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EXECUTION VERSION
VOTING AGREEMENT
This VOTING AGREEMENT (the "Agreement"), dated as of February
22, 2005, is entered into by and among Axle
Holdings, Inc., a Delaware
corporation ("Buyer Parent"), ValueAct
Capital Partners, L.P., a Delaware
limited partnership ("ValueAct CP"),
ValueAct Capital Partners II, L.P., a
Delaware limited partnership ("ValueAct CP
II"), ValueAct Capital Master Fund,
L.P., a British Virgin Islands limited
partnership ("ValueAct Master") and
ValueAct Capital Partners Co-Investors,
L.P., a Delaware limited partnership
("ValueAct Co-Investors", and together with
ValueAct CP, ValueAct CP II and
ValueAct Master, each a "Shareholder" and
collectively, the "Shareholders").
WHEREAS, concurrently with the execution and delivery of this
Agreement, Buyer Parent, Axle Merger Sub,
Inc., an Illinois corporation
("Buyer") and Insurance Auto Auctions,
Inc., an Illinois corporation (the
"Company"), are entering into an Agreement
and Plan of Merger (the "Merger
Agreement"), which Merger Agreement has
been unanimously approved by the Axle
Board (other than recused members) and
which provides, among other things, for a
merger of Buyer with and into the Company,
with the Company remaining as the
surviving corporation (the "Merger");
WHEREAS, as of the date hereof, each Shareholder is the
beneficial owner of the number of shares of
common stock of the Company, no par
value (the "Common Stock") opposite such
Shareholder's name set forth on Exhibit
I attached hereto (the shares of Common
Stock held by all Shareholders, the
"Shares");
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Buyer Parent has required
that the Shareholders agree, and
each Shareholder is willing to agree, to
the matters set forth herein; and
WHEREAS, capitalized terms used but not otherwise defined
herein shall have the respective meanings
attributed to them in the Merger
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
agreements set forth below, the parties
hereto agree as follows:
1.
Voting of Shares.
1.1 Voting
Agreement.
(a) Each Shareholder hereby agrees to vote (or cause to be voted)
all
of the Shares which such Shareholder has
the right to so vote at the Axle
Shareholders' Meeting in favor of the
approval and adoption of the Merger
Agreement, the transactions contemplated
thereby (including, without limitation,
the Merger) and any actions required in
furtherance thereof. In addition, from
the date hereof and until the termination
of this Agreement pursuant to Section
9, each Shareholder hereby agrees to vote
(or cause to be
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voted) at any annual, special or other
meeting of the shareholders of the
Company, and at any adjournment or
adjournments thereof, or pursuant to any
consent in lieu of a meeting or otherwise,
all of the Shares which such
Shareholder has the right to so vote:
(i) against any action or agreement that would reasonably be
expected to result in a breach in any material respect of any
covenant,
representation or warranty or any other obligation of the Company
under
this Agreement, the Merger Agreement, or any other agreement
contemplated hereby or thereby;
(ii) against any Acquisition Proposal and against any other
proposal for action or agreement that is intended, or would
reasonably
be expected, to impede, interfere with, delay, frustrate, postpone
or
adversely affect the consummation of the transactions contemplated
by
the Merger Agreement;
(iii) against any change in the composition of the Axle Board,
other than as contemplated by the Merger Agreement; and
(iv) against any amendment to the Articles of Incorporation or
by-laws of the Company, other than as contemplated by the
Merger
Agreement.
(b) Any vote required to be cast or consent required to be
executed
pursuant to this Section 1.1 shall be cast
or executed in accordance with the
applicable procedures relating thereto so
as to ensure that it is duly counted
for purposes of determining that quorum is
present (if applicable) and for
purposes of recording the results of that
vote or consent.
(c) If any action is taken by written consent rather than at a
meeting
of the shareholders of the Company, consent
shall be given or withheld by each
Shareholder with respect to the Shares held
by such Shareholder in the same
manner as if such Shares were voted at a
meeting in accordance with the
provisions of Section 1.1(a).
