DEFM14A 1 v234254_defm14a.htm FORM DEFM 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934



 
Filed by the Registrant x
Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

OPENLANE, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
x Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:

(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:


 
 

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This Proxy Statement is dated as of September 8, 2011 and is being mailed, along with the accompanying annexes, to the holders of the Company’s capital stock on or about September 9, 2011. You should not assume that the information contained herein is accurate as of any date other than the date hereof or as of the date or dates referenced herein or in any of the documents provided herewith.

OPENLANE, INC.
2200 Bridge Parkway, Suite 202
Redwood City, CA 94065

Dear OPENLANE, Inc. Stockholder:

OPENLANE, Inc., a Delaware corporation (“OPENLANE” or the “Company”), is furnishing this proxy statement for Merger, Solicitation of Acknowledgment, Advisory Consent on Executive Compensation and Notice of Appraisal Rights (this “Proxy Statement”) to its stockholders of record as of August 11, 2011 in connection with the proposed acquisition of OPENLANE by ADESA, Inc., a Delaware corporation (“ADESA” or “Purchaser”) and a wholly owned subsidiary of KAR Auction Services, Inc., a Delaware corporation (“KAR”), pursuant to an Agreement and Plan of Merger, dated as of August 15, 2011, by and among ADESA, KAR, as the Guarantor, Riley Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of ADESA (“Merger Sub”), OPENLANE, and Shareholder Representative Services LLC, a Colorado limited liability company, as the Securityholders’ Representative (the “Securityholders’ Representative”), which is attached hereto as Annex A (as may be amended, supplemented or modified from time to time, the “Merger Agreement”). Pursuant to the Merger Agreement, and subject to the terms and conditions thereof, Merger Sub will be merged (the “Merger”) with and into OPENLANE, with OPENLANE surviving as a wholly owned subsidiary of ADESA. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Merger Agreement.

On August 16, 2011, OPENLANE stockholders representing the requisite number of shares to adopt the Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement did so through an action by written consent. This Proxy Statement is being sent to you pursuant to Section 228 of the General Corporation Law of the State of Delaware (“DGCL”) for purposes of (i) requesting that you acknowledge and adopt certain stockholder resolutions approving and ratifying the Merger and waiving your appraisal rights by executing the Stockholder Acknowledgement attached hereto as Annex B (the “ Stockholder Acknowledgment”), (ii) providing a non-binding, advisory consent to approve “golden parachute” compensation potentially payable under existing agreements between the Company and certain executive officers of the Company by executing the Advisory Consent attached hereto as Annex C (the “Advisory Consent”), (iii) informing you of your appraisal rights under Delaware law, as more fully described in Annex D attached hereto and (iv) informing you of certain corporate actions taken by the Company as more fully set forth in Annex E. Each stockholder is entitled to the number of votes equal to the number of shares of OPENLANE common stock (“Common Stock”) into which all shares of OPENLANE capital stock held by such stockholder on the record date could be converted in accordance with OPENLANE’s Amended and Restated Certificate of Incorporation (the “Company Charter”).

Under the terms of the Merger Agreement, Purchaser has agreed to pay $210 million, plus an increase for excess cash on OPENLANE’s balance sheet at the consummation of the Merger, in cash to the holders of the Company’s securities (the “Securityholders”), subject to certain adjustments as described below (the “Merger Consideration”), in exchange for all of the outstanding equity securities of the Company. In addition, under the terms of the Merger Agreement, the OPENLANE securityholders (the “Securityholders”) are obligated to indemnify Purchaser for certain losses and damages that Purchaser or certain other parties may incur in connection with the Merger. To partially secure the indemnification obligations of the Securityholders, Purchaser will deposit up to $26 million of the Merger Consideration (the “Escrow Amount”), to be held in escrow pursuant to the terms of the Merger Agreement.

The Company’s Board of Directors (the “Board”), by resolutions duly adopted, unanimously (i) declared that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and its stockholders (the “Stockholders”), (ii) approved the Merger Agreement in accordance with the provisions of Delaware law, (iii) directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the Stockholders for their adoption


 
 

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and approval by written consent and (iv) recommends that the Stockholders adopt the Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement. A specially appointed committee of the Board has specified the close of business on August 11, 2011 as the record date for the purpose of determining the stockholders of record who are entitled to act with respect to the proposals set forth herein.

By executing and delivering the Stockholder Acknowledgment to the Company, you will acknowledge and adopt the resolutions attached to the Stockholder Acknowledgment at Annex B and, in addition, expressly agree and acknowledge:

That you are aware of the availability of appraisal rights under Section 262 of the DGCL, in connection with the Merger (under Delaware law, OPENLANE stockholders who do not vote in favor of the adoption of the Merger Agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the Merger is completed, but only if they submit a written demand for such an appraisal within 20 days of the date of the mailing of this Proxy Statement and comply with the other Delaware law procedures explained in this Proxy Statement);
That you agree to irrevocably and unconditionally waive, cause to be waived, and prevent the exercise of any rights of appraisal, any dissenters rights and any similar rights relating to the Merger that the you may have by virtue of, or with respect to, any shares of capital stock of the Company owned by you (including those rights pursuant to Section 262 of the DGCL);
That you agree to irrevocably nominate, constitute and appoint Shareholder Representative Services LLC, as the Securityholders’ Representative;
That you agree to be bound by the provisions of the Merger Agreement requiring that a portion of the Merger Consideration otherwise payable to you in the Merger be held in escrow pursuant to the terms of the Merger Agreement to partially secure the indemnification obligations of the Securityholders under the Merger Agreement;
That you agree to be bound by the indemnification obligations contained in Article IX of the Merger Agreement;
That you waive any notice rights you might have with respect to the Merger; and
If you are a holder of Preferred Stock and are a party to that certain Third Amended and Restated Investors’ Rights Agreement dated October 29, 2008, that you approve of the termination of such agreement, effective as of and contingent upon the effective time of the Merger.

By executing and delivering the Advisory Consent to the Company, you will provide a consent with respect to the resolutions set forth in the Advisory Consent at Annex C and, in addition, expressly agree and acknowledge:

That you are providing a non-binding, advisory consent to approve “golden parachute” compensation potentially payable under existing agreements between the Company and certain executive officers of the Company.

You may approve and ratify the matters described above by executing the Stockholder Acknowledgment attached hereto at Annex B and the Advisory Consent attached hereto at Annex C and delivering each to the Company’s legal counsel in the manner described in the box titled “ACTIONS REQUESTED OF YOU” below. The Stockholder Acknowledgment and the Advisory Consent are separate actions, and you may choose to execute one without executing the other.

The proposed Merger is a complex transaction. The summary of the Merger, the Merger Agreement, the Stockholder Acknowledgment, the Advisory Consent and the other terms described in this Proxy Statement are only a summary, do not purport to be complete and are in each case qualified in their entirety by the actual terms thereof provided in the Merger Agreement, the Stockholder Acknowledgment, the Advisory Consent and the attachments thereto and documents contemplated thereby. You should also consult with your own legal, tax and accounting advisors regarding the consequences of the proposed Merger and the related transactions.

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ACTIONS REQUESTED OF YOU
    After reviewing this Proxy Statement and the documents attached hereto, if you wish to adopt the stockholder resolutions relating to the Merger and/or provide a non-binding advisory consent with respect to executive compensation matters, we ask that you reply to this Proxy Statement promptly and in any event prior to Wednesday, September 28, 2011, by taking the following steps:
IF YOU ARE A STOCKHOLDER OF RECORD (YOU HOLD SHARES IN YOUR NAME):

1.

Tear out, execute and date the Stockholder Acknowledgment attached hereto as Annex B and/or tear out, execute and date the Advisory Consent attached hereto as Annex C.

2.

Fax or e-mail the signature pages directly to: Neela Morrison, Attorney, Wilson Sonsini Goodrich & Rosati, P.C., the Company’s legal counsel, at (650) 493-6811 or nmorrison@wsgr.com.

3.

Send your original executed Stockholder Acknowledgment and/or Advisory Consent to: Reeta Sharma, Corporate Paralegal, Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304-1050.

IF YOU ARE NOT A STOCKHOLDER OF RECORD (YOUR SHARES ARE HELD BY A BROKER OR OTHER NOMINEE):

1.

Instruct your broker to execute and date the Stockholder Acknowledgment attached hereto as Annex B and/or the Advisory Consent attached hereto as Annex C on your behalf and return it to Wilson Sonsini Goodrich & Rosati, P.C. in the manner described above.

YOUR PROMPT ATTENTION IS IMPORTANT TO THE CONSUMMATION OF THE MERGER.
    If you have any questions regarding the foregoing, please contact Scott Cross, Assistant Secretary of the Company at (480) 809-3400 or at stockholderquestions@openlane.com.
IMPORTANT NOTICE: THIS PROXY STATEMENT SERVES AS YOUR NOTICE PURSUANT TO SECTION 228(e) OF THE DGCL OF THE STOCKHOLDER ACTIONS TAKEN BY WRITTEN CONSENT ON AUGUST 16, 2011 WITH RESPECT TO (1) THE APPROVAL OF THE MERGER AGREEMENT AND THE MERGER AND (2) THE ELECTION TO CONVERT ALL SHARES OF PREFERRED STOCK OF THE COMPANY TO SHARES OF COMMON STOCK IMMEDIATELY PRIOR TO AND CONTINGENT UPON THE CONSUMMATION OF THE MERGER, EACH AS DESCRIBED MORE FULLY HEREIN.

No person is authorized to give any information or to make any representation not contained in this Proxy Statement in connection with the solicitation made hereby, and, if given or made, you should not rely upon such information or representation as having been authorized by the Company.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

Sincerely,

[GRAPHIC MISSING]
Peter Kelly
Chief Executive Officer and Director

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ADDITIONAL INFORMATION

See “Where You Can Find More Information” on page 57. You can obtain additional copies of this Proxy Statement and the attachments thereto by requesting them in writing from OPENLANE, Inc., Attn: Assistant Secretary, 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065. You will not be charged for any of the documents that you request. If you wish to request documents, you should do so by Tuesday, September 20, 2011.

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  Page
QUESTIONS AND ANSWERS ABOUT THE MERGER     1  
SUMMARY     5  
The Merger     5  
The Stockholder Acknowledgment and Advisory Consent     5  
The Companies     6  
Reasons for the Merger     7  
Recommendation of the OPENLANE Board of Directors     7  
Financial Statements     7  
Treatment of Preferred Stock     7  
Treatment of Stock Options     8  
Treatment of Warrants     8  
Certain Material U.S. Federal Income Tax Consequences of the Merger     8  
Interests of OPENLANE’s Directors and Executive Officers in the Merger     8  
Capital Stock Ownership of OPENLANE’s Directors and Executive Officers     9  
Escrow and Indemnification     9  
Appointment of the Securityholders’ Representative     9  
Appraisal Rights     10  
Conditions to the Merger     10  
No Solicitation     11  
Termination of the Merger Agreement     12  
Termination Fees and Expenses     12  
Regulatory Approvals     13  
Consummation of the Merger     13  
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION     14  
THE STOCKHOLDER ACKNOWLEDGMENT AND THE ADVISORY CONSENT     15  
Purpose of the Stockholder Acknowledgment     15  
Purpose of the Advisory Consent     16  
Record Date     16  
Consent Required for Approval     16  
Revocation     17  
Solicitation of Consent     17  
Questions and Additional Information     17  
Availability of Documents     17  
THE COMPANIES     18  
THE MERGER     19  
Background of the Merger     19  
Reasons for the Merger; Recommendation of the OPENLANE Board of Directors     22  
Interests of OPENLANE’s Directors and Executive Officers in the Merger     24  
Certain Material U.S. Federal Income Tax Consequences of the Merger     31  
Regulatory Approvals     33  
THE MERGER AGREEMENT     34  


 
 

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  Page
The Merger     34  
The Merger Consideration and the Conversion of Capital Stock     34  
Payment Procedures     35  
Escrow and Indemnification     35  
Appointment of the Securityholders’ Representative     37  
Treatment of Stock Options     37  
Treatment of Preferred Stock     38  
Warrants     38  
Stockholder Approval     38  
Representations and Warranties     38  
Covenants Regarding Conduct of Business by OPENLANE Pending the Merger     40  
No Solicitation     40  
Employee Compensation and Benefits     40  
Other Covenants and Agreements     41  
Conditions to the Merger     44  
Termination of the Merger Agreement     46  
Amendment     46  
No Third Party Beneficiaries     47  
Remedies     47  
Expenses     47  
Guarantee by KAR     47  
SUBMISSION OF STOCKHOLDER PROPOSALS     48  
APPRAISAL RIGHTS     49  
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND OFFICERS     52  
FINANCIAL STATEMENTS     54  
ADVISORY CONSENT REGARDING CERTAIN EXECUTIVE COMPENSATION     55  
Golden Parachute Compensation     55  
Consent Required     56  
HOUSEHOLDING OF STOCKHOLDER MAILINGS     57  
WHERE YOU CAN FIND MORE INFORMATION     57  
Annex A: Agreement and Plan of Merger     A-1  
Annex B: Stockholder Acknowledgment     B-1  
Annex C: Advisory Consent     C-1  
Annex D: Section 262 of the General Corporation Law of the State of Delaware     D-1  
Annex E: Prior Corporate Actions     E-1  


 
 

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following questions and answers address briefly some questions you may have regarding the proposed Merger. These questions and answers may not address all questions that may be important to you as a holder of shares of OPENLANE capital stock. For important additional information, please refer to the more detailed discussion contained elsewhere in this Proxy Statement, the annexes to this Proxy Statement and the documents referred to in this Proxy Statement. We sometimes make reference to OPENLANE, Inc. and its subsidiaries in this Proxy Statement by using the terms “OPENLANE,” “the Company,” “we,” “our” or “us.”

Q: What is the transaction?
A: OPENLANE and ADESA have entered into a Merger Agreement pursuant to which, subject to the terms and conditions of the Merger Agreement, ADESA will acquire OPENLANE through the merger of a wholly owned subsidiary of ADESA with and into OPENLANE. OPENLANE will be the surviving corporation (which we refer to as the surviving corporation) in the Merger and will continue as a wholly owned subsidiary of ADESA.
Q: What will an OPENLANE stockholder receive in the Merger?
A: For every share of Common Stock held at the time of the Merger, after giving effect to the automatic conversion of all outstanding shares of the Company’s preferred stock (the “Preferred Stock”) into shares of Common Stock, as described below, OPENLANE stockholders (other than stockholders who have perfected their appraisal rights under Delaware law) will be entitled to receive the per share merger consideration of up to approximately $8.30 in cash, without interest, less any applicable withholding taxes. This amount is a current estimate only and may be reduced or increased in accordance with the terms of the Merger Agreement. At the consummation of the Merger, the per share merger consideration will be determined by calculating the quotient (a) the numerator of which is equal to $210 million (i) plus an increase for excess cash on OPENLANE’s balance sheet at the consummation of the Merger; (ii) plus the aggregate exercise price of outstanding options and in-the-money warrants; (iii) minus outstanding indebtedness; and (iv) minus certain transaction-related expenses and (b) the denominator of which is equal to the sum of (without double counting) (i) the aggregate number of shares of Common Stock (after giving effect to the automatic conversion of the Preferred Stock into Common Stock) issued and outstanding as of the effective time of the Merger, plus (ii) the aggregate number of shares of Common Stock issuable upon the exercise of the in-the-money options and warrants outstanding as of the effective time of the Merger (such quotient, the “Per Share Merger Consideration”). A portion of the Per Share Merger Consideration payable to the Securityholders will be deposited into an escrow account as partial security for the Securityholders’ indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification.” We refer to the portion of the Per Share Merger Consideration that will be paid at the time of the consummation of the Merger (i.e., the Per Share Merger Consideration less the portion to be placed in escrow) as the “Per Share Closing Consideration.”
Q: Will the outstanding Preferred Stock be automatically converted to Common Stock?
A: Yes. Pursuant to the Company Charter, holders of a majority of the outstanding shares of Preferred Stock as of the record date elected on August 16, 2011 by written consent to automatically convert all outstanding shares of Preferred Stock to Common Stock immediately prior to and contingent upon the consummation of the Merger. As a result, all shares of Preferred Stock that you hold will be converted to Common Stock immediately prior to and contingent upon the consummation of the Merger.
Q: What will happen in the Merger to OPENLANE’s stock options?
A: Immediately prior to the effective time of the Merger, the vesting of all options to purchase shares of Common Stock (each, a “Company Option”) will accelerate in full contingent upon the consummation of the Merger and all options issued and outstanding on the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Common Stock as to which the applicable Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger,

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multiplied by (ii) the excess of the Per Share Closing Consideration over the exercise price of the applicable Company Option, plus a pro-rata portion of any subsequent distributions from the escrow account and any additional payments made pursuant to the terms of the Merger Agreement (up to the amount of the Per Share Merger Consideration). A portion of the Merger Consideration otherwise payable to the holders of Company Options will be deposited into the escrow account as partial security for such holders’ indemnification obligations under the Merger Agreement, as described below in the section beginning on page 35 entitled “Escrow and Indemnification.”
Q: What will happen in the Merger to OPENLANE’s warrants?
A: OPENLANE has agreed to use reasonable best efforts to enter into a warrant termination agreement with each warrant holder pursuant to which, effective as of and contingent upon the effective time of the Merger, all of such holders’ warrants will be cancelled in exchange for (1) a cash payment equal to the product of the number of shares of OPENLANE capital stock subject to such warrants, as converted into shares of Common Stock, multiplied by the Per Share Closing Consideration, less the exercise price of the applicable warrants, less the amount of any applicable withholding taxes plus a pro-rata portion of any subsequent distributions from the escrow account and any additional payments made pursuant to the terms of the Merger Agreement (up to the amount of the Per Share Merger Consideration) (we refer to the amount described in this clause 1 as the “Warrant Consideration”) or (2) if the exercise price of the applicable warrant is greater than the Per Share Merger Consideration, a nominal cash payment as consideration for executing the warrant termination agreement. A portion of the Warrant Consideration payable to the warrant holders will be deposited into the escrow account as partial security for the warrant holders’ indemnification obligations under the Merger Agreement, as described below in the section beginning on page 35 entitled “Escrow and Indemnification.”
Q: Do any OPENLANE executive officers have interests in the Merger that may differ from those of OPENLANE stockholders?
A: Yes. In considering the recommendation of the Board with respect to the Merger Agreement, you should be aware that certain of OPENLANE’s executive officers have economic interests in the Merger that are different from, or in addition to, their interests as OPENLANE stockholders generally. The members of the Board were aware of these interests and considered them, among other matters, in approving the Merger Agreement and the Merger. Please see “Interests of OPENLANE’s Directors and Executive Officers in the Merger” on page 24 for further details.
Q: When do you expect the Merger to be completed?
A: The Merger will close once the closing conditions, including OPENLANE stockholder approval and regulatory approvals, are satisfied or waived. Please see “Conditions to the Merger” on page 44 for further details.
Q: Why am I receiving this Proxy Statement?
A: You are receiving this Proxy Statement because you were a stockholder of OPENLANE as of August 11, 2011, the record date determined by the Board. All stockholders of OPENLANE as of the record date are being asked to acknowledge and adopt the stockholder resolutions attached to the Stockholder Acknowledgment and provide an advisory consent with respect to the “golden parachute” compensation set forth in the Advisory Consent. Copies of the Merger Agreement, the Stockholder Acknowledgment and the Advisory Consent are attached to this Proxy Statement as Annex A, Annex B and Annex C, respectively.
Q: What consent is required to adopt the Merger Agreement?
A: Under Delaware law and the Company Charter, the adoption of the Merger Agreement requires the written consent of the holders of at least (i) a majority of the outstanding Preferred Stock (voting together as single class on an as converted to Common Stock basis) and (ii) a majority of the outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis). The Company obtained such majority approval on August 16, 2011. In addition, under the Merger Agreement,

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as a condition to completing the Merger, stockholders representing at least 75% of the outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) must consent to the approval and adoption of the Merger Agreement. The Company expects to obtain such 75% approval at or around the time of the mailing of this Proxy Statement. In addition, the Company’s stockholders are being asked to execute and deliver to the Company the Stockholder Acknowledgment and thereby agree to be bound by the same stockholder resolutions as were adopted in connection with obtaining the consents described above.
Q: Why am I being asked to provide a non-binding, advisory consent to approve the “golden parachute” compensation potentially payable under existing agreements to certain executive officers of the Company?
A: The SEC has recently adopted new rules that require us to seek a non-binding, advisory vote with respect to certain payments potentially payable under existing agreements to certain of the Company’s executive officers in connection with the Merger.
Q: What consent of the Company’s stockholders is required to approve the non-binding proposal regarding the “golden parachute” compensation potentially payable under existing agreements to certain executive officers of the Company?
A: Approval of the non-binding proposal regarding the “golden parachute” compensation potentially payable under existing agreements to certain executive officers of the Company requires the affirmative consent of a majority of the outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis).
Q: What will happen if the Company’s stockholders do not approve the “golden parachute” compensation?
A: Approval of the “golden parachute” compensation potentially payable under existing arrangements between certain executive officers and the Company is not a condition to the consummation of the Merger. The consent with respect to the “golden parachute” compensation is an advisory consent and will not be binding on the Company or Purchaser. Therefore, if the Merger is approved by our stockholders and completed, the “golden parachute” compensation will still be paid to the executive officers (if any) when due regardless of whether such compensation is approved.
Q: How does the Board recommend that I act with respect to the Stockholder Acknowledgment?
A: The Board has unanimously determined that it is in the best interests of OPENLANE and its stockholders that OPENLANE enter into the Merger Agreement and consummate the Merger and unanimously recommends that you execute and return the Stockholder Acknowledgment. You should read the section entitled “The Merger — Reasons for the Merger; Recommendation of the OPENLANE Board of Directors” beginning on page 22.
Q: What do I need to do now?
A: After carefully reading and considering the information contained in this Proxy Statement, including the annexes and the other documents referred to in this Proxy Statement, please follow the instructions in the box appearing on page iii entitled “ACTIONS REQUESTED OF YOU.” You have one vote for each share of Common Stock that you would own if all of the shares of OPENLANE capital stock that you own as of the record date were converted into Common Stock.
Q: May I revoke my acknowledgment or my consent after I have delivered my Stockholder Acknowledgment and/or Advisory Consent?
A: You may not revoke your Stockholder Acknowledgment after you have delivered your Stockholder Acknowledgment to the Company. The Advisory Consent is irrevocable once the full percentage consent being sought has been received. If you are a record holder, to revoke your Advisory Consent, you must deliver to the Company’s Assistant Secretary a signed written notice of revocation bearing a date later than the date of your Advisory Consent, stating that your Advisory Consent is revoked. If you are not a

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record holder, you must instruct your broker or other nominee to revoke your consent on your behalf. If your written revocation is received after the Company has received the full percentage consent being sought, your revocation will not be effective. All written notices of revocation and related communications should be addressed to: OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary.
Q: Should I send in my stock certificates now?
A: No. After the Merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of OPENLANE capital stock for a portion of the Merger Consideration. PLEASE DO NOT SEND IN YOUR CERTIFICATES NOW.
Q: Am I entitled to appraisal rights in connection with the Merger?
A: Stockholders are entitled to appraisal rights under Section 262 of the DGCL, provided they satisfy the special criteria and conditions set forth in Section 262 of the DGCL. For more information regarding appraisal rights, see “Appraisal Rights” on page 49. In addition, a copy of Section 262 of the DGCL is attached as Annex D to this Proxy Statement.
Q: What are the material U.S. federal income tax consequences of the Merger to me?
A: The receipt of the portion of the Merger Consideration to which a Stockholder is entitled pursuant to the Merger Agreement for such Stockholder’s shares of OPENLANE capital stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a holder of OPENLANE capital stock will recognize gain or loss in an amount equal to the difference, if any, between (i) the amount of Merger Consideration received in the Merger and (ii) the holder’s adjusted tax basis in the shares. Because your individual circumstances may differ, we recommend that you consult your own tax advisor to determine the particular tax effects of the Merger to you (including the application and effect of any state, local or non-U.S. income and other tax laws). See “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 31.
Q: Who can answer further questions?
A: For additional questions about the Merger, assistance in submitting the Stockholder Acknowledgment or Advisory Consent, or additional copies of the Proxy Statement, the Stockholder Acknowledgment or the Advisory Consent, please contact us at:

OPENLANE, Inc.
2200 Bridge Parkway, Suite 202
Redwood City, CA 94065
Attn: Scott Cross, Assistant Secretary
Phone: (480) 809-3400
Email: stockholderquestions@openlane.com

If your broker or other nominee holds your shares in “street name,” you should also call your broker or other nominee for additional information.

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SUMMARY

The following summary highlights information in this Proxy Statement and may not contain all the information that is important to you. Accordingly, we encourage you to read carefully this entire Proxy Statement and its annexes and the documents referred to in this Proxy Statement. We sometimes make reference to OPENLANE, Inc. and its subsidiaries in this Proxy Statement by using the terms “OPENLANE,” “the Company,” “we,” “our” or “us.” Each item in this summary includes a page reference directing you to a more complete description of the item in this Proxy Statement.

