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LOAN AGREEMENT

    THIS LOAN AGREEMENT is made as of September 7, 2001, by and among The Cobalt
Group, Inc., a Washington corporation (the "Company"), and Warburg, Pincus
Equity Partners, L.P. as agent (the "Agent") for the entities named on the
Schedule of Lenders attached hereto as Schedule A (individually, a "Lender" and
collectively, the "Lenders").

RECITALS

    WHEREAS, the Company seeks bridge financing to provide working capital for
its business; and

    WHEREAS, the Lenders desire to provide such bridge financing.

    NOW THEREFORE, in consideration of the foregoing and the mutual premises and
covenants made herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

    1.  Loan.

    1.1 The Maximum Amount. The Agent hereby agrees to loan to the Company, on
behalf of the Lenders, funds necessary to enable the Company to meet its working
capital needs; provided, however, that the aggregate amount of such borrowings
shall not exceed $5,000,000.00 (the "Maximum Amount").

    1.2 Borrowings. The Company may borrow from the Lenders from time to time
any amounts in denominations of at least $1,000,000.00 or integral multiples of
$250,000.00 in excess thereof up to but not exceeding the Maximum Amount in the
aggregate; provided, however, that any principal amounts repaid under the Notes
(as defined below) may not be reborrowed under this Agreement and any such
repayments will cause a corresponding reduction in the Maximum Amount. To make a
borrowing, the Company shall give the Agent at least three business days' notice
of borrowing. The exact amount outstanding shall be the amount reflected on the
Agent's books and records from time to time, which books and records shall be
conclusive evidence of the amount outstanding absent manifest error. The Agent
shall advance the borrowings, on behalf of the Lenders, to such account as the
Company shall direct.

    1.3 Certificate of Officer. All borrowings hereunder shall be evidenced by a
certificate from a duly authorized officer of the Company in form and substance
reasonably satisfactory to the Agent certifying that the representations,
warranties and covenants of the Company set forth herein are true and correct in
all respects and that there has been no change in or effect on the business of
the Company or any of its subsidiaries that is or is reasonably likely to be
materially adverse to the business, operations, properties (including intangible
properties and leased or owned properties), condition (financial or otherwise),
prospects, assets or liabilities of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"), each as of the date of such borrowing.

    2.  Issuance of Notes.

    2.1 Note. The Company hereby agrees that, upon each borrowing of funds from
the Lenders, the Company will execute and deliver to the Agent, on behalf of the
Lenders, a note substantially in the form of Exhibit A attached hereto
evidencing the loan made by such Lender (each, a "Note," and collectively, the
"Notes").

    2.2 Interest. The outstanding principal amount on each Note shall bear
interest at the rates set forth in the Notes. Interest shall commence with the
date of issuance thereof and shall continue on the outstanding principal balance
until the Note is paid in full.

    2.3 Usury Savings Clause. Each Note shall contain an appropriate usury
savings clause.

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    3.  Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to the Agent and each Lender the following:

    3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Washington and has all requisite corporate power and authority
to carry on its business as now being conducted and proposed to be conducted in
the future. The Company is duly qualified to transact business and is in good
standing in each jurisdiction where failure to so qualify would have a Material
Adverse Effect.

    3.2 Authorization. All corporate actions on the part of the Company, its
officers, directors, and shareholders necessary for the authorization,
execution, and delivery of this Agreement, the Notes, the performance of all
obligations of the Company hereunder and thereunder, and the authorization,
issuance, and delivery of the Notes, have been taken. This Agreement and the
Notes constitute the valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as limited by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally, (b) laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (c) state and federal
securities laws with respect to rights to indemnification or contribution.

    3.3 No Conflict. Except as may be required under the SVB Agreement (as
defined below), the execution and delivery by the Company of this Agreement and
the performance by the Company of its obligations hereunder (including the
issuance and sale of the Notes) do not require the Company to obtain any
consent, approval or action of, or make any filing with or give any notice to,
any corporation, person or firm or any public, governmental or judicial
authority that has not already been obtained prior to the date hereof.

