Document:

<Page>

                                                                    EXHIBIT 10.7

                              EQUITY INCENTIVE PLAN

                               COBALT CORPORATION

                               SEPTEMBER 11, 1998

                 (REFLECTS ALL AMENDMENTS THROUGH MAY 29, 2002)

                         THIS DOCUMENT CONSTITUTES PART
                       OF A PROSPECTUS COVERING SECURITIES
                            THAT HAVE BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<Page>

                               COBALT CORPORATION

                              EQUITY INCENTIVE PLAN

                                TABLE OF CONTENTS

<Table>
<Caption>
Article    Section                                                             Page
-------    -------                                                             ----
   <S>       <C>         <C>                                                     <C>
   1                     ESTABLISHMENT, PURPOSE, AND DURATION

             1.1         Establishment of the Plan                                1
             1.2         Purpose of the Plan                                      1
             1.3         Duration of the Plan                                     2

   2                     DEFINITIONS                                              2

   3                     ADMINISTRATION

             3.1         The Committee                                            8
             3.2         Authority of the Committee                               9
             3.3         Decisions Binding                                        9

   4                     SHARES SUBJECT TO THE PLAN
             4.1         Number of Shares                                        10
             4.2         Lapsed Awards                                           11
             4.3         Adjustments in Authorized Shares                        11

   5                     ELIGIBILITY AND PARTICIPATION

             5.1         Eligibility                                             11
             5.2         Actual Participation                                    11

   6                     STOCK OPTIONS

             6.1         Grant of Options                                        12
             6.2         Option Award Agreement                                  14
             6.3         Option Price                                            15
             6.4         Duration of Options                                     15
             6.5         Exercise of Options                                     15
             6.6         Payment                                                 15
             6.7         Restrictions on Share Transferability                   16
             6.8         Termination of Employment Due to Death,
                         Disability or Retirement                                16
             6.9         Termination of Employment for
                         Other Reasons                                           18
             6.10        Transferability of Options                              18
</Table>

                                       i
<Page>

<Table>
   <S>       <C>         <C>                                                     <C>
   7                     STOCK APPRECIATION RIGHTS

             7.1         Grant of SARs                                           19
             7.2         Exercise of Tandem SARs                                 20
             7.3         Exercise of Affiliated SARs                             20
             7.4         Exercise of Freestanding SARs                           20
             7.5         SAR Agreement                                           20
             7.6         Term of SARs                                            20
             7.7         Payment of SAR Amount                                   21
             7.8         Rule 16b-3 Requirements                                 21
             7.9         Termination of Employment Due to Death, Disability,
                         or Retirement                                           21
             7.10        Termination of Employment for Other Reasons             22
             7.11        Nontransferability of SARs                              23

   8                     RESTRICTED STOCK

             8.1         Grant of Restricted Stock                               23
             8.2         Restricted Stock Agreement                              23
             8.3         Transferability                                         23
             8.4         Other Restrictions                                      24
             8.5         Certificate Legend                                      24
             8.6         Removal of Restrictions                                 24
             8.7         Voting Rights                                           25
             8.8         Dividends and Other Distributions                       25
             8.9         Termination of Employment Due to Death, Disability, or
                         Retirement                                              25
             8.10        Termination of Employment for Other Reasons             25

   9                     PERFORMANCE UNITS AND PERFORMANCE SHARES

             9.1         Grant of Performance Units/Shares                       26
             9.2         Value of Performance Units/Shares                       26
             9.3         Earning of Performance Units/Shares                     26
             9.4         Form and Timing of Payment of Performance
                         Units/Shares                                            27
             9.5         Termination of Employment Due to Death, Disability,
                         Retirement, or Involuntary Termination (without Cause)  27
             9.6         Termination of Employment for Other Reasons             27
             9.7         Nontransferability                                      27

   10                    BENEFICIARY DESIGNATION                                 28

   11                    DEFERRALS                                               28
</Table>

                                       ii
<Page>

<Table>
   <S>       <C>         <C>                                                     <C>
   12                    RIGHTS OF EMPLOYEES

             12.1        Employment                                              28
             12.2        Participation                                           29

   13                    CHANGE IN CONTROL                                       29

   14                    AMENDMENT, MODIFICATION, AND TERMINATION

             14.1        Amendment, Modification, and Termination                30
             14.2        Awards Previously Granted                               30

   15                    WITHHOLDING

             15.1        Tax Withholding                                         30
             15.2        Share Withholding                                       30

   16                    INDEMNIFICATION                                         30

   17                    SUCCESSORS                                              31

   18                    LEGAL CONSTRUCTION

             18.1        Gender and Number                                       31
             18.2        Severability                                            31
             18.3        Requirements of Law                                     31
             18.4        Securities Law Compliance                               32
             18.5        Governing Law                                           32
</Table>

                                      iii
<Page>

                               COBALT CORPORATION
                              EQUITY INCENTIVE PLAN

                 ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION

     1.1  ESTABLISHMENT OF THE PLAN. Cobalt Corporation, a Wisconsin corporation
(hereinafter referred to as the "Company"), has established an incentive
compensation plan to be known as the "Cobalt Corporation Equity Incentive Plan"
(hereinafter referred to as the "Plan"), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, Performance Units, and Performance Shares.

     This Plan was originally created in connection with the distribution (the
"Distribution"), by the corporation formerly known as United Wisconsin Services,
Inc. of all of the shares in the Company in connection with the spin-off of the
managed care and specialty products business to the Company. In connection with
the Distribution, Options ("Substituted Awards") will be issued under this Plan
in substitution for Options issued under the equity incentive plan of the
corporation formerly known as United Wisconsin Services, Inc. (the "Prior
Plan").

     Upon approval by the Board of Directors of the Company, subject to
ratification by an affirmative vote of the holders of a majority of the Shares
of the Company, the Plan shall become effective as of the Distribution Date (the
"Effective Date"), and shall remain in effect as provided in Section 1.3 herein.

     1.2  PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success, and enhance the value, of the Company by linking the personal interests
of Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.

     The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
is dependent.

<Page>

     1.3  DURATION OF THE PLAN. Subject to approval by the Board of Directors of
the Company and ratification by the shareholders of the Company, the Plan shall
commence on the Effective Date, as described in Section 1.1 herein, and shall
remain in effect, subject to the right of the Board of Directors to terminate
the Plan at any time pursuant to Article 14 herein, until all Shares subject to
it shall have been purchased or acquired according to the Plan's provisions.
However, in no event may an Award be granted under the Plan more than ten years
after the Effective Date.

                             ARTICLE 2. DEFINITIONS

     Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:

          (a)  "Affiliate" - A company closely related to the Company such as
               Blue Cross & Blue Shield United of Wisconsin, or such other
               company as the Board may designate. For purposes of Options
               received in connection with the Distribution, American Medical
               Security Group, Inc. (and its subsidiaries) will be considered
               Affiliates.

          (b)  "Affiliated SAR" means an SAR that is granted in connection with
               a related Option, and which will be deemed to automatically be
               exercised simultaneous with the exercise of the related Option.

          (c)  "Award" means, individually or collectively, a grant under this
               Plan of Nonqualified Stock Options, Incentive Stock Options,
               SARs, Restricted Stock, Performance Units, or Performance Shares.

          (d)  "Award Agreement" means an agreement entered into by each
               Participant and the Company, setting forth the terms and
               provisions applicable to Awards granted to Participants under
               this Plan.

                                       2
<Page>

          (e)  "Beneficial Owner" shall have the meaning ascribed to such term
               in Rule 13d-3 of the General Rules and Regulations under the
               Exchange Act.

          (f)  "Board" or "Board of Directors" means the Board of Directors of
               the Company.

          (g)  "Cause" means: (i) willful and gross misconduct on the part of a
               Participant that is materially and demonstrably detrimental to
               the Company; or (ii) the commission by a Participant of one or
               more acts which constitute an indictable crime under United
               States Federal, state, or local law. "Cause" under either (i) or
               (ii) shall be determined in good faith by the Committee.

          (h)  "Change in Control" of the Company shall be deemed to have
               occurred as of the first day that any one or more of the
               following conditions shall have been satisfied:

               (i)     Any Person (other than those Persons in control of the
                       Company as of the Effective Date, or other than a trustee
                       or other fiduciary holding securities under an employee
                       benefit plan of the Company, or a corporation owned
                       directly or indirectly by the shareholders of the Company
                       in substantially the same proportions as their ownership
                       of stock of the Company), becomes the Beneficial Owner,
                       directly or indirectly, of securities of the Company
                       representing twenty-five percent (25%) or more of the
                       combined voting power of the Company's then outstanding
                       securities; or

               (ii)    During any period of two (2) consecutive years (not
                       including any period prior to the Effective Date),
                       individuals who at the beginning of such period
                       constitute the Board

                                       3
<Page>

                       (and any new Director, whose election by the Company's
                       shareholders was approved by a vote of at least
                       two-thirds (2/3) of the Directors then still in office
                       who either were Directors at the beginning of the period
                       or whose election or nomination for election was so
                       approved), cease for any reason to constitute a majority
                       thereof; or

               (iii)   The shareholders of the Company approve: (A) a plan of
                       complete liquidation of the Company; or (B) an agreement
                       for the sale or disposition of all or substantially all
                       the Company's assets; or (C) a merger, consolidation, or
                       reorganization of the Company with or involving any other
                       corporation, other than a merger, consolidation, or
                       reorganization that would result in the voting securities
                       of the Company outstanding immediately prior thereto
                       continuing to represent (either by remaining outstanding
                       or by being converted into voting securities of the
                       surviving entity), at least fifty percent (50%) of the
                       combined voting power of the voting securities of the
                       Company (or such surviving entity) outstanding
                       immediately after such merger, consolidation, or
                       reorganization.

                       However, in no event shall a "Change in Control" be
                       deemed to have occurred, with respect to a Participant,
                       if the Participant is part of a purchasing group which
                       consummates the Change-in-Control transaction. A
                       Participant shall be deemed "part of a purchasing group"
                       for purposes of the preceding sentence if the Participant
                       is an equity participant in the purchasing company or
                       group (except for: (i) passive ownership of less than
                       three percent (3%) of the stock of the purchasing
                       company; or (ii) ownership of equity participation in the
                       purchasing

                                       4
<Page>

                       company or group which is otherwise not significant, as
                       determined prior to the Change in Control by a majority
                       of the nonemployee continuing Directors).

          (i)  "Code" means the Internal Revenue Code of 1986, as amended from
               time to time.

          (j)  "Committee" means the Management Review Committee, as specified
               in Article 3, appointed by the Board to administer the Plan.

          (k)  "Company" means Cobalt Corporation, a Wisconsin corporation,
               (until the Effective Date known as Newco/UWS, Inc.) or any
               successor thereto as provided in Article 17 herein.

          (l)  "Director" means any individual who is a Non-Employee member of
               the Board of Directors of the Company.

          (m)  "Directors Plan" means the 1995 Directors Stock Option Plan of
               United Wisconsin Services, Inc.

          (n)  "Disability" means a permanent and total disability, within the
               meaning of Code Section 22(e)(3), as determined by the Committee
               in good faith, upon receipt of sufficient competent medical
               advice from one or more individuals, selected by the Committee,
               who are qualified to give professional medical advice.

          (o)  "Distribution Date" means the date the stock of the Company was
               distributed by the corporation formerly known as United Wisconsin
               Services, Inc.

          (p)  "Employee" means any full-time employee of the Company or of the
               Company's Subsidiaries or Affiliates. Directors who are not
               otherwise employed by the Company shall not be considered
               Employees under this Plan.

                                       5
<Page>

          (q)  "Exchange Act" means the Securities Exchange Act of 1934, as
               amended from time to time, or any successor act thereto.

          (r)  "Fair Market Value" means the closing price for Shares on the
               relevant date, or (if there were no sales on such date) the
               average of closing prices on the nearest day before and the
               nearest day after the relevant date, on a stock exchange or over
               the counter, as determined by the Committee.

          (s)  "Freestanding SAR" means an SAR that is granted independently of
               any Options.

          (t)  "Incentive Stock Option" or "ISO" means an Option to purchase
               Shares, granted under Article 6 herein, which is designated as an
               Incentive Stock Option and is intended to meet the requirements
               of Section 422 of the Code.

          (u)  "Insider" shall mean a Participant who is, on the relevant date,
               an officer, Director or 10% shareholder of the Company, subject
               to Section 16 of the Exchange Act.

          (v)  "Nonqualified Stock Option" or "NQSO" means an Option to purchase
               Shares, granted under Article 6 herein, which is not intended to
               be an Incentive Stock Option.

          (w)  "Option" means an Incentive Stock Option or a Nonqualified Stock
               Option.

          (x)  "Option Price" means the price at which a Share may be purchased
               by a Participant pursuant to an Option, as determined by the
               Committee.

          (y)  "Participant" means an Employee or a Director who has outstanding
               an Award granted under the Plan.

                                       6
<Page>

          (z)  "Performance Unit" means an Award granted to an Employee, as
               described in Article 9 herein.

          (aa) "Performance Share" means an Award granted to an Employee, as
               described in Article 9 herein.

          (bb) "Period of Restriction" means the period during which the
               transfer of Shares of Restricted Stock is limited in some way
               (based on the passage of time, the achievement of performance
               goals, or upon the occurrence of other events as determined by
               the Committee, at its discretion), and the Shares are subject to
               a substantial risk of forfeiture, as provided in Article 8
               herein.

          (cc) "Person" shall have the meaning ascribed to such term in Section
               3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
               thereof, including a "group" as defined in Section 13(d).

          (dd) "Restricted Stock" means an Award granted to a Participant
               pursuant to Article 8 herein.

          (ee) "Retirement" means severance of employment or termination of
               services with the Company, Affiliate, or Subsidiary as applicable
               for any reason other than leave of absence, death, Disability, or
               Cause on or after the attainment of age fifty-five (55) with ten
               (10) Years of Service.

          (ff) "Shares" means the shares of common stock of the Company.

          (gg) "Stock Appreciation Right" or "SAR" means an Award, granted alone
               or in connection with a related Option, designated as an SAR,
               pursuant to the terms of Article 7 herein.

          (hh) "Subsidiary" means any corporation in which the Company owns
               directly, or indirectly through subsidiaries, at least fifty
               percent (50%) of the total combined voting power of all classes
               of stock, or

                                       7
<Page>

               any other entity (including, but not limited to, partnerships and
               joint ventures) in which the Company owns at least fifty percent
               (50%) of the combined equity thereof.

          (ii) "Substituted Award" means an Option issued under this Plan in
               substitution for an award issued under another equity incentive
               plan, including but not limited to awards issued pursuant to the
               Prior Plan and the Directors Plan.

          (jj) "Tandem SAR" means an SAR that is granted in connection with a
               related Option, the exercise of which shall require forfeiture of
               the right to purchase a Share under the related Option (and when
               a Share is purchased under the Option, an SAR shall similarly be
               cancelled).

          (kk) "Window Period" means the period beginning on the third business
               day following the date of public release of the Company's
               quarterly sales and earnings information, and ending on the
               thirtieth day following such date.

          (ll) "Years of Service" means years of vesting service as set forth in
               Article 15.6 of the Cobalt Corporation Pension Plan as amended
               and restated effective January 1, 1999, or any successor plan
               thereto.

                            ARTICLE 3. ADMINISTRATION

     3.1  THE COMMITTEE. The Plan shall be administered by the Management Review
Committee of the Board, or by any other Committee appointed by the Board
consisting of not less than two (2) Directors who are not Employees. The members
of the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.

                                       8
<Page>

     All members of the Committee shall be Non-Employee Directors. "Non-Employee
Directors," as defined in rule 16b-3 promulgated by the Securities and Exchange
Commission ("SEC") under the Exchange Act, means a director who (i) is not
currently an officer or otherwise employed by the Company or any affiliate (ii)
does not receive compensation for consulting service or in any other capacity
from the Company in excess of $60,000 in any one year, (iii) does not possess an
interest in and is not engaged in business relationships required to be reported
under Items 404(a) or 404(b) of Regulation S-K promulgated under the Exchange
Act and (iv) is an Outside Director as defined in Treas. Reg. 1.162-27.

     3.2  AUTHORITY OF THE COMMITTEE. The Committee shall have full power except
as limited by law or by the Articles of Incorporation or Bylaws of the Company,
and subject to the provisions herein, to determine the size and types of Awards
with respect to Employees; to determine the terms and conditions of such
Employee Awards in a manner consistent with the Plan; to construe and interpret
the Plan and any agreement or instrument entered into under the Plan; to
establish, amend, or waive rules and regulations for the Plan's administration;
and (subject to the provisions of Article 14 herein) to amend the terms and
conditions of any outstanding Award to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the Committee
may delegate its authority as identified hereunder.

     3.3  DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including the Company, its shareholders, Employees, Directors,
Participants, and their estates and beneficiaries.

                                       9
<Page>

                      ARTICLE 4. SHARES SUBJECT TO THE PLAN

     4.1  NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3
herein, the total number of Shares available for grant under the Plan may not
exceed 8,700,000. These 8,700,000 Shares may be either authorized but unissued
or reacquired Shares.

     The following rules will apply for purposes of the determination of the
number of Shares available for grant under the Plan:

          (a)  While an Award is outstanding, it shall be counted against the
               authorized pool of Shares, regardless of its vested status.