The Merger (Page 19)

The Agreement and Plan of Merger, dated as of August 15, 2011, (as may be amended, supplemented or modified from time to time, the “Merger Agreement”), by and among ADESA, Inc., a wholly owned subsidiary of KAR Auction Services, Inc. (“ADESA or “Purchaser”), Riley Acquisition, Inc., a wholly owned subsidiary of ADESA (“Merger Sub”), KAR Auction Services, Inc., as the Guarantor (“KAR”), OPENLANE and Shareholder Representative Services LLC, as the Securityholders’ Representative (the “Securityholders’ Representative”) provides that Merger Sub will merge with and into OPENLANE (the “Merger”). As a result of the Merger, OPENLANE will become a wholly owned subsidiary of ADESA. At the effective time of the Merger, each outstanding share of OPENLANE common stock (“Common Stock”), after giving effect to the automatic conversion of all shares of OPENLANE preferred stock (“Preferred Stock”) into Common Stock as described in this Proxy Statement, and subject to the indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification,” will be automatically converted into the right to receive up to approximately $8.30 in cash, without interest and less applicable withholding taxes (other than shares of Common Stock held by any holder who has properly exercised appraisal rights of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) as described in this Proxy Statement). This amount is a current estimate only and may be reduced or increased in accordance with the terms of the Merger Agreement. At the consummation of the Merger, the per share merger consideration will be determined by calculating the quotient (a) the numerator of which is equal to $210 million (i) plus an increase for excess cash on OPENLANE’s balance sheet at the consummation of the Merger; (ii) plus the aggregate exercise price of outstanding options and in-the-money warrants; (iii) minus outstanding indebtedness; and (iv) minus certain transaction-related expenses and (b) the denominator of which is equal to the sum of (without double counting) (i) the aggregate number of shares of Common Stock (after giving effect to the automatic conversion of the Preferred Stock into Common Stock) issued and outstanding as of the effective time of the Merger, plus (ii) the aggregate number of shares of Common Stock issuable upon the exercise of the in-the-money options and warrants outstanding as of the effective time of the Merger (such quotient, the “Per Share Merger Consideration”). At closing, a portion of the Per Share Merger Consideration payable to the OPENLANE securityholders (the “Securityholders”) will be deposited into an escrow account as partial security for the Securityholders’ indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification.” We refer to the portion of the Per Share Merger Consideration that will be paid at the time of the consummation of the Merger (i.e., the Per Share Merger Consideration less the portion to be placed in escrow) as the “Per Share Closing Consideration.”

At the effective time of the Merger, any shares of OPENLANE capital stock owned by OPENLANE or any of its subsidiaries will be cancelled and extinguished without any conversion thereof and no merger consideration will be paid by ADESA with respect to such shares.

The Stockholder Acknowledgment and Advisory Consent (Page 15)

Purpose of the Stockholder Acknowledgment.  You are being asked to consider and consent to the stockholder resolutions attached to the Stockholder Acknowledgment, which include the adoption of the Merger Agreement, the waiver of your appraisal rights, the appointment of Shareholders Representative Services as the Securityholders’ Representative pursuant to the Merger Agreement, the waiver of any notice rights you might have in connection with the Merger, and certain other matters described herein. You may acknowledge and adopt the stockholder resolutions relating to the Merger described above by executing the Stockholder Acknowledgment attached hereto at Annex B (the “Stockholder Acknowledgment”) and delivering it to the Company’s legal counsel in the manner described in the box titled “ACTIONS REQUESTED OF YOU” on page iii.

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Purpose of the Advisory Consent.  You are being asked to provide a non-binding, advisory consent to approve “golden parachute” compensation potentially payable to certain executive officers under existing agreements between the Company and certain executive officers of the Company. You may provide a non-binding advisory consent in favor of such payments by executing the Advisory Consent attached hereto at Annex C (the “Advisory Consent”) and delivering it to the Company’s legal counsel in the manner described in the box titled “ACTIONS REQUESTED OF YOU” on page iii.

Record Date.  The record date for both the Stockholder Acknowledgment and the Advisory Consent is the close of business on August 11, 2011. Each stockholder is entitled to the number of votes equal to the number of shares of Common Stock into which all shares of OPENLANE capital stock held by such stockholder on the record date could be converted in accordance with OPENLANE’s Amended and Restated Certificate of Incorporation (the “Company Charter”). As of August 11, 2011, there were 8,238,312 shares of Common Stock issued, outstanding and entitled to vote, and 16,122,606 shares of Preferred Stock (equal to 16,278,668 shares of Common Stock on an as-converted basis) issued, outstanding and entitled to vote.

Consent Required.  Under Delaware law and the Company Charter, the adoption of the Merger Agreement requires the consent of the holders of at least (i) a majority of the outstanding shares of Preferred Stock (voting together as a single class on an as converted to Common Stock basis) and (ii) a majority of the outstanding shares of capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) (items (i) and (ii) collectively, the “Majority Consent”). On August 16, 2011, the Company obtained the Majority Consent. In addition, under the Merger Agreement, as a condition to completing the Merger, stockholders representing at least 75% of the outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) must consent to the approval and adoption of the Merger Agreement (the “Super-Majority Consent”). In addition, the Company’s stockholders are being asked to execute and deliver to the Company the Stockholder Acknowledgment and thereby agree to be bound by the same stockholder resolutions as were adopted in connection with obtaining the Majority Consent.

Approval of the non-binding, advisory proposal regarding the “golden parachute” compensation potentially payable under existing agreements to certain executive officers of the Company requires the affirmative consent of the holders of a majority of the shares of outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis). Approval of this proposal is separate and apart from the consent to adopt the Merger Agreement. Accordingly, you may approve the proposal to adopt the Merger Agreement and not approve this proposal on executive compensation and vice versa.

Revocability of Acknowledgment and Consent.  The Stockholder Acknowledgment is irrevocable once it has been delivered to the Company. The Advisory Consent is irrevocable once the full percentage consent being sought has been received. If you are a record holder, to revoke your Advisory Consent, you must deliver to the Company’s Assistant Secretary a signed written notice of revocation bearing a date later than the date of your Advisory Consent, stating that your Advisory Consent is revoked. If you are not a record holder, you must instruct your broker or other nominee to revoke your Advisory Consent on your behalf. If your written revocation is received after the Company has received the full percentage consent being sought, your revocation will not be effective. All written notices of revocation and related communications should be addressed to: OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary.

The Companies (Page 18)

OPENLANE.  OPENLANE, Inc., a Delaware corporation, is a leading online auction company in North America that enables automotive dealers to buy and sell wholesale vehicles. OPENLANE offers end-to-end auto remarketing solutions to auto manufacturers, captive finance companies, lease and daily rental companies, financial institutions and wholesale auto auctions throughout the United States and Canada. OPENLANE’s principal executive offices are located at 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, and its telephone number is (650) 412-4000. See also “Where You Can Find More Information.”

ADESA.  ADESA, Inc., a Delaware corporation, is a leading provider of wholesale used vehicle auctions. ADESA’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

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Riley Acquisition, Inc.  Riley Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of ADESA, was formed solely for the purpose of facilitating ADESA’s acquisition of OPENLANE. Riley Acquisition, Inc. has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Upon consummation of the proposed Merger, Riley Acquisition, Inc. will merge with and into OPENLANE and will cease to exist. Riley Acquisition, Inc.’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

KAR.  KAR Auction Services, Inc., a Delaware corporation, is the holding company for ADESA, Insurance Auto Auctions, Inc., a leading salvage auto auction company, and Automotive Finance Corporation, a leading provider of floorplan financing to independent used vehicle dealers. KAR’s common stock is publicly traded on the New York Stock Exchange under the symbol “KAR.” KAR’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

Reasons for the Merger (Page 22)

In reaching its decision to adopt and approve, and declare advisable, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the OPENLANE board of directors (the “Board”) consulted with OPENLANE’s management, as well as its financial and legal advisors, and considered a number of factors that the board members believed supported their decision. In particular, the Board reviewed the strategic alternatives available to the Company, including remaining as a stand-alone company and conducting an initial public offering, and concluded that the Merger and the Merger Agreement reflected the highest value reasonably attainable for OPENLANE stockholders.

Recommendation of the OPENLANE Board of Directors (Page 22)

The Board, by resolutions duly adopted, unanimously (i) declared that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and its stockholders (the “Stockholders”), (ii) approved the Merger Agreement in accordance with the provisions of Delaware law, (iii) directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the Stockholders for their adoption and approval by written consent and (iv) recommends that the Stockholders adopt the Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement.

Financial Statements (Page 54)

The following financial statements of the Company are available without charge upon request to Stockholders as of the record date: (1) the audited consolidated balance sheet of the Company as of December 31, 2010 and December 31, 2009 and the related audited consolidated statements of income, shareholders’ deficit and cash flow for the year then ended and (2) the unaudited consolidated balance sheet of the Company as of June 30, 2011 and the related unaudited consolidated statements of income, shareholders’ deficit and cash flow for the six-month period then ended. You may request the financial statements by contacting OPENLANE by telephone at (480) 809-3400, by mail at OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary, or by e-mail at stockholderquestions@openlane.com.

Treatment of Preferred Stock (Page 38)

Pursuant to the Company Charter, holders of a majority of the outstanding shares of Preferred Stock as of the record date elected on August 16, 2011 by written consent to automatically convert all outstanding shares of Preferred Stock to Common Stock immediately prior to and contingent upon the consummation of the Merger. As a result, all shares of Preferred Stock that you hold will be converted to Common Stock immediately prior to and contingent upon the consummation of the Merger. Accordingly, for each share of Common Stock that your shares of Preferred Stock are converted into, you (i) will receive the up to the Per Share Closing Consideration plus a pro-rata portion of any subsequent distributions from the escrow account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration) and (ii) will not receive any liquidation preference that may be set forth in the

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Company Charter. A portion of the Merger Consideration otherwise payable to the holders of Preferred Stock will be deposited into the escrow account as partial security for such holders’ indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification.”

Treatment of Stock Options (Page 37)

Immediately prior to the effective time of the Merger, the vesting of all options to purchase Common Stock (each, a “Company Option”) will accelerate in full contingent upon the consummation of the Merger and all options issued and outstanding on the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Common Stock as to which the applicable Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger, multiplied by (ii) the excess of the Per Share Closing Consideration over the exercise price of the Company Option, plus a pro-rata portion of any subsequent distributions from the escrow account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration). A portion of the Merger Consideration otherwise payable to the holders of Company Options will be deposited into the escrow account as partial security for such holders’ indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification.”

Treatment of Warrants (Page 38)

OPENLANE has agreed to use reasonable best efforts to enter into a warrant termination agreement with each warrant holder pursuant to which, effective as of and contingent upon the effective time of the Merger, all of such holder’s warrants will be cancelled in exchange for (1) a cash payment equal to the product of the number of shares of OPENLANE capital stock subject to such warrants, as converted into shares of Common Stock, multiplied by the Per Share Closing Consideration, less the exercise price of the applicable warrants, less the amount of any applicable withholding taxes plus a pro-rata portion of any subsequent distributions from the escrow account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration) (we refer to the amount described in this clause 1 as the “Warrant Consideration”) or (2) if exercise price of the applicable warrant is greater than the Per Share Merger Consideration, a nominal cash payment as consideration for executing the warrant termination agreement. A portion of the Warrant Consideration payable to the warrant holders will be deposited into the escrow account as partial security for the warrant holders’ indemnification obligations under the Merger Agreement, as described below in the section entitled “Escrow and Indemnification.”

Certain Material U.S. Federal Income Tax Consequences of the Merger (Page 31)

The receipt of Merger Consideration for shares of Common Stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a holder of Common Stock will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of Merger Consideration received in the Merger and (2) the holder’s adjusted tax basis in the shares. Stockholders should consult their tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or non-U.S. income and other tax laws) of the Merger.

Interests of OPENLANE’s Directors and Executive Officers in the Merger (Page 24)

In considering the recommendation of the Board with respect to the Merger Agreement, Stockholders should be aware that OPENLANE’s directors and executive officers have economic interests in the Merger that may be different from, or in addition to, their interests as Stockholders. The Board was aware of and considered these interests, among other matters, in reaching its decision to adopt and approve, and declare advisable, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. All of the members of the Board currently, whether personally or through an affiliate, own stock of OPENLANE and/or Company Options to acquire stock of OPENLANE. Accordingly, the directors will receive their pro rata share of cash in exchange for all securities of OPENLANE that they currently own. Unvested and outstanding Company Options held by directors and/or officers immediately prior to the consummation of the Merger will be treated as described above under Treatment of Stock Options. Certain officers of OPENLANE, specifically, Peter Kelly, Michael Briggs, Nagendra Palle, Gary Edelstein and Todd Hodnett (the “Key Employees”), have received offer letters from Purchaser or one of its affiliates and

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entered into Non-Solicitation, Non-Competition and Severance Agreements or Severance and Consulting Agreements with Purchaser or one of its affiliates, which provide, contingent on the consummation of the Merger, for employment with Purchaser or one of its affiliates, severance and other benefits in the case of qualifying separations from service.

Certain of OPENLANE’s executive officers are parties to offer letters with OPENLANE, which provide for benefits in the case of qualifying separations from service in connection with a change in control of OPENLANE, including consummation of the Merger.

Under the Merger Agreement, the Company may purchase insurance policies providing coverage for six years after the effective time of the Merger for directors’ and officers’ liability insurance. In addition, executive officers and directors of OPENLANE have rights as set forth in the Company Charter and various agreements with the Company to indemnification and directors’ and officers’ liability insurance that will survive consummation of the Merger.

Capital Stock Ownership of OPENLANE’s Directors and Executive Officers (Page 52)

As of August 11, 2011, the record date, the directors and executive officers of OPENLANE beneficially owned in the aggregate approximately 15,899,376 shares of OPENLANE capital stock entitled to vote on as converted to Common Stock basis, representing approximately 65% of OPENLANE’s outstanding capital stock as of the record date.

Escrow and Indemnification (Page 35)

At the effective time of the Merger, ADESA will deposit up to $26 million of the Merger Consideration that would otherwise be received by the Securityholders in an escrow account to serve as partial security for the indemnification obligations of the Securityholders under the Merger Agreement.

Subject to the provisions and limitations set forth in the Merger Agreement, from and after the effective time of the Merger, each Securityholder is required to, severally and not jointly, indemnify, defend and hold harmless Purchaser and certain of its affiliates for any and all losses they suffer, sustain or incur to the extent arising from, in connection with, or as a result of (without duplication): the inaccuracy or breach of any representation or warranty of the Company contained in the Merger Agreement; the breach of any agreement or covenant of the Company contained in the Merger Agreement; certain transaction expenses to the extent not paid prior to the consummation of the Merger; any outstanding Indebtedness to the extent not paid at or prior to the the consummation of the Merger; any claim to the extent relating to the transactions contemplated by the Merger Agreement brought by a Stockholder in their capacity as a stockholder, in each case, against the Company, any of its subsidiaries or any of their respective officers or directors who held such positions prior to the effective time of the Merger; any amounts paid with respect to shares held by Stockholders who exercise their appraisal rights that are in excess of the amount that would have been payable with respect to such shares pursuant to the Merger Agreement; any amounts paid as consideration to holders of out-of-the money warrants executing warrant termination agreements; certain specified securities law compliance matters; matters related to obtaining contractual consents from certain third parties; and certain specified indemnification matters, including among others, tax and employee benefit compliance matters.

Maximum indemnification obligations of individual Securityholders are capped at the portion of the Merger Consideration actually received by such Securityholder, subject to additional caps within that amount, with most aggregate obligations capped at $21 million.

Appointment of the Securityholders’ Representative (Page 37)

Pursuant to the Merger Agreement, Shareholder Representative Services, LLC has been irrevocably appointed and designated as the Securityholders’ Representative. The Securityholders’ Representative will have full power and authority to act on behalf of all Securityholders with respect to all matters relating to the Merger Agreement. A decision of the Securityholders’ Representative will constitute a decision of all of the Securityholders and will be final, binding and conclusive upon each of the Securityholders, and the Merger Agreement provides that Purchaser, Merger Sub and OPENLANE may rely on the decisions, actions, consents and instructions of the Securityholders’ Representative. The Securityholders will indemnify and hold the Securityholders’ Representative harmless from and against for any loss, liability or expense arising in

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connection with any act or omission of the Securityholders’ Representative, except in the case a liability for gross negligence or willful misconduct.

A portion of the total Merger Consideration equal to $200,000 will be set aside and held by the Securityholders’ Representative in a segregated client bank account for the sole purpose of paying directly or reimbursing the Securityholders’ Representative for any expenses, losses or obligations. If such account is depleted, the Securityholders’ Representative may recover such expenses, losses or obligations from the funds in the escrow account otherwise distributable to the Securityholders.

Appraisal Rights (Page 49)

Under Delaware law, Stockholders who do not vote in favor of adoption of the Merger Agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the Merger is completed, but only if they submit a written demand for such an appraisal within 20 days of the date of mailing of this Proxy Statement and comply with the other Delaware law procedures explained in this Proxy Statement.

Conditions to the Merger (Page 44)

Conditions to Each Party’s Obligations.  Each party’s obligation to consummate the Merger is subject to the satisfaction of the following mutual conditions:

all authorizations, consents, orders or approvals of, or declarations or filings with, or expiration of waiting periods, imposed by, any governmental entity necessary for the consummation of the transactions contemplated by the Merger Agreement and related documents being obtained or made;
there being in effect no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental entity nor other legal restraint or prohibition preventing or, in certain specified circumstances, seeking to prevent the consummation of the transactions contemplated by the Merger Agreement and related documents;
there being no action taken or threatened, and there being no law or order enacted, promulgated or issued or deemed applicable to the transactions contemplated by the Merger Agreement and related documents, by any governmental entity that would (i) make the consummation of the transactions contemplated thereby illegal or prevent the consummation of any material aspect of the transactions contemplated thereby, or (ii) render any party unable to consummate the transactions contemplated thereby; and
the certificate of merger being accepted for filing by the Secretary of State of the State of Delaware.

Conditions to OPENLANE’s Obligations.  The obligation of OPENLANE to consummate the Merger is subject to the satisfaction or waiver of the following additional conditions:

all representations and warranties made by ADESA and Merger Sub in the Merger Agreement being true and correct in all respects as of the date of the Merger Agreement and as of the date of the consummation of the Merger as though made at such time (other than representations or warranties made as of a specified date, which representations and warranties must be true and correct only as of such date), in each case, except for any failure to be so true and correct which has not had and would not reasonably be likely to have, individually or in the aggregate, a material adverse effect on ADESA or the ability of ADESA or Merger Sub to perform its obligations under the Merger Agreement;
ADESA and Merger Sub having performed in all respects all obligations and covenants required to be performed by them under the Merger Agreement as of the date of the consummation of the Merger; and
the delivery by ADESA and Merger Sub to OPENLANE of certain ancillary documents, including an executed counterpart to the escrow agreement, a certificate of the corporate secretary of ADESA as to certain corporate matters, and a certificate of the corporate secretary of Merger Sub as to certain corporate matters.

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Conditions to ADESA’s and Merger Sub’s Obligations.  The obligation of ADESA and Merger Sub to consummate the Merger is subject to the satisfaction or waiver of the following additional conditions:

all representations and warranties made by OPENLANE in the Merger Agreement being true and correct in all respects as of the date of the Merger Agreement and as of the date of the consummation of the Merger as though made at such time (other than representations or warranties made as of a specified date, which representations and warranties must be true and correct only as of such date), in each case, except for any failure to be so true and correct which has not had and would not reasonably be likely to have, individually or in the aggregate, a Material Adverse Effect on OPENLANE (as defined on page 45).
OPENLANE having performed in all material respects all obligations and covenants required to be performed by it under the Merger Agreement as of the date of the consummation of the Merger;
there having occurred no Material Adverse Effect on OPENLANE that has not been cured;
the delivery by OPENLANE to ADESA of a certificate executed by OPENLANE’s Chief Executive Officer as to compliance with the conditions described in the foregoing three bullet points;
the delivery by OPENLANE to ADESA of certain ancillary documents, including payoff letters with respect to indebtedness, invoices reflecting transaction expenses, an executed counterpart to the escrow agreement, a certificate of the corporate secretary of OPENLANE as to certain corporate matters, certificates of good standing from the jurisdictions in which OPENLANE and its subsidiaries are organized or qualified to do business, a legal opinion provided by OPENLANE’s outside legal counsel, certification that an interest in OPENLANE is not a U.S. real property interest within the meaning of the Internal Revenue Code, written resignations of certain directors and officers of OPENLANE and its subsidiaries, evidence of the termination of the Investors’ Rights Agreement, delivery of an executed counterpart to an assumption agreement relating to guarantee obligations to be assumed by OPENLANE after the consummation of the Merger, and delivery of required third party consents;
the delivery by OPENLANE to ADESA of the Majority Consent no later than 11:59 pm on the first business day following the execution of the Merger Agreement;
holders of not more than 10% of the outstanding shares of OPENLANE’s capital stock (as determined immediately prior to the effective time of the Merger on an as converted to Common Stock basis) having demanded, properly and in writing, appraisal for shares of OPENLANE capital stock held by such holder in accordance with Section 262 of the DGCL; and
the delivery by OPENLANE to ADESA of the Super-Majority Consent.

No Solicitation (Page 40)

OPENLANE has agreed, effective immediately upon signing of the Merger Agreement, to cease any activities, discussions or negotiations with any third parties conducted prior to signing of the Merger Agreement with respect to any alternative transaction proposal (as described below). In addition, subject to certain exceptions described below, OPENLANE has agreed not to, and has agreed to cause certain of its affiliates not to:

discuss, negotiate, undertake, authorize, recommend, propose or enter into, either as the proposed surviving, merged, acquiring or acquired corporation, any alternative acquisition transaction, meaning any transaction involving a merger, consolidation, business combination, purchase or disposition of any amount of the assets (other than the sale of inventory in the ordinary course of business) or the capital stock of OPENLANE or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement;
facilitate, knowingly encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an alternative acquisition transaction;

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furnish or cause to be furnished, to any person or entity, any information concerning the business, operations, properties or assets of OPENLANE or its subsidiaries in connection with an alternative acquisition transaction; or
otherwise cooperate in any way with, or assist or participate in, facilitate or knowingly encourage, any effort or attempt by any other person or entity to do or seek any of the foregoing.

OPENLANE has agreed that, until the earlier of the consummation of the Merger or the termination date of the Merger Agreement, OPENLANE will immediately notify ADESA orally and in writing if any person makes any proposal, offer, inquiry or contact with respect to any of the foregoing.

Termination of the Merger Agreement (Page 46)

OPENLANE and ADESA may terminate the Merger Agreement by mutual written consent at any time before the consummation of the Merger. In addition, either ADESA or OPENLANE may terminate the Merger Agreement before the consummation of the Merger if:

the Majority Consent is not delivered by 11:59 pm on the first business day following the execution of the Merger Agreement; or
any permanent injunction or other order of a governmental entity preventing the consummation of the Merger shall have become final and nonappealable.

ADESA may also terminate the Merger Agreement if:

there has been a breach by OPENLANE of any representation, warranty, covenant or agreement on the part of OPENLANE contained in the Merger Agreement and such breach is not capable of being cured or has not been cured within twenty days after ADESA notifies OPENLANE of such breach, and if not capable of being cured or cured within such period, such breach would result in the failure of any of the conditions to ADESA’s and Merger Sub’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement to be satisfied; or
the conditions to ADESA’s and Merger Sub’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement have not been satisfied or waived (to the extent they may be waived) by May 15, 2012, unless ADESA’s or Merger Sub’s breach of the Merger Agreement has been a principal cause of the failure of the consummation of the Merger to occur on or before such date.

OPENLANE may also terminate the Merger Agreement if:

there has been a breach by ADESA or Merger Sub of any representation, warranty, covenant or agreement on the part of ADESA or Merger Sub contained in the Merger Agreement and such breach is not capable of being cured or has not been cured within twenty days after OPENLANE notifies ADESA of such breach, and if not capable of being cured or cured within such period, such breach would result in the failure of any of the conditions to OPENLANE’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement to be satisfied; or
the conditions to OPENLANE’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement have not been satisfied or waived (to the extent they may be waived) by May 15, 2012, unless OPENLANE’s breach of the Merger Agreement has been a principal cause of the failure of the consummation of the Merger to occur on or before such date.

Termination Fees and Expenses (Page 47)

If the Merger Agreement is validly terminated, no party will have any liability or any further obligation to any other party under the Merger Agreement, except that the termination of the Merger Agreement will not release any party from any liability or damage to any other party arising out of such party’s willful default or material breach under the Merger Agreement.

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Regulatory Approvals (Page 33)

Each of ADESA, Merger Sub and OPENLANE has agreed to cooperate with one another and to use their reasonable best efforts to promptly take all actions necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement, including making all required or recommended filings under applicable antitrust laws, and to obtain all governmental and third party authorizations and consents that are necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement. In addition, ADESA, Merger Sub and OPENLANE have agreed to:

make an appropriate filing of a Notification and Report Form pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), within five business days of the execution of the Merger Agreement and supply as promptly as practicable any additional information and documentary material requested pursuant to the HSR Act;
cooperate in all respects with each other in connection with any filing or submission to a governmental entity, or any investigation or inquiry by a governmental entity, including keeping each other informed in all material respects an on a reasonably timely basis of any material communication with a governmental entity or in connection with a private party proceeding, in each case regarding the transactions contemplated by the Merger Agreement;
provide the other party with an opportunity to participate in any material meetings with the Federal Trade Commission, the Antitrust Division of the Department of Justice or any other governmental entity, subject to applicable law, and provide the other party with an opportunity to review and provide comments on any material draft submissions, filings or other communications to be provided to the Federal Trade Commission, the Antitrust Division of the Department of Justice or any other governmental entity;
use their reasonable best efforts to resolve any objections a governmental entity or third party may assert with respect to the transactions contemplated by the Merger Agreement, provided that ADESA is not required to agree to dispose or divest any of its (or its affiliates’) or the Company’s or its subsidiaries’ assets, businesses or product lines, or to enter into a hold separate agreement; and
use their reasonable best efforts to defend any litigation challenging the consummation of the transactions contemplated by the Merger Agreement and to avoid or eliminate any impediment to obtaining required governmental approvals.

Consummation of the Merger (Page 44)

The Merger will close once various closing conditions, including Stockholder approval and regulatory approvals, are satisfied or waived.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This Proxy Statement, and the documents to which we refer you in this Proxy Statement, include forward-looking statements based on estimates and assumptions. There are forward-looking statements throughout this Proxy Statement, including, without limitation, under the headings “Summary,” “The Merger,” “Regulatory Approvals,” and in statements containing words such as “believes,” “estimates,” “anticipates,” “continues,” “predict,” “potential,” “contemplates,” “expects,” “may,” “will,” “likely,” “could,” “should” or “would” or other similar words or phrases. These statements are subject to risks, uncertainties, and other factors, including, among others:

the effect of the announcement of the Merger on OPENLANE’s business relationships, operating results and business generally;
the retention of certain key employees at OPENLANE;
the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;
the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule, if at all, or other conditions to the consummation of the transaction may not be satisfied;
the amount of the costs, fees, expenses and charges related to the Merger; and
OPENLANE’s and ADESA’s ability to meet expectations regarding the timing and consummation of the Merger.