    3.4 Absence of Defaults. Except pursuant to the SVB Agreement, the execution
and delivery of this Agreement and the performance of its obligations hereunder
(including the issuance and sale of the Notes) will not result in a breach of
any of the terms, conditions or provisions of, or constitute a default under, or
permit the acceleration of rights under or termination of, any material
indenture, mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness, or other material agreement of the Company or the Articles of
Incorporation or Bylaws of the Company. No event has occurred and no condition
exists which, upon notice or the passage of time (or both), would constitute a
default under any such key agreements and instruments or in any license, permit
or authorization to which the Company is a party or by which it may be bound.

    4.  Legends. The Company and the Agent understand that the Notes may bear
the following legend:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS."

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    5.  Conditions to Loan. The obligation of the Agent to advance any funds
hereunder on behalf of the Lenders is subject to the satisfaction of the
following conditions:

    5.1 Note. The Agent shall have received a Note substantially in the form of
Exhibit A attached hereto evidencing such loan.

    5.2 Certificate. The Agent shall have received a certificate of a duly
authorized officer of the Company pursuant to Section 1.3 of this Agreement.

    5.3 Waiver. The Agent shall have received a waiver from Silicon Valley Bank
of any event of default under the Loan and Security Agreement (the "SVB
Agreement") dated as of March 8, 2001 by and between Silicon Valley Bank and the
Company in form and substance reasonably satisfactory to the Agent; provided,
however, that no such waiver will be required if there are no amounts
outstanding under the SVB Agreement.

    6.  Miscellaneous.

    6.1 Fees and Expenses. The Company shall pay the Agent's and the Lender's
out-of-pocket fees and expenses incurred in connection with the transactions
contemplated hereby. Except as provided in the immediately preceding sentence,
each party hereto shall bear their own attorney's fees in connection with the
negotiation and execution of this Agreement and the other documents and
agreements with the Agent or the Lenders contemplated herein.

    6.2 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties hereto (including
transferees of any securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

    6.3 Governing Law. Notwithstanding Section 6.11 below, this Agreement shall
be governed by and construed under the laws of the State of New York as applied
to agreements among New York residents, entered into and to be performed
entirely within New York.

    6.4 Counterparts. This Agreement may be executed in two or more
counterparts, and by facsimile, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

    6.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or four (4) days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party, in the case of the Company or the Agent, on the
signature page hereto, and in the case of each Lender, on Exhibit A hereto, or
at such other address as such party may designate by advance written notice to
the other parties.

    6.6 Finder's Fee. The Company agrees to indemnify and hold harmless the
Agent and each Lender from any liability for any commission or compensation in
the nature of a finders' fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible. The Agent and each Lender
severally agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Agent or such Lender or any of their respective
officers, partners, employees, or representatives is responsible.

    6.7 Entire Agreement. This Agreement, the Notes and the other documents
delivered pursuant hereto or thereto, constitute the entire agreement among the
parties hereto and no party shall be liable or bound to any other party in any
manner by any warranties, representations, or covenants except as specifically
set forth herein or therein.

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    6.8 Amendment and Waiver. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Agent. Any waiver or amendment effected in
accordance with this section shall be binding upon each holder of any Notes
purchased under this Agreement at the time outstanding, each future holder of
all such Notes, and the Company.

    6.9 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

    6.10 Survival. The representations, warranties, covenants and agreements
made herein shall survive the consummation or termination of this Agreement.

    6.11 Washington Statutory Notice. ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

    THE COBALT GROUP, INC.                     By: /s/ JOHN W.P. HOLT   

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    Name: John W.P. Holt     Title: President & Chief Executive Officer
 
 
Address:
2200 First Avenue South, Suite 400
Seattle, WA 98134

ACCEPTED AND AGREED:

WARBURG, PINCUS EQUITY PARTNERS, L.P., as Agent                         By:
WARBURG, PINCUS & CO.,
General Partner                           By: /s/ JOSEPH P. LANDY   

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        Name: Joseph P. Landy
Title: Partner               Address: 466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention:
   

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SCHEDULE A

Lender Name and Address

Warburg, Pincus Equity Partners, L.P.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention:

Warburg, Pincus Netherlands
Equity Partners I, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention:

Warburg, Pincus Netherlands
Equity Partners II, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention:

Warburg, Pincus Netherlands
Equity Partners III, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention:

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EXHIBIT A

Form of Unsecured Promissory Note

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LOAN AGREEMENT
RECITALS
EXHIBIT A
Form of Unsecured Promissory Note