          (b)  The grant of an Option or Restricted Stock shall reduce the
               Shares available for grant under the Plan by the number of Shares
               subject to such Award.

          (c)  The grant of a Tandem SAR shall reduce the number of Shares
               available for grant by the number of Shares subject to the
               related Option (i.e., there is no double counting of Options and
               their related Tandem SARs).

          (d)  The grant of an Affiliated SAR shall reduce the number of Shares
               available for grant by the number of Shares subject to the SAR,
               in addition to the number of Shares subject to the related
               Option.

          (e)  The grant of a Freestanding SAR shall reduce the number of Shares
               available for grant by the number of Freestanding SARs granted.

          (f)  The Committee shall in each case determine the appropriate number
               of Shares to deduct from the authorized pool in connection with
               the grant of Performance Units and/or Performance Shares.

                                       10
<Page>

          (g)  To the extent that an Award is settled in cash rather than in
               Shares, the authorized Share pool shall be credited with the
               appropriate number of Shares represented by the cash settlement
               of the Award, as determined at the sole discretion of the
               Committee (subject to the limitation set forth in Section 4.2
               herein).

     4.2  LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan.

     4.3  ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Options, SARs,
and Restricted Stock granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; and provided that the number of Shares
subject to any Award shall always be a whole number.

                    ARTICLE 5. ELIGIBILITY AND PARTICIPATION

     5.1  ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees and Directors.

     5.2  ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award. Directors shall receive Options as provided in Section 6.1.

                                       11
<Page>

                            ARTICLE 6. STOCK OPTIONS

     6.1  GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as shall
be determined by the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each Employee
except that no Employee may receive Options (other than Substituted Awards) with
respect to more than 250,000 Shares in any year. The Committee may grant ISOs,
NQSOs, or a combination thereof to Employees. Directors may receive only NQSOs.
Substituted Awards may be issued under the Plan. The number of Substituted
Awards shall be the number of awards immediately before the substitution,
adjusted to prevent dilution or enlargement of the Participant's rights. The
grant date of such Substituted Awards shall be the grant date under the plan
through which the awards were originally granted. Substituted Awards shall be
issued to Directors and Employees who participated in the Prior Plan and in the
Directors Plan in accordance with the terms of the Employee Benefits Agreement
executed in connection with the Distribution, and such Substituted Awards shall
be subject to the same grant date, exercise price (as adjusted pursuant to
Section 6.3), vesting and exercise period such awards were subject to under the
Prior Plan and the Directors Plan.

          To the extent Shares are available for grant under the Plan, each
Director who is first elected as a Director subsequent to the Effective Date (a
"Subsequent Director") shall be granted, as of the date on which such Subsequent
Director is qualified and first begins to serve as a Director, an Option to
purchase 6,000 shares, subject to adjustment pursuant to Section 4.3 or to
purchase such lesser number of Shares as remain available for grant under the
Plan. In the event that the number of Shares available for grant under the Plan
is insufficient to make all grants hereby specified on the relevant date, then
all Directors who are entitled to a grant on such date shall share ratably in
the number of Shares then available for grant under the Plan. The Option Price
of such Option shall equal the Fair Market Value of a Share on the date the
grant of this Option is effective.

                                       12
<Page>

          If sufficient Shares are not available under the Plan to fulfill the
grant of Options to any Subsequent Director first elected after the Effective
Date, and thereafter additional Shares become available, such Subsequent
Director receiving an Option for fewer than 6,000 Shares shall then receive an
Option to purchase an amount of Shares, determined by dividing the number of
Shares available pro-rata among each Subsequent Director receiving an Option for
fewer than 6,000 Shares, then available under the Plan, not to exceed 6,000
Shares, subject to adjustment as to any one Subsequent Director. The date of
grant shall be the date such additional Shares become available. The Option
Price of an Option shall equal the Fair Market Value of a Share on the date the
Option is granted.

          If a Subsequent Director receives an Option to purchase fewer than
6,000 Shares, subject to adjustment pursuant to Section 4.3 hereof, and
additional Shares subsequently become available under the Plan, an Option to
purchase such Shares shall first be allocated as of the date of availability to
any Subsequent Director who has not previously been granted an Option. Such
Options shall be granted to purchase a number of Shares no greater than the
number of Shares covered by Options granted to other Subsequent Directors first
elected subsequent to the Effective Date, but who have received Options to
purchase fewer than 6,000 Shares (subject to adjustment pursuant to Section
4.3). Thereafter, Options for any remaining Shares shall be granted pro-rata
among all Subsequent Directors granted Options to purchase fewer than 6,000
Shares. No Director first elected after the Effective Date shall receive an
Option to purchase more than 6,000 Shares (subject to adjustment under Section
4.3).

          To the extent Shares are available for grant under the Plan, each
Director shall be granted during each calendar year, other than the calendar
year in which the Director receives the option with respect to 6,000 Shares as a
Subsequent Director, an Option to purchase 1,000 Shares, subject to adjustment
pursuant to Section 4.3 (the "Annual Director Grant"). The date of the Annual
Director Grants will be the first trading day of each calendar year. In the
event that the number of Shares available for grant in any calendar year is
insufficient to make Annual Director Grants, then no Annual Director Grants
shall be made during such calendar year. The absence of Annual

                                       13
<Page>

Director Grants during a calendar year shall not affect the Annual Director
Grants in a subsequent calendar year.

     The Option Price of the Shares purchasable under each Option granted to a
Director shall be equal to one hundred percent (100%) of the Fair Market Value
per Share on the date of grant of such Option.

     Subject to acceleration as provided below, Options granted to Directors
shall vest annually at the rate of thirty-three and one third percent (33-1/3%)
of the aggregate number of Shares granted annually beginning on the first
anniversary of the date of grant and on each subsequent anniversary of the date
of grant thereafter. If a Director's tenure ends during the applicable
three-year period due to death, Disability or Retirement or following a Change
in Control, however, such Director's Options shall become immediately
exercisable as to one hundred percent (100%) of the Shares covered thereby as of
the Director's last day of service as a Director with the Company to the extent
such Option may be exercised pursuant to Section 6.5 of this Plan. Retirement
with respect to a Director shall mean the date of the Company's annual
shareholders' meeting at which he or she would otherwise, but for said
Retirement, be a nominee for election to the Board, or the date on which the
Director attains seventy (70) years of age.

     Once any portion of an Option issued to a Director becomes exercisable, it
shall remain exercisable for the shortest period of (1) twelve years from the
date of grant; or (2) two (2) years following the date on which the Director
ceases to serve in such capacity for any reason other than removal for Cause. If
a Director is removed for Cause, all outstanding Options held by the Director
shall immediately be forfeited to the Company and no additional exercise period
shall be allowed, regardless of the vested status of the Options.

     6.2  OPTION AWARD AGREEMENT. Each Option grant shall be evidenced by an
Option Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Option Award Agreement also
shall specify whether

                                       14
<Page>

the Option is intended to be an ISO within the meaning of Section 422 of the
Code, or an NQSO whose grant is intended not to fall under the Code provisions
of Section 422.

     6.3  OPTION PRICE. The Option Price for each grant of an Option to an
Employee shall be determined by the Committee; provided that the Option Price
shall not be less than one hundred percent (100%) of the Fair Market Value of a
Share on the date the Option is granted. The Option Price for a Substituted
Award shall be the award price immediately before the substitution, adjusted to
prevent dilution or enlargement of the Participant's rights.

     6.4  DURATION OF OPTIONS. Each Option granted shall expire at such time as
the Committee shall determine at the time of grant; provided, however, that no
ISO shall be exercisable later than the tenth (10th) anniversary date of its
grant, and no NQSO shall be exercisable later than the twelfth (12th)
anniversary date of its grant. Substituted Awards shall expire on the earlier of
the date provided in this Section 6.4 or the date such awards would have expired
under the plan and agreement pursuant to which they were originally granted.

     6.5  EXERCISE OF OPTIONS. Options granted to Employees under the Plan shall
be exercisable at such times and be subject to such restrictions and conditions
as the Committee shall in each instance approve, which need not be the same for
each grant or for each Employee.

     6.6  PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Secretary of the Company, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares.

     The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered must have been held by the

                                       15
<Page>

Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (c) by a combination of (a) and (b).

     The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.

     As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).

     6.7  RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan, as it may deem advisable, including, without limitation, restrictions
under applicable federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and
under any Blue Sky or state securities laws applicable to such Shares.

     6.8  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.
Unless otherwise provided in an Employee's employment agreement, Executive
Severance Agreement (such severance agreements have been entered into with
certain Company executives), or other written agreement entered into by the
Company and the Employee (including, but not limited to an Award Agreement), the
following apply:

          (a)  TERMINATION BY DEATH. In the event the employment of an Employee
               is terminated by reason of death, all outstanding Options granted
               to that Employee shall immediately vest one hundred percent
               (100%), and shall remain exercisable at any time prior to their
               expiration date, or for one (1) year after the date of death,
               whichever period is shorter, by such person or persons as shall
               have been named as the Employee's beneficiary, or by such

                                       16
<Page>

               persons that have acquired the Employee's rights under the Option
               by will or by the laws of descent and distribution.

          (b)  TERMINATION BY DISABILITY. In the event the employment of an
               Employee is terminated by reason of Disability, all outstanding
               Options granted to that Employee shall immediately vest one
               hundred percent (100%) as of the date the Committee determines
               the definition of Disability to have been satisfied, and shall
               remain exercisable at any time prior to their expiration date, or
               for one (1) year after the date that the Committee determines the
               definition of Disability to have been satisfied, whichever period
               is shorter.

          (c)  TERMINATION BY RETIREMENT. Each Employee's Award Agreement shall
               set forth the extent to which the Employee shall have the right
               to exercise the Option following termination of the Employee's
               employment with the Company due to Retirement. Such provisions
               shall be determined in the sole discretion of the Committee,
               shall be included in the Award Agreement entered into with each
               Employee, and need not be uniform among all Options issued
               pursuant to this Article 6.

          (d)  EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event that an
               Employee's employment terminates by reason of Disability or
               Retirement, and within the exercise period allowed by the
               Committee following such termination the Employee dies, then the
               remaining exercise period under outstanding Options shall equal
               the longer of: (i) one (1) year following death; or (ii) the
               remaining portion of the exercise period which was triggered by
               the employment termination. Such Options shall be exercisable by
               such person or persons who shall have been named as the
               Employee's beneficiary, or by such persons who have acquired the

                                       17
<Page>

               Employee's rights under the Option by will or by the laws of
               descent and distribution.

          (e)  EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax
               treatment prescribed under Section 422 of the Code may not be
               available if the Options are not exercised within the Section 422
               prescribed time periods after each of the various types of
               employment termination.

     6.9  TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of an
Employee shall terminate for any reason other than the reasons set forth in
Section 6.8 (and other than for Cause), all Options held by the Employee which
are not vested as of the effective date of employment termination immediately
shall be forfeited to the Company (and shall once again become available for
grant under the Plan). However, the Committee, in its sole discretion, shall
have the right to immediately vest all or any portion of such Options, subject
to such terms as the Committee, in its sole discretion, deems appropriate.

     Options which are vested as of the effective date of employment termination
may be exercised by the Employee within the period beginning on the effective
date of employment termination, and ending six (6) months after such date or on
such later date as is approved by the Committee.

     If the employment of an Employee shall be terminated by the Company for
Cause, all outstanding Options held by the Participant immediately shall be
forfeited to the Company and no additional exercise period shall be allowed,
regardless of the vested status of the Options.

     For Employees employed by Affiliates, termination shall mean termination of
such Employee's employment with the Affiliate.

     6.10 TRANSFERABILITY OF OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by

                                       18
<Page>

will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.

     NQSOs granted hereunder may be exercised only during a Participant's
lifetime by the Participant, the Participant's guardian or legal representative
or by a permissible transferee. NQSOs shall be transferable by Participants
pursuant to the laws of descent and distribution upon a Participant's death, and
during a Participant's lifetime, NQSOs shall be transferable by Participants to
members of their immediate family, trusts for the benefit of members of their
immediate family, and charitable institutions ("permissible transferees") to the
extent permitted under Section 16 of the Exchange Act and subject to federal and
state securities laws. The term "immediate family" shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, sister-in-law, or
brother-in-law and shall include adoptive relationships.

     NQSOs also shall be transferable by Participants other than to permissible
transferees with the prior approval of the Committee which shall have the
authority to approve such transfers of NQSOs on a case-by-case basis in its sole
discretion.

     The Committee shall have the authority to establish rules and regulations
specifically governing the transfer of NQSOs granted under this Plan as it deems
necessary and advisable.

                      ARTICLE 7. STOCK APPRECIATION RIGHTS

     7.1  GRANT OF SARS. Subject to the terms and conditions of the Plan, an SAR
may be granted to an Employee at any time and from time to time as shall be
determined by the Committee. The Committee may grant Affiliated SARs,
Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.

     The Committee shall have complete discretion in determining the number of
SARs granted to each Employee (subject to Article 4 herein) and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs. However, the grant price of a Freestanding SAR shall be at least
equal to one hundred

                                       19
<Page>

percent (100%) of the Fair Market Value of a Share on the date of grant of the
SAR. The grant price of Tandem or Affiliated SARs shall equal the Option Price
of the related Option. In no event shall any SAR granted hereunder become
exercisable within the first six (6) months of its grant.

     7.2  EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

     Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.

     7.3  EXERCISE OF AFFILIATED SARS. Affiliated SARs shall be deemed to be
exercised upon the exercise of the related Options. The deemed exercise of
Affiliated SARs shall not necessitate a reduction in the number of related
Options.

     7.4  EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.

     7.5  SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.

     7.6  TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed twelve (12) years.

                                       20
<Page>

     7.7  PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, an Employee shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

          (a)  The difference between the Fair Market Value of a Share on the
               date of exercise over the grant price; by

          (b)  The number of Shares with respect to which the SAR is exercised.

     At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.

     7.8  RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of an SAR (including,
without limitation, the right of the Committee to limit the time of exercise to
specified periods) as may be required to satisfy the requirements of Section 16
(or any successor rule) of the Exchange Act.

     For example, if the Participant is an Insider, the ability of the
Participant to exercise SARs for cash will be limited to Window Periods.
However, if the Committee determines that the Participant is not an Insider, or
if the securities laws change to permit greater freedom of exercise of SARs,
then the Committee may permit exercise at any point in time, to the extent the
SARs are otherwise exercisable under the Plan.

     7.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT

          (a)  TERMINATION BY DEATH. In the event the employment of an Employee
               is terminated by reason of death, all outstanding SARs granted to
               that Employee shall immediately vest one hundred percent (100%),
               and shall remain exercisable at any time prior to their
               expiration date, or for one (1) year after the date of death,
               whichever period is shorter, by such person or persons as shall
               have been named as the Employee's beneficiary, or by such

                                       21
<Page>

               persons that have acquired the Employee's rights under the SAR by
               will or by the laws of descent and distribution.

          (b)  TERMINATION BY DISABILITY. In the event the employment of a
               Participant is terminated by reason of Disability, all
               outstanding SARs granted to that Employee shall immediately vest
               one hundred percent (100%) as of the date the Committee
               determines the definition of Disability to have been satisfied,
               and shall remain exercisable at any time prior to their
               expiration date, or for one (1) year after the date that the
               Committee determines the definition of Disability to have been
               satisfied, whichever period is shorter.

          (c)  TERMINATION BY RETIREMENT. In the event the employment of an
               Employee is terminated by reason of Retirement, the Committee
               shall retain discretion over the treatment of SARs.

          (d)  EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event that an
               Employee's employment terminates by reason of Disability or
               Retirement, and within the exercise period allowed by the
               Committee following such termination the Employee dies, then the
               remaining exercise period under outstanding SARs shall equal the
               longer of: (i) one (1) year following death; or (ii) the
               remaining portion of the exercise period which was triggered by
               the employment termination. Such SARs shall be exercisable by
               such person or persons who shall have been named as the
               Employee's beneficiary, or by such persons who have acquired the
               Employee's rights under the SAR by will or by the laws of descent
               and distribution.

     7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of an
Employee shall terminate for any reason other than the reasons set forth in
Section 7.9 (and other than for Cause), all SARs held by the Employee which are
not vested as of the effective date of employment termination immediately shall
be forfeited to the

                                       22
<Page>

Company (and shall once again become available for grant under the Plan).
However, the Committee, in its sole discretion, shall have the right to
immediately vest all or any portion of such SARs, subject to such terms as the
Committee, in its sole discretion, deems appropriate.

     SARs which are vested as of the effective date of employment termination
may be exercised by the Employee within the period beginning on the effective
date of employment termination, and ending six (6) months after such date or on
such later date as is approved by the Committee.

     If the employment of an Employee shall be terminated by the Company for
Cause, all outstanding SARs held by the Employee immediately shall be forfeited
to the Company and no additional exercise period shall be allowed, regardless of
the vested status of the SARs.

     7.11 NONTRANSFERABILITY OF SARs. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all SARs
granted to an Employee under the Plan shall be exercisable during his or her
lifetime only by such Employee.

                           ARTICLE 8. RESTRICTED STOCK

     8.1  GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees in such amounts as the Committee shall
determine.

     8.2  RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by an Award Agreement that shall specify the Period of Restriction, or
Periods, the number of Restricted Stock Shares granted, and such other
provisions as the Committee shall determine.