Many of the factors that will determine OPENLANE’s future results are beyond OPENLANE’s ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We cannot guarantee any future results, levels of activity, performance or achievements. The statements made in this Proxy Statement represent OPENLANE’s views as of the date of this Proxy Statement, and it should not be assumed that the statements made herein remain accurate as of any future date. Moreover, we assume no obligation to update forward-looking statements or update the reasons that actual results could differ materially from those anticipated in forward-looking statements, except as required by law.

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THE STOCKHOLDER ACKNOWLEDGMENT AND THE ADVISORY CONSENT

Purpose of the Stockholder Acknowledgment

This Proxy Statement is being furnished to OPENLANE’s Stockholders as part of the solicitation of Stockholder Acknowledgment by the Board in connection with the proposed acquisition of OPENLANE by ADESA. By executing and delivering the Stockholder Acknowledgment to the Company, you will adopt and consent to the resolutions attached to the Stockholder Acknowledgment at Annex B and, in addition, expressly agree and acknowledge:

That you are aware of the availability of appraisal rights under Section 262 of the DGCL, in connection with the Merger (under Delaware law, Stockholders who do not vote in favor of the adoption of the Merger Agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the Merger is completed, but only if they submit a written demand for such an appraisal within 20 days of the date of mailing of this Proxy Statement and comply with the other Delaware law procedures explained in this Proxy Statement);
That you agree to irrevocably and unconditionally waive, cause to be waived, and prevent the exercise of any rights of appraisal, any dissenters rights and any similar rights relating to the Merger that the you may have by virtue of, or with respect to, any shares of capital stock of the Company owned by you (including those rights pursuant to Section 262 of the DGCL);
That you agree to irrevocably nominate, constitute and appoint Shareholder Representative Services LLC, as the Securityholders’ Representative;
That you agree to be bound by the provisions of the Merger Agreement requiring that a portion of the Merger Consideration otherwise payable to you in the Merger be held in escrow pursuant to the terms of the Merger Agreement to partially secure the indemnification obligations of the Securityholders under the Merger Agreement;
That you agree to be bound by the indemnification obligations contained in Article IX of the Merger Agreement;
That you waive any notice rights you might have with respect to the Merger; and
If you are a holder of Preferred Stock and are a party to that certain Third Amended and Restated Investors’ Rights Agreement dated October 29, 2008 (the “Investors’ Rights Agreement”), that you approve of the termination of the Investor Rights Agreement, effective as of and contingent upon the effective time of the Merger.

If you are a stockholder of record, meaning you hold your shares of OPENLANE capital stock in your name, you may acknowledge and adopt the stockholder resolutions relating to the Merger described above by executing the Stockholder Acknowledgment attached hereto at Annex B and delivering it to the Company’s legal counsel in the manner described in the box titled “ACTIONS REQUESTED OF YOU” on page iii. If you are not a stockholder of record, meaning your shares of OPENLANE capital stock are held by a broker or other nominee, you must contact your broker or other nominee and provide instructions as to what action should be taken by your broker or other nominee with respect to your shares. If you fail to provide your broker or other nominee with instructions, your broker or other nominee will not be able to act with respect to your shares.

A copy of the Merger Agreement is attached to this Proxy Statement as Annex A. You are urged to read this Proxy Statement, the Merger Agreement and the documents referenced herein and therein in their entirety.

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Purpose of the Advisory Consent

In connection with the Merger, we are required to seek stockholder approval, on an advisory basis, of the “golden parachute” compensation potentially payable under existing arrangements between the Company and certain executive officers. By executing and delivering the Advisory Consent to the Company, you will approve and ratify the resolutions set forth in the Advisory Consent at Annex C and, in addition, expressly agree and acknowledge that you are providing a non-binding, advisory consent to approve “golden parachute” compensation potentially payable under existing agreements between the Company and certain executive officers of the Company.

If you are a stockholder of record, meaning you hold your shares of OPENLANE capital stock in your name, you may approve the payments described above by executing the Advisory Consent attached hereto at Annex C and delivering it to the Company’s legal counsel in the manner described in the box titled “ACTIONS REQUESTED OF YOU” on page iii. If you are not a stockholder of record, meaning your shares of OPENLANE capital stock are held by a broker or other nominee, you must contact your broker or other nominee and provide instructions as to what action should be taken by your broker or other nominee with respect to your shares. If you fail to provide your broker or other nominee with instructions, your broker or other nominee will not be able to act with respect to your shares.

Record Date

We have fixed the close of business on August 11, 2011 as the record date for both the Stockholder Acknowledgment and the Advisory Consent, and only holders of record of OPENLANE capital stock on the record date are entitled to act on the Stockholder Acknowledgment and the Advisory Consent. As of August 11, 2011, there were 8,238,312 shares of Common Stock issued, outstanding and entitled to vote, and 16,122,606 shares of Preferred Stock (equal to 16,278,668 shares of Common Stock on an as converted basis) issued, outstanding and entitled to vote. Each Stockholder is entitled to the number of votes equal to the number of shares of Common Stock into which all shares of OPENLANE capital stock held by such Stockholder on the record date could be converted in accordance with the Company Charter.

Consent Required for Approval

Stockholder Acknowledgment.  You may choose not to execute and deliver the Stockholder Acknowledgment. Under Delaware law and the Company Charter, the adoption of the Merger Agreement requires the written consent of the holders of at least (i) a majority of the outstanding shares of Preferred Stock (voting together as a single class on an as converted to Common Stock basis) and (ii) a majority of the outstanding shares of capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) (items (i) and (ii) collectively, the “Majority Consent”). On August 16, 2011, the Company obtained the Majority Consent. In addition, under the Merger Agreement, as a condition to completing the Merger, Stockholders representing at least 75% of the outstanding capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) must consent to the approval and adoption of the Merger Agreement (the “Super-Majority Consent”). The Company expects to obtain the Super-Majority Consent at or around the time of the mailing of this Proxy Statement.

In addition, Stockholders are being asked to execute and deliver to the Company the Stockholder Acknowledgment and thereby agree to be bound by the same stockholder resolutions as were adopted in connection with obtaining the Majority Consent and Super-Majority Consent. Because the Majority Consent and the Super-Majority Consent has or will be obtained, the Company’s ability to satisfy its obligations to obtain stockholder approval under the Merger Agreement and Delaware law will not be affected if you do not execute and deliver the Stockholder Acknowledgment, or if you fail to provide your broker or other nominee with instructions to do so.

As of the record date, OPENLANE’s directors and executive officers held and are entitled to vote, in the aggregate, approximately 15,899,376 shares of OPENLANE capital stock, on an as converted to Common Stock basis, representing approximately 65% of OPENLANE’s outstanding voting power.

Advisory Consent.  You may provide an advisory consent with respect to the “golden parachute” compensation potentially payable under existing arrangements that certain executive officers. Approval of the non-binding proposal regarding the “golden parachute” compensation potentially payable to certain executive

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officers of the Company requires the affirmative approval of the holders of a majority of the outstanding shares of capital stock of the Company (voting together as a single class on an as converted to Common Stock basis) but is not a condition to the consummation of the Merger. The consent with respect to the “golden parachute” compensation is an advisory consent and will not be binding on the Company or Purchaser. Therefore, if the Merger is approved by our Stockholders and completed, the “golden parachute” compensation will still be paid to the executive officers (if any) when due regardless of whether such compensation is approved. The consent to this proposal is separate and apart from the consent to adopt the Merger Agreement. Accordingly, you may approve the proposal to adopt the Merger Agreement and not to approve this proposal on executive compensation and vice versa.

Revocation

The Stockholder Acknowledgment is irrevocable once it has been delivered to the Company. The Advisory Consent is irrevocable once the full percentage consent being sought has been received. If you are a record holder, to revoke your Advisory Consent, you must deliver to the Company’s Assistant Secretary a signed written notice of revocation bearing a date later than the date of your Advisory Consent, stating that your Advisory Consent is revoked. If you are not a record holder, you must instruct your broker or other nominee to revoke your Advisory Consent on your behalf. If your written revocation is received after the Company has received the full percentage consent being sought, your revocation will not be effective. All written notices of revocation and related communications should be addressed to: OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary.

Solicitation of Consent

This solicitation is being made and paid for by OPENLANE on behalf of our Board. Our directors, officers and employees may solicit consent by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. We will also request brokers and other fiduciaries to forward consent solicitation material to the beneficial owners of shares of OPENLANE capital stock that such brokers and fiduciaries hold of record. Upon request, we will reimburse them for their reasonable out-of-pocket expenses.

Filing of this Proxy Statement

We recently discovered that we were required pursuant to Rule 12h-3 promulgated under the Securities Exchange Act of 1934, or the 1934 Act, to resume filing periodic reports required by Section 12(g) of the 1934 Act beginning with our Form 10-K for our fiscal year ended December 31, 2006 as a result of having more than 500 Stockholders of record of our Series D Preferred Stock as of such date. Our Series D Preferred Stock represented 2.88% of our total outstanding capital stock on a fully diluted basis as of June 30, 2011. In August 2011, we concluded that we would file this Proxy Statement with the SEC and otherwise comply with the requirements of Regulation 14A of the 1934 Act in connection with the Merger. As a result of our failure to comply with Rule 12h-3, we could be subject to administrative and/or civil actions by the SEC, the costs of which could result in a claim for indemnification by ADESA pursuant to the Merger Agreement.

Questions and Additional Information

If you have questions about the Merger or how to submit your Stockholder Acknowledgment or Advisory Consent, or if you need additional copies of this Proxy Statement, the Stockholder Acknowledgment or the Advisory Consent, please contact OPENLANE at 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary, or by calling Scott Cross, Assistant Secretary, at (480) 809-3400 or sending an email to stockholderquestions@openlane.com.

Availability of Documents

Documents referenced in this Proxy Statement will be provided by first class mail without charge to each person to whom this Proxy Statement is delivered upon written or oral request of such person. See “Where You Can Find More Information” for more information regarding how you may request any of the documents referenced in this Proxy Statement or other information concerning OPENLANE.

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THE COMPANIES

OPENLANE.  OPENLANE, Inc., a Delaware corporation, is a leading online auction company in North America that enables automotive dealers to buy and sell wholesale vehicles. OPENLANE offers end-to-end auto remarketing solutions to auto manufacturers, captive finance companies, lease and daily rental companies, financial institutions and wholesale auto auctions throughout the United States and Canada. OPENLANE’s principal executive offices are located at 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, and its telephone number is (650) 412-4000. See also “Where You Can Find More Information.”

ADESA.  ADESA, Inc., a Delaware corporation, is a leading provider of wholesale used vehicle auctions. ADESA’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

Riley Acquisition, Inc.  Riley Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of ADESA, was formed solely for the purpose of facilitating ADESA’s acquisition of OPENLANE. Riley Acquisition, Inc. has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Upon consummation of the proposed Merger, Riley Acquisition, Inc. will merge with and into OPENLANE and will cease to exist. Riley Acquisition, Inc.’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

KAR.  KAR Auction Services, Inc., a Delaware corporation, is the holding company for ADESA, Insurance Auto Auctions, Inc., a leading salvage auto auction company, and Automotive Finance Corporation, a leading provider of floorplan financing to independent used vehicle dealers. KAR’s common stock is publicly traded on the New York Stock Exchange under the symbol “KAR.” KAR’s principal executive offices are located at 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032, and its telephone number is (800) 923-3725.

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THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this Proxy Statement as Annex A and which is incorporated by reference into this Proxy Statement. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Background of the Merger

The Board and members of OPENLANE’s senior management, from time to time, have engaged in internal and external discussions in order to explore strategic relationships (including potential acquisitions) that would maximize OPENLANE’s value. On or about June 1, 2009, OPENLANE entered into a non-disclosure agreement with Company A, and informal strategic talks occurred between the two companies’ CEOs in 2009 and 2010.

In the winter and spring of 2010, OPENLANE’s management discussed with Montgomery and Company (“Montgomery”) potential interest in OPENLANE from strategic acquirers, solicited input on how to maximize shareholder value and on strategies for potential market outreach. On May 7, 2010, OPENLANE and Montgomery signed a formal engagement agreement in order to move ahead with a proposed market outreach to a limited number of strategic acquirers, including KAR and Company A. On May 18, 2010, a conference call occurred between OPENLANE and KAR’s Chairman, Brian Clingen, and CEO, Jim Hallett, in which OPENLANE thanked KAR for its interest in OPENLANE’s business and deferred a more detailed conversation to their respective advisors. Two days later on May 20, 2010, Montgomery followed up with Messrs. Clingen and Hallett to discuss their desire to move forward and to ascertain what initial information KAR might require of OPENLANE for discussions to proceed. On May 24, 2010, Montgomery responded to diligence inquiries.

On June 4, 2010, Montgomery had a call with Messrs. Clingen and Hallett in which KAR’s management indicated that it was unable to put a price on the table at that point in time, and Montgomery indicated that it was not authorized to offer a price to KAR.

On June 8, 2010, Montgomery had a call with Company A’s management about a potential transaction, and on June 21, 2010, Montgomery received a call from the chief financial officer of Company A with respect to diligence.

On July 23, 2010, Montgomery had a call with Company A’s CFO to clarify certain diligence questions, as well as to provide responses to the diligence questions asked by Company A, and five days later on July 28, 2010, Montgomery had a call with Company A’s CEO to assess Company A’s interest in OPENLANE in light of the diligence materials that had been provided.

On August 6, 2010, members of OPENLANE’s and Company A’s respective management teams met at Company A’s offices. This meeting was followed up by a call between OPENLANE’s then-CEO, Daniel Farrar, and Company A’s CEO and members of his technical team regarding information technology integration.

In late August 2010, Mr. Farrar received a call from Company A’s CEO, indicating that while Company A’s CEO was not authorized to make a formal written offer for OPENLANE, he could provide a verbal valuation. The preliminary valuation was substantially below OPENLANE’s expectations and, after Mr. Farrar spoke with the strategy committee of the Board, he called Company A’s CEO and told him that discussions could not continue on the basis of Company A’s preliminary valuation. Company A’s CEO said that he understood OPENLANE’s position.

In September 2010, OPENLANE terminated its formal engagement of Montgomery for the purposes of performing a market outreach process.

In November 2010, in advance of OPENLANE’s December 2010 Board meeting, discussions occurred between OPENLANE’s management and Montgomery regarding scenarios for maximizing shareholder value with or without an acquisition, as well as regarding a planned presentation on strategic alternatives for the OPENLANE directors. On December 8, 2010, Montgomery and OPENLANE’s management discussed the strategic alternatives with the Board.

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On January 10, 2011, OPENLANE’s then-CFO, Peter Kelly, and a member of its Board met with Company A’s CEO and a member of Company A’s board of directors in which Company A expressed interest in re-engaging in discussions.

On January 27, 2011, Mr. Kelly met with Company A’s CEO at Company A’s offices to discuss different aspects of the business and potential post-merger synergies. The following day, on January 28, 2011, Company A’s CEO called Mr. Kelly to deliver a verbal offer to acquire the Company.

Effective as of January 31, 2011, Mr. Farrar voluntary resigned from OPENLANE and from his position as CEO. At the next meeting of the Board, on February 15, 2011, the Board appointed Mr. Kelly to the position of CEO, in addition to his position as CFO.

On February 15, 2011, the Board discussed Company A’s offer and, after careful consideration and deliberation, rejected it, instructing Mr. Kelly to make a counter-offer to Company A, which was delivered to Company A by Mr. Kelly via a phone call three days later on February 18, 2011 to Company A’s CEO.

On February 21, 2011, Company A’s CEO called Mr. Kelly to indicate that Company A was not prepared to revise its bid to the level of OPENLANE’s counter-offer.

On March 23, 2011, Michael Stein, OPENLANE’s Chairman, met with Sanjeev Mehra, a managing director of Goldman Sachs and a director of KAR. Messrs Stein and Mehra discussed a number of topics, including a potential strategic relationship between KAR and OPENLANE, and concluded that, as a next step, Mr. Stein should speak with Brian Clingen, KAR’s Chairman. Beginning on March 28, 2011, Messrs. Stein and Clingen had several discussions regarding the industry in general and KAR’s interest in a potential strategic transaction with OPENLANE.

On its regularly scheduled meeting on April 14, 2011, the Board appointed Mr. Kelly as a member of the Board.

On April 28, 2011, following a review by KAR of selected information provided to it by OPENLANE’s management, Mr. Clingen met with Mr. Stein to further discuss the terms of a potential transaction.

On May 6, 2011, OPENLANE received a written indication of interest, or an IOI, from KAR. On May 11, 2011, the Board held a meeting to discuss the KAR IOI and directed Mr. Stein to continue negotiations of the IOI with Mr. Clingen in accordance with the Board’s direction and directed management to reengage with Montgomery.

On May 13, 2011, after considering the potential damage to OPENLANE’s business to the extent it became widely know that it was considering a sale, the Board and its strategy committee directed management to engage Montgomery to perform limited outreach to potential acquirors. Upon such instruction, OPENLANE and Montgomery entered into a new engagement agreement to move ahead with a proposed market outreach to a limited number of strategic acquirers, including KAR and Company B.

On May 23, 2001, the Board held a meeting where it discussed the KAR IOI and, after careful consideration and deliberation, directed management to make a counter-offer to KAR in accordance with the Board’s direction. On the following day, May 24, 2011, OPENLANE responded to KAR’s interest by providing a mark-up of the IOI.

On June 6, 2011, OPENLANE’s management team and Montgomery discussed strategy for outreach to Company B, and during the week of June 6, Montgomery contacted Company B regarding a potential acquisition target in its vertical market.

On June 8, 2011, Montgomery and OPENLANE’s advisory team discussed strategy with respect to getting clarity from KAR around key issues, as well as to lay groundwork for moving forward.

On June 8 and 9, 2011, Montgomery called Company B regarding OPENLANE. On June 15, 2011, Montgomery and OPENLANE management had a conference call with Company B to discuss a potential acquisition of OPENLANE and the business outlook.

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On June 13, 2011, KAR delivered a revised IOI to OPENLANE and Montgomery, and on the same day, OPENLANE’s strategy committee of its Board met to discuss the revised IOI, the key terms that must be met for OPENLANE to move forward. On the following day, June 14, 2011, OPENLANE delivered a further revised IOI to KAR.

On June 16, 2011, at a meeting of the Board, the directors of OPENLANE further discussed strategic alternatives, including a detailed discussion of the status of Montgomery’s outreach and considered, among other things, the factors set forth below in “Reasons for the Merger; Recommendation of the OPENLANE Board of Directors.”

On June 20, 2011, members of OPENLANE’s management discussed the IOI received from KAR with Montgomery and OPENLANE’s counsel Wilson Sonsini Goodrich & Rosati, PC (“WSGR”). On the same day, the strategy committee of the Board met. That same day, Company B delivered a written IOI to the OPENLANE.

On June 21, 2011, Montgomery reached out to Company B’s corporate development vice president to indicate that Company B’s offer would need to be narrowed to the top end of their range in order to move forward.

On June 22, 2011, the Board met to discuss the IOIs received from KAR and from Company B, as well as the parameters for proceeding forward and considered, among other things, the factors set forth below in “Reasons for the Merger; Recommendation of the OPENLANE Board of Directors.” At the direction of the Board, a representative of OPENLANE’s management reached out to Company B’s CEO to discuss the potential for Company B resubmitting its offer, but received no response. On June 24, 2011, OPENLANE and KAR signed the IOI with a 30-day exclusivity provision.

Starting on June 30, 2011, daily diligence calls began between OPENLANE, KAR and their respective representatives and advisors, and OPENLANE provided to KAR and its representatives and advisors access to a virtual data site containing diligence on the Company.

On July 1, 2011, WSGR and OPENLANE received from KAR and its counsel an initial draft of the Merger Agreement.

On July 10, 2011, WSGR and OPENLANE provided a revised draft of the Merger Agreement to KAR.

On July 18, 2011, the executive and management teams of OPENLANE and KAR and their respective representatives and advisors met in Chicago and Mr. Kelly and other members of management reviewed the operations of the business and their respective areas of responsibility within the Company.

On July 22, 2011, the Board met to discuss the status of due diligence in advance of the expiration of the 30 day period of exclusivity. The exclusivity period expired two days later, on July 24, 2011.

On July 26, 2011, WSGR and OPENLANE provided a revised draft of the Merger Agreement to KAR and its counsel. Between July 26, 2011 and August 14, 2011, representatives of OPENLANE and WSGR discussed with representatives of KAR and its counsel on numerous occasions the remaining unresolved issues in the draft Merger Agreement and related documents. In addition, during this period, representatives of KAR and its counsel completed their due diligence investigation of OPENLANE, including, between August 9, 2011 and August 12, 2011, due diligence meetings with OPENLANE customers by Messrs. Hallett and Kelly.

On August 11, 2011, the Board met to review and discuss the proposed transaction with KAR and the status of negotiations on the Merger Agreement. At the meeting, representatives of WSGR summarized the principal terms and conditions of the proposed Merger Agreement with KAR and its wholly owned subsidiary, ADESA, and reviewed the Board’s previously discussed fiduciary duties in this context. After careful consideration and deliberation, the Board unanimously determined that it is in the best interests of OPENLANE and its Stockholders that OPENLANE enter into the Merger Agreement and consummate the Merger.

On August 15, 2011, OPENLANE, ADESA and KAR entered into the definitive Merger Agreement.

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Reasons for the Merger; Recommendation of the OPENLANE Board of Directors

The Board, by resolutions duly adopted, unanimously (i) declared that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and its Stockholders, (ii) approved the Merger Agreement in accordance with the provisions of Delaware law, (iii) directed that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement be submitted to the Stockholders for their adoption and approval by written consent and (iv) recommends that the Stockholders adopt the Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement.

In the course of reaching its determination, the Board consulted with the Company’s senior management team, as well as its legal and financial advisors, and considered a number of positive factors and potential benefits of the Merger, each of which the members of the Board believed supported its decision. The factors the Board considered included the following material factors:

its knowledge of the Company’s business, operations, financial condition, earnings and prospects, industry and macroeconomic trends, including the Board’s consideration and evaluation of the strategic plan and the execution risks and uncertainties related to achieving that plan, compared to the relative certainty of realizing a fair cash value for the Stockholders in the Merger;
its knowledge of the current environment in the online remarketing industry, including the information provided by the Company’s senior management team and financial advisors with respect to trends in the industry, the possibility of continued industry challenges from a declining off lease market in the next few years, and the likely effects of these factors on OPENLANE’s ability to maintain growth in the near term;
recognizing the impact of the off lease volume decline on OPENLANE’s performance and the risks associated with offsetting the off lease impact with diversified sales;
recognizing that a merger with ADESA could potentially accelerate growth of diversified segments taking advantage of OPENLANE’s online auction platform;
the possible revenue synergies achievable by leveraging ADESA’s physical auction platform;
the possible increase in “network effect” for OPENLANE’s online auction business by increasing both the number of vehicles listed and number of buying dealers as a result of the Merger;
the possible increase in transport opportunities for OPENLANE’s CarsArrive Network Inc. subsidiary as a result of the Merger;
the possible alternatives to the sale of OPENLANE, including continuing to operate OPENLANE on a stand-alone basis and conducting an initial public offering, and the range of potential benefits to the Stockholders of these alternatives, as well as the Board’s assessment that none of these alternatives was reasonably likely to present superior opportunities for OPENLANE to create greater value for its Stockholders, taking into account the timing and the likelihood of accomplishing such alternatives and the risks of execution, as well as business, competitive, industry and market risks;
the price proposed by KAR, which reflected extensive negotiations between the parties and represented the highest price the Company had received and, to the best knowledge of the Board, could receive, from KAR for the acquisition of OPENLANE. The Board noted that the final purchase price was substantially consistent to the top end of the price range proposed by KAR in its initial indication of interest and the price did not materially diminish subsequent to due diligence and negotiations;
the fact that the Merger consideration is all cash, allowing the Stockholders to realize immediately a fair value for their investment, while also providing the Stockholders certainty of value for their shares;

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the business reputation of KAR and its management, the substantial financial resources of KAR, and KAR’s expressed desire to complete a transaction promptly, which the Board believed supported the conclusion that a transaction with KAR and ADESA could be completed in an orderly and timely manner;
the availability of appraisal rights to holders of the Company’s stock who comply with all of the required procedures under Delaware law, which allows such holders to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery; and
the terms of the Merger Agreement and the related agreements, including the limited number and nature of the conditions to ADESA’s obligation to consummate the Merger and the obligations of ADESA with respect to obtaining all regulatory approvals required for the consummation of the Merger, which were the product of extensive arms-length negotiations among the parties and were designed to provide a high degree of certainty that the Merger would ultimately be consummated on a timely basis.

The Board also considered a variety of risks and other potentially negative factors concerning the Merger Agreement and the Merger, including the following:

the risks and costs to OPENLANE if the Merger does not close, including the diversion of management and employee attention, potential employee attrition and the potential effect on OPENLANE’s business and its relationships with customers and suppliers;
the fact that the Merger will be subject to antitrust review under the HSR Act, which could delay or prevent consummation of the Merger, despite OPENLANE’s efforts to negotiate terms and conditions in the Merger Agreement that optimize the likelihood that all required approvals will be obtained;
the fact that the Stockholders will not participate in any future earnings or growth of OPENLANE, KAR or ADESA and will not benefit from any appreciation in value of OPENLANE, KAR or ADESA, including any appreciation in value that could be realized as a result of improvements to the Company’s operations;
the fact that a portion of the merger consideration otherwise payable to the Stockholders will be held in escrow for at least 18 months and may not be paid out to such Stockholders at all;
the fact that the merger consideration otherwise payable to the Stockholders may be ratably reduced by the amount of certain losses suffered by ADESA or its affiliates for which ADESA and affiliates are indemnified under the Merger Agreement;
the restrictions on the conduct of the Company’s business prior to the consummation of the Merger, requiring the Company to conduct its business only in the ordinary course (with various specified exceptions) and subject to specific limitations, which may delay or prevent the Company from undertaking business opportunities that may arise during the term of the Merger Agreement, whether or not the Merger is completed;
the fact that the Company is prohibited by the Merger Agreement from furnishing information to and conducting negotiations with third parties in connection with an alternative transaction; and
the fact that an all cash transaction would be taxable for U.S. income tax purposes to the Stockholders that are U.S. persons (and under certain circumstances to the Stockholders who are non-U.S. persons).

