one or more Persons that are not, immediately prior to such sale, transfer or other disposition, Affiliates of the Company or any Kelso Member. For the avoidance of doubt, assets of the Company shall include, without limitation, shares of common stock of Axle Holdings, Inc., a Delaware corporation, that are held by the Company.

“Fair Market Value” means, as of any date,

(a) for purposes of determining the value of any property owned by, contributed to or distributed by the Company, (i) in the case of publicly-traded securities, the average of their last sales prices on the applicable trading exchange or quotation system on each trading day during the five trading-day period ending on such date and (ii) in the case of any other property, the fair market value of such property, as determined in good faith by the Board, or

(b) for purposes of determining the value of any Member’s Interest in connection with Section 13.5 (“Puts and Calls”) and Section 13.6 (“Involuntary Transfers”), (i) the fair market value of such Interest as reflected in the most recent appraisal report prepared, at the request of the Board, by an independent valuation consultant or appraiser of recognized national standing, reasonably satisfactory to Kelso, or (ii) in the event no such appraisal exists or the date of such report is more than one year prior to the date of determination, the fair market value of such Interest as determined in good faith by the Board.

“Financing Documents” shall have the meaning set forth in Section 13.5(c).

“Final Value” shall mean the total Fair Market Value of all distributions received by Kelso from the Company in respect of Kelso’s investment in the Company, calculated giving simultaneous effect to the applicable level of participation of Value Units in distributions pursuant to Section 8.1(b).

“IAAI” means Insurance Auto Auctions, Inc., an Illinois corporation.

“Inactive Management Member” shall have the meaning set forth in Section 8.2.

“Initial Capital Contribution” shall mean, with respect to a Member, the Capital Contribution to be made by such Member on the Initial Capital Contribution Date, as set forth on Schedule A.

“Initial Capital Contribution Date” shall mean the date of this Agreement.

4

“Initial Public Offering” or “IPO” means the first underwritten public offering of the common stock of Newco or a Subsidiary of the Company to the general public through a registration statement filed with the Securities and Exchange Commission that covers (together with prior effective registrations) (i) not less than 25% of the then outstanding shares of common stock of Newco or such Subsidiary of the Company on a fully diluted basis or (ii) shares of Newco or such Subsidiary of the Company that will be traded on any of the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automated Quotation System after the close of any such general public offering.

“Initial Value” means Kelso’s aggregate Capital Contributions to the Company.

“Interest” means the limited liability interest in the Company which represents the interest of each Member in and to the profits and losses of the Company, such Member’s right to receive distributions of the Company’s assets, as set forth in this Agreement.

“Investor Member” has the meaning set forth in the recitals to this Agreement.

“Involuntary Transfer” shall have the meaning set forth in Section 13.6.

“Involuntary Transferee” shall have the meaning set forth in Section 13.6.

“IRR” shall have the meaning set forth in Section 8.1(b).

“Kelso” means Kelso Investment Associates VII, L.P., a Delaware limited partnership, together with KEP VI, LLC, a Delaware limited liability company.

“Kelso Advisory Agreement” shall mean the financial advisory agreement, dated as of February 22, 2005, between Axle Merger Sub, Inc. and Kelso & Company, L.P.

“Kelso Investment Multiple” shall have the meaning set forth in Section 8.1(b).

“Kelso Member” has the meaning set forth in the recitals to this Agreement.

“Lender Financial Information” has the meaning set forth in Section 1 l.l(b).

“Magnetite” has the meaning set forth in the recitals to this Agreement.

“Management Members” has the meaning set forth in the recitals to this Agreement. A Management Member shall be deemed not to be a “manager” within the meaning of the Delaware Act (except to the extent Section 5.1(b)(i) applies).

“Majority in Interest” means the holders of a majority of the Units (as defined in Section 4.2) held by Members having the right to vote at a meeting of the Members.

“Maximum Amount” shall have the meaning set forth in Section 13.5(c).

5

“Member” has the meaning set forth in the recitals to this Agreement and includes any Person admitted as an additional or substitute Member of the Company pursuant to this Agreement.

“Net Profits” and “Net Losses” means, with respect to any Accounting Period, net income or net loss of the Company for such Accounting Period, determined in accordance with § 703(a) of the Code, including any items that are separately stated for purposes of § 702(a) of the Code, as determined in accordance with federal income tax accounting principles with the following adjustments:

(a) any income of the Company that is exempt from United States federal income tax shall be included as income;

(b) any expenditures of the Company described in § 705(a)(2)(B) of the Code or treated as expenditures pursuant to § 1.704-l(b)(2)(iv)(i) of the Treasury Regulations shall be treated as current expenses;

(c) any items of income, gain, loss or deduction specially allocated pursuant to this Agreement, including pursuant to Section 9.2, shall be excluded from the determination of Net Profit and Net Loss; and

(d) treating as an item of gain (loss) the excess (deficit), if any, of the gross fair market value of property distributed in such Accounting Period over (under) the amount at which such property was carried on the books of the Company.

“Newco” shall have the meaning set forth in Section 13.11(b).

“Officer” shall have the meaning set forth in Section 5.11.

“Operating Units” mean a sub-class of Override Units, as described in Section 4.2(b).

“Override Units” means either Operating Units or Value Units, or both, as described in Section 4.2(b).

“Parthenon Members” shall have the meaning set forth in the recitals to this Agreement.

“Partnership Minimum Gain” shall have the meaning set forth in sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.

“Person” means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, or other legal entity or organization.

“Put Rights” shall have the meaning set forth in Section 13.5(a).

6

“Registration Rights Agreement” means the registration rights agreement dated as of April 1, 2005, by and between Axle Holdings, Inc. and Axle Holdings II, LLC, as the same may be amended or supplemented from time to time.

“resignation for Good Reason” means a voluntary termination of a Management Member’s employment with the Company or any Subsidiary of the Company that employs such individual by such Management Member of his employment with the Company or any such Subsidiary as a result of either of the following:

(a) without the Management Member’s prior written consent, a significant reduction by the Company or any such Subsidiary of his or her current salary, other than any such reduction which is part of a general salary reduction or other concessionary arrangement affecting all employees or affecting the group of employees of which the Management Member is a member (after receipt by the Company or such Subsidiary of written notice from such Management Member and the expiration of a 20-day cure period); or

(b) the taking of any action by the Company or any such Subsidiary that would substantially diminish the aggregate value of the benefits provided him or her under the Company’s or such Subsidiary’s accident, disability, life insurance and any other employee benefit plans in which he or she was participating on the date of his or her execution of this Agreement, other than any such reduction which is (i) required by law, (ii) implemented in connection with a general concessionary arrangement affecting all employees or affecting the group of employees of which the Management Member is a member, (iii) generally applicable to all beneficiaries of such plans (after receipt by the Company or such Subsidiary of written notice and the expiration of a 20-day cure period) or (iv) in accordance with the terms of any such plan.

or, if such Management Member is a party to a services, severance or employment agreement with the Company or any Subsidiary of the Company that employs such individual, the meaning as set forth in such services or employment agreement.

“Retirement” means the voluntary termination of a Management Member’s employment with the Company or any Subsidiary of the Company that employs such individual on or after the date the Management Member attains age 65. Notwithstanding the foregoing, (i) with respect to any Management Member who is a party to a services or employment agreement with the Company or any Subsidiary of the Company that employs such individual, “Retirement” shall have the meaning, if any, specified in such Management Member’s services, severance or employment agreement and (ii) in the event a Management Member whose employment with the Company terminates due to Retirement continues to serve as a Director of or a consultant to the Company, his or her employment with the Company shall not be deemed to have terminated for purposes of Sections 8.3 and 13.5 until the date as of which such Management Member’s

7

services as a Director of or consultant to the Company shall have also terminated, at which time the Management Member shall be deemed to have terminated employment due to retirement.

“Rule 144” shall have the meaning set forth in Section 6.1(b).

“Securities Act” means the Securities Act of 1933 as amended from time to time.

“Special Termination” shall have the meaning set forth in Section 8.3(a).

“Shareholders Agreement” means the Shareholders Agreement, dated as of May 25, 2005, among Axle Holdings, Inc., the Company and the individuals named therein, as the same may be amended, modified, supplemented or restated, from time to time.

“Subject Members” means the Investor Members (including the Parthenon Members) and the Management Members.

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person (either alone or through or together with any other Subsidiary) (a) owns, directly or indirectly, fifty percent (50%) or more of the stock, partnership interests or other equity interests which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, partnership, joint venture of other legal entity; or (b) possesses, directly or indirectly, control over the direction of management or policies of such corporation, partnership, joint venture or other legal entity (whether through ownership of voting securities, by agreement or otherwise).

“Subsidiary Board” shall have the meaning set forth in Section 5.1(b)(ii).

“Tag-Along Rights” shall have the meaning set forth in Section 13.10(a).

“Tax Matters Partner” shall have the meaning set forth in Section 11.2(b).

“termination for Cause” means a termination of a Management Member’s employment by the Company or any Subsidiary of the Company that employs such individual (or by the Company on behalf of any such Subsidiary) due to such Management Member’s (i) refusal or neglect to perform substantially his or her employment-related duties, (ii) personal dishonesty, incompetence, willful misconduct or breach of fiduciary duty, (iii) conviction of or entering a plea of guilty or nolo contendere (or any applicable equivalent thereof) to a crime constituting a felony (or a crime or offense of equivalent magnitude in any jurisdiction) or his or her willful violation of any law, rule, or regulation (other than a traffic violation or other offense or violation outside of the course of employment which in no way adversely affects the Company and its Subsidiaries or its reputation or the ability of the Management Member to perform his or her employment-related duties or to represent the Company or any of its Subsidiaries that employs such Management Member) or (iv) material breach of any covenant or agreement with the Company or any of its Subsidiaries, or any written policy of the Company or any of its

8

Subsidiaries, not to disclose any information pertaining to the Company or its Subsidiaries or not to compete or interfere with the Company or of its Subsidiaries, provided that, in the case of any Management Member who, as of the date of determination, is party to an effective services, severance or employment agreement with the Company or any Subsidiary of the Company that employs such individual, “termination for Cause” shall have the meaning, if any, specified in such agreement.

“Third Party” shall mean, in respect of any Transfer, one or more Persons other than the Company, any Member or any of their respective Affiliates.

“Transfer” means to directly or indirectly transfer, sell, pledge, hypothecate or otherwise dispose of.

“Treasury Regulations” means the Regulations of the Treasury Department of the United States issued pursuant to the Code.

“Units” shall have the meaning set forth in Section 4.2.

ARTICLE II

FORMATION OF THE COMPANY

Section 2.1 Formation. The Company was formed upon the filing of the Certificate with the Secretary of State of the State of Delaware on February 18, 2005.

Section 2.2 Company Name. The name of the Company is Axle Holdings II, LLC. The business of the Company may be conducted under such other names as the Board may from time to time designate, provided that the Company complies with all relevant state laws relating to the use of fictitious and assumed names.

Section 2.3 The Certificate, etc. The designation of Deborah M. Reusch as an authorized person within the meaning of the Delaware Act and the actions taken by Deborah M. Reusch in causing the Certificate of Formation to be executed, delivered and filed with the Secretary of State of the State of Delaware on February 18, 2005, are hereby ratified, adopted and approved. Each Director is hereby authorized to execute, deliver file and record all such other certificates and documents, including amendments to or restatements of the Certificate, and to do such other acts as may be appropriate to comply with all requirements for the formation, continuation and operation of a limited liability company, the ownership of property, and the conduct of business under the laws of the State of Delaware and any other jurisdiction in which the Company may own property or conduct business.

Section 2.4 Term of Company. The term of the Company commenced on the date of the initial filing of the Certificate with the Secretary of State of the State of Delaware. The Company may be terminated in accordance with the terms and provisions hereof, and shall

9

continue unless and until dissolved as provided in Article XIV. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate as provided in the Delaware Act.

Section 2.5 Registered Agent and Office. The Company’s registered agent and office in the State of Delaware shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The Board may designate another registered agent and/or registered office from time to time in accordance with the then applicable provisions of the Delaware Act and any other applicable laws.

Section 2.6 Principal Place of Business. The principal place of business of the Company shall be located at 320 Park Avenue, 24^th Floor, New York, New York 10022. The location of the Company’s principal place of business may be changed by the Board from time to time in accordance with the then applicable provisions of the Delaware Act and any other applicable laws.

Section 2.7 Qualification in Other Jurisdictions. Any authorized person of the Company shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

Section 2.8 Fiscal Year; Taxable Year. The fiscal year of the Company for financial accounting purposes shall end on or about December 31. The taxable year of the Company for federal, state and local income tax purposes shall end on or about December 31.

ARTICLE III

PURPOSE AND POWERS OF THE COMPANY

Section 3.1 Purpose. The purposes of the Company are, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Delaware Act and engaging in all acts or activities as the Company deems necessary, advisable or incidental to the furtherance of the foregoing.

Section 3.2 Powers of the Company. The Company shall have the power and authority to take any and all actions that are necessary, appropriate, advisable, convenient or incidental to or for the furtherance of the purposes set forth in Section 3.1.

Section 3.3 Certain Tax Matters. The Company shall not elect, and the Board shall not permit the Company to elect, to be treated as an association taxable as a corporation for U.S. federal, state or local income tax purposes under Treasury Regulations section 301.7701-3 or under any corresponding provision of state or local law. The Company and the Board shall not

10

permit the registration or listing of interests in the Company on an “established securities market,” as such term is used in Treasury Regulations section 1.7704-1.

ARTICLE IV

MEMBERS

Section 4.1 Powers of Members. The Members shall have the power to exercise any and all rights or powers granted to the Members pursuant to the express terms of this Agreement. The approval or consent of the Members shall not be required in order to authorize the taking of any action by the Company and the Members shall have no right to reject, overturn, override, veto or otherwise approve or pass judgment upon any action taken by the Board or an authorized officer of the Company, unless and then only to the extent that (i) this Agreement shall expressly provide therefor, (ii) such approval or consent shall be required by non-waivable provisions of the Delaware Act or (iii) the Board shall determine that obtaining such approval or consent would be appropriate or desirable. The Members, as such, shall have no power to bind the Company.

Section 4.2 Units Generally. As of the date hereof, the Company has two authorized classes of Interests: Common Units and Override Units (which, as described below, will consist of either Operating Units or Value Units) (Common Units and Override Units collectively, the “Units”). Additional classes of Interests denominated in the form of Units may be authorized from time to time by the Board without obtaining the consent of any Member or class of Members. Except as otherwise provided in this Article IV, Units in a particular class may be issued from time to time, at such prices and on such terms as the Board or, in the case of Override Units, the Board (or the Compensation Committee) less any Management Member or Members to whom such Override Units are to be issued may determine, without obtaining the consent of any Member or class of Members.

(a) Common Units.

(i) General. The holders of Common Units will have voting rights with respect to their Common Units as provided in Section 4.3(d) and shall have the rights with respect to profits and losses of the Company and distributions from the Company as are set forth herein. The number of Common Units of each Member as of any given time shall be set forth on Schedule A, as it may be updated from time to time in accordance with this Agreement.

(ii) Price. Unless otherwise determined by the Board, the Common Units will initially be issued for a Capital Contribution of $25.616798 per Common Unit. The payment terms and schedule for the Capital Contributions applicable to the issuance of any Common Unit will be determined by the Board upon issuance of such Common Units.

11

(b) Override Units.

(i) General. The Company will have two sub-classes of Override Units: Operating Units and Value Units. Subject to the provisions of Article VIII hereof (including the applicable Benchmark Amount), the holders of Override Units shall have the rights with respect to profits and losses of the Company and distributions from the Company as set forth herein (including Article VIII and Article X), provided that additional terms and conditions applicable to an Override Unit may be established by the Compensation Committee in connection with the issuance of any such Override Unit to a person who becomes a Management Member at any time after the date of this Agreement in accordance with Section 4.8 hereof. The number of Override Units issued to a Management Member as of any given time shall be set forth on Schedule A, as it may be updated from time to time in accordance with this Agreement. Notwithstanding anything to the contrary, Override Units shall not have voting rights.

(ii) Price. The holders of Override Units are not required to make any Capital Contribution to the Company in exchange for their Override Units, it being recognized that such Units shall be issued only to Management Members who own Common Units.

Section 4.3 Meetings of Members.

(a) Meetings; Notice of Meetings. Meetings of the Members, including any special meeting, may be called by the Board from time to time. Notice of any such meeting shall be given to all Members not less than five nor more than 30 Business Days prior to the date of such meeting and shall state the location, date and hour of the meeting and, in the case of a special meeting, the nature of the business to be transacted. Meetings shall be held at the location (within or without the State of Delaware) at the date and hour set forth in the notice of the meeting.

(b) Waiver of Notice. No notice of any meeting of Members need be given to any Member who submits a signed waiver of notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Members need be specified in a written waiver of notice. The attendance of any Member at a meeting of Members shall constitute a waiver of notice of such meeting, except when the Member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

(c) Quorum. Except as otherwise required by law or by the Certificate, the presence in person or by proxy of the holders of record of a Majority in Interest shall constitute a quorum for the transaction of business at such meeting.

(d) Voting. If the Board has fixed a record date, every holder of record of Units entitled to vote at a meeting of Members or to consent in writing in lieu of a meeting of Members

12

shall be entitled to one vote for each such Unit outstanding in such Member’s name at the close of business on such record date. If no record date has been so fixed, then every holder of record of such Units entitled to vote at a meeting of Members or to consent in writing in lieu of a meeting of Members shall be entitled to one vote for each Unit outstanding in his name on the close of business on the day next preceding the day on which notice of the meeting is given or the first consent in respect of the applicable action is executed and delivered to the Company, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by applicable law, the Certificate or this Agreement, the vote of a Majority in Interest at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting.

(e) Proxies. Each Member may authorize any Person to act for such Member by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or such Member’s attorney-in-fact. No proxy shall be valid after the expiration of three years from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it unless otherwise provided in such proxy, provided, that such right to revocation shall not invalidate or otherwise affect actions taken under such proxy prior to such revocation.

(f) Organization. Each meeting of Members shall be conducted by such Person as the Board may designate.

(g) Action Without a Meeting. Unless otherwise provided in this Agreement, any action which may be taken at any meeting of the Members may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by a Majority in Interest. Prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be given to those Members who have not consented in writing.

(h) Certain Fee Agreements. The entering into of any agreement with respect to regularly payable advisory or monitoring fees payable by the Company or any of its Subsidiaries, or any amendment to any such agreement (including any increase in the current annual advisory fee under the Kelso Advisory Agreement), between the Kelso Members or any of their Affiliates (other than the Company or any of its Subsidiaries), on the one hand, and the Company or any of its Subsidiaries, on the other hand, shall require the approval of the Disinterested Members of the Board (as defined below); provided, that, the Kelso Advisory Agreement has been ratified and approved in all respects, and any advisory or monitoring fees or other amounts payable to the Kelso Members or any of their Affiliates thereunder shall not be subject to any further approval hereunder or otherwise.

Section 4.4 Business Transactions of a Member with the Company. Subject to prior approval of the Board, a Member (or an Affiliate thereof) may lend money to, borrow money

13

from, act as surety or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, or transact any other business with the Company or any of its Subsidiaries, provided that any such transaction pursuant to any agreement entered into after the date hereof shall be approved by a majority of the Disinterested Members of the Board. For purposes of this Agreement, “Disinterested Members of the Board” shall mean, with respect to any transaction in question, the disinterested members of the Board with respect to any such transaction; provided that, for the avoidance of doubt, any designee of Kelso that is not an employee of Kelso or an Affiliate thereof (other than any portfolio company of Kelso or any such Affiliate) shall be considered disinterested unless such director has a direct pecuniary interest in the applicable transaction; provided further, that if no members of the Board are disinterested (after giving effect to the preceding proviso), the “Disinterested Members of the Board” shall be deemed to be all of the members of the Board. Notwithstanding anything to the contrary set forth in this Agreement, the proviso contained in the first sentence of this Section 4.4 shall not apply (by virtue of this Section 4.4) to agreements or amendments with respect to transactions contemplated by this Agreement (including, but not limited to, transactions pursuant to the terms of (x) Sections 7.4 and 7.5 (e.g., Additional Capital Contributions) or (y) Sections 13.5, 13.7, 13.8, 13.10 and 13.11 (e.g., rights exercised by Members in respect of Transfers)).

Section 4.5 No Cessation of Membership upon Bankruptcy. A Person shall not cease to be a Member of the Company upon the happening, with respect to such Person, of any of the events specified in Section 18-304 of the Delaware Act.

Section 4.6 Noncompetition; Confidentiality and Nonsolicitation. The covenants and restrictions contained in this Section 4.6 shall be in addition to and not in lieu of any covenants or restrictions applying to any Member pursuant to any employment, severance or services agreement between such Member and the Company or any of its Subsidiaries. Notwithstanding the foregoing, in the case of any Management Member or Inactive Management Member that is subject to any employment, severance or services agreement with the Company or any of its Subsidiaries that contains covenants or restrictions with respect to noncompetition, confidentiality and nonsolicitation of employees and clients, such corresponding covenants and restrictions in such Member’s agreement with the Company or any of its Subsidiaries shall apply to such Member in lieu of the restrictions set forth herein; provided that, for the avoidance of doubt, the applicable restrictions contained in the employment, severance or services agreement in effect at the time of (or concurrently with) such Management Member’s termination of employment with the Company or any Subsidiary of the Company that employs such individual shall apply to such Member following such termination of employment.

(a) Noncompetition.

(i) Parthenon Members Noncompetition. During the Parthenon Restriction Period (as defined below), the Parthenon Members shall not become associated with any entity, whether as a principal, partner, employee, member, consultant or shareholder (other than as a holder of not in excess of 1% of the outstanding voting shares of any

14

publicly traded company), that is actively engaged in any geographic area in which the Company or any of its Subsidiaries does business in any business which is in competition with the Company or any of its Subsidiaries in providing salvage (including related claims processing), impound, repossessed or whole vehicle auction services (other than (i) providing vehicle financing and (ii) buying and selling vehicles from retail customers through a dealership) (the “Auction Services Business”). For purposes of this Agreement, the term “Parthenon Restriction Period” shall mean a period of time beginning on the date hereof and ending on the date on which the Parthenon Members or any transferee thereof permitted under Section 13.2 hereof, directly or indirectly, no longer retains any equity interest in the Company (or the Company no longer owns a direct or indirect equity interest in any Person conducting the Auction Services Business nor conducts the Auction Services Business) or, if earlier, the earlier of: (A) two years following the date that (1) Kelso’s direct and indirect equity ownership interest in the Company or any of its Subsidiaries (including IAAI) represents less than fifteen percent (15%) of the outstanding Common Units or corresponding equity interests of the Company and its Subsidiaries (including IAAI), (2) the Board no longer includes a representative of the Parthenon Members or any of their Affiliates as a Director (it being understood that the substitution or replacement of, or the creation of vacancy in, a directorship that was formerly occupied by a representative of the Parthenon Members shall not trigger this clause (2) if such directorship is filled with a representative of the Parthenon Members) and (3) the Parthenon Members elect, pursuant to Section 11.1 (b) hereof to no longer receive the Lender Financial Information; (B) five (5) years following the date that (x) the Board no longer includes a representative of the Parthenon Members or any of their Affiliates as a Director (it being understood that the substitution or replacement of, or the creation of vacancy in, a directorship that was formerly occupied by a representative of the Parthenon Members shall not shall not trigger this clause (x) if such directorship is filled with a representative of the Parthenon Members) and (y) the Parthenon Members elect, pursuant to Section 11.1 (b) hereof, to no longer receive the Lender Financial Information; or (C) such time as the Kelso Members no longer hold any direct or indirect equity ownership interest in the Company or any of its Subsidiaries (including IAAI).

(ii) Other Subject Members Noncompetition. Until the later of (i) the date on which a Subject Member or any transferee thereof permitted under Section 13.2 hereof, directly or indirectly, no longer retains any equity interest in the Company and (ii) if applicable, the termination of any severance payable pursuant to any termination or severance agreement, if any, entered into between such Subject Member and the Company or any Subsidiary of the Company that employs such Subject Member, if applicable, such Subject Member shall not become associated with any entity, whether as a principal, partner, employee, member, consultant or shareholder (other than as a holder of not in excess of 1% of the outstanding voting shares of any publicly traded company), that is actively engaged in any geographic area in which the Company or any of its Subsidiaries does business in any business which is (a) in competition with the business

15

of the Company or any of its Subsidiaries conducted during the 12 months preceding the date such Subject Member ceases to hold any equity interest in the Company or (b) proposed to be conducted by the Company or any of its Subsidiaries in the Company’s business plan as in effect as of the date such Subject Member ceases to hold any equity interest in the Company. This Section 4.6(a)(ii) does not apply to the Parthenon Members.

(b) Confidentiality. Without the prior written consent of a majority of the Board, except to the extent required by law, rule, regulation or court order, each Subject Member shall not disclose any trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board or management), operating policies or manuals, business plans, financial records, proprietary management information systems and/or software or other financial, commercial, business or technical information relating to the Company or any of its Subsidiaries or information designated as confidential or proprietary that the Company or any of its Subsidiaries may receive belonging to suppliers, customers or others who do business with the Company or any of its Subsidiaries (collectively, “Confidential Information”) to any third person (in the case of any Parthenon Member, other than such Parthenon Member’s officers, directors, employees and legal advisors who have a need to know such information and who have agreed to maintain the confidentiality of such information) unless such Confidential Information has been previously disclosed to the public by the Company, any such Subsidiary of the Company or is or becomes in the public domain (other than by reason of such Subject Member’s breach of this Section 4.6(b)) or, in the case of the Parthenon Members, is independently developed by the Parthenon Members without the use of or including, and without being derived from or based on, any Confidential Information in its possession.

(c) Non-Solicitation of Employees. During the applicable restriction period under Section 4.6(a)(ii) (or, with respect to the Parthenon Members, the Parthenon Restriction Period), no Subject Member shall directly or indirectly induce any employee of the Company or any of its Subsidiaries to terminate employment with such entity, and no Subject Member shall directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ, offer employment to or otherwise interfere with the employment relationship of the Company or any of its Subsidiaries with any person who is or was employed by the Company or such Subsidiary unless, at the time of such employment, offer or other interference, such person shall have ceased to be employed by such entity for a period of at least six months, provided that, nothing in this Section 4.6(c) shall preclude such Subject Member from placing advertisements during the restriction period in periodicals of general circulation soliciting persons for employment or from employing any person who comes to such Subject Member solely in response to such advertisements.

(d) Non-Solicitation of Clients. During the applicable restriction period under Section 4.6(a)(ii) (or, with respect to the Parthenon Members, the Parthenon Restriction Period), no

16

Subject Member shall solicit or otherwise attempt to establish for himself or any other person, firm or entity any business relationship (provided that, in the case of the Parthenon Members, this provision shall be limited to any business relationship intended to compete with the Auction Services Business) with any person, firm or entity which is, or during the 12-month period preceding the date such Subject Member ceases to hold any equity interest in the Company was, a customer, client or distributor of the Company or any of its Subsidiaries.

(e) Injunctive Relief with Respect to Covenants. Each Subject Member acknowledges and agrees that the covenants and obligations of such Subject Member with respect to noncompetition, nonsolicitation and confidentiality herein relate to special, unique and extraordinary matters and that a violation or threatened violation of any of the terms of such covenants or obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, each Subject Member agrees, to the fullest extent permitted by applicable law, that the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) restraining such Subject Member from committing any violation of the covenants or obligations contained in this Section 4.6. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity, in connection with the foregoing provisions of this Section 4.6, each Subject Member represents that his economic means and circumstances are such that such provisions will not prevent him from providing for himself and his family on a basis satisfactory to him.

(f) Unenforceable Restriction. It is expressly understood and agreed that although each Subject Member and the Company consider the restrictions contained in this Section 4.6 to be reasonable, if a final determination is made by an arbitrator to whom the parties have assigned the matter or a court of competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against any Subject Member, the provisions of this Agreement shall not be rendered void but shall be reformed to apply as to such maximum time and to such maximum extent as such arbitrator or court may determine or indicate to be enforceable. Alternatively, if such arbitrator or court finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be reformed so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(g) Inactive Management Members. Notwithstanding anything to the contrary, the provisions of this Section 4.6 shall apply to both Management Members and Inactive Management Members (as defined in Section 8.2).

(h) Parthenon Members Portfolio Companies. Section 4.6 shall not apply to portfolio companies of the Parthenon Members; provided that (i) any such portfolio company has not been provided confidential information concerning the Company or any of its Subsidiaries by or on behalf of the Parthenon Members (it being understood that a representative of the Parthenon Members acting as a director of a portfolio company shall not be considered to have provided such information to such portfolio company solely by virtue of such representative acting as a

17

director of such portfolio company) and (ii) with respect to the action in question (in connection with the Company or any of its Subsidiaries or their employees or clients) that is otherwise prohibited by this Section 4.6 if taken by any Parthenon Member, such portfolio company is not being directed, directly or indirectly, by the Parthenon Members or any Affiliate thereof to take such action.

Section 4.7 Other Business for Kelso Members. Any Kelso Member or Affiliate thereof may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Company, and the Company, the Directors (as defined in Section 5.1) and the Members shall have no rights by virtue of this Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not be deemed wrongful or improper. No Kelso Member, Director (other than any Subject Member who serves as a Director) or Affiliate thereof shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and any Kelso Member, Director (other than any Subject Member who serves as a Director) or Affiliate thereof shall have the right to take for such Person’s own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment opportunity; provided that this Section 4.7 shall not apply to Management Members or any other Members who are employees of the Company or any of its Subsidiaries.

Section 4.8 Additional Members.

(a) Admission. Upon the approval of a majority of the Board or the compensation committee of the Board (the “Compensation Committee”), provided that such majority includes a majority of the Directors or members of the Compensation Committee appointed by Kelso, the Company may admit one or more additional Members (each an “Additional Member”), including additional Management Members to the Company, to be treated as a “Member” or one of the “Members” for all purposes hereunder. Each Person shall be admitted as an Additional Member at the time such Person (i) executes a joinder agreement to this Agreement, (ii) complies with the applicable Board resolution, if any, with respect to such admission and (iii) is named as a Member in Schedule A (as described in Section 8.1) hereto. The Board may designate any such Additional Member as a “Management Member” or as an “Investor Member” (or another category or class of Members created by the Board (subject to the provisions of Section 15.11), with such rights and obligations as the Board may specify). Any Management Member or Investor Member admitted as an Additional Member after the date hereof who is unable to make the representation contained in Section 6.1(e) may execute a joinder agreement which excludes such representation; provided such Additional Member also concurrently delivers to the Company a certificate, accompanied by an opinion of counsel, to the effect that the issuance of Units to such Member shall be exempt from the registration requirements under the Securities Act. Kelso is authorized to amend Schedule A to reflect any such admission and any actions pursuant to Section 4.8(b) below.

18

(b) Rights of Additional Members, Upon the admission of an Additional Member:

(i) the Board shall determine the capital commitment (if any) of such Additional Member;

(ii) the Board shall determine the rights, if any, of such Additional Members to appoint Directors to the Board;

(iii) such Additional Member shall make Capital Contributions to the Company in an amount to be determined by the Board;

(iv) if such Additional Member is an employee of the Company or any of its subsidiaries, such employee will be a “Management Member” and one of the “Management Members” for all purposes hereunder, and the Board or the Compensation Committee will (i) have the right to grant such employee Override Units pursuant to Article VIII and amend Schedule A accordingly (including Operating Units and Value Units as applicable) and (ii) if Override Units are granted pursuant to clause (i), assign to such Management Member the applicable Benchmark Amount and other terms applicable to such Override Units;

(v) if such Additional Member will not be a Management Member hereunder then the Board may either designate such Member as a “Kelso Member” or as an “Investor Member” or another category or class of Members created by the Board (subject to the provisions of Section 15.11), with such rights and obligations as the Board may specify;

(vi) without duplication of any of foregoing, the Board shall assign Units, if any, to such Additional Member; and

(vii) the Board will amend Schedule A to reflect the actions taken pursuant to this Section 4.8.

(c) Notwithstanding anything to the contrary, unless the Board elects otherwise, any former stockholder of any entity receiving Units in a merger transaction involving the Company or any Subsidiary shall be admitted as a Member (and be bound by the terms of this Agreement as a “Member” for all purposes of this Agreement except where expressly indicated) irrespective of whether this Agreement or any Joinder Agreement is executed by such Person, and, unless the Board elects otherwise, there shall be no conditions (other than the consummation of the relevant merger) to such admission as contemplated under §18-101(7)(a)(2) of the Delaware Act. Section 4.8(b) above shall apply to such admission of any such Member by merger.

19

ARTICLE V

MANAGEMENT

Section 5.1 Board.

(a) Generally. The business and affairs of the Company shall be managed by or under the direction of a committee of the Company (the “Board”) consisting of at least five natural persons (each a “Director”), which initially shall be those persons designated as Directors in the first sentence of Section 5.1(b)(i) and subsequently shall be those persons appointed as provided in Section 5.1(b)(ii). The authorized number of Directors on the Board shall be established by Kelso. Directors need not be Members. The Board shall have full, exclusive and complete discretion to manage and control the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as it deems necessary or appropriate to accomplish the purposes of the Company as set forth herein, including, without limitation, to exercise all of the powers of the Company set forth in Section 3.2 of this Agreement. Notwithstanding anything contained herein to the contrary, Kelso will have the right to designate all of the Directors of the Board; provided, that, one of such Kelso designees shall be the Chief Executive Officer of IAAI (or its successor) so long as such individual is the Chief Executive Officer of IAAI.

(b) Election of Directors.

(i) Initial Directors; Term. The Board shall initially consist of five (5) Directors. The initial Directors of the Company will be David Wahrhaftig, Church Moore, Thomas O’Brien, Brian T. Clingen and David Ament. Each Director shall hold office until a successor is appointed in accordance with this Section 5.1(b) or until such Director’s earlier death, resignation or removal in accordance with the provisions hereof. Each person named as a Director herein or subsequently appointed as a Director (including any Management Member named or appointed as such) is hereby designated as a “manager” (within the meaning of the Delaware Act) of the Company. Except as otherwise provided herein, and notwithstanding the last sentence of Section 18-402 of the Delaware Act, no single Director may bind the Company, and the Board shall have the power to act only collectively in the manner specified herein.

(ii) Composition. Subject to the last sentence of Section 5.1(a), Kelso shall have the right to appoint in its sole discretion all of the Directors of the Company, and shall have the right to appoint in its sole discretion additional Directors to fill all additional seats on the Board created in the event the Board determines to expand the size of the Board following the date hereof in accordance with Section 5.1(a). Other than the board of directors of any direct subsidiary of IAAI, the composition of the board of directors of each of the Company’s subsidiaries (a “Subsidiary Board”) shall be in the same proportion of Kelso appointed directors to non-Kelso appointed directors as that of

20

the Board. Any committees of the Board or a Subsidiary Board shall be created only upon the approval of the Board as provided in Section 5.5 hereof. In the event that any Director designated hereunder by Kelso for any reason ceases to serve as a member of the Board or a Subsidiary Board during his or her term of office, the resulting vacancy on the Board or the Subsidiary Board shall be filled by a representative designated by Kelso.