     8.3  TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or

                                       23
<Page>

otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award Agreement,
or upon earlier satisfaction of any other conditions, as specified by the
Committee in its sole discretion and set forth in the Award Agreement. However,
in no event may any Restricted Stock granted under the Plan become vested in an
Employee prior to six (6) months following the date of its grant. All rights
with respect to the Restricted Stock granted to an Employee under the Plan shall
be available during his or her lifetime only to such Participant.

     8.4  OTHER RESTRICTIONS. The Committee shall impose such other restrictions
on any Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions based upon the achievement
of specific performance goals (Company-wide, divisional, and/or individual),
and/or restrictions under applicable federal or state securities laws; and may
legend the certificates representing Restricted Stock to give appropriate notice
of such restrictions.

     8.5  CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:

          "The sale or other transfer of the shares of stock
          represented by this certificate, whether voluntary,
          involuntary, or by operation of law, is subject to certain
          restrictions on transfer as set forth in the Cobalt
          Corporation Equity Incentive Plan, and in an associated
          Award Agreement. A copy of the Plan and such Award Agreement
          may be obtained from the Secretary of Cobalt Corporation."

     8.6  REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
8, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Employee after the last day of
the Period of Restriction. Once the Shares are released from the restrictions,
the Employee shall be

                                       24
<Page>

entitled to have the legend required by Section 8.5 removed from his or her
Share certificate.

     8.7  VOTING RIGHTS. During the Period of Restriction, Employees holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

     8.8  DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Employees holding Shares of Restricted Stock granted hereunder shall be entitled
to receive all dividends and other distributions paid with respect to those
Shares while they are so held. If any such dividends or distributions are paid
in Shares, the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.

     In the event that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the longer of: (i) the remaining
vesting period of the Shares of Restricted Stock with respect to which the
dividend is paid; or (ii) six months. The Committee shall establish procedures
for the application of this provision.

     8.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT. In
the event the employment of an Employee is terminated by reason of death or
Disability, all outstanding Shares of Restricted Stock shall immediately vest
one hundred percent (100%) as of the date of employment termination (in the case
of Disability, the date employment terminates shall be deemed to be the date
that the Committee determines the definition of Disability to have been
satisfied). The Committee retains discretion over the treatment of Restricted
Stock upon Retirement. In the event of full vesting, the holder of the
certificates of Restricted Stock shall be entitled to have any
nontransferability legends required under Sections 8.4 and 8.5 of this Plan
removed from the Share certificates.

     8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of an
Employee shall terminate for any reason other than those specifically set forth
in

                                       25
<Page>

Section 8.9 herein, all Shares of Restricted Stock held by the Employee which
are not vested as of the effective date of employment termination immediately
shall be forfeited and returned to the Company (and, subject to Section 4.2
herein, shall once again become available for grant under the Plan).

     With the exception of a termination of employment for Cause, the Committee,
in its sole discretion, shall have the right to provide for lapsing of the
restrictions on Restricted Stock following employment termination, upon such
terms and provisions as it deems proper.

               ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES

     9.1  GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the Plan,
Performance Units and Performance Shares may be granted to eligible Employees at
any time and from time to time, as shall be determined by the Committee. The
Committee shall have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Employee.

     9.2  VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
Employee. The time period during which the performance goals must be met shall
be called a "Performance Period." Performance Periods shall, in all cases,
exceed six (6) months in length.

     9.3  EARNING OF PERFORMANCE UNITS/SHARES. After the applicable Performance
Period has ended, the holder of Performance Units/Shares shall be entitled to
receive payout on the number of Performance Units/Shares earned by the Employee
over the Performance Period, to be determined as a function of the extent to
which the corresponding performance goals have been achieved.

                                       26
<Page>

     9.4  FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/ SHARES. Payment of
earned Performance Units/Shares shall be made in a single lump sum, within
forty-five (45) calendar days following the close of the applicable Performance
Period. The Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash or in Shares (or in a combination thereof),
which have an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable Performance Period.

     Prior to the beginning of each Performance Period, Participants may elect
to defer the receipt of Performance Unit/Share payout upon such terms as the
Committee deems appropriate.

     9.5  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT, OR
INVOLUNTARY TERMINATION (WITHOUT CAUSE). In the event the employment of an
Employee is terminated by reason of death or Disability or involuntary
termination without Cause during a Performance Period, the Employee shall
receive a prorated payout of the Performance Units/Shares. The Committee retains
discretion over the treatment of Performance Units/Shares upon Retirement. Any
prorated payout shall be determined by the Committee, in its sole discretion,
and shall be based upon the length of time that the Employee held the
Performance Units/Shares during the Performance Period, and shall further be
adjusted based on the achievement of the preestablished performance goals.

     Timing of payment of earned Performance Units/Shares shall be determined by
the Committee at its sole discretion.

     9.6  TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that an
Employee's employment terminates for any reason other than those reasons set
forth in Section 9.5 herein, all Performance Units/Shares shall be forfeited by
the Employee to the Company, and shall once again be available for grant under
the Plan.

     9.7  NONTRANSFERABILITY. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by

                                       27
<Page>

will or by the laws of descent and distribution. Further, an Employee's rights
under the Plan shall be exercisable during the Employee's lifetime only by the
Employee or the Employee's legal representative.

                       ARTICLE 10. BENEFICIARY DESIGNATION

     Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when any necessary spousal
consent is obtained and filed by the Participant in writing with the Secretary
of the Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.

                              ARTICLE 11. DEFERRALS

     The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option or SAR, the lapse or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or goals with respect to Performance Units/Shares. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.

                         ARTICLE 12. RIGHTS OF EMPLOYEES

     12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Employee's employment at any time,
nor confer upon any Employee any right to continue in the employ of the Company.

     For purposes of the Plan, transfer of employment of a Participant between
the Company and any one of its Subsidiaries (or between Subsidiaries) or Blue
Cross & Blue Shield United of Wisconsin shall not be deemed a termination of
employment.

                                       28
<Page>

     12.2 PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

                          ARTICLE 13. CHANGE IN CONTROL

     Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Section 18 herein or otherwise determined in
accordance with an Employee's employment agreement, Executive Severance
Agreement (such severance agreements have been entered into with certain Company
executives), or other written agreement entered into by the Company and the
Employee (including, but not limited to an Award Agreement):

          (a)  Any and all Options and SARs granted hereunder shall become
               immediately exercisable;

          (b)  Any Period of Restriction and restrictions imposed on Restricted
               Shares shall lapse, and within ten (10) business days after the
               occurrence of a Change in Control, the stock certificates
               representing Shares of Restricted Stock, without any restrictions
               or legend thereon, shall be delivered to the applicable
               Participants;

          (c)  The target value attainable under all Performance Units and
               Performance Shares shall be deemed to have been fully earned for
               the entire Performance Period as of the effective date of the
               Change in Control, and shall be paid out in cash to Participants
               within thirty (30) days following the effective date of the
               Change in Control; provided, however, that there shall not be an
               accelerated payout with respect to Performance Units or
               Performance Shares which were granted less than six (6) months
               prior to the effective date of the Change in Control;

          (d)  Subject to Article 14 herein, the Committee shall have the
               authority to make any modifications to the Awards as determined
               by the

                                       29
<Page>

               Committee to be appropriate before the effective date of the
               Change in Control.

              ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION

     14.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan.

     14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.

                             ARTICLE 15. WITHHOLDING

     15.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising or as a result of this Plan.

     15.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon the achievement of performance goals related to Performance Shares, or
any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax that could be imposed on the transaction. All
elections shall be irrevocable, made in writing, and signed by the Participant,
and shall be subject to any restrictions or limitations that the Committee, in
its sole discretion, deems appropriate.

                           ARTICLE 16. INDEMNIFICATION

     Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any

                                       30
<Page>

loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

                             ARTICLE 17. SUCCESSORS

     All obligations, of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

                         ARTICLE 18. LEGAL CONSTRUCTION

     18.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     18.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

     18.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and

                                       31
<Page>

to such approvals by any governmental agencies or national securities exchanges
as may be required.

     Notwithstanding any other provision set forth in the Plan, if required by
the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current Rule 16(a) under the Exchange Act.

     18.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

     18.5 GOVERNING LAW. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Wisconsin.

                                       32<Page>

                                                                    Exhibit 10.8

                                 LOAN AGREEMENT

                                 BY AND BETWEEN

                           M&I MARSHALL & ILSLEY BANK

                                       AND

                               COBALT CORPORATION

                           DATED AS OF AUGUST 7, 2002

<Page>

<Table>
<S>          <C>                                                                                           <C>
ARTICLE 1       THE LOANS...................................................................................1

    1.1      Revolving Credit Loans.........................................................................1
    1.2      Unused Fee.....................................................................................1
    1.3      Interest.......................................................................................1
    1.4      Interest Options...............................................................................2
    1.5      Notice of Borrowing; Conversion................................................................2
    1.6      Warranty.......................................................................................2
    1.7      Payments.......................................................................................2
    1.8      Use of Proceeds................................................................................3
    1.9      Optional Prepayments...........................................................................3
    1.10     Recordkeeping..................................................................................3
    1.11     Increased Costs................................................................................4
    1.12     Deposits Unavailable or Interest Rate Unascertainable..........................................4
    1.13     Change in Law Rendering LIBOR Loans Unlawful...................................................5
    1.14     Discretion of M&I as to Manner of Funding......................................................5
    1.15     Letters of Credit..............................................................................5

ARTICLE 2       CONDITIONS..................................................................................6

    2.1      General Conditions.............................................................................6
    2.2      Deliveries at Closing..........................................................................6

ARTICLE 3       REPRESENTATIONS AND WARRANTIES..............................................................7

    3.1      Organization and Qualification; Subsidiaries...................................................7
    3.2      Financial Statements...........................................................................8
    3.3      Authorization; Enforceability..................................................................8
    3.4      Absence of Conflicting Obligations.............................................................8
    3.5      Taxes..........................................................................................8
    3.6      Absence of Litigation..........................................................................8
    3.7      Accuracy of Information........................................................................9
    3.8      Title to Property..............................................................................9
    3.9      ERISA..........................................................................................9
    3.10     Fiscal Year....................................................................................9
    3.11     Compliance With Laws...........................................................................9
    3.12     Dump Sites.....................................................................................9
    3.13     Tanks..........................................................................................9
    3.14     Other Environmental Conditions................................................................10
    3.15     Environmental Judgments, Decrees and Orders...................................................10
    3.16     Environmental Permits and Licenses............................................................10
    3.17     Use of Proceeds; Margin Stock.................................................................10
    3.18     Insurance Licenses............................................................................10
    3.19     Reinsurance...................................................................................10
    3.20     Reserves......................................................................................11
    3.21     Surplus Ratio.................................................................................11
    3.22     Dividends.....................................................................................11

ARTICLE 4       NEGATIVE COVENANTS.........................................................................11
</Table>

                                        i
<Page>

<Table>
<S>          <C>                                                                                           <C>
    4.1      Revolving Credit Loans........................................................................12
    4.2      Liens.........................................................................................12
    4.3      Indebtedness..................................................................................12
    4.4      Consolidation or Merger.......................................................................12
    4.5      Disposition of Assets.........................................................................12
    4.6      Sale and Leaseback............................................................................12
    4.7      Investments...................................................................................12
    4.8      Restricted Payments...........................................................................12
    4.9      Transactions with Affiliates..................................................................12
    4.10     Guarantees....................................................................................13
    4.11     Change in Control.............................................................................13
    4.12     Reinsurance...................................................................................13
    4.13     A.M. Best Rating..............................................................................13

ARTICLE 5       AFFIRMATIVE COVENANTS......................................................................13

    5.1      Payment.......................................................................................13
    5.2      Corporate Existence; Properties; Ownership....................................................13
    5.3      Licenses......................................................................................14
    5.4      Reporting Requirements........................................................................14
    5.5      Taxes.........................................................................................16
    5.6      Inspection of Properties and Records..........................................................16
    5.7      Reference in Financial Statements.............................................................16
    5.8      Compliance with Laws..........................................................................16
    5.9      Compliance with Agreements....................................................................16
    5.10     Notices.......................................................................................16
    5.11     Compcare......................................................................................17
    5.12     Insurance.....................................................................................18
    5.13     New Subsidiaries..............................................................................18
    5.14     Financial Covenants...........................................................................18

ARTICLE 6       REMEDIES...................................................................................19

    6.1      Acceleration..................................................................................19
    6.2      M&I's Right to Cure Default...................................................................19
    6.3      Remedies Not Exclusive........................................................................19
    6.4      Setoff........................................................................................19
    6.5      Cash Collateral...............................................................................20

ARTICLE 7       DEFINITIONS................................................................................20

    7.1      Definitions...................................................................................20
    7.2      Interpretation................................................................................32

ARTICLE 8       MISCELLANEOUS..............................................................................32

    8.1      Expenses and Attorneys' Fees..................................................................32
    8.2      Assignability; Successors.....................................................................32
    8.3      Survival......................................................................................33
    8.4      Governing Law.................................................................................33
    8.5      Counterparts; Headings........................................................................33
</Table>

                                       ii
<Page>

<Table>
<S>          <C>                                                                                           <C>
    8.6      Entire Agreement..............................................................................33
    8.7      Notices.......................................................................................33
    8.8      Amendment.....................................................................................34
    8.9      Taxes.........................................................................................34
    8.10     Severability..................................................................................34
    8.11     Indemnification...............................................................................34
    8.12     Participation.................................................................................34
    8.13     Inconsistent Provisions.......................................................................34
    8.14     WAIVER OF RIGHT TO JURY TRIAL.................................................................34
    8.15     TIME OF ESSENCE...............................................................................35
    8.16     SUBMISSION TO JURISDICTION; SERVICE OF PROCESS................................................35
</Table>

                                      iii
<Page>

                                 LOAN AGREEMENT
     THIS LOAN AGREEMENT is made as of August 7, 2002, by and between M&I
MARSHALL & ILSLEY BANK, a Wisconsin banking corporation ("M&I"), and COBALT
CORPORATION, a Wisconsin corporation ("Borrower").

     NOW THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:

                                    ARTICLE 1

                                    THE LOANS

     1.1    REVOLVING CREDIT LOANS. From time to time prior to the Revolving
Credit Termination Date and subject to the terms and conditions set forth in
this Loan Agreement, M&I agrees to make Revolving Credit Loans to Borrower. The
aggregate amount of Revolving Credit Loans outstanding at any one time shall
never exceed the Revolving Credit Commitment. Upon request of M&I, Borrower
shall confirm in writing the making of any and all Revolving Credit Loans. All
Revolving Credit Loans shall be evidenced by the Revolving Credit Note, Borrower
being obligated, however, to pay the amount of Revolving Credit Loans actually
made (including any over-advances), together with interest on the amount which
remains outstanding from time to time. Borrower may borrow, repay and reborrow
under this Section 1.1 subject to the terms and conditions of this Loan
Agreement. The Revolving Credit Note shall mature on the Revolving Credit
Termination Date.

     1.2    UNUSED FEE. As consideration for the Revolving Credit Commitment,
the Borrower agrees to pay to M&I on the last Business Day of each quarter prior
to the Revolving Credit Termination Date, commencing on September 30, 2002, and
on the Revolving Credit Termination Date, an unused fee equal to 0.375% per year
on the daily average unused amount of the Revolving Credit Commitment during the
preceding quarter or other applicable period.

     1.3    INTEREST. (a) Revolving Credit Loans shall be either LIBOR Loans or
Prime Rate Loans as selected by the Borrower in Section 1.5 hereof.

            (b)  In the event that any amount of the principal of, or interest
on, the Revolving Credit Note is not paid on the date when due (whether at
stated maturity, by acceleration or otherwise), the entire principal amount
outstanding under the Revolving Credit Note shall bear interest, in addition to
the interest otherwise payable under the Revolving Credit Note and to the extent
permitted by Law, at the annual rate of two percent (2%) from the day following
the due date until all such overdue amounts have been paid in full.

            (c)  All interest, the unused fee and other amounts due under this
Loan Agreement and the Revolving Credit Note shall be computed for the actual
number of days elapsed on the basis of a 360-day year.

                                        1
<Page>

     1.4    INTEREST OPTIONS.

                 (a)  PRIME RATE LOANS. The unpaid principal balance of all
            Prime Rate Loans shall bear interest at the Prime Rate. The interest
            rate for any outstanding Prime Rate Loans shall change on each day
            that the Prime Rate changes.

                 (b)  LIBOR LOANS. The unpaid principal of all LIBOR Loans shall
            bear interest at LIBOR quoted on the first Business Day of any
            calendar month (and such rate shall be the effective interest rate
            for the entire calendar month) plus the applicable Add-On. The
            interest rate for any outstanding LIBOR Loans shall change on each
            day that the applicable Add-On changes and also as of the first day
            of each calendar month. The LIBOR interest rate established on the
            first Business Day of any calendar month shall apply to all LIBOR
            Loans during that calendar month, whether previously advanced or
            advanced thereafter.