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The foregoing discussion summarizes the material factors considered by the Board in its consideration of the Merger. After considering these factors, as well as others, the Board concluded that the positive factors relating to the Merger Agreement and the Merger outweighed the potential negative factors. In view of the wide variety of factors considered by the Board and the complexity of these matters, the Board did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors but conducted an overall analysis of the transaction. In addition, individual members of the Board may have assigned different weights to various factors. The Board unanimously approved and recommends the Merger Agreement and the Merger based upon the totality of the information presented to and considered by it.

THE BOARD OF DIRECTORS OF OPENLANE HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF OPENLANE VOTE IN FAVOR OF ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER.

Interests of OPENLANE’s Directors and Executive Officers in the Merger

In considering the recommendation of the Board that you vote to adopt the Merger Agreement, you should be aware that OPENLANE’s executive officers and directors have economic interests in the Merger that may be different from, or in addition to, those of Stockholders generally. The Board was aware of and considered these interests, among other matters, in reaching its decisions to adopt and approve, and declare advisable, the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement.

Treatment of OPENLANE Equity Awards

The treatment of all equity awards, including those held by the directors and executive officers of OPENLANE, is summarized below.

Immediately prior to the effective time of the Merger, all Company Options will be accelerated in full contingent upon the consummation of the Merger, and all Company Options issued and outstanding at the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Common Stock as to which the applicable Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger, multiplied by (ii) the excess of the Per Share Closing Consideration over the exercise price of the Company Option, plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration).

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The following table sets forth the aggregate number of the outstanding and unexpired Company Options held by each of the executive officers and members of the Board that would be cancelled and converted into the right to receive cash at the effective time (assuming the Merger transaction were to have closed on September 30, 2011). The estimated total value is based on Per Share Merger Consideration of $8.30. However, the actual amount of cash consideration the executive officers and directors will receive in exchange for the Company Options may vary and cannot be determined until the effective time of the Merger.

       
Name   Number of Shares
Subject to Vested
Company Options
  Number of Shares
Subject to
Unvested Company
Options Subject to
Accelerated Vesting
  Weighted Average
Exercise Price of
Company Options
(Vested and Unvested)
  Estimated
Total Value*
EXECUTIVE OFFICERS
 
Peter Kelly     355,649       551,564     $ 2.78     $ 5,011,140  
Michael Briggs     124,420       73,751     $ 3.13     $ 1,025,436  
Laurel Finch     132,082       92,918     $ 3.08     $ 1,174,000  
Nagendra Palle     189,998       125,002     $ 3.07     $ 1,646,000  
Andrew Iorgulescu     328,394       55,420     $ 2.67     $ 2,159,733  
Gary Edelstein     290,416       49,584     $ 1.69     $ 2,248,100  
Charles Tapp     97,707       37,293     $ 3.04     $ 710,000  
Scott Cross     170,606       32,137     $ 2.23     $ 1,229,794  
Daniel Farrar**     615,999       0     $ 3.10     $ 3,203,195  
DIRECTORS
 
Adam Boyden     70,000       0     $ 2.40     $ 412,900  
Mark Bronder     80,000       0     $ 2.23     $ 485,900  
Paul Madera     10,000       0     $ 2.78     $ 55,200  
David Marquardt     80,000       0     $ 2.23     $ 485,900  
R. Gary McCauley     80,000       0     $ 2.23     $ 485,900  
L. David Sikes     85,000       0     $ 2.28     $ 511,900  
Michael Stein     190,000       0     $ 0.88     $ 1,409,900  

* The estimated total value was determined by adding (i) the number of shares subject to vested Company Options, multiplied by the excess of the estimated Per Share Closing Consideration (as defined in the Merger Agreement) of $8.30 over the exercise price of the vested Company Option, and (ii) the number of shares subject to unvested Company Options, multiplied by the excess of the estimated Per Share Closing Consideration of $8.30 over the exercise price of the unvested Company Option subject to accelerated vesting.
** Mr. Farrar’s employment with the Company terminated on January 31, 2011.

Change in Control Arrangements.  Certain of OPENLANE’s executive officers are parties to offer letters with OPENLANE, which provide for benefits in the case of qualifying separations from service in connection with a change in control of OPENLANE, including consummation of the Merger.

Pursuant to an offer letter dated May 30, 2008 between OPENLANE and Laurel Finch, VP, General Counsel and Corporate Secretary, if Ms. Finch’s employment is terminated without Cause, as defined in her offer letter, or resigns for Good Reason, as defined in her offer letter, in either case within six months after a Change of Control, as defined in her offer letter and including consummation of the Merger, then subject to Ms. Finch signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), (x) 50% of the then unvested portion of her outstanding equity awards will immediately vest and, if applicable, become exercisable as of the date of such termination, (y) all repurchase or reacquisition rights will immediately end, and (z) she will have been deemed to have satisfied all milestone requirements necessary to receive her annual bonus for the then current review period.

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Pursuant to an offer letter dated November 30, 2007 between OPENLANE and Nagendra Palle, VP of Analytics and GM of iDeal Business, as amended by the Compensation Committee of the Board pursuant to minutes of such committee meeting held on February 4, 2009, if Mr. Palle’s employment is terminated without Cause, as defined in his offer letter, or resigns for Good Reason, as defined in his offer letter and including consummation of the Merger, in either case within six months after a Change of Control, as defined in his offer letter and including consummation of the Merger, then subject to Mr. Palle signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), (x) 50% of the then unvested portion of his outstanding equity awards will immediately vest and, if applicable, become exercisable as of the date of such termination, (y) all repurchase or reacquisition rights will immediately end, and (z) he will have been deemed to have satisfied all milestone requirements necessary to receive his annual bonus for the then current review period. On July 26, 2011, the Compensation Committee of the Board granted Mr. Palle a cash bonus of $300,000, effective and contingent on the consummation of the Merger.

Pursuant to an offer letter dated October 19, 2007 between OPENLANE and Charles Tapp, VP, Institutional Sales, if Mr. Tapp’s employment is terminated without Cause, as defined in his offer letter, or resigns for Good Reason, as defined in his offer letter, in either case within six months after a Change in Control, as defined in his offer letter and including consummation of the Merger, then subject to Mr. Tapp signing and not revoking a separation and release of claims with the Company, then 50% of the unvested portion of his outstanding equity awards will immediately vest and, if applicable, become exercisable on the date of such termination, all repurchase or reacquisition rights will immediately lapse, and all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met.

Please note that although the offer letters entered into between the Company and each of Laurel Finch, Nagendra Palle and Charles Tapp provide for equity acceleration in the case of a qualifying separation from service in connection with a change in control of OPENLANE, pursuant to the terms of the Merger Agreement, all Company Options will accelerate in connection with the Merger.

In addition, OPENLANE has not entered into any agreement with Gary Edelstein that provides him with benefits in the event of a change of control. Further, although Mr. Edelstein’s employment agreement does not specifically address entitlements on termination of employment, in the event of a without cause dismissal, Mr. Edelstein would be entitled to receive reasonable notice of termination or pay in lieu thereof under Canadian common law.

Agreements with Purchaser.

Peter Kelly.  Mr. Kelly entered into an offer letter with KAR dated August 14, 2011, pursuant to which he will become Chief Executive Officer and President of the Company following (and contingent upon) the consummation of the Merger. Pursuant to the terms of his offer letter, Mr. Kelly will receive a base salary of $332,000 per year and an annual auto allowance of $18,000. For his 2011 bonus opportunity, Mr. Kelly will continue to participate at the same target level as he did prior to the Merger. Effective January 1, 2012, Mr. Kelly will be eligible to participate in the KAR Annual Incentive Plan at a target incentive opportunity of 100% of his base salary.

Subject to the approval of KAR’s Compensation Committee, Mr. Kelly will receive a stock option grant to purchase 350,000 shares of KAR common stock vesting ratably over a four-year period. Mr. Kelly will also be eligible to participate in KAR’s benefit plans.

Mr. Kelly has also agreed to certain non-solicitation and non-competition provisions during the course of his employment and for a period of 12 months following a termination of employment.

Mr. Kelly has entered into a Severance and Consulting Agreement with ADESA which provides that if Mr. Kelly’s employment is terminated as a result of a Termination Without Cause (as defined in his Severance and Consulting Agreement) or a Resignation for Good Reason (as defined in his Severance and Consulting Agreement), in exchange for a waiver and release of claims and Mr. Kelly’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Kelly will receive the following severance benefits: (i) an amount equal to Mr. Kelly’s base salary for a one-year period payable over time, and (ii) reimbursement of medical and dental benefits for Mr. Kelly and his beneficiaries for a period of up to one-year. At the employer’s sole discretion, and in lieu of any severance to

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which Mr. Kelly may be eligible, Mr. Kelly agrees to provide services as a consultant of the employer for up to 12 months from his termination date at the same base pay as in effect prior to entering into such a consulting agreement.

Michael Briggs.  Mr. Briggs entered into an offer letter with KAR dated August 14, 2011, pursuant to which he will become Senior Vice President of Transportation of the Company and President and Chief Executive Officer of CarsArrive Network, Inc. following (and contingent upon) the consummation of the Merger. Pursuant to the terms of his offer letter, Mr. Briggs will receive a base salary of $250,000 per year. For his 2011 bonus opportunity, Mr. Briggs will continue to participate at the same target level as he did prior to the Merger. Effective January 1, 2012, Mr. Briggs will be eligible to participate in the KAR Annual Incentive Plan at a target incentive opportunity of 45% of his base salary.

Subject to the approval of KAR’s Compensation Committee, Mr. Briggs will receive a stock option grant to purchase 35,000 shares of KAR common stock vesting ratably over a four-year period. Mr. Briggs will also be eligible to participate in KAR’s benefit plans.

Mr. Briggs has also agreed to certain non-solicitation and non-competition provisions during the course of his employment and for a period of 12 months following a termination of employment.

Mr. Briggs has entered into a Non-Solicitation, Non-Competition and Severance Agreement with ADESA which provides that if Mr. Briggs’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Briggs’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Briggs will receive the following severance benefits: (i) an amount equal to Mr. Briggs’s base salary for a one-year period payable over time, and (ii) reimbursement of medical and dental benefits for Mr. Briggs and his beneficiaries for a period of up to one-year.

Nagendra Palle.  Mr. Palle entered into an offer letter with KAR dated August 14, 2011, pursuant to which he will become Senior Vice President of Product Management of the Company following (and contingent upon) the consummation of the Merger. Pursuant to the terms of his offer letter, Mr. Palle will receive a base salary of $270,000 per year. For his 2011 bonus opportunity, Mr. Palle will continue to participate at the same target level as he did prior to the Merger. Effective January 1, 2012, Mr. Palle will be eligible to participate in the KAR Annual Incentive Plan at a target incentive opportunity of 45% of his base salary.

Subject to the approval of KAR’s Compensation Committee, Mr. Palle will receive a stock option grant to purchase 100,000 shares of KAR common stock vesting ratably over a four-year period. Mr. Palle will also be eligible to participate in KAR’s benefit plans.

Mr. Palle has also agreed to certain non-solicitation and non-competition provisions during the course of his employment and for a period of 12 months following a termination of employment.

Mr. Palle has entered into a Non-Solicitation, Non-Competition and Severance Agreement with ADESA which provides that if Mr. Palle’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Palle’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Palle will receive the following severance benefits: (i) an amount equal to Mr. Palle’s base salary for a one-year period payable over time, and (ii) reimbursement of medical and dental benefits for Mr. Palle and his beneficiaries for a period of up to one-year.

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Gary Edelstein.  Mr. Edelstein entered into an offer letter with KAR dated August 14, 2011, pursuant to which he will become Chief Information Officer and Senior Vice President of the Company following (and contingent upon) the consummation of the Merger. Pursuant to the terms of his offer letter, Mr. Edelstein will receive a base salary of $270,000 per year. For his 2011 bonus opportunity, Mr. Edelstein will continue to participate at the same target level as he did prior to the Merger. Effective January 1, 2012, Mr. Edelstein will be eligible to participate in the KAR Annual Incentive Plan at a target incentive opportunity of 45% of his base salary.

Subject to the approval of KAR’s Compensation Committee, Mr. Edelstein will receive a stock option grant to purchase 100,000 shares of KAR common stock vesting ratably over a four-year period. Mr. Edelstein will also be eligible to participate in KAR’s benefit plans.

Mr. Edelstein has also agreed to certain non-solicitation and non-competition provisions during the course of his employment and for a period of 12 months following a termination of employment.

Mr. Edelstein has entered into a Non-Solicitation, Non-Competition and Severance Agreement with ADESA which provides that if Mr. Edelstein’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Edelstein’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Edelstein will receive the following severance benefits: (i) an amount equal to Mr. Edelstein’s base salary for a one-year period payable over time, and (ii) reimbursement of medical and dental benefits for Mr. Edelstein and his beneficiaries for a period of up to one-year.

In addition, certain executive officers other than those discussed above may enter into severance or other similar arrangements with ADESA that may involve cash payments to such executives should they be terminated following the Closing. There are currently no such agreements in effect.

Potential Payments in Connection with a Change in Control.  The table below reflects the compensation and benefits that will or may be paid or provided to each of the named executive officers in connection with the Merger in the circumstances described below. Except where noted, severance payments have been calculated based on the named executive officer’s current compensation. Regardless of the manner in which a named executive officer’s employment terminates, the executive is entitled to receive amounts already earned during his or her term of employment, such as base salary earned through the date of termination. Please note that the amounts indicated below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this document. Some of these assumptions are based on information currently available and, as a result, the actual results, if any, to be received by a named executive officer may differ in material respects from the amounts set forth below. Furthermore, for purposes of calculating such amounts, we have assumed a closing date of September 30, 2011, including with respect to calculating the portion of equity awards subject to acceleration of vesting (assuming continued vesting of the Company Options and assuming that all Company Options remain outstanding on such date).

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Golden Parachute Compensation

             
Name   Cash
($)
  Equity
($)(1)
  Pension/NQDC
($)
  Perquisites/
Benefits
($)
  Tax Reimbursement
($)
  Other
($)
  Total
($)
Peter Kelly     332,000 (2)      5,011,140       N/A       15,015 (3)      N/A       N/A       5,358,155  
Michael Briggs     250,000 (4)      1,025,436       N/A       15,015 (5)      N/A       N/A       1,290,451  
Laurel Finch     100,000 (6)      1,174,000       N/A       N/A       N/A       N/A       1,274,000  
Nagendra Palle*     75,000 (7)      1,646,000       N/A       N/A       N/A       300,000 (10)      2,021,000  
Nagendra Palle*     270,000 (8)      1,646,000       N/A       15,015 (9)      N/A       300,000 (10)      2,231,015  
Daniel Farrar**     N/A       3,203,195       N/A       N/A       N/A       N/A       3,203,195  

* Mr. Palle may be eligible to receive certain cash payments pursuant to either his offer letter dated November 30, 2007 with the Company, as amended, or his Non-Solicitation, Non-Competition and Severance Agreement with ADESA, but would not receive such payments under both agreements. It cannot be determined at this time which agreement will be applicable; accordingly, both scenarios are set forth in this table.
** Mr. Farrar’s employment with the Company terminated January 31, 2011.
(1) Pursuant to the terms of the Merger Agreement, the vesting of all Company Options will accelerate in full contingent upon the consummation of the Merger and all Company Options issued and outstanding at the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Common Stock as to which the Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger, multiplied by (ii) the excess of the Per Share Closing Consideration (as defined in the Merger Agreement) over the exercise price of the Company Option, plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to approximately $8.30). The value of the accelerated Company Options was determined by multiplying (i) the number of accelerated Company Options, multiplied by (ii) the excess of the Per Share Closing Consideration (as defined in the Merger Agreement) of $8.30 over the exercise price of the Company Option.
(2) Pursuant to the terms of the Severance and Consulting Agreement entered into between Mr. Kelly and ADESA, if Mr. Kelly’s employment is terminated as a result of a Termination Without Cause (as defined in his Severance and Consulting Agreement) or a Resignation for Good Reason (as defined in his Severance and Consulting Agreement), in exchange for a waiver and release of claims and Mr. Kelly’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Kelly will receive an amount equal to Mr. Kelly’s base salary for a one-year period, payable over time (single-trigger benefit). At the employer’s sole discretion, and in lieu of any severance to which Mr. Kelly may be eligible, Mr. Kelly agrees to provide services as an exclusive consultant of the employer for up to 12 months from his termination date at the same base pay as in effect prior to entering into such a consulting agreement. Severance amounts calculated based on Mr. Kelly’s base salary with Purchaser following the Merger.
(3) Pursuant to the terms of the Severance and Consulting Agreement entered into between Mr. Kelly and ADESA, if Mr. Kelly’s employment is terminated as a result of a Termination Without Cause (as defined in his Severance and Consulting Agreement) or a Resignation for Good Reason (as defined in his Severance and Consulting Agreement), in exchange for a waiver and release of claims and Mr. Kelly’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Kelly will be reimbursed for the medical and dental benefits for Mr. Kelly and his beneficiaries for a period of up to one-year (single-trigger benefit). The amount provided represents the estimated cost of one-year of medical and dental benefits for Mr. Kelly and his beneficiaries based on Purchaser’s current rates for such coverage and Mr. Kelly’s current coverage election with the Company.
(4) Pursuant to the terms of the Non-Solicitation, Non-Competition and Severance Agreement entered into between Mr. Briggs and ADESA, if Mr. Briggs’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Briggs’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement,

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Mr. Briggs will receive an amount equal to Mr. Briggs’s base salary for a one-year period, payable over time (single-trigger benefit). Severance amounts calculated based on Mr. Briggs’s base salary with Purchaser following the Merger.
(5) Pursuant to the terms of the Non-Solicitation, Non-Competition and Severance Agreement entered into between Mr. Briggs and ADESA, if Mr. Briggs’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Briggs’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Briggs will be reimbursed for the medical and dental benefits for Mr. Briggs and his beneficiaries for a period of up to one-year (single-trigger benefit). The amount provided represents the estimated cost of one-year of medical and dental benefits for Mr. Briggs and his beneficiaries based on Purchaser’s current rates for such coverage and Mr. Briggs’s current coverage election with the Company.
(6) Pursuant to an offer letter dated May 30, 2008 between Ms. Finch and the Company, if Ms. Finch’s employment is terminated without Cause, as defined in her offer letter, or resigns for Good Reason, as defined in her offer letter, within six months after a Change of Control, as defined in her offer letter and including consummation of the Merger, then subject to Ms. Finch signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), she will be deemed to satisfy all milestone requirements necessary to receive her annual bonus of $100,000 for the then current review period (double-trigger benefits).
(7) Pursuant to an offer letter dated November 30, 2007 between Mr. Palle and the Company, as amended by the Compensation Committee of the Board pursuant to minutes of such committee meeting held on February 4, 2009, if Mr. Palle’s employment is terminated without Cause, as defined in his offer letter, or resigns for Good Reason, as defined in his offer letter, within six months after a Change of Control, as defined in his offer letter and including consummation of the Merger, then subject to Mr. Palle signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), he will be deemed to satisfy all milestone requirements necessary to receive his annual bonus of $75,000 for the then current review period (double-trigger benefits).
(8) Pursuant to the terms of the Non-Solicitation, Non-Competition and Severance Agreement entered into between Mr. Palle and ADESA, if Mr. Palle’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Palle’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Palle will receive an amount equal to Mr. Palle’s base salary for a one-year period, payable over time (single-trigger benefit). Severance amounts calculated based on Mr. Palle’s base salary with Purchaser following the Merger.
(9) Pursuant to the terms of the Non-Solicitation, Non-Competition and Severance Agreement entered into between Mr. Palle and ADESA, if Mr. Palle’s employment is terminated as a result of a Termination Without Cause (as defined in his Non-Solicitation, Non-Competition and Severance Agreement) or a Resignation for Good Reason (as defined in his Non-Solicitation, Non-Competition and Severance Agreement), in exchange for a waiver and release of claims and Mr. Palle’s compliance with the non-solicitation and non-competition provisions and the provisions of his confidentiality agreement, Mr. Palle will be reimbursed for the medical and dental benefits for Mr. Palle and his beneficiaries for a period of up to one-year (single-trigger benefit). The amount provided represents the estimated cost of one-year of medical and dental benefits for Mr. Palle and his beneficiaries based on Purchaser’s current rates for such coverage and Mr. Palle’s current coverage election with the Company.
(10) On July 26, 2011, the Compensation Committee of the Board granted Mr. Palle a cash bonus of $300,000, effective and contingent on the consummation of the Merger (single-trigger benefit).

Insurance and Indemnification of OPENLANE’s Directors and Officers.  The Merger Agreement provides that if the Merger is consummated, KAR will, and will cause the surviving corporation to, fulfill and honor in all respects the obligations of OPENLANE and its subsidiaries to their respective current and former directors, managers and officers as of immediately prior to the Closing under OPENLANE’s or its subsidiaries’ certificate of incorporation or bylaws (or other similar organizational documents) as in effect on the date of the Merger Agreement. Further, if the Merger is consummated, then until the sixth anniversary of the effective time of the Merger, KAR will cause the certificate of incorporation and bylaws (or other similar

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organizational documents) of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification, exculpation and the advancement of expenses that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the certificate of incorporation and bylaws of OPENLANE and its subsidiaries existing as of the date of the Merger Agreement, and during such six-year period such provisions will not be repealed, amended or otherwise modified in any manner adverse to such indemnified persons except as required by applicable law.

Prior to the Closing, OPENLANE may purchase directors’ and officers’ liability insurance covering for six years after the effective time of the Merger those persons who are currently covered by OPENLANE’s directors’ and officers’ liability insurance policy in an amount and on terms no less advantageous, when taken as a whole, to those applicable to the current directors, managers and officers of OPENLANE. OPENLANE may do so by purchasing a “tail” policy under OPENLANE’s existing directors’ and officers’ insurance policy which (i) has an effective term of six years from the effective time of the Merger and (ii) contains terms and conditions that are not materially less favorable than those applicable to OPENLANE’s current directors and officers.

Certain Material U.S. Federal Income Tax Consequences of the Merger

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, COMPANY STOCKHOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF TAX ISSUES IN THIS PROXY STATEMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY COMPANY STOCKHOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER APPLICABLE TAX LAWS; (B) SUCH DISCUSSION IS INCLUDED HEREIN IN CONNECTION WITH THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) COMPANY STOCKHOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM INDEPENDENT TAX ADVISORS.

This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated under the Code, and existing administrative interpretations and court decisions, all of which are subject to change, possibly with retroactive effect. This discussion is not binding on the Internal Revenue Service (the “IRS”) and there can be no assurance that the IRS (or a court, in the event of an IRS challenge) will agree with the conclusions stated herein. No ruling has been or will be requested from the IRS in connection with the Merger.

This discussion does not address the tax consequences of the Merger under U.S. federal tax laws other than income tax laws, or under state, local, or non-U.S. tax laws; the tax consequences of transactions effectuated before, after, or at the same time as the Merger, whether or not they are in connection with the Merger; the tax consequences to holders of options issued by the Company that are assumed, replaced, exercised, or converted, as the case may be, in connection with the Merger; or the tax consequences of the receipt of consideration other than in exchange for OPENLANE capital stock.

This discussion does not address all aspects of U.S. federal income taxation that may be important to Stockholders in light of their particular circumstances, or to Stockholders subject to special treatment under U.S. federal income tax laws, including, without limitation: dealers, brokers, and traders in securities; non-U.S. persons or entities; tax-exempt entities; financial institutions, regulated investment companies, real estate investment trusts, or insurance companies; partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, subchapter S corporations, and other pass-through entities and investors in such entities; holders who are subject to the alternative minimum tax provisions of the Code; holders who acquired their shares in connection with stock option or stock purchase plans or in other compensatory transactions; holders who hold shares that constitute small business stock within the meaning of Section 1202 of the Code; U.S. persons with a functional currency other than the U.S. dollar; holders who hold their shares as part of an integrated investment such as a hedge, straddle, or other risk reduction strategy; or holders who do not hold their shares as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds OPENLANE capital stock, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the

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partnership. Such entities and persons holding interests in such entities should consult their own tax advisors regarding the tax consequences of the Merger.

Accordingly, holders of OPENLANE capital stock are advised and expected to consult their own tax advisors regarding the U.S. federal income tax consequences of the Merger in light of their personal circumstances, as well as the consequences of the Merger under U.S. federal tax laws other than income tax laws, and state, local, and non-U.S. tax laws.

Taxable Sale of OPENLANE capital stock.  The payment of the Merger Consideration in exchange for shares of OPENLANE capital stock will be a fully taxable transaction, in which gain or loss generally will be recognized equal to the difference between the tax basis of the surrendered OPENLANE capital stock and the Merger Consideration received. In general, such gain or loss will be a capital gain or loss, and such capital gain or loss will be long-term capital gain or loss if the holding period for the OPENLANE capital stock is greater than one year as of the Closing, except for the portion of any payment from the Escrow Account taxed as interest income (as described below). Long-term capital gains of non-corporate taxpayers currently are taxed at a maximum 15% U.S. federal rate. Short-term capital gains are taxed at ordinary income rates. Capital losses are subject to limitations on deductibility. Gain or loss must be calculated separately for each block of OPENLANE capital stock (i.e., shares of OPENLANE capital stock acquired at the same time in a single transaction). Stockholders who own separate blocks of OPENLANE capital stock should consult their own tax advisors with respect to these rules.

