Case No. 02 B 02474, (Jointly Administered)United States Bankruptcy Court, N.D. Illinois
November 13, 2003
AGREED ORDER GRANTING THE APPLICATION OF WILMINGTON TRUST COMPANY, AS INDENTURE TRUSTEE FOR CERTAIN PREPETITION NOTES IN CLASS 4 OF THE CONFIRMED PLAN, FOR AN ORDER APPROVING THE PAYMENT OF FEES AND EXPENSES PURSUANT TO THE CONFIRMED PLAN AND SECTION 1129(A)(4) OF THE BANKRUPTCY CODE
SUSAN SONDERBY, Chief Judge, Bankruptcy
This cause coming on to be heard upon the Application of Wilmington Trust Company, as Indenture Trustee for Certain Prepetition Notes in Class 4 of the Confirmed Plan (“Wilmington”) for an Order Approving the Payment of Fees and Expenses Pursuant to the Confirmed Plan and Section 1129(a)(4) of the Bankruptcy Code (the “Wilmington Application”) (Docket #13091); the Court having continued the hearings on the Wilmington Application pursuant to agreement of the parties; the Debtors and Wilmington having represented to the Court that they have resolved their differences in connection with the Wilmington Application, and have entered into a letter agreement dated November 13, 2003 memorializing their agreement (the “Letter Agreement”):
NOW, THEREFORE, IT IS HEREBY ORDERED AND AGREED AS FOLLOWS:
1. The Wilmington Application is hereby granted on the conditions set forth in the Letter Agreement, a copy of which is attached hereto as Exhibit A and by express reference made a part hereof.
2. The Letter Agreement is hereby approved, and the parties are authorized lo act in accordance with its terms and to perform the Letter Agreement without further order or notice.
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3. The Debtors are authorized and directed to pay the amounts of fees and expenses allowed by this Order as set forth in Paragraphs 2, 3 and 4 of the Letter Agreement, and such amounts shall be paid as further set forth in Paragraph 5 of the Letter Agreement.
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PRYOR CASHMAN SHERMAN FLYNN LLP 410 PARK AVENUE, NEW YORK, NEW YORK 10022-4441 November 13, 2003
BY FAX AND FEDERAL EXPRESS
Eric Meier, Esq. Legal Department kmart Corporation 3100 West Big Beaver Road Troy, Michigan 48081
RE: In re Kmart Corporation, et al. Debtors, Case No. 02-B02474 (Bankr. N.D. Ill) — Settlement of Application of Wilmington Trust Company for Approval of Payment of Eggs and Expenses
Dear Eric;
This letter confirms and memorializes the understandings between Kmart Corporation (“Kmart”) and Wilmington Trust Company, as Indenture Trustee for certain Prepetition Notes (“Wilmington”), with respect to resolution of Wilmington’s pending application to the Bankruptcy Court, dated June 9, 2003 (“Application”), for approval of payment of fees and expenses of Wilmington pursuant to Section 5.4 of the confirmed First Amended Joint Plan of Reorganization (“Plan”) and Section 1129(a)(4) of the Bankruptcy Code. Unless otherwise defined, capitalized terms have the meanings given in the Plan,
1. Approval of the Bankruptcy Court: This agreement is subject to approval pursuant to an order of the Bankruptcy Court (“Approval Order”).
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Eric Meier, Esq. Kmart Corporation November
2. Allowance and Payment of Bankruptcy-Related Fees andExpenses: Kmart does not object to payment of, and agrees upon the entry of the Approval Order to pay, as provided by this agreement, the following amounts to Wilmington, as Indenture Trustee (for itself and its predecessor indenture trustees under the Indentures, as well as their respective professionals and agents):
WILMINGTON TRUST COMPANY (Successor Indenture Trustee) Fees $247,453,00 Disbursements $12,319.38
Total: $259,777,28
BANK OF NEW YORK (Predecessor Indenture Trustee under 19S5 and 1995 Indentures) Fees $5,301.00
Total: $5,301.00
BANK OF NEW YORK (Paying Agent and Registrar) Fees $15,000.00 Disbursements $10,905.00
Total: $25,905.00
JP MORGAN CHASE BANK, F/K/A J P. MORGAN TRUST COMPANY (Predecessor Indenture Trustee under Harrison County Indenture) Fees; $3,367,00 Disbursements: $202.00
Total; $3,569.02
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Eric Meier, Esq. Kmart Corporation November 13,
PRYOR CASHMAN SHERMAN FLYNN LLP (Counsel for Wilmington, as Successor Indenture Trustee) Fees; $833,525,75 Less; 7% agreed reduction in fees ($58,346.80) Disbursements:. $32.202.39 Sub-Total; $807,381.34 Plus: Supplemental amounts requested through October 31, 2003 in connection with prosecution and settlement of the Application $10.710.04
Total $818,091.38
COMPASS ADVISERS LLP (Financial Advisors to Wilmington, as Successor Indenture Trustee)) Fees: $159,592.50 Less; 7% agreed reduction ($11,171.44) Disbursements; $2.876.29
Total: $151,297.31
MAYER, BROWN, ROWE MAW LLP (Local Bankruptcy Counsel for Wilmington) Fees: $4,112.50 Disbursements: $744.97 Sub-Total: $4,857.47 Plus: Supplemental amounts requested through October 31, 2003 in connection with prosecution and settlement of the Application $538.95
Total: $5,396-42