Section 5.2 Meetings of the Board. The Board shall meet from time to time to discuss the business of the Company. The Board may hold meetings either within or without the State of Delaware. Meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board. The Chief Executive Officer of the Company or a majority of the Board may call a meeting of the Board by providing five Business Days’ notice to each Director, either personally, by telephone, by facsimile or by any other similarly timely means of communication which notice requirement may be waived by the Directors.

Section 5.3 Quorum and Acts of the Board. At all meetings of the Board three Directors shall constitute a quorum for the transaction of business unless the number of Directors is increased or decreased pursuant to Section 5.1 (a), in which case the presence of a majority of the then authorized number of Directors shall constitute a quorum. Except as otherwise provided in this Agreement, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if a majority of the members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

Section 5.4 Electronic Communications. Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 5.5 Committees of Directors. The Board (a) shall designate a Compensation Committee, which shall be comprised of two Kelso Directors and the Chief Executive Officer of IAAI and (b) may, by resolution passed by unanimous consent of the Directors, designate one or more additional committees. Such resolution shall specify the duties and quorum requirements of such additional committees, each such committee to consist of such number of Directors as the Board may fix from time to time. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or

21

not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

Section 5.6 Compensation of Directors. The Board shall have the authority to fix the compensation (if any) of Directors. The Directors may be paid their expenses (if any) of attendance at such meetings of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary as a Director. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

Section 5.7 Resignation. Any Director may resign at any time by giving written notice to the Company. The resignation of any Director shall take effect upon receipt of such notice or at such later time as shall be specified in the notice; and, unless otherwise specified in the notice, the acceptance of the resignation by the Company, the Members or the remaining Directors shall not be necessary to make it effective. Upon the effectiveness of any such resignation, such Director shall cease to be a “manager” (within the meaning of the Delaware Act).

Section 5.8 Removal of Directors. Members shall have the right to remove any Director at any time for cause upon the affirmative vote of a Majority in Interest. In addition, a majority of the Directors then in office shall have the right to remove a Director for cause. Upon the taking of such action, the Director shall cease to be a “manager” (within the meaning of the Delaware Act). Notwithstanding the preceding sentence, (i) Kelso may remove any Director designated by Kelso or an initial Director designated in the first sentence of Section 5.1(b)(i) and (ii) the removal from the Board or a Subsidiary Board (with or without cause) of any Director designated hereunder by Kelso or any initial Director designated in the first sentence of Section 5.1(b)(i) shall be only at the written request of Kelso and under no other circumstances. Upon receipt of any such written request, the Board will promptly take all such actions as shall be necessary or desirable to cause the removal of such Director. Any vacancy caused by any such removal shall be filled in accordance with Section 5.9.

Section 5.9 Vacancies. If any vacancies shall occur in the Board, by reason of death, resignation, removal or otherwise, the Directors then in office shall continue to act, and actions that would otherwise be taken by a majority of the Directors may be taken by a majority of the Directors then in office, even if less than a quorum. Any vacancy shall be filled at any time in accordance with Section 5.1(b)(ii). A Director elected to fill a vacancy shall hold office until his

22

or her successor has been elected and qualified or until his or her earlier death, resignation or removal.

Section 5.10 Directors as Agents. The Directors, to the extent of their powers set forth in this Agreement, are agents of the Company for the purpose of the Company’s business, and the actions of the Directors taken in accordance with such powers shall bind the Company. Except as otherwise provided in this Agreement and notwithstanding the last sentence of Section 18-402 of the Delaware Act, no single Director shall have the power to bind the Company and the Board shall have the power to act only collectively in the manner specified herein.

Section 5.11 Officers. The Board may appoint from time to time as it deems advisable, appoint additional officers of the Company (collectively, the “Officers”) and assign such officers titles (including, without limitation, President, Vice President, Secretary and Treasurer). Unless the Board decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office. Any delegation pursuant to this Section 5.11 may be revoked at any time by the Board. Any Officer may be removed with or without cause by the Board, except as otherwise provided in any services or employment agreement between such Officer and the Company.

Section 5.12 Holdings Funding. With respect to cash amounts received by the Company on the Initial Capital Contribution Date, any of the Officers of the Company shall be authorized to authorize the contribution on the Initial Capital Contribution Date of all or a portion of such funds promptly to Axle Holdings, Inc. and/or any other Subsidiary following the Initial Capital Contributions. Notwithstanding anything to the contrary, no further approval of the Board or the Members shall be required with respect to the foregoing.

ARTICLE VI

INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 6.1 Representations, Warranties and Covenants of Members.

(a) Investment Intention and Restrictions on Disposition. Each Member represents and warrants that such Member is acquiring the Interests solely for such Member’s own account for investment and not with a view to resale in connection with, any distribution thereof. Each Member agrees that such Member will not, directly or indirectly, Transfer any of the Interests (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any of the Interests) or any interest therein or any rights relating thereto or offer to Transfer, except in compliance with the Securities Act, all applicable state securities or “blue sky” laws and this Agreement, as the same shall be amended from time to time. Any attempt by a Member, directly or indirectly, to

23

Transfer, or offer to Transfer, any Interests or any interest therein or any rights relating thereto without complying with the provisions of this Agreement, shall be void and of no effect.

(b) Securities Laws Matters. Each Member acknowledges receipt of advice from the Company that (i) the Interests have not been registered under the Securities Act or qualified under any state securities or “blue sky” laws, (ii) it is not anticipated that there will be any public market for the Interests, (iii) the Interests must be held indefinitely and such Member must continue to bear the economic risk of the investment in the Interests unless the Interests are subsequently registered under the Securities Act and such state laws or an exemption from registration is available, (iv) Rule 144 promulgated under the Securities Act (“Rule 144”) is not presently available with respect to sales of any securities of the Company and the Company has made no covenant to make Rule 144 available and Rule 144 is not anticipated to be available in the foreseeable future, (v) when and if the Interests may be disposed of without registration in reliance upon Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule and the provisions of this Agreement, (vi) if the exemption afforded by Rule 144 is not available, public sale of the Interests without registration will require the availability of an exemption under the Securities Act, (vii) restrictive legends shall be placed on any certificate representing the Interests and (viii) a notation shall be made in the appropriate records of the Company indicating that the interests are subject to restrictions on transfer and, if the Company should in the future engage the services of a transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Interests.

(c) Ability to Bear Risk. Each Member represents and warrants that (i) such Member’s financial situation is such that such Member can afford to bear the economic risk of holding the Interests for an indefinite period and (ii) such Member can afford to suffer the complete loss of such Member’s investment in the Interests.

(d) Access to Information; Sophistication; Lack of Reliance. Each Member represents and warrants that (i) such Member is familiar with the business and financial condition, properties, operations and prospects of the Company and that such Member has been granted the opportunity to ask questions of, and receive answers from, representatives of the Company concerning the Company and the terms and conditions of the purchase of the Interests and to obtain any additional information that such Member deems necessary, (ii) such Member’s knowledge and experience in financial and business matters is such that such Member is capable of evaluating the merits and risk of the investment in the Interests and (iii) such Member has carefully reviewed the terms and provisions of this Agreement and has evaluated the restrictions and obligations contained therein. In furtherance of the foregoing, each Member represents and warrants that (i) no representation or warranty, express or implied, whether written or oral, as to the financial condition, results of operations, prospects, properties or business of the Company or as to the desirability or value of an investment in the Company has been made to such Member by or on behalf of the Company, (ii) such Member has relied upon such Member’s own independent appraisal and investigation, and the advice of such Member’s own counsel, tax

24

advisors and other advisors, regarding the risks of an investment in the Company and (iii) such Member will continue to bear sole responsibility for making its own independent evaluation and monitoring of the risks of its investment in the Company. For purposes of this Section 6.1(d), the Company includes each of the businesses to be acquired by the Company.

(e) Accredited Investor. Each Member represents and warrants that such Member is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and, in connection with the execution of this Agreement, agrees to deliver such certificates to that effect as the Board may request.

Section 6.2 Additional Representations and Warranties of Management Members and Investor Members. Each Investor Member and Management Member represents and warrants that (a) such Investor Member or Management Member has duly executed and delivered this Agreement; (b) all actions required to be taken by or on behalf of the Investor Member or Management Member to authorize it to execute, deliver and perform its obligations under this Agreement have been taken and this Agreement constitutes such Investor Member’s or Management Member’s legal, valid and binding obligation, enforceable against such Investor Member or Management Member in accordance with the terms hereof; (c) the execution and delivery of this Agreement and the consummation by the Investor Member or Management Member of the transactions contemplated hereby in the manner contemplated hereby do not and will not conflict with, or result in a breach of any terms of, or constitute a default under, any agreement or instrument or any statute, law, rule or regulation, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or governmental authority which is applicable to the Investor Member or Management Member or by which the Investor Member or Management Member or any material portion of its properties is bound; (d) no consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by such Investor Member or Management Member in connection with the execution and delivery of this Agreement or the performance of such Investor Member’s or Management Member’s obligations hereunder; (e) if such Investor Member or Management Member is an individual, such Investor Member or Management Member is a resident of the state set forth below such Investor Member’s or Management Member’s name on the signature page hereof; and (f) if such Investor Member or Management Member is not an individual, such Investor Member’s or Management Member’s principal place of business and mailing address is in the state or foreign jurisdiction set forth below the Investor Member or Management Member’s signature on the signature page.

Section 6.3 Additional Representations and Warranties of Kelso Members.

(a) Due Organization; Power and Authority, etc. Kelso Investment Associates VII, L.P. represents and warrants that it is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. KEP VI, LLC represents and warrants that it is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. Each Kelso Member further represents and warrants that it has all

25

necessary power and authority to enter into this Agreement to carry out the transactions contemplated herein and therein.

(b) Authorization; Enforceability. All actions required to be taken by or on behalf of such Kelso Member to authorize it to execute, deliver and perform its obligations under this Agreement have been taken, and this Agreement constitutes the valid and binding obligation of such Kelso Member, enforceable against such Kelso Member in accordance with its terms, except as the same may be affected by bankruptcy, insolvency, moratorium or similar laws, or by legal or equitable principles relating to or limiting the rights of contracting parties generally.

(c) Compliance with Laws and Other Instruments. The execution and delivery of this Agreement and the consummation by such Kelso Member of the transactions contemplated hereby and thereby in the manner contemplated hereby and thereby do not and will not conflict with, or result in a breach of any terms of, or constitute a default under, any agreement or instrument or any statute, law, rule or regulation, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or governmental authority which is applicable to such Kelso Member or by which such Kelso Member or any material portion of its properties is bound, except for conflicts, breaches and defaults that, individually or in the aggregate, will not have a material adverse effect upon the financial condition, business or operations of such Kelso Member or upon such Kelso Member’s ability to enter into and carry out its obligations under this Agreement.

(d) Executing Parties. The person executing this Agreement on behalf of each Kelso Member has full power and authority to bind such Kelso Member to the terms hereof.

Section 6.4 Certain Members. Notwithstanding anything to the contrary contained herein, the representations and warranties under this Article VI shall be deemed not to be made to Members not executing this Agreement or a joinder agreement to this Agreement.

ARTICLE VII

CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS

Section 7.1 Capital Accounts. A separate capital account (a “Capital Account”) shall be established and maintained for each Member. The initial balance in each Member’s Capital Account shall be zero.

Section 7.2 Adjustments.

(a) Each Member’s Capital Accounts shall be credited with the amount of cash contributed by such Member on the Initial Capital Contribution Date, as set forth on Schedule A,

26

and shall also be credited with the Fair Market Value of property contributed by such Member on the Initial Capital Contribution Date, as set forth on Schedule A.

(b) As of the end of each Accounting Period, the balance in each Member’s Capital Account shall be adjusted by (i) increasing such balance by such Member’s (A) allocable share of Net Profit (allocated in accordance with Section 9.1) and (B) the amount of cash and the Fair Market Value of any property (as of the date of the contribution thereof and net of any liabilities encumbering such property) contributed to the Company during such Accounting Period, if any, and (ii) decreasing such balance by (A) the amount of cash and the Fair Market Value of any property (as of the date of the distribution thereof and net of any liabilities encumbering such property) distributed to such Member during such Accounting Period and (B) such Member’s allocable share of Net Loss (allocated in accordance with Section 9.1). Each Member’s Capital Account shall be further adjusted with respect to any special allocations pursuant to Section 9.2. The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations section 1.704-1(b) and section 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

Section 7.3 Capital Contributions. Each of the Members hereby commits to make an initial cash contribution to the capital of the Company in the amount equal to its Initial Capital Contribution set forth opposite each Members name on Schedule A upon the Initial Capital Contribution Date. Any contributions of property after the Initial Capital Contribution Date shall be valued at their Fair Market Value.

Section 7.4 Additional Capital Contributions by Kelso. (a) Kelso (or any Affiliate thereof) may make additional cash Capital Contributions to the Company or any Subsidiary at such times as the Board shall determine such additional Capital Contributions are advisable (x) to make, or in connection with, acquisitions of assets, businesses or other entities which the Board determines are desirable for the business of the Company and its Subsidiaries and (y) for other bona fide corporate or organizational purposes (each such time, an “Additional Capital Contribution Event”).

(b) Without limiting the generality of Section 7.5 (and without duplication), in connection with each additional Capital Contribution made by Kelso pursuant to paragraph (a) of this Section 7.4 (or any loan made by Kelso or an Affiliate thereof whether or not in connection with equity interests), the Parthenon Members shall have the right to make a concurrent Capital Contribution of such amount (or a corresponding loan, if applicable) on the same terms as Kelso or its Affiliate, applicable, and concurrently therewith (or, if additional notice is required in good faith pursuant to the requirements of its fund in order to call capital, as soon as practicable (but no later than 20 days) after Kelso or its Affiliate, as applicable, makes its applicable Capital Contribution or loan) as is necessary to maintain the relative equity interests or relative debt interests (which shall be deemed to be pro rata for equity interests if no Kelso loans have been made), as applicable, in the Company and its Subsidiaries between the Kelso Members and the Parthenon Members. In the event that Kelso makes a Capital Contribution pursuant to

27

paragraph (a) of this Section 7.4 (or a loan, if applicable) by means of a Capital Contribution (or loan, if applicable) to a Subsidiary of the Company, so long as Kelso is in a position to cause the Company to do so, Kelso agrees to use reasonable best efforts to cause the Company (including to cause the applicable Subsidiary) to permit the Parthenon Members to make a concurrent Capital Contribution (or loan, if applicable) in a manner consistent with the first sentence hereof.

Section 7.5 Additional Capital Contributions. No Member shall be required to make any additional capital contribution to the Company in respect of the Interests then owned by such Member. However, a Member may make such additional capital contributions to the Company, but only with the written consent of the Board acting by majority vote. The provisions of this Section 7.5 are intended solely to benefit the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third party beneficiary of this Agreement), and no Member shall have any duty or obligation to any creditor of the Company to make any additional capital contributions or to cause the Board to consent to the making of additional capital contributions. Members shall be deemed to have contributed such additional capital upon issuance of additional Interests equal to the cash purchase price for such Interests or, if no cash is paid or there is non-cash consideration (including in the event that the Company or any Subsidiary acquires any company or business (whether by stock purchase, merger or otherwise, including any Company or business acquired or transferred from any Affiliate of the Company), and Units are issued in respect of such acquisition), in the amount of the Fair Market Value of such non-cash consideration as determined by the Board in good faith at or prior to issuance of such Interests. For the avoidance of doubt, the immediately foregoing sentence shall also apply to issuances of Interests to new Members.

Section 7.6 Negative Capital Accounts. Except as required by law, no Member shall be required to make up a negative balance in its Capital Account.

ARTICLE VIII

ADDITIONAL TERMS APPLICABLE TO OVERRIDE UNITS

Section 8.1 Certain Terms.

(a) Forfeiture of Operating Units. A Management Member’s Operating Units shall be subject to forfeiture on a pro-rata basis in accordance with the schedule in Section 8.2 hereof if he or she becomes an Inactive Management Member before the third anniversary of the issuance date of such Member’s Operating Units.

(b) Value Unit Participation. Value Units will participate in distributions under Article X only upon an Exit Event and, upon such Exit Event, as follows (and only as follows): (i) No Value Units will participate in distributions if the Kelso Investment Multiple is less than or equal to 2, (ii) all Value Units will participate in distributions if the Kelso Investment Multiple is at

28

least 4 and (iii) the Applicable Performance Percentage of the Value Units will participate in distributions if the Kelso Investment Multiple is greater than 2 and less than 4. Notwithstanding the foregoing or anything to the contrary, in no event shall any Value Units participate in distributions unless Kelso receives an internal rate of return, compounded annually (“IRR”), on its investment in the Company (as defined below) of at least 12% and the Kelso Investment Multiple is greater than 2. Kelso’s IRR will be calculated after giving full effect to the dilution of Kelso’s Interests in the Company by the Override Units (i.e., after calculating an assumed distribution to Management Members based on the first sentence hereof and calculating Kelso’s IRR on this basis). The “Applicable Performance Percentage” means, expressed as a percentage, the quotient obtained by dividing (x) the excess, if positive, of the Kelso Investment Multiple (as defined below) over 2 by (y) 2. The “Kelso Investment Multiple” is computed by dividing (x) the Final Value by (y) the Initial Value.

(c) Certain Cancellations. In the event that any portion of the Value Units does not become eligible to participate in distributions pursuant to Section 8.1(b) upon the first occurrence of an Exit Event, such portion of such Value Units shall automatically be canceled without payment therefor.

(d) Certain Adjustments. All Override Units shall expire and be forfeited on the 10^th anniversary of the issuance of such Override Unit.

(e) Calculations. All calculations required or contemplated by Section 8.1(b) shall be made in the sole determination of the Compensation Committee (or the Board, as applicable) and shall be final and binding on the Company and each Management Member.

(f) Benchmark Amount. The Board shall determine the Benchmark Amount with respect to each Override Unit at the time such Override Unit is issued to a Management Member, which shall be reflected on Schedule A. The Benchmark Amount of each Override Unit issued as of the date hereof will be $25.616798, which (together with the provisions of Sections 10.1(a)(i) and (ii)) are intended to result in such Override Unit being treated as a profits interest for U.S. federal income tax purposes as of the date such Override Units is issued.

Section 8.2 Effects of Termination of Employment on Override Units.

(a) Forfeiture of Override Units upon Termination.

(i) Termination for Cause. Unless otherwise determined by the Compensation Committee in a manner more favorable to such Management Member, in the event that a Management Member’s employment with the Company or any Subsidiary that employs such individual is terminated for Cause, all of the Override Units issued to such Inactive Management Member shall be forfeited.

(ii) Other Termination. Unless otherwise determined by the Compensation Committee in a manner more favorable to such Inactive Management Member, in the

29

event that a Management Member’s employment with the Company or any Subsidiary that employs such individual is terminated for any reason other than for Cause, then, in the event that (x) an Exit Event has not yet occurred, and (y) no definitive agreement shall be in effect regarding a transaction, which, if consummated, would result in an Exit Event, then all of the Value Units issued to such Inactive Management Member shall be forfeited and a percentage of the Operating Units issued to such Inactive Management Member shall be forfeited according to the following schedule (it being understood that in the event that such forfeiture does not occur as a result of the operation of clause (y) but the definitive agreement referred to in such clause (y) subsequently terminates without consummation of an Exit Event, then the forfeiture of all of the Value Units and of the applicable percentage of Operating Units referred to herein shall thereupon occur):

If the termination occurs	Percentage of such Inactive Management Member’s Operating Units to be Forfeited
Before the first quarterly anniversary of the grant of such Inactive Management Member’s Operating Units	100	%
On or after the first quarterly anniversary, but before the second quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	91.67	%
On or after the second quarterly anniversary, but before the third quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	83.33	%
On or after the third quarterly anniversary, but before the fourth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	75	%
On or after the fourth quarterly anniversary, but before the fifth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	66.67	%
On or after the fifth quarterly anniversary, but before the sixth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	58.33	%

30

On or after the sixth quarterly anniversary, but before the seventh quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	50	%
On or after the seventh quarterly anniversary, but before the eighth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	41.67	%
On or after the eighth quarterly anniversary, but before the ninth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	33.33	%
On or after the ninth quarterly anniversary, but before the tenth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	25	%
On or after the tenth quarterly anniversary, but before the eleventh quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	16.67	%
On or after the eleventh quarterly anniversary, but before the twelfth quarterly anniversary, of the grant of such Inactive Management Member’s Operating Units	8.33	%
On or after the twelfth quarterly anniversary of the grant of such Inactive Management Member’s Operating Units	0	%

(b) Inactive Management Members. If a Management Member’s employment with the Company terminates for any reason, such Member shall be thereafter be referred to herein as an “Inactive Management Member” with only the rights (and applicable restrictions) of an Inactive Management Member specified herein. Notwithstanding anything to the contrary, such Inactive Management Member shall continue to be treated as a Member for purposes of any applicable allocations or distributions, which shall be deemed for tax purposes to be made to such Inactive Management Member in its capacity as a Member, until such time as all Units retained by such Inactive Management Member are Transferred or repurchased in accordance with this Agreement.

(c) Special Distribution. If a Management Member’s employment with the Company or any Subsidiary that employs such individual is terminated for any reason, the Company may distribute in its discretion to such Management Member, in complete liquidation of his retained Units (including Common Units and Operating Units), shares of the common stock of Axle Holdings, Inc. having a Fair Market Value equal to the amount that such Inactive Management Member would have received with respect to such retained Units if the assets of the Company

31

were sold for their Fair Market Value and the proceeds thereof distributed in accordance with Section 14.2. Any such shares shall be subject to the Shareholders Agreement.

(d) Effect of Forfeiture. Any Override Unit which is forfeited shall be cancelled for no consideration.

(e) Special Allocation. Notwithstanding any other provision of this Agreement, if an Override Unit of a Management Member is forfeited pursuant to Section 8.1(a) or 8.2(a) of this Agreement, then the Board, in its sole discretion, may (in its discretion) at any time reallocate all or any portion of such forfeited Override Units to one or more of the Management Members.

Section 8.3 Nontransferability of Awards. Notwithstanding anything to the contrary, no Override Units may be Transferred, other than (i) retained Operating Units by will or by the laws of descent and distribution (or, subject to the approval of the Compensation Committee, such approval not to be unreasonably withheld, to a trust or other entity as described in Section 13.2 for estate-planning purposes), (ii) subject to approval by the Compensation Committee in any individual case (including such additional terms and conditions as the Compensation Committee shall require), to a transferee under Article XIII. All distributions in respect of Override Units issued to a Management Member or an Inactive Management Member hereunder shall be distributed during his or her lifetime only to such Management Member or Inactive Management Member or, if applicable, a transferee permitted under Section 13.2.

ARTICLE IX

ALLOCATIONS

Section 9.1 Book Allocations of Net Profit and Net Loss. Except as provided in Section 9.2, Net Profit or Net Loss, as the case may be, with respect to any Accounting Period, including each item of income, gain, loss and deduction of the Company, shall be allocated among the Capital Accounts as of the end of such Accounting Period in a manner that as closely as possible gives effect to the provisions of Article X and the other relevant provisions of this Agreement.

Section 9.2 Special Book Allocations.

(a) Qualified Income Offset. If any Member unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations section 1.704-l(b)(2)(ii)(d)(4), (5) or (6) and such adjustment, allocation or distribution causes or increases a deficit in such Member’s Capital Account in excess of its obligation to make additional Capital Contributions (a “Deficit”), items of gross income and gain for such Accounting Period and each subsequent Accounting Period shall be specifically allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Deficit of such Member as quickly as possible; provided that an allocation pursuant to this Section 9.2(a) shall

32

be made only if and to the extent that such Member would have a Deficit after all other allocations provided for in this Article IX have been tentatively made as if this Section 9.2(a) were not in this Agreement. This Section 9.2(a) is intended to comply with the qualified income offset provision of Treasury Regulations section 1.704-1 (b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.

(b) Partnership Minimum Gain. Except as otherwise provided in Treasury Regulations section 1.704-2(f), if there is a net decrease in Partnership Minimum Gain during any Accounting Period, each Member shall be specially allocated items of Company income and gain for such Accounting Period in proportion to, and to the extent of, an amount equal to the portion of such Member’s share of the net decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulations section 1.704-2(g). This Section 9.2(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulations section 1.704-2(f) and shall be interpreted consistently therewith.

(c) Restorative Allocations. Any special allocations of items of income or gain pursuant to this Section 9.2 shall be taken into account in computing subsequent allocations pursuant to this Agreement, so that the net amount for any item so allocated and all other items allocated to each Member pursuant to this Agreement shall be equal, to the extent possible, to the net amount that would have been allocated to each Member pursuant to the provisions of this Agreement if such special allocations had not occurred.

Section 9.3 Tax Allocations. The income, gains, losses, credits and deductions recognized by the Company shall be allocated among the Members, for U.S. federal, state and local income tax purposes, to the extent permitted under the Code and the Treasury Regulations, in the same manner that each such item is allocated to the Members’ Capital Accounts. Notwithstanding the foregoing, the Board shall have the power to make such allocations for U.S. federal, state and local income tax purposes as may be necessary to maintain substantial economic effect, or to insure that such allocations are in accordance with the Members’ Interests, in each case within the meaning of the Code and the Treasury Regulations, it being anticipated that no Management Member or Additional Management Member shall be allocated taxable income in excess of the amount of cash to be received by such Member or Additional Member. In accordance with section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for U.S. federal income tax purposes and its fair market value at the time of contribution.

33

ARTICLE X

DISTRIBUTIONS

Section 10.1 Distributions Generally

(a) This section provides for the distribution of certain amounts (“Distributable Amounts”) to the Members. The term “Distributable Amounts” means (i) upon the occurrence of an Exit Event, all amounts held by the Company immediately following such Exit Event reduced by existing liabilities and expenses of the Company and a reasonable reserve for future liabilities and expenses; and (ii) at any other time determined by Board, any amounts designated by the Board to the extent that the cash available to the Company and its subsidiaries is in excess of the reasonably anticipated needs of the business (including reserves). Immediately prior to the making of any distribution, a tentative distribution schedule shall be made, including for the purpose of determining whether applicable Kelso performance hurdles are met. In determining the amount distributable to each Member, the provisions of this Section 10.1 shall be applied in an iterative manner. Distributable Amounts shall then be distributed as follows:

(i) Subject to Section 10. l(a)(ii) and the provisions of Article VIII, to the Members in proportion to the number of Units held by each Member as of the time of such distribution.

(ii) The amount of any proposed distribution to a holder of any participating Override Unit pursuant to Section 10. l(a)(i) in respect of such Override Unit shall be reduced until the total reductions in proposed distributions pursuant to this Section 10.1(a)(ii) in respect of such Override Unit equals the Benchmark Amount in respect of such Override Unit. Any amount that is not distributed to the holder of any Override Unit pursuant to this Section 10.1(a)(ii) shall be distributed to the Members pursuant to Section 10.1(a)(i) without applying this Section 10.1(a)(ii) again with respect to such redistributed Benchmark Amount.

(b) In the event that an Exit Event is structured as a sale of Interests by the Members (including pursuant to Section 13.10(b)), rather than a distribution of proceeds by the Company, the purchase agreement governing such Interest sale will have provisions therein which replicate, to the greatest extent possible, the economic result which would have been attained under this Article X had the Exit Event been structured as a sale of the Company’s assets and a distribution of proceeds thereof.

(c) For the avoidance of doubt, it is understood that references herein to Override Units that “will not participate in distributions under Article X” or any similar formulation or reference means (i) that Members will not receive distributions in respect of such Units held pursuant to Article X and (ii) that such non-participating Override Units held will not be counted in any determination of the pro rata or proportionate ownership of Units of such Member or any other Member for purposes of Article X. Notwithstanding anything to the contrary, no Override Units shall participate in any distributions under this Section 10.1 except pursuant to an Exit Event in accordance with this Agreement (including Section 8.1(b)) unless the Compensation Committee shall determine otherwise.

34

Section 10.2 Distributions In Kind. In the event of a distribution of Company property, such property shall for all purposes of this Agreement be deemed to have been sold at its Fair Market Value and the proceeds of such sale shall be deemed to have been distributed to the Members.

Section 10.3 No Withdrawal of Capital. Except as otherwise expressly provided in Article XIV, no Member shall have the right to withdraw capital from the Company or to receive any distribution or return of such Member’s Capital Contributions.

Section 10.4 Withholding.

(a) Each Member shall, to the fullest extent permitted by applicable law, indemnify and hold harmless each Person who is or who is deemed to be the responsible withholding agent for U.S. federal, state or local income tax purposes against all claims, liabilities and expenses of whatever nature (but, in each case, excluding any penalties and excluding accrued interest that results from such Person’s fraud, willful misfeasance, bad faith or gross negligence) solely relating to such Person’s obligation to withhold and to pay over any U.S. federal, state, or local income taxes imposed on such Member and the employee’s share of social security, Medicare, and federal unemployment taxes imposed on such Member (including, in each case, accrued interest but excluding penalties thereon), provided that such liability of any Member shall not exceed the sum of the balance of such Member’s Capital Account, after giving effect to all adjustments hereunder, and the aggregate amount of all prior distributions made to such Member by the Company.

(b) Notwithstanding any other provision of this Article X, (i) each Member hereby authorizes the Company to withhold and to pay over, or otherwise pay, any withholding or other taxes payable by the Company or any of its Affiliates with respect to such Member or as a result of such Member’s participation in the Company and (ii) if and to the extent that the Company shall be required to withhold or pay any such taxes (including any amounts withheld from amounts payable to the Company to the extent attributable, in the judgment of the Members, to such Member’s Interest), such Member shall be deemed for all purposes of this Agreement to have received a payment from the Company as of the time such withholding or tax is required to be paid, which payment shall be deemed to be a distribution with respect to such Member’s Interest to the extent that the Member (or any successor to such Member’s Interest) is then entitled to receive a distribution. To the extent that the aggregate of such payments to a Member for any period exceeds the distributions to which such Member is entitled for such period, such Member shall make a prompt payment to the Company of such amount. It is the intention of the Members that no amounts will be includible as compensation income to any Management Member, or will give rise to any withholding taxes imposed on compensation income, for United States federal income tax purposes as a result of the receipt, vesting or disposition of, or lapse of any restriction with respect to, any Override Units granted to such Member.

35

(c) If the Company makes a distribution in kind and such distribution is subject to withholding or other taxes payable by the Company on behalf of any Member, such Member shall make a prompt payment to the Company of the amount of such withholding or other taxes by wire transfer.

Section 10.5 Restricted Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its Interest in the Company if such distribution would violate Section 18-607 of the Delaware Act or other applicable law.

Section 10.6 Tax Distributions. In the event the Company allocates net taxable income to any of the Company’s Members for any accounting period, then, at the Compensation Committee’s discretion (or the Board’s, if there shall be no Compensation Committee), the Company shall make distributions of cash to such members prior to any other distributions provided for in Article X in an amount determined by the Compensation Committee (or the Board, if there shall be no Compensation Committee) for the purpose of allowing such members to satisfy their tax liability arising as a result of such allocation. Tax distributions made pursuant to the foregoing shall be treated as advances against distributions payable to members pursuant to Section 10.1.

Section 10.7 Benchmark Adjustment. Management Members’ Benchmark Amounts shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Compensation Committee, distributions (including any such distribution in connection with a recapitalization transaction or similar extraordinary transaction) made to the other Members pursuant to Section 10.1 at a time other than an Exit Event. All determinations and calculations required under this Section 10.7 shall be made in the sole discretion of the Compensation Committee.

ARTICLE XI

BOOKS AND RECORDS

Section 11.1 Books, Records and Financial Statements

(a) At all times during the continuance of the Company, the Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company’s business in accordance with generally accepted accounting principles consistently applied, and, to the extent inconsistent therewith, in accordance with this Agreement. Such books of account, together with

36

a copy of this Agreement and the Certificate, shall at all times be maintained at the principal place of business of the Company and shall be open to inspection and examination at reasonable times by each Member and its duly authorized representative for any purpose reasonably related to such Member’s Interest; provided that the Company may maintain the confidentiality of Schedule A.

(b) Within the same time periods applicable to the Company’s lenders with respect to the relevant financial information, the Company shall provide to the Parthenon Members such quarterly or annual financial statements and other financial information (if any) (collectively, the “Lender Financial Information”) required to be provided, and provided, to the lenders of the Company and its Subsidiaries; provided that, following such time that a Parthenon Member first informs the Company in writing that it has elected to no longer receive the Lender Financial Information, thereinafter the Parthenon Members shall no longer receive, and the Company shall no longer have any obligation to provide to the Parthenon Members, the Lender Financial Information.

Section 11.2 Filings of Returns and Other Writings; Tax Matters Partner.

(a) The Company shall timely file all Company tax returns and shall timely file all other writings required by any governmental authority having jurisdiction to require such filing. Within 90 days after the end of each taxable year (or as soon as reasonably practicable thereafter), the Company shall send to each Person that was a Member at any time during such year copies of Schedule K-l, “Partner’s Share of Income, Credits, Deductions, Etc.”, or any successor schedule or form, with respect to such Person, together with such additional information as may be necessary for such Person to file his, her or its United States federal income tax returns.

(b) KIA VII shall be the tax matters partner of the Company, within the meaning of section 6231 of the Code (the “Tax Matters Partner”) unless a Majority in Interest votes otherwise. Each Member hereby consents to such designation and agrees that upon the request of the Tax Matters Partner, such Member will execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent.

(c) Promptly following the written request of the Tax Matters Partner, the Company shall, to the fullest extent permitted by applicable law, reimburse and indemnify the Tax Matters Partner for all reasonable expenses, including reasonable legal and accounting fees, claims, liabilities, losses and damages incurred by the Tax Matters Partner in connection with any administrative or judicial proceeding with respect to the tax liability of the Members, except to the extent arising from the bad faith, gross negligence, willful violation of law, fraud or breach of this Agreement by such Tax Matters Partner.

37

(d) The provisions of this Section 11.2 shall survive the termination of the Company or the termination of any Member’s Interest and shall remain binding on the Members for as long a period of time as is necessary to resolve with the Internal Revenue Service any and all matters regarding the U.S. federal income taxation of the Company or the Members.

Section 11.3 Accounting Method. For both financial and tax reporting purposes, the books and records of the Company shall be kept on the accrual method of accounting applied in a consistent manner and shall reflect all Company transactions and be appropriate and adequate for the Company’s business.

ARTICLE XII

LIABILITY, EXCULPATION AND INDEMNIFICATION

Section 12.1 Liability. Except as otherwise provided by the Delaware Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Covered Person.

Section 12.2 Exculpation. No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner believed to be within the scope of authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence, willful misconduct or willful breach of this Agreement.

Section 12.3 Fiduciary Duty. To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person.

Section 12.4 Indemnification. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner believed to be within the scope of authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence, willful

38

misconduct or willful breach of this Agreement with respect to such acts or omissions; provided, that any indemnity under this Section 12.4 shall be provided out of and to the extent of Company assets only, and no Covered Person shall have any personal liability on account thereof.