Installment Sale Method of Reporting Gain.  Because the cash in the Escrow Account is to be received by the Stockholders after the close of the taxable year in which the Merger occurs, any gain realized by a Stockholder on the sale of OPENLANE capital stock should be reported under the installment method, unless the Stockholder affirmatively elects out of or is otherwise ineligible for installment method reporting. A Stockholder may elect out of the installment method by timely filing the appropriate form with its tax return for the tax year in which the Merger occurs. The installment method does not apply to any Stockholder who will recognize a loss upon such the sale of such Stockholder’s OPENLANE capital stock. In addition, installment sale reporting does not apply to amounts deposited into the Expense Fund, which shall be treated as having been received and voluntarily set aside by the Stockholders at the time of Closing. Stockholders should consult their own tax advisors as to the application, and the desirability of electing out, of the installment sale method.

Under the installment method, a portion of each payment received is taxable as gain in the year of receipt, a portion represents a tax-free recovery of the Stockholder’s basis in the shares of OPENLANE capital stock and, with respect to any payment from the Escrow Account, a portion is taxable as imputed interest. The gain to a Stockholder would be calculated by multiplying the value of any payment received (excluding the portion of such payment treated as interest income under the imputed interest rules described below) by the gross profit ratio. The “gross profit ratio” is the ratio that (1) the selling price less the Stockholder’s adjusted basis in the shares of OPENLANE capital stock bears to (2) the total selling price of the Stockholder’s shares of OPENLANE capital stock. When a maximum sales price is stated, Treasury regulations regarding the installment method generally require Stockholders to assume, for purposes of calculating the selling price and the gross profit ratio, that they will receive the maximum possible amount of sale proceeds at the earliest possible times under the terms of the Merger Agreement. The selling price, however, does not include amounts treated as interest income under the imputed interest rules described below. One significant effect of the installment method of which Stockholders should be aware is that the amount of gain attributable to the Merger Consideration paid on the Closing may be reduced by only a portion of the Stockholder’s basis in the shares of OPENLANE capital stock. To the extent the installment sale rules result in a net overinclusion of gain, a Stockholder generally would be entitled to a capital loss.

Imputed Interest.  As noted above, under Section 483 of the Code, a portion of any payment from the Escrow Account will be treated as interest income taxable at ordinary income rates when received, and will reduce the amount of gain (or increase the amount of loss) otherwise recognizable. The portion of any payment from the Escrow Account that will be treated as interest income is determined by discounting the actual amount of the payment, using the appropriate applicable federal rate, from the date the payment

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becomes fixed to the date of the Closing. The discounted amount is then subtracted from the actual amount of the payment, and the remainder is the portion of the payment treated as interest income.

Interest on Deferred Taxes.  Under Section 453A of the Internal Revenue Code, additional annual interest charges may be imposed on the portion of a Stockholder’s tax liability that is deferred by the installment method in connection with sales of any property (including the shares of OPENLANE capital stock) with a sales price greater than $150,000, to the extent that the aggregate face amount of installment receivables that arise from all $150,000 sales by the Stockholder (including sales of shares of OPENLANE capital stock) during the year and that remain outstanding as of the close of the year exceeds $5 million.

Stockholders Recognizing Loss or Electing Out of the Installment Method.  Stockholders recognizing a loss and Stockholders electing out of or otherwise ineligible for the installment method generally should determine their gain or loss upon the exchange of their OPENLANE capital stock for the Merger Consideration based upon the value of the Merger Consideration, including the value of the cash placed in the Escrow Account and the Expense Fund. To the extent that a payment from the Escrow Account or Expense Fund is more or less than the amount previously taken into income with respect the Escrow Account or Expense Fund, respectively, a Stockholder would be required to recognize additional gain or loss. As described above, under Section 483 of the Code, a portion of any payment from the Escrow Account will be treated as interest income taxable at ordinary income rates when received. This imputed interest should not be included as part of the value of the Escrow Account for purposes of determining gain or loss.

Regulatory Approvals

Under the provisions of the HSR Act, the Merger may not be completed until (1) the expiration or termination of a 30-day waiting period following the filing of notification and report forms with the Antitrust Division of the United States Department of Justice (which we refer to as the Antitrust Division) and the Federal Trade Commission (which we refer to as the FTC) by OPENLANE and ADESA, or (2) if, during the initial 30-day waiting period following the filing of notification and report forms, the Antitrust Division and FTC issue a request for additional information and documentary material (which we refer to as a second request), the expiration or termination of a 30-day waiting period following the certification of substantial compliance of the second request by the parties. On August 16, 2011, OPENLANE and ADESA filed their respective notification and report forms with the Antitrust Division and the FTC under the HSR Act.

The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the Merger. At any time before or after the Merger, the Antitrust Division, the FTC, a state attorney general could take action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the Merger or seeking divestiture of substantial businesses or assets of OPENLANE or ADESA or their subsidiaries. Private parties may also bring legal actions under antitrust laws under certain circumstances.

While we believe that we will receive the requisite approvals and clearances for the Merger, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made, or, if a challenge is made, the result of such challenge. Similarly, there can be no assurance that OPENLANE and ADESA will obtain the regulatory approvals necessary to consummate the Merger or that the granting of these approvals will not involve the imposition of conditions to the consummation of the Merger or require changes to the terms of the Merger. These conditions or changes could result in the conditions to the Merger not being satisfied prior to the end date (which is described in the section of this Proxy Statement entitled “The Merger Agreement — Termination of the Merger Agreement”) or at all. Under the terms of the Merger Agreement, except for any divestiture that would not materially impair the benefits of the Merger to ADESA, ADESA is not obligated to consent to any sale, divestiture, license or other disposition or holding separate of any assets of ADESA or OPENLANE, or to any limitation or regulation on ADESA’s ability to conduct its business or own such assets, or to the holding separate of shares of OPENLANE capital stock or any limitation or regulation on the ability of ADESA to exercise full rights of ownership thereof.

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THE MERGER AGREEMENT

The summary of the material provisions of the Merger Agreement below and elsewhere in this Proxy Statement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this Proxy Statement as Annex A and which we incorporate by reference into this document. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read carefully the Merger Agreement in its entirety.

The Merger

The Merger Agreement provides that, upon and subject to the terms and conditions set forth in the Merger Agreement and the applicable provisions of the DGCL, at the effective time of the Merger, Merger Sub will be merged with and into OPENLANE, the separate corporate existence of Merger Sub will thereupon cease and OPENLANE will continue as the surviving corporation in the Merger and a wholly owned subsidiary of ADESA.

The Merger will close once various closing conditions, including OPENLANE stockholder approval and regulatory approvals, are satisfied or waived. The Merger will become effective when the certificate of Merger has been duly filed with the Secretary of State of the State of Delaware. The parties cannot predict the exact timing of the consummation of the Merger or whether the Merger will be completed at a later time as agreed by the parties or at all.

The Merger Consideration and the Conversion of Capital Stock

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, by virtue of the Merger and without any action on the part of the parties thereto or the holders of any of OPENLANE’s securities, the following will occur:

each share of Common Stock that is issued and outstanding immediately prior to the effective time of the Merger (after giving effect to the automatic conversion of the Preferred Stock into Common Stock, and other than shares held by a holder that has perfected appraisal rights under the DGCL or as provided in the bullet point immediately below) will be automatically converted into and represent the right to receive up to approximately $8.30 in cash, without interest and less applicable withholding taxes, subject to reductions resulting from any payouts to Purchaser for indemnification claims as described in “Escrow and Indemnification” below; and
each share of OPENLANE capital stock owned by OPENLANE or any of its subsidiaries will be cancelled and extinguished without any conversion thereof and no Merger consideration will be paid by ADESA with respect to such shares.

The amount set forth above is an estimate of the Per Share Merger Consideration only and may be reduced or increased in accordance with the terms of the Merger Agreement. The Per Share Merger Consideration will be determined by calculating the quotient (a) the numerator of which is equal to $210 million (i) plus an increase for excess cash on OPENLANE’s balance sheet at Closing; (ii) plus the aggregate exercise price of outstanding options and in-the-money warrants; (iii) minus outstanding indebtedness; and (iv) minus certain transaction-related expenses and (b) the denominator of which is equal to the sum of (without double counting) (i) the aggregate number of shares of Common Stock (after giving effect to the automatic conversion of the Preferred Stock into Common Stock) issued and outstanding as of the effective time of the Merger, plus (ii) the aggregate number of shares of Common Stock issuable upon the exercise of the in-the-money options and warrants outstanding as of the effective time of the Merger.

The Per Share Merger Consideration will be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Common Stock occurring on or after the date of the Merger Agreement and prior to the effective time of the Merger.

Each share of common stock of Merger Sub that is outstanding immediately prior to the effective time of the Merger will be converted into one validly issued, fully paid and nonassessable share of common stock of the surviving corporation in the Merger.

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Payment Procedures

As soon as reasonably practicable after the Closing, ADESA will make available to Wells Fargo Bank, National Association, as the Paying Agent, an amount of cash equal to the aggregate merger consideration to which the holders of OPENLANE capital stock, options and warrants outstanding prior to the effective time of the Merger become entitled at the time of the Merger under the Merger Agreement.

In addition, as soon as reasonably practicable after the Closing, to the extent not delivered by ADESA or OPENLANE prior to the effective time, ADESA shall mail, or cause to be mailed, to each holder of record of shares of OPENLANE capital stock that were converted into the right to receive a portion of the merger consideration, a letter of transmittal and instructions for use in effecting the surrender of their share certificates in exchange for a portion of the merger consideration. Until so surrendered, each such certificate will be deemed, from and after the effective time of the Merger, to evidence only the right to receive a portion of the merger consideration. Upon payment of the merger consideration pursuant to the provisions described herein, each certificate or certificates will be immediately cancelled.

Certificates representing shares of OPENLANE’s capital stock must be accompanied with a completed letter of transmittal. PLEASE DO NOT SEND IN YOUR CERTIFICATES NOW.

Escrow and Indemnification

At the effective time of the Merger, ADESA will deposit up to $26 million of the Merger Consideration that would otherwise be received by the Securityholders (the “Escrow Amount”) in an escrow account (the “Escrow Account”) to serve as partial security for the indemnification obligations of the Securityholders under the Merger Agreement.

The treatment and disposition of the Escrow Account will be governed by the terms of the Merger Agreement and the Escrow Agreement entered into by and among the Purchaser, the Securityholders’ Representative and Wells Fargo Bank, National Association, as the Escrow Agent (the “Escrow Agreement”). The Escrow Agent will hold the amounts in the Escrow Account until the date of the 18 month anniversary of the Closing, (the “Escrow Release Date”), at which time the remaining amounts in the Escrow Account, if any, will be distributed pro rata to each Securityholder, subject to retention in the Escrow Account of any amounts reasonably necessary to satisfy an unresolved or unsatisfied claims that were specified in notices delivered by Purchaser to the Securityholders’ Representative in accordance with the Merger Agreement before the Escrow Release Date. As soon as each claim that is pending as of the Escrow Release Date is resolved, the amounts held back for such claim that are not used to satisfy such claim, will be released and distributed pro rata to Securityholders until the remaining balance in the Escrow Account is zero.

Subject to the provisions and limitations set forth in Article IX of the Merger Agreement, from and after the effective time of the Merger, each Securityholder is required to, severally and not jointly, indemnify, defend and hold harmless Purchaser and certain of its affiliates (the “Purchaser Indemnified Parties”) for any and all losses they suffer, sustain or incur to the extent arising from, in connection with, or as a result of (without duplication):

the inaccuracy or breach of any representation or warranty of the Company contained in the Merger Agreement;
the breach of any agreement or covenant of the Company contained in the Merger Agreement;
certain transaction expenses to the extent not paid prior to the consummation of the Merger;
any outstanding Indebtedness to the extent not paid at or prior to the consummation of the Merger;
any claim to the extent relating to the transactions contemplated by the Merger Agreement brought by a holder of OPENLANE capital stock in their capacity as a stockholder, in each case, against the Company, any of its subsidiaries or any of their respective officers or directors who held such positions prior to the effective time of the Merger;
any amounts paid with respect to shares held by Stockholders who exercise their appraisal rights that are in excess of the amount that would have been payable with respect to such shares pursuant to the Merger Agreement;

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any amounts paid as consideration to holders of out-of-the money warrants executing warrant termination agreements;
certain specified securities law compliance matters;
matters related to obtaining contractual consents from certain third parties; and
certain specified indemnification matters, including, among others, tax and employee benefit compliance matters.

Subject to the provisions and limitations set forth in Article IX of the Merger Agreement, Purchaser is required to indemnify, defend and hold harmless each member of the seller group for any and all losses they suffer, sustain or incur to the extent arising from, in connection with, or as a result of (without duplication)):

the inaccuracy or breach of any representation or warranty of Purchaser or Merger Sub contained in the Merger Agreement; or
the breach of any agreement or covenant of Purchaser of Merger Sub to be performed by Purchaser or Merger Sub contained in the Merger Agreement.

For the Purchaser Indemnified Parties to obtain indemnification, (i) any individual claim or series of related claims must exceed $15,000, in which case the Purchaser Indemnified Parties will be entitled to the full amount of such claim or series of related claims, and (ii) the aggregate amount of all claims relating to breaches of representations and warranties or covenants must exceed $1,000,000, in which case the Purchaser Indemnified Parties will be entitled to the full amount of such claims, in each case subject to any other limitations in the Merger Agreement. The $1,000,000 threshold described in clause (ii) is not applicable to breaches of certain fundamental representations (including representations related to the Company’s organization, capitalization, subsidiaries, authority to enter into and perform its obligations under the Merger Agreement, absence of conflicts and use of brokers) or tax representations, fraudulent breaches of representations, or fraudulent or knowing and intentional breaches of covenants.

In general, the maximum amount of all losses for which indemnification is payable to the Purchaser Indemnified Parties may not exceed $21 million (the “General Indemnification Cap”), subject to the following exceptions:

The maximum amount of all losses for which indemnification is payable to the Purchaser Indemnified Parties with respect to certain specified indemnification matters (when combined with all losses that are subject to the General Indemnification Cap) may not exceed $26 million;
The maximum amount of all losses for which indemnification is payable to the Purchaser Indemnified Parties with respect to breaches of employee benefit representations and certain employee benefit compliance matters (when combined with all losses that are subject to the General Indemnification Cap) may not exceed $42 million;
The maximum amount of all losses for which indemnification is payable to the Purchaser Indemnified Parties with respect to (i) knowing and intentional breach of any covenant contained in the Merger Agreement, (ii) fraudulent breach of any representation or warranty contained in the Merger Agreement, (iii) breaches of certain fundamental representations and tax representations, (iv) certain securities law compliance matters, and (v) certain tax compliance matters (when combined with all other losses) may not exceed the aggregate Merger Consideration.

Any claims for fraud against any Securityholder must be made against such Securityholder individually and not against the Escrow Account or any other Securityholder.

The indemnification provisions set forth in Article IX of the Merger Agreement are the exclusive remedy of the Purchaser Indemnified Parties against the Securityholders, except with respect to claims for fraud or other claims in tort brought against an individual Securityholder, or claims for equitable relief.

For additional information regarding the indemnification obligations of the Securityholders, we encourage you to read Article IX of the Merger Agreement.

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Appointment of the Securityholders’ Representative

Pursuant to the Merger Agreement, Shareholder Representative Services LLC has been irrevocably designated and appointed as the Securityholders’ Representative and attorney-in-fact and agent to act for and on behalf of the Securityholders. Without limiting the generality of the foregoing, the Securityholders’ Representative has full power and authority on behalf of each Securityholder and his or her successors and assigns to, (i) interpret the terms and provisions of this the Merger Agreement; (ii) execute and deliver all agreements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with the consummation of the transactions contemplated by the Merger Agreement, including the Escrow Agreement; (iii) receive service of process in connection with any claims under the Merger Agreement; (iv) agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, and to take all actions necessary or appropriate in the judgment of the Securityholders’ Representative for the accomplishment of the foregoing; (v) resolve disputes relating to the Revised Closing Statement, if any, in accordance with the procedures set forth in the Merger Agreement; (vi) give and receive notices and communications; (vii) engage counsel, and such accountants and other advisors or experts for the Securityholders and incur such other expenses on behalf of the Securityholders in connection with the Merger Agreement and the transactions contemplated thereby as the Securityholders’ Representative may deem appropriate; and (viii) take all actions necessary or appropriate in the judgment of Securityholders’ Representative on behalf of the Securityholders in connection with the Merger Agreement.

A decision of the Securityholders’ Representative will constitute a decision of all of the Securityholders and will be final, binding and conclusive upon each of the Securityholders, and the Merger Agreement provides that Purchaser, Merger Sub and OPENLANE may rely on the decisions, actions, consents and instructions of the Securityholders’ Representative. The Securityholders will indemnify and hold the Securityholders’ Representative harmless from and against for any loss, liability or expense arising in connection with any act or omission of the Securityholders’ Representative, except in the case a liability for gross negligence or willful misconduct.

A portion of the total Merger Consideration equal to $200,000 will be set aside and held by the Securityholders’ Representative in a segregated client bank account (the “Expense Fund”) for the sole purpose of paying directly or reimbursing the Securityholders’ Representative for any expenses, losses or obligations. If the Expense Fund is depleted, the Securityholders’ Representative may recover such expenses, losses or obligations from the funds in the Escrow Account otherwise distributable to the Securityholders. If any amounts remain in the Expense Fund after the Escrow Release Date and the resolution of all pending indemnification claims, such amounts will be distributed pro rata to the Securityholders.

If the Securityholders’ Representative is entitled to be indemnified or reimbursed out of the Expense Fund and/or the Escrow Account, the Securityholders’, as a whole, will receive less consideration as a result of the Merger. For additional information regarding the obligations of the Securityholders with respect to the Securityholders’ Representative, we encourage you to read Section 10.1 of the Merger Agreement.

Treatment of Stock Options

Immediately prior to the effective time of the Merger, the vesting of all options to purchase Common Stock will accelerate in full contingent upon the consummation of the Merger and all options issued and outstanding on the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Common Stock as to which the applicable is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger, multiplied by (ii) the excess of the Per Share Closing Consideration over the exercise price of the Company Option, plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration). A portion of the Merger Consideration otherwise payable to the holders of Company Options will be deposited into the Escrow Account as partial security for such holders’ indemnification obligations under the Merger Agreement, as described above in the section entitled “Escrow and Indemnification.”

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Treatment of Preferred Stock

Pursuant to the Company Charter, holders of a majority of the outstanding shares of Preferred Stock as of the record date elected on August 16, 2011 by written consent to automatically convert all outstanding shares of Preferred Stock to Common Stock immediately prior to and contingent upon the consummation of the Merger. As a result, all shares of Preferred Stock that you hold will be converted to Common Stock immediately prior to and contingent upon the consummation of the Merger. Accordingly, for each share of Common Stock that your shares of Preferred Stock are converted into, you (i) will receive the Per Share Closing Consideration plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration) and (ii) will not receive any liquidation preference that may be set forth in the Company Charter. A portion of the Merger Consideration otherwise payable to the holders of Preferred Stock will be deposited into the Escrow Account as partial security for such holders’ indemnification obligations under the Merger Agreement, as described above in the section entitled “Escrow and Indemnification.”

Warrants

OPENLANE has agreed to use reasonable best efforts to enter into a warrant termination agreement with each warrant holder pursuant to which, effective as of and contingent upon the effective time of the Merger, all of such holders’ warrants will be cancelled in exchange for (1) a cash payment equal to the product of the number of shares of OPENLANE capital stock subject to such warrants (which will subsequently be converted into shares of Common Stock) multiplied by the Per Share Closing Consideration, less the exercise price of the applicable warrants, less the amount of any applicable withholding taxes plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to the Per Share Merger Consideration) (we refer to the amount described in this clause 1 as the “Warrant Consideration”) or (2) if the exercise price of the applicable warrant is greater than the Per Share Merger Consideration, a nominal cash payment as consideration for executing the warrant termination agreement. A portion of the Warrant Consideration payable to the warrant holders will be deposited into the Escrow Account as partial security for the warrant holders’ indemnification obligations under the Merger Agreement, as described above in the section entitled “Escrow and Indemnification.”

Stockholder Approval

OPENLANE has agreed in the Merger Agreement that it will use its reasonable best efforts to obtain, as soon as reasonably practicable after the signing of the Merger Agreement, approval of the Merger Agreement and the transactions contemplated thereby from the holders of a majority of the outstanding shares of Preferred Stock and a majority of the outstanding shares of Common Stock. Such approval was obtained on August 16, 2011.

Representations and Warranties

Representations and Warranties

The Merger Agreement contains various representations and warranties of OPENLANE, Purchaser and Merger Sub. The representations and warranties of OPENLANE will survive until eighteen (18) months following the consummation of the Merger, with the exception of certain fundamental representations, employee benefits representations and tax representations, each of which will survive until the expiration of the applicable statute of limitations.

The representations and warranties made by OPENLANE cover the following topics, among others, as they relate to OPENLANE:

organization, good standing, and qualification and power to do business;
capital structure, charter documents and subsidiaries;
authority to enter into the Merger Agreement and other transaction agreements and to perform its obligations thereunder;
non-contravention of its charter documents, material agreements or applicable law in entering into and consummating the Merger;

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title to and the condition of its real and personal property;
financial statements;
undisclosed liabilities;
the absence of certain changes or events since December 31, 2010, including any Material Adverse Effect (as defined below);
the absence of material litigation;
compliance with applicable laws and orders, including regulatory compliance;
material contracts;
tax reporting and compliance;
matters relating to employee benefit plans;
insurance coverage;
environmental laws;
matters relating to intellectual property;
contracts with related parties;
largest customers;
employees;
possession of all material licenses, permits, or other authorizations required by government entities;
the nature and amount of accounts receivable;
brokers’ and finders’ fees;
product and service warranties;
compliance with applicable anti-bribery laws;
approvals required from Stockholders; and
the applicability of Canadian business competition laws to the Merger.

The representations and warranties made by Purchaser and Merger Sub cover the following topics as they relate to Purchaser and Merger Sub:

organization, good standing, and power to do business;
Purchaser’s and Merger Sub’s authority to enter into the Merger Agreement and other transaction agreements and to perform their respective obligations thereunder;
non-contravention of their respective charter documents, material agreements or applicable law in entering into and consummating the Merger;
brokers’ and finders’ fees;
Purchaser’s available funds; and
Purchaser’s own due diligence investigation.

The assertions embodied in the representations and warranties contained in the Merger Agreement were made for purposes of the Merger Agreement and are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the Merger Agreement, including information contained in a confidential disclosure schedule that the parties exchanged in connection with signing the Merger Agreement. Accordingly, Stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of a specific date

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and are modified in important part by such confidential disclosure schedule. In addition, certain representations and warranties may be subject to a contractual standard of materiality different from what might be viewed as material to Stockholders, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters of fact. Information concerning the subject matter of such representations and warranties may change after the date of the Merger Agreement.

For information regarding the Securityholders’ indemnification obligations for breaches of or inaccuracies in representations and warranties of the Company, please see the section of this Proxy Statement entitled “The Merger Agreement and the Merger — Indemnification and Escrow.”

Covenants Regarding Conduct of Business by OPENLANE Pending the Merger

The Merger Agreement contains customary covenants of each of parties thereto, including, but not limited to covenants relating to access to information and OPENLANE’s facilities, notice of certain events, confidentiality and prohibitions on soliciting alternative transactions, preparation of tax returns, indemnification of OPENLANE’s directors and officers, arrangements for continuing employees, and the matters described in more detail below.

Conduct of OPENLANE’s Business Prior to Closing

The Merger Agreement provides that from the time the Merger Agreement is executed until the Merger, or the termination of the Merger Agreement, if earlier, OPENLANE will operate its business in the ordinary course on a basis consistent with its past practice. In addition, OPENLANE has agreed to undertake and to abstain from certain activities prior to the Effective Time, unless OPENLANE obtains prior written consent from Purchaser. These activities are described more fully in Article VI of the Merger Agreement.

No Solicitation

OPENLANE has agreed, effective immediately upon signing of the Merger Agreement, to cease any activities, discussions or negotiations with any third parties conducted prior to signing of the Merger Agreement with respect to any alternative transaction proposal (as described below). In addition, subject to certain exceptions described below, OPENLANE has agreed not to, and has agreed to cause certain of its affiliates not to:

discuss, negotiate, undertake, authorize, recommend, propose or enter into, either as the proposed surviving, merged, acquiring or acquired corporation, any alternative acquisition transaction, meaning any transaction involving a merger, consolidation, business combination, purchase or disposition of any amount of the assets (other than the sale of inventory in the ordinary course of business) or the capital stock of OPENLANE or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement (an “Acquisition Transaction”);
facilitate, knowingly encourage, solicit or initiate discussions, negotiations or submissions of proposals or offers in respect of an Acquisition Transaction;
furnish or cause to be furnished, to any person or entity, any information concerning the business, operations, properties or assets of OPENLANE or its subsidiaries in connection with an Acquisition Transaction; or
otherwise cooperate in any way with, or assist or participate in, facilitate or knowingly encourage, any effort or attempt by any other person or entity to do or seek any of the foregoing.

Until the earlier of (x) the date of the consummation of the Merger or (y) the date on which the Merger Agreement is terminated, OPENLANE will immediately notify ADESA orally and in writing if any person makes any proposal, offer, inquiry or contact with respect to any of the foregoing.

Employee Compensation and Benefits

Employee Benefits and Service Credit.  ADESA has agreed to use commercially reasonable efforts to ensure that employees of OPENLANE and its subsidiaries who continue employment with OPENLANE (or any other subsidiary of ADESA) following the effective time of the Merger (who we refer to as continuing employees) receive credit for purposes of eligibility to participate and vesting for their service with

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OPENLANE or its subsidiaries under KAR’s employee benefit plans, subject to applicable law and limitations on accrual generally applicable to KAR’s employees under its employee benefit plans. For the 12 months immediately following the effective time of the Merger, KAR has agreed to either (1) continue OPENLANE’s employee benefit plans (other than equity-based compensation plans) or (2) arrange for continuing employees (and their dependents) to participate in the KAR benefit programs (other than equity-based compensation plans) to the same extent as other similarly situated employees of ADESA as of the effective time of the Merger, subject to the terms of KAR’s benefit programs. After the effective time of the Merger, subject to applicable laws and to the extent permitted under KAR’s benefit programs, ADESA has agreed to use commercially reasonable efforts to (i) waive the following requirements for continuing employees participating in the ADESA welfare benefit plans: (A) preexisting conditions limitations, (B) evidence of insurability requirements and (C) eligibility waiting periods, and (ii) provide continuing employees and their eligible dependents with credit for any co-payments and deductibles paid under any OPENLANE welfare benefit plan in satisfying any applicable deductible, out-of-pocket, or similar requirements under any KAR welfare benefit plan.

