Document:

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                       REGISTRATION RIGHTS AGREEMENT

                               By and Among:

                             Kmart Corporation

                                    and

                          the Rightsholders listed

                                on Exhibit A

                         Dated as of July 20, 2001

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                                                   TABLE OF CONTENTS

                                                                                                               PAGE

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SECTION 1: REGISTRATION...........................................................................................1

         1.1      Registrable Shares..............................................................................1

         1.2      Registration....................................................................................2

SECTION 2: KMART'S OBLIGATIONS....................................................................................3

         2.1      Registration Statement..........................................................................3

         2.2      Amendments and Supplements......................................................................3

         2.3      Copies of Offering Documents....................................................................3

         2.4      Misleading Prospectus...........................................................................3

         2.5      Rule 144........................................................................................3

SECTION 3: THE RIGHTSHOLDER'S OBLIGATIONS.........................................................................4

         3.1      Other Documents and Information.................................................................4

         3.2      Cessation of Offering...........................................................................4

         3.3      No Preliminary Prospectus.......................................................................4

         3.4      Acceptable Brokers..............................................................................4

SECTION 4: EXPENSES AND INDEMNIFICATION...........................................................................4

         4.1      Certain Fees and Commissions....................................................................4

         4.2      Other Expenses..................................................................................4

         4.3      Indemnification.................................................................................5

SECTION 5: OTHER PROVISIONS.......................................................................................7

         5.1      Attorneys' Fees.................................................................................7

         5.2      Notices.........................................................................................7

         5.3      Headings........................................................................................7

         5.4      Counterparts....................................................................................7

         5.5      Governing Law...................................................................................7

         5.6      Successors and Assigns..........................................................................7

         5.7      Waiver..........................................................................................7

         5.8      Amendments......................................................................................8

         5.9      Severability....................................................................................8

         5.10     Parties in Interest.............................................................................8

         5.11     Entire Agreement................................................................................8

         5.12     Waiver of Jury Trial............................................................................8

         5.13     Construction....................................................................................8

         5.14     Assignment of Registration Rights...............................................................8
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         THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 20, 2001, by and among: KMART CORPORATION, a
Michigan corporation ("Kmart"), and those entities listed in Exhibit A
hereto (collectively, the "Rightsholders").

                                  RECITALS

         A. Kmart, Kmart Merger Corp., a Delaware corporation and an
indirect, wholly-owned subsidiary of Kmart ("Merger Sub"), and
BlueLight.com, Inc., a Delaware corporation (the "Company"), have entered
into that certain Agreement and Plan of Merger dated as of July 20, 2001
(the "Merger Agreement"), pursuant to which Merger Sub will be merged with
and into the Company (the "Merger"), and the Company shall thereby become
an indirect wholly-owned subsidiary of Kmart. Upon consummation of the
Merger, Merger Sub shall cease to exist and the Company shall continue as
the surviving corporation.

         B. In connection with the Merger, the Rightsholders shall receive
in exchange for their shares of Series A Preferred Stock and Series C
Preferred Stock in the Company shares of common stock, par value $1.00 per
share, of Kmart (the "Kmart Common Stock").

         C. Kmart and Evercore Venture Partners LLP, a Delaware limited
liability partnership ("Evercore") have entered into, or may enter into, a
Unit Purchase Agreement, pursuant to which Kmart will purchase all of the
Class A Units of BlueLight.com LLC owned by Evercore in exchange for Kmart
Common Stock (the "Evercore Transaction").

         D. The Kmart Common Stock, when issued pursuant to the Merger and
the Evercore Transaction, will not be freely-tradable because such shares
of Kmart Common Stock shall not have been registered under the Securities
Act of 1933 (the "Securities Act").

         E. In order to induce the Company to consummate the transactions
contemplated by the Merger, Kmart desires to grant to the Rightsholders
certain registration rights (the "Registration Rights") in connection with
the Rightsholders' receipt of the Kmart Common Stock. The Registration
Rights shall be as more fully set forth herein. Capitalized terms used in
this Agreement and not otherwise defined shall have the meanings given to
them in the Merger Agreement.

                                 AGREEMENT

         NOW THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby agree as follows:

SECTION 1:  REGISTRATION

     1.1 Registrable Shares. As used in this Agreement, "Registrable
Shares" means the shares of Kmart Common Stock to be issued to the
Rightsholders pursuant to the Merger and the Evercore Transaction and any
shares of Kmart Common Stock issued in respect thereof as a result of any
stock split, stock dividend, share exchange, merger, consolidation or
similar recapitalization; provided, however, that Registrable Shares shall
cease to be Registrable Shares when a registration statement covering such
Registrable Shares shall have become effective under the Securities Act,
and such Registrable Shares shall have been disposed of in accordance with
such Registration Statement. Upon the consummation of the Merger, and upon
the consummation of the Evercore Transaction, Kmart shall cause Exhibit A
hereto to be amended with respect to each Rightsholder to accurately
reflect in the column entitled "No. of Shares of Kmart Common" the number
of Registrable Shares issued to and held by such Rightsholder, and upon
being notified of any assignment of registration rights permitted by
Section 5.14, Kmart shall cause Exhibit A hereto to be amended with respect
to each assigning Rightsholder and each assignee of such registration
rights to accurately reflect in the column entitled "No. of Shares of Kmart
Common" the number of Registrable Shares held by each such Rightsholder and
assignee. The Rightsholders desiring to sell shares pursuant to Rule 144
under the Securities Act shall provide Rule 144 representation letters and
opinions of counsel in usual and customary form as may reasonably be
requested by Kmart's counsel.

     1.2 Registration.

     (a) On or prior to ten (10) business days following the Effective Time
of the Merger or the consummation by Kmart of the Purchase Obligation
pursuant to Section 6.6 of the Voting Agreement of even date herewith
between Kmart and the Designated Stockholders listed on Exhibit A thereto
(but subject to Section 1.2(b)), Kmart shall prepare and file with the
Securities and Exchange Commission ("SEC") a registration statement on Form
S-3 (the "Registration Statement") covering the resale in the open market
from time to time of one hundred percent (100%) of the shares of Kmart
Common Stock issued or issuable to the Rightsholders pursuant to the Merger
or the Evercore Transaction and any shares of Kmart Common Stock issued in
respect thereof as a result of any stock split, stock dividend, share
exchange, merger, consolidation or similar recapitalization after the
Effective Time. Kmart shall use its reasonable efforts to have such
Registration Statement declared effective on or before seventy-five (75)
days following the Effective Date.

     (b) The Rightsholders shall furnish such information as Kmart may
reasonably request in connection with the preparation of the Registration
Statement. Upon registration for the resale of the Registrable Shares with
the SEC pursuant to the terms of this Agreement, the Registrable Shares may
be sold in accordance with the Registration Statement under the Securities
Act. Kmart shall use its best efforts to cause the Registration Statement
to remain effective until the earliest of (i) the date on which all
Registrable Shares covered by the Registration Statement have been sold to
the public pursuant to the Registration Statement (ii) one (1) year after
the effective date of the Registration Statement, or if earlier, until the
Rightsholder or Rightsholders have completed the distribution related
thereto; provided, however, that at any time, upon written notice to the
participating Rightsholders and for a period not to exceed thirty (30) days
thereafter (the "Suspension Period"), Kmart may delay the filing or the
effectiveness of the Registration Statement or suspend the use or
effectiveness of the Registration Statement (and the Rightsholders hereby
agree not to offer or sell any Registrable Shares pursuant to such
Registration Statement during the Suspension Period) if Kmart reasonably
believes that the Kmart may, in the absence of such delay or suspension
hereunder, be required under state or federal securities laws to disclose
any corporate development the disclosure of which could reasonably be
expected to have an adverse effect upon Kmart, its stockholders, a
potentially significant transaction or event involving Kmart, or any
negotiations, discussions, or proposals directly relating thereto. No more
than one (1) such Suspension Period shall occur in any twelve (12) month
period. The Rightsholders shall not disclose the existence of any such
Suspension Period to the public. In the event that Kmart shall exercise its
rights hereunder, the applicable time period during which the Registration
Statement is to remain effective shall be extended by a period of time
equal to the duration of the Suspension Period.

