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                                                                    EXHIBIT 10.2

                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT ("Agreement") is made this 15th day of February,
2002 by and between Cobalt Corporation, a Wisconsin corporation ("Cobalt") and
Blue Cross & Blue Shield United of Wisconsin, a Wisconsin stock insurance
corporation ("BCBSUW").

                                    ARTICLE I
                                   DEFINITIONS

         When used in this Agreement, the following terms shall have the
meanings specified:

         1.1 "ACT" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations issued thereunder.

         1.2 "COLLATERAL" means the Stock and the Proceeds.

         1.3 "CERTIFICATES" means the certificates representing the Stock.

         1.4 "COMPCARE" means Compcare Health Services Insurance Corporation.

         1.5 "EVENT OF DEFAULT" means an event described in Section V of this
Agreement.

         1.6 "NOTE" means the promissory note from Cobalt to BCBSUW dated
February 15, 2002 in the original principal amount of Seventy Million Dollars
($70,000,000) and any amendment or modification thereof.

         1.7 "OBLIGATIONS" means (a) the outstanding principal of, and all
interest on, the Note; (b) all liabilities, obligations, covenants and
agreements of Cobalt contained in the Note; and (c) all liabilities,
obligations, covenants and agreements of Cobalt contained in this Agreement.

         1.8 "OCI" means the Office of the Commissioner of Insurance of the
State of Wisconsin.

         1.9 "PROCEEDS" means whatever is received upon the sale, exchange,
collection or other disposition of the Stock or proceeds of the Stock,
including, without limitation, all interest and other income from the Stock and
distributions with respect to the Stock, and any other products thereof.

         1.10 "STOCK" means 100% of the issued and outstanding capital stock of
Compcare Health Services Insurance Corporation, a Wisconsin stock insurance
corporation wholly owned by Cobalt.

         1.11 "STOCK RIGHTS" means any stock dividend or other right or property
that Cobalt receives or becomes entitled to receive for any reason with respect
to, in substitution for, or in exchange for any shares of the Stock.

         1.12 "UCC" means the Uniform Commercial Code as adopted in Wisconsin
and in effect from time to time.

                                   ARTICLE II
                                   THE PLEDGE

         2.1 THE PLEDGE. To secure the full and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of each of
the Obligations, Cobalt hereby grants to BCBSUW a security interest in the
Collateral, wherever located and whether now owned or hereafter acquired.

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         2.2 CERTIFICATES; STOCK POWERS. Cobalt shall deliver to BCBSUW, to hold
in accordance with the terms and conditions of this Agreement, the Certificates
and appropriate stock powers duly endorsed by Cobalt in blank.

         2.3 ACTIONS PRIOR TO AN EVENT OF DEFAULT. Prior to the occurrence of an
Event of Default, Cobalt shall have the sole right to vote the stock and the
sole right to receive and retain any and all cash dividends and distributions
declared and paid on the Stock; provided, however, that no vote shall be cast,
or corporate right exercised, or other action taken, that would result in
violation of any provision of the Note or this Agreement.

                                   ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF HOLDINGS

         Cobalt hereby represents and warrants to BCBSUW as follows:

         3.1 OWNERSHIP OF COLLATERAL. Cobalt is the owner of the Stock, free and
clear of all liens, encumbrances, security interests and restrictions, except
the security interest granted by this Agreement.

         3.2. ENFORCEABILITY. This Agreement is a valid and binding obligation
of Cobalt, enforceable against Cobalt in accordance with its terms, except as
the enforcement thereof may be limited by applicable bankruptcy, insolvency, or
similar laws generally affecting the rights of creditors. Upon delivery of the
Certificates to BCBSUW, the security interest granted pursuant to this Agreement
will constitute a valid, perfected first priority lien against the Stock,
enforceable against all persons.

         3.3 ABSENCE OF CONFLICTING OBLIGATIONS. The making, execution, delivery
and performance of this Agreement by Cobalt, and compliance with its terms, do
not violate any presently existing provision of law, the articles of
incorporation or bylaws of Cobalt, or any agreement to which Cobalt is a party
or by which Cobalt or any of its assets is bound.

         3.4 STATUS OF COLLATERAL. The Stock has been duly authorized and
validly issued and is fully paid and non-assessable. The Stock constitutes 100%
of the issued and outstanding shares of the capital stock of Compcare.

