Exhibit 10.8
MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT is made as of February 28, 1997 by and between The Cobalt
Group, Inc., a Washington corporation (the "COMPANY"), and First Analysis
Securities Corporation, an Illinois corporation ("FIRST ANALYSIS").
WHEREAS, the Company desires to retain First Analysis and First Analysis
desires to perform for the Company certain services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. TERM. This Agreement shall be in effect from the date hereof and
shall terminate upon the Sale of the Company (used herein as defined in the
Stockholders Agreement as of the date hereof by and among the Company and
certain of the stockholders of the Company).
2. SERVICES. First Analysis shall perform or cause to be performed
such services for the Company and its subsidiaries as directed by the Company's
board of directors, which may include, without limitation, the following:
(a) general executive and management services;
(b) identification, support, negotiation and analysis of
acquisitions and dispositions by the Company;
(c) support, negotiation and analysis of financing
alternatives, including, without limitation, in connection with acquisitions,
capital expenditures and refinancing of indebtedness;
(d) finance functions, including assistance in the
preparation of financial projections, and monitoring of compliance with
financing agreements; and
(e) other services for the Company and its subsidiaries upon
which the Company's board of directors and First Analysis agree.
3. TRANSACTION FEES. During the term of this Agreement, First
Analysis shall be entitled to receive from the Company a transaction fee in
connection with the consummation of an initial public offering of the Company's
securities under the Securities Act of 1933 (an "IPO") in an amount equal to
0.75% of the aggregate value of such transaction (each such
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payment, a "TRANSACTION FEE"). In addition, during the term of this Agreement,
First Analysis shall be entitled to receive from the Company a Transaction Fee
in connection with the consummation of (a) each acquisition by the Company of an
additional business or disposition by the Company of any or all business assets
(other than sales of inventory in the ordinary course of business and other than
the sale of assets relating to HomeScout) and (b) each financing of either debt
or equity by the Company (other than for an IPO), in each case, in an amount
equal the greater of 1.5% of the aggregate value of such transaction or the
percentage fee that constitutes the industry standard for the performance of
such services; provided, however, First Analysis shall defer the receipt of any
Transaction Fee from the Company until the earlier of the Sale of the Company or
such time as the Company's enterprise value (defined herein as the sum of the
Company's debt plus its stockholders' equity) is at least $10,000,000.
4. PERSONNEL. First Analysis shall provide and devote to the
performance of this Agreement the services of Mark Koulogeorge (the
"COORDINATOR") and such other partners, employees and agents of First Analysis
as the Coordinator shall deem appropriate to the furnishing of the services
required.
5. LIABILITY. Neither First Analysis nor any of its affiliates,
partners, employees or agents shall be liable to the Company or its subsidiaries
or affiliates for any loss, liability, damage or reasonable expense arising out
of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of First Analysis, its affiliates, partners, employees or agents acting
within the scope of their employment or authority.
6. INDEMNITY. The Company and its subsidiaries shall defend,
indemnify and hold harmless First Analysis, its affiliates, partners, employees
and agents from and against any and all loss, liability, damage, or expenses
arising from any claim (a "CLAIM") by any person with respect to, or in any way
related to, the performance of services contemplated by this Agreement
(including attorneys' fees) (collectively, "CLAIMS") resulting from any act or
omission of First Analysis, its affiliates, partners, employees or agents, other
than for Claims which shall be proven to be the direct result of gross
negligence, bad faith or willful misconduct by First Analysis, its affiliates,
partners, employees or agents. The Company and its subsidiaries shall defend at
its own cost and expense any and all suits or actions (just or unjust) which may
be brought against the Company, its subsidiaries and First Analysis, its
officers, directors, affiliates, partners, employees or agents or in which First
Analysis, its affiliates, partners, employees or agents may be impleaded with
others upon any Claim or Claims or upon any matter, directly or indirectly,
related to or arising out of this Agreement or the performance hereof by First
Analysis, its affiliates, partners, employees or agents, except that if such
damage shall be proven to be the direct result of gross negligence, bad faith or
willful misconduct by First Analysis, its affiliates, partners, employees or
agents, then First Analysis shall reimburse the Company and its subsidiaries for
the costs of defense and other costs incurred by the Company and its
subsidiaries.
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7. NOTICES. All notices hereunder shall be in writing and shall be
delivered by reputable express courier, personally or mailed by United States
mail, postage prepaid, addressed to the parties as follows:
To the Company:
The Cobalt Group, Inc.
2030 First Avenue, Suite 300
Seattle, Washington 98121
Attention: President
with a copy to:
Stoel Rives LLP
One Union Square
600 University Street, Suite 3600
Seattle, Washington 98101-3197
Attention: Ronald J. Lone
To First Analysis:
First Analysis Securities Corporation
233 South Wacker Drive, Suite 9500
Chicago, Illinois 60606
Attention: Mark Koulogeorge
with a copy to:
McDermott, Will & Emery
227 W. Monroe Street
Chicago, Illinois 60606-5096
Attention: Timothy R.M. Bryant
8. ASSIGNMENT. Neither party may assign any rights or obligations
hereunder to any other party without the prior written consent of the other
party, which consent shall not be unreasonably withheld; provided, however, that
First Analysis (a) may assign its rights and obligations under this Agreement
to any of its affiliates without the consent of the Company and (b) shall assign
its rights and obligations to the Coordinator if he shall no longer be
affiliated with First Analysis. The assignor shall remain liable for the
performance of any assignee.
9. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties.
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10. COUNTERPARTS. This Agreement may be executed and delivered by
each party hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute but one and the same agreement.
11. ENTIRE AGREEMENT; MODIFICATION; GOVERNING LAW. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions thereof shall be binding upon
either party unless approved in writing by an authorized representative of such
party. All issues concerning this agreement shall be governed by and construed
in accordance with the laws of the State of Illinois, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of Illinois.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THE COBALT GROUP, INC.
By:
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Its:
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FIRST ANALYSIS SECURITIES CORPORATION
By:
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Its:
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