SECTION 2:  KMART'S OBLIGATIONS

         In connection with the Registration Statement referred to in
Section 1.2 above, Kmart shall:

     2.1 Registration Statement. Prepare and file with the SEC the
Registration Statement and thereafter use its best efforts to cause such
Registration Statement to become and remain effective for the period set
forth in Section 1.2.

     2.2 Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such Registration Statement and the
prospectus used in connection therewith (the "Prospectus") as may be
necessary to keep the Registration Statement effective for the period set
forth in Section 1.2 and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of the shares of Kmart
Common Stock covered by the Registration Statement.

     2.3 Copies of Offering Documents. Furnish to the Rightsholders such
numbers of copies of the Registration Statement, the Prospectus, and any
amendments and supplements thereto, in conformity with the requirements of
the Securities Act, such documents incorporated by reference into the
Registration Statement and such other documents as the Rightsholders
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Shares.

     2.4 Misleading Prospectus. Promptly notify each Rightsholder, at any
time when a prospectus relating thereto covered by the Registration
Statement is required to be delivered under the Securities Act, upon Kmart
becoming aware that the prospectus included in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing, and immediately thereafter use reasonable efforts to prepare
and file with the SEC and furnish to such Rightsholder a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they are made.

     2.5 Rule 144. Use its reasonable efforts to file in a timely manner
any reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and take
such further action as the Rightsholders may reasonably request, all from
time to time to enable each such Rightsholder to sell the Registrable
Shares owned by it without registration under the Securities Act pursuant
to the exemption provided by Rule 144.

SECTION 3:  THE RIGHTSHOLDER'S OBLIGATIONS

         In connection with the Registration Statement referred to in
Section 1.2, the Rightsholders shall each:

     3.1 Other Documents and Information. Complete, execute, acknowledge
and/or deliver such questionnaires, indemnification agreements and other
documents, certificates and instruments as are reasonably required by Kmart
or are otherwise necessary in connection with the registration and
offering. Each Rightsholder shall promptly provide to Kmart such
information concerning such Rightsholder, its ownership of Kmart's
securities, the intended method of distribution and such other information
as may be required by applicable law or regulation or as may be reasonably
requested by Kmart.

     3.2 Cessation of Offering. Upon receipt of any notice from Kmart of
the happening of any event of the kind described in Section 2.4,
immediately discontinue disposition of the Registrable Shares pursuant to
the Registration Statement covering such shares until the Rightsholders'
receipt of the copies of the supplemented or amended prospectus
contemplated by Sections 1.2(b) and 2.4, and, if so directed by Kmart,
deliver to Kmart all copies of the prospectus covering such Registrable
Shares in such Rightsholder's possession at the time of receipt of such
notice.

     3.3 No Preliminary Prospectus. No Rightsholder and no person or entity
acting on any Rightsholder's behalf (other than an underwriter selected by
Kmart or approved by Kmart) shall offer any Registrable Shares by means of
any preliminary prospectus.

     3.4 Acceptable Brokers. Each Softbank Entity, as a Rightsholder, shall
sell Registrable Shares through brokers chosen by the Softbank Entity and
reasonably acceptable to Kmart. Each Softbank Entity, as a Rightsholder,
shall notify Kmart of the name of any broker through whom it intends to
sell Registrable Shares.

SECTION 4:  EXPENSES AND INDEMNIFICATION

     4.1 Certain Fees and Commissions. Kmart shall pay its own general
legal and accounting fees and all printing fees in connection with the
Registration Statement. Kmart shall reimburse the Rightsholders for
reasonable legal fees and costs incurred by the Rightsholders in connection
with the initial preparation and filing of the Registration Statement and
for reasonable legal fees and costs incurred by the Rightsholders in
connection with any amendment or supplement to the Registration Statement.
The Rightsholders shall pay any additional fees and costs of their own
counsel and all underwriting discounts, commissions and expenses of
underwriters or brokers incurred in connection with the offering and sale
of the Registrable Shares.

     4.2 Other Expenses. Kmart shall pay all registration and filing fees
attributable to the Registrable Shares and the listing fee payable to the
New York Stock Exchange.

     4.3 Indemnification. In the event any Registrable Shares are included
in a Registration Statement under Section 1:

          (a) To the extent permitted by law, Kmart will indemnify and hold
harmless each Rightsholder, the partners, officers and directors of each
Rightsholder, any underwriter (as defined in the Securities Act) for such
Rightsholder and each person, if any, who controls such Rightsholder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation") by Kmart: (i) any untrue statement or alleged untrue statement
of a material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation by Kmart of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in connection
with the offering covered by such Registration Statement; and Kmart will
pay as incurred to each such Rightsholder, partner, officer, director,
underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided however, that
the indemnity agreement contained in this Section 4.3(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Kmart,
which consent shall not be unreasonably withheld, nor shall Kmart be liable
in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such
Rightsholder, partner, officer, director, underwriter or controlling person
of such Rightsholder.

          (b) To the extent permitted by law, each Rightsholder will, if
Registrable Shares held by such Rightsholder are included in the securities
as to which such registration qualifications or compliance is being
effected, indemnify and hold harmless Kmat, each of its directors, its
officers and each person, if any, who controls Kmart within the meaning of
the Securities Act, any underwriter and any other Rightsholder selling
securities under such Registration Statement or any of such other
Rightsholder's partners, directors or officers or any person who controls
such Rightsholder, against any losses, claims, damages or liabilities
(joint or several) to which Kmart or any such director, officer,
controlling person, underwriter or other such Rightsholder, or partner,
director, officer or controlling person of such other Rightsholder may
become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by such Rightsholder under an instrument duly executed by such
Rightsholder and stated to be specifically for use in connection with such
registration; and each such Rightsholder will pay as incurred any legal or
other expenses reasonably incurred by Kmart or any such director, officer,
controlling person, underwriter or other Rightsholder, or partner, officer,
director or controlling person of such other Rightsholder in connection
with investigating or defending any such loss, claim, damage, liability or
action if it is judicially determined that there was such a Violation;
provided, however, that the indemnity agreement contained in this Section
4.3 shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Rightsholder, which consent shall not be unreasonably
withheld; provided further, that in no event shall any indemnity under this
Section 4.3 exceed the proceeds from the offering received by such
Rightsholder.

          (c) Promptly after receipt by an indemnified party under this
Section 4.3 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section
4.3, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that
an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 4.3, but the omission
so to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section 4.3.

          (d) If the indemnification provided for in this Section 4.3 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or
liabilities referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall to the extent
permitted by applicable law contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the
other in connection with the Violation(s) that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided,
that in no event shall any contribution by a Rightsholder hereunder exceed
the proceeds from the offering received by such Rightsholder.

          (e) The obligations of Kmart and Rightsholders under this Section
4.3 shall survive completion of any offering of Registrable Shares in a
Registration Statement and the termination of this Agreement. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim
or litigation.

SECTION 5:  OTHER PROVISIONS

     5.1 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).

     5.2 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, and if not
during normal business hours of the recipient, then on the next business
day, (c) five (5) calendar days after having been sent by registered or
certified mail, return receipt requested, with postage and fees prepaid, or
(d) one (1) business day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification
of receipt. All communications shall be sent to the other party hereto at
such party's address hereinafter shown below its signature, or at such
other address as such party may designate by ten (10) days' advance written
notice to the other party hereto.

     5.3 Headings. The headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction
or interpretation of this Agreement.

     5.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement.

     5.5 Governing Law. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
Delaware (without giving effect to principles of conflicts of laws).

     5.6 Successors and Assigns. This Agreement shall be binding upon each
of the parties hereto and each of their respective permitted successors and
assigns, if any.

     5.7 Waiver. No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the
part of any Person in exercising any power, right, privilege or remedy
under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy. No Person shall
be deemed to have waived any claim arising out of this Agreement, or any
power, right, privilege or remedy under this Agreement, unless the waiver
of such claim, power, right, privilege or remedy is expressly set forth in
a written instrument duly executed and delivered on behalf of such Person;
and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.

     5.8 Amendments. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed
and delivered on behalf of all of the parties hereto.

     5.9 Severability. In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those
as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by
law.

     5.10 Parties in Interest. Except for the provisions of Section 4.3,
and subject to the provisions of Section 5.14, none of the provisions of
this Agreement is intended to provide any rights or remedies to any Person
other than the parties hereto and their respective successors and assigns,
if any.