Other Covenants and Agreements

Notification of Changes.

OPENLANE has agreed that it shall promptly notify ADESA in writing of:

any Material Adverse Effect (as defined below) on OPENLANE;
any written notice or other written communication from any person alleging that such person’s consent is or may be required in connection with the transactions contemplated by the Merger Agreement;
any notice or other communication from any governmental entity in connection with the transactions contemplated by the Merger Agreement;
any legal actions commenced or (to OPENLANE’s knowledge) threatened against, relating to, involving or affecting OPENLANE or any of its subsidiaries, including such actions that relate to the consummation of the transactions contemplated by the Merger Agreement;
the occurrence, or failure to occur, of any event which occurrence or failure would be reasonably likely to cause any representation or warranty of the Company contained in the Merger Agreement to be untrue or inaccurate in such a manner as would or would be reasonably expected to cause the failure of a closing condition;
any failure of OPENLANE to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement in any material respect; and
the commencement of an audit or other proceeding with respect to taxes or any material activity with respect to any ongoing audits or other proceedings with respect to taxes.

Regulatory Approvals.

Subject to the terms and conditions of the Merger Agreement, each of ADESA, Merger Sub and OPENLANE shall cooperate with the other parties and use (and shall cause their respective subsidiaries to use) their reasonable best efforts to promptly (i) take, or cause to be taken, all actions, and do, or cause to be done, all things, necessary, proper or advisable to consummate and make effective the transactions contemplated by the Merger Agreement, including preparing and filing promptly and fully all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents (including any required or recommended filings under applicable antitrust laws), and (ii) obtain all approvals, consents, registrations, permits, authorizations and other confirmations from any governmental entity or third party necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement. “Antitrust laws” means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act (each, as amended), and all other applicable laws issued by a governmental entity that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or prevention or lessening of competition through merger or acquisition.

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In furtherance and not in limitation of the foregoing, each of ADESA, Merger Sub and OPENLANE agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the Merger Agreement as promptly as practicable and in any event within 5 business days of the signing date of the Merger Agreement and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and to take, or cause to be taken, all other commercially reasonable actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable. ADESA shall be solely responsible for any and all filing fees due under the HSR Act in connection with the filing described above and neither OPENLANE nor any of its securityholders shall have any liability with respect to the payment of such filing fees other than its own internal costs as well as costs and expenses of its advisors in connection therewith.

Each of ADESA, Merger Sub and OPENLANE shall (i) cooperate in all respects with each other in connection with any filing or submission with a governmental entity in connection with the transactions contemplated by the Merger Agreement and in connection with any investigation or other inquiry by or before a governmental entity relating to the transactions contemplated by the Merger Agreement, including any proceeding initiated by a private party, (ii) respond promptly to any request for information from a governmental entity in relation to the transactions contemplated by the Merger Agreement, (iii) keep the other party informed in all material respects and on a reasonably timely basis of any material communication received by such party from, or given by such party to, the Federal Trade Commission, the Antitrust Division of the Department of Justice or any other governmental entity and of any material communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated by the Merger Agreement and (iv) provide the other party with an opportunity to participate in any material meetings with the Federal Trade Commission, the Antitrust Division of the Department of Justice or any other governmental entity, subject to applicable law, and provide the other party with an opportunity to review and provide comments on any material draft submissions, filings or other communications to be provided to the Federal Trade Commission, the Antitrust Division of the Department of Justice or any other governmental entity (any information contained in such draft submissions, filing or other communications that is competitively sensitive may be redacted from the version provided to the receiving party, subject to a non-redacted version being provided to the receiving party’s external counsel), and such providing party shall give due consideration to the comments received.

Each of ADESA, Merger Sub and OPENLANE shall use its reasonable best efforts to resolve such objections, if any, as may be asserted by a governmental entity or other person with respect to the transactions contemplated by the Merger Agreement; provided, however, that nothing shall require ADESA to agree to dispose or divest any of ADESA’s (or its affiliates’) or OPENLANE’s (or its subsidiaries’) assets, businesses or product lines, or to enter into a hold separate arrangement.

Each of ADESA’s, Merger Sub’s and OPENLANE’s obligations described above shall include, without limitation, (i) the obligation to use its reasonable best efforts to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging consummation of the Merger or the other transactions contemplated by the Merger Agreement, including seeking to avoid the entry of, or have reversed, terminated or vacated, any stay or other injunctive relief which could prevent or delay the Merger or the consummation of the transactions contemplated by the Merger Agreement and (ii) the obligation to use its reasonable best efforts to avoid or eliminate each impediment to obtaining required governmental approvals, in each of clauses (i) and (ii) so as to enable the Closing to occur as promptly as is reasonably practicable.

Access to Information.  During the period prior to the Closing, and subject to applicable laws, OPENLANE will (i) provide Purchaser and its representatives with such information as Purchaser may from time to time reasonably request, (ii) provide Purchaser and its representatives access to the books and records, offices, personnel, counsel, accountants and actuaries of the Company and (iii) permit Purchaser and its representatives to make inspections thereof.

Confidentiality.  Purchaser and Merger Sub have acknowledged that the information being provided to them in connection with the transactions contemplated by the Merger Agreement is subject to a confidentiality agreement that OPENLANE and KAR entered into in connection with the Merger.

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Public Announcements.  Subject to their respective legal obligations, each of Purchaser, Merger Sub and the Company shall consult with one another regarding the timing and content of all announcements regarding any aspect of the Merger Agreement or the transactions contemplated thereby to the financial community, governmental entities, employees, customers, payors or the general public and shall use reasonable efforts to agree upon the text of any such announcement prior to its release; however, Purchaser may issue any press release or make any public announcement in such form as it deems necessary to comply with the securities laws or stock market regulations.

Resignations.  All of the directors of the Company and its subsidiaries shall have resigned, effective as of the Closing and, except as otherwise specified in writing by Purchaser prior to the Closing, all of the officers of the Company and its subsidiaries shall have resigned, effective as of the Closing.

Third Party Consents.  OPENLANE will use commercially reasonable good faith efforts to obtain prior to the Closing, and deliver to ADESA at or prior to the Closing, all consents, waivers and approvals under certain material contracts.

Certificates.  OPENLANE will deliver on the date of the Closing a certificate from the Secretary of State of the State of Delaware and each state in which each of its subsidiaries is organized and qualified to do business certifying that OPENLANE and each such subsidiary is in good standing and that all applicable taxes and fees through and including the date of the Closing have been paid.

Reasonable Best Efforts; Cooperation.  OPENLANE, Merger Sub and ADESA have agreed that each will use their commercially reasonable, good faith efforts to perform their obligations in the Merger Agreement and to take, or cause to be taken, and do, or cause to be done, all things necessary, proper or advisable under applicable law to obtain all consents required and all regulatory approvals and to satisfy all conditions to their respective obligations under the Merger Agreement and to cause the transactions contemplated by the Merger Agreement to be effected on or prior to May 15, 2012, and that following the Closing, each of the parties shall deliver to the others such further information and documents and shall execute and deliver to the others such further instruments and agreements as the other party shall reasonably request to consummate or confirm the transactions provided for in the Merger Agreement, to accomplish the purpose of the Merger Agreement or to assure to the other party the benefits of the Merger Agreement.

Indemnification of OPENLANE Directors and Officers.  From and after the Closing, ADESA shall, or shall cause OPENLANE and its subsidiaries to, honor and fulfill the obligations of OPENLANE and its subsidiaries, to OPENLANE’s and its subsidiaries’ respective present and former directors, managers and officers (the “Indemnified Directors and Officers”) pursuant to the terms of the Company Charter or other applicable organizational documents of OPENLANE and its subsidiaries and of certain specified agreements. In addition, for six years following the Closing, ADESA shall cause the charter (or other applicable organizational document) of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification, exculpation and the advancement of expenses, covering acts and omissions of the Indemnified Directors and Officers, in each case in their capacities as directors, managers or officers of OPENLANE and its subsidiaries, occurring at or prior to the Merger, that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions contained in OPENLANE’s and its subsidiaries’ current charters (or other applicable organizational documents), and, during such six-year period, except as required by applicable law, such provisions shall not be repealed, amended or otherwise modified in any manner that adversely affects the rights of the Indemnified Directors and Officers.

Prior to the Closing, OPENLANE may purchase directors’ and officers’ liability insurance covering for six years after the effective time of the Merger those persons who are currently covered by OPENLANE’s directors’ and officers’ liability insurance policy in an amount and on terms no less advantageous, when taken as a whole, to those applicable to the current directors, managers and officers of OPENLANE. OPENLANE may do so by purchasing a “tail” policy under OPENLANE’s existing directors’ and officers’ insurance policy which (i) has an effective term of six years from the effective time of the Merger and (ii) contains terms and conditions that are not materially less favorable than those applicable to OPENLANE’s current directors and officers.

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Conditions to the Merger

Conditions to Each Party’s Obligations.  Each party’s obligation to consummate the Merger is subject to the satisfaction of the following mutual conditions:

all authorizations, consents, orders or approvals of, or declarations or filings with, or expiration of waiting periods, imposed by, any governmental entity necessary for the consummation of the transactions contemplated by the Merger Agreement and related documents being obtained or made;
there being in effect no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental entity nor other legal restraint or prohibition preventing or, in certain specified circumstances, seeking to prevent the consummation of the transactions contemplated by the Merger Agreement and related documents;
there being no action taken or threatened, and there being no law or order enacted, promulgated or issued or deemed applicable to the transactions contemplated by the Merger Agreement and related documents, by any governmental entity that would (i) make the consummation of the transactions contemplated thereby illegal or prevent the consummation of any material aspect of the transactions contemplated thereby, or (ii) render any party unable to consummate the transactions contemplated thereby; and
the certificate of merger being accepted for filing by the Secretary of State of the State of Delaware.

Conditions to OPENLANE’s Obligations.  The obligation of OPENLANE to consummate the Merger is subject to the satisfaction or waiver of the following additional conditions:

all representations and warranties made by ADESA and Merger Sub in the Merger Agreement being true and correct in all respects as of the date of the Merger Agreement and as of the date of the Closing as though made at such time (other than representations or warranties made as of a specified date, which representations and warranties must be true and correct only as of such date), in each case, except for any failure to be so true and correct which has not had and would not reasonably be likely to have, individually or in the aggregate, a material adverse effect on ADESA or the ability of ADESA or Merger Sub to perform its obligations under the Merger Agreement;
ADESA and Merger Sub having performed in all respects all obligations and covenants required to be performed by them under the Merger Agreement as of the date of the Closing; and
the delivery by ADESA and Merger Sub to OPENLANE of certain ancillary documents, including an executed counterpart to the escrow agreement, a certificate of the corporate secretary of ADESA as to certain corporate matters, and a certificate of the corporate secretary of Merger Sub as to certain corporate matters.

Conditions to ADESA’s and Merger Sub’s Obligations.  The obligation of ADESA and Merger Sub to consummate the Merger is subject to the satisfaction or waiver of the following additional conditions:

all representations and warranties made by OPENLANE in the Merger Agreement being true and correct in all respects as of the date of the Merger Agreement and as of the date of the Closing as though made at such time (other than representations or warranties made as of a specified date, which representations and warranties must be true and correct only as of such date), in each case, except for any failure to be so true and correct which has not had and would not reasonably be likely to have, individually or in the aggregate, a Material Adverse Effect on OPENLANE (as defined on page 45).
OPENLANE having performed in all material respects all obligations and covenants required to be performed by it under the Merger Agreement as of the date of the Closing;
there having occurred no Material Adverse Effect on OPENLANE that has not been cured;
the delivery by OPENLANE to ADESA of a certificate executed by OPENLANE’s Chief Executive Officer as to compliance with the conditions described in the foregoing three bullet points;

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the delivery by OPENLANE to ADESA of certain ancillary documents, including payoff letters with respect to indebtedness, invoices reflecting transaction expenses, an executed counterpart to the escrow agreement, a certificate of the corporate secretary of OPENLANE as to certain corporate matters, certificates of good standing from the jurisdictions in which OPENLANE and its subsidiaries are organized or qualified to do business, a legal opinion provided by OPENLANE’s outside legal counsel, certification OPENLANE is not a U.S. real property interest within the meaning of the Internal Revenue Code, written resignations of certain directors and officers of OPENLANE and its subsidiaries, evidence of the termination of the Investors’ Rights Agreement, delivery of an executed counterpart to an assumption agreement relating to guarantee obligations to be assumed by OPENLANE after the Closing, and deliver of required third party consents;
the delivery by OPENLANE to ADESA of the Majority Consent no later than 11:59 pm on the first business day following the execution of the Merger Agreement;
holders of not more than 10% of the outstanding shares of OPENLANE’s capital stock (as determined immediately prior to the effective time of the Merger on an as converted to Common Stock basis) having demanded, properly and in writing, appraisal for shares of OPENLANE capital stock held by such holder in accordance with Section 262 of the DGCL; and
the delivery by OPENLANE to ADESA of the Super-Majority Consent.

For purposes of the Merger Agreement, Material Adverse Affect,” when used in connection with OPENLANE, means any state of facts, change, event, effect, occurrence or non-occurrence (whether or not constituting a breach of a representation, warranty or covenant set forth in the Merger Agreement) that, individually or in the aggregate, is or would be reasonably likely to be materially adverse to the business, financial condition, results of operations, properties, or assets and liabilities of OPENLANE and its subsidiaries, taken as a whole, and any state of facts, change, event or occurrence that, individually or in the aggregate, is or would be reasonably likely to prevent the performance by OPENLANE of its obligations under the Merger Agreement, except that any state of facts, change, event, effect, occurrence or non-occurrence arising from, in connection with or as a result of any of the following will not be deemed to constitute, or be taken into account in determining whether there has been or would reasonably likely be a Material Adverse Effect:

changes in general economic conditions, political conditions or conditions in financial markets, provided that such changes do not affect OPENLANE disproportionately as compared to companies operating in the same industry;
changes in conditions affecting the industry in which OPENLANE operates, provided that such changes do not affect OPENLANE disproportionately as compared to companies operating in the same industry, and provided further that any changes or events arising from or related to market trends affecting the listing of off-lease vehicles will not constitute or be taken into account in determining whether there has been or would reasonably be likely to be, a Material Adverse Effect.
acts of war, terrorism or natural disasters; provided that such events do not affect OPENLANE disproportionately as compared to companies operating in the same industry;
changes in law or generally accepted accounting principles;
the announcement or pendency of the Merger, the Merger Agreement and the transactions contemplated thereby (including the loss of any employee, consultant, customer, supplier or business partner);
compliance with the terms of, or taking of any action required by, the Merger Agreement or any related document to which OPENLANE is party or that is otherwise taken with consent of ADESA;
any failure by OPENLANE to meet any financial forecast, projection, estimate, prediction or models for any period, provided, that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of “Material Adverse Effect” may be taken into account in determining whether there has been a Material Adverse Affect; and

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any matter disclosed in the OPENLANE disclosure schedule to the Merger Agreement solely to the extent disclosed therein in accordance with the Merger Agreement.

Termination of the Merger Agreement

OPENLANE and ADESA may terminate the Merger Agreement by mutual written consent at any time before the consummation of the Merger. In addition, either ADESA or OPENLANE may terminate the Merger Agreement before the consummation of the Merger if:

the Majority Consent is not delivered 11:59 pm on the first business day following the execution of the Merger Agreement; or
any permanent injunction or other order of a governmental entity preventing the consummation of the Merger shall have become final and nonappealable.

ADESA may also terminate the Merger Agreement if:

there has been a breach by OPENLANE of any representation, warranty, covenant or agreement on the part of OPENLANE contained in the Merger Agreement and such breach is not capable of being cured or has not been cured within twenty days after ADESA notifies OPENLANE of such breach, and if not capable of being cured or cured within such period, such breach would result in the failure of any of the conditions to ADESA’s and Merger Sub’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement to be satisfied; or
the conditions to ADESA’s and Merger Sub’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement have not been satisfied or waived (to the extent they may be waived) by May 15, 2012, unless ADESA’s or Merger Sub’s breach of the Merger Agreement has been a principal cause of the failure of the Closing to occur on or before such date.

OPENLANE may also terminate the Merger Agreement if:

there has been a breach by ADESA or Merger Sub of any representation, warranty, covenant or agreement on the part of ADESA or Merger Sub contained in the Merger Agreement and such breach is not capable of being cured or has not been cured within twenty days after OPENLANE notifies ADESA of such breach, and if not capable of being cured or cured within such period, such breach would result in the failure of any of the conditions to OPENLANE’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement to be satisfied; or
the conditions to OPENLANE’s obligation to consummate the Merger (including conditions to all parties’ obligations) set forth in the Merger Agreement have not been satisfied or waived (to the extent they may be waived) by May 15, 2012, unless OPENLANE’s breach of the Merger Agreement has been a principal cause of the failure of the Closing to occur on or before such date.

Amendment

The Merger Agreement may not be amended, modified or supplemented prior to the effective time of the Merger except by written agreement of the parties, other than KAR and the Securityholders’ Representative (except that no amendments may be made to (i) Section 9.6 of the Merger Agreement without the written agreement of KAR and (ii) to Section 10.1 of the Merger Agreement without the written agreement of the Securityholders’ Representative). Notwithstanding the foregoing, no amendment, modification or supplement to the Merger Agreement that affects the rights and obligations of the Securityholders’ Representative shall be binding on the Securityholders’ Representative unless executed by the Securityholders’ Representative. The Merger Agreement may not be amended, modified or supplemented after the effective time of the Merger except by written agreement of the parties (including, for the avoidance of doubt, the Securityholders’ Representative), other than KAR (except that no amendments may be made to Section 9.6 of the Merger Agreement without the written agreement of KAR).

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No Third Party Beneficiaries

Nothing expressed or implied in the Merger Agreement is intended, or will be construed, to confer upon or give any Person other than the parties, and their successors or permitted assigns, any rights, remedies or Liabilities under or by reason of the Merger Agreement, or result in such Person being deemed a third party beneficiary of the Merger Agreement (other than (A) following the effective time of the Merger, the rights of Securityholders to receive payment in accordance with Section 3.3 of the Merger Agreement, (B) the right of the Company on behalf of its Securityholders, to pursue damages or equitable remedies in the event of Purchaser’s or Merger Sub’s breach of the Merger Agreement and (C) the rights conferred on the Indemnified Parties under Article IX and the Indemnified Directors and Officers pursuant to Section 6.10 of the Merger Agreement).

Remedies

The parties to the Merger Agreement each acknowledged in the Merger Agreement that the rights of each party to consummate the transactions contemplated by the Merger Agreement are special, unique and of extraordinary character and that, in the event that any party violates or fails or refuses to perform any covenant or agreement made by it in the Merger Agreement, the non-breaching party may be without an adequate remedy at Law. The parties agree, therefore, that in the event that any party violates or fails or refuses to perform any covenant or agreement made by such party in the Merger Agreement, the non-breaching party or parties may, subject to the terms of the Merger Agreement and in addition to any remedies at law for damages or other relief, shall be entitled to specific performance of such covenant or agreement or may seek any other equitable relief, and the parties thereby waive the requirement of any posting of a bond in connection with the remedies described in the Merger Agreement.

Expenses

Each party to the Merger has agreed to pay its own fees, costs and expenses incurred in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement, including the fees, costs and expenses of their financial advisors, accountant and legal counsel, whether or not the Merger is consummated, except that Purchaser will be solely responsible for any and all filing fees due under the HSR Act in connection with HSR Act filings described in the Merger Agreement.

Guarantee by KAR

Under the Merger Agreement, KAR, the parent company of ADESA, has guaranteed the full and prompt payment and performance when due of all present and future obligations, liabilities and indebtedness of ADESA to the Company and certain of its affiliates arising under the Merger Agreement at or prior to the effective time of the Merger, and the Company and certain of its affiliates may have immediate recourse against KAR for full and immediate payment of such guaranteed obligations at any time after such guaranteed obligations, or any part thereof, have not been paid in full when due or performed when required by the Merger Agreement.

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SUBMISSION OF STOCKHOLDER PROPOSALS

If the Merger is consummated, ADESA will be our sole stockholder and there will be no participation by our current Stockholders in any future meetings of stockholders. However, if the Merger is not consummated, we expect to hold the 2012 annual meeting of stockholders.

If the Merger has not been consummated prior to May 15, 2012, we will hold our 2012 annual meeting of stockholders on August 31, 2012. If you intend to present a director nomination or other proposal of business at our 2012 annual meeting of stockholders, your nomination or proposal must be delivered to the attention of the Secretary of OPENLANE, at our principal executive offices, no earlier than June 15, 2012 and no later than July 15, 2012. As set forth in our bylaws, your notice of a stockholder nomination or proposal must set forth the information required pursuant to our bylaws.

For more information regarding stockholder proposals or nominations, you may request a copy of our bylaws from the Secretary of OPENLANE.

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APPRAISAL RIGHTS

Under Delaware law, you have the right to an appraisal of, and to receive payment in cash for, the fair value of your shares of OPENLANE capital stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest, if any, as determined by the court, in lieu of the consideration you would otherwise be entitled to pursuant to the Merger Agreement. These rights are known as appraisal rights. Stockholders electing to exercise appraisal rights must strictly comply with the provisions of Section 262 of Delaware law in order to perfect their rights.

The following is intended as a summary of the material provisions of the Delaware statutory procedures required to be followed by a stockholder in order to perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Section 262 of the DGCL (“Section 262”), the full text of which appears in Annex D to this Proxy Statement. Failure to precisely follow any of the statutory procedures set forth in Section 262 of Delaware law may result in a termination or waiver of your appraisal rights.

All references in this summary to a “stockholder” are to the record holder of shares of OPENLANE capital stock unless otherwise indicated.

Under Section 262, if a merger agreement was approved by stockholders pursuant to an action by written consents from such stockholders, either the constituent company before the effective date of the merger or the surviving corporation within 10 days thereafter, must notify each of the stockholders entitled to appraisal rights of the approval of the merger, the effective date of the merger and that appraisal rights are available for any or all of the shares of the constituent corporation and include in each such notice a copy of Section 262. Accordingly, this Proxy Statement constitutes our notice to OPENLANE’s stockholders of the availability of appraisal rights in connection with the Merger in compliance with the requirements of Section 262. If you wish exercise your appraisal rights, you should carefully review the text of Section 262 contained in Annex D to this Proxy Statement since failure to timely and properly comply with the requirements of Section 262 will result in the loss of your appraisal rights under Delaware law.

In order to demand an appraisal of your shares, you must satisfy each of the following conditions:

You must deliver to us, within 20 days after date of our mailing of the notice of the approval of the Merger in accordance with Section 262, a written demand for appraisal of such your shares of capital stock of OPENLANE. This Proxy Statement constitutes such a notice.
You may not vote in favor of, or consent in writing to, the adoption of the Merger Agreement and approval of the Merger. A vote in favor of the adoption of the Merger Agreement and approval of the Merger, will constitute a waiver of your appraisal rights in respect of the shares so voted.
You must continue to hold your shares of OPENLANE capital stock through the effective date of the Merger. Therefore, a stockholder who is the record holder of shares of OPENLANE capital stock on the date the written demand for appraisal is made but who thereafter transfers the shares prior to the effective date of the Merger will lose any right to appraisal with respect to such shares.
You or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the effective date of the Merger. The surviving company is under no obligation to file any petition and has no intention of doing so.

If you fail to comply with any of these conditions and the Merger is completed, you will be entitled to receive a portion of the merger consideration pursuant to the terms of the Merger Agreement, but you will have no appraisal rights with respect to your shares of OPENLANE capital stock.

All demands for appraisal should be addressed to OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Secretary, and must be delivered within 20 days of the mailing of this Proxy Statement, and should be executed by, or on behalf of, the record holder of the shares of capital stock. The demand must reasonably inform us of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares.

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To be effective, a demand for appraisal by a holder of capital stock must be made by, or in the name of, such registered stockholder, fully and correctly, as the stockholder’s name appears on his, her or its stock certificate(s). Beneficial owners who do not also hold the shares of record may not directly make a demand for appraisal. The beneficial holder must, in such cases, have the registered owner, such as a brokerage firm, bank, trust or other nominee, submit the required demand in respect of those shares. If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made by or for the fiduciary; and if the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares as a nominee for others, may exercise his or her right of appraisal with respect to the shares held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares as to which appraisal is sought. Where no number of shares is expressly mentioned, the demand will be presumed to cover all shares held in the name of the record owner.

If you hold your shares of capital stock in a brokerage account or in other nominee form and you wish to exercise appraisal rights, you should consult with your broker or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.

Within 10 days after the effective date of the Merger, the surviving corporation must give written notice that the Merger has become effective to each stockholder who has properly filed a written demand for appraisal and who did not vote in favor of the Merger Agreement and the Merger. At any time within 60 days after the effective time, any stockholder who has demanded an appraisal, and who has not commenced an appraisal proceeding or joined that proceeding as a named party, has the right to withdraw the demand and to accept the cash payment specified by the Merger Agreement for his, her or its shares of capital stock of OPENLANE; after this period, the stockholder may withdraw such demand for appraisal only with the consent of the surviving corporation. Within 120 days after the effective date of the Merger, any stockholder who has complied with Section 262 will, upon written request to the surviving corporation, be entitled to receive a written statement setting forth the aggregate number of shares not voted in favor of the Merger Agreement and the Merger and with respect to which demands for appraisal rights have been received and the aggregate number of holders of such shares. A person who is the beneficial owner of shares of capital stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, request from the surviving corporation the statement described in the previous sentence. Such written statement will be mailed to the requesting stockholder within 10 days after such written request is received by the surviving corporation or within 10 days after expiration of the period for delivery of demands for appraisal, whichever is later. Within 120 days after the effective time, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 and who is otherwise entitled to appraisal rights may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. A person who is the beneficial owner of shares of OPENLANE capital stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file the petition described in the previous sentence. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon OPENLANE, as the surviving corporation. The surviving corporation has no obligation to file such a petition in the event there are dissenting stockholders. Accordingly, the failure of a stockholder to file such a petition within the period specified could nullify the stockholder’s previously written demand for appraisal. There is no present intent on the part of OPENLANE to file an appraisal petition, and stockholders seeking to exercise appraisal rights should not assume that OPENLANE will file such a petition or that OPENLANE will initiate any negotiations with respect to the fair value of such shares. Accordingly, stockholders who desire to have their shares appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262.