WALLER LANSDEN DORTCH DAVIS (Counsel to Bank of New York, as paying agent and registrar) Fees: $20,706.50 Disbursements $49.13
Total: $20,755.63
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Eric Meier, Esq. Kmart Corporation November 13, 2003
3. Allowance and Payment of Plan Distribution-Related Fees andExpenses: In Addition to the amounts under Paragraph 2, Kmart does not object to payment of, and agrees upon the entry of the Approval Order to pay, as provided by this agreement, the amounts of $8,350.00 and $21,636,36, respectively, to Wilmington, as Indenture Trustee, and Pryor Cashman Sherman Flynn LLP, Us counsel (“Pryor Cashman”), on account of fees and expenses incurred and billed pursuant to Section 9.5 of the Plan with respect to implementation of the distributions to the holders of the Prepetition Notes for which Wilmington served as Indenture Trustee,
4. Payment of Certain Additional Amounts Relating to FinalResolution of the Application: In addition to the amounts under Paragraphs 2 and 3 above, Kmart does not object to payment of, and is authorized upon the entry of the Approval Order to pay, the reasonable additional amounts of fees and expenses of Pryor Cashman and its local counsel Mayer, Brown, Rowe Maw LLP (“Mayer Brown”), up to an aggregate of $7,500,00, incurred on account of the negotiation and approval of this agreement and the collection and final disposition of the proceeds of the existing escrow account held for the benefit of Wilmington at JPMorgan Chase Bank (“Escrow Account”). The fees and expenses under this paragraph may be disbursed from the Escrow Account or,
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Eric Meier, Esq. Kmart Corporation November 13, 2003 Page 5 of
alternatively, will be paid directly by Kmart to Pryor Cashman and/or Mayer Brown, as the case may be, within ten (10) days after presentation of the supporting invoices). The fees and expenses requested under this paragraph will be evidenced by invoices consistent in form and substance with those submitted by the professionals in support of the Application.
5. Payment of Allowed Amounts: Upon entry of the Approval Order, and except as otherwise permitted or provided above, all of the amounts allowed under Paragraphs 2 and 3 of this agreement shall be paid to Wilmington and/or Pryor Cashman, as the initial recipient(s), from the proceeds of Escrow Account, in accordance with the terms and conditions of the escrow agreement relating to the Escrow Account. Kmart’s obligations for payment of the fees and expenses allowed under Paragraphs 1 and 3 of This agreement shall be satisfied and discharged upon collection in full by the initial recipient(s) from the Escrow Account of the aggregate of the amounts allowed, under Paragraphs 2 and 3. As the initial recipient(s) of such funds, Wilmington and/or Pryor Cashman, in turn, will be responsible to disburse from such funds the appropriate amounts due to each of the other entities covered by this agreement in payment of their respective approved fees and expenses as set forth above, and Kmart shall have no liability or responsibility with respect to such disbursement. Kmart’s obligation for payment of the fees and expenses allowed under Paragraph 4 shall be satisfied and discharged upon the collection of such amounts in full either from the Escrow Amount or directly from Kmart in the event that payment is to be made directly by Kmart.
(Signatures appear on next page)
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Eric Meier, Esq. Kmart Corporation November 13, 2003
This letter may be executed in multiple counterparts, all of which taken together will constitute a single document. Signatures may be Transmitted by fax, and such signatures will operate as originals.
Please confirm your agreement by countersigning this agreement, provide me a copy, and arrange with Kmart’s counsel for prompt submission of this agreement to the Bankruptcy Court,
Very truly yours,
PRYOR CASHMAN SHERMAN
FLYNN LLP, attorneys of record for Wilmington Trust Company, as Indenture Trustee
By:_________________________________ Richard Levy, Jr. A Member of the Firm
RL/jmr
ACCEPTED AND AGREED:
KMART CORPORATION
By:_______________________________ Title:____________________________ Date:_____________________________
Eric Meier, Esq. Kmart Corporation November 13, 2003
This letter may be executed in multiple counterparts, all of which taken together will constitute a single document. Signatures may be Transmitted by fax, and such signatures will operate as originals.
Please confirm your agreement by countersigning this agreement, provide me a copy, and arrange with Kmart’s counsel for prompt submission of this agreement to the Bankruptcy Court,
Very truly yours,
PRYOR CASHMAN SHERMAN
FLYNN LLP, attorneys of record for Wilmington Trust Company, as Indenture Trustee
By:_________________________________ Richard Levy, Jr. A Member of the Firm
RL/jmr
ACCEPTED AND AGREED: KMART CORPORATION
By: Title: Harold Lueken, Sr. Vice President, General Counsel Secretary Date: November 13, 2003
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