     5.11 Entire Agreement. This Agreement and the other agreements
referred to herein set forth the entire understanding of the parties hereto
relating to the subject matter hereof and thereof and supersede all prior
agreements and understandings among or between any of the parties relating
to the subject matter hereof and thereof.

     5.12 Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any Legal
Proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.

     5.13 Construction.

          (a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the
feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include the masculine and feminine genders.

          (b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.

          (c) As used in this Agreement, the words "include" and
"including" and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."

     5.14 Assignment of Registration Rights. The rights to cause Kmart to
register Registrable Shares pursuant to Sections 1 and 2 may be assigned by
a Rightsholder to a transferee or assignee of Registrable Shares that (a)
is an affiliate, subsidiary, parent, general partner, limited partner,
retired partner, member or retired member, stockholder or shareholder of a
Rightsholder, (b) is a Rightsholder's family member or trust for the
benefit of an individual Rightsholder or (c) is an entity affiliated by
common control (or other related entity) with such Rightsholder provided,
however, (i) the transferor shall, within ten (10) days after such
transfer, furnish to Kmart written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (ii) such transferee shall agree
to be subject to all restrictions and obligations set forth in this
Agreement; provided, further, however, that the Rightsholders may not
assign the rights granted pursuant to Sections 1 and 2 hereof to any person
who does not acknowledge the restrictions on the offer or sale of the Kmart
Common Stock under the Securities Act set forth in the Voting Agreement.
Upon any such transfer of Registrable Shares by a Softbank Entity, such
Rightsholder shall strongly recommend to such transferee or assignee that
such transferee or assignee use a broker of such Rightsholder's choosing
and reasonably acceptable to Kmart (the "Broker") in connection with the
sale of the Registrable Securities pursuant to the Registration Statement.
In addition, if requested by Kmart, upon such transfer or assignment, such
Rightsholder shall cause to be delivered to such transferee or assignee a
letter signed by an officer of Kmart, and reasonably acceptable to the
Rightsholder, regarding the use of the Broker as the preferred broker for
sales pursuant to the Registration Statement.

                [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

         The parties hereto have caused this Agreement to be executed and
delivered as of the date first written above.

KMART CORPORATION:                         GC&H INVESTMENTS

By:      /s/ Jeffrey Boyer                 By:      /s/ Kenneth L. Guernsey
   --------------------------------------     -----------------------------
Name:     Jeffery N. Boyer                 Name:     Kenneth L. Guernsey
     ------------------------------------       ---------------------------
Title:    Executive Vice President, CFO    Title:    Executive Partner
        ---------------------------------          -------------------
Address: 3100 West Big Beaver Road
                  Troy, MI 48084
                  Attn: Janet Kelley, Esq.
Facsimile No.:    (248) 463-1054

                                           SOFTBANK CAPITAL ADVISORS FUND, L.P.

                                           By:      /s/ Steven Murray
                                              -----------------------------
                                           Name:     Steven J. Murray
                                           Title:    Administrative Member

                                           SOFTBANK CAPITAL PARTNERS FUND, L.P.

                                           By:      /s/ Steven Murray
                                              -----------------------------
                                           Name:     Steven J. Murray
                                           Title:    Administrative Member

                                           SOFTBANK CAPITAL L.P.

                                           By:      /s/ Steven Murray
                                              -----------------------------
                                           Name:     Steven J. Murray
                                           Title:    Administrative Member

                                           SOFTBANK TECHNOLOGY VENTURES
                                           ADVISORS FUND V, L.P.

                                           By:      /s/ D. Rex Golding
                                              -----------------------------
                                           Name:     D. Rex Golding
                                           Title:    Managing Director

                                           SOFTBANK TECHNOLOGY VENTURES
                                           ENTREPRENEURS FUND V, L.P.

                                           By:      /s/ D. Rex Golding
                                              -----------------------------
                                           Name:     D. Rex Golding
                                           Title:    Managing Director

                                           SOFTBANK TECHNOLOGY VENTURES V, L.P.

                                           By:      /s/ D. Rex Golding
                                              -----------------------------
                                           Name:     D. Rex Golding
                                           Title:    Managing Director

                                           EVERCORE  VENTURE PARTNERS LLP

                                           By:   /s/ Kathleen Grady Reiland
                                              -----------------------------
                                           Name:     Kathleen Grady Reiland
                                           Title:    Managing Director

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                                 EXHIBIT A

                               RIGHTSHOLDERS
<S>                                       <C>                <C>                 <C>              <C>

                                          No. of Shares of   No. of Shares of    No. of Class A   No. of Shares of
          Name of Rightsholder                Series A           Series C         Units in LLC      Kmart Common

GC&H Investments                                    37,600               0                 0
----------------------------------------
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA  94306-2155

Softbank Capital Advisors Fund, L.P.                63,813          16,785                 0
1188 Centre Street
Newton Center, MA 02459

Softbank Capital Partners Fund, L.P.             2,218,361         972,439                 0
1188 Centre Street
Newton Center, MA 02459

Softbank Capital L.P.                            2,180,226         955,722                 0
1188 Centre Street
Newton Center, MA 02459

Softbank Technology Ventures Advisors              357,000         155,599                 0
Fund V, L.P.
200 West Evelyn, Suite 200
Mountain View, CA  94043

Softbank Technology Ventures                       240,800         104,953                 0
Entrepreneurs Fund V, L.P.
200 West Evelyn, Suite 200
Mountain View, CA  94043

Softbank Technology Ventures V, L.P.            13,402,200       5,841,377                 0
200 West Evelyn, Suite 200
Mountain View, CA  94043

Evercore Venture Partners LLP                            0               0         1,000,000
65 East 55th Street, 33rd Floor
New York, NY 10022
Total                                           23,500,000       8,046,875         1,000,000
</TABLE>Exhibit 10.1

                           QUADRAMED CORPORATION
                          GRANTOR TRUST AGREEMENT

This Grantor Trust Agreement (the "Trust Agreement") is made this first day
of January 2000, by and between QUADRAMED CORPORATION (the "Company"), and
WACHOVIA BANK, N.A. (the "Trustee").

                                  Recitals

(a)      WHEREAS, the Company (sometimes referred to as the "Employer" and
         individually as an "Employer") has adopted the nonqualified
         deferred compensation plans and arrangements listed in Exhibit A
         (the "Arrangements");

(b)      WHEREAS, the Employer has incurred or expects to incur liability
         under the terms of such Arrangements with respect to the
         individuals participating in such Arrangements (the "Participants
         and Beneficiaries");

(c)      WHEREAS, the Employer wishes to establish a Trust dated January 1,
         2000, to cover such Arrangements (the "Trust") and the Employer
         shall contribute to the Trust assets that shall be held therein,
         subject to the claims of the creditors of the Employer in the
         event of the Insolvency (as defined herein) of the Employer, until
         paid to Participants and their Beneficiaries in such manner and at
         such times as specified in the Arrangements in this Trust
         Agreement;

(d)      WHEREAS, it is the intention of the parties that this Trust shall
         constitute an unfunded arrangement and shall not affect the status
         of the Arrangements as an unfunded plan maintained for the purpose
         of providing deferred compensation for a select group of
         management or highly compensated employees for purposes of Title I
         of the Employee Retirement Income Security Act of 1974; and

(e)      WHEREAS, it is the intention of the Employer to make contributions
         to the Trust to provide itself with a source of funds (the "Fund")
         to assist it in satisfying its liabilities under the Arrangements.

NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:

Section 1.        Establishment of The Trust
(a)      The Trust is intended to be a grantor trust, of which the Employer
         is the Grantor, within the meaning of subpart E, part I,
         subchapter J, chapter 1, subtitle A of the Internal Revenue Code
         of 1986, as amended, and shall be construed accordingly. The Trust
         is established for the benefit of the Participants and
         Beneficiaries of the Arrangements. A list of Participants and
         Beneficiaries and the Arrangements in which they participate is
         contained in Exhibit B.

(b)      The Employer shall be considered a grantor with respect to the
         account maintained under the Trust for the Employer as described
         in Section 9.

(c)      The Trust hereby established is irrevocable by the Employer.

(d)      The Company hereby makes the deposit described in Exhibit C which
         shall become the principal of the Trust to be held, administered
         and disposed of by the Trustee as provided in this Trust
         Agreement.