1.2 Irrevocable Proxy. Each Shareholder hereby irrevocably grants
to,
and appoints, Buyer Parent and any designee
thereof and each of Buyer Parent's
officers, as such Shareholder's attorney,
agent and proxy (such grants and
appointment, the "Irrevocable Proxy"), with
full power of substitution, to vote
and otherwise act with respect to all of
such Shareholder's Shares at any
meeting of the shareholders of the Company
(whether annual or special and
whether or not an adjourned or postponed
meeting), and in any action by written
consent of the shareholders of the Company,
on the matters and in the manner
specified in Section 1.1. THIS PROXY AND
POWER OF ATTORNEY ARE IRREVOCABLE AND
COUPLED WITH AN INTEREST SUFFICIENT IN LAW
TO SUPPORT AN IRREVOCABLE PROXY AND,
TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, SHALL BE VALID AND BINDING ON ANY
PERSON TO WHOM SHAREHOLDER MAY TRANSFER ANY
OF ITS SHARES IN BREACH OF THIS
AGREEMENT. Each Shareholder hereby revokes
all other proxies and powers of
attorney with respect to all of such
Shareholder's Shares that may have
heretofore been appointed or granted, and
no subsequent proxy
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(whether revocable or irrevocable) or power
of attorney shall be given (and if
given, shall not be effective) by such
Shareholder with respect thereto on the
matters covered by Section 1.1. Each
Shareholder hereby affirms that the
irrevocable proxy set forth in this Section
1.2 is given in connection with the
execution of the Merger Agreement, and that
such irrevocable proxy is given to
secure the performance of the duties of
such Shareholder under this Agreement.
1.3 Fiduciary Responsibilities. Subject to Section 5 hereof,
notwithstanding any other provision of this
Agreement to the contrary, nothing
contained in this Agreement shall limit the
rights and obligations of any
officer of any Shareholder in his capacity
as a director of the Company from
taking any action in his capacity as a
director of the Company that the Axle
Board is permitted to take pursuant to the
terms of the Merger Agreement, and no
such action taken by an officer of any
Shareholder in any such capacity shall be
deemed to constitute a breach of any
provision of this Agreement.
2.
Representations and Warranties of each Shareholder.
Each Shareholder represents and warrants to Buyer Parent as
follows:
2.1 Binding Agreement. Such Shareholder is a limited partnership
duly
formed, validly existing and in good
standing under the laws of the State or
territory of its formation and has the
capacity to execute and deliver this
Agreement and to consummate the
transactions contemplated hereby. The execution
and delivery of this Agreement by such
Shareholder and the consummation by such
Shareholder of the transactions
contemplated hereby have been duly and validly
authorized by all necessary action of such
Shareholder, and no other action or
proceedings are necessary to authorize the
execution, delivery and performance
of this Agreement by such Shareholder and
the consummation by such Shareholder
of the transactions contemplated hereby.
Such Shareholder has duly and validly
executed and delivered this Agreement and
this Agreement constitutes a legal,
valid and binding obligation of such
Shareholder, enforceable against such
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.
2.2 No Conflict. Neither the execution and delivery of this
Agreement
by such Shareholder, the consummation by
such Shareholder of the transactions
contemplated hereby, the performance by
such Shareholder of its obligations
hereunder nor the compliance by such
Shareholder with any provisions hereof,
will (a) result in a violation or breach
of, or constitute (with or without due
notice or lapse of time or both) a default
under its partnership agreement or
other organizational documents or any
material contract, agreement, instrument,
commitment, arrangement or understanding to
which such Shareholder is a party,
or result in the creation of any Lien with
respect to such Shareholder's Shares,
(b) violate or conflict with any writ,
judgment, injunction or decree applicable
to such Shareholder or such Shareholder's
Shares or (c) require any consent,
authorization or approval with respect to
such Shareholder of any Person,
including any Governmental Authority.
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2.3 Ownership of
Shares. Such Shareholder is the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange
Act, which meaning will apply for all
purposes of this Agreement) of, and has the
sole power to vote and dispose of,
the Shares listed opposite such
Shareholder's name on Exhibit I hereto, free and
clear of any Liens (including any
restriction on the right to vote, sell or
otherwise dispose of such Shares), except
as may exist by reason of this
Agreement or pu