     1.5    NOTICE OF BORROWING: CONVERSION.

                 (a)  Each Revolving Credit Loan shall be made on written notice
            or telephonic notice from an authorized representative of the
            Borrower to the Person designated by M&I. Such notice shall be given
            at least one (1) Business Day prior to the day of the requested
            borrowing date (which must be a Business Day). Each notice shall
            specify the date and amount of such Revolving Credit Loan. Each new
            Revolving Credit Loan shall be a LIBOR Loan unless otherwise
            specified in writing by the Borrower to M&I at least one (1)
            Business Day in advance of the requested borrowing date. The
            Revolving Credit Loans shall be all either LIBOR Loans or Prime Rate
            Loans. Each such notice shall be effective upon receipt, provided
            that any notice received after 2:00 p.m., Milwaukee time, may be
            deemed by M&I, in its sole discretion, effective as of the next
            Business Day. Borrower shall promptly confirm any such telephonic
            request in writing.

                 (b)  Prime Rate Loans shall continue as such unless and until
            converted into LIBOR Loans or repaid. LIBOR Rate Loans shall
            continue as such unless and until they are converted into Prime Rate
            Loans or repaid.

     1.6    WARRANTY. Each notice of borrowing or conversion, and each request
for the issuance of a Letter of Credit, shall automatically constitute a
warranty by Borrower to M&I that, on the date of the requested date of such
borrowing, continuation or conversion: (a) all of the representations and
warranties of Borrower contained in this Loan Agreement shall be true and
correct on such date as though made on such date; and (b) no Default or Event of
Default shall exist on such date.

     1.7    PAYMENTS. (a) The outstanding unpaid principal balance plus all
accrued and unpaid interest on the Revolving Credit Loans shall be paid in full
on the Revolving Credit Termination Date. In the event that the outstanding
principal balance of the Revolving Credit Loans at any time exceeds the
Revolving Credit Commitment, Borrower shall immediately pay the amount necessary
to reduce such balance to be less than or equal to the then applicable Revolving
Credit Commitment.

                                        2
<Page>

            (b)  Interest accrued on the Revolving Credit Loans through the last
day of each month (including in the case of the first interest payment, interest
accrued from the Closing Date) shall be payable on such last day of the each
month, commencing on August 31, 2002 and continuing thereafter until all
principal of and accrued interest on the Revolving Credit Loans are repaid in
full.

            (c)  All payments of principal and interest on account of the
Revolving Credit Note and all other payments made pursuant to this Loan
Agreement shall be delivered to M&I, 770 North Water Street, Milwaukee,
Wisconsin 53202, Attention: Commercial Loan Department or at such other place as
M&I or any holder of the Revolving Credit Note shall designate in writing to
Borrower, in immediately available funds by 2:00 p.m., Milwaukee time on the
date when due, and if received after such time on any day shall be deemed to
have been made on the next Business Day. Whenever any payment to be made under
this Loan Agreement or under the Revolving Credit Note shall be stated to be due
on a day which is not a Business Day, the day for such payment shall be extended
to the next succeeding Business Day, and such extension of time shall be
included in the computation of interest. Borrower hereby authorizes M&I to debit
its deposit accounts at M&I for all payments of principal and interest due and
owing on the Revolving Credit Loans and for all other payments due and owing
under this Loan Agreement.

            (d)  All payments owed by Borrower to M&I under this Loan Agreement
and the Revolving Credit Note shall be made without any counterclaim and free
and clear of any restrictions or conditions and free and clear of, and without
deduction for or on account of, any present or future taxes, levies, imposts,
duties, charges, fees, deductions or withholdings of any nature now or hereafter
imposed on Borrower by any governmental or other authority. If Borrower is
compelled by Law to make any such deductions or withholdings it will pay such
additional amounts as may be necessary in order that the net amount received by
M&I after such deductions or withholding shall equal the amount M&I would have
received had no such deductions or withholding been required to be made, and it
will provide M&I with evidence satisfactory to M&I that it has paid such
deductions or withholdings.

     1.8    USE OF PROCEEDS. Borrower shall use the proceeds of the Loans to (a)
repay the outstanding principal balance, if any, of Borrower's promissory note,
dated as of December 31, 2001, in the original principal amount of $7,500,000
and payable to the order of M&I, (b) repay certain Indebtedness owing to its
Subsidiaries and (c) for working capital and other general corporate purposes.

     1.9    OPTIONAL PREPAYMENTS. Borrower may, from time to time and without
premium or penalty, prepay the Revolving Credit Loans in whole or in part.

     1.10   RECORDKEEPING. M&I shall record in its records the date and amount
of each Revolving Credit Loan and each repayment of Revolving Credit Loans. The
aggregate amounts so recorded shall be rebuttable presumptive evidence of the
principal and interest owing and unpaid on the Revolving Credit Note. The
failure to so record any such amount or any error in so recording any such
amount shall not, however, limit or otherwise affect the obligations of Borrower
under this Loan Agreement or under the Revolving Credit Note to repay the
principal amount of the Revolving Credit Loans together with all interest
accruing thereon.

                                        3
<Page>

     1.11   INCREASED COSTS. If Regulation D of the Board of Governors of the
Federal Reserve System, or the adoption of any applicable law, rule or
regulation of general application, or any change therein, or any interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by M&I with any request or directive of general application (whether
or not having the force of law) or any such authority, central bank or
comparable agency:

                 (a)  shall subject M&I to any tax, duty or other charge with
            respect to the Revolving Credit Loans, the Revolving Credit Note,
            any Letter of Credit or M&I's obligation to make Revolving Credit
            Loans or issue Letters of Credit, or shall change the basis of
            taxation of payments to M&I of the principal of or interest on the
            Revolving Credit Loans or any other amounts due under this Loan
            Agreement in respect of the Revolving Credit Loans or Letters of
            Credit or M&I's obligation to make Revolving Credit Loans or issue
            Letters of Credit (except for changes in the rate of tax on the
            overall net income of M&I); or

                 (b)  shall impose, modify or deem applicable any reserve
            (including, without limitation, any reserve imposed by the Board of
            Governors of the Federal Reserve System, but excluding any reserve
            included in the determination of interest rates pursuant to this
            Loan Agreement), special deposit or similar requirement against
            assets of, deposits with or for the account of, or credit extended
            by, M&I; or

                 (c)  shall affect the amount of capital required or expected to
            be maintained by M&I or any corporation controlling M&I; or

                 (d)  shall impose on M&I any other condition affecting the
            Revolving Credit Loans, the Revolving Credit Note or the Letters of
            Credit;

and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) M&I of making or
maintaining any Revolving Credit Loan or issuing Letters of Credit, or to reduce
the amount of any sum received or receivable by M&I under this Loan Agreement or
under the Revolving Credit Note with respect thereto or with respect to Letters
of Credit, then within ten (10) days after demand by M&I (which demand shall be
accompanied by a statement setting forth the basis of such demand), Borrower
shall pay directly to M&I such additional amount or amounts as will compensate
M&I for such increased cost or such reduction. Determinations by M&I for
purposes of this Section of the effect of any change in applicable laws or
regulations or of any interpretations, directives or requests thereunder on its
costs of making or maintaining Revolving Credit Loans or issuing Letters of
Credit hereunder, or sums receivable by it in respect of Revolving Credit Loans
or Letters of Credit, and of the additional amounts required to compensate M&I
in respect thereof, shall be conclusive, absent manifest error.

     1.12   DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE.

                 (a)  If M&I is advised that deposits in dollars (in the
            applicable amount) are not being offered to banks in the relevant
            market for an Interest

                                        4
<Page>

            Period, or M&I otherwise determines (which determination shall be
            binding and conclusive on all parties) that by reason of
            circumstances affecting the interbank London Eurodollar market
            adequate and reasonable means do not exist for ascertaining the
            applicable LIBOR; or

                 (b)  If lenders similar to M&I have determined that the LIBOR
            will not adequately and fairly reflect the cost to such lenders of
            maintaining or funding such LIBOR Loans for an Interest Period, or
            that the making or funding of such LIBOR Loans has become
            impracticable as a result of an event occurring after the date of
            this Loan Agreement which in the opinion of M&I materially affects
            such LIBOR Loans;

then so long as such circumstances shall continue, M&I shall not be under any
obligation to make or continue LIBOR Loans and on the last day of the
then-current Interest Period, such LIBOR Loans shall, unless then repaid in
full, be converted to Prime Rate Loans.

     1.13   CHANGE IN LAW RENDERING LIBOR LOANS UNLAWFUL. In the event that any
change in (including the adoption of any new) applicable laws or regulations, or
any change in the interpretation of applicable laws or regulations by any
governmental or other regulatory body charged with the administration thereof,
should make it unlawful for M&I to make, maintain or fund LIBOR Loans, then: (a)
M&I shall promptly notify Borrower; (b) the obligation of M&I to make or
continue LIBOR Loans shall, upon the effectiveness of such event, be suspended
for the duration of such unlawfulness; and (c) on the last day of the current
Interest Period for LIBOR Loans (or, in any event, if M&I so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the LIBOR Loans shall, unless then repaid in full, be converted
to Prime Rate Loans.

     1.14   DISCRETION OF M&I AS TO MANNER OF FUNDING. Notwithstanding any
provision of this Loan Agreement to the contrary, M&I shall be entitled to fund
and maintain its funding of all or any part of the Revolving Credit Loans in any
manner it sees fit, provided that no such funding decision on the part of M&I
shall affect any interest option election made by Borrower as to any Revolving
Credit Loan.

     1.15   LETTERS OF CREDIT. (a) From time to time prior to the Revolving
Credit Termination Date, Borrower may request, and M&I may issue, Letters of
Credit up to an aggregate undrawn face amount of $30,000,000. The aggregate
undrawn face amount of all Letters of Credit shall reduce the amount available
for borrowing under the Revolving Credit Commitment. In the event the Borrower
does not reimburse M&I in full on the date M&I is required to make a payment
with respect to any Letter of Credit, the Borrower shall be deemed to have
borrowed, as of the date such payment is made, a Revolving Credit Loan bearing
interest at the rate option applicable to other Revolving Credit Loans in an
amount equal to the amount drawn under such Letter of Credit which shall be used
to satisfy the Borrower's reimbursement obligation with respect to such Letter
of Credit. No expiration date of any Letter of Credit shall be beyond the
Revolving Credit Termination Date.

            (b)  Borrower shall pay to M&I upon issuance of each Letter of
Credit all customary fees, commissions and charges as established by M&I and
agreed to by Borrower and

                                        5
<Page>

execute all letter of credit applications and other agreements as may be
required by M&I in connection with the issuance of any letters of credit.

                                   ARTICLE 2

                                   CONDITIONS

     2.1    GENERAL CONDITIONS. The obligation of M&I to make any Revolving
Credit Loan or issue any Letter of Credit under this Loan Agreement is subject
to the satisfaction, on the date hereof and on the date of making each Revolving
Credit Loan and issuing each Letter of Credit, of the following express
conditions precedent:

                 (a)  the representations and warranties of Borrower contained
            in this Loan Agreement shall be true and accurate on and as of such
            date;

                 (b)  there shall not exist on such date any Default or Event of
            Default;

                 (c)  the making of the relevant Revolving Credit Loan or the
            issuance of the relevant Letter of Credit shall not be prohibited by
            any applicable Law and shall not subject M&I to any penalty under or
            pursuant to any applicable Law; and

                 (d)  all proceedings to be taken in connection with the
            Revolving Credit Loans or Letter of Credit and all documents
            incident thereto shall be reasonably satisfactory in form and
            substance to M&I and its counsel.

     2.2    DELIVERIES AT CLOSING. The obligation of M&I to make the initial
Revolving Credit Loans is further subject the satisfaction on or before the
Closing Date of each of the following express conditions precedent:

                 (a)  M&I shall have received each of the following (each to be
            properly executed, dated and completed), in form and substance
            satisfactory to M&I:

                      (i)    this Loan Agreement;

                      (ii)   the Revolving Credit Note;

                      (iii)  a certificate from an authorized officer of the
                 Borrower, dated as of the Closing Date, certifying that (a) all
                 of the representations and warranties contained in Article 3 of
                 this Agreement are true and (b) no Default or Event of Default
                 exists;

                      (iv)   a certificate of the Secretary of Borrower, in the
                 form of Exhibit B attached to this Loan Agreement, dated the
                 Closing Date, as to: (A) the incumbency and signature of the
                 officers of the Borrower who have signed or will sign this Loan
                 Agreement, the Revolving Credit Note, the Collateral Documents
                 and any other documents or materials to be delivered by
                 Borrower to M&I pursuant to this Loan Agreement; (B) the

                                        6
<Page>

                 adoption and continued effect of resolutions of the board of
                 directors of Borrower authorizing the execution, delivery and
                 performance of this Loan Agreement, the Revolving Credit Note
                 and the Collateral Documents together with copies of those
                 resolutions; and (C) the accuracy and completeness of copies of
                 the articles of incorporation and bylaws of Borrower, as
                 amended to date, attached thereto;

                      (v)    the Pledge Agreement together with all original
                 stock certificates representing all of the issued and
                 outstanding capital stock of the applicable Subsidiaries,
                 together with related stock powers executed by the Borrower in
                 blank;

                      (vi)   the Financing Statements;

                 (b)  M&I shall have received a certificate of the Wisconsin
            Department of Financial Institutions as to the existence of the
            Borrower dated as of a recent date;

                 (c)  M&I shall have received a search of the Uniform Commercial
            Code records of the Wisconsin Department of Financial Institutions
            and of the real estate records for Milwaukee county, against the
            name of the Borrower;

                 (d)  M&I shall have received certificates evidencing the
            insurance coverages required under this Loan Agreement and the
            Collateral Documents;

                 (e)  M&I shall have received a favorable opinion of Borrower's
            counsel, in form and substance satisfactory to M&I and its counsel;
            and

                 (f)  M&I shall have received such other agreements,
            instruments, documents, certificates and opinions as M&I or its
            counsel may reasonably request.

                                    ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

     Borrower hereby represents and warrants to M&I as follows:

     3.1    ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Borrower and each
Material Insurance Subsidiary is a corporation duly and validly organized and
existing under the Laws of the state of its incorporation and has the corporate
power and all necessary licenses, permits and franchises to own its assets and
properties and to carry on its business as now conducted or presently
contemplated. Each of Borrower and each Material Insurance Subsidiary is duly
licensed or qualified to do business and is in active status or good standing in
all jurisdictions in which failure to do so would have a material adverse effect
on its business or financial condition. All of the Subsidiaries of the Borrower,
together with the Borrower's percentage of ownership of each Subsidiary, are set
forth on Schedule 3.1.

                                        7
<Page>

     3.2    FINANCIAL STATEMENTS. All of the financial statements of Borrower
and its Subsidiaries heretofore furnished to M&I by Borrower are accurate and
complete in all material respects and fairly present the financial condition and
the results of operations of Borrower and its Subsidiaries for the periods
covered thereby and as of the relevant dates thereof, all financial statements
were prepared in accordance with GAAP or SAP, as applicable, subject in the case
of interim financial statements to audit and year-end adjustments. There has
been no material adverse change in the business, properties or condition
(financial or otherwise) of Borrower and its Subsidiaries since the date of the
latest of such financial statements. Borrower has no knowledge of any material
liabilities of any nature not disclosed in writing to M&I.

     3.3    AUTHORIZATION; ENFORCEABILITY. The making, execution, delivery and
performance of this Loan Agreement, the Revolving Credit Note and the Collateral
Documents, and compliance with their respective terms, have been duly authorized
by all necessary corporate action of Borrower. This Loan Agreement, the
Revolving Credit Note and the Collateral Documents are the valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws generally
affecting the rights of creditors and subject to general equity principles.

     3.4    ABSENCE OF CONFLICTING OBLIGATIONS. The making, execution, delivery
and performance of this Loan Agreement, the Revolving Credit Note and the
Collateral Documents, and compliance with their respective terms, do not violate
any presently existing provision of Law or the articles or certificate of
incorporation or bylaws of Borrower or any agreement material to the business of
Borrower or any Material Insurance Subsidiary to which either Borrower or any
Material Insurance Subsidiary is a party or by which Borrower or any Material
Insurance Subsidiary or any of their respective assets is bound.

     3.5    TAXES. Except as set forth on Schedule 3.5, each of the Borrower and
each Material Insurance Subsidiary has filed all federal, state, foreign and
local tax returns which were required to be filed (subject to any valid
extensions of the time for filing), the failure to file of which would have a
material adverse effect on the Borrower's or such Subsidiary's business or
Financial condition, and has paid, or made provision for the payment of, all
taxes owed by it, and no tax deficiencies have been assessed or, to Borrower's
knowledge, proposed against Borrower or any Material Insurance Subsidiary.

     3.6    ABSENCE OF LITIGATION. Except as set forth on Schedule 3.6, neither
the Borrower nor any Material Insurance Subsidiary is a party to, and so far as
is known to Borrower there is no threat of, any litigation or administrative
proceeding which would, if adversely determined, impair the ability of Borrower
to perform its obligations under this Loan Agreement, the Revolving Credit Note
or the Collateral Documents, cause any material adverse change in the assets and
properties of Borrower or any Material Insurance Subsidiary, cause any material
impairment of the right to carry on the business of Borrower or any Material
Insurance Subsidiary, or cause any material adverse effect on the financial
condition of Borrower or any Material Insurance Subsidiary.

                                        8
<Page>

     3.7    ACCURACY OF INFORMATION. All information, certificates or statements
by Borrower given in, or pursuant to, this Loan Agreement (whether in writing,
by electronic messaging or otherwise) shall be accurate, true and complete when
given.