(e)      The principal of the Trust, and any earnings thereon, shall be
         held separate and apart from other funds of the Employer and shall
         be used exclusively for the uses and purposes of Participants and
         general creditors as herein set forth. Participants and their
         Beneficiaries shall have no preferred claim on, nor any beneficial
         ownership interest in, any assets of the Trust. Any rights created
         under the Arrangements and this Trust Agreement shall be unsecured
         contractual rights of Participants and their Beneficiaries against
         the Employer. Any assets held by the Trust in the account of the
         Employer will be subject to the claims of the general creditors of
         the Employer under federal and state law in the event the Employer
         is Insolvent, subject to the provisions of Section 3 herein.

(f)      The Trustee shall, upon direction of the Employer, establish two
         separate funds (each individually referred to as a "Benefit
         Fund"). One Benefit Fund shall be for Arrangements having a lump
         sum payout as provided under the Arrangement and the other Benefit
         Fund shall be for all other arrangements. Prior to a Change in
         Control, the Trustee shall, upon direction, create in the Benefit
         Funds separate accounts (each individually referred to as an
         "Account").

(g)      The Employer, in its sole discretion, may at any time, or from
         time to time, make deposits of cash or other property acceptable
         to the Trustee in the Trust to augment the principal to be held,
         administered and disposed of by the Trustee as provided in this
         Trust Agreement. When making such deposits, the Employer shall
         certify the Benefit Fund or Funds to which such deposits shall be
         allocated and the Trustee shall allocate the contributions
         accordingly. Further, the Employer may direct the Trustee, prior
         to a Change in Control, the amount of deposits being made with
         respect to each Account of each Participant and the Trustee shall
         allocate the deposits among the Accounts accordingly. Prior to a
         Change of Control, neither the Trustee nor any Participant or
         Beneficiary shall have any right to compel additional deposits.

(h)      Upon a Threatened Change in Control, the Company shall, as soon as
         possible, but in no event longer than thirty (30) days following
         the occurrence of a Threatened Change in Control, as defined
         herein, make a contribution to the Trust in an amount that is
         sufficient to fund the Trust in an amount equal to no less than
         100% but no more than 120% (in addition to $125,000 to fund an
         expense reserve for the Trustee) of the amount necessary to pay
         each Participant or Beneficiary the benefits to which Participants
         or their Beneficiaries would be entitled pursuant to the terms of
         the Arrangements as of the date on which the Threatened Change in
         Control occurred.

(i)      In the event a Change in Control does not occur within six (6)
         months of a Threatened Change in Control, the Company shall have
         the right, upon direction, to recover any amounts contributed to
         and remaining on hand in the Trust pursuant to Section 1(h).

(j)      Upon a Change in Control, the Company shall, as soon as possible,
         but in no event longer than thirty (30) days following the
         occurrence of a Change in Control, as defined herein, make an
         irrevocable contribution to the Trust in an amount that is
         sufficient to fund the Trust in an amount equal to no less than
         100% but no more than 120% of the amount necessary to pay each
         Participant or Beneficiary the benefits to which Participants or
         their Beneficiaries would be entitled pursuant to the terms of the
         Arrangements as of the date on which the Change in Control
         occurred. The Company shall also fund an expense reserve for the
         Trustee in the amount of $125,000.00 unless such amount was
         previously funded pursuant to Section 1(h) above and not recovered
         pursuant to Section 1 (i) above.

Section 2.        Payments to Participants and Their Beneficiaries
(a)      Prior to a Change in Control, distributions from the Trust shall
         be made by the Trustee to Participants and Beneficiaries at the
         direction of the Employer. The entitlement of a Participant or his
         or her Beneficiaries to benefits under the Arrangements shall be
         determined by the Employer or such party or professional
         administrator as it shall designate under the Arrangements as the
         Employer's agent, and any claim for such benefits shall be
         considered and reviewed under the procedures set out in the
         Arrangements.

(b)      Notwithstanding Section 2 (a) above, a Participant or his or
         Beneficiaries may make application to the Trustee for payment of
         their benefit in the event he believes a Failure to Pay, as
         defined in Section 16, has occurred. In the event that the Trustee
         determines that a Failure to Pay has occurred, it shall make its
         own independent determination of the benefit which is payable to
         the Participant or Beneficiary. Upon reaching its determination,
         the Trustee shall pay the benefit, if any, which it has determined
         is due the Participant of Beneficiary.

(c)      The Employer may make payment of benefits directly to Participants
         or their Beneficiaries as they become due under the terms of the
         Arrangements. The Employer shall notify the Trustee of its
         decision to make payment of benefits directly prior to the time
         amounts are payable to Participants or their Beneficiaries. In
         addition, if the principal of the Trust, and any earnings thereon,
         are not sufficient to make payments of benefits in accordance with
         the terms of the Arrangements, the Employer shall make the balance
         of each such payment as it falls due in accordance with the
         Arrangements. The Trustee shall notify the Employer where
         principal and earnings are not sufficient. Nothing in this
         Agreement shall relieve the Employer of its liabilities to pay
         benefits due under the Arrangement except to the extent such
         liabilities are met by application of assets of the Trust.

(d)      To the extent there remains an amount credited to a Benefit Fund
         after the benefits with respect to which such Benefit Fund was
         established have been paid in full, such excess shall be
         reallocated to the remaining Benefit Funds, if any, as of the end
         of the calendar quarter in which the last payment from such
         Benefit Fund was made, in proportion to the respective Benefit
         Fund balances.

         If Individual Accounts have been established within a Benefit
         fund, to the extent there remains an amount credited to a
         Participant's Account after the Benefit with respect to which such
         Account was established has been paid in full, such excess shall
         be reallocated to the remaining Accounts of the Participant, if
         any. If no Account remains for such Participant, the excess shall
         be reallocated to the Accounts of all other Participants, as of
         the end of the calendar quarter in which the last payment to such
         Participant was made, in proportion to the respective Account
         balances.

         After all the benefits payable to all Participants pursuant to the
         Payment Schedules have been paid in full, the remaining Trust
         property, if any, shall upon written certification by each person
         entitled to receive the last Payment Schedule that all Benefits
         due to such person and funded within the Trust have been paid, be
         returned to the Company. Prior to the return of such assets, the
         Trustee may deduct its fees and expenses.

(e)      It is the intention of the Company to have each Benefit Fund and
         each Account, if any, established hereunder treated as a separate
         account designed to satisfy the Company's legal liability under
         the applicable Agreement in respect of the Participant or
         Participants for whom such Benefit Fund has been established, or
         the Participant for whom such Account has been established, as the
         case may be, and to have the balance, if any, in each Benefit Fund
         or Account, as the case may be, revert to the Company only after
         all of the Company's legal liabilities (including but not limited
         to the expenses of this Trust) with respect to Benefits payable to
         all Participants have been met. The Company agrees that all
         income, deductions and credits of the Trust Fund (or, if
         applicable, the Accounts) belong to it as owner for income tax
         purposes and will be included on the Company's income tax returns.

(f)      After a Threatened Change in Control, and before a Change in
         Control, the Company shall deliver to the Trustee a schedule of
         benefits due under the Arrangements ("Payment Schedule").
         Subsequent to a Change in Control, the Trustee shall pay benefits,
         subject to the terms of this Trust Agreement and the applicable
         underlying Plan, due in accordance with such schedule. After a
         Change in Control, the Employer shall continue to make the
         determination of benefits due to Participants or their
         Beneficiaries and shall provide the Trustee with an updated
         schedule of benefits due; provided, however, a Participant or
         their Beneficiaries may make application to the Trustee for an
         independent decision as to the amount or form of their benefits
         due under the Arrangements.

(g)      In making any determination required or permitted to be made by
         the Trustee under this Section 2, the Trustee shall, in each such
         case, reach its own independent determination, in its absolute and
         sole discretion, as to the Participant's or Beneficiary's
         entitlement to a payment hereunder. In making its determination,
         the Trustee may consult with and make such inquiries of such
         persons, including the Participant or Beneficiary, the Employer,
         legal counsel, actuaries or other persons, as the Trustee may
         reasonably deem necessary. Any reasonable costs incurred by the
         Trustee in arriving at its determination shall be reimbursed by
         the Employer and, to the extent not paid by the Employer within a
         reasonable time, shall be charged to the Trust. The Employer
         waives any right to contest any amount paid over by the Trustee
         hereunder pursuant to a good faith determination made by the
         Trustee notwithstanding any claim by or on behalf of the Employer
         (absent a manifest abuse of discretion by the Trustee) that such
         payments should not be made.