                                   ARTICLE IV
                               COVENANTS OF COBALT

         4.1 MAINTENANCE OF SECURITY INTEREST. Cobalt shall pay all expenses
and, upon request, take any action reasonably deemed advisable by BCBSUW to
defend and preserve Cobalt's title to the Stock or to establish, determine
priority of, perfect, continue perfected, terminate and enforce Cobalt's
security interest in the Stock or the rights of BCBSUW under this Agreement.

         4.2 TAXES. Cobalt shall pay, when due, all taxes and other governmental
charges levied or assessed upon or against the Stock.

         4.3 DELIVERY OF CERTAIN ITEMS. Cobalt shall hold in trust for BCBSUW
upon receipt, and immediately thereafter shall deliver to BCBSUW, any stock
certificate, instrument or other document evidencing or constituting any Stock
Rights.

         4.4 NO OTHER LIENS. Cobalt shall keep the Stock free from all liens,
encumbrances and security interests (other than the security interest granted by
this Agreement) and shall defend the Stock against all claims and legal
proceedings by persons other than BCBSUW.

         4.5 DISPOSITION OF STOCK. Cobalt shall not sell, transfer (including,
without limitation, transfer of a security interest or other collateral
interest) or otherwise dispose of all or any part of the Stock, without

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the prior written consent of OCI and BCBSUW, nor will Cobalt permit or cause
Compcare to purchase, redeem, retire, or otherwise acquire for value any of its
capital stock now or hereafter outstanding.

         4.6 NO ADDITIONAL STOCK. Cobalt agrees that it will cause the Stock to
constitute at all times not less than all of the total number of shares of each
class of capital stock then outstanding (including treasury shares) of Compcare,
and will not consent to or approve the issuance of and will cause Compcare not
to issue any additional shares of any class of capital stock of Compcare, any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or nonoccurrence of any event or condition into, or exchangeable
for, any such shares; or any subscription agreements, warrants, options, rights,
or other commitments entitling any person to purchase or otherwise acquire any
such shares.

                                    ARTICLE V
                           EVENTS OF DEFAULT; REMEDIES

         5.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default:

             (a) A breach by Cobalt of any of the terms or provisions of Article
         IV of this Agreement;

             (b) A material falsity in any representation or warranty made by
         Cobalt to BCBSUW under or in connection with this Agreement as of the
         date on which made;

             (c) Any failure by Cobalt to pay or perform any one or more of the
         Obligations when due, whether at stated maturity, by acceleration or
         otherwise;

             (d) Cobalt's becoming insolvent or the subject of any order for
         relief under the United States Bankruptcy Code or successor law or the
         subject of any insolvency or similar proceeding; or

             (e) Any other event that causes BCBSUW, in good faith, to deem
         itself insecure.

         5.2 RIGHTS AND REMEDIES OF BCBSUW. Upon the occurrence of any Event of
Default: (i) all of the Obligations shall, at BCBSUW 's option, become
immediately due and payable without presentment, demand, protest or notice of
any kind (all of which hereby are expressly waived); (ii) BCBSUW shall have all
of the rights and remedies provided in the Note, by Article 9 of the UCC and by
any other applicable law; (iii) BCBSUW may exercise its right under Article 9 of
the UCC and other applicable laws to retain the Stock; (iv) in the event that
BCBSUW elects not to retain the Stock, it may exercise its right under Article 9
of the UCC and any other applicable law to sell or otherwise dispose of the
Stock, subject to the prior approval of the terms and conditions of such
transaction by OCI; and (v) in the interim between BCBSUW's acceleration of the
Obligations following an Event of Default and BCBSUW 's retention of the Stock
under subparagraph (iii) above, or final disposition of the Stock under
subparagraph (iv) above, BCBSUW may exercise voting rights over the Stock and
shall have the sole right to receive any dividends declared and paid on the
Stock. With respect to the foregoing rights and remedies:

              (i) Written notice, when required by law, sent to any address of
       Cobalt in this Agreement at least ten calendar days (counting the day of
       sending) before the date of a proposed disposition of the Stock is
       reasonable notice.