     3.8    TITLE TO PROPERTY. Each of Borrower and each Material Insurance
Subsidiary has good title to, or a valid leasehold interest in, all assets and
properties necessary to conduct its business as now conducted or proposed to be
conducted, and there are no Liens on any of the assets or properties of Borrower
or any Material Insurance Subsidiary other than Permitted Liens. Each of
Borrower and each Material Insurance Subsidiary has all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto,
reasonably necessary to conduct its business as now conducted or proposed to be
conducted, and Borrower does not know of any conflict with or violation of any
valid rights of others with respect thereto.

     3.9    ERISA. Borrower has no knowledge that any Plan is in noncompliance
in any material respect with the applicable provisions of ERISA or the Internal
Revenue Code. Borrower has no knowledge of any pending or threatened litigation
or governmental proceeding or investigation against or relating to any Plan, and
has no knowledge of any reasonable basis for any material proceedings, claims or
actions against or relating to any Plan. Borrower has no knowledge that Borrower
has incurred any "accumulated funding deficiency" within the meaning of Section
302(a)(2) of ERISA in connection with any Plan. Borrower has no knowledge that
there has been any Reportable Event or Prohibited Transaction (as such terms are
defined in ERISA) with respect to any Plan, the occurrence of which would have a
material adverse effect on the business or condition (financial or otherwise) of
Borrower or any Material Insurance Subsidiary, or both, or that Borrower or any
Material Insurance Subsidiary, or both, has incurred any liability to the PBGC
under Section 4062 of ERISA in connection with any Plan.

     3.10   FISCAL YEAR. The Borrower's fiscal year ends on December 31.

     3.11   COMPLIANCE WITH LAWS. Each of the Borrower and each Material
Insurance Subsidiary is in compliance in all material respects with all Laws
applicable to Borrower or any Material Insurance Subsidiary, their respective
assets or operations, the failure to comply with which could have a material
adverse effect on the Borrower's or such Material Insurance Subsidiary's
business or Financial condition.

     3.12   DUMP SITES. To the best of Borrower's knowledge, with respect to any
period during which the Borrower or any Material Insurance Subsidiary has
occupied the Facilities and with respect to the time before Borrower or any
Material Insurance Subsidiary occupied the Facilities, no Person has caused or
permitted petroleum products or hazardous substances or other materials to be
stored, deposited, treated, recycled or disposed of on, under or at the
Facilities, which materials, if known to be present, might require material
investigation, clean-up, removal or some other remedial action under
Environmental Laws.

     3.13   TANKS. To the best of Borrower's knowledge, other than as shown on
Schedule 3.13, have there ever been tanks, containers or other vessels on, under
or at the Facilities that contained petroleum products or hazardous substances
or other materials which, if known to be

                                        9
<Page>

present in soils or ground water, might require material investigation,
clean-up, removal or some other remedial action under Environmental Laws.

     3.14   OTHER ENVIRONMENTAL CONDITIONS. To the best of Borrower's knowledge,
there are no conditions existing currently or likely to exist during the term of
this Loan Agreement that would subject Borrower or any Material Insurance
Subsidiary to damages, penalties, injunctive relief or clean-up costs under any
Environmental Laws, or that might require material investigation, clean-up,
removal or some other remedial action by Borrower or any Material Insurance
Subsidiary under Environmental Laws.

     3.15   ENVIRONMENTAL JUDGMENTS, DECREES AND ORDERS. To the best of
Borrower's knowledge, no judgment, decree, order or citation related to or
arising out of Environmental Laws is applicable to or binds Borrower, any
Material Insurance Subsidiary, the Facilities or the owner of any of the
Facilities.

     3.16   ENVIRONMENTAL PERMITS AND LICENSES. To the best of Borrower's
knowledge, all permits, licenses and approvals required under Environmental Laws
necessary for each of Borrower and each Material Insurance Subsidiary to operate
the Facilities and to conduct its business as now conducted or proposed to be
conducted, which are currently obtainable have been obtained and are in full
force and effect.

     3.17   USE OF PROCEEDS; MARGIN STOCK. Borrower shall use the proceeds of
the Revolving Credit Loans solely for the purposes set forth in Section 1.8
hereof. No part of the proceeds of the Revolving Credit Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.

     3.18   INSURANCE LICENSES. Schedule 3.18 hereto lists the jurisdiction of
domicile of each Material Insurance Subsidiary, the line or lines of insurance
in which each Material Insurance Subsidiary is engaged, if applicable, and the
jurisdictions in which each Material Insurance Subsidiary holds a license and is
authorized to transact insurance business, in each case as of the date of this
Agreement. No license, the loss of which could reasonably be expected to have a
material adverse effect on the business or condition (financial or otherwise) of
the applicable Material Insurance Subsidiary, is the subject of a proceeding for
suspension or revocation. To the Borrower's knowledge, there is no sustainable
basis for such suspension or revocation, and no such suspension or revocation
has been threatened by any governmental authority. To the Borrower's knowledge,
no Material Insurance Subsidiary has received written notice from any
governmental authority that it is deemed to be "commercially domiciled" for
insurance regulatory purposes in any jurisdiction other than that indicated on
Schedule 3.18.

     3.19   REINSURANCE. Schedule 3.19 lists all ceded or assumed reinsurance
agreements to which any Material Insurance Subsidiary is, as of the date of this
Agreement, a party, which are currently in force, and under which there is
liability by either party to the agreement (collectively, the "Existing
Reinsurance Agreements"). Each of the Existing Reinsurance Agreements is in full
force and effect, is valid and binding in all material respects in accordance
with its terms, and, as of the date hereof, no Material Insurance Subsidiary
has, to the Borrower's

                                       10
<Page>

knowledge, received notice (other than provisional notices of cancellation
received in the ordinary course of business) that any other party to an in-force
Existing Reinsurance Agreement will cancel or not renew such agreement, which
cancellation or nonrenewal could reasonably be expected to have a material
adverse effect on the business or condition (financial or otherwise) of the
applicable Subsidiary. The Borrower has no knowledge as of the date hereof that
any amount recoverable by any Material Insurance Subsidiary pursuant to any
Existing Reinsurance Agreement is not fully collectible in due course. To the
knowledge of the Borrower, no Material Insurance Subsidiary is in default in any
material respect as to any Existing Reinsurance Agreement. Except as disclosed
in Schedule 3.19, each Material Insurance Subsidiary is entitled to take full
credit in its statutory financial statements for ceded reinsurance under the
Existing Reinsurance Agreements pursuant to applicable insurance laws. Except as
disclosed in Schedule 3.19, there is no claim under any Existing Reinsurance
Agreement in excess of $100,000 which is disputed by any other party to such
agreement.

     3.20   RESERVES. Except as set forth on Schedule 3.20, each reserve and
other material liability amount in respect of the insurance business, including,
without limitation, material reserve and other material liability amounts in
respect of insurance policies of each Material Insurance Subsidiary, established
or reflected in the SAP Financial Statements for the year ended December 31,
2001 of such Material Insurance Subsidiary, was determined in accordance with
generally accepted actuarial standards consistently applied, was fairly stated
in accordance with sound actuarial principles and was in compliance with the
requirements of the insurance laws, rules and regulations of its state of
domicile as of the date thereof. Each Material Insurance Subsidiary owns assets
that qualify as admitted assets under applicable law in an amount at least equal
to the sum of all such reserves and liability amounts and its minimum Statutory
Capital and Surplus as required by the insurance laws, rules and regulations of
its state of domicile.

     3.21   SURPLUS RATIO. As of the date of this Agreement, each Material
Insurance Subsidiary has a ratio of Adjusted Statutory Capital and Surplus to
Compulsory Surplus of at least 110%.

     3.22   DIVIDENDS. Except as set forth on Schedule 3.22, No Insurance
Subsidiary is subject to any regulatory prohibition regarding the declaration or
payment of dividends that is not generally applicable to all insurance companies
that are domiciled in the same jurisdiction and are engaged in the same line of
business as such Insurance Subsidiary.

                                    ARTICLE 4

                               NEGATIVE COVENANTS

     From and after the date of this Loan Agreement and until: (i) the entire
amount of principal of and interest due on the Revolving Credit Loans, and all
other amounts of fees and payments due under this Loan Agreement and the
Revolving Credit Note are paid in full; and (ii) the commitment of M&I to make
Revolving Credit Loans under Section 1.1 of this Loan Agreement has ended; and
(iii) there are no outstanding Letters of Credit, Borrower shall not, and
Borrower shall not permit any Material Insurance Subsidiary to, without the
prior written consent of M&I:

                                       11
<Page>

     4.1    REVOLVING CREDIT LOANS. Permit the sum of the amount of outstanding
Revolving Credit Loans to exceed the Revolving Credit Commitment.

     4.2    LIENS. Incur, create, assume or permit to be created or allow to
exist any Lien upon or in any of its assets or properties, except Permitted
Liens.

     4.3    INDEBTEDNESS. Incur, create, assume, permit to exist, guarantee,
endorse or otherwise become directly or indirectly or contingently responsible
or liable for any Indebtedness, except Permitted Indebtedness.

     4.4    CONSOLIDATION OR MERGER. Consolidate with or merge into any other
Person, or permit another Person to merge into it, or acquire substantially all
of the assets of any other Person, whether in one or a series of transactions,
except that Borrower may permit any Subsidiary to merge into it or into a wholly
owned Subsidiary.

     4.5    DISPOSITION OF ASSETS. Sell, lease, assign, transfer or otherwise
dispose of any of its now owned or hereafter acquired assets or properties
except, prior to the occurrence of an Event of Default: (a) sales of inventory
and Investments in the ordinary course of business; (b) sales or other
disposition of equipment, provided that such equipment is replaced by equipment
of a similar kind and equivalent value; and (c) sales or other disposition of
any interest in any Subsidiary other than a Material Insurance Subsidiary, (d)
sales or other disposition of any interest in American Medical Security Group,
Inc.; (e) sales by Blue Cross & Blue Shield United of Wisconsin of capital stock
of the Borrower: and (f) other dispositions of assets provided that such assets,
in the aggregate for all such dispositions after the Closing Date, (i) represent
no more than 10% of the consolidated assets of the Borrower and its consolidated
Subsidiaries and (ii) are responsible for no more than 5% of the consolidated
net revenues or of the consolidated net income of the Borrower and its
consolidated Subsidiaries, in both cases as of the end of the fiscal quarter
preceding the disposition date.

     4.6    SALE AND LEASEBACK. Enter into any agreement, directly or
indirectly, to sell or transfer any real or personal property used in its
business and thereafter to lease back the same or similar property.

     4.7    INVESTMENTS. Make any new Investment in or to other Persons, except
Permitted Investments.

     4.8    RESTRICTED PAYMENTS. (a) Declare or pay any non-cash dividends; or
(b) purchase, redeem, retire, or otherwise acquire for value any of its capital
stock now or hereafter outstanding; or (c) make any distribution of assets to
its stockholders as such, whether in assets or in obligations of Borrower; or
(d) allocate or otherwise set apart any sum for the purchase, redemption, or
retirement of any shares of its capital stock; or (e) make any other
distribution by reduction of capital or otherwise in respect of any shares of
its capital stock; or (f) pay any cash dividends to any stockholders; provided,
however, the Subsidiaries may pay cash dividends to the Borrower or to a wholly
owned Subsidiary of the Borrower.

     4.9    TRANSACTIONS WITH AFFILIATES. Except as set forth on Schedule 4.9,
engage in any transaction with an Affiliate on terms materially less favorable
to Borrower than would be available at the time from a Person who is not an
Affiliate.

                                       12
<Page>

     4.10   GUARANTEES. Except as set forth on Schedule 4.10, guarantee the
Indebtedness of any Person, except guaranties in favor of M&I.

     4.11   CHANGE IN CONTROL. Permit a Change in Control.

     4.12   REINSURANCE. Permit any Material Insurance Subsidiary to (a) enter
into bulk reinsurance arrangements, including without limitation any bulk
financial reinsurance arrangements, or (b) enter into any other reinsurance
arrangements except in the ordinary course of business (i) with reinsurers rated
at least "A-" (at the time such reinsurance arrangements are entered into) by
A.M. Best & Co. or its equivalent by another reputable rating agency or
reinsurers whose obligations to the Material Insurance Subsidiaries are
sufficiently secured to permit Borrower to claim financial credit for
reinsurance under applicable Law, or (ii) with other reinsurers so long as the
aggregate corresponding credits to reserves (page 3, lines 1, 2, 3 and 4 of the
Annual Statement ) of all Material Insurance Subsidiaries in respect of
reinsurance arrangements with all such other reinsurers does not exceed 3% of
the aggregate of such reserves of all Material Insurance Subsidiaries; provided,
however, that Borrower or any Subsidiary may renew or extend any reinsurance
arrangement existing on the date hereof, and the Borrower or any Subsidiary may
enter into any reinsurance transaction which individually does not exceed 3% of
the aggregate insured premiums of the Borrower and the Subsidiaries; provided,
further, that Borrower shall update Schedule 3.19 as necessary such that
Schedule 3.19 shall at all times be an accurate and complete list of Existing
Reinsurance Agreements.

     4.13   A.M. BEST RATING. Each Material Insurance Subsidiary shall at all
times maintain an A.M. Best rating of at least B-.

                                    ARTICLE 5

                              AFFIRMATIVE COVENANTS

     From and after the date of this Loan Agreement and until: (i) the entire
amount of principal of and interest due on the Revolving Credit Loans, and all
other amounts of fees and payments due under this Loan Agreement and the
Revolving Credit Note are paid in full; and (ii) the commitment of M&I to make
Revolving Credit Loans under Section 1.1 of this Loan Agreement has ended; and
(iii) there are no outstanding Letters of Credit:

     5.1    PAYMENT. Borrower shall timely pay or cause to be paid the principal
of and interest on the Revolving Credit Loans and all other amounts due under
this Loan Agreement, the Revolving Credit Note, the Letters of Credit and the
Collateral Documents.

     5.2    CORPORATE EXISTENCE; PROPERTIES; OWNERSHIP. Borrower shall, and
Borrower shall cause each Material Insurance Subsidiary to: (a) maintain its
corporate existence; except that Borrower may permit any Subsidiary to merge
into it or into a wholly owned Subsidiary; (b) conduct its business
substantially as now conducted or as described in any business plans delivered
to M&I prior to the Closing Date; (c) maintain all assets (other than assets no
longer used or useful in the conduct of its business) in good repair, working
order and condition, ordinary wear and tear excepted; and (d) maintain accurate
records and books of account in accordance with GAAP consistently applied
throughout all accounting periods.

                                       13
<Page>

     5.3    LICENSES. Borrower shall, and Borrower shall cause each Material
Insurance Subsidiary to, maintain in full force and effect each license, permit
and franchise granted or issued by any federal, state or local governmental
agency or regulatory authority that is reasonably necessary to or used in
Borrower's or any Material Insurance Subsidiary's business.

     5.4    REPORTING REQUIREMENTS. Borrower shall furnish to M&I such
information respecting the business, assets and financial condition of Borrower
and its Subsidiaries as M&I may reasonably request and, without request:

                 (a)  As soon as available, and in any event within forty-five
            (45) days after the end of each month other than the last month of
            each fiscal year, (i) a consolidated and consolidating balance sheet
            of Borrower and its Subsidiaries as of the end of each such month
            and of the comparable month in the preceding fiscal year; and (ii)
            consolidated and consolidating statements of income and retained
            earnings of Borrower and its Subsidiaries for each such month and
            for that part of the fiscal year ending with each month and for the
            corresponding periods of the preceding fiscal year, all in
            reasonable detail and certified as true and correct, subject to
            audit and normal year-end adjustments, by the chief financial
            officer or treasurer of Borrower; and

                 (b)  as soon as available, and in any event within ninety (90)
            days after the close of each fiscal year, a copy of the detailed
            annual audit report for such year and accompanying consolidated
            financial statements of Borrower and its Subsidiaries prepared in
            reasonable detail and in accordance with GAAP and audited by
            independent certified public accountants of recognized standing
            selected by Borrower, and reasonably satisfactory to M&I, which
            audit report shall be unqualified and shall be accompanied by: (i)
            an unqualified opinion of such accountants, in form and substance
            reasonably satisfactory to M&I, to the effect that the same fairly
            presents the financial condition and the results of operations of
            Borrower and its Subsidiaries for the periods and as of the relevant
            dates thereof, and (ii) a certificate of such accountants setting
            forth their computations as to Borrower's compliance with Section
            5.14 of this Loan Agreement stating that in the ordinary course of
            their audit, conducted in accordance with generally accepted
            auditing practices, they did not become aware of any Event of
            Default or, if their audit disclosed an Event of Default, a
            specification of the Event of Default and the actions taken or
            proposed to be taken by Borrower with respect thereto; and

                 (c)  within forty-five (45) days after the end of each fiscal
            quarter, an executed Officer's Certificate, in the form of Exhibit A
            attached to this Loan Agreement; and

                 (d)  promptly upon its becoming available, furnish to M&I one
            copy of each financial statement, report, notice, or proxy statement
            sent by the Borrower to its shareholders generally and of each
            regular or periodic report, registration statement or prospectus
            filed by the Borrower with any securities exchange or the Securities
            and Exchange Commission or any successor agency; and

                                       14
<Page>

                 (e)  as soon as received, but in any event not later than ten
            (10) days after receipt, copies of all management letters and other
            reports submitted to Borrower by independent certified public
            accountants in connection with any examination of the financial
            statements of Borrower and notify M&I promptly of any change in any
            accounting method used by Borrower in the preparation of the
            financial statements to be delivered to M&I pursuant to this
            Section; and

                 (f)  (i) No later than fifteen (15) days after the regulatory
            filing date (including any extension thereof) of each fiscal year of
            each Material Insurance Subsidiary, copies of the unaudited Annual
            Statement of such Material Insurance Subsidiary, certified by the
            chief financial officer of such Material Insurance Subsidiary, all
            such statements to be prepared in accordance with SAP consistently
            applied throughout the periods reflected therein and (ii) no later
            than each June 15, copies of annual financial statements of such
            Material Insurance Subsidiary, prepared in accordance with SAP,
            audited by independent certified public accountants of recognized
            national standing and reasonably acceptable to M&I (M&I agrees,
            without limitation, that Ernst & Young LLP is an acceptable auditor
            for purposes of this Section); and

                 (g)  No later than ten (10) days after the regulatory filing
            date (including any extension thereof) or (ii) 60 days after the
            close of each of the first three fiscal quarters of each fiscal year
            of each Material Insurance Subsidiary, copies of the Quarterly
            Statement of each of the Material Insurance Subsidiaries, certified
            by the chief financial officer of such Material Insurance
            Subsidiary, all such statements to be prepared in accordance with
            SAP consistently applied through the period reflected herein; and

                 (h)  Promptly and in any event within ten (10) days after (i)
            learning thereof, notification of any changes after the date hereof
            in the rating given by A.M. Best & Co. in respect of any Insurance
            Subsidiary and (ii) receipt thereof, copies of any ratings analysis
            by A.M. Best & Co. relating to any Insurance Subsidiary; and

                 (i)  As soon as available and in any event within ten (10) days
            after the regulatory filing date (including any extension thereof)
            of each fiscal year, a "Statement of Actuarial Opinion" and
            "Management Discussion and Analysis" including review of year-end
            loss reserves for each Material Insurance Company (prepared in
            accordance with SAP) for such fiscal year by an actuary reasonably
            acceptable to M&I (who may be an employee of the Borrower, and M&I
            agrees, without limitation, that Mark Cain of IRMS Actuarial
            Services is an acceptable actuary for purposes of this Section) as
            filed with the applicable regulatory insurance authority in
            compliance with the requirements thereof (or a report containing
            equivalent information for any Material Insurance Company not so
            required to file the foregoing with the applicable regulatory
            insurance authority); and

                                       15
<Page>

                 (j)  Copies of any other actuarial certificates prepared with
            respect to any Material Insurance Subsidiary, promptly after the
            receipt thereof.