(h)      The Trustee agrees that it will not itself institute any action at
         law or at equity, whether in the nature of an accounting,
         interpleading action, request for a declaratory judgment or
         otherwise, requesting a court or administrative or quasi-judicial
         body to make the determination required to be made by the Trustee
         under this Section 2 in the place and stead of the Trustee. The
         Trustee may, in its discretion, institute an action to collect a
         contribution due the Trust following a Change in Control or in the
         event that the Trust should ever experience a short-fall in the
         amount of assets necessary to make payments pursuant to the terms
         of the Arrangements.

(i)      In the event any Participant or his or her Beneficiary is
         determined to be subject to federal income tax on any amount to
         the credit of his or her account under any Arrangement prior to
         the time of payment hereunder, whether or not due to the
         establishment of or contributions to this Trust, a portion of such
         taxable amount equal to the federal, state and local taxes
         (excluding any interest or penalties) owed on such taxable amount,
         shall be distributed by the Trustee as soon thereafter as
         practicable to such Participant or Beneficiary. The Employer shall
         promptly reimburse the Trust for any such distribution in an
         amount certified by the Trustee to be needed for the Participant's
         benefits. For these purposes, a Participant or Beneficiary shall
         be deemed to pay state and local taxes at the highest marginal
         rate of taxation in the state in which the Participant resides or
         is employed (or both) where a tax is imposed and federal income
         taxes at the highest marginal rate of taxation, net of the maximum
         reduction in federal income taxes which could be obtained from
         deduction of such state and local taxes. Such distributions shall
         be at the direction of the Employer or the Trustee, or upon proper
         application of the Participant or Beneficiary; provided, that the
         actual amount of the distribution shall be determined by the
         Employer prior to a Change in Control and the Trustee following a
         Change in Control. An amount to the credit of a Participant's
         Account shall be determined to be subject to federal income tax
         upon the earliest of: (a) a final determination by the United
         States Internal Revenue Service addressed to the Participant or
         his Beneficiary which is not appealed to the courts; (b) a final
         determination by the United States Tax Court or any other federal
         court affirming any such determination by the Internal Revenue
         Service; or (c) an opinion by the Employer's tax counsel,
         addressed to the Employer and the Trustee, to the effect that by
         reason of Treasury Regulations, amendments to the Internal Revenue
         Code, published Internal Revenue Service rulings, court decisions
         or other substantial precedent, amounts to the credit of
         Participants hereunder are subject to federal income tax prior to
         payment. The Employer shall undertake at its sole expense to
         defend any tax claims described herein which are asserted by the
         Internal Revenue Service against any Participant or Beneficiary,
         including attorney fees and cost of appeal, and shall have the
         sole authority to determine whether or not to appeal any
         determination made by the Service or by a lower court. The
         Employer also agrees to reimburse any Participant or Beneficiary
         for any interest or penalties in respect of tax claims hereunder
         upon receipt of documentation of same. Any distributions from the
         Fund to a Participant or Beneficiary under this Section 2(e) shall
         be applied in accordance with the provisions of the Arrangement to
         reduce the Employer liabilities to such Participant and/or
         Beneficiary under the Arrangement with such reductions to be made
         on a pro-rata basis over the term of benefit payments under the
         Arrangement; provided, however, that in no event shall any
         Participant, Beneficiary or estate of any Participant or
         Beneficiary have any obligation to return all or any part of such
         distribution to the Employer if such distribution exceeds benefits
         payable under an Arrangement. Any reduction in accordance with the
         foregoing sentence and the Arrangements shall be determined by the
         Employer prior to a change in Control. Following a Change in
         Control, the Employer shall continue to make such determination
         subject to the right of a Participant to petition the Trustee
         under Section 2(b).

Section 3.        Trustee Responsibility Regarding Payments To The Trust
                  Beneficiary When The Employer Is Insolvent

(a)      The Trustee shall cease payment of benefits to Participants and
         their Beneficiaries if the Employer is Insolvent. The Employer
         shall be considered "Insolvent" for purposes of this Trust
         Agreement if (i) the Employer is unable to pay its debts as they
         become due, or (ii) the Employer is subject to a pending
         proceeding as a debtor under the United States Bankruptcy Code.

         At all times during the continuance of this Trust, except to the
         extent assets of the Trust have been pledged to secure loans to
         the Trust, the principal and income of the Trust shall be subject
         to claims of general creditors of the Employer under federal and
         state law as set forth below:

         (1)  The Board of Directors and the Chief Executive Officer of the
              Employer shall have the duty to inform the Trustee in writing
              that the Employer is Insolvent. If a person claiming to be a
              creditor of the Employer alleges in writing to the Trustee
              that the Employer has become Insolvent, the Trustee shall
              determine in its sole and absolute discretion whether the
              Employer is Insolvent and, pending such determination, the
              Trustee shall discontinue payment of benefits to Participants
              or their Beneficiaries.

         (2)  Unless the Trustee has actual knowledge that the Employer is
              Insolvent, or has received notice from the Employer or a
              person claiming to be a creditor alleging that the Employer
              is Insolvent, the Trustee shall have no duty to inquire
              whether the Employer is Insolvent. The Trustee may in all
              events rely on such evidence concerning the Employer's
              solvency as may be furnished to the Trustee and that provides
              the Trustee with a reasonable basis for making a
              determination concerning the Employer's solvency.

         (3)  If at any time the Trustee has determined that the Employer
              is Insolvent, the Trustee shall discontinue payments to
              Participants or their Beneficiaries and shall hold the assets
              of the Trust for the benefit of the Employer's general
              creditors. Nothing in this Trust Agreement shall in any way
              diminish any rights of Participants or their Beneficiaries to
              pursue their rights as general creditors of the Employer with
              respect to benefits due under the Arrangements or otherwise.

         (4)  The Trustee shall resume the payment of benefits to
              Participants or their Beneficiaries in accordance with
              Section 2 of this Trust Agreement only after the Trustee has
              determined that the Employer is not Insolvent (or is no
              longer Insolvent).

(c)      Provided that there are sufficient assets, if the Trustee
         discontinues the payment of benefits from the Trust pursuant to
         Section 3(b) hereof and subsequently resumes such payments, the
         first payment following such discontinuance shall include the
         aggregate amount of all payments due to Participants or their
         Beneficiaries under the terms of the Arrangements for the period
         of such discontinuance plus earnings on the amounts which were not
         paid less the aggregate amount of any payments made to
         Participants or their Beneficiaries by the Employer in lieu of the
         payments provided for hereunder during any such period of
         discontinuance.

Section 4.        Payments When a Short-Fall of The Trust Assets Occurs

(a)      If there are not sufficient assets for the payment of benefits
         pursuant to Section 2 or Section 3(c) hereof and the Employer does
         not otherwise make such payments within a reasonable time after
         demand from the Trustee, the Trustee shall make payment of
         benefits from the Trust to the Participants or their Beneficiaries
         prorata except to the extent that the Trustee has been instructed
         to establish an Account pursuant to Section 2.

(b)      Upon receipt of a contribution from the Employer necessary to make
         up for a short-fall in the payments due, the Trustee shall resume
         payments to all the Participants and Beneficiaries under the
         Arrangements. Following a Change in Control, the Trustee shall
         have the right, in its discretion, to compel a contribution to the
         Trust from the Employer to make-up for any short-fall.

Section 5.        Payments to the Employer

Except as may otherwise be provided by this Trust, the Employer shall have
no right or power to direct the Trustee to return to the Employer or to
divert to others any of the Trust assets before all payment of benefits
have been made to Participants and their Beneficiaries pursuant to the
terms of the Arrangements.

Section 6.        Investment Authority
(a)      The Trustee shall not be liable in discharging its duties
         hereunder, including without limitation its duty to invest and
         reinvest the Fund, if it acts for the exclusive benefit of the
         Participants and their Beneficiaries, in good faith and as a
         prudent person would act in accomplishing a similar task and in
         accordance with the terms of this Trust Agreement and any
         applicable federal or state laws, rules or regulations.