              (ii) Cobalt shall pay all fees and expenses incurred by BCBSUW,
       including the reasonable fees of counsel, in connection with the
       administration, protection and enforcement of BCBSUW's rights under this
       Agreement or with respect to the Stock, including, without limitation,
       the protection and enforcement of such rights in any bankruptcy or
       insolvency proceeding involving Cobalt.

         5.3 METHOD OF DISPOSITION. Whenever BCBSUW would have the right under
this Agreement

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and prior approval from OCI to sell the Stock, the parties agree that if, in the
opinion of BCBSUW or its legal counsel, sales of the Stock by BCBSUW or Cobalt
without registration of the Stock under the Act might, unless accomplished by
one or more of the methods described in this Section 5.3, constitute either
BCBSUW or Cobalt an "underwriter", as that term is defined in Section 2(11) of
the Act, it shall be commercially reasonable for BCBSUW, without registration,
notwithstanding that the terms of any such sale might be less favorable than
sale through registration, to take any of the following actions:

             (a) sell all or part of the Stock in compliance with Rule 144,
         Rule 237, Regulation A or Regulation D under the Act as then in effect,
         or pursuant to any other rules or regulations under the Act then in
         effect, compliance with which would make the exemptions provided
         pursuant to Sections 3(b) or 4(1) of the Act applicable to the sale; or

             (b) sell all or part of the Stock in an intrastate public
         offering within the meaning of Section 3(a)(11) of the Act; or

             (c) sell all or part of the Stock in one or more private
         transactions not involving any public offering in order to secure the
         exemption provided in Section 4(l) of the Act, if: (i) the Stock is
         sold for cash to the highest bidder after biding or "firm" offers to
         purchase have been received from at least two offerors; and (ii) BCBSUW
         has reasonable grounds to believe and does believe that each such
         offeror has sufficient financial resources to enable such offeror to
         purchase the Stock offered and that the offer was made in good faith;
         and (iii) each such offeror was informed, prior to the time such offer
         was made, that offers to purchase the Stock were also being solicited
         from others; and (iv) BCBSUW has, for at least 60 days prior to the
         sale, solicited offers to purchase the stock within the restrictions
         imposed by federal or state securities Laws.

Nothing in this Section 5.3 shall prevent BCBSUW from making any other
commercially reasonable disposition of the Stock, and no sale of the Stock shall
be commercially unreasonable solely because it was not made in compliance with
this Section.

         5.4 APPLICATION OF PROCEEDS. BCBSUW shall apply the Proceeds resulting
from any sale or disposition of the Stock pursuant to this Agreement in the
following order of priority:

             (a) to the costs of the sale;

             (b) to the expenses incurred by BCBSUW in connection with the sale,
         including reasonable attorneys fees;

             (c) to the payment of the Obligations then due and owing in any
         order selected by BCBSUW; and

             (d) to Cobalt.

         5.5 OTHER REMEDIES. No remedy herein conferred upon BCBSUW 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
Agreement or the Note or now or hereafter existing at law or in equity or by
statute or otherwise. No failure or delay on the part of BCBSUW in exercising
any right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude other or further
exercise thereof or the exercise of any other right or remedy.

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         5.6 LIMITATION ON BCBSUW'S DUTIES REGARDING COLLATERAL. Subject to any
contrary order by OCI, BCBSUW 's sole duty with respect to the custody,
safekeeping and physical preservation of the Stock in its possession, under the
UCC or otherwise, shall be to deal with it in the same manner as BCBSUW deals
with similar securities and property for its own account. Neither BCBSUW nor any
of its directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Stock or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Stock upon the
request of Cobalt or otherwise.

                                   ARTICLE VI
                                  MISCELLANEOUS

         6.1 BCBSUW APPOINTED ATTORNEY-IN-FACT. Cobalt hereby appoints BCBSUW
Cobalt's attorney-in-fact, with full authority in the place and stead of Cobalt
and in the name of Cobalt or otherwise, from time to time in BCBSUW's discretion
to take any action and to execute any instrument which BCBSUW may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made payable to
Cobalt pursuant to Section 4.3 representing any dividend, interest payment or
other distribution in respect of the Stock or any part thereof and to give full
discharge for the same. If Cobalt fails to perform any agreement contained
herein, BCBSUW may itself perform, or cause performance of, such agreement, and
the expenses of BCBSUW incurred in connection therewith, including without
limitation reasonable attorneys' fees and expenses, shall be payable by Cobalt.

