Severance Agreement

Exhibit 10.1

SEVERANCE AGREEMENT

THIS AGREEMENT, dated as of May 1st, 2006, is made by and between ADESA Inc., a Delaware corporation (the "Company"), and Angel R. Sales (the "Executive").

WHEREAS, the Company considers it essential to the best interests of its stockholders to employ the Executive.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1. Terms . The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2. Term of Agreement . The Term of this Agreement shall commence on the date hereof and shall continue in effect through December 31, 2010.

3. Company92s Covenants Summarized . In order to induce the Executive to agree to employment with the Company and in consideration of the Executive92s covenants set forth in Sections 4 and 7 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

4. The Executive92s Covenants . The Executive agrees to abide by and perform the covenants set forth in Section 7 below.

5. Severance Payments .

5.1 If the Executive92s employment is terminated during the Term by the Company without Cause:

(a) All outstanding stock options and restricted stock units awarded previously to the Executive shall vest immediately upon the Date of Termination, subject to the satisfactory achievement of the performance goals set for the Executive (prior to the Date of Termination) as determined in the reasonable judgment of the Compensation Committee of the Board of Directors.

(b) Until the Executive reaches the age of 65, the Company shall arrange to provide the Executive and his dependents health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at an after-tax cost to the Executive which shall not exceed the lower of: (1) an amount calculated by multiplying the percentage share of the Company92s health insurance costs paid by employees at such time (e.g.,



25%) by the monthly cost to the Company of obtaining health care insurance coverage for the Executive and his dependents substantially similar to the health care insurance provided to the Executive prior to the Date of Termination, or (2) $1,000 per month.

5.2 If the Executive92s employment is terminated during the Term by the Executive with Good Reason or by the Company without Cause AND David Gartzke is no longer the Chief Executive Officer of the Company, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described below ("Severance Payments"):

(a) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash ("Cash Severance Payment"), equal to two times the sum of (i) the Executive92s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Executive92s target annual bonus under any annual bonus or annual incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason.

(b) Until the Executive reaches the age of 65, health insurance benefits as set forth in section 5.1(b) hereof.

(c) Notwithstanding the foregoing provisions of this Section 5, the Company shall not be obligated to pay the Severance Payments to the Executive unless the Executive shall have signed a release of claims (other than with respect to claims arising under this Agreement, that certain letter agreement between the Executive and the Company dated as of May 1, 2006 (the "Offer Letter") or any documents evidencing grants or awards of equity based compensation, existing rights to indemnification or coverage under the Company92s liability insurance policies, and rights under the Company92s benefits plans not inconsistent with the terms of this Agreement) in favor of the Company in a form to be prescribed by the Board, and all applicable rescission periods provided by law shall have expired. The Company shall pay the Cash Severance Payment to the Executive on or before the thirtieth day after the later of (i) the Date of Termination, (ii) the date of the Notice of Termination, and (iii) the date upon which the conditions set forth in this Section 5.2(C) are satisfied.



5.3 If the Executive92s employment is terminated during the Term by the Executive without Good Reason and the Executive is between the age of 62 and 65 on the Date of Termination, then in such event, until the Executive reaches the age of 65, the Company shall arrange to provide health insurance benefits as set forth in section 5.1(b) hereof.



5.4 If the Executive92s employment is terminated during the Term by reason of death or Disability, then there shall be no payments under this Agreement.



6 . Termination Procedures .

6.1 Notice of Termination . During the Term, any purported termination of the Executive92s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive92s employment under the provision so indicated.

6.2 Date of Termination . "Date of Termination," with respect to any purported termination of the Executive92s employment during the Term shall mean (i) if the Executive92s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive92s duties during such thirty (30) day period), and (ii) if the Executive92s employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Executive, shall not be less than fifteen (15) days from the date such Notice of Termination is given).

7. Covenants .

7.1 Nondiscl ...