(b)      Subject to investment guidelines agreed to in writing from time to
         time by the Company and the Trustee prior to a Change in Control,
         the Trustee shall have the power in investing and reinvesting the
         Fund in its sole discretion:

         (1)  To invest and reinvest in any readily marketable common and
              preferred stocks, bonds, notes, debentures (including
              convertible stocks and securities, and including stock and
              securities of the Company, but not including any stock or
              security of the Trustee other than a deminimis amount held in
              a collective or mutual fund), certificates of deposit or
              demand or time deposits (including any such deposits with the
              Trustee) and shares of investment companies and mutual funds,
              including any proprietary mutual funds of the Trustee,
              without being limited to the classes or property in which the
              Trustees are authorized to invest by any law or any rule of
              court of any state and without regard to the proportion any
              such property may bear to the entire amount of the Fund;

         (2)  To commingle for investment purposes all or any portion of
              the Fund with assets of any other similar trust or trusts
              established by the Company with the Trustee for the purpose
              of safeguarding deferred compensation or retirement income
              benefits of its employees and/or directors;

         (3)  To retain any property at any time received by the Trustee;

         (4)  To sell or exchange any property held by it at public or
              private sale, for cash or credit, to grant and exercise
              options for the purchase or exchange thereof, to exercise all
              conversion or subscription rights pertaining to any such
              property and to enter into any covenant or agreement to
              purchase any property in the future;

         (5)  To participate in any plan of reorganization, consolidation,
              merger, combination, liquidation or other similar plan
              relating to property held by it and to consent to or oppose
              any such plan or any action thereunder or any contract,
              lease, mortgage, purchase, sale or other action by any
              person;

         (6)  To deposit any property held by it with any protective,
              reorganization or similar committee, to delegate
              discretionary power thereto, and to pay part of the expenses
              and compensation thereof any assessments levied with respect
              to any such property so deposited;

         (7)  To extend the time of payment of any obligation held by it;

         (8)  To hold uninvested any moneys received by it, without
              liability for interest thereon, but only in anticipation of
              payments due for investments, reinvestments, expenses or
              disbursements;

         (9)  To exercise all voting or other rights with respect to any
              property held by it and to grant proxies, discretionary or
              otherwise;

         (10) For the purposes of the Trust, to borrow money from a bank,
              including Wachovia Bank, N.A. or an affiliated bank, to issue
              its promissory note or notes therefor, and to secure the
              repayment thereof by pledging any property (including but not
              limited to any insurance policies) held by it;

         (11) To employee and reply upon suitable contractors and counsel,
              who may be counsel to the Company or to the Trustee, and to
              pay their reasonable expenses and compensation from the Fund
              to the extent not paid by the Company;

         (12) To register investments in its own name or in the name of a
              nominee; to hold any investment in bearer form; and to
              combine certificates representing securities with
              certificates of the same issue held by it in other fiduciary
              capacities or to deposit or to arrange for the deposit of
              such securities with any depository, even though, when so
              deposited, such securities may be held in the name of the
              nominee of such depository with other securities deposited
              therewith by other persons, or to deposit or to arrange for
              the deposit of any securities issued or guaranteed by the
              United States government, or any agency or instrumentality
              thereof, including securities evidenced by book entries
              rather than by certificates, with the United States
              Department of the Treasury or a Federal Reserve Bank, even
              though, when so deposited, such securities may not be held
              separate from securities deposited therein by other persons;
              provided, however, that no securities held in the Fund shall
              be deposited with the United States Department of the
              Treasury or a Federal Reserve Bank or other depository in the
              same account as any individual property of the Trustee, and
              provided, further, that the books and records of the Trustee
              shall at all times show that all securities are part of the
              Trust Fund;

         (13) To settle, compromise or submit to arbitration any claims,
              debts or damages due or owing to or from the Trust,
              respectively, to commence or defend suits or legal
              proceedings to protect any interest of the Trust, and to
              represent the Trust in all suits or legal proceedings in any
              court or before any other body or tribunal; provided,
              however, that the Trustee shall not be required to take any
              such action unless it shall have been indemnified by the
              Company to its reasonable satisfaction against liability or
              expenses it might incur therefrom;

         (14) To hold and retain policies of life insurance, annuity
              contracts, and other property of any kind which policies are
              contributed to the Trust by the Employer or are purchased by
              the Trustee;

         (15) To hold any other class of assets which may be contributed by
              the Employer and that it deemed reasonable by the Trustee,
              unless expressly prohibited herein; and

         (16) Generally, to do all acts, whether or not expressly
              authorized, that the Trustee may deem necessary or desirable
              for the protection of the fund.

(c)      Prior to a Change in Control, the Company shall have the right,
         subject to this Section 6, to direct the Trustee with respect to
         investments.

         (1)  The Company may at any time direct the Trustee to segregate
              all or a portion of the Fund in a separate investment account
              or accounts and may appoint one or more investment managers
              and/or an investment committee established by the Company to
              direct the investment and reinvestment of each such
              investment account or accounts. In such event, the Company
              shall notify the Trustee of the appointment of each such
              investment manager and/or investment committee. No such
              investment manager shall be related, directly or indirectly,
              to the Company, but members of the investment committee may
              be employees of the Company.

         (2)  Thereafter, the Trustee shall make every sale or investment
              with respect to such investment account as directed in
              writing by the investment manager or investment committee. It
              shall be the duty of the Trustee to act strictly in
              accordance with each direction. The Trustee shall be under no
              duty to question any such direction of the investment manager
              or investment committee, to review any securities or other
              property held in such investment account or accounts acquired
              by it pursuant to such directions or to make any
              recommendations to the investment managers or investment
              committee with respect to such securities or other property.

         (3)  Notwithstanding the foregoing, the Trustee, without obtaining
              prior approval or direction from an investment manager or
              investment committee, shall invest cash balances held by it
              from time to time in short term cash equivalents including,
              but not limited to, through the medium of any short term
              mutual fund established and maintained by the Trustee subject
              to the instrument establishing such trust fund, U.S. Treasury
              Bills, commercial paper (including such forms of commercial
              paper as may be available through the Trustee's Trust
              Department), certificates of deposit (including certificates
              issued by the Trustee in its separate corporate capacity),
              and similar type securities, with a maturity not to exceed
              one year; and, furthermore, sell such short term investments
              as may be necessary to carry out the instructions of an
              investment manager or investment committee regarding more
              permanent type investment and directed distributions.

         (4)  The Trustee shall neither be liable nor responsible for any
              loss resulting to the Fund by reason of any sale or purchase
              of an investment directed by an investment manager or
              investment committee nor by reason of the failure to take any
              action with respect to any investment which was acquired
              pursuant to any such direction in the absence of further
              directions of such investment manager or investment
              committee.

         (5)  Notwithstanding anything in this Agreement to the contrary,
              the Trustee shall be indemnified and saved harmless by the
              Company from and against any and all personal liability to
              which the Trustee may be subjected by carrying out any
              directions of an investment manager or investment committee
              issued pursuant hereto or for failure to act in the absence
              of directions of the investment manager or investment
              committee including all expenses reasonably incurred in its
              defense in the event the Company fails to provide such
              defense; provided, however, the Trustee shall not be so
              indemnified if it participates knowingly in, or knowingly
              undertakes to conceal, an act or omission of an investment
              manager or investment committee, having actual knowledge that
              such act or omission is a breach of a fiduciary duty;
              provided further, however, that the Trustee shall not be
              deemed to have knowingly participated in or knowingly
              undertaken to conceal an act or omission of an investment
              manager or investment committee with knowledge that such act
              or omission was a breach of fiduciary duty by merely
              complying with directions of an investment manager or
              investment committee or for failure to act in the absence of
              directions of an investment manager or investment committee.
              The Trustee may rely upon any order, certificate, notice,
              direction or other documentary confirmation purporting to
              have been issued by the investment manager or investment
              committee which the Trustee believes to be genuine and to
              have been issued by the investment manager or investment
              committee. The Trustee shall not be charged with knowledge of
              the termination of the appointment of any investment manager
              or investment committee until it receives written notice
              thereof from the Company.

(d)      Following a Change in Control, the Trustee shall have the sole and
         absolute discretion in the management of the Trust assets and
         shall have all the powers set forth under Section 6(b) and (c). In
         investing the Trust assets, the Trustee shall consider:

         (1)  The needs of the Arrangements;

         (2)  The need for matching of the Trust assets with the
              liabilities of the Arrangements; and

         (3)  The duty of the Trustee to act solely in the best interests
              of the Participants and their Beneficiaries.