Section 12.5 Expenses. To the fullest extent permitted by applicable law, expenses (including, without limitation, reasonable attorneys’ fees, disbursements, fines and amounts paid in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding relating to or arising out of their performance of their duties on behalf of the Company shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that the Covered Person is not entitled to be indemnified as authorized in Section 12.4.

Section 12.6 Severability. To the fullest extent permitted by applicable law, if any portion of this Article shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each Director or Officer and may indemnify each employee or agent of the Company as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated.

ARTICLE XIII

TRANSFERS OF INTERESTS

Section 13.1 Restrictions on Transfers of Interests by Investor Members and Management Members. No Management Member or Investor Member may Transfer any Interests (including, without limitation to any other Member, or by gift, or by operation of law or otherwise), provided that Interests may be Transferred (a) pursuant to Section 13.2(a) (“Estate Planning Transfers, Transfers Upon Death”), (b) in accordance with Section 13.5 (“Puts and Calls”), (c) in accordance with Section 13.6 (“Involuntary Transfers”), (d) pursuant to Section 13.10(a) (“Tag-Along Rights”), (e) pursuant to Section 13.10(b) (“Drag-Along Rights”) and (f) pursuant to Section 13.11, in connection with the formation of Newco (as defined in Section 13.11 (b)) in anticipation of an IPO.

Section 13.2 Estate Planning Transfers; Transfers upon Death of an Investor Member or Management Member; Affiliate Transfers.

(a) Common Units held by Management Members or Investor Members may be transferred for estate-planning purposes of such Investor Member or Management Member, authorized by the prior written approval (such approval not to be unreasonably withheld or

39

delayed) of the Board (excluding such Management Member or Investor Member and other members of the Board who are designees of the Management Members and the Investor Members), to (A) a trust under which the distribution of the Common Units may be made only to beneficiaries who are such Management Member or Investor Members, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants, (B) a charitable remainder trust, the income from which will be paid to such Management Member or Investor Member during his or her life, (C) a corporation, the shareholders of which are only such Management Member or Investor Member, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants or (D) a partnership or limited liability company, the partners or members of which are only such Management Member or Investor Member, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants. Common Units may be transferred as a result of the laws of descent, provided that any heirs, executors or other beneficiaries shall remain subject to the terms of this Agreement as if such Management Member or Investor Member continued to hold the Common Units directly.

(b) The Parthenon Members may Transfer all or a portion of their Interests to any of their Affiliates (other than any portfolio company). For the avoidance of doubt, upon any such Transfer to a permitted Affiliate (or to any subsequent permitted affiliated transferee), such Affiliate of the Parthenon Members shall be bound by all of the restrictions of this Agreement applicable to the Parthenon Members. The Parthenon Members shall promptly inform the Company of any Transfer made pursuant to this Section 13.2(b).

Section 13.3 Effect of Assignment. The Company shall, from the effective date of any permitted assignment of an Interest (or part thereof), thereafter pay all further distributions on account of such Interest (or part thereof) to the assignee of such Interest (or part thereof); provided that such assignee shall have no rights or powers as a Member unless such assignee complies with Section 13.8.

Section 13.4 Overriding Provisions.

(a) Any Transfer in violation of this Article XIII shall be null and void ab initio, and the provisions of Section 13.3 shall not apply to any such Transfers. The approval of any Transfer in any one or more instances shall not limit or waive the requirement for such approval in any other or future instance.

(b) All Transfers permitted under this Article XIII are subject to this Section 13.4 and Sections 13.5, 13.7 and 13.8.

(c) Any proposed Transfer by a Member pursuant to the terms of this Article XIII shall, in addition to meeting all of the other requirements of this Agreement, satisfy the following conditions: (i) the Transfer will not be effected on or through an “established securities market” or a “secondary market or the substantial equivalent thereof,” as such terms are used in Treasury

40

Regulations section 1.7704-1, and, at the request of the Board, the transferor and the transferee will have each provided the Company a certificate to such effect; and (ii) the proposed transfer will not result in the Company having more than 99 Members, within the meaning of Treasury Regulations section 1.7704-1(h)(1) (determined pursuant to the rules of Treasury Regulations section 1.7704-1(h)(3)). The Board may in its sole discretion waive the condition set forth in clause (ii) of this Section 13.4(c).

(d) The Company shall promptly amend Schedule A to reflect any permitted transfers of Interests pursuant to this Article XIII.

Section 13.5 Put and Call Rights.

(a) Sale by Inactive Management Members to the Company (“Put Rights”). Subject to all provisions of this Section 13.5(a) and to Section 13.5(c) (“Prohibited Purchases”), each Inactive Management Member shall have the right to sell to the Company, and the Company shall have the obligation to purchase from each such Inactive Management Member, all, but not less than all, of such Inactive Management Member’s Common Units following the termination of employment of such Inactive Management Member, at their Fair Market Value, if the employment of such Inactive Management Member with the Company or any Subsidiary that employs such individual (or by the Company on behalf of any such Subsidiary) (i) is terminated without Cause or (ii) terminates as a result of (A) the death or Disability of such Inactive Management Member, (B) the resignation of such Inactive Management Member (with or without Good Reason); provided, that (in the case of this clause (B)), at the time of such resignation the Company or any Subsidiary that employs such individual would not have the right to terminate such Management Member for Cause or (C) the Retirement of such Inactive Management Member. If any Inactive Management Member desires to sell Common Units pursuant to this Section 13.5(a), he or she (or his or her estate, as the case may be) shall notify the Company not more than 180 days after the termination of employment as a result of death or Disability and not more than 90 days after the termination of employment as a result of a termination without Cause, the resignation of such Inactive Management Member or the Retirement of such Inactive Management Member.

(b) Right of the Company to Purchase from Inactive Management Members (“Call Rights”). Subject to all provisions of this Section 13.5(b) and Section 13.5(c) (“Prohibited Purchases”), the Company shall have the right to purchase from each Inactive Management Member, and each such Inactive Management Member shall have the obligation to sell to the Company, all, but not less than all, of such Inactive Management Member’s Common Units following the termination of employment of such Inactive Management Member:

(i) at their Fair Market Value, if the employment of such Inactive Management Member with the Company or any Subsidiary that employs such individual (or by the Company on behalf of any such Subsidiary) is terminated as a result of (A) the termination by the Company or any such subsidiary (or by the Company on behalf of any

41

such subsidiary) of such employment without Cause, (B) the death or Disability of such Inactive Management Member, (C) the resignation of such Inactive Management Member (with or without Good Reason); provided, that (in the case of this clause (C)), at the time of such resignation the Company or any Subsidiary that employs such individual would not have the right to terminate such Management Member for Cause or (D) the Retirement of such Inactive Management Member;

(ii) at the lesser of Fair Market Value and the Carrying Value of such Common Units if the employment of such Inactive Management Member with the Company or any Subsidiary that employs such individual (or by the Company on behalf of any such Subsidiary) is terminated for Cause; or

(iii) at the Fair Market Value or the Carrying Value of such Common Units, in the sole discretion of the Board (excluding such Inactive Management Member and other members of the Board who are designees of the Management Members), if such Inactive Management Member is terminated by the Company for any reason other than as a result of an event described in either subparagraph (i) or (ii) of this Section 13.5(b).

(c) Prohibited Purchases. Notwithstanding anything to the contrary herein, the Company shall not be obligated to purchase any Interests from an Inactive Management Member hereunder and shall not exercise any right to purchase Interests from a Management Member hereunder, in each case, to the extent (a) the Company is prohibited from purchasing such Interests (or incurring debt to finance the purchase of such Interests), or the Company is unable to obtain funds to pay for such Interests from a Subsidiary of the Company, in any case by reason of any debt instruments or agreements, including any amendment, renewal, extension, substitution, refinancing, replacement or other modification thereof, which have been entered into or which may be entered into by the Company or any of its Subsidiaries, including those to finance the acquisition of the Company on the date hereof, and any future acquisitions by the Company or recapitalizations of the Company (the “Financing Documents”) or by applicable law, (b) an event of default has occurred (or, with notice or the lapse of time or both, would occur) under any Financing Document and is (or would be) continuing, or (c) the purchase of such Interests (including the incurrence of any debt which in the judgment of the Board is necessary to finance such purchase) or the distribution of funds to the Company by a Subsidiary thereof to pay for such purchase (1) would, or in the view of the Board (excluding such Inactive Management Member and other members of the Board who are designees of any Management Member), would reasonably be likely to result in the occurrence of an event of default under any Financing Document or create a condition which would reasonably be likely to, with notice or lapse of time or both, result in such an event of default, (2) would, in the judgment of the Board (excluding such Inactive Management Member and other members of the Board who are designees of any Management Member), be imprudent in view of the financial condition (present or projected) of the Company and its Subsidiaries or the anticipated impact of the purchase (or of the obtaining of funds to permit the purchase) of such Interests on the Company’s or any of its Subsidiaries’ ability to meet their respective obligations, including under any Financing Document or

42

otherwise, or to satisfy and make their planned capital and other expenditures or satisfy any related obligations, or (3) could, in the judgment of the Board, constitute a fraudulent conveyance or transfer by the Company or a Subsidiary thereof or render the Company or a Subsidiary thereof insolvent under applicable law or violate limitations in applicable corporate law on repurchases of stock or payment of dividends or distributions. If Interests which the Company has the right or obligation to purchase on any date exceed the total amount permitted to be purchased on such date pursuant to the preceding sentence (the “Maximum Amount”), the Company shall purchase on such date only that number of Interests up to the Maximum Amount (if any) (and shall not be required to purchase more than the Maximum Amount) in such amounts as the Board shall in good faith determine.

Notwithstanding anything to the contrary contained in this Agreement, if the Company is unable to make any payment when due to any Management Member under this Agreement by reason of this Section 13.5(c), the Company shall have the option to either (i) make such payment at the earliest practicable date permitted under this Section 13.5(c) and any such payment shall accrue simple interest (or if such payment is accruing interest at such time, shall continue to accrue interest) at a rate per annum of 6% from the date such payment is due and owing to the date such payment is made, provided that all payments of interest accrued hereunder shall be paid only at the date of payment by the Company for the Interests being purchased or (ii) pay the purchase price for such Interests with a subordinated note which is fully subordinated in right of payment and exercise of remedies to the lenders’ rights under the Financing Documents and the maturity date of which is 30 days after the latest maturity date on any debt of the Company which is outstanding (or reasonably expected to become outstanding) as of the date such subordinated note is issued.

(d) Retained Operating Units. Notwithstanding anything to the contrary, the provisions of Section 13.5(a) and 13.5(b) shall not apply to (and there shall no put or call rights with respect to) retained Operating Units unless the Board or the Compensation Committee determines in its discretion that such provisions will so apply; provided that in the event that the Board or the Compensation Committee, as applicable, determines that the provisions will be applicable to retained Operating Units, with respect to any Operating Units to be purchased or sold pursuant to such Sections, clauses 13.5(a)(ii)(B) and 13.5(b)(i)(C) shall read as follows: “the resignation of such Inactive Management Member with Good Reason” (it being understood that, in respect of retained Operating Units, the Board or the Compensation Committee, as applicable, will have discretion to purchase such Operating Units at either Fair Market Value or Carrying Value with respect to resignations without Good Reason).

Section 13.6 Involuntary Transfers. Any transfer of title or beneficial ownership of Interests upon default, foreclosure, forfeit, divorce, court order or otherwise than by a voluntary decision on the part of a Management Member or an Investor Member (each, an “Involuntary Transfer”) shall be void unless the Management Member or the Investor Member complies with this Section 13.6 and enables the Company to exercise in full its rights hereunder. Upon any Involuntary Transfer, the Company shall have the right to purchase such Interests pursuant to

43

this Section 13.6 and the person or entity to whom such Interests have been Transferred (the “Involuntary Transferee”) shall have the obligation to sell such Interests in accordance with this Section 13.6. Upon the Involuntary Transfer of any Interest, such Management Member or an Investor Member shall promptly (but in no event later than two days after such Involuntary Transfer) furnish written notice to the Company indicating that the Involuntary Transfer has occurred, specifying the name of the Involuntary Transferee, giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer. Upon the receipt of the notice described in the preceding sentence, and for 60 days thereafter, the Company shall have the right to purchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Interests acquired by the Involuntary Transferee for a purchase price equal to the lesser of (i) the Fair Market Value of such Interest and (ii) the amount of the indebtedness or other liability that gave rise to the Involuntary Transfer plus the excess, if any, of the Carrying Value of such Interests over the amount of such indebtedness or other liability that gave rise to the Involuntary Transfer. Notwithstanding anything to the contrary, any Involuntary Transfer of Override Units shall result in the immediate forfeiture of such Override Units and without any compensation therefor, and such Involuntary Transferee shall have no rights with respect to such Override Units without regard to the transferring Management Member’s or Investor Member’s, as applicable, status of employment with the Company or any of its Subsidiaries.

Section 13.7 Assignment by the Company. The Company shall have the right to assign to Kelso all or any portion of its rights and obligations under Sections 13.5(a), 13.5(b) or 13.6, provided that any such assignment or assumption is accepted by Kelso; provided further that if the Company determines to assign its rights and obligations under this Section 13.7 to Kelso (and Kelso accepts such assignment and assumption), the Company shall also offer to assign such rights and obligations to the Parthenon Members on a pro-rata basis based on relative ownership interests between Kelso and the Parthenon Members. If the Company has not exercised its right to purchase Interests pursuant to any such Section within fifteen (15) days of receipt by the Company of the letter, notice or other occurrence giving rise to such rights, then Kelso shall have the right to require the Company to assign such rights; provided that the provisos set forth in the immediately preceding sentence with respect to the pro-rata assignment of such rights shall apply if Kelso determines to require the Company to assign such rights. Kelso shall have the right to assign to one or more of the Kelso Members all or any of its rights to purchase Interests pursuant to this Section 13.7.

Section 13.8 Substitute Members. In the event any Management Member, Investor Member or Kelso Member Transfers its Interest in compliance with the other provisions of this Article XIII, the transferee thereof shall have the right to become a substitute Management Member, Investor Member or substitute Kelso Member, as the case may be, but only upon satisfaction of the following:

(a) execution of such instruments as the Board deems reasonably necessary or desirable to effect such substitution; and

44

(b) acceptance and agreement in writing by the transferee of the Member’s Interest to be bound by all of the terms and provisions of this Agreement and assumption of all obligations under this Agreement (including breaches hereof) applicable to the transferor and in the case of a transferee of a Management Member who resides in a state with a community property system, such transferee causes his or her spouse, if any, to execute a Spousal Waiver in the form of Exhibit A attached hereto. Upon the execution of the instrument of assumption by such transferee and, if applicable, the Spousal Waiver by the spouse of such transferee, such transferee shall enjoy all of the rights and shall be subject to all of the restrictions and obligations of the transferor of such transferee.

Section 13.9 Release of Liability. In the event any Member shall sell such Member’s entire Interest in the Company (other than in connection with an Exit Event) in compliance with the provisions of this Agreement, including, without limitation, pursuant to the last sentence of Section 13.6, without retaining any interest therein, directly or indirectly, then the selling Member shall, to the fullest extent permitted by applicable law, be relieved of any further liability arising hereunder for events occurring from and after the date of such Transfer, provided, however, that no such Transfer shall relieve any Management Member of his obligations pursuant to Section 4.6 hereof and such obligations shall survive any termination of such Management Member’s membership in the Company for the restriction period set forth in Section 4.6.

Section 13.10 Tag-Along and Drag-Along Rights.

(a) Tag-Along Rights. In the event that at any time Kelso (or an Affiliate (other than the Company and its Subsidiaries) thereof holding Interests) proposes to Transfer Interests in the Company, other than any Transfer to an Affiliate of Kelso, Kelso shall give each Investor Member and Management Member written notice of such proposed Transfer. Each Management Member and Investor Member shall then have the right (the “Tag-Along Right”), exercisable by written notice to Kelso within 30 days following delivery of the notice referred to in the foregoing sentence, to participate pro rata in such sale by selling a pro rata portion of such Management Member’s and Investor Member’s Interests on substantially the same (and no less favorable) terms (including with respect to representations, warranties and indemnification) as the selling Kelso Member, provided, however, that any representations and warranties relating specifically to any Member shall only be made by that Member and any indemnification provided by the Members (other than in respect of representations and warranties relating to any such Shareholder’s title to or ownership of the Interests being sold by such Shareholder in the Proposed Sale and such holder’s authority, power and right to enter into and consummate such transaction without violating any other agreement or legal requirement) shall be based on the proceeds to be received by each Member in the proposed sale, either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the proposed purchaser; provided, further, however, that, (i) in respect of consideration received by the Management Members, if a majority (based on ownership of participating Interests) of participating Management Members consent (ii) in respect of consideration received by the Parthenon

45

Members, with a Parthenon Members’ consent, or (iii) in respect of consideration received by the Investor Members (other than the Parthenon Members), if a majority (based on ownership of participating Interests) of participating Investor Members (other than the Parthenon Members) consent, the form of consideration to be received by Kelso or any Kelso Member in connection with the proposed sale may be different from that received by the Management Members and/or the Investor Members so long as the value of the consideration to be received by Kelso or any Kelso Member is the same or less than what they would have received had they received the same form of consideration as the Management Members and/or Investor Members (as reasonably determined by the Board in good faith).

(b) Drag-Along Rights. (i) In the event that at any time Kelso (or an Affiliate (other than the Company and its Subsidiaries) thereof holding Interests) (A) proposes to Transfer Interests in the Company, other than any Transfer to an Affiliate of Kelso, or (B) desires to effect an Exit Event, Kelso shall have the right (the “Drag-Along Right”), upon written notice to the other Members not less than 30 days prior to the proposed closing, to require that each other Member join pro rata in such sale by selling a pro rata portion of such Member’s Interests on substantially the same (and no less favorable) terms (including with respect to representations, warranties and indemnification) as the selling Kelso Members, provided, however, that any representations and warranties relating specifically to any Member shall only be made by that Member and any indemnification provided by the Members (other than in respect of representations and warranties relating to any such Shareholder’s title to or ownership of the Interests being sold by such Shareholder in the Proposed Sale and such holder’s authority, power and right to enter into and consummate such transaction without violating any other agreement or legal requirement) shall be based on the relative purchase price being received by each Member in the proposed sale, either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the proposed purchaser; provided, further, however, that (i) in respect of consideration received by the Management Members, if a majority (based on ownership of participating Interests) of participating Management Members consent, (ii) in respect of consideration received by the Parthenon Members, with a Parthenon Members’ consent, or (iii) in respect of consideration received by the Investor Members (other than the Parthenon Members), if a majority (based on ownership of participating Interests) of the Investor Members (other than the Parthenon Members) consent, the form of consideration to be received by Kelso or any Kelso Member in connection with the proposed sale may be different from that received by the Management Members and/or the Investor Members so long as the value of the consideration to be received by Kelso or any Kelso Member is the same or less than what they would have received had they received the same form of consideration as the Management Members and/or Investor Members (as reasonably determined by the Board in good faith). For purposes of this Section 13.10, for each Member, “joining Kelso in such sale” shall include voting its Interests consistently with Kelso, transferring its Interests to a corporation organized in anticipation of such sale in exchange for capital stock of such corporation, executing and delivering agreements and documents which are being executed and delivered by Kelso and providing such other cooperation as Kelso may reasonably request.

46

(ii) Any Exit Event may be structured as an auction and may be initiated by the delivery to the Company and the other Members of a written notice that Kelso has elected to initiate an auction sale procedure. Kelso shall be entitled to take all steps reasonably necessary to carry out an auction of the Company, including, without limitation, selecting an investment bank, providing confidential information (pursuant to confidentiality agreements), selecting the winning bidder and negotiating the requisite documentation. The Company and each Member shall provide assistance with respect to these actions as reasonably requested.

(iii) The Members acknowledge and agree that Kelso shall have the right, pursuant to Section 6.2(f) of the Shareholders Agreement, to elect that a Member holding securities of Axle Holdings, Inc., a Delaware corporation (“Holdings”) sell additional shares of Holdings common stock (in addition to shares that such Member holding securities of Holdings would be required to sell pursuant to Section 6.2(a) of the Shareholders Agreement) in lieu of all or a portion of Interests that such Member would otherwise be required to sell by virtue of Kelso’s drag-along rights pursuant to Section 13.10(b).

(c) In the event the Kelso Members sell less than 100% of their Interests in the Company, joining “pro rata in such sale” shall be based on relative participating Common Units unless the Compensation Committee deems the provisions of Article X operative (including Section 10.1(b)) or the Compensation Committee determines that Override Units shall, or shall be required to, participate in such sale (in which case “pro rata in such sale” shall be based on relative participating Units, with applicable adjustments made for Benchmark Amounts) or the Compensation Committee otherwise determines on a reasonable basis based on the then current capital structure of the Company. Notwithstanding anything to the contrary set forth in this Section 13.10, holders of Override Units shall not have rights (nor obligations) to participate in Transfers by Kelso or Affiliates thereof pursuant to Section 13.10(a) or 13.10(b) unless the Compensation Committee, in its sole discretion, determines (with respect to any particular Transfer by Kelso or an Affiliate) that Override Units (including either or both of Operating Units or Value Units or portions thereof) shall be permitted to (in the case of Section 13.10(a)), or shall be required to (in the case of 13.10(b)), to participate in a sale of Interests by Kelso pursuant to Section 13.10(a) or 13.10(b) (in which case applicable Override Units shall be permitted to participate or be required to participate); provided that, in either case, the Compensation Committee may make appropriate provision in the transaction with respect to Override Units so included to account for applicable Benchmark Amounts, the retention schedule set forth in Section 8.2(a)(ii) and other appropriate provisions of this Agreement. The foregoing shall not limit the rights of holders of Override Units to participate in any Exit Event pursuant to Articles VIII and X.

(d) Any transaction costs, including transfer taxes and legal, accounting and investment banking fees incurred by the Company and Kelso in connection with a Exit Event shall, unless the applicable purchaser refuses, be borne by the Company in the event of a merger, consolidation or sale of assets and shall otherwise be borne by the Members on a pro rata basis based on the consideration received by each Member in such Exit Event.

47

Section 13.11 Initial Public Offering.

(a) Upon a determination by Kelso to effect an Initial Public Offering, the Board shall take such actions as are necessary to structure the IPO in a manner acceptable to Kelso, including, without limitation, causing the public offering of the stock of an existing or newly formed subsidiary of the Company or any of the Transfers, mergers, consolidations or restructurings pursuant to Section 13.11 (b) and making any such amendments to this Agreement (subject to Section 15.11) as may be deemed by the Board to be necessary to facilitate such IPO.

(b) In the event of a determination by Kelso to cause (i) a Transfer of all or substantially all of (x) the assets of the Company or (y) the Interests to a newly organized stock corporation or other business entity (“Newco”), (ii) a merger of the Company into Newco by merger or consolidation or (iii) any other restructuring of the Interests, in any such case in anticipation of an Initial Public Offering, each Member shall take such steps to effect such Transfer, merger, consolidation or other restructuring as may be requested by the Company on terms that are substantially the same (and no less favorable) in respect of such Member’s Interests as other holders of corresponding Interests in respect of such corresponding Interests, including, without limitation, if requested, Transferring such Member’s Interests to Newco in exchange for capital stock of Newco, provided, that in the event of such an exchange, each Interest would be exchanged for a number of shares of Newco stock determined in a manner such that each Member is treated no less favorably than such Member would have been treated upon an Exit Event (assuming the value of the consideration to be received by Kelso in the Exit Event is the mid-point of the filing range in the IPO); provided, however, in lieu of effecting any such exchange of the Common Units (and/or, at the option and request of Kelso, Override Units) of Management Members, the Company shall, at the request of Kelso, pay to the Management Members cash in an amount equal to the aggregate Fair Market Value of the shares such Management Member would, otherwise, have received pursuant to the preceding proviso. Notwithstanding the preceding sentence, no Member shall be required to take any action or omit to take any action to the extent such action or omission violates applicable law. If the Board determines to effect an IPO pursuant to this Section 13.11(b) and the Management Members receive shares of Newco pursuant to any such Transfer, merger, consolidation or restructuring, each Management Member and Investor Member agrees to enter (as a “Management Shareholder” or a “Outside Investor”, respectively, as set forth therein) into a registration rights agreement on terms substantially comparable to the terms of the Registration Rights Agreement.

ARTICLE XIV

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 14.1 Dissolving Events. The Company shall be dissolved and its affairs wound up in the manner hereinafter provided upon the happening of any of the following events:

(a) the Board and the Members shall vote or agree in writing to dissolve the Company pursuant to the required votes set forth in Sections 5.3 and 4.3(d), respectively;

48

(b) any event which under applicable law would cause the dissolution of the Company, provided that, unless required by law, the Company shall not be wound up as a result of any such event and the business of the Company shall continue.

Notwithstanding the foregoing, the death, retirement, resignation, expulsion, bankruptcy or dissolution of any Member or the occurrence of any other event that terminates the continued membership of any Member in the Company under the Delaware Act shall not, in and of itself, cause the dissolution of the Company. In such event, the remaining Member(s) shall continue the business of the Company without dissolution.

Section 14.2 Dissolution and Winding-Up. Upon the dissolution of the Company, the assets of the Company shall be liquidated or distributed under the direction of and to the extent determined by the Board and the business of the Company shall be wound up. Within a reasonable time after the effective date of dissolution of the Company, the Company’s assets shall be distributed in the following manner and order:

First, to creditors in satisfaction of indebtedness (other than any loans or advances that may have been made by any of the Members to the Company), whether by payment or the making of reasonable provision for payment, and the expenses of liquidation, whether by payment or the making of reasonable provision for payment, including the establishment of reasonable reserves (which may be funded by a liquidating trust) determined by the Board or the liquidating trustee, as the case may be, to be reasonably necessary for the payment of the Company’s expenses, liabilities and other obligations (whether fixed, conditional, unmatured or contingent);

Second, to the payment of loans or advances that may have been made by any of the Members to the Company; and

Third, to the Members in accordance with Section 10.1, taking into account any amounts previously distributed under Section 10.1,

provided that no payment or distribution in any of the foregoing categories shall be made until all payments in each prior category shall have been made in full, and provided, further, that if the payments due to be made in any of the foregoing categories exceed the remaining assets available for such purpose, such payments shall be made to the Persons entitled to receive the same pro rata in accordance with the respective amounts due to them.

Section 14.3 Distributions in Cash or in Kind. Upon the dissolution of the Company, the Board shall use all commercially reasonable efforts to liquidate all of the Company’s assets in an orderly manner and apply the proceeds of such liquidation as set forth in Section 14.2, provided that if in the good faith judgment of the Board, a Company asset should not be

49

liquidated, the Board shall cause the Company to allocate, on the basis of the Fair Market Value of any Company assets not sold or otherwise disposed of, any unrealized gain or loss based on such value to the Members’ Capital Accounts as though the assets in question had been sold on the date of distribution and, after giving effect to any such adjustment, distribute such assets in accordance with Section 14.2 as if such Fair Market Value had been received in cash, subject to the priorities set forth in Section 14.2, and provided, further, that the Board shall in good faith attempt to liquidate sufficient Company assets to satisfy in cash (or make reasonable provision for) the debts and liabilities referred to in Section 14.2.

Section 14.4 Termination. The Company shall terminate when the winding up of the Company’s affairs has been completed, all of the assets of the Company have been distributed and the Certificate has been canceled, all in accordance with the Delaware Act.

Section 14.5 Claims of the Members. The Members and former Members shall look solely to the Company’s assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company or any other Member.

ARTICLE XV

MISCELLANEOUS

Section 15.1 Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by fax, as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(a) If to the Company:

Axle Holdings II, LLC

c/o Kelso & Company

320 Park Avenue, 24^th Floor

New York, New York 10022

Attention: James J. Connors II, Esq.

Telecopy No.: (212) 751-3939

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

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Lou R. Kling

Telecopy No.: (917) 777-2770

50

(b) If to a Member, at the address set forth opposite such Member’s name on Schedule A attached hereto, or at such other address as such Member may hereafter designate by written notice to the Company.

All such notices, requests, demands, waivers and other communications shall be deemed to have been received by (w) if by personal delivery, on the day delivered, (x) if by certified or registered mail, on the fifth Business Day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax, on the day delivered, provided that such delivery is confirmed.

Section 15.2 Securities Act Matters. Each Member understands that in addition to the restrictions on transfer contained in this Agreement, he or she must bear the economic risks of his or her investment for an indefinite period because the Interests have not been registered under the Securities Act.

Section 15.3 Headings. The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement.

Section 15.4 Entire Agreement. This Agreement constitutes the entire agreement among the Members with respect to the subject matter hereof, and supersedes any prior agreement or understanding among them with respect to such subject matter.

Section 15.5 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

Section 15.6 Governing Law; Attorneys’ Fees. This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of Delaware, without giving effect to the conflict of laws rules thereof. The substantially prevailing party in any action or proceeding relating to this Agreement shall be entitled to receive an award of, and to recover from the other party or parties, any fees or expenses incurred by him, her or it (including, without limitation, reasonable attorneys’ fees and disbursements) in connection with any such action or proceeding.

Section 15.7 Waiver of Jury Trial. EACH MEMBER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

51

Section 15.8 Waiver of Partition. Except as may otherwise be provided by law in connection with the winding-up, liquidation and dissolution of the Company, each Member hereby irrevocably waives any and all rights that it may have to maintain an action for partition of any of the Company’s property.

Section 15.9 Severability. If any provision of this Agreement is inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever, so long as this Agreement, taken as a whole, still expresses the material intent of the parties hereto. The invalidity of any one or more phrases, sentences, clauses, Sections or subsections of this Agreement shall not affect the remaining portions of this Agreement.

Section 15.10 Further Actions. Each Member shall execute and deliver such other certificates, agreements and documents, and take such other actions, as may reasonably be requested by the Company in connection with the continuation of the Company and the achievement of its purposes, including, without limitation, (a) any documents that the Company deems necessary or appropriate to continue the Company as a limited liability company in all jurisdictions in which the Company or its subsidiaries conduct or plan to conduct business and (b) all such agreements, certificates, tax statements and other documents as may be required to be filed in respect of the Company.

Section 15.11 Amendments. This Agreement (including this Section 15.11) may not be amended, modified or supplemented except by a written instrument signed by the Kelso Members; provided, however, that Kelso may, pursuant to Section 4.8, make such modifications to this Agreement, including Schedule A as are necessary to admit Additional Members. Notwithstanding the foregoing, no amendment, modification or supplement shall adversely affect either (a) a particular Member on a discriminatory basis (or otherwise adversely and disproportionately relative to the other Members) without such Member’s consent (it being understood that any such applicable amendment to the rights or exceptions herein that apply expressly and exclusively to “Parthenon Members” shall require the consent of the Parthenon Members) or (b) the Management Members as a class without the consent of a majority of the Management Members. The Company shall notify all Members after any such amendment, modification or supplement, other than any amendments to Schedule A, as permitted herein, has taken effect.

52

Section 15.12 Power of Attorney. Each Member (other than the Parthenon Members) hereby constitutes and appoints Kelso as his or her true and lawful representative and attorney-in-fact in his or her name, place and stead to make, execute, acknowledge, record and file the following:

(a) any amendment to the Certificate which may be required by the laws of the State of Delaware because of:

(i) any duly made amendment to this Agreement, or

(ii) any change in the information contained in such Certificate, or any amendment thereto;

(b) any other certificate or instrument which may be required to be filed by the Company under the laws of the State of Delaware or under the applicable laws of any other jurisdiction in which counsel to the Company determines that it is advisable to file;

(c) any certificate or other instrument which Kelso or the Board deems necessary or desirable to effect a termination and dissolution of the Company which is authorized under this Agreement;

(d) any amendments to this Agreement, duly adopted in accordance with the terms of this Agreement; and

(e) any other instruments that Kelso or the Board may deem necessary or desirable to carry out fully the provisions of this Agreement; provided, however, that any action taken pursuant to this power shall not, in any way, increase the liability of the Members beyond the liability expressly set forth in this Agreement, and provided further that where action by a majority of the Board is required, such action shall have been taken.

Such attorney-in-fact is not by the provisions of this Section 15.12 granted any authority on behalf of the undersigned to amend this Agreement, except as provided for in this Agreement. Such power of attorney is coupled with an interest and shall continue in full force and effect not-withstanding the subsequent death or incapacity of the Member granting such power of attorney.

Section 15.13 Fees and Expenses. The Company shall assume (as applicable) and pay all legal, formation, transaction and related expenses incurred by the Company and its Subsidiaries (including all such expenses incurred by the Kelso Members on behalf of the Company and its Subsidiaries). Except as provided in this Agreement or in any other agreement between the Company and such Member or its Affiliates (including the letter agreement dated February 22, 2005, between Kelso & Company, L.P. and Axle Merger Sub, Inc.), all other fees and expenses incurred by any Member in connection with its investment in the Company (including in connection with such Member’s negotiation of this Agreement) shall be borne by the respective Member incurring such expenses.