     5.5    TAXES. Borrower shall, and Borrower shall cause each Material
Insurance Subsidiary to, pay all taxes and assessments prior to the date on
which penalties attach thereto, except for any tax or assessment which is either
not delinquent or which is being contested in good faith and by proper
proceedings and against which adequate reserves have been provided.

     5.6    INSPECTION OF PROPERTIES AND RECORDS. Borrower shall, and Borrower
shall cause each Material Insurance Subsidiary to, permit M&I or its agents or
representatives to visit any of its properties and examine any of its books and
records upon reasonable prior notice, at any reasonable time and as often as may
be reasonably desired, and Borrower shall facilitate each such inspection, audit
and examination.

     5.7    REFERENCE IN FINANCIAL STATEMENTS. Borrower shall include, to the
extent required by applicable Law, or cause to be included, a reference to this
Loan Agreement in all financial statements of Borrower which are furnished to
stockholders, financial reporting services, creditors and prospective creditors.

     5.8    COMPLIANCE WITH LAWS. Borrower shall, and Borrower shall cause each
Material Insurance Subsidiary to: (a) comply in all material respects with all
applicable Environmental Laws, and orders of regulatory and administrative
authorities with respect thereto, and, without limiting the generality of the
foregoing, promptly undertake and diligently pursue to completion appropriate
and legally authorized containment, investigation and clean-up action in the
event of any release of petroleum products or hazardous materials or substances
on, upon or into any real property owned, operated or within the control of
Borrower or any Material Insurance Subsidiary; and (b) comply in all material
respects with all other Laws applicable to Borrower, its Material Insurance
Subsidiaries, its assets or operations.

     5.9    COMPLIANCE WITH AGREEMENTS. Borrower shall, and Borrower shall cause
each Material Insurance Subsidiary to, perform and comply in all respects with
the provisions of any agreement (including without limitation any collective
bargaining agreement), license, regulatory approval, permit and franchise
binding upon Borrower or any Material Insurance Subsidiary or their respective
assets or properties, if the failure to so perform or comply would have a
material adverse effect on the condition (financial or otherwise) of the
business, assets or properties of Borrower or any Material Insurance Subsidiary.

     5.10   NOTICES. Borrower shall:

                 (a)  as soon as possible and in any event within five (5)
            Business Days after Borrower's knowledge of the occurrence of any
            Default or Event of Default, notify M&I in writing of such Default
            or Event of Default and set forth the details thereof and the action
            which is being taken or proposed to be taken by Borrower with
            respect thereto;

                 (b)  promptly notify M&I of the commencement of any litigation
            or administrative proceeding that would cause the representation and
            warranty of Borrower contained in Section 3.6 of this Loan Agreement
            to be untrue;

                                       16
<Page>

                 (c)  promptly notify M&I: (i) of the occurrence of any
            Reportable Event or Prohibited Transaction (as such terms are
            defined in ERISA) that has occurred with respect to any Plan; and
            (ii) of the institution by the PBGC or Borrower or any Subsidiary of
            proceedings under Title IV of ERISA to terminate any Plan;

                 (d)  unless prohibited by applicable Law, notify M&I, and
            provide copies, immediately upon receipt but in any event not later
            than ten (10) days after receipt, of any notice, pleading, citation,
            indictment, complaint, order or decree from any federal, state or
            local government agency or regulatory body, or any other source,
            asserting or alleging a circumstance or condition that requires or
            may require a financial contribution by Borrower or any Material
            Insurance Subsidiary, or both, or an investigation, clean-up,
            removal, remedial action or other response by or on the part of
            Borrower or any Material Insurance Subsidiary, or both, under
            Environmental Laws or which seeks damages or civil, criminal or
            punitive penalties from or against Borrower or any Material
            Insurance Subsidiary, or both, for an alleged violation of
            Environmental Laws; and provide M&I with written notice of any
            condition or event which would make the representations and
            warranties contained in Sections 3.11 through 3.16 of this Loan
            Agreement inaccurate, as soon as Borrower becomes aware of such
            condition or event;

                 (e)  notify M&I at least thirty (30) days prior to any change
            of Borrower's or any Material Insurance Subsidiary's name or their
            use of any trade name;

                 (f)  promptly notify M&I of any damage to, or loss of, any of
            the assets or properties of Borrower or any Material Insurance
            Subsidiary if the net book value of the damaged or lost asset or
            property at the time of such damage or loss exceeds $500,000; and

                 (g)  promptly notify M&I of the commencement of any
            investigation, litigation, or administrative or regulatory
            proceeding by, or the receipt of any notice, citation, pleading,
            order, decree or similar document issued by, any federal, state or
            local governmental agency or regulatory authority that results in,
            or may result in, the termination or suspension of any license,
            permit or franchise necessary to Borrower's or any Material
            Insurance Subsidiary's business, or that imposes, or may result in
            the imposition of, a material fine or penalty on Borrower or any
            Material Insurance Subsidiary, or both.

     5.11   COMPCARE. If at any time the Borrower repays all of the Indebtedness
owed to Blue Cross & Blue Shield United of Wisconsin secured by the capital
stock of Compcare Health Services Insurance Company, the Borrower agrees to
execute and deliver to M&I a Pledge Agreement covering all of the issued and
outstanding capital stock of Compcare Health Services Insurance Company,
together with all original stock certificates representing all of the issued and
outstanding capital stock of Compcare Health Services Insurance Company, all
related stock powers executed by the Borrower in blank, and such other officer's
certificates, legal opinions

                                       17
<Page>

and other approvals, documents, and materials as M&I may reasonably require in
connection therewith.

     5.12   INSURANCE. Borrower shall, and Borrower shall cause each Material
Insurance Subsidiary to obtain and maintain at its own expense the following
insurance, which shall be with insurers satisfactory to M&I: (a) "all risks"
property insurance in amounts not less than the one hundred percent (100%)
replacement cost of all buildings, improvements, fixtures, equipment and other
real and personal property of Borrower or such Material Insurance Subsidiary,
with a replacement cost agreed amount endorsement; (b) commercial general
liability insurance covered under a commercial general liability policy
including contractual liability in an amount not less than $1,000,000 combined
single limit for bodily injury, including personal injury, and property damage;
(c) product liability insurance in such amounts as is customarily maintained by
companies engaged in the same or similar businesses; and (d) worker's
compensation insurance in amounts meeting all statutory state and local
requirements. The property and commercial general liability policies described
above shall name M&I as lender's loss payee or additional insured as its
interest may appear, and shall require the insurer to provide at least thirty
(30) days' prior written notice to M&I of any material change or cancellation of
such policy.

     5.13   NEW SUBSIDIARIES. If the Borrower organizes one or more new
Subsidiaries after the Closing Date in compliance with the terms of this
Agreement, the Borrower shall promptly deliver to M&I an amended Schedule 3.1
listing all of the Subsidiaries of the Borrower, together with the Borrower's
Percentage of ownership of such Subsidiary.

     5.14   FINANCIAL COVENANTS.

                 (a)  TANGIBLE NET WORTH. Borrower and its Subsidiaries shall
            maintain an aggregate Tangible Net Worth of at least $136,075,000.00
            PLUS (i) 50% of the positive consolidated net income earned by the
            Borrower and its consolidated Subsidiaries for the two quarters
            ending on December 31, 2002, PLUS (ii) 50% of the positive
            consolidated net income earned by the Borrower and its consolidated
            Subsidiaries for each fiscal year ending after December 31, 2002,
            PLUS (iii) 100% of the net proceeds received by [A] the Borrower
            from the issuance of equity securities after the Closing Date or [B]
            Blue Cross & Blue Shield United of Wisconsin from the sale of
            capital stock of Borrower, all as determined at the end of each
            fiscal quarter.

                 (b)  FIXED CHARGE COVERAGE RATIO. Borrower shall at all times
            maintain a Fixed Charge Coverage Ratio of at least 1.10:1.0. The
            Fixed Charge Coverage Ratio shall be tested at the end of each
            fiscal quarter.

                 (c)  RISK-BASED CAPITAL. After the date hereof, the Borrower
            will cause each Material Insurance Subsidiary to maintain a ratio of
            (i) Total Adjusted Capital (as defined in the Risk-Based Capital Act
            or in the rules and procedures prescribed from time to time by the
            NAIC with respect thereto) to (ii) the Company Action Level RBC (as
            defined in the Risk-Based Capital Act or in the rules and procedures
            prescribed from time to time by the NAIC with respect

                                       18
<Page>

            thereto) of at least 200%, as determined [A] for the Borrower and
            each Material Insurance Subsidiary (other than Blue Cross & Blue
            Shield United of Wisconsin and Compcare Health Services Insurance
            Company until such ratio exceeds 375%) at the end of each fiscal
            year and [B] for Blue Cross & Blue Shield United of Wisconsin and
            Compcare Health Services Insurance Company at the end of each fiscal
            quarter until such time that such ratio exceeds 375%. The Borrower
            shall also provide M&I with copies of the IRIS ratio calculations
            for each applicable Material Insurance Subsidiary not later than 10
            days after receipt from the NAIC.

                                    ARTICLE 6

                                    REMEDIES

     6.1    ACCELERATION. (a) Upon the occurrence of an Automatic Event of
Default, then, without notice, demand or action of any kind by M&I: (i) the
obligation of M&I to make any Revolving Credit Loans or to issue any Letters of
Credit under this Loan Agreement shall automatically and immediately terminate;
and (ii) the entire unpaid principal of, and accrued interest on, the Revolving
Credit Note, and any other amount due under this Loan Agreement and the
Collateral Documents, shall be automatically and immediately due and payable.

            (b)  Upon the occurrence of a Notice Event of Default, M&I may, upon
written notice and demand to Borrower: (i) terminate its obligation to make any
Revolving Credit Loans or to issue any Letters of Credit under this Loan
Agreement; and (ii) declare the entire unpaid principal of, and accrued interest
on, the Revolving Credit Note, and any other amount due under this Loan
Agreement and the Collateral Documents, immediately due and payable.

     6.2    M&I'S RIGHT TO CURE DEFAULT. In case of failure by Borrower to
procure or maintain insurance, or to pay any fees, assessments, charges or taxes
arising with respect to any properties and assets pledged under any Collateral
Documents, M&I shall have the right, but shall not be obligated, to effect such
insurance or pay such fees, assessments, charges or taxes, as the case may be,
and, in that event, the cost thereof shall be payable by Borrower to M&I
immediately upon demand together with interest at an annual rate equal to the
Prime Rate plus three percent (3%) (to the extent permitted by applicable Law)
from the date that is ten days after the date M&I demands payment by Borrower.

     6.3    REMEDIES NOT EXCLUSIVE. No remedy herein conferred upon M&I is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Loan Agreement, the Revolving Credit Note or the Collateral Documents or
now or hereafter existing at law or in equity. No failure or delay on the part
of M&I in exercising any right or remedy shall operate as a waiver thereof nor
shall any single or partial exercise of any right preclude other or further
exercise thereof or the exercise of any other right or remedy.

     6.4    SETOFF. Borrower agrees that M&I and its affiliates shall have all
rights of setoff and bankers' Lien provided by applicable Law, and in addition
thereto, Borrower agrees that if at any time any payment or other amount owing
by Borrower under the Revolving Credit Note or

                                       19
<Page>

this Loan Agreement is then due to M&I, M&I may apply to the payment of such
payment or other amount any and all balances, credits, deposits, accounts or
moneys of Borrower then or thereafter with M&I or any affiliates of M&I.

     6.5    CASH COLLATERAL. If an Event of Default has occurred and is
continuing, M&I may make written demand upon Borrower, and Borrower will then
immediately cause to be deposited with M&I, in immediately available funds, an
amount equal to the maximum amount which could be drawn on all outstanding
Letters of Credit, to be held in a special cash collateral account in the name
of M&I. Funds on deposit and interest accrued on such funds held in such special
cash collateral account may be applied by M&I to the obligations of Borrower to
M&I and shall not be subject to withdrawal by Borrower until all outstanding
Letters of Credit are canceled or terminated and all obligations to M&I are paid
in full, unless otherwise agreed to by M&I.

                                    ARTICLE 7

                                   DEFINITIONS

     7.1    DEFINITIONS. When used in this Loan Agreement, the following terms
shall have the meanings specified:

            "Affiliate" shall mean any Person: (a) that directly or indirectly
controls, or is controlled by, or is under common control with, Borrower or any
Subsidiary; (b) that directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of Borrower or any Subsidiary;
(c) five percent (5%) or more of the voting stock of which Person is directly or
indirectly beneficially owned or held by Borrower or any Subsidiary; (d) that is
an officer or director of Borrower or any Subsidiary; (e) of which an Affiliate
is an officer or director; or (f) who is related by blood, adoption or marriage
to an Affiliate. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

            ADD-ON. "Add-On" shall mean the applicable percentage set forth in
the table below:

<Table>
<Caption>
            Level:                   Usage:                              Add-On:
            ------                   ------                              -------
             <S>      <C>                                                 <C>
             I        Less than or equal to 25%                           1.50%
             II       Less than or equal to 50% but greater than 25%      1.75%
             III      Less than or equal to 75% but greater than 50%      2.00%
             IV       Greater than 75%                                    2.50%
</Table>

                                       20
<Page>

The initial Add-On shall be Level IV. The Add-On shall adjusted in accordance
with the table above on the first Business Day of each February, May, August,
and November, commencing February 1, 2003, based upon the Usage of the credit
facility created by this Loan Agreement. The "Usage" for purposes of the table
above shall be the percentage of (a) the Borrower's daily average outstanding
Revolving Credit Loans plus the daily average undrawn face amount of outstanding
Letters of Credit during the quarter preceding the date of determination, to (b)
the Revolving Credit Commitment plus the undrawn face amount of outstanding
Letters of Credit during the quarter preceding the date of determination.

            "Adjusted Interbank Rate" shall mean an annual rate with respect to
any Interest Period (rounded upwards, if necessary, to the nearest 1/100 of 1%),
determined pursuant to the following formula:

            Adjusted Interbank Rate =              INTERBANK RATE
                                      ---------------------------------------
                                         1 - Interbank Reserve Requirement

            "Adjusted Statutory Capital and Surplus" shall mean Statutory
Capital and Surplus adjusted for security fund deposits of health maintenance
organizations and Insurance Subsidiaries.

            "Annual Statement" shall mean the annual statutory financial
statement of any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of incorporation, which
statement shall be in the form required by such Insurance Subsidiary's
jurisdiction of incorporation or, if no specific form is so required, in the
form of financial statements permitted by such insurance commissioner (or such
similar authority) to be used for filing annual statutory financial statements
and shall contain the type of information permitted by such insurance
commissioner (or such similar authority) to be disclosed therein, together with
all exhibits or schedules filed therewith.