(e)      The Trustee shall have the right, in its sole discretion, to
         delegate its investment responsibility to an investment manager
         who may be an affiliate of the Trustee. In the event the Trustee
         shall exercise this right, the Trustee shall remain, at all times
         responsible for the acts of an investment manager. The Trustee
         shall have the right to purchase an insurance policy or an annuity
         to fund the benefits of the Arrangements.

(f)      The Employer shall have the right at any time, and from time to
         time in its sole discretion, to substitute assets or equal fair
         market value for any asset held by the trust. This right is
         exercisable by the Employer in a nonfiduciary capacity without the
         approval or consent of any person in a fiduciary capacity.

Section 7.        Insurance Contracts
(a)      Prior to a Change in Control, the Company may direct the Trustee
         to invest Trust assets in an insurance contract or may, in its
         discretion, contribute insurance policies to the Trust. To the
         extent that the Trustee is directed by the Company prior to a
         Change in Control to invest part or all of the Trust Fund in
         insurance contracts, the type and amount thereof shall be
         specified by the Company. The Trustee shall be under no duty to
         make inquiry as to the propriety of the type or amount so
         specified.

(b)      Each insurance contract issued shall provide that the Trustee
         shall be the owner thereof with the power to exercise all rights,
         privileges, options and elections granted by or permitted under
         such contract or under the rules of the insurer. The exercise by
         the Trustee of any incidents of ownership under any contract
         shall, prior to a Change in Control, be subject to the direction
         of the Company. After a Change in Control, the Trustee shall have
         all such rights.

(c)      The Trustee shall have no power to name a beneficiary of the
         policy other than the Trust, to assign the policy (as distinct
         from conversion of the policy to a different form) other than to a
         successor Trustee, or to loan to any person the proceeds of any
         borrowing against an insurance policy held in the Trust Fund.

(d)      No insurer shall be deemed to be a party to the Trust and an
         insurer's obligations shall be measured and determined solely by
         the terms of contracts and other agreements executed by the
         insurer.

Section 8.        Disposition of Income

All income received by the Trust, net of expenses and taxes shall be
accumulated and reinvested within the Trust.

Section 9.        Accounting by The Trustee

The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
the Company and the Trustee within forty-five (45) days following the close
of each calendar year and within forty-five (45) days after the removal or
resignation of the Trustee. The Trustee shall deliver to the Company a
written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of
such removal or resignation setting forth all investments, receipts,
disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the
cost or net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date
of such removal or resignation, as the case may be. The Company may approve
such account by an instrument in writing delivered to the Trustee. In the
absence of the Company's filing with the Trustee objections to any such
account within ninety (90) days after its receipt, the Company shall be
deemed to have so approved such account. In such case, or upon the written
approval by the Company of any such account, the Trustee shall, to the
extent permitted by law, be discharged from all liability to the Company
for its acts or failures to act described by such account. The foregoing,
however, shall not preclude the Trustee from having its accounting settled
by a court of competent jurisdiction. The Trustee shall be entitled to hold
and to commingle the assets of the Trust in one Fund for investment
purposes, but, at the direction of the Company prior to a Change in
Control, the Trustee shall maintain an account in the name of the Employer,
Arrangement or Participant, which pursuant to the rules established by the
Company, will reflect:

(a)      deposits made by the Employer pursuant to this Trust Agreement for
         the benefit of an Arrangement or Participant;

(b)      income, losses, and appreciation or depreciation in the value of
         trust assets resulting from investment of the trust fund to the
         extent such items are attributable to the Employer's deposits as
         provided herein;

(c)      payments made from the Trust to Participants employed or formerly
         employed by the Employer (or to their Beneficiaries) in the form
         of benefits payable to them under the Arrangement, or to the
         Employer's creditors; and (d) Any other amounts charged to the
         Employer's account, including its share of compensation and
         expenses described in Section 11.

In making the payments required by the Trustee under Sections 2, 3 and 4
hereof, the Trustee shall not be permitted to invade an Account established
pursuant to this Section 9 to pay benefits due under another Arrangement or
to another Participant until all benefits due which are attributable to the
Account have been paid in full.

Section 10.       Responsibility of The Trustee
(a)      The Trustee shall act with the care, skill, prudence and diligence
         under the circumstances then prevailing that a prudent person
         acting in like capacity and familiar with such matters would use
         in the conduct of an enterprise of a like character and with like
         aims, provided, however, that the Trustee shall incur no liability
         to any person for any action taken pursuant to a direction,
         request or approval given by the Company which is contemplated by,
         and in conformity with, the terms of the Arrangements or this
         Trust and is given in writing by the Company. In the vent of a
         dispute between the Company and a party, the Trustee may apply to
         a court of competent jurisdiction to resolve the dispute, subject,
         however, to Section 2(d) hereof.

(b)      The Company hereby indemnifies the Trustee against losses,
         liabilities, claims, costs and expenses in connection with the
         administration of the Trust, unless resulting from the negligence
         or misconduct of Trustee. To the extent the Company fails to make
         any payment on account of an indemnity provided in this Section
         10(b), in a reasonably timely manner, the Trustee may obtain
         payment from the Trust. If the Trustee undertakes or defends any
         litigation arising in connection with this Trust or to protect a
         Participant's or Beneficiary's rights under the Arrangements, the
         Company agrees to indemnify the Trustee against the Trustee's
         costs, reasonable expenses and liabilities (including, without
         limitation, attorneys' fees and expenses) relating thereto and to
         be primarily liable for such payments. If the Company does not pay
         such costs, expenses and liabilities in a reasonably timely
         manner, the Trustee may obtain payment from the Trust.

(c)      Prior to a Change in Control, the Trustee may consult with legal
         counsel (who may also be counsel for the Company generally) with
         respect to any of its duties or obligations hereunder. Following a
         Change in Control the Trustee shall select independent legal
         counsel and may consult with counsel or other persons with respect
         to its duties and with respect to the rights of Participants or
         their Beneficiaries under the Arrangements.

(d)      The Trustee may hire agents, accountants, actuaries, investment
         advisors, financial consultants or other professionals to assist
         it in performing any of its duties or obligations hereunder and
         may rely on any determinations made by such agents and information
         provided to it by the Company.

(e)      To furnish the employers with such information in the Trustee's
         possession as the Company may need or desire for tax or other
         purposes.

(f)      The Trustee shall have, without exclusion, all powers conferred on
         the Trustee by applicable law, unless expressly provided otherwise
         herein.

(g)      Notwithstanding any powers granted to the Trustee pursuant to this
         Trust Agreement or to applicable law, the Trustee shall not have
         any power that could give this Trust the objective of carrying on
         a business and dividing the gains therefrom, within the meaning of
         section 301.7701-2 of the Procedure and Administrative Regulations
         promulgated pursuant to the Internal Revenue Code.

Section 11.       Compensation and Expenses of The Trustee

The Trustee's compensation shall be as agreed in writing from time to time
by the Company and the Trustee. The Company shall pay all administrative
expenses and the Trustee's fees and shall promptly reimburse the Trustee
for any fees and expenses of its agents. If not so paid, the fees and
expenses shall be paid from the Trust.

Section 12.       Resignation and Removal of The Trustee
(a)      Prior to a Change in Control, the Trustee may resign at any time
         by written notice to the Company, which shall be effective sixty
         (60) days after receipt of such notice unless the Company and the
         Trustee agree otherwise. Following a Change in Control, the
         Trustee may resign only after the appointment of a successor
         Trustee or as provided by Section 12(c) below.

(b)      The Trustee may be removed by the Company on sixty days (60) days
         notice or upon shorter notice accepted by the Trustee prior to a
         Change in Control. Subsequent to a Change in Control, the Trustee
         may only be removed by the Company with the consent of a
         two-thirds majority of the Participants.

(c)      If the Trustee resigns within two years after a Change in Control,
         as defined herein, the Company, or if the Company fails to act
         within a reasonable period of time following such resignation, the
         Trustee shall apply to a court of competent jurisdiction for the
         appointment of a successor Trustee or for instructions.

(d)      Upon resignation or removal of the Trustee and appointment of a
         successor Trustee, all assets shall subsequently be transferred to
         the successor Trustee. The transfer shall be completed within
         sixty (60) days after the resignation, removal or transfer, unless
         the Company extends the time limit.