53

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

KELSO MEMBERS
KELSO INVESTMENT ASSOCIATES VII, L.P.
By:	Kelso GP VII, L.P., the general partner
By:	Kelso GP VII, LLC, its general partner
By:	/s/ David I. Wahrhaftig
	Name:	David I. Wahrhaftig
	Title:	Managing Member
KEP VI, LLC
By:	/s/ David I. Wahrhaftig
	Name:	David I. Wahrhaftig
	Title:	Managing Member
MANAGEMENT MEMBERS
/s/ Thomas C. O’Brien
Thomas C. O’Brien
/s/ Scott P. Pettit
Scott P. Pettit

/s/ David R. Montgomery

David R. Montgomery

/s/ Donald J. Hermanek

Donald J. Hermanek

/s/ John W. Kett

John W. Kett

/s/ John R. Nordin

John R. Nordin

/s/ Sidney L. Kerley

Sidney L. Kerley

INVESTOR MEMBERS

/s/ Brian T. Clingen

Brian T. Clingen

/s/ Dan Simon

Dan Simon

PARTHENON INVESTORS II, L.P., a Delaware limited partnership
By:	PCap Partners II, LLC, its General Partner
By:	PCap II, LLC its Managing Member
By:	/s/ John Rutherford
	Name:	John C. Rutherford or Ernest K. Jacquet
	Title:	Managing Member
J&R FOUNDERS’ FUND II, L.P., a Delaware limited partnership
By:	J&R Advisors F.F., LLC, its General Partner
By:	J&R Investment Management Company, LLC its Managing Member
By:	/s/ John Rutherford
	Name:	John C. Rutherford or Ernest K. Jacquet
	Title:	Managing Member
PCIP INVESTORS, a Delaware general partnership
By:	Parthenon Capital, LLC., its Managing Partner
By:	J&R Investment Management Company, LLC its Managing Member
By:	/s/ John Rutherford
	Name:	John C. Rutherford or Ernest K. Jacquet
	Title:	Managing Member

MAGNETITE ASSET INVESTORS III L.L.C.
By:	BLACKROCK FINANCIAL MANAGEMENT. INC. As Managing Member
By:	/s/ Mark J. Williams
	Name:	Mark J. Williams
	Title:	Authorized Signatory

Schedule A

Kelso Members

Name & Mailing Address	Date of Admission	Capital Contribution		Common Units
Kelso Investment Associates VII, L.P. c/o Kelso & Company, L.P. 320 Park Avenue, 24th Floor New York, NY 10022	May 10, 2005	$	97,353,435.41	3,800,374
KEP VI, LLC c/o Kelso & Company, L.P. 320 Park Avenue, 24th Floor New York, NY 10022	May 10, 2005	$	24,106,564.59	941,044

Management Members

					Override Units
Name & Mailing Address	Date of Admission	Capital Contribution		Common Units	Value Units	Operating Units	Benchmark Amount
Thomas C. O’Brien	May 25, 2005	$	20,000	781
Scott P. Pettit	May 25, 2005	$	20,000	781
David R. Montgomery	May 25, 2005	$	20,000	781
Donald J. Hermanek	May 25, 2005	$	20,000	781
John W. Kett	May 25, 2005	$	20,000	781
John R. Nordin	May 25, 2005	$	20,000	781
Sidney L. Kerley	May 25, 2005	$	20,000	781

Investor Members

Name & Mailing Address	Date of Admission	Capital Contribution		Common Units
PARTHENON MEMBERS:
Parthenon Investors II, L.P.	May 25, 2005	$	14,574,456	568,941
75 State Street
Boston, Massachusetts 02109
PCIP Investors	May 25, 2005	$	200,544	7,829
75 State Street
Boston, Massachusetts 02109
J&R Founders Fund II, L.P.	May 25, 2005	$	225,000	8,783
75 State Street
Boston, Massachusetts 02109
OTHER INVESTOR MEMBERS:
Magnetite Asset Investors III L.L.C.	May 25, 2005	$	2,000,000	78,074
c/o BlackRock Financial Management
40 East 52nd Street
New York, NY 10022

Name & Mailing Address	Date of Admission	Capital Contribution		Common Units
Brian T. Clingen	May 25, 2005	$	2,000,000	78,074
Dan Simon	May 25, 2005	$	3,000,000	117,111

MAGNETITE ASSET INVESTORS III L.L.C.
By:	BLACKROCK FINANCIAL MANAGEMENT, INC. As Managing Member
By:	/s/ Mark J. Williams
	Name:	Mark J. Williams
	Title:	Authorized Signatory

EX-10.15

Exhibit 10.15

EXECUTION COPY

SHAREHOLDERS AGREEMENT

AXLE HOLDINGS, INC.

Dated as of May 25, 2005

Table of Contents

			Page
1.	Restrictions on Transfer of Shares		1
	1.1	Restriction on Transfers by the Management Shareholders	1
	1.2	Restrictions on Transfers by Outside Investors	1
	1.3	Permitted Pledges	1
	1.4	Estate Planning Transfers	2
2.	Sale by Management Shareholders to the Company (“Put Rights”)		2
	2.1	Right to Sell	2
	2.2	Notice	3
	2.3	Payment	3
3.	Right of the Company to Purchase from Management Shareholders (“Call Rights”)		3
	3.1	Right to Purchase	3
	3.2	Notice	4
	3.3	Payment	5
4.	Purchase Price		5
	4.1	Appraisal	5
	4.2	Fair Market Value	5
	4.3	Carrying Value	6
5.	Prohibited Purchases		6
6.	Tag-Along and Drag-Along Rights		7
	6.1	Tag-Along Rights	7
	6.2	Drag-Along Rights	9
7.	Involuntary Transfers		12
8	Stock Certificate Legend		12
9.	Covenants; Representations and Warranties		13
	9.1	Management Shareholders	13
	9.2	No Other Arrangements or Agreements	13
	9.3	Additional Representations and Warranties	14
10.	Amendment and Modification		14
11.	Parties		15
	11.1	Assignment by the Company	15
	11.2	Assignment Generally	15
	11.3	Termination	15
	11.4	Agreements to Be Bound	15
12.	Recapitalizations, Exchanges, etc.		16
13.	No Third Party Beneficiaries		16
14.	Further Assurances		16
15.	Governing Law		16
16.	Invalidity of Provision		16
17.	Waiver		16

i

18.	Notices	17
19.	Headings	18
20.	Counterparts	18
21.	Fax Signatures	18
22.	Entire Agreement	18
23.	Outside Investors	19
24.	Injunctive Relief	19
25.	Confidentiality	19
26.	Preparation for an IPO	19
27.	Defined Terms	20

ii

SHAREHOLDERS AGREEMENT

THIS SHAREHOLDERS AGREEMENT (this “Agreement”), is made and entered into as of May 25, 2005, by and among Axle Holdings, Inc., a Delaware corporation (the “Company”), Axle Holdings II, LLC, a Delaware limited liability company (the “LLC”), and those employees of the Company or its Subsidiaries who are listed on Schedule 1 hereto (together with any persons who become parties to this Agreement pursuant to Section 9.1 and each of their respective permitted transferees, collectively, the “Management Shareholders”). The Management Shareholders, together with the any Person that becomes a party to this Agreement after the date hereof pursuant to Section 23 (collectively, the “Outside Investors”) and any of their respective permitted transferees, are hereinafter referred to as the “Non-Kelso Shareholders,” and the Non-Kelso Shareholders, together with the LLC, are hereinafter referred to as the “Shareholders.” Capitalized terms used herein without definition are defined in Section 27 of this Agreement.

The parties hereto agree as follows:

1. Restrictions on Transfer of Shares.

1.1 Restriction on Transfers by the Management Shareholders. No Shares now or hereafter owned by any Management Shareholder, nor any interest therein nor any rights relating thereto, may be Transferred; provided that, Shares held by any Management Shareholder may be Transferred (i) pursuant to Section 1.3 (“Permitted Pledges”), (ii) pursuant to Section 1.4 (“Estate Planning Transfers”) or, in case of the death of such Management Shareholder, by will or by the laws of intestate succession, to his or her executors, administrators, testamentary trustees, legatees or beneficiaries, (iii) pursuant to Section 2.1 (“Put Rights”), (iv) pursuant to Section 3.1 (“Call Rights”), (v) pursuant to Section 6.1 (“Tag-Along Rights”), (vi) pursuant to Section 6.2 (“Drag-Along Rights”), (vii) in accordance with Section 7 (“Involuntary Transfers”) or (viii) in connection with a registered offering pursuant to the Registration Rights Agreement.

1.2 Restrictions on Transfers by Outside Investors. No Shares now or hereafter owned by the Outside Investors, nor any interest therein nor any rights relating thereto, may be Transferred; provided that, Shares held by any Outside Investor may be Transferred (i) pursuant to Section 6.1 (“Tag-Along Rights”), (ii) pursuant to Section 6.2 (“Drag-Along Rights”), (iii) in accordance with Section 7 (“Involuntary Transfers”), (iv) in connection with a registered offering pursuant to the Registration Rights Agreement or (v) at any time to any third party with the prior written consent of the LLC in its sole discretion.

1.3 Permitted Pledges. A Management Shareholder may pledge any or all Shares now or hereafter owned by him or her, or grant a security interest therein to secure indebtedness of such Management Shareholder owing to a bank or other financial institution, in either case on terms and conditions approved (such approval not to be unreasonably withheld or delayed) by the Board (excluding such Management Shareholder, if he or she is a member of the Board) with respect to such pledge; provided, however, that any pledgee pursuant to this Section 1.3 shall acquire only a security interest in such Shares entitling such pledgee to (i) the proceeds from any sale of such Shares made in compliance with the terms of this Agreement and (ii) any proceeds of any distribution to Shareholders on account of the Shares in any liquidation as a

result of any bankruptcy proceeding or the winding up of affairs of the Company, and in no event shall such pledgee be entitled to receive title to such Shares or any other rights incident thereto other than those specified above. The pledge agreements or other related financing agreements of any Management Shareholder shall be subject to and acknowledge the rights of the Company and the other Shareholders set forth herein and shall acknowledge the restrictions imposed on the pledgee’s security interest pursuant to this Section 1.3.

1.4 Estate Planning Transfers. Shares held by any Management Shareholder may be Transferred for estate-planning purposes of such Management Shareholder, authorized by the prior written approval (such approval not to be unreasonably withheld or delayed) of the Board (excluding such Management Shareholder, if he or she is a member of the Board) to (i) a trust under which the distribution of the Shares may be made only to beneficiaries who are such Management Shareholder, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants, (ii) a charitable remainder trust, the income from which will be paid to such Management Shareholder during his or her life, (iii) a corporation, the stockholders of which are only such Management Shareholder, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants or (iv) a partnership or limited liability company, the partners or members of which are only such Management Shareholder, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants; provided that, any heirs, executors or other beneficiaries shall remain subject to the terms of this Agreement as if the applicable transferor Management Shareholder continued to hold the applicable Shares directly.

2. Sale by Management Shareholders to the Company (“Put Rights”).

2.1 Right to Sell. Subject to all subsections of this Section 2 and to Section 5 (“Prohibited Purchases”), each of the Management Shareholders shall have the right to sell to the Company, and the Company shall have the obligation to purchase from each such Management Shareholder, all, but not less than all, of such Management Shareholder’s Shares following the termination of employment of such Management Shareholder with the Company or any Subsidiary that employs such individual as follows:

(a) in the case of Exchange Options or Rollover Shares, at the Fair Market Value (as defined in Section 4.2(a)) of such Exchange Options or Rollover Shares, as applicable, to be sold, if such Management Shareholder’s employment with the Company or any Subsidiary that employs such individual (or by the Company on behalf of any such Subsidiary) is terminated as a result of (A) the termination by the Company and any such Subsidiary of such employment with or without Cause, (B) the death or Disability of such Management Shareholder, (C) the resignation of such Management Shareholder (with or without Good Reason), (D) the termination of such Management Shareholder’s employment with the Company or any Subsidiary upon or after reaching the age of 65 (“Retirement”) or (E) any reason other than as a result of an event described in the foregoing clauses (A) through (D); or

(b) in the case of any Shares (other than Exchange Options or Rollover Shares), at their Fair Market Value, if the employment of such Management Shareholder with the Company or any Subsidiary that employs such individual (or by the Company on behalf of any such Subsidiary) (a) is terminated without Cause or (b) terminates as a result of (i) the death or

2

Disability of such Management Shareholder, (ii) the resignation of such Management Shareholder for Good Reason, or (iii) the Retirement of such Management Shareholder.

2.2 Notice. If any Management Shareholder desires to sell Shares pursuant to Section 2.1, he or she (or his or her estate, trust, corporation or partnership, as the case may be) shall notify the Company (a) not more than 180 days after a termination of employment as a result of the death or Disability of such Management Shareholder or (b) not more than 90 days after a termination of employment as a result of any event (other than the death of Disability of such Management Shareholder) giving rise to the Management Shareholder’s right to sell such Management Shareholder’s Shares to the Company under Section 2.1; provided that if the Shares desired to be sold after a termination of employment as described in clause (b) of this Section 2.2 are shares of Common Stock acquired at any time by such Management Shareholder pursuant to an exercise of any stock options granted to such Management Shareholder within six months prior to the date of termination of employment of such Management Shareholder (including, without limitation, after the termination of employment), then the notice required by this Section 2.2 shall be given to the Company not earlier than six months and one day nor later than nine months after the acquisition of such shares.

2.3 Payment. Subject to Section 5 (“Prohibited Purchases”), payment for any Shares sold by a Management Shareholder pursuant to Section 2.1 shall be made on the date that is no later than 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of receipt by the Company of such Management Shareholder’s notice with respect to such shares pursuant to Section 2.2; provided, however, that in the event the Company was in the process of conducting an Appraisal pursuant to Section 4.1 prior to receiving the notice described in Section 2.2 and such Appraisal is not completed by the 25th day, then payment shall be made within five business days of the completion of the Appraisal.

3. Right of the Company to Purchase from Management Shareholders (“Call Rights”).

3.1 Right to Purchase. Subject to all subsections of this Section 3 and to Section 5 (“Prohibited Purchases”), the Company shall have the right to purchase from each Management Shareholder, and each such Management Shareholder shall have the obligation to sell to the Company, all, but not less than all, of such Management Shareholder’s Shares following the termination of employment of such Management Shareholder with the Company or any Subsidiary that employs such individual as follows:

(a) in the case of Exchange Options or Rollover Shares, at the Fair Market Value of such Exchange Options or Rollover Shares, as applicable, to be purchased if such Management Shareholder’s employment with the Company and any Subsidiary that employs such individual is terminated as a result of (A) the termination by the Company and any such Subsidiary (or by the Company on behalf of any such Subsidiary) of such employment with or without Cause, (B) the death or Disability of such Management Shareholder, (C) the resignation of such Management Shareholder with or without Good Reason, (D) the Retirement of such Management Shareholder or (E) any reason other than as a result of an event described in the foregoing clauses (A) through (D).

3

(b) in the case of any Shares (other than Exchange Options or Rollover Shares):

(i) at the Fair Market Value of such Shares to be purchased if such Management Shareholder’s employment with the Company and any Subsidiary that employs such individual is terminated as a result of (A) the termination by the Company and any such Subsidiary (or by the Company on behalf of any such Subsidiary) of such employment without Cause, (B) the death or Disability of such Management Shareholder, (C) the resignation of such Management Shareholder for Good Reason, or (D) the Retirement of such Management Shareholder;

(ii) at the lesser of the Fair Market Value and the Carrying Value of such Shares to be purchased if such Management Shareholder’s employment with the Company and any Subsidiary that employs such individual is terminated by the Company and any such Subsidiary (or by the Company on behalf of any such Subsidiary) for Cause; or

(iii) at the Fair Market Value or the Carrying Value of such Shares to be purchased, in the sole discretion of the Board (excluding such Management Shareholder and other members of the Board who are designees of any Management Shareholder) if such Management Shareholder’s employment with the Company and any Subsidiary that employs such individual is terminated by the Company or such Management Shareholder for any reason other than as a result of an event described in either subparagraph (i) or (ii) of this Section 3.1(b).

3.2 Notice. If the Company desires to purchase Shares from a Management Shareholder pursuant to Section 3.1, it shall notify such Management Shareholder (or his or her estate, trust, corporation or partnership, as the case may be) (a) not more than 180 days after a termination of employment as a result of the death or Disability of such Management Shareholder or (b) not more than 90 days after the termination of employment as a result of any event (other than the death of Disability of such Management Shareholder) giving rise to the Company’s right to acquire such Management Shareholder’s Shares; provided that, with respect to the Company’s purchase of shares of Common Stock acquired at any time by such Management Shareholder pursuant to an exercise of any stock options granted to such Management Shareholder within six months prior to the date of termination of employment of such Management Shareholder (including, without limitation, after the termination of employment) in connection with any termination other than as a result of death, Disability or for Cause, the notice required by this Section 3.2 shall be given by the Company not earlier than six months and one day nor later than nine months after the acquisition of any such shares.

4

3.3 Payment. Subject to Section 5 (“Prohibited Purchases”), payment for any Shares purchased by the Company pursuant to Section 3.1 shall be made on the date that is no later than 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of the receipt by a Management Shareholder of the Company’s notice with respect to such shares pursuant to Section 3.2; provided, however, that in the event the Company was in the process of conducting an Appraisal pursuant to Section 4.1 prior to delivering the notice described in Section 3.2 and such Appraisal is not completed by the 25^th day, then payment shall be made within five business days of the completion of the Appraisal.

4. Purchase Price.

4.1 Appraisal. The Company shall engage, from time to time at the discretion of the Board, but not less often than within 90 days after every fiscal year, commencing with the fiscal year ending on December 31, 2005, an independent valuation consultant or appraiser of recognized national standing, satisfactory to the LLC (the “Appraiser”), to appraise the Fair Market Value of the Shares as of the last day of the calendar year then most recently ended or, at the request of the Company, as of any more recent date (the “Appraisal Date”), and to prepare and deliver a report to the Company describing the results of such appraisal (the “Appraisal”).

4.2 Fair Market Value.

(a) The “Fair Market Value” of any Share shall be: (i) with respect to any share of Common Stock, (A) the fair market value of the entire Common Stock equity interest of the Company taken as a whole, without additional premiums for control or discounts for minority interests or restrictions on transfer, divided by (B) the number of outstanding shares of Common Stock, calculated on a fully-diluted basis; provided that the Appraiser shall be entitled to determine in its reasonable judgment the extent to which any stock options, the exercise price of which exceeds the Fair Market Value of the underlying shares of Common Stock, should be included in the calculation of the number of fully diluted shares of Common Stock (and the extent to which override units in the LLC are taken into account, including for purposes of determining the number of such options included in such calculation), and (ii) with respect to any Exchange Option, (A) the Fair Market Value of the underlying share of Common Stock determined pursuant to clause (i) of this Section 4.2(a), less (B) the exercise price of such Exchange Option.

(b) The Fair Market Value of any Share shall be calculated with reference to the most recent Appraisal and as of the most recent Appraisal Date prior to the termination of the relevant Management Shareholder’s employment or the Involuntary Transfer, as the case may be; provided that, if the relevant Management Shareholder or the Company gives notice in accordance with Section 2.2 or Section 3.2, respectively, concerning shares of Common Stock acquired at any time by such Management Shareholder pursuant to an exercise of any stock options occurring within six months prior to the date of termination of employment of such Management Shareholder (including, without limitation, after the termination of employment), the Fair Market Value of any share of Common Stock acquired at any time pursuant to an exercise of stock options with respect to which such notice was given shall be calculated with reference to the most recent Appraisal and as of the most recent Appraisal Date prior to the date

5

of such notice (or as of the first Appraisal and the first Appraisal Date in the event that such termination or Involuntary Transfer occurs prior to December 31, 2006).

4.3 Carrying Value. For the purposes of this Agreement, the “Carrying Value” of: (a) any share of Common Stock being purchased by the Company shall be equal to the price paid by the selling Management Shareholder for any such share, less the amount of dividends and other distributions paid in respect of such share; provided that the price of any Rollover Share shall be equal to the Closing Date Value, less the amount of dividends and distributions paid in respect of such share, and (b) any Exchange Option being purchased by the Company shall be equal to the excess, if any, of the Closing Date Value over the exercise price for such Exchange Option.

5. Prohibited Purchases. Notwithstanding anything to the contrary herein, the Company shall not be obligated to purchase any Shares from a Management Shareholder under Section 2 and shall not exercise any right to purchase Shares from a Management Shareholder under Section 3, in each case, to the extent (a) the Company is prohibited from purchasing such Shares (or incurring debt to finance the purchase of such Shares), or the Company is unable to obtain funds to pay for such Shares from a Subsidiary of the Company, in any case by reason of any debt instruments or agreements, including any amendment, renewal, extension, substitution, refinancing, replacement or other modification thereof, which have been entered into or which may be entered into by the Company or any of its Subsidiaries, including those to finance the acquisition of IAAI on the date hereof, and any future acquisitions by the Company or recapitalizations of the Company (the “Financing Documents”) or by applicable law, (b) an event of default has occurred (or, with notice or the lapse of time or both, would occur) under any Financing Document and is (or would be) continuing, or (c) the purchase of such Shares (including the incurrence of any debt which in the judgment of the Board is necessary to finance such purchase) or the distribution of funds to the Company by a Subsidiary thereof to pay for such purchase (1) would, or in the view of the Board (excluding such Management Shareholder and other members of the Board who are designees of any Management Shareholder), would reasonably be likely to result in the occurrence of an event of default under any Financing Document or create a condition which would reasonably be likely to, with notice or lapse of time or both, result in such an event of default, (2) would, in the judgment of the Board (excluding such Management Shareholder and other members of the Board who are designees of any Management Shareholder), be imprudent in view of the financial condition (present or projected) of the Company and its Subsidiaries or the anticipated impact of the purchase (or of the obtaining of funds to permit the purchase) of such Shares on the Company’s or any of its Subsidiaries’ ability to meet their respective obligations, including under any Financing Document, or to satisfy and make their planned capital and other expenditures or satisfy any related obligations, or (3) could, in the judgment of the Board, constitute a fraudulent conveyance or transfer by the Company or a Subsidiary thereof or render the Company or a Subsidiary thereof insolvent under applicable law or violate limitations in applicable corporate law on repurchases of stock or payment of dividends or distributions. If Shares which the Company has the right or obligation to purchase on any date exceed the total amount permitted to be purchased on such date pursuant to the preceding sentence (the “Maximum Amount”), the Company shall purchase on such date only that number of Shares up to the Maximum Amount (if any) (and shall not be required or permitted to purchase more than the Maximum Amount) in such amounts and in such priorities as the Board shall in good faith determine.

6

Notwithstanding anything to the contrary contained in this Agreement, if the Company is unable to make any payment when due to any Management Shareholder under this Agreement by reason of this Section 5, the Company shall have the option to either (i) make such payment at the earliest practicable date permitted under this Section 5 and any such payment shall accrue simple interest (or if such payment is accruing interest at such time, shall continue to accrue interest) at a rate per annum of 6% from the date such payment is due and owing to the date such payment is made; provided that all payments of interest accrued hereunder shall be paid only at the date of payment, if any, by the Company for the Shares being purchased or (ii) pay the purchase price for such Shares with a subordinated note which is fully subordinated in right of payment and exercise of remedies to the lenders’ rights under the Financing Documents and the maturity date of which is 30 days after the latest maturity date on any debt of the Company or any of its Subsidiaries which is outstanding (or reasonably expected to become outstanding) as of the date such subordinated note is issued.

6. Tag-Along and Drag-Along Rights.

6.1 Tag-Along Rights.

(a) In the event that at any time (i) the LLC proposes to sell shares of Common Stock owned by it to any Person (a “Proposed Purchaser”), other than any Transfer (1) pursuant to a Registration or Rule 144, (2) to an Affiliate or (3) to a Management Shareholder who is a member of the LLC in connection with a distribution to such member or (ii) the Kelso Members (as defined in the LLC Agreement) proposes to transfer Units (as defined in the LLC Agreement) in the LLC such that a Management Shareholder (in its capacity as a Management Member under the LLC Agreement) would have tag-along rights under Section 13.10(a) of the LLC Agreement, then if the case of clause (i) or (ii) above the LLC will promptly provide each Non-Kelso Shareholder written notice (a “Sale Notice”) of such proposed sale (a “Proposed Sale”) and the material terms of the Proposed Sale as of the date of Sale Notice (the “Material Terms”), including the aggregate number of shares of Common Stock or Units, as applicable, the Proposed Purchaser is willing to purchase. If within 30 days of the receipt of the Sale Notice, the LLC receives a written request (a “Sale Request”) to include shares of Common Stock or Units, as applicable, (i) held by one or more Non-Kelso Shareholders or (ii) to be acquired pursuant to the exercise of either Exchange Options or options (to the extent then exercisable) granted to a Management Shareholder under any Option Plan in the Proposed Sale, the Common Stock or Units, as applicable, held or to be acquired by such Non-Kelso Shareholders shall be so included as provided therein; provided, however, that any Sale Request shall be irrevocable unless (x) there shall be a material adverse change in the Material Terms or (y) otherwise mutually agreed to in writing by such Non-Kelso Shareholders and the LLC. If within 30 days after the delivery of the Sale Notice, any Non-Kelso Shareholder has not delivered a Sale Request to the LLC, such Non-Kelso Shareholder will be deemed to have waived any and all rights with respect to, or to participate in, such Proposed Sale.

(b) Subject to Section 6.1(g) hereof, (I) the number of shares of Common Stock that any Non-Kelso Shareholder will be permitted to include in a Proposed Sale on a pro rata basis pursuant to a Sale Request will be equal to the product of (i)(A) the number of shares of Common Stock held by such Non-Kelso Shareholder divided by (B) the number of shares of Common Stock held by all Shareholders participating in such Proposed Sale and (ii)

7

the aggregate number of shares of Common Stock proposed to be sold in such Proposed Sale or (II) in the case of a sale of Units by the Kelso Members pursuant to clause (ii) of the first sentence of Section 6.1(a) above, such number of shares of Common Stock that, when combined with the shares underlying the number of Units (if any) to be sold in the Proposed Sale by the applicable Non-Kelso Shareholder, equal the product of (i) (A) the number of shares of Common Stock directly or indirectly held by such Non-Kelso Shareholder divided by (B) the number of shares of Common Stock directly or indirectly held by all participants in such Proposed Sale and (ii) the aggregate number of shares of Common Stock underlying the Units proposed to be sold in the Proposed Sale.

(c) Subject to Section 6.1(g) hereof, shares of Common Stock subject to a Sale Request (including any shares of Common Stock acquired pursuant to the exercise of Exchange Options that are subject to such Sale Request) will be included in a Proposed Sale pursuant hereto and to any agreement with the Proposed Purchaser relating thereto, on the same terms and subject to the same conditions applicable to the shares of Common Stock which the LLC proposes to sell (or, in the case of a sale of Units, Units which the Kelso Members propose to sell) in the Proposed Sale. Such terms and conditions shall include, without limitation, (i) the sale consideration (which shall be reduced by the fees and expenses incurred by the LLC and the Company (or the Kelso Members and the other members of the LLC, as applicable) in connection with the Proposed Sale); provided, that in the case of a sale of LLC Units by the Kelso Members, the sale consideration shall be the implied per share consideration with respect to shares underlying the LLC Units proposed to be sold, and (ii) the provision of information, representations, warranties, covenants and requisite indemnifications; provided, however, that (x) any representations and warranties relating specifically to any Shareholder shall only be made by that Shareholder, (y) any indemnification provided by the Shareholders (other than in respect of representations and warranties relating to any such Shareholder’s title to or ownership of its or his Common Stock being sold by such Shareholder in the Proposed Sale and such holder’s authority, power and right to enter into and consummate such transaction without violating any other agreement or legal requirement) shall be based on the number of shares of Common Stock being sold by each Shareholder in the Proposed Sale (including any shares of Common Stock acquired pursuant to the exercise of options), either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the Proposed Purchaser (it being understood and agreed that the Shareholders’ contributions to such escrow shall be on a pro-rata basis in accordance with the number of shares of Common Stock (including shares acquired pursuant to the exercise of options) being sold by each Shareholder in such Proposed Sale), it being understood and agreed that any such indemnification obligation of a Shareholder shall in no event exceed the net proceeds of such Shareholder from such Proposed Sale, and (z) if the participating Non-Kelso Shareholders holding a majority of the Shares held by all of the participating Non-Kelso Shareholders consent, the form of consideration to be received by the LLC or any of its Affiliates (or the Kelso Members or any of its Affiliates or any other members of the LLC, as applicable) in connection with the Proposed Sale may be different from that received by the Non-Kelso Shareholders so long as the per share value of the consideration to be received by the LLC (or implied per share value of consideration by the Kelso Members or any of its Affiliates, as applicable) is the same or less than that to be received by the Non-Kelso Shareholders (as determined by the Board in good faith).

8

(d) Upon delivering a Sale Request, each Non-Kelso Shareholder will, if requested by the LLC, execute and deliver a custody agreement and power of attorney in form and substance satisfactory to the LLC (a “Custody Agreement and Power of Attorney”) with respect to the shares of the Common Stock which are to be included in the Proposed Sale pursuant to this Section 6.1. The Custody Agreement and Power of Attorney will provide, among other things, that each such Non-Kelso Shareholder will deliver to and deposit in custody with the LLC, named as the custodian and attorney-in-fact therein, a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly executed stock powers in blank) and irrevocably appoint the LLC as such Non-Kelso Shareholder’s agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of such Non-Kelso Shareholder with respect to the matters specified therein.

(e) Each Non-Kelso Shareholder agrees that he or she will execute such other agreements as the LLC (or the Kelso Members, as applicable) may reasonably request in connection with the consummation of a Proposed Sale and Sale Request and the transactions contemplated thereby, including, without limitation, any purchase, recapitalization or merger agreement, escrow agreement or other ancillary agreements, proxies, written consents in lieu of meetings or waivers of appraisal rights.

(f) Each Non-Kelso Shareholder wishing to include shares of Common Stock that are acquirable pursuant to the exercise of Exchange Options in a Proposed Sale must include with such Non-Kelso Shareholder’s Sale Request an irrevocable commitment to exercise such Exchange Options, subject only to closing of such Proposed Sale.

(g) Notwithstanding anything to the contrary, if in any Proposed Sale of LLC Units, the Kelso Members are informed that the Proposed Purchaser in good faith is not willing to proceed with such sale if shares of Common Stock held by any Non-Kelso Shareholder are included in such sale (by virtue of the tag along rights specified hereunder), then the Kelso Members shall be permitted to proceed with such sale (to the full extent of such Proposed Sale with respect to its LLC Units) without including any such shares of Common Stock, and the Non-Kelso Shareholders shall not have tag along rights with respect to shares of Common Stock in such Proposed Sale; provided, that, in any such Proposed Sale by Kelso of LLC Units in which shares of Common Stock have been excluded at the request of the Proposed Purchaser, the Non-Kelso Shareholders shall have the right (if and to the extent the Kelso Members so agree) to include in such Proposed Sale (in lieu of shares of Common Stock that would otherwise be includable by virtue of the tag along rights hereunder) an applicable portion of their LLC Units (as determined in good faith by the Kelso Members) up to such amount as would be necessary to put such Non-Kelso Shareholder in the same direct and indirect ownership position with respect to the Company as if such Non-Kelso Shareholder were permitted to include shares of Common Stock in such Proposed Sale.

6.2 Drag-Along Rights.

(a) In the event that at any time (i) the LLC proposes to sell shares of Common Stock owned by it to any Proposed Purchaser, other than any Transfer (1) pursuant to a Registration or Rule 144, (2) to an Affiliate, or (3) to a Management Shareholder who is a

9

member of the LLC in connection with a distribution to such member or (ii) the Kelso Members (1) propose to transfer LLC Units such that the Kelso Members would have drag along rights under Section 13.10(b) of the LLC Agreement with respect to any Units held by any Management Shareholder (in its capacity as a Management Member under the LLC Agreement) or (2) desires to effect an Exit Event (as defined in the LLC Agreement), then the LLC may provide each Non-Kelso Shareholder written notice (a “Drag-Along Notice”) of such Proposed Sale and the Material Terms thereof not less than 25 business days prior to the proposed closing date of the Proposed Sale and each such Non-Kelso Shareholder hereby agrees to sell to such Proposed Purchaser that number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock then held, or acquirable by such Non-Kelso Shareholder pursuant to the exercise of Exchange Options or of options (to the extent exercisable, including as a result of the Proposed Sale) granted to a Management Shareholder under any Option Plan multiplied by (ii) the aggregate percentage of the Common Stock held by the LLC that is represented by the Common Stock that the LLC proposes to sell in the Proposed Sale (or, in the case of a sale of LLC Units by the Kelso Members, or an Exit Event, the aggregate percentage of LLC Units owned by Kelso that is represented by the Units that the Kelso Members propose to sell in the Proposed Sale).

(b) Shares of Common Stock subject to a Drag-Along Notice (including any shares of Common Stock acquired pursuant to the exercise of options that are subject to such Drag-Along Notice) will be included in the Proposed Sale pursuant hereto and to any agreement with the Proposed Purchaser relating thereto, on the same terms and subject to the same conditions applicable to the shares of Common Stock which the LLC proposes to sell (or LLC Units which the Kelso Members propose to sell) in the Proposed Sale. Such terms and conditions shall include, without limitation, (i) the sale consideration (which shall be reduced by the fees and expenses incurred by the LLC and the Company (or the Kelso Members and the other members of the LLC, as applicable) in connection with the Proposed Sale); provided, that in the case of sale of LLC Units by the Kelso Members, the sale consideration shall be the implied per share consideration with respect to shares underlying the LLC Units proposed to be sold, and (ii) the provision of information, representations, warranties, covenants and requisite indemnifications; provided, however, that (x) any representations and warranties relating specifically to any Shareholder shall only be made by that Shareholder, (y) any indemnification provided by the Shareholders (other than in respect of representations and warranties relating to such Shareholder’s title to or ownership of its or his Common Stock being sold by such Shareholder in the Proposed Sale and such holder’s authority, power and right to enter into and consummate such transaction without violating any other agreement or legal requirement) shall be based on the number of shares of Common Stock being sold by each Shareholder in the Proposed Sale (including any shares of Common Stock acquired pursuant to the exercise of options), either on a several, not joint, basis or solely with recourse to an escrow established for the benefit of the Proposed Purchaser (it being understood and agreed that the Shareholders’ contributions to such escrow shall be on a pro-rata basis in accordance with the number of shares of Common Stock (including shares acquired pursuant to the exercise of options) being sold by each Shareholder in such Proposed Sale), it being understood and agreed that any such indemnification obligation of a Shareholder shall in no event exceed the net proceeds of such Shareholder from such Proposed Sale, and (z) if the Non-Kelso Shareholders holding a majority of the Shares held by all of the Non-Kelso Shareholders consent, the form of consideration to be received by the LLC (or the Kelso Members and its Affiliates or any other members of the LLC,

10

as applicable) in connection with the Proposed Sale may be different from that received by the Non-Kelso Shareholders (including, but not limited to, non-cash consideration) so long as the per share value of the consideration to be received by the LLC (or implied per share consideration by the Kelso Members and its Affiliates, as applicable) is the same or less than that to be received by the Non-Kelso Shareholders (as determined by the Board in good faith). No Non-Kelso Shareholders shall exercise any dissenter’s rights with respect to the consummation of any such Proposed Sale pursuant to this Section 6.2.

(c) Each Non-Kelso Shareholder will, if requested by the LLC, execute and deliver a Custody Agreement and Power of Attorney in form and substance satisfactory to the LLC with respect to the shares of Common Stock which are to be included in the Proposed Sale pursuant to this Section 6.2. The Custody Agreement and Power of Attorney will provide, among other things, that each such Non-Kelso Shareholder will deliver to and deposit in custody with the LLC, named as the custodian and attorney-in-fact therein, a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly endorsed stock powers in blank) and irrevocably appoint the LLC as such Non-Kelso Shareholder’s agent and attorney-in-fact with full power and attorney to act under a custody agreement and power of attorney on behalf of such Non-Kelso Shareholder with respect to the matters specified therein.

(d) Each Non-Kelso Shareholder agrees that he or she will execute such other agreements as the LLC (or the Kelso Members, as applicable) may reasonably request in connection with the consummation of a Proposed Sale and Drag-Along Notice and the transactions contemplated thereby, including, without limitation, any purchase, merger or recapitalization agreement, escrow agreement or other ancillary agreements, proxies, written consents in lieu of meetings or waivers of appraisal rights.

(e) Each Non-Kelso Shareholder holding shares of Common Stock that are acquirable pursuant to the exercise of Exchange Options or any other options granted under any Option Plan and that are to be included in a Proposed Sale pursuant to a Drag-Along Notice agrees to provide to the LLC, upon delivery of the Drag-Along Notice, an irrevocable commitment to exercise such Exchange Options or, if exercisable (including as a result of the Proposed Sale), such other options, subject only to closing of such Proposed Sale.

