IN RE KMART CORPORATION

SUSAN PIERSON SONDERBY, United States Bankruptcy Judge

Kmart Corporation and certain of its domestic subsidiaries and affiliates, debtors and debtors-in-possession in the above-captioned cases (the "Debtors") and LaSalle Bank, N.A., as trustee, acting by and through its special servicer Orix Capital Markets, LLC ("Claimant"), hereby agree and stipulate as follows:

WHEREAS, the Debtors filed their First Amended Joint Plan of Reorganization of Kmart Corporation and its Affiliated Debtors and Debtors-in-Possession dated February 25, 2003 (as modified, the "Plan");

WHEREAS, on February 25, 2003, the Debtors filed (Docket No. 8886) the Debtors' Third Omnibus Objection to Claims Under 11 U.S.C. § 102(1), 105(a) and 502(b) and F.R.Bankr.P. 3007 (the "Third Omnibus Objection"), objecting to, among others, the Claims (as defined below) filed by Claimant against the Debtors;

WHEREAS, pursuant to the Order Approving (I) Disclosure Statement; (II) Record Date, Voting Deadline and Procedures for Temporary Allowance of Certain Claims; (11) Procedures for Filing Objections to Plan; (IV) Solicitation Procedures for Confirmation; and (V) Hearing Date to Consider Confirmation of the Plan (Docket No. 8887) (the "Solicitation Procedures Order"), any holder of claim against which the Debtors filed an objection to expunge or disallow such claim shall not be entitled to vote on the Plan and shall not be counted in determining whether the requirements of Section 1126(c) of the Bankruptcy Code have been meet with respect to the Plan (except to the extent and in the manner as may be set forth in the objection) (a) unless the claim has been temporarily allowed for voting purposes pursuant to Bankruptcy Rule 3018(a) and in accordance with the Solicitation Procedures Order or (b) except to the extent that, on or before April 4, 2003, the objection to such claim has been resolved in favor of the creditor asserting the claim;

WHEREAS, pursuant to the Solicitation Procedures Order, eligible voters must return their ballots to Trumbull Bankruptcy Services on or before April 4, 2003;

WHEREAS, the Debtors are party to certain leases, and Claimant has asserted contingent lease rejection claims against certain of the Debtors regarding those leases, with respect to the following properties in the following amounts: (a) Store No. 1030 in El Paso, Texas, in the amount of $2,922,745.18 (the "El Paso Claim"); (b) Store No. 1397 in Daytona Beach, Florida, in the amount of $4,663,129.20 (the "Daytona Claim"); (c) Store No. 3622 in Billings, Montana, in the amount of $912,228.06 (the "Billings Claim"); and (d) Store No. 1036 in San Antonio, Texas, in the amount of $3,196,198.83 (the "San Antonio Claim" and, together with the El Paso Claim, the Daytona Claim and the Billings Claim, the "Claims");

WHEREAS, Claimant filed Rule 3018 Motions on March 28, 2003 (Docket Nos. 9712, 9714, 9716 and 9718), seeking temporary allowance of the Claims for voting purposes only;

WHEREAS, the Debtors filed an Omnibus Objection to the Claimant's Rule 3018 Motions on April 9, 2003 (Docket No. 10292); and

WHEREAS, the Debtors and Claimant wish to enter into an agreement pursuant to Rule 3018 of the Federal Rules of Bankruptcy Procedure temporarily allowing the Claims solely for the purpose of voting on the Plan; provided that ultimate allowance or disallowance of the Claims shall remain subject to the resolution of the Third Omnibus Objection as such objection relates to the Claims, as well as any further objections to the Claimant's claims.

NOW, THEREFORE, the Debtors and the Claimant agree as follows:

1. With respect to the El Paso Claim, Claimant shall be temporarily deemed to hold a claim allowable solely for the purpose of voting on the Plan, pursuant to the Solicitation Procedures Order, as a Class 5 Claimholder in the amount of $2,922,745.18 against Kmart Corporation, case Number 02-02474.

2. With respect to the Daytona Claim, Claimant shall be temporarily deemed to hold a claim allowable solely for the purpose of voting on the Plan, pursuant to the Solicitation Procedures Order, as a Class 5 Claimholder in the amount of $4,663,129.20 against Kmart Corporation, case number 02-02474.

3. With respect to the Billings Claim, Claimant shall be temporarily deemed to hold a claim allowable solely for the purpose of voting on the Plan, pursuant to the Solicitation Procedures Order, as a Class 5 Claimholder in the amount of $912,228.06 against Kmart Corporation, case number 02-02474.

4. With respect to the San Antonio Claim, Claimant shall be temporarily deemed to hold a claim allowable solely for the purpose of voting on the Plan, pursuant to the Solicitation Procedures Order, as a Class 5 Claimholder in the amount of $3,196,198.83 against Kmart Corporation, case number 02-02474.

5. This stipulation is being executed only for the purpose of allowing the Claimant to vote, pursuant to the Solicitation Procedures Order, on the Plan. Nothing herein shall be deemed to be a determination of any of the Claims against the Debtors, or the Debtors' objection thereto, for any other purpose, including, without limitation, with respect to entitlement to distributions under the Plan, or an admission, release or waiver with respect to any of the Claims, including, without limitation, as to the amount, extent, validity or priority of any of the Claims.