(e)      If the Trustee resigns or is removed, a successor shall be
         appointed by the Company, in accordance with Section 13 hereof, by
         the effective date of resignation or removal under paragraph(s)
         (a) or (b) of this section. If no such appointment has been made,
         the Trustee may apply to a court of competent jurisdiction for
         appointment of a successor or for instructions. All expenses of
         the Trustee in connection with the proceeding shall be allowed as
         administrative expenses of the Trust.

Section 13.       Appointment of Successor
(a)      If the Trustee resigns or is removed in accordance with Section 12
         hereof, the Company may appoint, subject to Section 12, any third
         party national banking association with a market capitalization
         exceeding $1,000,000,000 to replace the Trustee upon resignation
         or removal. The successor Trustee shall have all of the rights and
         powers of the former Trustee, including ownership rights in the
         Trust. The former Trustee shall execute any instrument necessary
         or reasonably requested by the Company or the successor Trustee to
         evidence the transfer.

(b)      The successor Trustee need not examine the records and acts of any
         prior Trustee and may retain or dispose of existing Trust assets,
         subject to Section 8 and 9 hereof. The successor Trustee shall not
         be responsible for and the Company shall indemnify and defend the
         successor Trustee from any claim or liability resulting from any
         action or inaction of any prior Trustee or from any other past
         event, or any condition existing at the time it becomes successor
         Trustee.

Section 14.       Amendment or Termination
(a)      This Trust Agreement may be amended by a written instrument
         executed by the Trustee and the Company. Notwithstanding the
         foregoing, no such amendment shall conflict with the terms of the
         Arrangements or shall make the Trust revocable.

(b)      The Trust shall not terminate until the date on which Participants
         and their Beneficiaries have received all of the benefits due to
         them under the terms and conditions of the Arrangements.

(c)      Upon written approval of all Participants or Beneficiaries
         entitled to payment of benefits pursuant to the terms of the
         Arrangements, the Company may terminate this Trust prior to the
         time all benefit payments under the Arrangements have been made.
         All assets in the Trust at termination shall be returned to the
         Employer.

(d)      This Trust Agreement may not be amended or terminated by the
         Company for two (2) years following a Change in Control without
         the written consent of a majority of the Participants; provided,
         however, the Trust Agreement may be amended by the Company and the
         Trustee following a Change in Control without the written consent
         of a majority of the Participants to comply with legal or
         regulatory requirements necessary to maintain the tax status for
         Participants or Beneficiaries.

(e)      In no event may this Trust Agreement be terminated as to any
         Accounts which have been established without the consent of the
         Participants or beneficiaries for whom such Account was
         established.

Section 15.       Change in Control
(a)      For purposes of this Trust, the following terms shall be defined as
     set forth below:

         (1)  Threatened Change in Control shall mean, as determined by the
              Company in its discretion:

                           Any pending offer for the Company's outstanding
                           shares of common stock, or any pending offer to
                           acquire the Company by merger or consolidation,
                           or any other pending action or plan to effect a
                           Change in Control of the Company.

         (2)  Change in Control - The term "Change in Control" as used
              herein shall mean the occurrence of one of the following:

                                         (i) the Company consolidates or
                               merges with or into another corporation, or
                               is otherwise reorganized, if the Company is
                               not the surviving corporation in such
                               transaction or if after such transaction any
                               other corporation, association or other
                               person, entity or group or the shareholders
                               thereof own, direct and/or indirectly, more
                               than 50% of the then outstanding shares of
                               common stock or more than 50% of the assets
                               of the Company; or

                                         (ii) more than 35% of the then
                               outstanding shares of common stock of the
                               Company are, in a single transaction or in a
                               series of related transactions, sold or
                               otherwise transferred to or are acquired by
                               any other corporation, association or other
                               person, entity or group, whether or not any
                               such shareholder or any shareholders
                               included in such group were shareholders of
                               the Company prior to the Change in Control;
                               or

                                         (iii) all or substantially all of
                               the assets of the Company are sold or
                               otherwise transferred to or otherwise
                               acquired by any other corporation,
                               association or other person, entity or
                               group; or

                                         (iv) the occurrence of any other
                               event or circumstance which is not covered
                               by (i) through (iii) above which the Board
                               determines affects control of the Company
                               and constitutes a Change in Control for
                               purpose of this Agreement.

(b)      The General Counsel of the Company shall have the specific
         authority to determine whether a Potential Change in Control or
         Change in Control has transpired under the guidance of this
         Section 15(a) and shall be required to give the Trustee notice of
         a Change in Control or a Potential Change in Control. The Trustee
         shall be entitled to rely upon such notice, but if the Trustee
         receives notice of a Change in Control from another source, the
         Trustee shall make its own independent determination.

Section 16.       Failure to Pay

"Failure to Pay" shall mean that the circumstances described in either (a)
or (b) have occurred:

(a)      Any Plan participant shall have notified the Trustee and the
         Company in writing that the Company shall have failed to pay to
         the Participant, when due, either directly or by direction to the
         Trustee in accordance with the terms hereof, at least 75% of any
         and all amounts which the Participant was entitled to receive at
         any time in accordance with the terms of any Plan, the Payment
         Schedule or this trust Agreement, and that such amount remains
         unpaid. Such notice must set forth the amount, if any, which was
         paid to the Participant, the amount which the Participant believes
         he was entitled to receive under the Arrangements, the Payment
         Schedule and this Trust. Subject to this Trust, the failure to
         make such payment shall have continued for a period of 30 days
         after receipt of such notice by the Trustee and by the Company,
         and during such 30 day period, the Company shall have failed to
         prove, by clear and convincing evidence as determined by the
         Trustee in its sole and absolute discretion, that such amount was
         in fact paid or was not due and payable; or

(b)      More than two Participants in an Arrangement shall have notified
         the Trustee and the Company in writing, either individually or
         jointly, that they have not been paid, when due, amounts to which
         they are entitled under the Arrangements, the Payment Schedule and
         this Trust. Within 15 days after receipt of such notice, the
         Trustee shall determine on a preliminary basis, whether any
         failure to pay such Participants has resulted in a failure to pay
         when due, directly or by direction, at least 75% of the aggregate
         amount due to all Participants under the Arrangements, the Payment
         Schedule or this Trust and that such amount remains unpaid.
         Subject to this Trust, if the Trustee determines that such a
         failure has occurred, then it shall so notify the Company and
         Participants in writing. If the Company shall fail to prove by
         clear and convincing evidence as determined by the Trustee in its
         sole and absolute discretion that such payments have been made or
         were not due, a Failure to Pay shall be deemed to have occurred.

Section 17.       Miscellaneous
(a)      Any provision of this Trust Agreement prohibited by law shall be
         ineffective to the extent of any such prohibition, without
         invalidating the remaining provisions hereof.

(b)      The Employer hereby represents and warrants that all the
         Arrangements have been established, maintained and administered in
         accordance with all applicable laws, including without limitation,
         ERISA. The Employer hereby indemnifies and agrees to hold the
         Trustee harmless from all liabilities, including attorney's fees,
         relating to or arising out of the establishment, maintenance and
         administration of the Arrangements. To the extent the Employers do
         not pay any of such liabilities in a reasonably timely manner, the
         Trustee may obtain payment from the Trust.

(c)      Benefits payable to Participants and their Beneficiaries under
         this Trust Agreement may not be anticipated, assigned (either at
         law or in equity), alienated, pledged, encumbered or subjected to
         attachment, garnishment, levy, execution or other legal or
         equitable process.

(d)      This Trust Agreement shall be governed by and construed in
         accordance with the laws of North Carolina.

IN WITNESS WHEREOF, this Grantor Trust Agreement has been executed on
behalf of the parties hereto on the day and year first above written.

<TABLE>
<CAPTION>

COMPANY                                              TRUSTEE

By:                                                           By:
<S>     <C>                                          <C>
         E. A. Roskovensky                                             Joe O. Long
--------------------------------------------         --------------------------------------------

Its:                                                          Its:
         Compensation Committee                                        SVP/GE
--------------------------------------------         --------------------------------------------

ATTEST:                                              ATTEST:

By:                                                           By:
--------------------------------------------         --------------------------------------------

Its:                                                          Its:
--------------------------------------------         --------------------------------------------
</TABLE>

[Attach an additional signature page for each Subsidiary that is a party to
the Trust Agreement.]

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