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If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Delaware Court of Chancery with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached by the surviving corporation. After notice to dissenting stockholders who demanded appraisal of their shares, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition, and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided thereby. The Delaware Court of Chancery may require the stockholders who have demanded appraisal for their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

After determination of the stockholders entitled to appraisal of their shares of capital stock, the Delaware Court of Chancery will appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment. When the value is determined, the Delaware Court of Chancery will direct the payment of such value, with interest thereon accrued during the pendency of the proceeding, if the Delaware Court of Chancery so determines, to the stockholders entitled to receive the same, upon surrender by such holders of the certificates representing those shares.

You should be aware that the fair value of your shares as determined under Section 262 could be more than, the same as, or less than the value that you are entitled to receive under the terms of the Merger Agreement.

Costs of the appraisal proceeding may be imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery as the Court deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. Any stockholder who had demanded appraisal rights will not, after the effective time of the Merger, be entitled to vote shares subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective time; however, if no petition for appraisal is filed within 120 days after the effective time of the Merger, or if the stockholder delivers a written withdrawal of his, her or its demand for appraisal and an acceptance of the terms of the Merger within 60 days after the effective time of the Merger, then the right of that stockholder to appraisal will cease and that stockholder will be entitled to receive the cash payment for shares of his, her or its shares of OPENLANE capital stock pursuant to the Merger Agreement. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the prior approval of the Court, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however, that any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party will maintain the right to withdraw its demand for appraisal and to accept the cash that such holder would have received pursuant to the Merger Agreement within 60 days after the effective date of the Merger.

In view of the complexity of Section 262, stockholders who may wish to dissent from the Merger and pursue appraisal rights should consult their legal advisors. The value per share determined pursuant to exercising appraisal rights may be more or less than the per share consideration. Each holder of capital stock of OPENLANE should consider such value when determining whether to exercise such holder’s appraisal rights.

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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS AND OFFICERS

The following table sets forth certain information regarding the beneficial ownership of OPENLANE’s Common Stock and Preferred Stock as of August 24, 2011 with respect to (i) each person who is known by us to own beneficially more than 5% of OPENLANE’s issued and outstanding Common and Preferred Stock, (ii) each of OPENLANE’s directors, (iii) each of OPENLANE’s named executive officers (as defined in Item 402 of Regulation S-K promulgated by the SEC) and (iv) all of OPENLANE’s directors and executive officers as a group. On August 24, 2011, there were 8,238,312 shares of Common Stock and 16,122,606 shares of Preferred Stock (equal to 16,278,668 shares of Common Stock on an as-converted basis) issued and outstanding.

Unless otherwise indicated, all persons named below can be reached at 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065.

                     
                     
Name of Stockholder   Common
Stock
  Series A
Preferred
Stock
  Series B
Preferred
Stock
  Series C
Preferred
Stock
  Series D
Preferred
Stock
  Series E
Preferred
Stock
  Series F
Preferred
Stock
  Series G
Preferred
Stock
  Series H
Preferred
Stock
  Options &
Warrants
  Ownership of Outstanding Capital Stock (i.e. Options, Common plus Preferred Stock)
        (i) At least 5% Stockholders
MPI Holdings, Inc.
11 Church St.
Suite 200
Toronto, M5E 1W1
Canada
    0       0       0       0       0       0       4,917,580            0       113,152       5,576       20.54 % 
Entities Affiliated with Meritech Capital Partners(1)
245 Lytton Ave.
Suite 350
Palo Alto, CA 94301
    263,753       0       0       0       0       0       0       0       3,584,368       0       15.70 % 
Entities Affiliated with August Capital(2)
2480 Sand Hill Rd.
Suite 101
Menlo Park,
CA 94025
    1,974,247       1,361,867       311,321       0       0       836,683       0       0       879,415       11,318       21.91 % 
        (ii) Directors
 
Adam Boyden     562,192       0       0       0       0       15,661       0       0       33,943       71,672       2.78 % 
Mark Bronder     0       51,068       0       0       0       0       0       0       0       80,000        *  
Paul Madera(3)     263,753       0       0       0       0       0       0       0       3,584,368       10,000       15.73 % 
David Marquardt(4)     1,974,247       1,361,867       311,321       0       0       836,683       0       0       879,415       91,318       22.17 % 
R. Gary McCauley(5)     19,372       0       0       0       0       0       0       29,521       0       82,788        *  
L. David Sikes     9,789       0       0       0       0       0       0       11,808       0       86,115        *  
Michael Stein(6)     0       0       0       0       0       0       4,917,580       0       113,152       195,576       21.15 % 
        (iii) Executive Officers
 
Peter Kelly(7)     562,277       0       0       0       0       15,661       0       0       45,141       357,596 (8)      3.94 % 
Michael Briggs     0       0       0       0       0       0       0       0       0       136,295 (9)       *  
Laurel Finch     0       0       0       0       0       0       0       0       0       134,789 (10)       *  
Nagendra Palle     0       0       0       0       0       0       0       0       0       194,373 (11)       *  
Daniel Farrar     0       0       0       0       0       0       0       0       0       615,999 (12)      2.45 % 
All directors and current executive officers as a group (16 persons)     3,637,091       1,412,935       311,321       0       0       875,835       4,917,580       43,454       4,656,019       2,947,365 (13)      68.46 % 

* 1% or less.
(1) Shares held by Meritech Capital Affiliates II, L.P. and Meritech Capital Partners III L.P.
(2) Shares held by August Capital II, L.P. and August Capital III, L.P.
(3) Includes shares held by Meritech Capital Affiliates II, L.P. and Meritech Capital Partners III L.P.
(4) Includes shares held by August Capital II, L.P. and August Capital III, L.P.
(5) Includes shares held by Arizona Interests, Inc.

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(6) Includes shares held by MPI Holdings, Inc.
(7) Includes shares held by Victoria Valandra
(8) Includes vested options plus 13,680 options that vest within 60 days of August 24, 2011 (which are deemed outstanding for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage for any other person).
(9) Includes vested options plus 4,167 options that vest within 60 days of August 24, 2011 (which are deemed outstanding for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage for any other person).
(10) Includes vested options plus 8,333 options that vest within 60 days of August 24, 2011 (which are deemed outstanding for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage for any other person).
(11) Includes vested options plus 12,083 options that vest within 60 days of August 24, 2011 (which are deemed outstanding for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage for any other person).
(12) Includes vested options plus zero options that vest within 60 days of August 24, 2011.
(13) Includes vested options plus 52,118 options that vest within 60 days of August 24, 2011 (which are deemed outstanding for computing the percentage ownership of the person holding such options but are not deemed outstanding for computing the percentage for any other person).

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FINANCIAL STATEMENTS

The following financial statements of the Company are available without charge upon request to Stockholders as of the record date: (1) the audited consolidated balance sheet of the Company as of December 31, 2010 and December 31, 2009 and the related audited consolidated statements of income, shareholders’ deficit and cash flow for the year then ended and (2) the unaudited consolidated balance sheet of the Company as of June 30, 2011 and the related unaudited consolidated statements of income, shareholders’ deficit and cash flow for the six-month period then ended. You may request the financial statements by contacting OPENLANE by telephone at (480) 809-3400, by mail at OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary, or by e-mail at stockholderquestions@openlane.com.

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ADVISORY CONSENT REGARDING CERTAIN EXECUTIVE COMPENSATION

“Golden Parachute” Compensation

The Company is required pursuant to Section 14A of the Exchange Act to include in this document a non-binding, advisory vote on the compensation payable to each of its “named executive officers” (Peter Kelly, Michael Briggs, Laurel Finch, Nagendra Palle and Daniel Farrar) in connection with the proposed Merger payable pursuant to arrangements entered into with the Company, and the Company is therefore asking our Stockholders to adopt the following resolution:

RESOLVED, that the compensation that will or may become payable by the Company to the named executive officers of the Company as disclosed pursuant to Item 402(t) of Regulations S-K and as set forth in this proposal titled “Advisory Consent Regarding Certain Executive Compensation” and as further described in “Interests of OPENLANE’s Directors and Executive Officers in the Merger,” is hereby approved.

The description of the payments contained in the section titled “Interests of OPENLANE’s Directors and Executive Officers in the Merger” as well as the table titled “Golden Parachute Compensation” is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about compensation for each named executive officer that is based on or otherwise relates to the Merger and will or may become payable either by the Company or Purchaser. We are asking our Stockholders to approve the “golden parachute” compensation that will or may become payable by the Company to each of its named executive officers as set forth in the table below and as described in “Interests of OPENLANE’s Directors and Executive Officers in the Merger.

The table below reflects the compensation and benefits that will or may be paid or provided to each of the named executive officers in connection with the Merger in the circumstances described below. Severance payments have been calculated based on the named executive officer’s current target bonus opportunity. Regardless of the manner in which a named executive officer’s employment terminates, the executive is entitled to receive amounts already earned during his or her term of employment, such as base salary earned through the date of termination. Please note that the amounts indicated below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this document. Some of these assumptions are based on information currently available and, as a result, the actual amounts, if any, to be received by a named executive officer may differ in material respects from the amounts set forth below. Furthermore, for purposes of calculating such amounts, we have assumed a closing date of the Merger of September 30, 2011, including with respect to calculating the portion of stock options subject to acceleration of vesting (assuming continued vesting of such options and assuming that all stock options remain outstanding on such date).

             
Name   Cash
($)
  Equity
($)(1)
  Pension/
NQDC
($)
  Perquisites/
Benefits
($)
  Tax Reimbursement
($)
  Other
($)
  Total
($)
Peter Kelly     N/A       5,011,140       N/A       N/A       N/A       N/A       5,011,140  
Michael Briggs     N/A       1,025,436       N/A       N/A       N/A       N/A       1,025,436  
Laurel Finch     100,000 (2)      1,174,000       N/A       N/A       N/A       N/A       1,274,000  
Nagendra Palle     75,000 (3)      1,646,000       N/A       N/A       N/A       300,000 (4)      2,021,000  
Daniel Farrar*     N/A       3,203,195       N/A       N/A       N/A       N/A       3,203,195  

* Mr. Farrar’s employment with the Company terminated January 31, 2011.
(1) Pursuant to the terms of the Merger Agreement, the vesting of all Company Options will accelerate in full contingent upon the consummation of the Merger and all Company Options issued and outstanding on the effective time of the Merger will be cancelled and converted into the right to receive an amount in cash, less applicable tax withholding, equal to (i) the number of shares of Company Common Stock as to which the Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the effective time of the Merger, multiplied by (ii) the excess of the Per Share Closing Consideration (as defined in the Merger Agreement) over the exercise price of the Company Option, plus a pro-rata portion of any subsequent distributions from the Escrow Account and any additional payments made pursuant to the terms of the Merger Agreement (up to approximately $8.30). The value of the accelerated Company

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Options was determined by multiplying (i) the number of accelerated Company Options, multiplied by (ii) the excess of the Per Share Closing Consideration (as defined in the Merger Agreement) of $8.30 over the exercise price of the Company Option.
(2) Pursuant to an offer letter dated May 30, 2008 between Ms. Finch and the Company, if Ms. Finch is terminated without Cause, as defined in her offer letter, or resigns for Good Reason, as defined in her offer letter, within six months after a Change of Control, as defined in her offer letter and including consummation of the Merger, then subject to Ms. Finch signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), she will be deemed to satisfy all milestone requirements necessary to receive her annual bonus for the then current review period (double-trigger benefits).
(3) Pursuant to an offer letter dated November 30, 2007 between Mr. Palle and the Company, as amended by the Compensation Committee of the Board pursuant to minutes of such committee meeting held on February 4, 2009, if Mr. Palle is terminated without Cause, as defined in his offer letter, or resigns for Good Reason, as defined in his offer letter, within six months after a Change of Control, as defined in his offer letter and including consummation of the Merger, then subject to Mr. Palle signing and not revoking a separation agreement and mutual release of claims with the Company (or its successor), he will be deemed to satisfy all milestone requirements necessary to receive his annual bonus for the then current review period (double-trigger benefits).
(4) On July 26, 2011, the Compensation Committee of the Board granted Mr. Palle a cash bonus of $300,000, effective and contingent on the consummation of the Merger (single-trigger benefit).

Consent Required

The consent to this proposal is separate and apart from the Stockholder Acknowledgement related to the Merger Agreement. Accordingly, you may sign the Stockholder Acknowledgement adopting and approving the resolutions attached thereto and not to approve this proposal on executive compensation and vice versa. Because this consent is advisory in nature only, it will not be binding on either the Company or Purchaser regardless of whether the proposed Merger is completed. Accordingly, as the compensation to be paid in connection with the proposed Merger is contractual with respect to the executives, regardless of the outcome of this advisory consent such compensation will be payable, subject only to the conditions applicable thereto, if the proposed Merger is completed. The consent required to approve this proposal is the affirmative approval of the holders of a majority of the shares of the capital stock of the Company outstanding (voting as a single class on an as converted to Common Stock basis). As a result, failing to provide your consent (in the case of record holders), or failing to instruct your broker or other nominee to provide consent on your behalf (in the case of non-record holders), is the same as not approving the proposal.

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HOUSEHOLDING OF STOCKHOLDER MAILINGS

We and some brokers or other nominee record holders may participate in the practice of “householding” certain stockholder mailings. This means that only one copy of this Proxy Statement may have been sent to multiple Stockholders in your household. If you would prefer to receive separate copies of this Proxy Statement now or of certain other stockholders mailings in the future, if applicable, please (1) mail your request to OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary, or (2) call our Assistant Secretary, Scott Cross, at (480) 809-3400. Upon written or oral request, we will provide a separate copy of the annual reports and proxy statements. In addition, security holders sharing an address can request delivery of a single copy of certain stockholder mailings if you are receiving multiple copies upon written or oral request at the address and telephone number stated above.

WHERE YOU CAN FIND MORE INFORMATION

Statements contained in this Proxy Statement, or in any document referenced in this Proxy Statement regarding the contents of any contract or other document, are not necessarily complete and each such statement is qualified in its entirety by reference to that contract or other document.

Any person, including any beneficial owner, to whom this Proxy Statement is delivered may request copies of Proxy Statements and any of the documents referenced in this document or other information concerning us, without charge, by contacting OPENLANE by telephone at (480) 809-3400, by mail at OPENLANE, Inc., 2200 Bridge Parkway, Suite 202, Redwood City, CA 94065, Attn: Scott Cross, Assistant Secretary, or by e-mail at stockholderquestions@openlane.com. Such documents are available without charge.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR REFERENCED IN THIS PROXY STATEMENT TO DETERMINE WHAT ACTION TO TAKE WITH RESPECT TO THE STOCKHOLDER ACKNOWLEDGMENT AND THE ADVISORY CONSENT. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED SEPTEMBER 8, 2011. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

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Annex A

AGREEMENT AND PLAN OF MERGER


 
 

TABLE OF CONTENTS

Execution Version

  
  
  
  
  
  
  
  
  
  
  
  
  

AGREEMENT AND PLAN OF MERGER
  
by and among
  
ADESA, INC.,
  
RILEY ACQUISITION, INC.,
  
KAR AUCTION SERVICES, INC.,
  
OPENLANE, INC.,
  
  
  
and
  
  
  
SHAREHOLDER REPRESENTATIVE SERVICES LLC,
  
  
as the Securityholders’ Representative,
  
  
  
  
  
  
  
  

Dated as of August 15, 2011

  
  
  
  
  
  
  
  
  
  
  

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TABLE OF CONTENTS

 
  Page
ARTICLE I DEFINITIONS     A-5  
ARTICLE II THE MERGER     A-15  

Section 2.1.

The Merger

    A-15  

Section 2.2.

Effective Time

    A-15  

Section 2.3.

Closing

    A-16  

Section 2.4.

Effects of the Merger

    A-16  

Section 2.5.

Certificate of Incorporation, By-Laws and Officers and Directors of the Surviving Corporation

    A-16  

Section 2.6.

Further Assurances

    A-16  
ARTICLE III MERGER CONSIDERATION AND CONVERSION OF SHARES     A-16  

Section 3.1.

Effect on Company Stock; Treatment of Company Options and Company Stock Option Plan; Treatment of Company Warrants

    A-16  

Section 3.2.

Payments

    A-17  

Section 3.3.

Payment and Surrender of Certificates

    A-18  

Section 3.4.

Closing Statement

    A-20  

Section 3.5.

Final Closing Statement

    A-20  

Section 3.6.

Payment of Excess or Deficiency

    A-21  

Section 3.7.

Withholding Rights

    A-22  
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY     A-22  

Section 4.1.

Organization

    A-22  

Section 4.2.

Capitalization and Subsidiaries

    A-22  

Section 4.3.

Authorization

    A-23  

Section 4.4.

Absence of Restrictions and Conflicts

    A-24  

Section 4.5.

Real Property

    A-24  

Section 4.6.

Title to Assets; Related Matters

    A-24  

Section 4.7.

Financial Statements

    A-25  

Section 4.8.

No Undisclosed Liabilities

    A-25  

Section 4.9.

Absence of Certain Changes

    A-25  

Section 4.10.

Legal Proceedings

    A-25  

Section 4.11.

Compliance with Laws

    A-26  

Section 4.12.

Contracts

    A-26  

Section 4.13.

Taxes

    A-27  

Section 4.14.

Employee Benefits

    A-29  

Section 4.15.

Insurance Policies

    A-32  

Section 4.16.

Environmental, Health and Safety Matters

    A-31  

Section 4.17.

Intellectual Property

    A-32  

Section 4.18.

Transactions with Affiliates

    A-34  

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  Page

Section 4.19.

Customers

    A-35  

Section 4.20.

Employee Matters

    A-35  

Section 4.21.

Permits

    A-36  

Section 4.22.

Notes and Accounts Receivable

    A-36  

Section 4.23.

Brokers, Finders and Investment Bankers

    A-36  

Section 4.24.

Product and Service Warranties

    A-37  

Section 4.25.

Ethical Practices

    A-37  

Section 4.26.

Voting Requirements

    A-37  

Section 4.27.

Competition Act

    A-37  
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT     A-38  

Section 5.1.

Organization

    A-38  

Section 5.2.

Authorization

    A-38  

Section 5.3.

Absence of Restrictions and Conflicts

    A-38  

Section 5.4.

Brokers, Finders and Investment Bankers

    A-38  

Section 5.5.

Sufficient Funds

    A-39  

Section 5.6.

Due Diligence Investigation

    A-39  
ARTICLE VI CERTAIN COVENANTS AND AGREEMENTS     A-39  

Section 6.1.

Conduct of Business by the Company

    A-39  

Section 6.2.

Inspection and Access to Information

    A-41  

Section 6.3.

Notices of Certain Events

    A-41  

Section 6.4.

No Solicitation of Transactions; Confidentiality

    A-42  

Section 6.5.

Commercially Reasonable Efforts; Further Assurances; Cooperation

    A-42  

Section 6.6.

Interim Financials

    A-42  

Section 6.7.

Public Announcements

    A-43  

Section 6.8.

Supplements to Schedules

    A-43  

Section 6.9.

Tax Covenants

    A-43  

Section 6.10.

Continuing Director and Officer Indemnification

    A-45  

Section 6.11.

Stockholders Consent

    A-46  

Section 6.12.

Antitrust Laws

    A-47  

Section 6.13.

Employee Benefits

    A-48  
ARTICLE VII CONDITIONS TO CLOSING     A-49  

Section 7.1.

Conditions to Each Party’s Obligations

    A-49  

Section 7.2.

Conditions to Obligations of Parent and Merger Sub

    A-49  

Section 7.3.

Conditions to Obligations of the Company

    A-51  
ARTICLE VIII TERMINATION     A-51  

Section 8.1.

Termination

    A-51  

Section 8.2.

Termination Procedures

    A-52  

Section 8.3.

Effect of Termination

    A-52  

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  Page
ARTICLE IX INDEMNIFICATION     A-52  

Section 9.1.

Indemnification Generally

    A-52  

Section 9.2.

Limitations on Indemnification

    A-53  

Section 9.3.

Assertion of Claims; Payment of Claims

    A-55  

Section 9.4.

Notice and Defense of Third Party Claims

    A-56  

Section 9.5.

Survival of Representations and Warranties; Release of Escrow Funds

    A-57  

Section 9.6.

Guarantee

    A-58  
ARTICLE X MISCELLANEOUS PROVISIONS     A-59  

Section 10.1.

Securityholders’ Representative

    A-59  

Section 10.2.

Specific Performance and Other Remedies

    A-61  

Section 10.3.

Notices

    A-62  

Section 10.4.

Schedules and Exhibits

    A-63  

Section 10.5.

Assignment; Successors in Interest

    A-63  

Section 10.6.

Number; Gender

    A-63  

Section 10.7.

Captions

    A-63  

Section 10.8.

Controlling Law; Amendment

    A-63  

Section 10.9.

Consent to Jurisdiction, Etc

    A-63  

Section 10.10.

WAIVER OF JURY TRIAL

    A-64  

Section 10.11.

Severability

    A-64  

Section 10.12.

Counterparts

    A-64  

Section 10.13.

Enforcement of Certain Rights

    A-64  

Section 10.14.

Waiver

    A-64  

Section 10.15.

Integration

    A-64  

Section 10.16.

Cooperation Following the Closing

    A-65  

Section 10.17.

Transaction Costs

    A-65  

Section 10.18.

Interpretation; Construction

    A-65  

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”), is dated as of August 15, 2011, by and among ADESA, INC., a Delaware corporation (“Parent”), RILEY ACQUISITION, INC., a Delaware corporation (“Merger Sub”), OPENLANE, INC., a Delaware corporation (the “Company”), SHAREHOLDER REPRESENTATIVE SERVICES LLC, a Colorado limited liability company, solely in its capacity as the Securityholders’ Representative (the “Securityholders’ Representative”), and, solely with respect to Section 9.6, KAR AUCTION SERVICES, INC., a Delaware corporation (“Guarantor ”).

A.  Parent, Merger Sub and the Company intend to effect a merger (the “Merger”) of Merger Sub with and into the Company in accordance with this Agreement and the Delaware General Corporation Law (the “DGCL”). Upon consummation of the Merger, Merger Sub will cease to exist and the Company will become a wholly-owned subsidiary of Parent.

B.  This Agreement and the Merger have been approved by the respective boards of directors of Parent, Merger Sub and the Company.

C.  It is intended that this Agreement will be adopted by the written consent of stockholders holding at least (i) a majority of the outstanding Company Preferred Stock (voting together as single class) (as defined below) and (ii) a majority of the outstanding voting stock of the Company (voting together as a single class on an as converted to Company Common Stock basis), in accordance with Section 228 of the DGCL as promptly as practicable following the execution and delivery of this Agreement by all parties.

D.  Concurrently with the execution and delivery of this Agreement, each of the Key Employees (as defined below) has entered into an employment arrangement with Parent or one of its Affiliates to be effective as of the Closing Date (as defined below) pursuant to the execution of an offer letter (each, an “Offer Letter”), each in a form acceptable to the parties thereto.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
DEFINITIONS

The following terms, as used herein, have the following meanings:

Accountants’ Determination” has the meaning set forth in Section 3.5(b).

Acquisition Transaction” has the meaning set forth in Section 6.4(a).

Affiliate” means, with respect to any Person, (i) a director, officer, partner, member, beneficiary or stockholder of such Person; (i) a spouse, parent, sibling or child of such Person (or spouse, parent, sibling or child of any director or executive officer of such Person); and (iii) any other Person that, in each case directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

Affiliate Transaction” has the meaning set forth in Section 4.18.

Aggregate Exercise Price” means an aggregate dollar amount equal to the aggregate exercise prices of all Company Options and Company Warrants that are included for purposes of determining the Fully Diluted Number.

Agreement” has the meaning set forth in the introductory paragraph hereto.

Antitrust Laws” has the meaning set forth in Section 6.12(a).

Arbitrating Accountants” has the meaning set forth in Section 3.5(b).

Audited Financial Statements” has the meaning set forth in Section 4.7.

Balance Sheet” means the audited consolidated balance sheet of the Company and the Subsidiaries as of December 31, 2010.

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Business Day” means any day except Saturday, Sunday or any day on which banks are generally not open for business in the State of California.

Canadian Subsidiaries” means OPENLANE Canada Co., OPENLANE Canada Inc. and NEPO Auto Centre, Inc.

Canadian Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, each as amended from time to time.

Cap Amount” has the meaning set forth in Section 9.2(b).

Cash” means, in each case, as of 12:01 a.m. Pacific time on the Closing Date, (i) the outstanding cash and cash equivalents of the Company and the Subsidiaries, excluding Restricted Cash, plus (ii) all un-cleared deposits of the Company and the Subsidiaries outstanding less (iii) all un-cleared checks or withdrawals of the Company and the Subsidiaries outstanding.

CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and any rules or regulations promulgated thereunder.

Certificate of Incorporation” means the Company’s Amended and Restated Certificate of Incorporation as currently in effect.

Certificate of Merger” has the meaning set forth in Section 2.2.

Certificates” has the meaning set forth in Section 3.3(b).

Closing” has the meaning set forth in Section 2.3.

Closing Date” has the meaning set forth in Section 2.3.

Closing Payment” means the Initial Merger Consideration minus the payments made pursuant to Sections 3.2(b)(i), 3.2(b)(ii), 3.2(b)(iii), 3.2(b)(iv) and 3.2(b)(v).

Closing Statement” has the meaning set forth in Section 3.4(a).

COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code.

Code” means the Internal Revenue Code of 1986, as amended.

Company” has the meaning set forth in the introductory paragraph hereto.

Company Ancillary Documents” has the meaning set forth in Section 4.3.