(f) Notwithstanding anything to the contrary, if in any Proposed Sale of LLC Units, the Kelso Members are informed that the Proposed Purchaser in good faith desires to proceed with such sale with the inclusion of additional shares of Common Stock held by any Non-Kelso Shareholder (including any shares exercisable upon the exercise of options), in lieu of all or a portion of LLC Units held by such Non-Kelso Shareholder which would be includable therein by virtue of the Kelso Members’ drag along rights pursuant the LLC Agreement, then in the discretion of the Kelso Members each Non-Kelso Shareholder agrees to sell in the Proposed Sale, in lieu of selling all or a portion of LLC Units (and in addition to shares of Common Stock agreed to be sold pursuant to Section 6.2(a)), such number of additional shares of Common Stock (including shares exercisable upon the exercise of options) equaling the number of shares of Common Stock beneficially deemed to be owned by virtue of such Non-Kelso Shareholder’s ownership of LLC Units that would otherwise be includable in the Proposed Sale.

11

7. Involuntary Transfers. Any transfer of title or beneficial ownership of Shares upon default, foreclosure, forfeit, divorce, court order or otherwise than by a voluntary decision on the part of a Shareholder (each, an “Involuntary Transfer”) shall be void unless the Shareholder complies with this Section 7 and enables the Company to exercise in full its rights hereunder. Upon any Involuntary Transfer, the Company shall have the right to purchase such Shares pursuant to this Section 7 and the Person to whom such Shares have been Transferred (the “Involuntary Transferee”) shall have the obligation to sell such Shares in accordance with this Section 7. Upon the Involuntary Transfer of any Shares, such Shareholder shall promptly (but in no event later than two days after such Involuntary Transfer) furnish written notice to the Company indicating that the Involuntary Transfer has occurred, specifying the name of the Involuntary Transferee, giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer. Upon the receipt of such notice, and for 60 days thereafter, the Company shall have the right to purchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Shares acquired by the Involuntary Transferee for a purchase price equal to the lesser of (i) the Fair Market Value of such Shares on the date of transfer to the Involuntary Transferee and (ii) the amount of indebtedness or other liability that gave rise to the Involuntary Transfer plus the excess, if any, of the Carrying Value of such Shares over the amount of such indebtedness or other liability that gave rise to the Involuntary Transfer.

8. Stock Certificate Legend. A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company. Each certificate representing shares of Common Stock owned by the Shareholders shall bear upon its face the following legends, as appropriate:

(a) “THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO THE SHAREHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH LAWS AND THE SHAREHOLDERS AGREEMENT OF THE ISSUER, DATED AS OF MAY 25, 2005 (THE “SHAREHOLDERS AGREEMENT”).”

(b) THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS, AS SPECIFIED IN THE SHAREHOLDERS AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE OFFICE

12

OF THE ISSUER AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST.”

In addition, certificates representing shares of Common Stock owned by residents of certain states shall bear any legends required by the laws of such states.

All Shareholders shall be bound by the requirements of such legends. Upon a Registration of any shares of Common Stock, the certificate representing the registered shares shall be replaced, at the expense of the Company, with certificates not bearing the legends required by clauses (a) and (b) of this Section 8.

9. Covenants; Representations and Warranties.

9.1 Management Shareholders.

(a) Each of the Shareholders hereby agrees that the Company may request that any employee of the Company or any of its Subsidiaries who, after the date of this Agreement, is offered shares of any class of Common Stock or holds stock options (whether pursuant to the Stock Incentive Plan or any other stock option plan, collectively the “Option Plans”) that are exercisable into shares of Common Stock, as a condition precedent to the acquisition of such shares of Common Stock or the exercise of such stock options, as the case may be, (a) become a party to this Agreement by executing a signature page to the same and (b) if such employee is a resident of a state with a community or marital property system, cause his or her spouse to execute a Spousal Waiver in the form of Exhibit A attached hereto, and deliver such executed signature page to this Agreement and Spousal Waiver, if applicable, to the Company at its address specified in Section 18 hereof. Upon such execution and delivery, such employee shall be a Management Shareholder for all purposes of this Agreement and the Company may amend this Agreement (including Schedule 1) accordingly.

(b) Notwithstanding any requirement set forth in Section 10, the Company, with the prior written consent of the LLC, can determine that any stock options granted pursuant to any Option Plan and outstanding and vested as of the option holder’s termination of employment with the Company or any of its Subsidiaries shall be deemed to be Shares for purposes of Section 2 and Section 3; provided, however, that appropriate adjustments shall be made to reflect the existence of an exercise price for such options, including for purposes of calculating “Fair Market Value” or “Carrying Value” as applicable; provided, further, that the foregoing shall not limit any provisions set forth in any Option Plan including with respect to cancellations, forfeitures, puts, calls or repurchases of options.

9.2 No Other Arrangements or Agreements. Each Shareholder hereby represents and warrants to the Company and to each other Shareholder that, except for this Agreement, the Exchange Stock Option Agreements, the Merger Agreement, the LLC Agreement, the Registration Rights Agreement, applicable Conversion Agreements, applicable stock subscription agreements, if any, with the Company, and in the case of any affected Management Shareholder, any employment agreement with the Company and any stock option agreement of the Company applicable to such Management Shareholder, he or she has not entered into or agreed to be bound by any other arrangements or agreements of any kind with

13

any other party with respect to any shares of capital stock of the Company (including any Shares) or other securities of the Company, including, but not limited to, arrangements or agreements with respect to the acquisition or disposition of shares of capital stock or other securities or any interest therein or the voting of shares of capital stock or other securities (whether or not such agreements and arrangements are with the Company or any of its Subsidiaries, or other Shareholder) and each Non-Kelso Shareholder agrees that, except as expressly permitted under this Agreement, he or she will not enter into any such other arrangements or agreements.

9.3 Additional Representations and Warranties. Each Shareholder represents and warrants to the Company and each other Shareholder that:

(a) such Shareholder has the power, authority and capacity (or, in the case of any Shareholder that is a corporation, limited liability company or limited partnership, all corporate, limited liability company or limited partnership power and authority, as the case may be) to execute, deliver and perform this Agreement;

(b) in the case of a Shareholder that is a corporation, limited liability company or limited partnership, the execution, delivery and performance of this Agreement by such Shareholder have been duly and validly authorized and approved by all necessary corporate, limited liability company or limited partnership action, as the case may be;

(c) this Agreement has been duly and validly executed and delivered by such Shareholder and constitutes a valid and legally binding obligation of such Shareholder, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to creditors’ rights generally and general principles of equity; and

(d) the execution, delivery and performance of this Agreement by such Shareholder does not and will not violate the terms of or result in the acceleration of any obligation under (i) any material contract, commitment or other material instrument to which such Shareholder is a party or by which such Shareholder is bound or (ii) in the case of a Shareholder that is a corporation, limited liability company or limited partnership, the certificate of incorporation and the by-laws, the certificate of formation and the limited liability company agreement, or the certificate of limited partnership and the limited partnership agreement, as the case may be.

10. Amendment and Modification. Except as otherwise provided in Section 9.1, this Agreement may be amended, modified or supplemented by the Company only with the written consent of the LLC, and (i) to the extent (and only to the extent) any particular Shareholder would be uniquely and adversely affected by such amendment, modification or supplement, written consent of such Shareholder or (ii) written consent of a majority (by number of shares of Common Stock at the time of such amendment, modification or supplement) of any other Shareholders whose interests as a group would be adversely affected by such amendment, modification or supplement. The Company shall notify all Shareholders promptly after any such amendment, modification or supplement shall have taken effect. Notwithstanding anything to the contrary herein, the Company, with the consent of the LLC, may determine in its discretion to add any additional third party to this Agreement (and amend Schedule 1 accordingly, if

14

applicable) or, subject to the consent of the affected party, eliminate any party from this Agreement as the Company sees fit.

11. Parties.

11.1 Assignment by the Company. The Company shall have the right to assign to the LLC all or any portion of its rights and obligations under Section 2.1 (“Put Rights”), Section 3.1 (“Call Rights”) and Section 7 (“Involuntary Transfer”); provided that any such assignment or assumption is accepted by the LLC. If the Company has not exercised its right to purchase Shares pursuant to any such section within 15 days of receipt by the Company of the letter, notice or other occurrence giving rise to such right, then the LLC shall have the right to require the Company to assign such right. The LLC shall have the right to assign to one or more of its Affiliates all or any of its rights to purchase Shares pursuant to this Section 11.1.

11.2 Assignment Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; provided that neither the Company nor any Non-Kelso Shareholder may assign any of its rights or obligations hereunder without the consent of the LLC unless, in the case of a Non-Kelso Shareholder, such assignment is in connection with a Transfer explicitly permitted by this Agreement and, prior to such assignment, such assignee complies with the requirements of Section 11.4.

11.3 Termination.

(a) Any party to, or Person who is subject to, this Agreement who ceases to own Shares or any interest therein, shall cease to be a party to, or Person who is subject to, this Agreement and thereafter shall have no rights or obligations hereunder provided, however, that a Transfer of Shares not explicitly permitted under this Agreement shall not relieve a Non-Kelso Shareholder of any of his or her obligations hereunder.

(b) At the election of the LLC, this entire Agreement shall terminate upon (i) an IPO or (ii) a sale of Common Stock by the LLC to a Third Party Investor, whether pursuant to a stock sale, business combination, merger or any similar transaction involving the Company, if following such sale, a majority of the issued and outstanding shares of Common Stock are owned by Third Party Investors. It is understood that any rights of any Shareholder existing in this Agreement with respect to any particular transaction described clause (i) or (ii) (including rights pursuant to Section 6) shall apply notwithstanding any termination of this Agreement pursuant to this Section 11.3(b) in connection with such transaction, and termination of this Agreement shall be effective only after giving effect to such transaction (and the application of the applicable rights hereunder).

11.4 Agreements to Be Bound. Notwithstanding anything to the contrary contained in this Agreement, any Transfer of Shares by a Non-Kelso Shareholder (other than pursuant to (i) a Registration or (ii) Section 2, Section 3 or Section 11.3(b)) shall be permitted under the terms of this Agreement only if the transferee shall agree in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument of assumption reasonably satisfactory in substance and form to the Company, and in the case of a transferee of a

15

Management Shareholder who resides in a state with a community property system, such transferee causes his or her spouse, if any, to execute a Spousal Waiver in the form of Exhibit A attached hereto. Upon the execution of the instrument of assumption by such transferee and, if applicable, the Spousal Waiver by the spouse of such transferee, such transferee shall enjoy all of the rights and shall be subject to all of the restrictions and obligations of the transferor of such transferee, including, without limitation, if such transferor was a Management Shareholder, the provisions of Section 2 and Section 3 (which shall continue to apply as though such transferor were still the holder of such shares).

12. Recapitalizations, Exchanges, etc. Except as otherwise provided herein, the provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) the shares of Common Stock, (b) the Exchange Options and (c) any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the shares of Common Stock, by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation or otherwise. All share numbers and percentages shall be proportionately adjusted to reflect any stock split, stock dividend or other subdivision or combination effected after the date hereof.

13. No Third Party Beneficiaries. Except as otherwise provided herein, this Agreement is not intended to confer upon any Person, except for the parties hereto, any rights or remedies hereunder.

14. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party hereto or Person subject hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

15. Governing Law. This Agreement and the rights and obligations of the parties hereunder and the Persons subject hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the choice of law principles thereof.

16. Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

17. Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party to assert its or his or her rights hereunder on any occasion or series of occasions.

16

18. Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by fax, as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(i)	If to the Company, to:
	Axle Holdings, Inc.
	c/o Kelso & Company
	320 Park Avenue, 24th Floor
	New York, New York 10022
	Attention: James J. Connors II, Esq.
	Tel: (212) 751-3939
	Fax: (212) 223-2379
	with a copy (which shall not constitute notice) to: Skadden, Arps, Slate, Meagher & Flom LLP at its address set forth below.
(ii)	If to a Management Shareholder, to his or her attention at:
	c/o Insurance Auto Auctions, Inc.
	2 Westbrook Corporate Center, Suite 500
	Westchester, Illinois 60154
	Tel: (708) 492-7000
	Fax: (708) 492-7078
	with a copy (which shall not constitute notice) to:
	Schiff Hardin LLP
	6600 Sears Tower
	Chicago, Illinois 60606
	Attention: Stephen J. Dragich
	Tel: (312) 258-5962
	Fax: (312) 258-5600
(iii)	If to the LLC, to:
	Axle Holdings II, LLC
	c/o Kelso & Company, L.P.
	320 Park Avenue
	24th Floor
	New York, NY 10022
	Attention: James J. Connors II, Esq.
	Tel: (212) 751-3939
	Fax: (212) 223-2379

17

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

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Lou R. Kling

Tel: (212) 735-3000

Fax: (917) 777-2770

All such notices, requests, demands, waivers and other communications shall be deemed to have been received by (w) if by personal delivery, on the day delivered, (x) if by certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax, on the day delivered; provided that such delivery is confirmed.

19. Headings. The headings to sections in this Agreement are for the convenience of the parties only and shall not control or affect the meaning or construction of any provision hereof.

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

21. Fax Signatures. Each of the parties hereto (i) has agreed to permit the use, from time to time and where appropriate, of faxed signatures in order to expedite the Closing, (ii) intends to be bound by its respective faxed signature, (iii) is aware that the other parties hereto will rely on the faxed signature, and (iv) acknowledges such reliance and waives any defenses to the enforcement of the documents effecting the transaction contemplated by this Agreement based on the fact that a signature was sent by fax.

22. Entire Agreement. This Agreement, the Merger Agreement, the Registration Rights Agreement, the Exchange Stock Option Agreements, the applicable Conversion Agreements, if any, with the Company and, in the case of any affected Management Shareholder, any employment agreement with the Company and any stock option agreement of the Company applicable to such Management Shareholder, constitute the entire agreement and understanding of the parties hereto with respect to the matters referred to herein. This Agreement and the agreements referred to in the preceding sentence supersede all prior agreements and understandings among the parties with respect to such matters. There are no representations, warranties, promises, inducements, covenants or undertakings relating to the Shares, other than those expressly set forth or referred to herein, in the Registration Rights Agreement, in the Exchange Stock Option Agreements, in the applicable Conversion Agreements, if any, with the Company and, in the case of any affected Management Shareholder, any employment agreement with the Company and any stock option agreement of the Company applicable to such Management Shareholder.

18

23. Outside Investors. Each of the Shareholders hereby agrees that the Company may require that any party, other than an employee of the Company or any of its Subsidiaries (who is dealt with in Section 9.1), who purchases shares of Common Stock shall become a party to this Agreement by executing the same and delivering it to the Company at its address specified in Section 18. Upon such execution and delivery, such party shall be deemed to be an “Outside Investor” for all purposes of this Agreement.

24. Injunctive Relief. The Shares cannot readily be purchased or sold in the open market, and for that reason, among others, the Company and the Shareholders will be irreparably damaged in the event this Agreement is not specifically enforced. Each of the parties therefore agrees that in the event of a breach of any provision of this Agreement, the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which the Company or any Shareholder may have. Each Shareholder hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts in New York for the purposes of any suit, action or other proceeding arising out of or based upon this Agreement or the subject matter hereof. Each Shareholder hereby consents to service of process made in accordance with Section 18.

25. Confidentiality. Without the prior written consent of the Board except to the extent required by law, rule, regulation or court order, no Non-Kelso Shareholder shall disclose any trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, management organization information (including data and other information relating to members of the Board or management), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to the Company or any of its Affiliates or information designated as confidential or proprietary that the Company or any of its Affiliates may receive belonging to suppliers, customers or others who do business with the Company or any of its subsidiaries (collectively, “Confidential Information”) to any third person unless such Confidential Information has been previously disclosed to the public by the Company or is in the public domain (other than by reason of a breach of this Section 25).

26. Preparation for an IPO. Notwithstanding anything in this Agreement to the contrary, in connection with an IPO, the Non-Kelso Shareholders agree to vote their Shares and take all actions necessary or desirable (including attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company shall take all necessary and desirable actions within its control (including calling special board and stockholder meetings), to amend the Certificate of Incorporation and the Bylaws of the Company to include such provisions as determined by the LLC, including, if so determined by the LLC, (a) customary anti-takeover protections and (b) provisions preserving the rights of the LLC as the controlling shareholder of the Company.

19

27. Defined Terms. As used in this Agreement, the following terms shall have the meanings ascribed to them below:

Affiliate: a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

Board: the board of directors of the Company.

Bylaws: the bylaws of the Company as in effect on the date hereof and as may be amended from time to time following the date hereof.

Cause: the meaning as set forth in the employment agreement between the Company or any Subsidiary of the Company that employs such Management Shareholder, or, if such Management Shareholder is not a party to an employment agreement, a termination of such Management Shareholder’s employment by the Company or any Subsidiary (or by the Company on behalf of any such Subsidiary) due to (i) the refusal or neglect of the Management Shareholder to perform substantially his or her employment-related duties, (ii) the Management Shareholder’s personal dishonesty, incompetence, willful misconduct or breach of fiduciary duty, (iii) the Management Shareholder’s conviction of or entering a plea of guilty or nolo contendere (or any applicable equivalent thereof) to a crime constituting a felony (or a crime or offense of equivalent magnitude in any jurisdiction) or his or her willful violation of any other law, rule, or regulation (other than a traffic violation or other offense or violation outside of the course of employment which in no way adversely affects the Company or any Subsidiary or its reputation or the ability of the Management Shareholder to perform his or her employment related duties or to represent the Company or any Subsidiary) or (iv) the material breach by the Management Shareholder of any covenant or agreement with the Company or any Subsidiary, or any written policy of the Company or any Subsidiary, not to disclose any information pertaining to the Company or any Subsidiary or not to compete or interfere with the Company or any Subsidiary.

Certificate of Incorporation: the certificate of incorporation of the Company as in effect on the date hereof and as may be amended from time to time following the date hereof.

Closing: the closing of the transactions contemplated by the Merger Agreement.

Closing Date Value: $25.616798 per share of Common Stock, as such number may be equitably adjusted for any stock dividend, stock split, reverse stock split, recapitalization, consolidation or any similar event affecting the Common Stock.

Common Stock: the Common Stock of the Company, par value $.01 per share (which shall include, for the avoidance of doubt, Rollover Shares) or any other securities of the Company or any other Person issued with respect to such Common Stock by way of a conversion, exchange, replacement, stock dividend or stock split or other distribution in connection with a combination of shares, conversion exchange, replacement, recapitalization, merger, consolidation or other reorganization or otherwise.

Conversion Agreements: the Conversion Agreements, each dated as of May 25, 2005, between the Company and each of the Management Shareholders, as the same may be amended, modified, supplemented or restated from time to time.

Disability: with respect to a Management Shareholder, the term “Disability” shall have the meaning set forth in the employment agreement between the Company or any

20

Subsidiary of the Company that employs such Management Shareholder, or, if such Management Shareholder is not a party to an employment agreement, the termination of the employment of any Management Shareholder by the Company or any Subsidiary (or by the Company on behalf of any such Subsidiary) as a result of such Management Shareholder’s incapacity due to reasonably documented physical or mental illness that shall have prevented such Management Shareholder from performing his or her duties for the Company on a full-time basis for more than six months and within 30 days after written notice of termination has been given to such Management Shareholder, such Management Shareholder shall not have returned to the full time performance of his or her duties. The date of termination in the case of a termination due to “Disability” shall be deemed to be the last day of the aforementioned 30-day period.

Exchange Options: any options to purchase shares of Common Stock that were acquired by a Management Shareholder pursuant to a Conversion Agreement.

Exchange Stock Option Agreements: the Exchange Stock Option Agreements, each dated as of May 25, 2005, between the Company and each of the Management Shareholders, as the same may be amended, modified, supplemented or restated from time to time.

Good Reason: the meaning as set forth in the employment agreement between the Company or any Subsidiary of the Company that employs such Management Shareholder, or, if such Management Shareholder is not a party to an employment agreement, a termination of a Management Shareholder’s employment with the Company and any Subsidiary that employs such individual shall be for “Good Reason” if such Management Shareholder voluntarily terminates his employment with the Company or any such Subsidiary as a result of either of the following:

(i) without the Management Shareholder’s prior written consent, a significant reduction by the Company or any Subsidiary of his or her current salary, other than any such reduction which is part of a general salary reduction or other concessionary arrangement affecting all employees or affecting the group of employees of which the Management Shareholder is a member (after receipt by the Company of written notice and the expiration of a 20-day cure period); or

(ii) the taking of any action by the Company or any such Subsidiary that would substantially diminish the aggregate value of the benefits provided him or her under the Company’s or such Subsidiary’s accident, disability, life insurance and any other employee benefit plans in which he or she was participating on the date of his or her execution of this Agreement, other than any such reduction which is (A) required by law, (B) implemented in connection with a general concessionary arrangement affecting all employees or affecting the group of employees of which such Management Shareholder is a member, (C) generally applicable to all beneficiaries of such plans (after receipt by the Company of written notice and a 20-day cure period), or (D) in accordance with the terms of any such plan.

IPO: an underwritten initial bona fide public offering of Common Stock after which such Common Stock will be listed and traded on the New York Stock Exchange or the

21

American Stock Exchange, or quoted on the National Association of Securities Dealers Automated Quotation System, in each case, pursuant to an effective registration statement under the Securities Act.

LLC Agreement: the Limited Liability Company Agreement of Axle Holdings II LLC, dated as of the date hereof, as the same may be amended, modified, supplemented or restated from time to time.

Merger Agreement: the Agreement and Plan of Merger, dated as of February 22, 2005, by and among Insurance Auto Auctions, Inc., Axle Holdings, Inc. and Axle Merger Sub, Inc., as the same may be amended, modified, supplemented or restated from time to time.

Person: an individual, corporation, partnership, limited liability company, joint venture, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

Registration: the closing of a public offering pursuant to an effective registration statement under the Securities Act.

Registration Rights Agreement: the Registration Rights Agreement, dated as of April 1, 2005, as amended and restated on the date hereof, among the parties hereto, as the same may be amended modified, supplemented or restated from time to time.

Rollover Shares: any shares of Common Stock that were acquired by a Management Shareholder pursuant to a Conversion Agreement and/or the exercise of Exchange Options.

Securities Act: the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder which shall be in effect at the time.

Shares: any shares of Common Stock or Exchange Options.

Stock Incentive Plan: the Axle Holdings Stock Incentive Plan, adopted by the Company’s Board on May 25, 2005, as amended from time to time.

Subsidiary: any entity a majority of whose outstanding voting securities is owned, directly or indirectly, by the Company.

Third Party Investor: any Person other than the LLC or an Affiliate of the LLC.

Transfer: any direct or indirect sale, assignment, mortgage, transfer, gift, pledge or other form of disposal.

—Signature page follows—

22

IN WITNESS WHEREOF this Shareholders Agreement has been signed by each of the parties hereto, and shall be effective as of the date first above written.

AXLE HOLDINGS, INC.
By:	/s/ James J. Connors II, Esq.
	Name:	James J. Connors II, Esq.
	Title:	Vice President and Assistant Secretary
AXLE HOLDINGS II, LLC
By:	/s/ David I. Wahrhaftig
	Name:	David I. Wahrhaftig
	Title:	Vice President and Treasurer
/s/ Thomas C. O’Brien
Thomas C. O’Brien
/s/ Scott P. Pettit
Scott P. Pettit
/s/ David R. Montgomery
David R. Montgomery
/s/ Donald J. Hermanek
Donald J. Hermanek
/s/ John W. Kett
John W. Kett
/s/ John R. Nordin
John R. Nordin
/s/ Sidney L. Kerley
Sidney L. Kerley

Schedule 1

Management Shareholders

Thomas C. O’Brien

Scott P. Pettit

David R. Montgomery

Donald J. Hermanek

John W. Kett

John R. Nordin

Sidney L. Kerley

24

Exhibit A

SPOUSAL WAIVER

[INSERT NAME] hereby waives and releases any and all equitable or legal claims and rights, actual, inchoate or contingent, which she may acquire with respect to the disposition, voting or control of the Shares subject to the Shareholders Agreement, dated as of May 25, 2005, by and among Axle Holdings, Inc., Axle Holdings II, LLC and certain shareholders, as the same may be amended from time to time, except for rights in respect of the proceeds of any disposition of such Shares.

Name:

25

EX-10.16

Exhibit 10.16

EXECUTION COPY

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

AXLE HOLDINGS, INC.

Dated as of May 25, 2005

TABLE OF CONTENTS

		Page
1.	Registrations Upon Request	1
	1.1        Requests by the LLC	1
	1.2        Registration Statement Form	2
	1.3        Expenses	2
	1.4        Priority in Demand Registrations	3
2.	Incidental Registrations	3
3.	Registration Procedures	5
4.	Underwritten Offerings	9
	4.1        Underwriting Agreement	9
	4.2        Selection of Underwriters	10
5.	Holdback Agreements	10
6.	Preparation; Reasonable Investigation	11
7.	Indemnification	11
	7.1        Indemnification by the Company	11
	7.2        Indemnification by the Sellers	12
	7.3        Notices of Claims, etc.	13
	7.4        Other Indemnification	14
	7.5        Indemnification Payments	14
	7.6        Other Remedies	14
8.	Representations and Warranties	15
9.	Definitions	16
10.	Miscellaneous	17
	10.1      Rule 144, etc.	17
	10.2      Successors, Assigns and Transferees	18
	10.3      Stock Splits, etc.	18
	10.4      Amendment and Modification	18
	10.5      Additional Management Shareholders	19
	10.6      Outside Investors	19
	10.7      Governing Law	19
	10.8      Invalidity of Provision	19
	10.9      Notices	19
	10.10    Headings; Execution in Counterparts	21
	10.11    Injunctive Relief	21
	10.12    Term	21
	10.13    Further Assurances	21
	10.14    Entire Agreement	21

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into as of May 25, 2005, by and among Axle Holdings, Inc., a Delaware corporation (the “Company”), Axle Holdings II, LLC, a Delaware limited liability company (the “LLC”), those employees of the Company or its subsidiaries listed on Schedule 1 hereto (together with any person who become parties to this Agreement pursuant to Section 10.5 and each of their respective Permitted Transferees, collectively, the “Management Shareholders”). The Management Shareholders, together with the any Person that becomes a party to this Agreement after the date hereof pursuant to Section 10.6 (any such Person, an “Outside Investor”) and the LLC, are hereinafter referred to collectively as the “Shareholders.” Capitalized terms used herein without definition are defined in Section 9 of this Agreement.

WHEREAS, on April 1, 2005, the Company and the LLC entered into a registration rights agreement and now wish to amend and restate such agreement in its entirety in order to add each Management Shareholder as a party to this Agreement and each Management Shareholder desires to become a party to, and subject to the rights and restrictions of, this Agreement; and

WHEREAS, the parties hereto wish to set forth certain rights and obligations with respect to the registration of the shares of Common Stock under the Securities Act.

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, the parties hereto agree as follows:

1. Registrations Upon Request.

1.1 Requests by the LLC. At any time, the LLC shall have the right to request that the Company effect the registration under the Securities Act of all or a portion of the Registrable Securities owned by the LLC, each such request to specify the intended method or methods of disposition thereof. Upon any such request, the Company will promptly, but in any event within 15 days, give written notice of such request to all holders of Registrable Securities and thereupon the Company will, subject to Section 1.4, use its best efforts to effect the prompt registration under the Securities Act of:

(a) the Registrable Securities which the Company has been so requested to register by the LLC, and

1

(b) all other Registrable Securities which the Company has been requested to register by the holders thereof by written request given to the Company by such holders within 15 days after the giving of such written notice by the Company to such holders,

all to the extent required to permit the disposition of the Registrable Securities so to be registered in accordance with the intended method or methods of disposition of the LLC.

Notwithstanding the foregoing, but subject to the rights of holders of Registrable Securities under Section 2, (a) if the Board determines in its good faith judgment, after consultation with a firm of nationally recognized underwriters, that a requested registration under this Section 1.1 will have a material and adverse effect on the offering price or marketability of the securities being sold in a then contemplated IPO, the Company may defer the filing (but not the preparation) of the registration statement which is required to effect such registration during the period starting with the 30th day immediately preceding the date of anticipated filing by the Company of the registration statement and ending on the later of (i) a date 60 days following the effective date of the registration statement relating to such IPO or (ii) such later date (not to exceed 180 days) as may be required by the managing underwriter of the IPO, provided that at all times the Company is in good faith using all reasonable efforts to cause such registration statement to be filed as soon as possible and provided, further, that such period shall end on such earlier date as may be permitted by the underwriters of such underwritten public offering, and (b) if the Company shall at any time furnish to the LLC a certificate signed by the president of the Company stating that the Company has pending or in process a material transaction (including, but not limited to, a financing transaction), the disclosure of which would, in the good faith judgment of the Board, materially and adversely affect the Company, the Company may defer the filing (but not the preparation) of a registration statement to be filed pursuant to this Section 1.1 for up to 60 days (but the Company shall use its best efforts to complete the transaction and file the registration statement as soon as possible).

1.2 Registration Statement Form. A registration requested pursuant to Section 1.1 shall be effected by the filing of a registration statement on a form agreed to by the LLC.

1.3 Expenses. The Company shall pay all Registration Expenses in connection with any registration requested under Section 1.1; provided that each seller of Registrable Securities shall pay all Registration Expenses to the extent required to be paid by such seller under applicable law and all underwriting discounts and commissions and transfer taxes, if any.

2

1.4 Priority in Demand Registrations. If a registration pursuant to Section 1.1 involves an underwritten offering, and the managing underwriter (or, in the case of an offering which is not underwritten, a nationally recognized investment banking firm) shall advise the Company in writing (with a copy to each Person requesting registration of Registrable Securities) that, in its opinion, the number of securities requested, and otherwise proposed to be included in such registration, exceeds the number which can be sold in such offering without materially and adversely affecting the offering price or marketability of the securities being sold in such registration, the Company shall include in such registration, to the extent of the number which the Company is so advised can be sold in such offering without such material adverse effect, first, the Registrable Securities of the LLC, the Outside Investors, if any, and the Management Shareholders, on a pro rata basis (based on the number of shares of Registrable Securities owned by each such Shareholder), and second, the securities, if any, being sold by the Company. Notwithstanding the foregoing, the Management Shareholders shall not be entitled to participate in any such registration requested by the LLC to the extent that the managing underwriter (or, in the case of an offering that is not underwritten, a nationally recognized investment banking firm) shall determine in good faith and in writing (with a copy to each affected Person requesting registration of Registrable Securities), that the participation of management would materially and adversely affect the marketability or offering price of the securities being sold in such registration, it being understood that the Company shall include in such registration that number of shares of the Management Shareholders which can be sold in such offering without materially and adversely affecting the marketability or offering price of the other securities to be sold in such registration. In the event of any such determination under this Section 1.4, the Company shall give the affected holders of Registrable Securities notice of such determination and in lieu of the notice otherwise required under Section 1.1.

2. Incidental Registrations. If the Company at any time proposes to register any of its equity securities under the Securities Act for its own account (including, but not limited to, a shelf registration statement on Form S-3, but other than pursuant to a registration on Form S-4 or S-8 or any successor form), then the Company shall give prompt written notice to all holders of Registrable Securities regarding such proposed registration. Upon the written request of any such holder made within 15 days after the receipt of any such notice (which request shall specify the number of Registrable Securities intended to be disposed of by such holder and the intended method or methods of disposition thereof), the Company shall use its best efforts to effect the registration under the Securities Act of such Registrable Securities on a pro rata basis in accordance with such intended method or methods of disposition, provided that:

(a) (i) the Company shall not include Registrable Securities in such proposed registration to the extent that the Board shall have determined, after consultation with the managing underwriter for such offering, that it would materially and adversely affect the offering price to include any Registrable Securities in such registration and (ii) the Company shall not include Registrable

3

Securities of any Management Shareholder in any proposed registration pursuant to this Section 2 to the extent that the managing underwriter (or, in the case of an offering that is not underwritten, a nationally recognized investment banker) shall determine in good faith that the participation of such Management Shareholder would materially and adversely affect the marketability or offering price of the securities being sold in such registration and provided, further, that in the event of any such determination under clause (i) or (ii), the Company shall give the affected holders of Registrable Securities notice of such determination and in lieu of the notice otherwise required by the first sentence of this Section 2;

(b) if, at any time after giving written notice (pursuant to this Section 2) of its intention to register equity securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such equity securities, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities and, thereupon, shall not be obligated to register any Registrable Securities in connection with such registration (but shall nevertheless pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of the LLC that a registration be effected under Section 1.1;

(c) if in connection with a registration pursuant to this Section 2, the managing underwriter of such registration (or, in the case of an offering that is not underwritten, a nationally recognized investment banking firm) shall advise the Company in writing (with a copy to each holder of Registrable Securities requesting registration thereof) that the number of securities requested and otherwise proposed to be included in such registration exceeds the number which can be sold in such offering without materially and adversely affecting the offering price or marketability of the securities being sold in such registration, then in the case of any registration pursuant to this Section 2, the Company shall include in such registration to the extent of the number which the Company is so advised can be sold in such offering without such material adverse effect, first, the securities, if any, being sold by the Company, and second, the Registrable Securities of the LLC, the Outside Investors, if any, and the Management Shareholders, on a pro rata basis (based on the number of shares of Registrable Securities owned by each such Shareholder); and

(d) the Company shall have no obligation under this Section 2 to use its best efforts to effect any registration of Registrable Securities which any Outside Investor or Management Shareholder has requested to be registered, unless Registrable Securities owned by the LLC or its Permitted Transferees shall be included in such registration or unless the LLC in its sole discretion determines otherwise.

4

The Company shall pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 2, provided that each seller of Registrable Securities shall pay all Registration Expenses to the extent required to be paid by such seller under applicable law and all underwriting discounts and commissions and transfer taxes, if any. No registration effected under this Section 2 shall relieve the Company from its obligation to effect registrations under Section 1.1.

3. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 1.1 or Section 2, the Company shall promptly:

(a) prepare, and as soon as practicable, but in any event within 60 days thereafter, file with the Commission, a registration statement with respect to such Registrable Securities, make all required filings with the NASD and use its best efforts to cause such registration statement to become effective as soon as practicable;

(b) prepare and promptly file with the Commission such amendments and post-effective amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for so long as is required to comply with the provisions of the Securities Act and to complete the disposition of all securities covered by such registration statement in accordance with the intended method or methods of disposition thereof, but in no event for a period of more than six months after such registration statement becomes effective;

(c) furnish copies of all documents proposed to be filed with the Commission in connection with such registration to (i) counsel selected by the LLC in the case of a registration pursuant to Section 1.1 and otherwise the Majority Holders, and which counsel may also be counsel to the Company, and (ii) each seller of Registrable Securities (or in the case of the initial filing of a registration statement, within five business days of such initial filing) and such documents shall be subject to the review of such counsel, provided that the Company shall not file any registration statement or any amendment or post- effective amendment or supplement to such registration statement or the prospectus used in connection therewith to which such counsel shall have reasonably objected on the grounds that such registration statement amendment, supplement or prospectus does not comply (explaining why) in all material respects with the requirements of the Securities Act or of the rules or regulations thereunder;

(d) furnish to each seller of Registrable Securities, without charge, such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits and

5

documents filed therewith) and such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller in accordance with the intended method or methods of disposition thereof;

(e) use its best efforts to register or qualify such Registrable Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as each seller shall reasonably request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition of such Registrable Securities in such jurisdictions in accordance with the intended method or methods of disposition thereof, provided that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, subject itself to taxation in any jurisdiction wherein it is not so subject, or take any action which would subject it to general service of process in any jurisdiction wherein it is not so subject;

(f) use its best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies, authorities or self-regulatory bodies as may be necessary by virtue of the business and operations of the Company to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities in accordance with the intended method or methods of disposition thereof;

(g) furnish to the LLC:

(i) an opinion of counsel for the Company experienced in securities law matters, dated the effective date of the registration statement (and, if such registration includes an underwritten public offering, the date of the closing under the underwriting agreement), and

(ii) a “comfort” letter (unless the registration is pursuant to Section 2 and such a letter is not otherwise being furnished to the Company), dated the effective date of such registration statement (and if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have issued an audit report on the Company’s financial statements included in the registration statement,

6

covering such matters as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in underwritten public offerings of securities and such other matters as the LLC may reasonably request;

(h) notify each seller of any Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event or existence of any fact as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and, as promptly as is practicable, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(i) otherwise comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement of the Company (in form complying with the provisions of Rule 158 under the Securities Act) covering the period of at least 12 months, but not more than 18 months, beginning with the first month after the effective date of such registration statement;

(j) notify each seller of any Registrable Securities covered by such registration statement (i) when the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission for amendments or supplements to such registration statement or to amend or to supplement such prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose and (iv) of the suspension of the qualification of such securities for offering or sale in any jurisdiction, or of the institution of any proceedings for any of such purposes;

(k) use every reasonable effort to obtain the lifting of any stop order that might be issued suspending the effectiveness of such registration statement at the earliest possible moment;

(l) use its best efforts (i) (A) to list such Registrable Securities on any securities exchange on which the equity securities of the Company are then listed or, if no such equity securities are then listed, on an exchange selected by the

7

Company, if such listing is then permitted under the rules of such exchange, or (B) if such listing is not practicable, to secure designation of such securities as a NASDAQ “national market system security” within the meaning of Rule 11 Aa2-1 under the Exchange Act or, failing that, to secure NASDAQ authorization for such Registrable Securities, and, without limiting the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD, and (ii) to provide a transfer agent and registrar for such Registrable Securities not later than the effective date of such registration statement and to instruct such transfer agent (A) to release any stop transfer order with respect to the certificates with respect to the Registrable Securities being sold and (B) to furnish certificates without restrictive legends representing ownership of the shares being sold, in such denominations requested by the sellers of the Registrable Securities or the lead underwriter;

(m) enter into such agreements and take such other actions as the sellers of Registrable Securities or the underwriters reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including, without limitation, preparing for, and participating in, such number of “road shows” and all such other customary selling efforts as the underwriters reasonably request in order to expedite or facilitate such disposition;

(n) furnish to any holder of such Registrable Securities such information and assistance as such holder may reasonably request in connection with any “due diligence” effort which such seller deems appropriate; and

(o) use its best efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby.

As a condition to its registration of Registrable Securities of any prospective seller, the Company may require such seller of any Registrable Securities as to which any registration is being effected to execute powers-of-attorney, custody arrangements and other customary agreements appropriate to facilitate the offering and to furnish to the Company such information regarding such seller, its ownership of Registrable Securities and the disposition of such Registrable Securities as the Company may from time to time reasonably request in writing and as shall be required by law in connection therewith. Each such holder agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such holder not materially misleading.

The Company agrees not to file or make any amendment to any registration statement with respect to any Registrable Securities, or any amendment of or supplement to the prospectus used in connection therewith, which refers to any holder of Registrable Securities, or otherwise identifies any holder of Registrable Securities as the

8

holder of any Registrable Securities, without the consent of such holder, such consent not to be unreasonably withheld or delayed, unless such disclosure is required by law.

By acquisition of Registrable Securities, each holder of such Registrable Securities shall be deemed to have agreed that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(h), such holder will promptly discontinue such holder’s disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(h). If so directed by the Company, each holder of Registrable Securities will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, in such holder’s possession of the prospectus covering such Registrable Securities at the time of receipt of such notice. In the event that the Company shall give any such notice, the period mentioned in Section 3(a) shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of any Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 3(h).

4. Underwritten Offerings.

4.1 Underwriting Agreement. If requested by the underwriters for any underwritten offering pursuant to a registration requested under Section 1.1 or Section 2, the Company shall enter into an underwriting agreement with the underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the underwriters and to the LLC (unless the LLC is not participating in such registration, in which case, counsel to the Majority Holders). Any such underwriting agreement shall contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in agreements of this type, including, without limitation, indemnities to the effect and to the extent provided in Section 7. Each holder of Registrable Securities to be distributed by such underwriter who owns 10% or more of the Common Stock of the Company (computed on a fully-diluted basis) at the time of such offering shall be a party to such underwriting agreement and may, at such holder’s option, require that any or all of the representations and warranties by, and the agreements on the part of, the Company to and for the benefit of such underwriters be made to and for the benefit of such holder of Registrable Securities and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall also be conditions precedent to the obligations of such holder of Registrable Securities. The Management Shareholders in their capacities as shareholders and/or controlling persons (but not in their capacities as managers of the Company) shall not be required by any underwriting agreement to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such holder, the ownership of such holder’s Registrable Securities and such holder’s intended method or methods of disposition and

9

any other representation required by law or to furnish any indemnity to any Person which is broader than the indemnity furnished by such holder pursuant to Section 7.2.

4.2 Selection of Underwriters. If the Company at any time proposes to register any of its securities under the Securities Act for sale for its own account pursuant to an underwritten offering, the Company will have the right to select the managing underwriter (which shall be of nationally recognized standing) to administer the offering, but if the LLC and its Affiliates at such time own at least 10% of the number of shares of Common Stock they own on the date hereof, only with the approval of the LLC, such approval not to be unreasonably withheld. Notwithstanding the foregoing sentence, whenever a registration requested pursuant to Section 1.1 is for an underwritten offering, the LLC will have the right to select the managing underwriter (which shall be of nationally recognized standing) to administer the offering, but only with the approval of the Company, such approval not to be unreasonably withheld.

5. Holdback Agreements.

(a) If and whenever the Company proposes to register any of its equity securities under the Securities Act for its own account (other than on Form S-4 or S-8 or any successor form) or is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 1.1 or Section 2, each holder of Registrable Securities agrees by acquisition of such Registrable Securities not to effect any sale or distribution, including any sale pursuant to Rule 144 under the Securities Act, or to request registration under Section 1.1 of any Registrable Securities within seven days prior to and 90 days (unless advised by the managing underwriter that a longer period, not to exceed 180 days, is required, or such shorter period as the managing underwriter for any underwritten offering may agree) after the effective date of the registration statement relating to such registration (the “Trigger Date”), except as part of such registration or unless, in the case of a sale or distribution not involving a public offering, the transferee agrees in writing to be subject to this Section 5, even if such Registrable Securities cease to be Registrable Securities upon such transfer; provided that, with respect to any shelf registration statement on Form S-3, the Trigger Date shall be the pricing of any offering made under such registration statement. If requested by such managing underwriter, each holder of Registrable Securities agrees to execute an agreement to such effect with the Company and consistent with such managing underwriter’s customary form of holdback agreement.

(b) The Company agrees not to effect any public sale or distribution of its equity securities or securities convertible into or exchangeable or exercisable for any of such securities within seven days prior to and 90 days (or such longer period, not to exceed 180 days, which may be required by the managing underwriter, or such shorter period as the managing underwriter may agree) after

10

the Trigger Date with respect to any registration statement filed pursuant to Section 1.1 (except (i) as part of such registration, (ii) as permitted by any related underwriting agreement, (iii) pursuant to an employee equity compensation plan, (iv) pursuant to an acquisition or strategic relationship, bank or equipment financing or similar transaction or (v) pursuant to a registration on Form S-4 or S-8 or any successor form); provided that, with respect to any shelf registration statement on Form S-3, the Trigger Date shall be the pricing of any offering made under such registration statement. In addition, if, and to the extent requested by the managing underwriter, the Company shall use its best efforts to cause each holder (other than any holder already subject to Section 5(a)) of its equity securities or any securities convertible into or exchangeable or exercisable for any of such securities, whether outstanding on the date of this Agreement or issued at any time after the date of this Agreement (other than any such securities acquired in a public offering), to agree not to effect any such public sale or distribution of such securities during such period, except as part of any such registration if permitted, and to cause each such holder to enter into an agreement to such effect with the Company and consistent with such managing underwriter’s customary form of holdback agreement.

6. Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, the Company shall give counsel to the holders of such Registrable Securities so to be registered the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and shall give such counsel access to the financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and opportunities to discuss the business of the Company with its officers and the independent public accountants who have issued audit reports on its financial statements in each case as shall be reasonably requested by such counsel in connection with such registration statement.

7. Indemnification.

7.1 Indemnification by the Company. In the event of any registration of any Registrable Securities pursuant to this Agreement, the Company shall indemnify, defend and hold harmless (a) each seller of such Registrable Securities, (b) the directors, members, shareholders, officers, partners, employees, agents and Affiliates of such seller, (c) each Person who participates as an underwriter in the offering or sale of such securities and (d) each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any of the foregoing against any and all losses, claims, damages or liabilities (or actions or proceedings in respect thereof), jointly or severally, directly or indirectly, based upon or arising out of (i) any untrue statement or alleged untrue statement of a fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any

11

preliminary prospectus, final prospectus or summary prospectus contained therein or used in connection with the offering of securities covered thereby, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state a fact required to be stated therein or necessary to make the statements therein not misleading; and the Company will reimburse each such indemnified party for any legal or any other expenses reasonably incurred by them in connection with enforcing its rights hereunder or under the underwriting agreement entered into in connection with such offering or investigating, preparing, pursuing or defending any such loss, claim, damage, liability, action or proceeding, except insofar as any such loss, claim, damage, liability, action, proceeding or expense arises out of or is based upon an untrue statement or omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such seller expressly for use in the preparation thereof in accordance with the second sentence of Section 7.2. Such indemnity shall remain in full force and effect, regardless of any investigation made by such indemnified party and shall survive the transfer of such Registrable Securities by such seller. If the Company is entitled to, and does, assume the defense of the related action or proceedings provided herein, then the indemnity agreement contained in this Section 7.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed).

7.2 Indemnification by the Sellers. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 1.1 or Section 2 that the Company shall have received an undertaking satisfactory to it from each of the prospective sellers of such Registrable Securities to indemnify and hold harmless, severally, not jointly, in the same manner and to the same extent as set forth in Section 7.1, the Company, its directors, officers, employees, agents and each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such seller expressly for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. The Company and the holders of the Registrable Securities in their capacities as shareholders and/or controlling persons (but not in their capacities as managers of the Company) hereby acknowledge and agree that, unless otherwise expressly agreed to in writing by such holders, the only information furnished or to be furnished to the Company for use in any registration statement or prospectus relating to the Registrable Securities or in any amendment, supplement or preliminary materials associated therewith are statements specifically relating to (a) transactions between such

12

holder and its Affiliates, on the one hand, and the Company, on the other hand, (b) the beneficial ownership of shares of Common Stock by such holder and its Affiliates and (c) the name and address of such holder. If any additional information about such holder or the plan of distribution (other than for an underwritten offering) is required by law to be disclosed in any such document, then such holder shall not unreasonably withhold its agreement referred to in the immediately preceding sentence of this Section 7.2 Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such Registrable Securities by such seller. The indemnity agreement contained in this Section 7.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of such seller (which consent shall not be unreasonably withheld or delayed). The indemnity provided by each seller of Registrable Securities under this Section 7.2 shall be limited in amount to the net amount of proceeds actually received by such seller from the sale of Registrable Securities pursuant to such registration statement.

7.3 Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding paragraphs of this Section 7, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action or proceeding, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 7, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate therein and to assume the defense thereof, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof except for the reasonable fees and expenses of any counsel retained by such indemnified party to monitor such action or proceeding. Notwithstanding the foregoing, if such indemnified party reasonably determines, based upon advice of independent counsel, that a conflict of interest may exist between the indemnified party and the indemnifying party with respect to such action and that it is advisable for such indemnified party to be represented by separate counsel, such indemnified party may retain other counsel, reasonably satisfactory to the indemnifying party, to represent such indemnified party, and the indemnifying party shall pay all reasonable fees and expenses of such counsel. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of such indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or

13

plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

7.4 Other Indemnification. Indemnification similar to that specified in the preceding paragraphs of this Section 7 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration (other than under the Securities Act) or other qualification of such Registrable Securities under any federal or state law or regulation of any governmental authority.

7.5 Indemnification Payments. Any indemnification required to be made by an indemnifying party pursuant to this Section 7 shall be made by periodic payments to the indemnified party during the course of the action or proceeding, as and when bills are received by such indemnifying party with respect to an indemnifiable loss, claim, damage, liability or expense incurred by such indemnified party.

7.6 Other Remedies. If for any reason any indemnification specified in the preceding paragraphs of this Section 7 is unavailable, or is insufficient to hold harmless an indemnified party, other than by reason of the exceptions provided therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities, actions, proceedings or expenses in such proportion as is appropriate to reflect the relative benefits to and faults of the indemnifying party on the one hand and the indemnified party on the other and the statements or omissions or alleged statements or omissions which resulted in such loss, claim, damage, liability, action, proceeding or expense, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omissions. No person guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the other provisions of this Section 7, in respect of any claim for indemnification pursuant to this Section 7, no indemnifying party (other than the Company) shall be required to contribute pursuant to this Section 7.6 any amount in excess of (a) the net proceeds received and retained by such indemnifying party from the sale of its Registrable Securities covered by the applicable registration statement, preliminary prospectus, final prospectus, or supplement or amendment thereto, filed pursuant hereto minus (b) any amounts previously paid by such indemnifying party pursuant to this Section 7 in respect of such claim, it being understood that insofar as such net proceeds have been distributed by any indemnifying party to its partners, shareholders or members, the amount of such indemnifying party’s contribution hereunder shall be limited to the net proceeds which it actually recovers from its partners,

14

shareholders or members based upon their relative fault and that to the extent that such indemnifying party has not distributed such net proceeds, the amount such indemnifying party’s contribution hereunder shall be limited by the percentage of such net proceeds which corresponds to the percentage equity interests in such indemnifying party held by those of its partners, shareholders or members who have been determined to be at fault. No party shall be liable for contribution under this Section 7.6 except to the extent and under such circumstances as such party would have been liable for indemnification under this Section 7 if such indemnification were enforceable under applicable law.

8. Representations and Warranties. Each Shareholder represents and warrants to the Company and each other Shareholder that:

(a) such Shareholder has the power, authority and capacity (or, in the case of any Shareholder that is a corporation, limited liability company or limited partnership, all corporate, limited liability company or limited partnership power and authority, as the case may be) to execute, deliver and perform this Agreement;

(b) in the case of a Shareholder that is a corporation, limited liability company or limited partnership, the execution, delivery and performance of this Agreement by such Shareholder has been duly and validly authorized and approved by all necessary corporate, limited liability company or limited partnership action, as the case may be;

(c) this Agreement has been duly and validly executed and delivered by such Shareholder and constitutes a valid and legally binding obligation of such Shareholder, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to creditors’ rights generally and general principles of equity; and

(d) the execution, delivery and performance of this Agreement by such Shareholder does not and will not violate the terms of or result in the acceleration of any obligation under (i) any material contract, commitment or other material instrument to which such Shareholder is a party or by which such Shareholder is bound or (ii) in the case of a Shareholder that is a corporation, limited liability company or limited partnership, the certificate of incorporation, certificate of formation, certificate of limited partnership, by-laws, limited liability company agreement or limited partnership agreement, as the case may be.

15

9. Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings:

Affiliate: a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

Board: the board of directors of the Company.

Commission: the Securities and Exchange Commission.

Common Stock: the Common Stock of the Company, par value $.01 per share.

Exchange Act: the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder which shall be in effect at the time.

IPO: the initial public offering of Common Stock.

Majority Holders: the holders of at least 51% of the Registrable Securities that are participating in the registration at issue.

NASD: National Association of Securities Dealers, Inc.

NASDAQ: the Nasdaq National Market.

Person: an individual, corporation, partnership, limited liability company, joint venture, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

Registrable Securities: the shares of Common Stock beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act) by the LLC, the Outside Investors, if any, the Management Shareholders or the Permitted Transferees (as such term is defined in Section 10.2), except for any shares of Common Stock beneficially owned or held by a Management Shareholder that (i) were issued to such Management Shareholder pursuant to an effective registration statement under the Securities Act on Form S-8 or (ii) may be sold by such Management Shareholder pursuant to Rule 144(k) under the Securities Act. As to any particular shares of Common Stock, such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) a registration statement on Form S-8 with respect to the sale of such securities shall have become effective under the Securities Act, (iii) they shall have been sold to the public pursuant to Rule 144 under the Securities Act, (iv) they shall have been otherwise transferred other than to a Permitted Transferee and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any similar state law then in force or (v) they shall have ceased to be outstanding. Any and all shares

16

of Common Stock which may be issued in respect of, in exchange for, or in substitution for any Registrable Securities, whether by reason of any stock split, stock dividend, reverse stock split, recapitalization, combination or otherwise, shall also be “Registrable Securities” hereunder.

Registration Expenses: all expenses incident to the Company’s performance of or compliance with any registration pursuant to this Agreement, including, without limitation, (i) registration, filing and NASD fees, (ii) fees and expenses of complying with securities or blue sky laws, (iii) fees and expenses associated with listing securities on an exchange or NASDAQ, (iv) word processing, duplicating and printing expenses, (v) messenger and delivery expenses, (vi) transfer agents’, trustees’, depositories’, registrars’ and fiscal agents’ fees, (vii) fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or “cold comfort” letters, (viii) reasonable fees and disbursements of any one counsel retained by the sellers of Registrable Securities, which counsel shall be designated in the manner specified in Section 3(c), and (ix) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if any.

Securities Act: the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder which shall be in effect at the time.

Shareholders Agreement: the Shareholders Agreement, dated as of the date hereof, as the same may be amended from time to time, by and among Axle Holdings, Inc., Axle Holdings II, LLC, the Management Shareholders (as defined therein) parties thereto and the Outside Investors (as defined therein), if any, parties thereto.

10. Miscellaneous.

10.1 Rule 144, etc. If the Company shall have filed a registration statement pursuant to the requirements of Section 12 of the Exchange Act or a registration statement pursuant to the requirements of the Securities Act relating to any class of equity securities, the Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (b) any successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements.

17

10.2 Successors, Assigns and Transferees. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns under this Section 10.2. The provisions of this Agreement which are for the benefit of a holder of Registrable Securities shall be for the benefit of and enforceable by any transferee of such Registrable Securities, provided that such transferee acquires such Registrable Securities in accordance with all of the terms of the Shareholders Agreement and pursuant to an express assignment from the transferor, and further provided that such transferee executes a joinder agreement agreeing to be bound by all of the transferor’s obligations hereunder, including, without limitation, Section 5 hereof, copies of which shall have been delivered to the Company (each such transferee, a “Permitted Transferee”). Notwithstanding anything herein to the contrary, the Management Shareholders must exercise all rights hereunder on behalf of any of their Permitted Transferees and all other parties hereto shall be entitled to deal exclusively with the Management Shareholders and rely on the consent, waiver or any other action by the Management Shareholders as the consent, waiver or other action, as the case may be, of any such Permitted Transferees of such Management Shareholders. The LLC shall have the right to assign any of its rights or obligations under this Agreement to any of its Affiliate or successors without the prior written consent of any other party hereto.

10.3 Stock Splits, etc. Each holder of Registrable Securities agrees that it will vote to effect a stock split, reverse stock split, recapitalization or combination with respect to any Registrable Securities in connection with any registration of any Registrable Securities hereunder, or otherwise, if (i) the managing underwriter shall advise the Company in writing (or, in connection with an offering that is not underwritten, if an investment banker shall advise the Company in writing) that in its opinion such a stock split, reverse stock split, recapitalization or combination would facilitate or increase the likelihood of success of the offering, and (ii) such stock split, reverse stock split, recapitalization or combination does not impact the respective ownership percentages of each such holder of Registrable Securities in the Company. The Company shall cooperate in all respects in effecting any such stock split, reverse stock split, recapitalization or combination.

10.4 Amendment and Modification. This Agreement may be amended, modified or supplemented by the Company with the written consent of the LLC and a majority (by number of shares) of any other holders of Registrable Securities whose interests would be adversely affected by such amendment, modification or supplement; provided that the interests of any existing holders of Registrable Securities shall not be adversely affected by an amendment, modification or supplement of this Agreement that provides for or has the effect of providing for an additional grant of incidental registration rights with a lower or the same priority as the rights held by such existing holders of Registrable Securities, as long as any such grant of incidental registration rights with the same priority are pari passu with those held by such existing holders of Registrable Securities.

18

10.5 Additional Management Shareholders. Notwithstanding anything in this Agreement to the contrary, the Company may, with the consent of the LLC (and only the consent of the LLC), admit additional Management Shareholders to this Agreement and amend Schedule 1 accordingly, provided that any such Management Shareholder has become a party to the Shareholders Agreement and executes and delivers a joinder agreement to this Agreement and such other agreements or documents as may reasonably be requested by the Company.

10.6 Outside Investors. Notwithstanding anything in this Agreement to the contrary, the Company may, with the consent of the LLC (and only the consent of the LLC), admit one or more Outside Investor’s to this Agreement, provided that any such Outside Investor has become a party to the Shareholders Agreement and executes and delivers a joinder agreement to this Agreement and such other agreements or documents as may reasonably be requested by the Company.

10.7 Governing Law. This Agreement and the rights and obligations of the parties hereunder and the Persons subject hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware, without giving effect to the choice of law principles thereof.

10.8 Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

10.9 Notices. All notices, requests, demands, letters, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:

(i) If to the Company, to:

Axle Holdings, Inc.

c/o Kelso & Company

320 Park Avenue, 24th Floor

New York, New York 10022

Attention: James J. Connors II, Esq.

Tel: (212) 751-3939

Fax: (212) 223-2379

19

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

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Lou R. Kling

Tel: (212) 735-3000

Fax: (917) 777-2770

(ii) If to a Management Shareholder, to his or her attention at:

c/o Insurance Auto Auctions, Inc.

2 Westbrook Corporate Center, Suite 500

Westchester, Illinois 60154

Tel: (708) 492-7000

Fax: (708) 492-7078

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

Schiff Hardin LLP

6600 Sears Tower

Chicago, Illinois 60606

Attention: Stephen J. Dragich

Tel: (312) 258-5962

Fax: (312) 258-5600

(iii) If to the LLC, to:

Axle Holdings II, LLC

c/o Kelso & Company, L.P.

320 Park Avenue, 24th Floor

New York, NY 10022

Attention: James J. Connors II, Esq.

Tel: (212) 751-3939

Fax: (212) 223-2379

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

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Lou R. Kling

Tel: (212) 735-3000

Fax: (917) 777-2770

20

or to such other Person or address as any party shall specify by notice in writing to the Company. All such notices, requests, demands, letters, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax, on the day delivered, provided that such delivery is confirmed.

10.10 Headings; Execution in Counterparts. The headings and captions contained herein are for convenience and shall not control or affect the meaning or construction of any provision hereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument.

10.11 Injunctive Relief. Each of the parties recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach of any provision of this Agreement the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which such party may have.

10.12 Term. This Agreement shall be effective as of the date hereof and shall continue in effect thereafter until the earlier of (a) its termination by the consent of the parties hereto or their respective successors in interest and (b) the date on which no Registrable Securities remain outstanding.

10.13 Further Assurances. Subject to the specific terms of this Agreement, each of the Company and the Shareholders shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

10.14 Entire Agreement. This Agreement, the Shareholders Agreement and any agreements entered into in connection with any of the foregoing constitute the entire agreement and the understanding of the parties hereto with the matters referred to herein. This Agreement and the agreements referred to in the preceding sentence supersede all prior agreements and understandings between the parties with respect to such matters.

21

IN WITNESS WHEREOF this Amended and Restated Registration Rights Agreement has been signed by each of the parties hereto, and shall be effective as of the date first above written.

AXLE HOLDINGS, INC.
By:	/s/ James J. Connors II, Esq.
	Name: James J. Connors II, Esq.
	Title:   Vice President and Assistant Secretary

AXLE HOLDINGS II, LLC
By:	/s/ David I. Wahrhaftig
	Name: David I. Wahrhaftig
	Title:   Vice President and Treasurer

/s/ Thomas C. O’Brien

Thomas C. O’Brien

/s/ Scott P. Pettit

Scott P. Pettit

/s/ David R. Montgomery

David R. Montgomery

/s/ Donald J. Hermanek

Donald J. Hermanek

/s/ John W. Kett

John W. Kett

/s/ John R. Nordin

John R. Nordin

/s/ Sidney L. Kerley

Sidney L. Kerley

Schedule 1

Management Shareholders

Thomas C. O’Brien

Scott P. Pettit

David R. Montgomery

Donald J. Hermanek

John W. Kett

John R. Nordin

Sidney L. Kerley

EX-10.17

Exhibit 10.17

CONVERSION AGREEMENT

This Conversion Agreement (this “Agreement”) is made and entered into as of this 25th day of May, 2005, between Axle Holdings, Inc., a Delaware corporation (“Buyer Parent”), and [                ] (the “Shareholder”).

WHEREAS, Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”), Buyer Parent and Axle Merger Sub, Inc., an Illinois corporation and a wholly owned subsidiary of Buyer Parent (“Buyer”), have entered into an Agreement and Plan of Merger, dated as of February 22, 2005 (as the same may be amended from time to time, the “Merger Agreement”), which provides, among other things, for the merger of Buyer with and into the Company, with the Company continuing as the surviving corporation (the “Merger”);

WHEREAS, as the date hereof, the Shareholder is the beneficial owner of an aggregate number of options (the “IAAI Options”) to acquire [            ] shares of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”);

WHEREAS, subject to the terms and conditions set forth herein, immediately prior to the Effective Time, the Shareholder desires to have (i) a portion of the IAAI Options held by Shareholder as identified on Schedule A hereto under the heading “Number of Exchange Options” (the “Exchange Options”) cancelled in exchange (the “Option Exchange”) for, and converted into, substitute options (each, a “New Option”) to acquire shares of common stock, par value $0.01 per share, of Buyer Parent (the “Buyer Parent Common Stock”) and (ii) the remaining portion of such IAAI Options held by Shareholder as identified on Schedule B hereto under the heading “Number of Cash Out Options” (the “Cash Out Options”) terminated or cancelled, as applicable, in exchange for a payment, in each case in accordance with Section 2 of this Agreement;

WHEREAS, as a condition to Buyer Parent’s obligations to effect the Option Exchange, the Shareholder shall enter into a shareholders agreement with Buyer Parent, the LLC (as defined below) and certain other parties with respect to the ownership of securities of Buyer Parent in the form set forth on Exhibit A hereto (the “Shareholders Agreement”);

WHEREAS, Buyer Parent and the LLC are parties to an effective Registration Rights Agreement dated April 1, 2005 and as a condition to Buyer Parent’s obligations to effect the Option Exchange, the Shareholder shall enter into an amended and restated registration rights agreement with Buyer Parent and certain other parties in the form set forth on Exhibit B hereto (the “Registration Rights Agreement”); and

WHEREAS, Kelso Investment Associates VII, L.P. and KEP VI, LLC, certain other parties and Shareholder intend to enter into a Limited Liability Company Agreement with Axle Holdings II, LLC (the “LLC”) with respect to the management and

ownership of the LLC, in connection with the Closing, in the form set forth on Exhibit C hereto (the “LLC Agreement”).

Capitalized terms used herein and not otherwise defined shall have the respective meanings attributed to them in the Merger Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and warranties contained herein, Buyer Parent and the Shareholder hereby agree as follows:

1. Option Exchange. Effective as of the Closing, Shareholder agrees that each Exchange Option shall be cancelled and, in exchange therefor, converted into a New Option that shall (A) cover the number of shares determined by multiplying (i) the number of shares of Company Common Stock that were issuable upon exercise of such Exchange Option immediately prior to the Closing by (ii) the ratio (the “Option Exchange Ratio”) of the Merger Consideration to the Closing Date Value rounded to the nearest whole share of Buyer Parent Common Stock, and (B) have such per share exercise price equal to the quotient determined by dividing (i) the exercise price per share of Company Common Stock at which each Exchange Option was exercisable immediately prior to the Closing by (ii) the Option Exchange Ratio (rounded to the nearest whole cent). It is acknowledged and agreed that the intent of the foregoing is to preserve for Shareholder, pursuant to the grant of New Options, the aggregate spread value of the Exchange Options (based on the Merger Consideration). Each New Option shall be subject to, and evidenced by, a stock option agreement in the form attached as Exhibit D hereto (the “Exchange Stock Option Agreement”). The “Closing Date Value” (which is intended to represent the average price paid by the LLC in respect of its equity contribution to Buyer Parent per share of Buyer Parent Common Stock) shall mean $25.616798. The number of shares of Buyer Parent Common Stock issued to the LLC at the Closing is 5,605,697.

2. Option Cancellation. With respect to each Cash Out Option granted under the 1991 Stock Option Plan and the Supplemental Stock Option Plan that is not exercised prior to the consummation of the Merger (other than Exchange Options granted under the 1991 Stock Option Plan and the Supplemental Stock Option Plan), each such Cash Out Option will terminate effective as of the consummation of the Merger. With respect to each Cash Out Option granted under the 2003 Stock Incentive Plan (other than Exchange Options granted under the 2003 Stock Incentive Plan) that is not exercised prior to the consummation of the Merger, each such Cash Out Option will be cancelled in exchange for, with respect to each share of Company common stock subject to the Cash Out Option, a cash payment equal to the excess, if any, of the Merger Consideration over the exercise price of the Cash Out Option (less any applicable amounts withheld for Taxes).

3. Closing. The closing of the transactions contemplated by this Agreement shall take place at the offices of Skadden, Arps, Slate, Meagher, Flom, LLP, 4 Times Square, New York, New York (or such other place as the Closing under the Merger Agreement shall occur) immediately prior to, or simultaneously with, the Closing under the Merger Agreement.

2

4. Covenants. The parties hereto agree to use reasonable best efforts to take such actions, including executing such documents and agreements, as are necessary to make effective the transactions contemplated by this Agreement.

5. Representations and Warranties of the Shareholder. The Shareholder represents and warrants as follows:

(a) Binding Agreement. The Shareholder has the capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Shareholder has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

(b) Ownership of Options. The Shareholder is the beneficial owner of the number of Exchange Options set forth on Schedule A attached hereto, free and clear of any security interests, liens, charges, encumbrances, equities, claims, options or limitations of whatever nature and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of the Exchange Options), except as may exist by reason of this Agreement or pursuant to applicable law, or pursuant to the restrictions on transferability and on exercise provided for in the applicable Company option plan under which any Exchange Option was granted and any related option agreement. Except as provided for in this Agreement, the Merger Agreement and the other agreements contemplated hereby and thereby, there are no outstanding options or other rights to acquire from the Shareholder, or obligations of the Shareholder to sell or to dispose of, any Exchange Options.

(c) No Agreements. Except for this Agreement, the Exchange Stock Option Agreement, any relevant option agreements covering the Exchange Options and any other agreements contemplated hereby or thereby, the Shareholder has not entered into or agreed to be bound by any other arrangements or agreements of any kind with any other party with respect to the Exchange Options, including, but not limited to, arrangements or agreements with respect to the acquisition or disposition thereof or any interest therein or the voting of any such shares.

(d) No Conflict. Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the performance of the Shareholder’s obligations hereunder will (a) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under any contract, agreement, instrument, commitment, arrangement or understanding to which the Shareholder is a party, or result in the

3

creation of a security interest, lien, charge, encumbrance, equity or claim with respect to the Shareholder’s Exchange Options, or (b) require any consent, authorization or approval of any other person or any entity or government entity, or (c) violate or conflict with any writ, injunction or decree applicable to the Shareholder or the Shareholder’s Exchange Options, or New Options to be received by the Shareholder.

(e) Securities Laws Matters. The Shareholder acknowledges receipt of advice from Buyer Parent that (i) the New Options and any shares of Buyer Parent Common Stock acquired on exercise of the New Options (“Exercise Shares”) have not been registered under the Securities Act of 1933 (the “Act”) or qualified under any state securities or “blue sky” or non U.S. securities laws, (ii) it is not anticipated that there will be any public market for any Exercise Shares, (iii) any Exercise Shares must be held indefinitely and the Shareholder must continue to bear the economic risk of the investment in the shares of Buyer Parent Common Stock unless such shares are subsequently registered under the Act and such state or non U.S. securities laws or an exemption from such registration is available, (iv) Rule 144 promulgated under the Act (“Rule 144”) is not presently available with respect to sales of any Exercise Shares and Buyer Parent has made no covenant to make Rule 144 available and Rule 144 is not anticipated to be available in the foreseeable future, (v) when and if any Exercise Shares may be disposed of without registration in reliance upon Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule, (vi) if the exemption afforded by Rule 144 is not available, public sale of the shares of any Exercise Shares without registration will require the availability of an exemption under the Act, (vii) restrictive legends in the form set forth in the Shareholders Agreement shall be placed on the certificate representing the shares of any Exercise Shares and (viii) a notation shall be made in the appropriate records of the Buyer Parent indicating that the shares of any Exercise Shares are subject to restrictions on transfer and, if Buyer Parent should in the future engage the services of a stock transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to any Exercise Shares.

(f) Accredited Investor. The Shareholder is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Act.

(g) Shareholder’s Experience. (A) The Shareholder’s financial situation is such that the Shareholder can afford to bear the economic risk of holding the New Options and any Exercise Shares for an indefinite period of time, (B) the Shareholder can afford to suffer complete loss of his investment in the New Options and any Exercise Shares and (C) the Shareholder’s knowledge and experience in financial and business matters are such that the Shareholder is capable of evaluating the merits and risks of the Shareholder’s investment in the New Options and any Exercise Shares.

4

(h) Access to Information. The Shareholder represents and warrants that the Shareholder has been granted the opportunity to ask questions of, and receive answers from, representatives of Buyer Parent concerning the terms and conditions of the Option Exchange and to obtain any additional information that the Shareholder deems necessary to verify the accuracy of the information so provided.

(i) Investment Intent. The Shareholder is acquiring the New Options, and such Shareholder will acquire any Exercise Shares, solely for the Shareholder’s own account for investment and not with a view to or for sale in connection with any distribution thereof. The Shareholder agrees that the Shareholder will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of any of the New Options or any Exercise Shares (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any shares of Buyer Parent Common Stock), except in compliance with (i) the Act and the rules and regulations of the Securities and Exchange Commission thereunder, (ii) applicable state and non-U.S. securities or “blue sky” laws and (iii) the provisions of this Agreement, the Exchange Stock Option Agreement, the Registration Rights Agreement and the Shareholders Agreement, as applicable.

6. Representations and Warranties of Buyer Parent. Buyer Parent represents and warrants as follows:

(a) Corporate Form. Buyer Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has (and, immediately following the Effective Time, will have) all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as now conducted.

