IN RE KMART CORP., (Bankr.N.D.Ill. 2002)

SUSAN PIERSON SONDERBY, United States Bankruptcy Judge.

Upon the motion dated February 1, 2002 (the "Motion"), wherein Kmart Corporation ("Kmart") and certain of its domestic subsidiaries and affiliates, debtors and debtors-in-possession in the above-captioned cases (collectively, the "Debtors"), moved this Court for entry of an order, pursuant to 11 U.S.C. § 365 and Rule 6006 of the Federal Rules of Bankruptcy Procedure, authorizing the Debtors to assume the unexpired nonresidential real property lease set forth on Schedule A attached hereto and other related documents and to assign their interests under the lease and related documents to Rubloff Development Group, Inc. ("Assignee" and/ or "Rubloff") and upon the objection of the landlord, First Berkshire Business Trust ("Landlord"); it appearing to the Court that (i) it has jurisdiction over the matters raised in the Motion pursuant to 28 U.S.C. § 157 and 1334; (ii) this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2); (iii) the relief requested in the Motion is in the best interests of the Debtors, their estates and their creditors; (iv) proper and adequate notice of the Motion and the hearing thereon has been given and that no order or further notice is necessary; and (v) upon the record herein after due deliberation thereon, that the relief should be granted as set forth below:

1. The Debtors are authorized to assume that certain unexpired lease of non-residential real property as set forth on Schedule A along with any and all easements, licenses, nondisturbance agreements and other similar agreements entered into by the Debtors which relate to their use and occupancy of the leased property (the "Property"), and all amendments, licenses, consents and other similar agreements between the Debtors and the Landlord under the Lease (the "Landlord") relating to the Property (collectively, the "Real Property Lease"). The Landlord has voluntarily withdrawn its objection based on the terms of this Order.

2. The Debtors are authorized to assign the Real Property Lease pursuant to the terms of that certain Lease Assignment and Assumption Agreement, a copy of which is attached to the Motion as Exhibit A (the "Assignment Agreement"). Upon the assignment of the Real Property Lease in accordance with the Assignment Agreement, neither the Debtor nor its estate shall retain any right or interest whatsoever in such Real Property Lease.

3. The assumption and assignment of the Real Property Lease is effective as of the Assignment Date (as defined in the Assignment Agreement).

4. The motion for assumption and assignment of Store Number 3377 (Homewood, Illinois), as requested in the Motion for Order Pursuant to 11 U.S.C. § 365 and Fed.R. Bankr, P. 6006 Authorizing Debtors to Assume and Assign

Certain Unexpired Real Property Lease to Rubloff Development Group, Inc., is granted, and Rubloff agrees to satisfy the following requirements:

a. Rubloff shall pay to Landlord the cure amount of $83,332 immediately upon entry of this Order, which cure amount relates to the rent payment due under the Lease covering the period of February 1,2002 to July 31, 2002;

b. Rubloff shall execute, in a form satisfactory to Landlord and Rubloff, an assignment of subleases and rents for any tenants currently occupying the Premises, or a portion thereof, and for any tenants which may occupy the Premises, or a portion thereof, in the future. Said assignment shall be subordinate to claims or liens to Rubloff's current and future Lender(s) of the property.

c. Rubloff shall provide Landlord with proof of adequate insurance for the Premises in the amount required in the Lease, naming Landlord as an additional insured;

d. Rubloff shall provide Landlord with a Letter of Credit, in a form satisfactory to Landlord, in the amount of $166,664, as security to cover the semi-annual rent payments that Rubloff is required to satisfy under the terms of the Lease.

e. Rubloff shall provide Landlord with a Letter of Credit, in a form satisfactory to Landlord, in the amount of $78,000, as security to cover the semi-annual tax payment that Rubloff is required to satisfy under the terms of the Lease, which Letter of Credit shall be in place for a period of two years from the date this Order is executed by the Court.

f. Upon entry of this Order, Rubloff shall immediately make the following repairs and satisfy the following maintenance issues, to the reasonable satisfaction of Landlord, which are the responsibility of the lessee under the Lease and which cause an immediate danger to the Premises and to the public: (i) repair all roof leaks; (ii) resurface or pat all parking lot potholes; (iii) repair or replace all car stops and anchor pins; (iv) repair or replace all lot and canopy lighting; and (v) repair or replace sidewalk and ramp concrete.

g. Prior to August 1, 2002, Rubloff shall make all other repairs and satisfy all other maintenance issues, to the reasonable satisfaction of Landlord, as may be necessary to maintain the Premises in the condition required under the terms of the Lease,

5. In the event Rubloff fails to make the required repairs or fails to satisfy the maintenance issues as required by the terms of this Order, Landlord shall have the right to file a motion with this Court to seek an order that either (i) compels Rubloff to make the repairs and/or satisfy the maintenance issues, or (ii) requires Rubloff to pay money damages to Landlord in the amount of the repairs and/or maintenance issues.

6. The Debtors' decision to assume the Real Property Lease, however, remains subject to the satisfaction (or waiver by the applicable party) of (i) all of the foregoing conditions and (ii) any and all conditions set forth in the Assignment Agreement.

7. The transactions contemplated herein are entitled to the full protections of Section 363(m) of the Bankruptcy Code.

8. The Debtors shall be released and forever discharged of any and all obligations with respect to the cure claim under the Real Property Lease, without any further action by the Landlord or order of the Court. As of the Assignment Date, the Debtors shall be released and forever discharged of any and all obligations and claims under the Real Property Lease, without any further action by the Landlord or order of the Court.

9. The Debtors are authorized to deliver possession of the premises subject to the Real Property Lease to Assignee as set forth in the Assignment Agreement.

10. The Debtors are authorized to sell and assign the Real Property Lease to Assignee free and clear of all liens, claims and encumbrances (except as set forth in the Assignment Agreement) pursuant to Section 363(f) of the Bankruptcy Code, with all such valid and enforceable liens, claims and encumbrances to attach to the proceeds of the assignment of the Real Property Lease, in the same relative priority as existed with respect to the Real Property Lease.

11. The Debtors and their respective officers, employees and agents, are authorized to perform all of their obligations, take whatever actions necessary, and issue, execute and deliver whatever documents may be necessary or appropriate to implement and effectuate the assumption and assignment of the Real Property Lease.

12. In accordance with section 1146(c) of the Bankruptcy Code, the sale, conveyance and assignment of the Real Property Lease to Assignee is hereby exempt from the imposition and payment of any law imposing a stamp tax, transfer tax or similar tax.

13. Each and every federal state and local government agency or department is hereby directed to accept any and all documents and instruments necessary or appropriate to consummate the assignment of the Real Property Lease in the appropriate public records.

14. To the extent that this Order is inconsistent with any prior order, the terms of this Order shall govern.

15. Nothing in this Order shall be deemed to extend the time to assume or reject any Real Property Lease under section 365(d)(4) of the Bankruptcy Code.

16. The Court shall retain exelusive jurisdiction to resolve any dispute arising from or relating to the assumption and assignment authorized herein or this Order.

17. Notwithstanding Rule 6006(d) of the Federal Rules of Bankruptcy Procedure, this Order shall take effect immediately upon signature.

SCHEDULE A Store Date of No. Location Lease Landlord 3377 Homewood, Illinois May 1, First Berkshire Business Trust 1994