         6.2 ASSIGNABILITY; SUCCESSORS. Cobalt's rights and liabilities under
this Agreement are not assignable or delegable, in whole or in part, without the
prior written consent of BCBSUW and OCI. The provisions of this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
parties.

         6.3 SURVIVAL. All agreements, representations and warranties made
herein or in any document delivered pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the delivery of any such document.

         6.4 GOVERNING LAW. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Wisconsin.

         6.5 AMENDMENT. No amendment of this Agreement shall be effective unless
in writing, signed by both parties, and approved by OCI.

         6.6 CONTINUATION. This Agreement replaces and supersedes that prior
Pledge Agreement dated January 1, 2002, which in turn replaced and superseded
that prior Pledge Agreement dated April 30, 2001.

         IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.

                                    COBALT CORPORATION

                                    By:    /s/  Thomas R. Hefty
                                           -------------------------------------
                                    Title: Chief Executive Officer and President
                                           -------------------------------------

                                    BLUE CROSS & BLUE SHIELD UNITED OF WISCONSIN

                                    By:    /s/  Gail L. Hanson
                                           -------------------------------------
                                    Title: Treasurer
                                           -------------------------------------

                                       5<PAGE>
                                                                    EXHIBIT 10.3

                                 PROMISSORY NOTE

$22,650,397                                                  December 31, 2001

         FOR VALUE RECEIVED, Cobalt Corporation, a Wisconsin corporation
("Cobalt") hereby promises to pay to the order of United Wisconsin Insurance
Company, a Wisconsin stock insurance corporation ("UWIC"), on the maturity date,
the principal sum of Twenty Two Million Six Hundred Fifty Thousand Three Hundred
Ninety Seven Dollars ($22,650,397), together with interest on the unpaid
principal balance at an annual rate equal to 7.38% (the "Note Rate"). This Note
will mature and become due and payable on September 30, 2002 (the "Maturity
Date"). Interest is computed for the actual number of days principal is unpaid
on the basis of a 360-day year.

         Cobalt shall pay UWIC interest due hereunder on a quarterly basis on
the last business day of each calendar quarter and shall make a final payment of
unpaid principal and interest due on the Maturity Date. All payments of
principal and interest shall be made in lawful money of the United States of
America to UWIC at its offices at 401 West Michigan Street, Milwaukee, WI 53203
or at such other place as UWIC may designate to Cobalt in writing. Presentment,
notice of protest, demand and notice of dishonor of this Note are waived.

         All or any portion of the outstanding principal balance of this Note
may be prepaid at any time without penalty or premium.

         This Note is secured by a Pledge Agreement of even date from Cobalt to
UWIC. In the event that Cobalt fails to make any payment under this Note when
due, or in the event of the occurrence of an Event of Default described in the
Pledge Agreement securing this Note, then, in any or all such events, UWIC may
declare the entire balance of principal and accrued interest under this Note to
be immediately due and payable. In the event that Cobalt (i) becomes insolvent
or admits, by action or inaction, its inability to pay its debts as they become
due, or (ii) makes an assignment for the benefit of creditors, or (iii) becomes
the subject of any order for relief under the United States Bankruptcy Code or
the subject of any state insolvency or similar proceeding, then the entire
unpaid principal of, and accrued interest on, this Note shall become
automatically due and payable. Cobalt hereby agrees to pay all reasonable fees
and expenses incurred both before and after any judgment by UWIC or any
subsequent holder in connection with the protection and enforcement of the
rights of UWIC or any subsequent holder under this Note (including, without
limitation, reasonable attorneys' fees and legal expenses and all other expenses
of collecting any amounts due under this Note and protecting and enforcing the
rights of UWIC and any subsequent holder in any bankruptcy, reorganization or
insolvency proceeding involving Cobalt) until UWIC is paid in full.

         This Note shall be governed by and construed in accordance with the
laws of the State of Wisconsin.

                                    COBALT CORPORATION
(CORPORATE SEAL)

                                    By:    /s/  Thomas R. Hefty
                                           -------------------------------------
                                    Title: Chief Executive Officer and President
                                           -------------------------------------

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