            "Automatic Event of Default" shall mean any one or more of the
following:

                 (a)  Borrower or any Material Insurance Subsidiary shall become
            insolvent or generally not pay, or be unable to pay, or admit in
            writing its inability to pay, its debts as they mature; or

                 (b)  Borrower or any Material Insurance Subsidiary shall make a
            general assignment for the benefit of creditors or to an agent
            authorized to liquidate any substantial amount of its assets; or

                 (c)  Borrower or any Material Insurance Subsidiary shall become
            the subject of an "order for relief" within the meaning of the
            United States Bankruptcy Code, or shall file a petition in
            bankruptcy, for reorganization or to effect a plan or other
            arrangement with creditors; or

                 (d)  Borrower or any Material Insurance Subsidiary shall have a
            petition or application filed against it in bankruptcy or any
            similar proceeding, or shall have such a proceeding commenced
            against it, and such petition, application

                                       21
<Page>

            or proceeding shall remain unstayed or undismissed for a period of
            sixty (60) days or more, or Borrower or any Material Insurance
            Subsidiary shall file an answer to such a petition or application,
            admitting the material allegations thereof; or

                 (e)  Borrower or any Material Insurance Subsidiary shall apply
            to a court for the appointment of a receiver or custodian for any of
            its assets or properties, or shall have a receiver or custodian
            appointed for any of its assets or properties, with or without
            consent, and such receiver shall not be discharged or dismissed
            within sixty (60) days after his appointment; or

                 (f)  Borrower or any Material Insurance Subsidiary shall adopt
            a plan of complete liquidation of its assets.

            "Business Day" shall mean any day other than a Saturday, Sunday,
public holiday or other day when commercial banks in Wisconsin are authorized or
required by Law to close.

            "Change in Control" shall mean the acquisition by any Person or a
group of Affiliates of any Person of 25% or more of the outstanding common stock
of the Borrower or a change in the membership of a majority of the board of
directors of the Borrower, if not approved by the incumbent directors of the
Borrower.

            "Closing Date" shall mean August 7, 2002 or such later date on which
all of the conditions precedent contained in Section 2.2 are satisfied or waived
by M&I.

            "Code" shall mean the Internal Revenue Code of 1986, as amended.

            "Collateral" shall mean all of the personal property of Borrower,
its Subsidiaries or third parties subject to a Lien in favor of M&I pursuant to
the Collateral Documents.

            "Collateral Documents" shall mean the Pledge Agreement and such
other guaranties, security agreements, mortgages, deeds of trust and other
credit enhancements as may be executed from time to time by Borrower, or third
parties in favor of M&I in connection with this Loan Agreement.

            "Compulsory Surplus" shall mean, with respect to any Insurance
Subsidiary at any time, the compulsory surplus of such Insurance Subsidiary at
such time, as determined in accordance with policies and procedures established
by Wisconsin Law and applicable regulations.

            "Default" shall mean any event which would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.

            "Environmental Laws" means any Law, including any common law, which
relates to or otherwise imposes liability or standards of conduct concerning
discharges, emissions, releases or threatened releases of noises, odors or any
pollutants, contaminants or hazardous or toxic wastes,

                                       22
<Page>

substances or materials, into air, water or groundwater, or land, or otherwise
relating to the manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous or toxic wastes, substances or materials, including,
but not limited to CERCLA as amended, the Resource Conservation and Recovery Act
of 1976, as amended, the Toxic Substances Control Act of 1976, as amended, the
Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of
1977, as amended, the Oil Pollution Act of 1990, as amended, any so-called
"Superlien" law, and any other similar Federal, state or local statutes.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and as in effect from time to time.

            "Event of Default" shall mean any Automatic Event of Default or any
Notice Event of Default.

            "Facilities" shall mean all real property and improvements now or
hereafter owned or occupied by Borrower and its Material Insurance Subsidiaries
in the conduct of its business.

            "Financing Statements" shall mean Uniform Commercial Code financing
statements related to the Collateral Documents.

            "Fixed Charge Coverage Ratio" shall mean the relationship, expressed
as a numerical ratio of:

            (a)  the result of (i) operating income from continuing operations,
PLUS (ii) to the extent deducted in the calculation of operating income from
continuing operations, [A] interest expense, [B] depreciation and amortization
expense, MINUS (iii) income tax expense, MINUS (iv) cash distributions paid to
shareholders of the Borrower, PLUS (v) cash balances of the Borrower as of June
30, 2002, PLUS (vi) to the extent not already included to the calculation of
operating income from continuing operations, [A] cash proceeds from the issuance
of equity interests of the Borrower arising solely from employee purchases
through the employee 401k plan or as a result of the exercise of stock options,
and [B] the aggregate of the cash dividends the Insurance Subsidiaries are
permitted to pay to the Borrower as determined in accordance with restrictions
established by the applicable state insurance commissioner or similar
governmental authority; to

            (b)  the sum of (i) interest expense, PLUS (ii) regularly scheduled
principal payments (excluding any scheduled principal payments on the $7,500,000
promissory note of the Borrower, dated as of December 31, 2002, and payable to
M&I), PLUS (iii) the automatic reduction of the Revolving Credit Commitment when
applicable,

all as determined for the Borrower on a year to date basis until December 31,
2002, and for the four quarter period preceding the date of determination
thereafter, without duplication, and in accordance with GAAP applied on a
consistent basis.

            "GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America, applied by Borrower
and its Subsidiaries on a basis consistent with the preparation of Borrower's
most recent financial statements furnished to M&I pursuant to Section 3.2
hereof.

                                       23
<Page>

            "Indebtedness" shall mean all liabilities or obligations of Borrower
or any Subsidiary, whether primary or secondary or absolute or contingent: (a)
for borrowed money or for the deferred purchase price of property or services
(excluding trade obligations incurred in the ordinary course of business, which
are not the result of any borrowing); (b) as lessee under leases that have been
or should be capitalized according to GAAP; (c) evidenced by notes, bonds,
debentures or similar obligations; (d) under any guaranty or endorsement (other
than in connection with the deposit and collection of checks in the ordinary
course of business), and other contingent obligations to purchase, provide funds
for payment, supply funds to invest in any Person, or otherwise assure a
creditor against loss; or (e) secured by any Liens on assets of either Borrower
or any Subsidiary, whether or not the obligations secured have been assumed by
Borrower or any Subsidiary.

            "Insurance Subsidiary" shall mean any Subsidiary which is engaged in
the insurance business.

            "Interbank Rate" shall mean with respect to any Revolving Credit
Loan for any Interest Period, the rate per annum equal to the rate (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted as the rate at which
dollar deposits in immediately available funds are offered on the first Business
Day of each calendar month in the interbank Eurodollar market on or about 9:00
A.M. Milwaukee time for a period of one (1) calendar month. Each such
determination shall be conclusive and binding upon the parties hereto in the
absence of demonstrable error. M&I currently uses the Knight Ridder Information
Service to provide information with respect to the interbank Eurodollar market,
but M&I may change the service providing such information at any time.

            "Interbank Reserve Requirement" shall mean a percentage (expressed
as a decimal) equal to the aggregate reserve requirements in effect on the first
day of each calendar month (including all basic, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements during each calendar month) specified
for "Eurocurrency Liabilities" under Regulation D of the Board of Governors of
the Federal Reserve System, or any other regulation of the Board of Governors
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D, as then in effect, as applicable to the
class or classes of banks of which M&I is a member. As of the date of this Loan
Agreement, the Interbank Reserve Requirement is 0%.

            "Interest Period" shall mean a period commencing on the first day of
any calendar month and ending on the last day of that calendar month.

            "Investment" shall mean: (a) any transfer or delivery of cash, stock
or other property or value by such Person in exchange for Indebtedness, stock or
any other security of another Person; (b) any loan, advance or capital
contribution to or in any other Person; (c) any guaranty, creation or assumption
of any liability or obligation of any other Person; and (d) any investment in
any fixed property or fixed assets other than fixed properties and fixed assets
acquired and used in the ordinary course of the business of that Person.

                                       24
<Page>

            "Law" shall mean any federal, state, local or other law, rule,
regulation or governmental requirement of any kind, and the rules, regulations,
written interpretations and orders promulgated thereunder.

            "Letters of Credit" shall mean any letters of credit which are now
or at any time hereafter issued by M&I at the request and for the account of
Borrower pursuant to this Loan Agreement and which have not expired or been
revoked or terminated.

            "LIBOR" shall mean an annual rate of interest equal to the Adjusted
Interbank Rate, which rate shall change on the first day of each calendar month.
Each change in any rate of interest computed by reference to LIBOR shall take
effect on the first day of each calendar month.

            "LIBOR Loan" shall mean a Revolving Credit Loan bearing interest at
a rate determined by reference to LIBOR.

            "Lien" shall mean, with respect to any asset: (a) any mortgage,
pledge, lien, charge, security interest or encumbrance of any kind in respect of
such asset; or (b) the interest of a vendor or lessor under any conditional sale
agreement, financing lease or other title retention agreement relating to such
asset.

            "Loan Agreement" shall mean this Loan Agreement, together with the
Exhibits and Schedules attached hereto, as the same shall be amended from time
to time in accordance with the terms hereof.

            "M&I" shall mean M&I Marshall & Ilsley Bank, a Wisconsin banking
corporation.

            "Material Insurance Subsidiary" shall mean an Insurance Subsidiary
with a Statutory Capital and Surplus of greater than $5,000,000.

            "NAIC" shall mean the National Association of Insurance
Commissioners or any successor thereto, or in lieu thereof, any other
association, agency or other organization performing advisory, coordination or
other like functions among insurance departments, insurance commissioners and
similar governmental authorities of the various states of the United States
toward the promotion of uniformity in the practices of such governmental
authorities.

            "Notice Event of Default" shall mean any one or more of the
following:

                 (a)  Borrower shall fail: (i) to pay when due any installment
            of the principal of the Revolving Credit Note; or (ii) to pay when
            due any interest on the Revolving Credit Note, any fee, expense or
            other amount due under this Loan Agreement, the Revolving Credit
            Note and the Collateral Documents and such failure continues for
            five days; or

                 (b)  there shall be a default in the performance or observance
            of any of the covenants and agreements contained in Article IV or
            Sections 5.1, 5.2, 5.4, 5.6, 5.10, 5.13 or 5.14 of this Loan
            Agreement; or

                                       25
<Page>

                 (c)  there shall be a default in the performance or observance
            of any of the other covenants, agreements or conditions contained in
            this Loan Agreement, the Revolving Credit Note or the Collateral
            Documents, and such default shall have continued for a period of
            thirty (30) calendar days after written notice from M&I to Borrower
            specifying such default and requiring it to be remedied; or

                 (d)  any representation or warranty made by Borrower in this
            Loan Agreement or in any document or financial statement delivered
            pursuant to this Loan Agreement shall prove to have been false in
            any material respect as of the time when made or given; or

                 (e)  any final judgment shall be entered against Borrower or
            any Subsidiary which, when aggregated with other final judgments
            against Borrower and its Subsidiaries, exceeds $100,000 in amount,
            and shall remain outstanding and unsatisfied, unbonded or unstayed
            after sixty (60) days from the date of entry thereof; provided that
            no final judgment shall be included in the calculation under this
            subsection to the extent that the claim underlying such judgment is
            covered by insurance and defense of such claim has been tendered to
            and accepted by the insurer without reservation; or

                 (f)  (i) any Reportable Event (as defined in ERISA) shall have
            occurred which constitutes grounds for the termination of any Plan
            by the PBGC or for the appointment of a trustee to administer any
            Plan, or any Plan shall be terminated within the meaning of Title IV
            of ERISA, or a trustee shall be appointed by the appropriate court
            to administer any Plan, or the PBGC shall institute proceedings to
            terminate any Plan or to appoint a trustee to administer any Plan,
            or Borrower or any trade or business which together with Borrower
            would be treated as a single employer under Section 4001 of ERISA
            shall withdraw in whole or in part from a multi-employer Plan, and
            (ii) the aggregate amount of Borrower's liability for all such
            occurrences, whether to a Plan, the PBGC or otherwise, may exceed
            $100,000, and such liability is not covered for the benefit of
            Borrower or its Subsidiaries by insurance; or

                 (g)  Borrower or any Subsidiary shall: (i) fail to pay any
            amount of principal or interest when due (whether by scheduled
            maturity, required prepayment, acceleration or otherwise) under any
            Indebtedness (other than the Revolving Credit Note or as provided in
            (h) below) in an aggregate amount of $100,000 or more and such
            failure shall continue after the applicable grace period, if any,
            specified in any agreement or instrument relating to such
            Indebtedness; or (ii) fail to perform or observe any term, covenant
            or condition on its part to be performed or observed under any
            agreement or instrument relating to any such Indebtedness in an
            aggregate amount of $100,000 or more when required to be performed
            or observed, and such failure shall not be waived and shall continue
            after the applicable grace period, if any, specified in such
            agreement or instrument, if the effect of such failure to perform or
            observe is to accelerate, or to permit acceleration of, with the
            giving of notice if required, the maturity of such Indebtedness; or

                                       26
<Page>

                 (h)  Borrower or any Subsidiary shall: (i) fail to pay any
            amount of principal or interest when due (whether by scheduled
            maturity, required prepayment, acceleration or otherwise) under any
            Indebtedness to M&I (other than the Revolving Credit Note) and such
            failure shall continue after the applicable grace period, if any,
            specified in any agreement or instrument relating to such
            Indebtedness; or (ii) fail to perform or observe any term, covenant
            or condition on its part to be performed or observed under any
            agreement or instrument relating to any such Indebtedness to M&I
            when required to be performed or observed, and such failure shall
            not be waived and shall continue after the applicable grace period,
            if any, specified in such agreement or instrument, if the effect of
            such failure to perform or observe is to accelerate, or to permit
            acceleration of, with the giving of notice if required, the maturity
            of such Indebtedness;

                 (i)  Any license of any Material Insurance Subsidiary issued in
            its state of domicile or in a state in which its earned premiums in
            the prior fiscal year constituted 2% or more of its aggregate earned
            premiums in such period (i) shall be revoked by the governmental
            authority which issued such license, or any formal action
            (administrative or judicial) to revoke such license shall have been
            commenced against such Material Insurance Subsidiary and shall not
            have been dismissed within 30 days after the commencement thereof,
            (ii) shall be suspended by such governmental authority for a period
            in excess of 30 days or (iii) shall not be reissued or renewed by
            such governmental authority upon the expiration thereof following
            application for such reissuance or renewal of such Material
            Insurance Subsidiary;

                 (j)  Any Insurance Subsidiary shall be the subject of a final
            non-appealable order imposing a fine in an amount in excess of
            $500,000 in any single instance or other such orders imposing fines
            in excess of $2,000,000 in the aggregate after the date of this
            Agreement by or at the request of any state insurance regulatory
            agency as a result of the violation by such Insurance Subsidiary of
            such state's applicable insurance laws of the regulations
            promulgated in connection therewith;

                 (k)  Any Insurance Subsidiary shall become subject to (i) any
            conservation or liquidation order, directive or mandate issued by
            any governmental authority or (ii) any other directive or mandate
            issued by any governmental authority which is materially adverse to
            such Insurance Subsidiary, which in either case is not stayed within
            ten (10) days.

            "Obligations" shall mean: (a) the outstanding principal of, and all
interest on, the Revolving Credit Note, and any renewal, extension or
refinancing thereof; (a) the undrawn face amount of all outstanding Letters of
Credit; (c) all other debts, liabilities, obligations, covenants and agreements
of Borrower contained in this Loan Agreement, the Collateral Documents and any
Swap Agreements; and (d) any and all other debts, liabilities and obligations of
Borrower to M&I.

                                       27
<Page>

            "PBGC" shall mean Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

            "Permitted Indebtedness" shall mean: (a) Indebtedness of Borrower to
M&I; (b) purchase money Indebtedness secured by Purchase Money Liens, which
Indebtedness shall not exceed $500,000 per year on a non-cumulative consolidated
basis; (c) unsecured accounts payable and other unsecured obligations of
Borrower or any Subsidiary incurred in the ordinary course of business of
Borrower or any Subsidiary and not as a result of any borrowing; (d)
Indebtedness owed by the Borrower to a Subsidiary or owed by a Subsidiary to the
Borrower or another Subsidiary and constituting a Permitted Investment; and (e)
Indebtedness existing on the Closing Date and set forth on Schedule 7.1 and
refinancings thereof which does not increase the principal amount thereof or
accelerate the amortization thereof.