(b) Corporate Authority, etc. Buyer Parent has (and, immediately prior to the Effective Time, will have) all requisite corporate power and authority to enter into this Agreement and to perform all of its obligations hereunder and to carry out the transactions contemplated hereby and Buyer Parent has (and, immediately prior to the Effective Time, will have) all requisite corporate power and authority to issue the New Options. The Exercise Shares, when issued, delivered and paid for in accordance with the terms hereof, will be duly and validly issued, fully paid and nonassessable.

(c) Actions Authorized. Buyer Parent has taken all corporate actions necessary to authorize it to enter into this Agreement and, prior to the Effective Time, will have taken all corporate actions necessary to authorize it to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Buyer Parent and, assuming due authorization, execution and delivery of this Agreement by the Shareholder, constitutes a legal, valid and binding obligation of Buyer Parent enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws

5

affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

(d) No Conflicts. Other than as provided for in the Merger Agreement and the disclosure schedules thereto, none of the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, by Buyer Parent will conflict with the certificate of incorporation or the by-laws of Buyer Parent or result in any breach of, or constitute a default under any contract, agreement or instrument to which Buyer Parent is a party or by which it or any of its respective assets is bound.

7. Conditions Precedent. The obligations of Buyer Parent to consummate the transactions contemplated hereby are subject to (i) the conditions set forth in Section 8.1 and 8.2 of the Merger Agreement being satisfied or waived by Buyer Parent, (ii) the Shareholder having entered into the Shareholders Agreement, (iii) the Shareholder having entered into the Registration Rights Agreement, (iv) the Shareholder having entered into the LLC Agreement and (v) the Shareholder having entered into the Exchange Stock Option Agreement. Shareholder agrees to execute the Shareholders Agreement, the Registration Rights Agreement, the LLC Agreement and the Exchange Stock Option Agreement at the Closing.

8. Miscellaneous.

(a) Acknowledgement. Shareholder acknowledges that upon the completion of the Merger, the IAAI Options shall be of no further force or effect, and neither the Company nor Buyer Parent, nor any of their respective affiliates, shall have any further obligations in respect thereof (other than any obligations specifically set forth in this Agreement).

(b) Binding Effect; Benefits. This Agreement shall be binding upon the successors, heirs, executors and administrators of the parties hereto. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement and their respective successors or permitted assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein No party shall have liability for any breach of any representation or warranty contained herein, except for any knowing or intentional breach thereof.

(c) Amendments. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the Shareholder and Buyer Parent.

(d) Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Shareholder without the prior written consent of Buyer Parent; it being understood that Buyer Parent may assign its rights hereunder to any affiliate of Buyer Parent.

6

(e) Specific Performance. The parties acknowledge and agree that any breach of the terms of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and accordingly the parties hereto agree that, in addition to any other remedies, each party shall be entitled to enforce the terms of this Agreement by a decree of specific performance without the necessity of proving the inadequacy of money damages as a remedy.

(f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof).

(g) Counterparts. This Agreement may be executed by facsimile and in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

(h) Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner.

(i) Waiver. Any party to this Agreement may waive any condition to their obligations contained herein.

(j) Termination. This Agreement shall terminate on the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms and (ii) an agreement in writing of Buyer Parent and the Shareholder to terminate this Agreement. Termination shall not relieve any party from liability for any intentional breach of its obligations hereunder committed prior to such termination. Upon termination of this Agreement, all rights and obligations of the parties, and all representations and warranties of the parties, shall terminate.

7

IN WITNESS WHEREOF, Buyer Parent and the Shareholder have executed this Conversion Agreement as of the date first above written.

AXLE HOLDINGS, INC.
By:
	Name: [                                         ]
	Title:   [                                         ]
SHAREHOLDER

8

Schedule A

Exchange Options

Date of Grant of
Exchange
Options Name of
Plan Granting
Exchange
Options Number of
Exchange
Options Current
Exercise
Price of
Exchange
Options Expiration Date
of Exchange
Options

9

Schedule B

Cash Out Options

Name of
Plan Granting
Cash Out Options Number of
Cash Out Options Current Exercise Price of
Cash Out Options

10

EX-10.18

Exhibit 10.18

AXLE HOLDINGS, INC.

EXCHANGE STOCK OPTION AGREEMENT

EXCHANGE STOCK OPTION AGREEMENT (the “Agreement”), dated as of May 25, 2005, between Axle Holdings, Inc., a Delaware corporation (“Holdings”), and [                    ] (the “Employee”). Capitalized terms used herein without definition have the meaning set forth in Section 15 hereof.

WHEREAS, in connection with the merger (the “Merger”) of Axle Merger Sub, Inc., an Illinois corporation, with and into Insurance Auto Auctions, Inc., an Illinois corporation (“IAA”) Holdings and the Employee entered into a Conversion Agreement, dated as of May 25, 2005 (the “Conversion Agreement”), pursuant to which the Employee agreed to exchange certain options to purchase shares of common stock of IAA held by the Employee prior to the Merger (the “IAA Options”) for options to purchase common stock of Holdings (“Holdings Common Stock”).

NOW, THEREFORE, the parties hereto agree as follows:

1. Confirmation of Grant, Option Price.

(a) Confirmation of Grant. Holdings hereby evidences and confirms the grant to the Employee, effective as of the date hereof (the “Grant Date”), of options to purchase from Holdings the number of shares of Holdings Common Stock (the “Options”) specified on Schedule A hereto; provided, however, that such grant is expressly conditioned upon the Employee executing the Shareholders Agreement and the Registration Rights Agreement.

(b) Option Price. Each Option shall have the exercise price per share (the “Option Price”) specified on Schedule A hereto.

(c) Character of Options. The Options granted hereunder are not intended to be “incentive stock options” within the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Vesting, Exercisability and Forfeiture.

All Options granted pursuant to this Agreement shall be fully vested as of the date hereof and shall terminate on the date specified on Schedule A hereto, which is the date the applicable IAA Options would have otherwise terminated if the Employee had not entered into the Conversion Agreement and if the IAA Options had remained outstanding following the Merger (the “Expiration Date”). All Options may be exercised, subject to the provisions hereof, upon the same terms and conditions as were applicable to the IAA Options under, as the case may be, an option award agreement

between the Employee and IAA, the IAA 2003 Stock Incentive Plan and the IAA 1991 Stock Option Plan.

3. Method of Exercise and Payment.

All or part of the Options may be exercised by the Employee upon (a) the Employee’s written notice to Holdings of exercise, (b) the Employee’s payment of the Option Price in full at the time of exercise (i) in cash or cash equivalents, (ii) with the consent of the Committee, in unencumbered shares of Holdings Common Stock owned by the Employee for at least six (6) months (or such longer period as is required by applicable accounting standards to avoid a charge to earnings) having a Fair Market Value on the date of exercise equal to such Option Price, or (if permitted by the Committee and subject to such terms and conditions as it may determine) by surrender of outstanding awards under the Axle Holdings, Inc. Stock Incentive Plan, or (iii) in accordance with such procedures or in such other form as the Committee shall from time to time determine (including by permitting broker’s cashless exercise procedure). As soon as practicable after receipt of a written exercise notice and payment in full of the exercise price of any Options, but subject to Section 6 below, Holdings shall deliver to the Employee a certificate or certificates representing the shares of Holdings Common Stock acquired upon the exercise of such Options, registered in the name of the Employee, provided that, if Holdings, in its sole discretion, shall determine that, under applicable securities laws, any certificates issued under this Section 3 must bear a legend restricting the transfer of such Holdings Common Stock, such certificates shall bear the appropriate legend. It is agreed that Employee may satisfy clause (a) above by delivering written notice to Holdings of his desire to pay the Option Price as described in the preceding sentence on or before the exercise date.

4. Termination of Employment.

(a) Upon any termination of the Employee’s employment with the Company or any Subsidiary, the Options (or any shares of Holdings Common Stock purchased by the Employee upon exercise of the Options) then held by the Employee shall be subject to Sections 2 (“Put Rights”) and 3 (“Call Rights”) of the Shareholders Agreement.

(b) Upon a termination of the Employee’s employment with the Company or any Subsidiary, any Options then held by the Employee shall be governed by the terms and conditions relating to termination of employment as were applicable to the IAA Options under, as the case may be, an option award agreement between the Employee and IAA, the IAA 2003 Stock Incentive Plan and the IAA 1991 Stock Option Plan.

2

5. Exit Event.

(a) Payment. Unless the Committee shall otherwise determine in the manner set forth in Section 5(b), in the event of an Exit Event, each outstanding Option shall be canceled in exchange for a payment in cash of an amount equal to the excess, if any, of the Exit Event Price over the Option Price.

(b) Alternative Options. Notwithstanding Section 5(a), no cancellation or cash settlement or other payment shall occur with respect to any Option in connection with an Exit Event if the Committee reasonably determines in good faith, prior to the occurrence of such Exit Event, that such Option shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted Option being hereinafter referred to as an “Alternative Option”) by the new employer, provided that any such Alternative Option must:

(i) provide the Employee that held such Option with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Option, including, but not limited to, an identical or better exercise and vesting schedule and identical or better timing and methods of payment; and

(ii) have substantially equivalent economic value to such Option (determined at the time of the Exit Event).

6. Tax Withholdings.

Whenever Holdings Common Stock is to be issued pursuant to the exercise of an Option or any cash payment is to be made hereunder, Holdings or any Subsidiary shall have the power to withhold, or require the Employee to remit to Holdings or such Subsidiary, an amount sufficient to satisfy the statutory minimum federal, state, and local withholding tax requirements relating to such transaction (which amount may be paid in whole or in part by withholding a number of shares of Common Stock subject to such Option), and Holdings or such Subsidiary may defer payment of cash or issuance of Holdings Common Stock until such requirements are satisfied.

7. Nontransferability of Awards.

No Options granted hereby may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than as permitted under the terms of the Shareholders Agreement.

3

8. Beneficiary Designation.

The Employee may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) by whom any right under this Agreement is to be exercised in case of his death. Each designation will revoke all prior designations by the Employee, shall be in a form reasonably prescribed by the Committee, and will be effective only when filed by the Employee in writing with the Committee during his lifetime. If no beneficiary is named, or if a named beneficiary does not survive the Employee, benefits remaining unpaid or Options outstanding at the Employee’s death shall be paid to or exercisable by the Employee’s surviving spouse, if any, or otherwise to his estate, in each case in accordance with the terms of the Shareholders Agreement.

9. Adjustment in Capitalization.

The aggregate number of shares of Holdings Common Stock subject to outstanding Option grants and the respective exercise prices applicable to outstanding Options, shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, any stock dividend, stock split or share combination of, or extraordinary cash dividend on, the Holdings Common Stock, or any recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares affecting the Holdings Common Stock, or any issuance of any warrants or rights offering or any other similar event affecting the Holdings Common Stock. All determinations and calculations required under this Section 9 shall be made in the sole discretion of the Committee.

10. Requirements of Law.

The issuance of shares of Holdings Common Stock pursuant to the Options shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. No shares of Holdings Common Stock shall be issued upon exercise of any Options granted hereunder, if such exercise would result in a violation of applicable law, including the U.S. federal securities laws and any applicable state or foreign securities laws.

11. No Guarantee of Employment.

Nothing in this Agreement shall interfere with or limit in any way the right of Holdings or any Subsidiary to terminate the Employee’s employment at any time, or confer upon the Employee any right to continue in the employ of Holdings or any Subsidiary.

4

12. No Rights as Stockholder.

Except as otherwise required by law, the Employee shall not have any rights as a stockholder with respect to any shares of Holdings Common Stock covered by the Options granted hereby until such time as the shares of Holdings Common Stock issuable upon exercise of such Options have been so issued.

13. Restrictions on Sale Upon Public Offering.

Except as otherwise provided in the Registration Rights Agreement, the Employee agrees that, in the event that Holdings files a registration statement under the Act with respect to a public offering of any shares of its capital stock, the Employee will not effect any sale or distribution of any shares of the Holdings Common Stock including, but not limited to, pursuant to Rule 144 under the Act, within seven days prior to and 90 days (unless Holdings, in consultation with the managing underwriter, determines that a longer period, not to exceed 180 days, is required, or such shorter period as the managing underwriter for any underwritten offering may agree) after the effective date of the registration statement relating to such registration (the “Trigger Date”), except as part of such registration or unless, in the case of a sale or distribution not involving a public offering, the transferee agrees in writing to be subject to this Section 13; provided that, with respect to any shelf registration statement on Form S-3, the Trigger Date shall be the pricing of any offering made under such registration statement and the Employee agrees to execute a customary holdback agreement with the underwriters for any such public offering.

14. Interpretation; Construction.

Any determination or interpretation by the Committee under or pursuant to this Agreement shall be final and conclusive on all persons affected hereby.

15. Additional Definitions.

Whenever used herein, the following terms shall have the respective meanings set forth below:

Act: the Securities Act of 1933, as amended.

Board: the Board of Directors of Holdings.

Committee: the Compensation Committee of the Board or, if there shall not be any such committee then serving, the Board.

Exit Event: shall mean an “Exit Event” as defined in the Limited Liability Company Agreement of Axle Holdings II, LLC.

5

Exit Event Price: the price per share of Holdings Common Stock paid in conjunction with any transaction resulting in an Exit Event (as determined in good faith by the Committee if any part of the price is paid other than in cash).

Fair Market Value: if no Public Offering has occurred, the fair market value of a share of Holdings Common Stock as determined in accordance with the Shareholders Agreement. Following a Public Offering, the Fair Market Value, on any date of determination, shall mean the average of the closing sales prices for a share of Holdings Common Stock as reported on a national exchange for each of the ten business days preceding the date of determination or the average of the last transaction prices for a share of Holdings Common Stock as reported on a nationally recognized system of price quotation for each of the ten business days preceding the date of determination. In the event that there are no Holdings Common Stock transactions reported on such exchange or system on such date, Fair Market Value shall mean the closing price on the immediately preceding date on which Holdings Common Stock transactions were so reported.

Public Offering: an underwritten initial bona fide public offering of Holdings Common Stock after which such Holdings Common Stock will be listed and traded on the New York Stock Exchange or the American Stock Exchange, or quoted on the National Association of Securities Dealers Automated Quotation System, in each case, pursuant to an effective registration statement under the Act.

Registration Rights Agreement: the Registration Rights Agreement, dated as of April 1, 2005, among Holdings and Axle Holdings II, LLC, a Delaware limited liability company, as it may be amended from time to time to add certain other shareholders (including Employee) of Holdings as a party thereto.

Section 409A: Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and guidance issued thereunder (and any successor section).

Shareholders Agreement: the Shareholders Agreement, dated as of May 25, 2005, among Holdings, Axle Holdings II, LLC, a Delaware limited liability company, and certain other shareholders (including Employee) of Holdings, as it may be amended from time to time.

Subsidiary: any corporation a majority of whose outstanding voting securities is owned, directly or indirectly, by Holdings.

16. Miscellaneous.

(a) Notices. All notices, requests, demands, letters, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered personally,

6

(ii) mailed, certified or registered mail with postage prepaid, (iii) sent by next-day or overnight mail or delivery, or (iv) sent by fax, as follows:

(i) If to Holdings, to it at:

Axle Holdings, Inc.

c/o Kelso & Company

320 Park Avenue, 24^th Floor

New York, New York 10022

Tel: 212-751-3939

Fax: 212-223-2379

Attention: James J. Connors II, Esq.

(ii) If to the Employee, to the Employee’s last known home address,

or to such other person or address as any party shall specify by notice in writing to Holdings. All such notices, requests, demands, letters, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, or (z) if by fax, on the day delivered, provided that such delivery is confirmed.

(b) Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(c) Waiver. Either party hereto may by written notice to the other (i) extend the time for the performance of any of the obligations or other actions of the other under this Agreement, (ii) waive compliance with any of the conditions or covenants of the other contained in this Agreement and (iii) waive or modify performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of either party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by either party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

7

(d) No Impact On Benefits. The Options granted under this Agreement shall not be deemed compensation for purposes of calculating an Employee’s rights under any employee benefit plan.

(e) Securities Law Compliance. The Employee shall represent to Holdings in writing, when the Employee receives shares upon exercise of an Option (or at such other time as the Committee deems appropriate) that the Employee is acquiring such shares (unless they are then covered by an effective registration statement filed under the Act) for the Employee’s own account for investment only and with no present intention to transfer, sell or otherwise dispose of such shares except such disposition by a legal representative as shall be required by will or the laws of any jurisdiction in winding up the estate of the Employee. Such shares shall be transferable only if the proposed transfer shall be permissible pursuant to this Agreement and if, in the opinion of counsel satisfactory to Holdings, such transfer at such time will be in compliance with all applicable securities laws.

(f) Unsecured Creditor. To the extent that the Employee or his executor, administrator or other personal representative, as the case may be, acquires a right to receive any payment from Holdings pursuant to this Agreement, such right shall be no greater than the right of an unsecured general creditor of Holdings.

(g) Code Section 409A Compliance. Notwithstanding any provision of this Agreement, to the extent that the Committee determines that any Option granted under this Agreement is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, notwithstanding anything to the contrary contained in this Agreement, the Committee reserves the right to amend, restructure, terminate or replace the Option in order to cause the Option to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

(h) Severability of Provisions. If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Agreement shall be construed and enforced as if such provision had not been included.

(i) Applicable Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws.

(j) Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

8

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

— Signature page follows —

9

IN WITNESS WHEREOF, Holdings and the Employee have duly executed this Exchange Stock Option Agreement as of the date first above written.

AXLE HOLDINGS, INC.
By:
	Name:	[                                                             ]
	Title:	[                                                             ]
EMPLOYEE
[                                                             ]

10

Schedule A

[                    ] Exchange Options

Name of Plan Granting Options Options
Exercise Price
Expiration Date

11

EX-10.19

Exhibit 10.19

Axle Merger Sub, Inc.

c/o Kelso & Company, L.P.

320 Park Avenue, 24^th Floor

New York, NY 10022

February 22, 2005

Kelso & Company, L.P.

320 Park Avenue, 24^th Floor

New York, New York 10022

Ladies and Gentlemen:

Axle Merger Sub, Inc. (the “Company”) hereby agrees to retain you, Kelso & Company, L.P. (“Kelso”), and any of your affiliates or designees (collectively, with Kelso, the “Kelso Group”), to provide consulting and advisory services to the Company commencing on the Closing Date (as defined in the Agreement and Plan of Merger by and among Insurance Auto Auctions, Inc. (“Axle”), Axle Holdings, Inc. and the Company, dated as of February 22, 2005 (the “Merger Agreement”)) for a term ending on the date on which Kelso and its affiliates cease to own any shares of common stock of the Company. Such services may include (i) assisting in the raising of additional debt and equity capital from time to time for the Company, if deemed advisable by the Board of Directors of the Company, (ii) assisting the Company in its long-term strategic planning generally, (iii) providing the Company with financial, investment banking, management advisory and other services with respect to proposed transactions directly or indirectly involving the Company or any of its subsidiaries (collectively, the “Transaction Services”) and (iv) providing such other consulting and advisory services as the Company may reasonably request.

In consideration of the Kelso Group’s providing the foregoing services (other than Transaction Services), the Company (or its successor by operation of law) will pay Kelso (i) a fee of $5,000,000 in cash, which amount shall be paid substantially concurrently with the consummation of the merger of the Company with and into Axle pursuant to the terms of the Merger Agreement (the “Merger”), and (ii) an annual advisory fee of $500,000, payable quarterly in advance on January 1, April 1, July 1 and October 1 (or the first business day following each such date), provided that the first payment shall be due on the Closing Date and shall be in an amount pro-rated for the period from the Closing Date to the end of the then current fiscal quarter. If the Kelso Group invests additional equity in the Company or any of its affiliates on one or more occasions after the Closing Date, then, in each such case, the Company and Kelso will negotiate in good faith to effect a mutually acceptable increase to such advisory fee. In consideration of the Kelso Group’s providing Transaction Services, the Company will pay Kelso a fee to be agreed between the Company and Kelso. The Company shall

reimburse Kelso promptly for the Kelso Group’s out-of-pocket costs and expenses incurred in connection with any investment by the Kelso Group in the Company, whether made on or after the Closing Date (the “Acquisition”). Such costs and expenses shall include, but not be limited to, those incurred by the Kelso Group in the course of monitoring its investment in the Company and performing Kelso’s duties (including, without limitation, Transaction Services) hereunder.

The Company will indemnify each member of the Kelso Group, and their respective officers, directors, partners, employees, agents and control persons (as such term is used in the Securities Act of 1933, as amended, and the rules and regulations thereunder) to the full extent lawful against any and all claims, losses and expenses as incurred (including all reasonable fees and disbursements of any such indemnitee’s counsel and other out-of-pocket expenses incurred in connection with the investigation of and preparation for any such pending or threatened claims and any litigation or other proceedings arising therefrom) arising in connection with the Merger, the Acquisition, any of the transactions contemplated by the Merger Agreement (including the financing of the Merger) or the Acquisition, or such indemnitee’s investment in the Acquisition or out of any services rendered by the Kelso Group hereunder or any such indemnitee being a controlling person of the Company or any of its subsidiaries, provided, however, there shall be excluded from such indemnification any such claim, loss or expense to the extent that it is based upon any action or failure to act by such indemnitee that is found in a final judicial determination to constitute gross negligence or intentional misconduct on such indemnitee’s part. The Company will advance costs and expenses, including attorney’s fees, incurred by any such indemnitee in defending any such claim in advance of the final disposition of such claim upon receipt of an undertaking by or on behalf of such indemnitee to repay amounts so advanced if it shall ultimately be determined that such indemnitee is not entitled to be indemnified by the Company pursuant to this Agreement.

The Company’s obligations set forth in this Agreement shall survive the termination of Kelso’s services pursuant to the first paragraph of this Agreement.

This Agreement may not be amended or revised except by a writing signed by the parties.

This agreement shall be governed by the laws of the State of New York.

[remainder of the page intentionally left blank]

2

If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.

Very truly yours,
AXLE MERGER SUB, INC.
By:	/s/ David I. Wahrhaftig
Name:	David I. Wahrhaftig
Title:	Vice President and Treasurer

Agreed and accepted:
KELSO & COMPANY, L.P.
By:	Kelso & Companies, Inc., its general partner
	By:	/s/ Howard A. Matlin
	Name:	Howard A. Matlin
	Title:	Vice President and CFO

EX-10.20

EXHIBIT 10.20

Axle Merger Sub, Inc.

Kelso & Company, L.P.

320 Park Avenue, 24^th Floor

New York, NY 10022

May 25, 2005

PCAP, L.P.

75 State Street

Boston, Massachusetts 02109

Ladies and Gentlemen:

Reference is made to that certain financial advisory agreement, dated as of February 22, 2005 (the “Advisory Agreement”) entered into by and between Axle Merger Sub, Inc. (the “Company”) and Kelso & Company, L.P. (“Kelso”), pursuant to which the Company (or its successor by operation of law) agreed, amongst other things, to pay Kelso, substantially concurrently with the consummation (the “Closing”) of the merger of the Company with and into Insurance Auto Auctions, Inc. pursuant to the terms of the Merger Agreement, a fee of $5,000,000 (the “Closing Fee”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Advisory Agreement.

Kelso and the Company agree that substantially concurrently with the Closing, the Company shall pay (i) a fee to you equal to $525,000 and (ii) in lieu of the full Closing Fee pursuant to the terms of the Advisory Agreement, a fee to Kelso equal to $4,475,000.

This Agreement may not be amended or revised except by a writing signed by the parties.

This agreement shall be governed by the laws of the State of New York.

If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.

[remainder of the page intentionally left blank]

Very truly yours,
AXLE MERGER SUB, INC.
By:	/s/ James J. Connors II
Name:	James J. Connors II, Esq.
Title:	Vice President, Assistant Secretary
KELSO & COMPANY, L.P.
By:	Kelso & Companies, Inc., its general partner
By:	/s/ Howard A. Matlin
Name:	Howard A. Matlin
Title:	Vice President, CFO

Agreed and accepted:

PCAP, L.P., a Delaware limited partnership

By:	PCap, LLC, its General Partner
By:	/s/ John C. Rutherford
Name:	John C. Rutherford
Title:	Managing Member

EX-10.21

EXHIBIT 10.21

Insurance Auto Auctions, Inc.

2005 Incentive Plan

Corporate Management

Insurance Auto Auctions, Inc.

2005 Incentive Plan

SECTION 1 OBJECTIVE

The purpose of this Plan is to motivate and reward key executives and management personnel responsible for the successful achievement of Company financial goals along with specific personal goals during the Plan year. Performance will be evaluated against pre-determined financial objectives so that each Participant will know what specific performance will be required to achieve an incentive award.

SECTION 2 EFFECTIVE DATE

This Plan is effective January 1, 2005 and thereafter. The Plan Year shall coincide with the Company’s fiscal year. The Company reserves the right to revise or terminate the Plan at any time, with or without advance notice.

SECTION 3 PARTICIPATION

The Company’s Chief Executive Officer (CEO) will approve all Plan Participants in accordance with the authorities granted by the Board of Directors. Only personnel whose responsibilities and accomplishments can be directly identified with the achievement of major business goals are eligible to participate.

No employee shall have a right to be selected as a Participant in any year, or having been selected as a Participant for one year, to be a Participant in any other year. Participation does not constitute a guarantee of employment for the entire Plan year, or any specific time period.

SECTION 4 ELIGIBILITY

Key managers are eligible to participate in the Program provided the Chief Executive Officer approves them. The Company’s Chief Executive Officer shall approve individual participants and their Target Incentive Opportunity for the Plan year as well as any changes in Target Incentive Opportunities during the Plan year, as changes in assignments warrant.

The Company’s Chief Executive Officer must approve additions to the Executive Incentive Plan after the start of the Plan year and prior to October 1, 2005. After October 1, 2005 additional Participants will not be added to the Plan until the beginning of the next Plan year. The amount of incentive award paid will be pro-rated based on the employee’s date of Plan entrance or employment. These same guidelines apply to employees who are promoted into an incentive plan position during the year.

SECTION 5 INCENTIVE OPPORTUNITY

Incentive opportunities are expressed as a percentage of total base salary for the plan year and vary by organization level.

SECTION 6 INCENTIVE AWARDS

Incentive awards are earned based on achievement of specific objectives. For the 2005 fiscal year, each participant’s incentive award will be based on an earnings target of $1.33 per share.

Each year budgets are prepared and submitted to the Company’s Chief Executive Officer and the Board of Directors for review and approval. In order for the incentive plan to be truly motivational and assist in achieving corporate growth objectives, two principles will be adhered to closely:

• Budgets must be realistic, yet rigorous. Budgets should set attainable goals; yet, to attain these goals above average performance will be required. Presumably, base salary is being paid for average performance and is thus sufficient.

• Equity requires that each budget have relatively equal “stretch”. The Chief Executive Officer will review each budget to evaluate the “stretch”.

Incentive Awards will be based on achievement of specific objectives using the formula in Exhibit A. The Company must achieve at least 71.4% (or $.96 per share) of the earnings per share before any incentive awards are earned. Overall percentage achievement above or below plan will be factored up or down by 50% to arrive at the payout percentage. For example, the incentive factor would require payout at 115% of target for 10% above plan performance.

Maximum achievement will be 130%. Using the 50% incentive factor, this results in an initial payout of 57.1% of target once the threshold is achieved to a maximum payout of 145% of target.

The CEO has the right to designate individual goals and objectives for specific participants as a part of their incentive calculation.

SECTION 7 DEFINITION OF FINANCIAL PERFORMANCE

The financial performance measurement for awards under this Plan shall be calculated based on attaining $1.33 earnings per share.

SECTION 8 PLAN ADMINISTRATION

The Chief Executive Officer of Insurance Auto Auctions, Inc. will approve final bonus recommendations and authorize the distribution of incentive bonus checks to participants after approval. The CEO is the final authority to resolve any issues or disputes that arise in the administration of the plan.

Adjustments to the Incentive Plan Awards may be made to reflect changes in responsibility, account reassignment, etc., at the discretion of the Company. Any amendments to the Plan or adjustments to an award must be approved by IAA’s Chief Executive Officer. In the event of a Change in Control, participants will be paid the greater of either the pro-rated award at target or the pro-rated award based on the payout percentage computed using the actual year-to-date performance.

The cost of the incentive pool will be recognized through the monthly accrual of funds equivalent to the total target award payment for all participants divided by 12 months. Accruals will be adjusted based on actual financial performance against financial plan goals.

SECTION 9 INCENTIVE AWARD PAYMENT

Incentive payments to eligible participants will be made within 90 days after year-end (but not before completion of the annual audit of the Company’s financial statements). Participants must be on the payroll and in good standing on the date awards are paid to be eligible for an award payment.

SECTION 10 TERMINATIONS

The following provisions will cover participants whose employment with the Company terminates during the Plan Year:

• Participants voluntarily terminating their employment or Participants discharged for cause forfeit all rights to any incentive award payment under this Plan. IAA shall have the sole right to determine what constitutes “cause” for purposes of this paragraph.

• Pro-rated incentive awards will be paid to Participants whose employment with the company terminates during the Plan year due to retirement, permanent and total disability, or death. Pro-rated incentive awards will be also be paid to Participants who are granted a leave of absence during the Plan year.

SECTION 11 ASSIGNMENTS AND TRANSFERS

The rights and interests of a Participant under the Plan may not be assigned, encumbered or transferred except, in the event of the death of a Participant, to his/her designated beneficiary, or in the absence of such designation by will or the laws of descent and distribution.

SECTION 12 PLAN DEVIATION

The Chief Executive Officer and Board of Directors, at their discretion, may make adjustments as they deem advisable in order to give consideration to distinguished performance, changes in accounting rules, principles, or methods, changes in portfolio, disputes that may arise, or other extraordinary events (including weather-related natural disasters) and to adjust Financial Performance measures in recognition of such occurrence.

EX-12.1

Exhibit 12.1

INSURANCE AUTO AUCTIONS INC.

RATIO OF EARNINGS TO FIXED CHARGES

							Six months ended June 27, 2004	Dec 27, 2004 through May 25, 2005	May 26, 2005 through June 26, 2005
(In thousands)	2000	2001		2002	2003	2004
Fixed charges
Interest expense, net (1)	116	763		507	1,375	1,505	887	567	2,642
Interest factor attributable to rentals	5,295	6,760		7,359	7,493	8,025	3,908	3,583	715
Fixed Charges	5,411	7,523		7,866	8,868	9,530	4,795	4,150	3,357
Earnings
Pre-tax (loss) income from continuing operations	17,778	(5,972	)	7,023	3,636	19,404	8,346	4,459	(5,811	)
Plus fixed charges	5,411	7,523		7,866	8,868	9,530	4,795	4,150	3,357
Earnings	23,189	1,551		14,889	12,504	28,934	13,141	8,609	(2,454	)
Ratio of earnings to fixed charges	4.3	—		1.9	1.4	3.0	2.7	2.1	—
Deficiency	—	(5,972	)	—	—	—	—	—	(5,811	)

(1) Includes amortization on debt issueance cost.

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF INSURANCE AUTO AUCTIONS, INC.

The following is a list of subsidiaries of Insurance Auto Auctions, Inc. (an Illinois corporation).

Name	State or Country of Incorporation or Organization
Insurance Auto Auctions Corp.	Delaware
IAA Services, Inc.	Illinois
IAA Acquisition Corp.	Delaware

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Insurance Auto Auctions, Inc.:

We consent to the use of our report dated March 11, 2005, with respect to the consolidated balance sheets of Insurance Auto Auctions, Inc. and subsidiaries as of December 26, 2004 and December 28, 2003 and the related consolidated statements, statements of shareholders’ equity, and cash flows for each of the fiscal years in the three-year period ended December 26, 2004, incorporated herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

Chicago, Illinois

August 22, 2005

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

The undersigned directors and/or officers of Insurance Auto Auctions, Inc. (the “Corporation”) hereby constitute and appoint Thomas C. O’Brien and Scott P. Pettit, and each of them, severally, their true and lawful attorneys-in-fact:

(i) to execute, in their names and capacities as directors and/or officers of the Corporation, one or more registration statements on Form S-4, and all exhibits, amendments and supplements thereto and any related documents, to register new notes (and guarantees) to be exchanged for the $150 million principal amount of 11% Senior Notes of the Corporation, and

(ii) to file, in the name and on behalf of the Corporation, such registration statements, exhibits, amendments, supplements and documents with the Securities and Exchange Commission under the Securities Act of 1933, as amended.

This Power of Attorney automatically ends as to each appointee upon the termination of his or her service with the Corporation.

In witness whereof, the undersigned have executed this instrument on                     , 2005.

/s/    Thomas C. O’Brien        

Thomas C. O’Brien

/s/    Scott P. Pettit        

Scott P. Pettit

/s/    David Ament        

David Ament

/s/    Brian Clingen        

Brian Clingen

/s/    Church Moore        

Church Moore

/s/    David I. Wahrhaftig        

David I. Wahrhaftig

EX-24.2

Exhibit 24.2

POWER OF ATTORNEY

The undersigned directors and/or officers of Insurance Auto Auctions Corp., IAA Services, Inc. and IAA Acquisition Corp. (the “Guarantors”) hereby constitute and appoint Thomas C. O’Brien and Scott P. Pettit, and each of them, severally, their true and lawful attorneys-in-fact:

(i) to execute, in their names and capacities as directors and/or officers of the Guarantors, one or more registration statements on Form S-4, and all exhibits, amendments and supplements thereto and any related documents, to register new notes (and guarantees) to be exchanged for the $150 million principal amount of 11% Senior Notes of the Insurance Auto Auctions, Inc., and

(ii) to file, in the name and on behalf of the Guarantors, such registration statements, exhibits, amendments, supplements and documents with the Securities and Exchange Commission under the Securities Act of 1933, as amended.

This Power of Attorney automatically ends as to each appointee upon the termination of his or her service with the Corporation.

In witness whereof, the undersigned have executed this instrument on                     , 2005.

/s/    Thomas C. O’Brien        

Thomas C. O’Brien

/s/    Scott P. Pettit        

Scott P. Pettit

/s/    Sidney L. Kerley        

Sidney L. Kerley

EX-25.1

EXHIBIT 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b) (2)

WELLS FARGO BANK, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

A National Banking Association	94-1347393
(Jurisdiction of incorporation or organization if not a U.S. national bank)	(I.R.S. Employer Identification No.)
101 North Phillips Avenue Sioux Falls, South Dakota	57104
(Address of principal executive offices)	(Zip code)

Wells Fargo & Company

Law Department, Trust Section

MAC N9305-175

Sixth Street and Marquette Avenue, 17^th Floor

Minneapolis, Minnesota 55479

(612) 667-4608

(Name, address and telephone number of agent for service)

INSURANCE AUTO AUCTIONS, INC.¹

(Exact name of obligor as specified in its charter)

Illinois	95-3790111
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Two Westbrook Corporate Center Suite 500 Westchester, IL	60154
(Address of principal executive offices)	(Zip code)

11.00% Senior Notes due 2013

(Title of the indenture securities)

¹ See Table 1 – List of additional obligors

Table 1 – List of Additional Obligors

Address of each of the additional obligors listed below is c/o Insurance Auto Auctions, Inc., Two Westbrook Corporate Center, Suite 500, Westchester, Illinios 60154.