Company Benefit Plan” means each employee benefit plan as defined in Section 3(3) of ERISA (regardless of whether such plan is subject to ERISA) and each other plan, fund, program, agreement or arrangement which provides employee benefits to or for the remuneration, direct or indirect, of employees, former employees, directors, officers, consultants, independent contractors, contingent workers or leased employees, which is (a) sponsored, maintained, contributed to or required to be contributed to by the Company or any of the Subsidiaries, or (b) with respect to which the Company or any of the Subsidiaries has or may have any Liability (including by reason of having an ERISA Affiliate).

Company Common Stock” means the common stock, par value $0.001 per share, of the Company.

Company Disclosure Schedule” has the meaning set forth in Article IV.

Company Options” means the options (whether or not vested or exercisable) to purchase Company Common Stock that have been granted and that remain outstanding under the Company Stock Option Plan.

Company-Owned Intellectual Property” has the meaning set forth in Section 4.17(a).

Company Participants” has the meaning set forth in Section 6.13.

Company Preferred Stock” means the preferred stock, par value $0.001 per share, of the Company.

Company Registered IP” has the meaning set forth in Section 4.17(a).

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Company Stock” means the Company Common Stock and the Company Preferred Stock.

Company Stock Option Plan” means the Company’s 2002 Stock Plan.

Company Warrants” means the warrants (whether or not exercisable) to purchase Company Common Stock or Company Preferred Stock, as the case may be.

Competition Act” means the Competition Act (Canada) and the regulations thereunder, each as amended from time to time.

Confidentiality Agreement” means the Confidentiality Agreement, dated as of March 8, 2010, by and between KAR Auction Services, Inc. and the Company.

Contract” means any written or oral legally binding contract, agreement, purchase order, commitment, Permit, loan or credit agreement, note, bond, mortgage, indenture, lease, sublease, purchase order or other legally binding agreement, instrument, concession, franchise or license, including, without limitation, customer contracts, royalty and license agreements and purchase agreements.

Control” means (including, with correlative meanings, “controlled by” and “under common control with”), with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise.

Copyrights” has the meaning set forth in the definition of Intellectual Property Right.

D&O Tail Policy” has the meaning set forth in Section 6.10(b).

De Minimis Amount” has the meaning set forth in Section 9.2(a).

DGCL” has the meaning set forth in the recitals hereto.

Dissenting Shares” has the meaning set forth in Section 3.3(f).

Dissenting Stockholders” has the meaning set forth in Section 3.3(f).

Effective Time” has the meaning set forth in Section 2.2.

Employee Benefits Cap Amount” has the meaning set forth in Section 9.2(c)(ii)(B).

Employee Benefits Representations” means the representations and warranties set forth in Section 4.14.

Environmental Laws” means any applicable federal, state, provincial, local or foreign Law (including, without limitation, common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, or governmental restriction or any legally binding agreement with any Governmental Entity relating to the environment, workplace safety or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials.

Environmental Permits” has the meaning set forth in Section 4.16(a).

Equity Interests” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether voting or nonvoting) of capital stock, including each class of common stock and preferred stock of such Person, and (ii) with respect to any Person that is not a corporation, any and all general partnership interests, limited partnership interests, membership or limited liability company interests, beneficial interests or other equity interests of or in such Person (including any common, preferred or other interest in the capital or profits of such Person, and whether or not having voting or similar rights).

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

ERISA Affiliate” means any trade or business, whether or not incorporated, which, together with the Company or any of the Subsidiaries, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

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Escrow Account” has the meaning set forth in Section 3.2(b)(iv).

Escrow Agent” means Wells Fargo Bank, National Association, a national banking association.

Escrow Agreement” means the Escrow Agreement to be entered into on the Closing Date, among the Securityholders’ Representative, Parent and the Escrow Agent, as the same may be amended, restated, modified, or otherwise supplemented from time-to-time, substantially in the form of Exhibit A attached hereto.

Escrow Funds” means, at the time of determination, the amount then held in the Escrow Account.

Escrow Period” has the meaning set forth in Section 9.5.

Estimated Excess Cash” has the meaning set forth in Section 3.4(a).

Excess Cash” means an amount equal to Cash minus the Required Cash, if any.

Expense Amount” means an amount equal to Two Hundred Thousand Dollars ($200,000).

Expense Fund” has the meaning set forth in Section 10.1(f).

Final Excess Cash” has the meaning set forth in Section 3.5(b).

Financial Statements” has the meaning set forth in Section 4.7.

Flow Thru Entity” means (a) an entity, plan or arrangement that is treated for income Tax purposes as a partnership, (b) a “controlled foreign corporation” within the meaning of Code Section 957 or (c) a “passive foreign investment corporation” within the meaning of Code Section 1297.

Foreign Company Benefit Plans” has the meaning set forth in Section 4.14(g).

Fully Diluted Number” means an amount equal to the sum of, without duplication, (i) the total number of shares of Company Common Stock outstanding immediately prior to the Effective Time, plus (ii) the total number of shares of Company Common Stock issuable upon exercise of Company Options (whether vested or unvested) that are issued and outstanding as of immediately prior to the Effective Time, plus (iii) the total number of shares of Company Common Stock issuable upon conversion of the total number of shares of Company Preferred Stock outstanding immediately prior to the Effective Time, plus (iv) the total number of shares of Company Common Stock issuable upon the exercise of Company Warrants that are issued and outstanding as of immediately prior to the Effective Time. Notwithstanding anything to the contrary set forth herein, the calculation of the Fully Diluted Number shall not include any shares of Company Stock held by the Company in treasury.

Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization) (but excluding the last sentence thereof), 4.2 (Capitalization and Subsidiaries), 4.3 (Authorization), 4.4 (Absence of Restrictions and Conflicts) (clause (a) of the first sentence only) and 4.23 (Brokers, Finders and Investment Bankers).

GAAP” means generally accepted accounting principles employed in the United States, consistently applied and on a basis consistent with the Company’s and the Subsidiaries’ past practice.

General Escrow Amount” means an amount equal to Twenty One Million Dollars ($21,000,000).

General Escrow Funds” means, at the time of determination, the amount then held in the Escrow Account that is related to the General Escrow Amount.

Governmental Entity” means the United States government, the Government of Canada, any state, provincial or local or foreign government or any court, tribunal, department, instrumentality, commission, bureau, agency, including administrative or regulatory agencies, of the United States government and of the Government of Canada, any state or provincial government or any local government, or other governmental authority or agency, domestic or foreign.

Guaranteed Obligations” has the meaning set forth in Section 9.6(a).

Guarantor” has the meaning set forth in the introductory paragraph hereto.

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Hazardous Materials” mean any waste, pollutant, contaminant, hazardous substance, toxic, ignitable, reactive or corrosive substance, hazardous waste, special waste, industrial substance, by-product, process intermediate product or waste, petroleum or petroleum-derived substance or waste, chemical liquids or solids, liquid or gaseous products or any constituent of any such substance or waste, the use, handling or disposal of which by the Company or any of the Subsidiaries is in any way governed by or subject to any applicable Environmental Law.

Indebtedness” means, with respect to the Company or any of the Subsidiaries, but without duplication, (i) all indebtedness of the Company or any of the Subsidiaries for borrowed money and all accrued interest thereon (other than accounts payable in the ordinary course of business), including, without limitation, arising from loans, advances and obligations related thereto, (ii) all obligations of the Company or any of the Subsidiaries for the deferred purchase price of assets, property or services other than (w) operating or other leases of property, (x) trade payables and other ordinary or non-ordinary course third party payables, (y) accrued expenses and (z) liabilities to current and/or former employees incurred in the ordinary course of business, (iii) all obligations of the Company or any of the Subsidiaries for borrowed money evidenced by notes, bonds, debentures, hedging and swap arrangements or Contracts or other similar instruments, (iv) all capital lease (but not operating lease) obligations, (v) all accrued and unpaid interest on any Indebtedness referred to in clauses (i) through (iv) above through the Closing Date and any prepayment penalties, premiums, consent or other fees, breakage costs on interest rate swaps and any other hedging obligations (including, but not limited to, foreign exchange contracts) or other costs incurred in connection with the repayment or assumption of such Indebtedness, and (vi) all indebtedness of others of the type referred to in clauses (i) through (v) above guaranteed in any manner by the Company or any of the Subsidiaries.

Indemnified Directors and Officers” has the meaning set forth in Section 6.10(a).

Indemnified Persons” means the Parent Group or the Seller Group, as the case may be, that is entitled to be indemnified under Article IX.

Indemnifying Persons” means Parent or the Securityholders, as the case may be, that is required to provide indemnification under Article IX.

Indemnity Threshold” has the meaning set forth in Section 9.2(a).

Information Statement” has the meaning set forth in Section 6.11(b).

Initial Merger Consideration” means Two Hundred Ten Million Dollars ($210,000,000), with such amount being adjusted in accordance with Section 3.4(b).

Intellectual Property Right” means all (i) trademarks, service marks, applications for trademarks, applications for service marks, service names, trade names, trade dress, fictitious business names (d/b/a’s), internet domains and URLs, registered user names, and all goodwill associated with any of the foregoing (collectively, “Marks”), (ii) patents and patent applications, including all divisionals, continuations, continuations-in-part, extensions, substitutions, renewals, reexaminations, reissues, additions, any supplementary certificates of protection of or to any of the foregoing, and any registrations or applications for registration of any of the foregoing (collectively, “Patents”), (iii) copyrights and any rights in works of authorship (including without limitation rights in all forms of software, whether in source code, object code, firmware or development tools) and any registrations or applications for registration of any of the foregoing (collectively, “Copyrights”), (iv) trade secrets and rights (other than Patents and Copyrights) in confidential information, and in confidential Technology and any other rights (other than Patents and Copyrights) in confidential know-how, inventions, invention disclosures and other information which has actual or potential commercial value and is not available in the public domain (collectively, “Trade Secrets”), and (v) and all other intellectual property or intangible proprietary right, whether or not subject to statutory registration or protection (collectively, “Other IP Rights ”).

Interested Person” has the meaning set forth in Section 4.18.

Interim Financial Statements” has the meaning set forth in Section 4.7.

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Investor Rights Agreement” means that certain Third Amended and Restated Investor Rights Agreement, dated as of October 29, 2008, by and among the Company and the holders of Company Preferred Stock named therein.

IRS” shall have the meaning set forth in Section 4.14(a).

Key Employees” means those employees set forth on Schedule 1.1(a).

Knowledge” of any Person means (i) the actual knowledge of such Person and (ii) with respect to the Company, the actual knowledge of Peter Kelly, Michael Briggs, Scott Cross, Gary Edelstein, Laurel Finch, Andrew Iorgulescu, Nagi Palle, Todd Hodnett and Chuck Tapp after reasonable inquiry of Zach Hallowell, Clark Hammond, Serge Shukhat, Amy Carlson and Eddie Ammar.

Latest Balance Sheet” has the meaning set forth in Section 4.7.

Latest Balance Sheet Date” has the meaning set forth in Section 4.7.

Law” means any law (both common and statutory law and civil and criminal law), treaty, rule, directive, legislation, ordinance, regulatory code (including, without limitation, statutory instruments, circulars, directives, decisions, rules and regulations, in each case, having the force of law) or similar provision having the force of law or an Order of any Governmental Entity.

Leased Real Property” means any and all real property leased, subleased or licensed to, or otherwise used or occupied by, the Company or the Subsidiaries pursuant to the Leases or other Contract and all rights, title and interests under the Leases relating thereto.

Leases” means all leases, lease guaranties, subleases, licenses, easements, and agreements, whether written or oral, for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property, including all amendments, terminations and modifications thereof and all subordination, non-disturbance and attornment agreements and estoppel certificates with respect thereto.

Letter of Transmittal” has the meaning set forth in Section 3.3(b).

Liability” means any liability or obligation (including as related to Taxes), whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, determined, determinable or otherwise, liquidated or unliquidated and whether due or to become due, regardless of when asserted.

Lien” means, with respect to any property or asset, any mortgage, deed of trust, deed to secure debt, lien, pledge, charge, security interest, encumbrance, right-of-way, easement, lease, sublease, license or other similar adverse claim of any kind in respect of such property or asset, including, without limitation, any voting or other transfer restrictions. For the purposes of this Agreement, (x) a Person shall be deemed to own, subject to a Lien, any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset and (y) notwithstanding anything to the contrary contained herein, licenses to Intellectual Property Rights shall not constitute a Lien.

Losses” means any and all losses, damages, known Liabilities (and the parties agree that for the purposes of this definition, “known” shall not limit the quantum of Liabilities, but only that the source of the Liabilities must be known to constitute “Losses”), out-of-pocket expenses (including reasonable attorneys’ and accountants’ and other professionals’ fees and expenses), assessments, and Taxes; provided that, notwithstanding the foregoing, Losses shall in no event include any exemplary, special or punitive damages (except to the extent such damages are awarded by a Governmental Entity in connection with a Third Party Claim).

Major Private Label Customers” has the meaning set forth in Section 4.19.

Marks” has the meaning set forth in the definition of Intellectual Property Right.

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Material Adverse Effect” means any state of facts, change, event, effect, occurrence or non-occurrence (whether or not constituting a breach of a representation, warranty or covenant set forth in this Agreement) that, individually or in the aggregate, is or would be reasonably likely to be materially adverse to the business, financial condition, results of operations, properties, or assets and Liabilities of the Company and the Subsidiaries, taken as a whole. A Material Adverse Effect shall also include any state of facts, change, event or occurrence that shall have occurred that, individually or in the aggregate, is or would be reasonably likely to prevent the performance by the Company of its obligations under this Agreement. Notwithstanding the foregoing, any state of facts, change, event, effect, occurrence or non-occurrence (whether or not constituting a breach of a representation, warranty or covenant set forth in this Agreement) arising from, in connection with or as a result of any of the following shall not be deemed to constitute, or be taken into account in determining whether there has been or would reasonably be likely to be, a Material Adverse Effect: (i) changes in general economic conditions, political conditions or conditions in financial markets; (ii) changes in conditions affecting the industry in which the Company and the Subsidiaries operate; (iii) acts of war, terrorism or natural disasters; (iv) changes in law or GAAP; (v) the announcement or pendency of the Merger, this Agreement and the transactions contemplated hereby (including the loss of any employee, consultant, customer, supplier or business partner); (vi) compliance with the terms of, or taking of any action required by, this Agreement or any Related Document to which the Company is party or that is otherwise taken with consent of Parent; (viii) any failure by the Company to meet any financial forecast, projection, estimate, prediction or models for any period, provided, that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of “Material Adverse Effect” may be taken into account in determining whether there has been a Material Adverse Effect; and (ix) any matter disclosed in the Company Disclosure Schedule solely to the extent disclosed therein in accordance with this Agreement; provided, that with respect to clauses (i), (ii) and (iii), only to the extent such changes or events do not have a materially disproportionate effect on the Company and the Subsidiaries, taken as a whole, as compared to any of the other companies in the industry in which the Company and the Subsidiaries operate; provided further, that with respect to clause (ii), notwithstanding the foregoing, any changes or events arising from or related to market trends affecting the listing of off-lease vehicles shall not constitute, or be taken into account in determining whether there has been or would reasonably be likely to be, a Material Adverse Effect.

Material Contracts” has the meaning set forth in Section 4.12(a).

Material Customer Revenue” has the meaning set forth in Section 4.19.

Material Customers” has the meaning set forth in Section 4.19.

Merger” has the meaning set forth in the recitals hereto.

Merger Consideration” has the meaning set forth in Section 3.5(b).

Merger Sub” has the meaning set forth in the introductory paragraph hereto.

Merger Sub Common Stock” has the meaning set forth in Section 3.1(a)(i).

Objection Notice” has the meaning set forth in Section 3.5(b).

Offer Letters” has the meaning set forth in the recitals hereto.

Option Closing Consideration” means, with respect to any Company Option, whether vested or unvested, an amount equal to (a) the number of shares of Company Common Stock as to which such Company Option is exercisable, or would be exercisable if fully vested, immediately prior to the Effective Time multiplied by (b) the excess of the Per Share Common Closing Consideration over the exercise price per share of such Company Option as set forth on Schedule 4.2(a).

Option Consideration” means, with respect to any Company Option, whether vested or unvested, an amount equal to the Option Closing Consideration with respect to such Company Option plus a pro-rata portion, based on the Fully Diluted Number, of any distributions from the Escrow Account, the Expense Fund or in respect of any payment made by Parent pursuant to Section 3.6(a).

Orders” means judgments, writs, decrees, compliance agreements, injunctions or judicial or administrative orders and legally binding determinations of any Governmental Entity or arbitrator.

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Other IP Rights” has the meaning set forth in the definition of Intellectual Property Right.

Outside Date” has the meaning set forth in Section 8.1(b).

Parent” has the meaning set forth in the introductory paragraph hereto.

Parent Ancillary Documents” has the meaning set forth in Section 5.2.

Parent Group” means Parent, Merger Sub, the Company, the Subsidiaries and their respective successors and assigns, and each of their respective officers, directors, managers and Affiliates.

Parent Plans” has the meaning set forth in Section 6.13.

Patents” has the meaning set forth in the definition of Intellectual Property Right.

Paying Agent” has the meaning set forth in Section 3.3(a).

Paying Agent Deposit” has the meaning set forth in Section 3.2(b)(vi).

Payoff Letters” means the letters and Lien releases provided to the Company or the Subsidiaries by the lenders and other holders of any Indebtedness in connection with the repayment of all Indebtedness of the Company and the Subsidiaries as contemplated hereby.

Per Share Common Closing Consideration” means an amount equal to (a)(i) the Closing Payment plus (ii) the Aggregate Exercise Price divided by (b) the Fully Diluted Number.

Per Share Common Consideration” means an amount equal to the Per Share Common Closing Consideration plus a pro-rata portion, based on the Fully Diluted Number, of any distributions from the Escrow Account, the Exchange Fund or in respect of any payment made by Parent pursuant to Section 3.6(a).

Permits” means all permits, licenses, authorizations, filings or registrations, franchises, approvals, certificates (including, without limitation, certificates of need, construction and operation permits and safety certificates), exemptions, classifications, registrations, variances and similar documents, applications, rights obtained, or required to be obtained, from Governmental Entities.

Permitted Liens” means (i) Liens for Taxes not yet due and payable, (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and repairmen incurred in the ordinary course of business consistent with past practice and not yet delinquent and (iii) zoning, building, or other restrictions, variances, covenants, rights of way, encumbrances, easements and other minor irregularities in title, none of which, individually or in the aggregate interfere in any material respect with the continued use of any Leased Real Property by the Company or any of the Subsidiaries for the purpose for which they are currently being used.

Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

Post-Closing Tax Period” means any Tax period beginning on or after the day immediately after the Closing Date.

Pre-Closing Tax Assets” has the meaning set forth in Section 9.2(f).

Pre-Closing Tax Period” means any Tax period ending on or before and including the Closing Date.

Proceedings” means actions, suits, claims, reviews, audits, examinations and investigations and legal, administrative or arbitration proceedings commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity or arbitrator.

Products” has the meaning set forth in Section 4.17(c).

Publicly Available Software” means (i) any freely available software distributed under a license that requires as a condition of use, modification and/or distribution of such software that such software or other software incorporated into, derived from, or distributed with such software (a) be disclosed or distributed in source code form, (b) be licensed for the purpose of making derivative works or (c) be redistributable at no or

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minimal charge (collectively, “Publicly Available Copyleft Software”), which shall specifically include any freely available software distributed under the GNU General Public License, the GNU Lesser General Public License, or the Affero General Public License or similar licensing and distribution models that meet the requirements of (a), (b) or (c) above; and (ii) any other freely available software distributed under the Apache Software License or pursuant to similar licensing and distribution models, which for clarity, shall specifically exclude any Publicly Available Copyleft Software.

Purchase Price Cap” has the meaning set forth in Section 9.2(c)(ii).

Receivables” has the meaning set forth in Section 4.22(b).

Registered IP” mean applications, registrations and filings for Intellectual Property Rights that have been registered, filed, certified or otherwise perfected or recorded with or by any Governmental Entity.

Related Documents” means the Escrow Agreement, the Company Ancillary Documents, the Securityholders Ancillary Documents and the Parent Ancillary Documents.

Release Event” has the meaning set forth in Schedule 9.1.

Representatives” has the meaning set forth in Section 6.2.

Required Cash” means the amount of Cash needed by the Company and the Subsidiaries such that ordinary course current assets (excluding Cash and deferred Tax assets) of the Company and the Subsidiaries determined in accordance with GAAP less ordinary course current liabilities (excluding the current portion of any Indebtedness and the Transaction Payroll Taxes)of the Company and the Subsidiaries determined in accordance with GAAP is equal to zero; provided, that in the event such current assets exceed such current liabilities, the amount of Required Cash shall be deemed to be zero dollars ($0). Required Cash shall be calculated based on those GAAP line items and the principles set forth on the sample balance sheet attached hereto as Exhibit B, which has been provided for illustrative purposes only but which the parties agree will be the line items used in determining Required Cash. For the avoidance of doubt, liabilities for Taxes will be calculated taking into account any available Tax asset or attribute of the Company or any of the Subsidiaries arising in a Pre-Closing Tax Period or the portion of any Straddle Period ending on and including the Closing Date.

Requisite Stockholder Approval” has the meaning set forth in Section 4.26.

Responsible Pro Rata Portion” means with respect to each Securityholder, the quotient (expressed as a percentage) obtained by dividing (a) the sum of (i) the total number of shares of Company Common Stock held by such Securityholder immediately prior to the Effective Time (including shares of Company Common Stock issuable upon the exercise of any Company Options or Company Warrants held by such Securityholder) plus (i) the total number of shares of Company Common Stock issuable upon conversion of the total number of shares of Company Preferred Stock held by such Securityholder immediately prior to the Effective Time by (b) the sum of (i) the total number of shares of Company Common Stock held by all Securityholders immediately prior to the Effective Time (including shares of Company Common Stock issuable upon the exercise of all Company Options or Company Warrants held by all Securityholders) plus (i) the total number of shares of Company Common Stock issuable upon conversion of the total number of shares of Company Preferred Stock held by all Securityholders immediately prior to the Effective Time.

Restricted Cash” means cash proceeds from vehicles sold at auction and collected from buyers by Company and/or the Subsidiaries, which are temporarily held by the Company and/or the Subsidiaries and payable to the seller in the auction transaction, net of transaction fees due to the Company and/or the Subsidiaries.

Review Period” has the meaning set forth in Section 3.5(b).

Revised Closing Statement” has the meaning set forth in Section 3.5(a).

Secretary of State” has the meaning set forth in Section 2.2.

Securityholders” means those Persons who hold, immediately prior to the Effective Time, shares of Company Common Stock, shares of Company Preferred Stock, Company Options or Company Warrants.

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Securityholders Ancillary Documents” means any certificate, agreement, document or other instrument to be executed and delivered by a Securityholder in connection with the transactions contemplated by this Agreement.

Securityholders’ Representative” has the meaning set forth in the introductory paragraph hereto.

Securityholders’ Representative Agreement” has the meaning set forth in Section 10.1(c).

Seller Group” means any Securityholder, their respective successors and assigns, and each of their respective officers, directors and managers.

Selling Expenses” means (i) all costs, fees and expenses payable to (A) Montgomery & Co. or any other financial advisor, finder or broker, (B) Wilson Sonsini Goodrich & Rosati, Professional Corporation, and (C) any other advisor, by the Company or any of the Subsidiaries, (ii) incurred by the Company or any of the Subsidiaries on behalf of any of its stockholders, in each case incurred in connection with the consummation of the transactions contemplated hereby (whether incurred prior to or after the date hereof) and (iii) the expenses set forth on Schedule 1.1(b).

Shortfall Amount” has the meaning set forth in Section 9.3(c).

Shrinkwrap Software” has the meaning set forth in Section 4.17(e).

Specified Indemnity Matters Group A” has the meaning set forth in Schedule 9.1.

Specified Indemnity Matters Group B” has the meaning set forth in Schedule 9.1.

Specified Request” has the meaning set forth in Schedule 7.1(b).

Stockholder Approval Delivery Deadline” has the meaning set forth in Section 7.2(g).

Stockholders” means the holders of the Company Common Stock and the Company Preferred Stock.

Straddle Period” means any taxable period beginning on or before the Closing Date and ending after the Closing Date.

Subsidiaries” means each of the direct and indirect subsidiaries of the Company.

Subsidiary Shares” has the meaning set forth in Section 4.2(b).

Supplemental Cap Amount” has the meaning set forth in Schedule 9.1.

Supplemental Escrow Amount” has the meaning set forth in Schedule 9.1.

Supplemental Escrow Funds” means, at the time of determination, the amount then held in the Escrow Account that is related to the Supplemental Escrow Amount.

Supplemental Information” has the meaning set forth in Section 6.8.

Survival Date” has the meaning set forth in Section 9.5(a).

Surviving Corporation” has the meaning set forth in Section 2.1.

Surviving Corporation Common Stock” has the meaning set forth in Section 3.1(a)(i).

Tax Contest” has the meaning set forth in Section 6.9(d).

Tax Representations” means the representations and warranties set forth in Section 4.13.

Tax Return” shall mean any report, return (including any attachments), separately filed election, declaration or other information required to be supplied (or supplied) to a Governmental Entity in connection with Taxes, including estimated returns and reports of every kind with respect to Taxes.

Taxes” means all taxes, assessments, charges, duties, fees, levies or other governmental charges (including interest, penalties or additions associated therewith), including income, franchise, capital, capital gains, capital stock, real property, personal property, customs duty, tangible, withholding, employment, payroll, social security, social contribution, unemployment compensation, employment insurance, public pension plan,

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disability, transfer, sales, use, goods and services, excise, gross receipts, value-added and all other taxes of any kind imposed by any Governmental Entity, whether disputed or not, and any charges, interest or penalties imposed by any Governmental Entity.

Technology” means tangible embodiments of any of the following: all forms of hardware, software (whether in source code, object code, firmware or development tools), technical information and documentation, customer and client information, client and customer lists, franchises, plans, advertising records, techniques, methods, instructions, research records, inventions, designs, drawings, procedures, processes, models, formulations, manuals and systems, data, databases and research, whether or not patentable or copyrightable.

Third Party Claim” has the meaning set forth in Section 9.4.