            "Permitted Investments" shall mean: (a) for the Borrower and each
Subsidiary that is not an Insurance Subsidiary:

                      (i)    Investments in insured savings accounts and
                 certificates of deposit;

                      (ii)   Investments in prime commercial paper, rated either
                 P-1 by Moody's Investors Service or A-1 by Standard & Poor's
                 Rating Services, or "local rated" commercial paper from M&I,
                 maturing within one year of the date of acquisition;

                      (iii)  Investments in obligations of a governmental body,
                 rated "A" or better, maturing within one year of the date of
                 acquisition;

                      (iv)   Investments in money market instruments or funds;

                      (v)    Investments in Subsidiaries and other Investments
                 in existence on the Closing Date and, to the extent they
                 consist of loans, refinancings thereof or amendments or
                 modifications thereto which do not have the effect of
                 increasing the principal amount thereof or accelerating the
                 amortization thereof;

                      (vi)   acquisitions of blocks of life, accident or health
                 insurance business through assumptive reinsurance, coinsurance
                 or indemnity reinsurance, so long as the only consideration
                 paid in connection therewith consists of (A) premiums sharing
                 and (B) payments of up to $5,000,000 in the aggregate after the
                 date hereof; and

                      (vii)  acquisitions of businesses or entities engaged in
                 the life, accident and health insurance business which do not
                 constitute hostile takeovers, that maintain a rating by A.M.
                 Best & Co. of B++ or better (and Investments in Subsidiaries
                 formed to acquire such businesses or acquired after the date of
                 this Agreement), and, if an acquisition of stock, the
                 outstanding stock of which is pledged to M&I upon M&I's request
                 (subject to obtaining regulatory approval for any such pledge
                 that the

                                       28
<Page>

                 Borrower shall use its commercially reasonable efforts to
                 obtain), and made after the Closing Date for an aggregate
                 consideration not to exceed $10,000,000 (including the amount
                 of any consideration paid in connection with reinsurance
                 transactions).

            and (b) in addition for each Insurance Subsidiary:

                      (i)    Investments in debt securities rated BBB- or better
                 by S&P, Baa-3 or better by Moody's or NAIC-2 or better by the
                 NAIC; provided, that any such Investment which, at any time
                 after which it is made, ceases to meet such rating requirements
                 shall cease to be a Permitted Investment under this Clause
                 (b)(i); and

                      (ii)   Other Investments of a quality acceptable to the
                 insurance commissioner in the respective domiciliary state of
                 such Insurance Subsidiary not otherwise permitted under this
                 definition; provided, that such Investments (excluding all
                 Investments comprised of capital stock of American Medical
                 Security Group, Inc. and the Borrower owned by Blue Cross &
                 Blue Shield United of Wisconsin) of (A) each such Insurance
                 Subsidiary that is a Material Insurance Subsidiary do not
                 exceed, in the aggregate at any one time outstanding, 20% of
                 the Statutory Capital and Surplus of such Material Insurance
                 Subsidiary or (B) all other Insurance Subsidiaries as a group,
                 if such other Insurance Subsidiaries have an aggregate
                 Statutory Capital and Surplus in excess of $5,000,000, do not
                 exceed 20% of such aggregate Statutory Capital and Surplus.

            "Permitted Liens" shall mean:

                 (a)  Liens in favor of M&I;

                 (b)  Liens for taxes, assessments, or governmental charges, or
            levies that are not yet due and payable or that are being contested
            in good faith by appropriate proceedings and for which adequate
            reserves have been established;

                 (c)  easements, restrictions, minor title irregularities and
            similar matters which have no material adverse effect as a practical
            matter upon the ownership and use of the affected property;

                 (d)  Liens or deposits in connection with workmen's
            compensation, unemployment insurance, social security, ERISA or
            similar legislation or to secure customs' duties, public or
            statutory obligations in lieu of surety, stay or appeal bonds, or to
            secure performance of contracts or bids (other than contracts for
            the payment of borrowed money) or deposits required by law as a
            condition to the transaction of business or other liens or deposits
            of a like nature made in the ordinary course of business;

                 (e)  Purchase Money Liens securing purchase money Indebtedness
            which is permitted hereunder; and

                                       29
<Page>

                 (f)  deposits made by any Insurance Subsidiary with the
            insurance regulatory authority in its jurisdiction of domicile or
            other statutory Liens or Liens or claims imposed or required by
            applicable insurance law or regulation against the assets of any
            Insurance Subsidiary, in each case in favor of all policy holders of
            such Insurance Subsidiary and in the ordinary course of such
            Insurance Subsidiary's business.

                 (g)  Liens set forth on Schedule 7.1.

            "Person" shall mean and include an individual, partnership, limited
liability entity, corporation, trust, unincorporated association and any unit,
department or agency of government.

            "Plan" shall mean each pension, profit sharing, stock bonus, thrift,
savings and employee stock ownership plan established or maintained, or to which
contributions have been made, by Borrower or any Subsidiary or any trade or
business which together with Borrower or any Subsidiary would be treated as a
single employer under Section 4001 of ERISA.

            "Pledge Agreement" shall mean the Pledge Agreement between Borrower
and M&I, in substantially the form of EXHIBIT C attached to this Loan Agreement

            "Prime Rate" shall mean the rate of interest adopted by M&I from
time to time as its base rate for interest determinations.

            "Prime Rate Loan" shall mean a Revolving Credit Loan bearing
interest at a rate determined by reference to the Prime Rate.

            "Purchase Money Liens" shall mean Liens securing purchase money
Indebtedness incurred in connection with the acquisition of capital assets by
Borrower or any Subsidiary in the ordinary course of business, provided that
such Liens do not extend to or cover assets or properties other than those
purchased in connection with the purchase in which such Indebtedness was
incurred and that the obligation secured by any such Lien so created shall not
exceed one hundred percent (100%) of the cost of the property covered thereby.

            "Quarterly Statement" shall mean the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of incorporation or, if
no specific form is so required, in the form of financial statements permitted
by such insurance commissioner (or such similar authority) to be used for filing
quarterly statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.

            "Revolving Credit Commitment" shall mean the commitment of M&I to
make Revolving Credit Loans to Borrower up to a maximum principal amount
outstanding from time to time, (a) during the period from the Closing Date
through the first anniversary thereof, equal to Thirty Million Dollars
($30,000,000) minus the undrawn face amount of outstanding Letters of Credit,
(b) during the period following the first anniversary of the Closing date
through the second anniversary thereof, equal to Twenty-Five Million Dollars
($25,000,000) minus the

                                       30
<Page>

undrawn face amount of outstanding Letters of Credit, and (c) during the period
from the second anniversary of the Closing Date through the Revolving Credit
Termination Date, equal to Fifteen Million Dollars ($15,000,000) minus the
undrawn face amount of outstanding Letters of Credit.

            "Revolving Credit Loans" shall mean the loans made from time to time
to Borrower by M&I pursuant to Section 1.1 of this Loan Agreement.

            "Revolving Credit Note" shall mean a promissory note from Borrower
to M&I evidencing the Revolving Credit Loans and in substantially the form of
EXHIBIT D attached to this Loan Agreement, as such note may be extended, renewed
or refinanced from time to time.

            "Revolving Credit Termination Date" shall mean the earlier of: (a)
the third anniversary of the Closing Date; and (b) the date that the Revolving
Credit Commitment is terminated pursuant to Section 6.1 of this Loan Agreement.

            "SAP" shall mean, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such Insurance
Subsidiary for the preparation of annual statements and other financial reports
by insurance companies of the same type as such Insurance Subsidiary in effect
from time to time, consistently applied.

            "Statutory Capital and Surplus" shall mean, with respect to any
Insurance Subsidiary at any time, the capital and surplus of such Insurance
Subsidiary at such time, as determined in accordance with SAP ("Liabilities,
Surplus and Other Funds" statement, Page 3, Column 1, Line 38 of the Annual
Statement) for a Subsidiary which is a life insurance company, Page 3, Column 1,
Line 32 of the Annual Statement for a Subsidiary which is a property and
casualty insurance company; and Page 3, Column 3, Line 26 of the Annual
Statement for a Subsidiary which is a health insurance company, as such
references may change from the 2001 annual statements.

            "Statutory Net Income" shall mean, with respect to any Insurance
Subsidiary for any computation period, the net income earned by such Insurance
Subsidiary during such period, as determined in accordance with SAP ("Summary of
Operations" statement, Page 4, Column 1, Line 33 of the Annual Statement) for a
Subsidiary which is a life insurance company; "Underwriting and Investment
Exhibit--Statement of Income" statement, Page 4, Column 1, Line 19 for a
Subsidiary which is a property and casualty insurance company; and "Statement of
Revenue and Expenses: statement, Page 4, Column 2, Line 29 for a Subsidiary
which is a health insurance company, as such references may change from the 2001
annual statements.

            "Subsidiary" shall mean any corporation, more than fifty percent
(50%) of the outstanding stock of which (of any class or classes, however
designated, having ordinary voting power for the election of at least a majority
of the members of the board of directors of such corporation, other than stock
having such power only by reason of the happening of a contingency) shall at all
time be owned by Borrower directly or through one or more Subsidiaries.

            "Swap Agreement" shall mean any agreement governing any transaction
now existing or hereafter entered into between the Borrower and M&I or any of
M&I's subsidiaries

                                       31
<Page>

or affiliates or their successors, which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

            "Tangible Net Worth" shall mean the Borrower's total consolidated
shareholder's equity (including capital stock, paid-in-capital and retained
earnings after deducting treasury stock, but excluding all unrealized gains or
losses on the capital stock of American Medical Security Group, Inc.) MINUS the
book amount of all assets treated as intangibles (including goodwill, deferred
acquisition costs and unamortized financing costs), all as determined for the
Borrower and its Subsidiaries on a consolidated basis as of the date of
determination, without duplication, and in accordance with GAAP applied on a
consistent basis.

     7.2    INTERPRETATION. The foregoing definitions are equally applicable to
both the singular and plural forms of the terms defined. The words "hereof",
"herein", and "hereunder" as words of like import when used in this Loan
Agreement shall refer to this Loan Agreement as a whole and not to any
particular provision of this Loan Agreement. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Loan Agreement, it shall be done in accordance with GAAP or
SAP, as applicable, except where such principles are inconsistent with the
specific provisions of this Loan Agreement.

                                    ARTICLE 8

                                  MISCELLANEOUS

     8.1    EXPENSES AND ATTORNEYS' FEES. Borrower shall pay all reasonable fees
and expenses incurred by M&I and any loan participants, including the reasonable
fees of counsel, in connection with the preparation, issuance, maintenance and
amendment of this Loan Agreement, the Revolving Credit Note and the Collateral
Documents and the consummation of the transactions contemplated by this Loan
Agreement, and the administration, protection and enforcement of M&I's rights
under this Loan Agreement, the Revolving Credit Note and the Collateral
Documents, or with respect to the Collateral, including without limitation the
protection and enforcement of such rights in any bankruptcy, reorganization or
insolvency proceeding involving Borrower, both before and after judgment.
Borrower further agrees to pay on demand all internal audit fees and
accountants' fees incurred by M&I in connection with the maintenance (limited to
$2,000 per year prior to a Default or an Event of Default) and enforcement of
this Loan Agreement, the Revolving Credit Note, the Collateral Documents or any
other collateral security.

     8.2    ASSIGNABILITY; SUCCESSORS. Borrower's rights and liabilities under
this Loan Agreement are not assignable or delegable, in whole or in part,
without the prior written consent of M&I. The provisions of this Loan Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of the parties.

                                       32
<Page>

     8.3    SURVIVAL. All agreements, representations and warranties made in
this Loan Agreement or in any document delivered pursuant to this Loan Agreement
shall survive the execution and delivery of this Loan Agreement, the issuance of
the Revolving Credit Note and the delivery of any such document.

     8.4    GOVERNING LAW. This Loan Agreement, the Revolving Credit Note, the
Collateral Documents and the other instruments, agreements and documents issued
pursuant to this Loan Agreement shall be governed by, and construed and
interpreted in accordance with, the Laws of the State of Wisconsin applicable to
agreements made and wholly performed within such state.

     8.5    COUNTERPARTS; HEADINGS. This Loan Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same agreement. The table
of contents and article and section headings in this Loan Agreement are inserted
for convenience of reference only and shall not constitute a part of this Loan
Agreement.

     8.6    ENTIRE AGREEMENT. This Loan Agreement, the Revolving Credit Note,
the Collateral Documents and the other documents referred to herein and therein
contain the entire understanding of the parties with respect to the subject
matter hereof. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly set forth in this Loan Agreement. This
Loan Agreement supersedes all prior negotiations, agreements and undertakings
between the parties with respect to such subject matter.

     8.7    NOTICES. All communications or notices required or permitted by this
Loan Agreement shall be in writing and shall be deemed to have been given: (a)
upon delivery if hand delivered; or (b) two (2) Business Days following deposit
in the United States mail, postage prepaid, or with a nationally recognized
overnight commercial carrier, airbill prepaid; or (c) upon transmission if by
facsimile, and each such communication or notice shall be addressed as follows,
unless and until any party notifies the other in accordance with this Section
8.7 of a change of address:

            If to Borrower:               Cobalt Corporation
                                          401 West Michigan Avenue
                                          Milwaukee, WI  53203
                                          Attention:  Gail Hanson
                                          Fax No.:  (414) 226-6229

            If to M&I:                    M&I Marshall & Ilsley Bank
                                          770 North Water Street
                                          Milwaukee, WI 53202
                                          Attention:  Thomas F. Bickelhaupt
                                          Fax No.:  (414) 765-7625

                                          with a copy to:

                                          Quarles & Brady LLP
                                          411 East Wisconsin Avenue
                                          Milwaukee, Wisconsin 53202

                                       33
<Page>

                                          Attention:  Ann M. Murphy
                                          Fax No.:  (414) 271-3552

     8.8    AMENDMENT. No amendment of this Loan Agreement shall be effective
unless in writing and signed by Borrower and M&I.

     8.9    TAXES. If any transfer or documentary taxes, assessments or charges
levied by any governmental authority shall be payable by reason of the
execution, delivery or recording of this Loan Agreement, the Revolving Credit
Note, the Collateral Documents or any other document or instrument issued or
delivered pursuant to this Loan Agreement, Borrower shall pay all such taxes,
assessments and charges, including interest and penalties (except to the extent
such interest or penalty is due to M&I's negligence), and hereby indemnifies M&I
against any liability therefor.

     8.10   SEVERABILITY. Any provision of this Loan Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Loan Agreement in such
jurisdiction or affecting the validity or enforceability of any provision in any
other jurisdiction.

     8.11   INDEMNIFICATION. Borrower hereby indemnifies, agrees to defend and
holds M&I harmless from and against all loss, liability, damage and expense,
including reasonable costs associated with administrative and judicial
proceedings and reasonable attorneys' fees, suffered or incurred by M&I on
account of: (i) Borrower's or any Subsidiary's failure to comply with any
Environmental Law, or any order of any regulatory or administrative authority
with respect thereto; (ii) any release of petroleum products or hazardous
materials or substances on, upon or into real property owned, operated or
controlled by Borrower or any Subsidiary; and (iii) any and all damage to
natural resources or real property or harm or injury to Persons resulting or
alleged to have resulted from any failure to comply or any release of petroleum
products or hazardous materials or substances as described in clauses (i) and
(ii) above. All indemnities set forth in this Loan Agreement shall survive the
execution and delivery of this Loan Agreement and the Revolving Credit Note and
the making and repayment of the Revolving Credit Loans.

     8.12   PARTICIPATION. The M&I may, at any time and from time to time, grant
to any bank or banks a participation in any part of the Revolving Credit Loans.
All of the representations, warranties and covenants of Borrower in this Loan
Agreement are also made to any participant with the same force and effect as if
expressly so made.

     8.13   INCONSISTENT PROVISIONS. The provisions of the Collateral Documents,
Revolving Credit Note and this Loan Agreement are not intended to supersede the
provisions of each other or this Loan Agreement, but shall be construed as
supplemental to this Loan Agreement and to each other. In the event of any
inconsistency between the provisions of the Collateral Documents, the Revolving
Credit Note and this Loan Agreement, it is intended that the provisions of this
Loan Agreement shall control.

     8.14   WAIVER OF RIGHT TO JURY TRIAL. M&I AND BORROWER ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE

                                       34
<Page>

UNDER THIS LOAN AGREEMENT AND THE COLLATERAL DOCUMENTS OR WITH RESPECT TO THE
TRANSACTION CONTEMPLATED HEREBY AND THEREBY WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF
ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

     8.15   TIME OF ESSENCE. TIME IS OF THE ESSENCE FOR THE PERFORMANCE BY
BORROWER OF THE OBLIGATIONS SET FORTH IN THIS LOAN AGREEMENT AND THE COLLATERAL
DOCUMENTS.

     8.16   SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. AS A MATERIAL
INDUCEMENT TO M&I TO ENTER INTO THIS LOAN AGREEMENT:

                 (a)  THE BORROWER AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY
            MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER
            COLLATERAL DOCUMENTS MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF
            WISCONSIN LOCATED IN MILWAUKEE COUNTY OR THE FEDERAL COURT FOR THE
            EASTERN DISTRICT OF WISCONSIN AND THE BORROWER CONSENTS TO THE
            JURISDICTION OF SUCH COURTS. THE BORROWER WAIVES ANY OBJECTION IT
            MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY
            RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH
            ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT; and

                 (b)  The Borrower consents to the service of process in any
            such action or proceeding by certified mail sent to the address
            specified in Section 8.7.

                 (c)  Nothing contained herein shall affect the right of M&I to
            serve process in any other manner permitted by law or to commence an
            action or proceeding in any other jurisdiction.

                                       35
<Page>

            IN WITNESS WHEREOF, the parties hereto have executed this Loan
Agreement as of the day and year first above written.

                                    COBALT CORPORATION

                                    By: /s/ Thomas R. Hefty
                                       -----------------------
                                      Its: Chairman & CEO
                                          --------------------

                                    By: /s/ Gail L. Hanson
                                       -----------------------
                                      Its: Sr VP & Treasurer
                                          --------------------

                                    M&I MARSHALL & ILSLEY BANK

                                    By: /s/ Thomas F. Bickelhaup
                                       -------------------------
                                      Its: Vice President
                                          --------------------

                                    By: /s/ Ann M. Benschoter
                                       -----------------------
                                      Its: S.V.P.
                                          --------------------

                                       36

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]