Name of Additional Registrant	State or Other Jurisdiction of Incorporation or Formation	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
Insurance Auto Auctions Corp.	Delaware	5010	95-4455113
IAAI Services Inc.	Illinois	7549	36-4294285
IAAI Acquisition Corp.	Delaware	5010	36-4351076

Item 1. General Information. Furnish the following information as to the trustee:

(a)	Name and address of each examining or supervising authority to which it is subject.
	Comptroller of the Currency
	Treasury Department
	Washington, D.C.
	Federal Deposit Insurance Corporation
	Washington, D.C.
	Federal Reserve Bank of San Francisco
	San Francisco, California 94120
(b)	Whether it is authorized to exercise corporate trust powers.
	The trustee is authorized to exercise corporate trust powers.

Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation.

None with respect to the trustee.

No responses are included for Items 3-14 of this Form T-1 because the obligor is not in default as provided under Item 13.

Item 15. Foreign Trustee. Not applicable.

Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility.

Exhibit 1.	A copy of the Articles of Association of the trustee now in effect.*
Exhibit 2.	A copy of the Comptroller of the Currency Certificate of Corporate Existence and Fiduciary Powers for Wells Fargo Bank, National Association, dated February 4, 2004.**
Exhibit 3.	See Exhibit 2
Exhibit 4.	Copy of By-laws of the trustee as now in effect.***
Exhibit 5.	Not applicable.
Exhibit 6.	The consent of the trustee required by Section 321(b) of the Act.
Exhibit 7.	A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.***
Exhibit 8.	Not applicable.
Exhibit 9.	Not applicable.

* Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation file number 022-28721.

** Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation file number 022-28721.

*** Incorporated by reference to the exhibit of the same number to the trustee’s Form T-1 filed as exhibit 25 to the Form S-4 dated May 26, 2005 of Penn National Gaming Inc file number 333-125274.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wells Fargo Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Minneapolis and State of Minnesota on the 5th day of August 2005.

WELLS FARGO BANK, NATIONAL ASSOCIATION

/s/ Jeffery T. Rose

Jeffery T. Rose

Vice President

EXHIBIT 6

August 5, 2005

Securities and Exchange Commission

Washington, D.C. 20549

Gentlemen:

In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, the undersigned hereby consents that reports of examination of the undersigned made by Federal, State, Territorial, or District authorities authorized to make such examination may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Very truly yours,

WELLS FARGO BANK, NATIONAL ASSOCIATION

/s/ Jeffery T. Rose

Jeffery T. Rose

Vice President

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

OF

INSURANCE AUTO AUCTIONS, INC.

OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2013, ISSUED ON APRIL 1, 2005, FOR AN EQUAL PRINCIPAL AMOUNT OF ITS 11% SENIOR NOTES DUE 2013, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO THE PROSPECTUS DATED                     , 2005 (THE “PROSPECTUS”).

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                 , 2005 UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

Wells Fargo Bank, National Association

By Overnight Courier or Mail:	By Registered or Certified Mail:	By Hand:
Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 6th & Marquette Avenue Minneapolis, MN 55479 Attn: Reorg (if by mail, registered or certified recommended)	Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480 Attn: Reorg	Wells Fargo Bank, N.A. Corporate Trust Services Northstar East Bldg. –12th Floor 608 2nd Avenue South Minneapolis, MN 55402 Attn: Reorg

By Facsimile:	To Confirm by Telephone:
(612) 667-6282 Attn: Bondholder Communications	(800) 344-5128; or (612) 667-9764 Attn: Bondholder Communications

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE ACCOMPANYING IRS FORM W-9 INCLUDED HEREIN. SEE INSTRUCTION 8.

DESCRIPTION OF OLD NOTES (See Instructions 2 and 3.)

Name(s) and Address(es) of Registered Owner(s)
(Please Fill In, if Blank, Exactly as Name(s)
Appear(s) on the Old Note(s)) Certificate
Number(s)(*) Aggregate
Principal
Amount of Old
Notes(*) Principal
Amount
Tendered(**)

(*) Need not be completed if Old Notes (as defined herein) are being transferred by book-entry transfer.

(**) Unless otherwise indicated, it will be assumed that ALL Old Notes described above are being tendered. See Instruction 3.

The undersigned acknowledges that he, she or it has received and reviewed this Letter of Transmittal (the “Letter”) and the Prospectus, dated , 2005 (as the same may be amended, supplemented or modified from time to time, the “Prospectus”), of Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”), which together constitute its offer to exchange up to $150,000,000 aggregate principal amount of its 11% Senior Notes due 2013 (the “New Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for a like principal amount of its issued and outstanding 11% Senior Notes due 2013 (the “Old Notes”), from the registered holders thereof (each, a “Holder” and, collectively, the “Holders”), upon the terms and subject to the conditions set forth in the Prospectus and this Letter (the “Exchange Offer”).

For each Old Note accepted for exchange, the Holder of such Old Note will receive a New Note having a principal amount equal to that of the surrendered Old Note. The New Notes will accrue interest from the last interest payment date on which interest was paid on the Old Notes. Accordingly, registered Holders of New Notes on the record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the last interest payment date on which interest was paid on the Old Notes. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders of Old Notes whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer.

This Letter is to be completed by a Holder of Old Notes either if certificates are to be forwarded herewith or if a tender of certificates for Old Notes, if available, is to be made by book-entry transfer (the “Book-Entry Transfer Facility”) to the account maintained by the Exchange Agent at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in “Exchange Offer—DTC Book-Entry Transfer” section of the Prospectus. Holders of Old Notes whose certificates are not immediately available or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent’s account at the Book-Entry Transfer Facility (a “Book-Entry Confirmation”) and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus. See Instruction 1. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

MUTILATED, LOST, STOLEN OR DESTROYED NOTES

¨ CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING NOTES THAT YOU OWN HAVE BEEN MUTILATED, LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 9.

BOOK-ENTRY TRANSFER

¨ CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER NOTES BY BOOK-ENTRY TRANSFER):

Name(s) of Tendering Institution(s)                                                                                                                                     

Account Number(s)                                                                                                                                                                   

Transaction Code Number(s)                                                                                                                                                 

GUARANTEED DELIVERY

¨ CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING. (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):

Name(s) of Registered Holder(s)                                                                                                                                          

Window Ticket Number (if any)                                                                                                                                          

Date of Execution of Notice of Guaranteed Delivery                                                                                                   

Name of Institution that Guaranteed Delivery                                                                                                                 

If delivered by book-entry transfer:                                                                                                                                      

Account Number at Book-Entry Transfer Facility                                                                                                         

Transaction Code Number                                                                                                                                                      

¨ CHECK HERE IF YOU ARE A BROKER-DEALER ENTITLED, PURSUANT TO THE TERMS OF THE REGISTRATION RIGHTS AGREEMENT REFERRED TO IN THE PROSPECTUS, TO RECEIVE, AND WISH TO RECEIVE COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO WITHIN 180 DAYS AFTER THE EXPIRATION DATE.

Name                                                                                                                                                                                              

Address                                                                                                                                                                                          

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes and that it has not entered into any arrangement or understanding with the Company or any of its affiliates to distribute the New Notes in connection with any resale of the New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges and represents that it will deliver a prospectus meeting the requirements of the Securities Act, in connection with any resale of such New Notes; however, by so acknowledging and representing and by delivering such a prospectus the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. If the undersigned is a broker-dealer that will receive New Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired as a result of market-making activities or other

trading activities. In addition, such broker-dealer represents that it is not acting on behalf of any person who could not truthfully make the foregoing representations.

NOTE: SIGNATURES MUST BE PROVIDED BELOW.

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

LADIES AND GENTLEMEN:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Old Notes described above. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes as are being tendered hereby and any and all Notes or other securities issued, paid or distributed or issuable, payable or distributable in respect of such Notes on or after                 , 2005.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned’s true and lawful agent, attorney-in-fact and proxy with respect to Old Notes tendered hereby, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), among other things, to cause the Old Notes to be assigned, transferred and exchanged.

The undersigned hereby represents and warrants (a) that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes, (b) that when such Old Notes are accepted for exchange, the Company will acquire good and unencumbered title to such notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim and such Old Notes will not have been transferred to the Company in violation of any contractual or other restriction on the transfer thereof, (c) that any New Notes acquired in exchange for Old Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, (d) that neither the Holder of such Old Notes nor, to the actual knowledge of such Holder, any such other person is engaged in, intends to engage in, or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of Old Notes or New Notes and (e) that neither the Holder of such Old Notes nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act, of the Company.

The undersigned acknowledges that the Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the “SEC”), as set forth in no-action letters issued to third parties, that the New Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder that is a broker-dealer or an “affiliate” of the Company within the meaning of Rule 405 of the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holder’s business, at the time of commencement of the Exchange Offer such Holder has no arrangement or understanding with any person to participate in a distribution of such New Notes, and such Holder is not engaged in, and does not intend to engage in, a distribution of such New Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as made in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in a distribution of New Notes and has no arrangement or understanding to participate in a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities and that it has not entered into any arrangement or understanding with the Company or any of its affiliates to distribute the New Notes in connection with any resale of the New Notes and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the Securities Act, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The SEC has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the New Notes (other than a resale of New Notes received in exchange for an unsold allotment

from the original sale of the Old Notes) with the Prospectus. The Prospectus may be used by certain broker- dealers (as specified in the Registration Rights Agreement referenced in the Prospectus) (“Participating Broker- Dealers”) for a period of 180 days from the date on which the Exchange Offer is consummated or such shorter period ending on the date on which a Participating Broker Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities. The Company has agreed that, for such period of time, it will make the Prospectus available to such a broker-dealer which elects to exchange Old Notes, acquired for its own account as a result of market making or other trading activities, for New Notes pursuant to the Exchange Offer for use in connection with any resale of such New Notes. By tendering in the Exchange Offer, each Holder that receives New Notes pursuant to the Exchange Offer acknowledges and agrees to notify the Company prior to using the Prospectus in connection with the sale or transfer of New Notes and agrees that, upon receipt of notice from the Company of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the Prospectus or for additional information relating thereto, the existence of any fact or the happening of any event which makes any statement of material fact in the Prospectus untrue in any material respect or which requires the making of any additions to or changes in the Prospectus in order to make the statements therein (in light of the circumstances under which they were made) not misleading or that the applicable Registration Statement is unusable pending a material development, such Holder will suspend use of the Prospectus until (i) the Company has amended or supplemented the Prospectus to correct such misstatement or omission and such Holder has received copies of the supplemented or amended Prospectus, or (ii) such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of New Notes. A broker dealer that would receive New Notes for its own account for its Old Notes, where such Old Notes were not acquired as a result of market-making activities or other trading activities, will not be able to participate in the Exchange Offer.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby.

All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

Tenders of Old Notes made pursuant to the Exchange Offer are irrevocable, except that Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. See information described in “Exchange Offer—Withdrawal of Tenders” section of the Prospectus.

The undersigned understands that tender of Old Notes pursuant to any of the procedures described in the “Exchange Offer—Procedures for Tendering” section of the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions set forth in the Prospectus, including the undersigned’s representation that the undersigned owns the Old Notes being tendered. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Notes tendered hereby.

Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Notes, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instructions” below, please send the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Old Notes.”

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OLD NOTES” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN SUCH BOX ABOVE.

PLEASE SIGN HERE

(TO BE COMPLETED BY ALL TENDERING HOLDERS)

	, 2005
	SIGNATURE(S) OF OWNER
Area Code and Telephone Number
	Dated:                                           , 2005

If a Holder is tendering an Old Note, this Letter must be signed by the registered Holder(s) exactly as the name(s) appear(s) on the certificate(s) for the Old Note or by any person(s) authorized to become registered Holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 4.

Name(s):                                                                                                                                                                                                            

(Please Type or Print)

Capacity (full title):                                                                                                                                                                                       

Address:                                                                                                                                                                                                             

(Zip Code)

Area Code and Telephone Number:                                                                                                                                                        

Tax Identification or Social Security Number:                                                                                                                                    

GUARANTEE OF SIGNATURE(S)

(IF REQUIRED BY INSTRUCTION 4)

SIGNATURE(S) GUARANTEED BY

AN ELIGIBLE INSTITUTION:                                                                                                                                                              

(AUTHORIZED SIGNATURE)

Name:                                                                                                                                                                                                                 

Capacity (full title):                                                                                                                                                                                       

Name of Firm:                                                                                                                                                                                                 

Address:                                                                                                                                                                                                             

(Zip Code)

Area Code and Telephone Number:                                                                                                                                                        

Dated:                     , 2005

(PLEASE COMPLETE ACCOMPANYING IRS FORM W-9 HEREIN. SEE INSTRUCTION 8.)

SPECIAL ISSUANCE INSTRUCTIONS

(See Instructions 4, 5 and 6)

To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Old Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.

Issue: New Notes and/or Old Notes to:

Name                                                                                                                                                                                                                   

(PLEASE TYPE OR PRINT)

(PLEASE TYPE OR PRINT)

Address                                                                                                                                                                                                              

(ZIP CODE)

(Tax Identification or Social Security No.)

(See IRS Form W-9 Included Herein)

¨ Credit unexchanged Old Notes delivered by book-entry transfer to the Book-Entry Facility account set forth below:

(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER(S), IF APPLICABLE)

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 4, 5 and 6)

To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above or to such person or persons at an address other than shown in the box entitled “Description of Old Notes” on this Letter above.

Mail: New Notes and/or Old Notes to:

Name                                                                                                                                                                                                                   

(PLEASE TYPE OR PRINT)

(PLEASE TYPE OR PRINT)

Address                                                                                                                                                                                                              

(ZIP CODE)

(Tax Identification or Social Security No.) (See IRS Form W-9 Included Herein)

IMPORTANT: UNLESS GUARANTEED DELIVERY PROCEDURES ARE COMPLIED WITH, THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2013, ISSUED ON APRIL 1, 2005, OF INSURANCE AUTO AUCTIONS, INC. FOR 11% SENIOR NOTES DUE 2013, OF INSURANCE AUTO AUCTIONS, INC., WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

1. Delivery of this Letter and Notes; Guaranteed Delivery Procedures. This Letter is to be completed by Holders of Old Notes either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in “The Exchange Offer—Procedures for Tendering” section of the Prospectus and an Agent’s Message is not delivered. Certificates for all physically tendered Old Notes, or Book-Entry Confirmation (as defined below), as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering Holder must comply with the guaranteed delivery procedures set forth below. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. Tenders by book-entry transfer may also be made by delivering an Agent’s Message in lieu of this Letter. “Agent’s Message” means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which message states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Old Notes which are the subject of the Book-Entry Confirmation that such participant has received and agrees to be bound by the Letter and that the Company may enforce the Letter against such participant. “Book-Entry Confirmation” means a timely confirmation of book-entry transfer of Notes into the Exchange Agent’s account at the Book-Entry Transfer Facility.

Holders whose certificates are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date or who cannot complete the procedure for book-entry transfer prior to 5:00 p.m., New York City time, on the Expiration Date may tender their Old Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Letter (or a facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange (“NYSE”) trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically-tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and any other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically-tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and all other documents required by this Letter, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.

THE METHOD OF DELIVERY OF THIS LETTER, THE OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF OLD NOTES ARE SENT BY MAIL, IT IS RECOMMENDED THAT THE MAILING BE BY REGISTERED OR CERTIFIED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

THE COMPANY WILL NOT ACCEPT ANY ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS. EACH TENDERING HOLDER, BY EXECUTION OF A LETTER OF TRANSMITTAL (OR

FACSIMILE THEREOF OR AGENT’S MESSAGE IN LIEU THEREOF), WAIVES ANY RIGHT TO RECEIVE ANY NOTICE OF THE ACCEPTANCE OF SUCH TENDER.

2.    Inadequate Space. If the space provided in the box captioned “Description of Notes Tendered” above is inadequate, the certificate number(s) and/or the principal amount of Notes and any other required information should be listed on a separate signed schedule and such schedule should be attached to this Letter.

3.    Partial Tenders (Not Applicable to Noteholders Who Tender by Book-Entry Transfer). If fewer than all of the Old Notes evidenced by a submitted certificate are to be tendered, the tendering Holder(s) should fill in the aggregate principal amount of Old Notes to be tendered in the box entitled “Description of Old Notes—Principal Amount of Notes Tendered.” A reissued certificate or book-entry representing the balance of nontendered Old Notes will be sent to such tendering Holder(s), unless otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

4.    Signatures on this Letter; Bond Powers and Endorsements. If this Letter is signed by the registered Holder(s) of the Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever.

If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter.

If any of the Old Notes are registered in different name(s) on several certificates, it will be necessary to complete, sign and submit as many separate Letters (or facsimiles thereof or Agent’s Messages in lieu thereof) as there are different registrations of certificates.

If this Letter is signed by the registered Holder(s) of the Old Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the New Notes are to be issued, or any untendered Old Notes are to be reissued, to a person other than the registered Holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution (as defined below).

If this Letter is signed by a person other than the registered Holder(s) of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered Holder(s) appear(s) on the certificate(s) and the signatures on such certificate(s) must be guaranteed by an Eligible Institution.

If this Letter or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to the Company of such persons’ authority to so act, unless such submission is waived by the Company.

ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 4 MUST BE GUARANTEED BY A FIRM WHICH IS A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER ENTITY WHICH IS A MEMBER IN GOOD STANDING OF A RECOGNIZED MEDALLION PROGRAM APPROVED BY THE SECURITIES TRANSFER ASSOCIATION INC., INCLUDING THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM (STAMP), THE STOCK EXCHANGE MEDALLION PROGRAM (SEMP) AND THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM (MSP), OR ANY OTHER “ELIGIBLE GUARANTOR INSTITUTION” (AS DEFINED IN RULE 17AD-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) (EACH OF THE FOREGOING, AN “ELIGIBLE INSTITUTION”).

SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OLD NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OLD NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION

LISTING AS THE HOLDER OF SUCH OLD NOTES) WHO HAS NOT COMPLETED THE BOX ENTITLED “SPECIAL ISSUANCE INSTRUCTIONS” OR “SPECIAL DELIVERY INSTRUCTIONS” IN THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.

5.    Special Issuance and Delivery Instructions. Tendering Holders of Old Notes should indicate in the applicable box the name and address to which New Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Old Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such Holder may designate herein. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address of the person signing this Letter.

6.    Transfer Taxes. Except as otherwise provided in this Instruction 6, the Company will pay any transfer taxes with respect to the transfer of Old Notes to it or its order pursuant to the Exchange Offer. If, however, New Notes or substitute Old Notes not exchanged are to be delivered to or registered or issued in the name of, any person other than the registered Holder(s) of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person(s) signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Old Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered Holder(s) or any other person) payable on account of the transfer to such person will be payable by the Holder(s) tendering hereby. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder(s).

7.    Waiver of Conditions. The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus.

8.    Taxpayer Identification Number; Backup Withholding; IRS Form W-9. U.S. federal income tax laws generally require that a tendering Holder provides the Exchange Agent with such Holder’s correct Taxpayer Identification Number (“TIN”) on IRS Form W-9, Request for Taxpayer Identification Number and Certification, below (the “IRS Form W-9”), which in the case of a Holder who is an individual, is his or her social security number. If the tendering Holder is a non-resident alien or a foreign entity, other requirements (as described below) will apply. If the Exchange Agent is not provided with the correct TIN or an adequate basis for an exemption from backup withholding, such tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue Service (the “IRS”). In addition, failure to provide the Exchange Agent with the correct TIN or an adequate basis for an exemption from backup withholding may result in backup withholding on payments made to the tendering Holder pursuant to the Exchange Offer at a current rate of 28%. If withholding results in an overpayment of taxes, the Holder may obtain a refund from the IRS.

Exempt Holders of the Notes (including, among others, all corporations) are not subject to these backup withholding and reporting requirements. See the enclosed Instructions for the Requester of Form W-9 (the “W-9 Guidelines”) for additional instructions.

To prevent backup withholding, each tendering Holder that is a U.S. person (including a resident alien) must provide its correct TIN by completing the IRS Form W-9 set forth below, certifying, under penalties of perjury, that such Holder is a U.S. person (including a resident alien), that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (i) such Holder is exempt from backup withholding, or (ii) such Holder has not been notified by the IRS that such Holder is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified such Holder that such Holder is no longer subject to backup withholding. If the Notes are in more than one name or are not in the name of the actual owner, such Holder should consult the W-9 Guidelines for information on which TIN to report. If such Holder does not have a TIN, such Holder should consult the W-9 Guidelines for instructions on applying for a TIN, write “Applied For” in the space reserved for the TIN, as shown on IRS Form W-9. Note: Writing “Applied For” on the IRS Form W-9 means that such Holder has already applied for a TIN or that such Holder intends to apply for one in the near

future. If such Holder does not provide its TIN to the Exchange Agent within 60 days, backup withholding will begin and continue until such Holder furnishes its TIN to the Exchange Agent.

A tendering Holder that is a non-resident alien or a foreign entity must submit the appropriate completed IRS Form W-8 (generally IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) to avoid backup withholding. The appropriate form may be obtained via the IRS website at www.irs.gov or by contacting the Exchange Agent at the address on the face of this Letter of Transmittal.

FAILURE TO COMPLETE IRS FORM W-9, IRS FORM W-8BEN OR ANOTHER APPROPRIATE FORM MAY RESULT IN BACKUP WITHHOLDING AT THE RATE DESCRIBED ABOVE ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER.

9.    Mutilated, Lost, Destroyed or Stolen Certificates. Any Holder whose certificate(s) representing Old Notes have been mutilated, lost, destroyed or stolen should promptly notify the Exchange Agent at the address included herein or at 800-344-5128 for further instructions. This Letter and related documents cannot be processed until the procedures for replacing mutilated, lost, destroyed or stolen certificate(s) have been followed.

10.    Withdrawal Rights. Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at the address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person who tendered the Old Notes to be withdrawn, (ii) identify the Old Notes to be withdrawn, including the aggregate principal amount of such Old Notes or, in the case of Notes transferred by book-entry transfer, specify the number of the account at the Book-Entry Transfer Facility from which the Old Notes were tendered and specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility; (iii) contain a statement that such Holder is withdrawing its election to have such Old Notes exchanged; (v) specify the name in which such Old Notes are registered, if different from that of the person who tendered the Old Notes.

All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties.

Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following the procedures described above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date with respect to such Old Notes.

Any Old Notes that have been tendered for exchange but which are not exchanged for any reason will be returned to the tendering Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent’s account at the Book-Entry Transfer Facility pursuant to the book- entry transfer procedures set forth in “The Exchange Offer- DTC Book-Entry Transfer” section of the Prospectus, such Old Notes will be credited to an account maintained with the Book-Entry Transfer Facility for the Old Notes) promptly after withdrawal, rejection of tender or termination of the Exchange Offer.

11.    Requests For Assistance and Additional Copies. Questions and requests for assistance regarding this Letter, as well as requests for additional copies of the Prospectus, this Letter, Notices of Guaranteed Delivery and other related documents may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter.

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

-2-

-3-

-4-

Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth below. Additional copies of the Prospectus, this Letter or other materials related to the Exchange Offer may be obtained from the Exchange Agent or from brokers, dealers, commercial banks or trust companies.

The Exchange Agent for the Offer is:

Wells Fargo Bank, National Association

By Overnight Courier or Mail:	By Registered or Certified Mail:	By Hand:
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.
Corporate Trust Operations	Corporate Trust Operations	Corporate Trust Services
MAC N9303-121 6th & Marquette Avenue Minneapolis, MN 55479	MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480	Northstar East Bldg. –12th Floor 608 2nd Avenue South Minneapolis, MN 55402
Attn: Reorg	Attn: Reorg	Attn: Reorg
(if by mail, registered or certified recommended)

By Facsimile:	To Confirm by Telephone:
(612) 667-6282 Attn: Bondholder Communications	(800) 344-5128; or (612) 667-9764 Attn: Bondholder Communications

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

FOR

INSURANCE AUTO AUCTIONS, INC.

OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2013, ISSUED ON APRIL 1, 2005, FOR AN EQUAL PRINCIPAL AMOUNT OF ITS 11% SENIOR NOTES DUE 2013, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO THE PROSPECTUS DATED                     , 2005

(Not to be used for signature guarantees)

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,

NEW YORK CITY TIME ON                     , 2005, UNLESS EXTENDED.

This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Exchange Offer made by Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”), pursuant to the Prospectus dated                     , 2005 (as the same may be amended, supplemented or modified from time to time, the “Prospectus”), if certificates for the outstanding 11% Senior Notes due 2013, (the “Old Notes” and the certificates representing such Old Notes, the “Certificates”) are not immediately available or time will not permit the Certificates and all required documents to reach Wells Fargo Bank, National Association, as exchange agent (the “Exchange Agent”), prior to 5:00 p.m., New York City time, on the Expiration Date (as defined in the Prospectus) or if the procedures for delivery by book-entry transfer, as set forth in the Prospectus, cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mailed to the Exchange Agent. See “Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus.

In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) relating to the tender for exchange of Old Notes (the “Letter of Transmittal”) must also be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.

The Exchange Agent for the Exchange Offer is:

Wells Fargo Bank, National Association

By Overnight Courier or Mail:	By Registered or Certified Mail:	By Hand:
Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 6th & Marquette Avenue Minneapolis, MN 55479 Attn: Reorg (if by mail, registered or certified recommended)	Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480 Attn: Reorg	Wells Fargo Bank, N.A. Corporate Trust Services Northstar East Bldg. –12th Floor 608 2nd Avenue South Minneapolis, MN 55402 Attn: Reorg

By Facsimile:	To Confirm by Telephone:
(612) 667-6282 Attn: Bondholder Communications	(800) 344-5128; or (612) 667-9764 Attn: Bondholder Communications

* as defined in the Letter of Transmittal.

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN THE LETTER OF TRANSMITTAL) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

THE GUARANTEE BELOW MUST BE COMPLETED.

Ladies and Gentlemen:

The undersigned hereby tenders to the Company, in accordance with the terms and subject to the conditions set forth in the Company’s Prospectus dated                     , 2005 (the “Prospectus”), and in the related Letter of Transmittal (which, together with the Prospectus, as each may be amended, supplemented or modified from time to time, collectively constitute the “Exchange Offer”), receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below, pursuant to the guaranteed delivery procedures described in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus.

(Please type or print)

Certificate Numbers of Old Notes (If Available):                                                                                                                               

OR

Account Number(s) at Book-Entry Transfer Facility:                                                                                                                      

Aggregate Principal Amount Represented of 11% Senior Notes due 2013:                                                                             

Name(s) of Record Holder(s):                                                                                                                                                                    

Address(es):                                                                                                                                                                                                     

Daytime Area Code and Tel. No.:                                                                                                                                                           

Signature(s):                                                                                                                                                                                                    

Dated:                                                                                                                                                                                                                 

¨ Check here if Old Notes will be tendered by book-entry transfer.

GUARANTEE

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), or any other “eligible guarantor institution” as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934 (“Exchange Act”), hereby guarantees that the Certificates representing the principal amount of Old Notes tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Old Notes into the Exchange Agent’s account at the Depository Trust Company (“DTC”) pursuant to the procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus, together with any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery.

The eligible guarantor institution that completes this form must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal and Certificates to the Exchange Agent within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution.

Name of Firm:                                                                                                                                                                                                 

Authorized Signature

Name:                                                                                                                                                                                                                 

(Please Print or Type)

Title:                                                                                                                                                                                                                    

Address:                                                                                                                                                                                                             

Zip Code

Area Code and Tel No.:                                                                                                                                                                               

Dated:                                                                                                                                                                                                                 

NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS NOTICE. CERTIFICATES FOR OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.

INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

1. Delivery Of This Notice Of Guaranteed Delivery. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of the Holder(s) (as defined in the Letter of Transmittal) and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, it is recommended that the mailing be by registered or certified mail, properly insured, with return receipt requested, made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. For a description of the guaranteed delivery procedure, see Instruction 1 of the Letter of Transmittal.

2. Signatures Of This Notice Of Guaranteed Delivery. If this Notice of Guaranteed Delivery is signed by the registered Holder(s) of the Old Notes referred to herein, the signature(s) must correspond with the name(s) as written on the face of the Old Notes without any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Old Notes, the signature must correspond with the name shown on the security position listing as the owner of the Old Notes.

If this Notice of Guaranteed Delivery is signed by a person other than the registered Holder(s) of any Old Notes listed or a participant of the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name(s) of the registered Holder(s) appear(s) on the Old Notes or signed as the name of the participant shown on the Book-Entry Facility’s security position listing.

If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing.

3. Requests For Assistance Or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.

EX-99.3

Exhibit 99.3

INSURANCE AUTO AUCTIONS, INC.

OFFER TO EXCHANGE ALL OUTSTANDING 11% SENIOR NOTES DUE 2013 ($150,000,000 PRINCIPAL AMOUNT) FOR 11% SENIOR NOTES DUE 2013 ($150,000,000 PRINCIPAL AMOUNT) WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

Enclosed for your consideration is a Prospectus dated                     , 2005 (as the same may be amended or supplemented from time to time, the “Prospectus”) and a form of Letter of Transmittal (the “Letter of Transmittal”), relating to the offer (the “Exchange Offer”) by Insurance Auto Auctions, Inc. (the “Company”) to exchange $150,000,000 aggregate principal amount of its 11% Senior Notes due 2013 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all of its outstanding 11% Senior Notes due 2013 (the “Outstanding Notes”). The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus) and are not subject to any covenant regarding registration under the Securities Act.

The Company will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

We are requesting that you contact your clients for whom you hold Outstanding Notes regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Outstanding Notes registered in your name or in the name of your nominee, or who hold Outstanding Notes registered in their own names, we are enclosing the following documents:

1. The Prospectus;

2. A Letter of Transmittal for use in connection with the exchange of Outstanding Notes and for the information of your clients, together with a Substitute Form W-9 and Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9, providing information relating to U.S. federal income tax backup withholding (facsimile copies of the Letter of Transmittal may be used to exchange Outstanding Notes);

3. A form of letter that may be sent to your clients for whose accounts you hold Outstanding Notes registered in your name or the name of your nominee, with space provided for obtaining the client’s instructions with regard to the Exchange Offer; and

4. A Notice of Guaranteed Delivery.

Your prompt action is requested. The Exchange Offer expires at 5:00 p.m., New York City time, on , 2005, unless the Company extends the Exchange Offer (the “Expiration Date”). Outstanding Notes tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to the Expiration Date.

To participate in the Exchange Offer, certificates for Outstanding Notes or a book-entry confirmation (see the section captioned “Exchange Offer” in the Prospectus), a duly executed and properly completed Letter of Transmittal or a facsimile thereof or electronic instructions sent to the Depository Trust Company, and any other required documents, must be received by the Exchange Agent as provided in the Prospectus and the Letter of Transmittal.

If a registered holder of Outstanding Notes desires to tender, but such Outstanding Notes are not immediately available, or time will not permit such holder’s Outstanding Notes or other required documents to reach the Exchange Agent before the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under “Exchange Offer—Guaranteed Delivery Procedures.”

The Company has not retained any dealer-manager in connection with the Exchange Offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the Exchange Agent, for soliciting tenders of Outstanding Notes pursuant to the Exchange Offer. The Company will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses incurred in connection with these services.

Questions and requests for assistance with respect to the Exchange Offer should be addressed to Wells Fargo Bank, National Association, the Exchange Agent for the Exchange Offer, at their address and telephone number set forth in the enclosed Prospectus and Letter of Transmittal. Additional copies of the enclosed material may be obtained from the Exchange Agent.

Very truly yours,

INSURANCE AUTO AUCTIONS, INC.

Nothing contained herein or in the enclosed documents shall constitute you or any other person as an agent of the Company or the Exchange Agent, or any affiliate thereof, or authorize you or any other person to make any statements or use any document on behalf of any of them in connection with the Exchange Offer, except for the enclosed documents and the statements expressly made in the Prospectus and the Letter of Transmittal.

EX-99.4

Exhibit 99.4

[Form of letter to clients]

INSURANCE AUTO AUCTIONS, INC.

OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2013, ISSUED ON APRIL 1, 2005, FOR AN EQUAL PRINCIPAL AMOUNT OF ITS 11% SENIOR NOTES DUE 2013, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO THE PROSPECTUS DATED                     , 2005

To Our Clients:

Enclosed for your consideration is a Prospectus, dated                     , 2005 (as the same may be amended, supplemented or modified from time to time, the “Prospectus”), and the related Letter of Transmittal (the “Letter of Transmittal”), relating to the offer (the “Exchange Offer”) of Insurance Auto Auctions, Inc. (the “Company”) to exchange its 11% Senior Notes due 2013 (the “New Notes”), which have been registered under the Securities Act of 1933, as amended, for its outstanding 11% Senior Notes due 2013 (the “Old Notes”), issued on April 1, 2005, upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement, dated April 1, 2005, relating to the Old Notes, by and among the Company, the guarantors referred to therein and the initial purchasers referred to therein.

This material is being forwarded to you as the beneficial owner of the Old Notes held by us for your account but not registered in your name. A tender of such Old Notes may only be made by us as the holder of record and pursuant to your instructions.

Accordingly, we request instructions as to whether you wish us to tender on your behalf the Old Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.

Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on                     , 2005, unless extended by the Company (such time and date, as may be extended, the “Expiration Date”). Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.

Your attention is directed to the following:

1. The Exchange Offer is for any and all Old Notes.

2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned “The Exchange Offer—Conditions.”

3. Any transfer taxes incident to the transfer of Old Notes from the holder to the Company will be paid by the Company, except as otherwise provided in the Instructions in the Letter of Transmittal.

4. The Exchange Offer expires at 5:00 p.m., New York City time, on                 , 2005, unless extended by the Company.

If you wish to have us tender your Old Notes, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. The Letter of Transmittal is furnished to you for information only and may not be used directly by you to tender Old Notes.

INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER

The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Insurance Auto Auctions, Inc. with respect to its Old Notes.

This will instruct you to tender the Old Notes held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal.

The aggregate principal amount of Old Notes held by you for the account of the undersigned is (fill in amount):

$             of 11% Old Senior Notes due 2013.

With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

¨ To TENDER $             of Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered (if any)).

¨ NOT to TENDER any Old Notes held by you for the account of the undersigned.

If the undersigned instructs you to tender Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the New Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, (ii) neither the undersigned nor, to the actual knowledge of such Holder, any such other person is engaged in, intends to engage in or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of Old Notes or New Notes and (iii) neither the undersigned nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act, of the Company. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities and that it has not entered into any arrangement or understanding with the Company or any of its affiliates to distribute the New Notes in connection with any resale of the New Notes and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the Securities Act, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

SIGN HERE

Signature(s)

Capacity (full title), if signing in a fiduciary or representative capacity

Print Name(s)

Name(s) and address, including zip code

Date:

Area Code and Telephone Number

Taxpayer Identification or Social Security Number

My Account Number with You

None of the Old Notes held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Old Notes held by us for your account.